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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Barry's Jewelers, Inc
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
06 88 91308
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(CUSIP Number)
Mr. John W. Gildea
c/o Gildea Management Company
115 East Putnam Avenue, Greenwich, Connecticut 06830
(203) 661-6945
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 3 , 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d- 1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [x]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13-d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 068891308
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1 Name of Reporting Person(1)
S.S. or I.R.S. Identification No. of Above Person
Network Fund III, Ltd.
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2 Check the Appropriate Box If a member of a Group
a. [ ]
b. [ ]
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3 SEC Use Only
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4 Source of Funds
WC
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5 Check Box if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
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6 Citizenship or Place of Organization
Cayman Islands, B.W.I.
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7 Sole Voting Power
Number of
Shares ________0_______
Beneficially 8 Shared Voting Power
Owned by
Each ________0_________
Reporting 9 Sole Dispositive Power
Person
With ________0_________
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(1) Filing jointly pursuant to Rule 13d-1(f)(1) under the
Securities Exchange Act of 1934, as amended, with John W. Gildea.
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10 Shared Dispositive Power
________525,000_____________
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
525,000
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12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
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13 Percent of Class Represented by Amount in Row (11)
13.1%
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14 Type of Reporting Person
PN
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CUSIP NO. 068891308
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1 Name of Reporting Person(2)
S.S. or I.R.S. Identification No. of Above Person
John W. Gildea
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2 Check the Appropriate Box If a member of a Group
a. [ ]
b. [ ]
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3 SEC Use Only
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4 Source of Funds
PF
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5 Check Box if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
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6 Citizenship or Place of Organization
United States of America
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7 Sole Voting Power
Number of
Shares _____70,000____________
Beneficially 8 Shared Voting Power
Owned by
Each ________0_________
Reporting 9 Sole Dispositive Power
Person
With ______70,000___________
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(2) Filing jointly pursuant to Rule 13d-1(f)(1) under the Securities
Exchange Act of 1934, as amended, with Network Fund III, Ltd.
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10 Shared Dispositive Power
_________525,000____________
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11 Aggregate Amount Beneficially Owned by Each Reporting Person [ ]
595,000
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12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
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13 Percent of Class Represented by Amount in Row (11)
14.9%
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14 Type of Reporting Person
IN
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ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (the "Schedule 13D") relates to Common
Stock, no par vaue (the "Common Stock") of Barry's Jewelers, Inc., a
California corporation (the "Company"). The address of the principal
executive offices of the Company is 111 West Lemon Avenue, Monrovia,
California 91016.
ITEM 2 IDENTITY AND BACKGROUND.
This Schedule 13D is filed jointly on behalf of John W. Gildea, a
United States citizen ("Gildea"), and Network Fund III, Ltd ,
("Network") a Cayman Island exempt company pursuant to Rule 13d-1(f)(1)
under the Securities Act of 1934, as amended.
Gildea is Managing Director of Gildea Management Company, a Delaware
corporation ("GM"). Gildea, as a Director and Chairman of Network and
as a Managing Director of GM, which has the power to dispose of 525,000
shares of Common Stock which Network owns beneficially (the "Network
Shares"), by virtue of an Investment Advsory Agreement dated Febraury
26, 1996 between GM and Network, a copy of which is attached hereto as
Exhibit 2, may be deemed to share any beneficial ownership of the
Network shares with Network. Gildea has the sole power to vote or
direct the voting and the sole right to dispose or direct the
disposition of 70,000 shares of Common Stock beneficially owned by him
(the "Gildea Shares") in his individual capacity. Network disclaims any
beneficial ownership of the Gildea Shares. Network's principal business
is investing in securities and other financial instruments of issuers
located primarily in the United States. The principal business address
and principal office address of Network is P.O. Box 219, Butterfield
House, Grand Cayman, Cayman Islands, B.W.I. Gildea's principal business
is managing the investments of various entities in issuers located
primarily in the United States. Gildea's principal business address is
115 East Putnam Avenue, Greenwich, Connecticut 06830.
The name, business address, citizenship and present principal
occupation of each director and executive officer of Network are set
forth on Schedule I hereto. This Schedule 13D does not report the sole
right of William P. O'Donnell, a Managing Director of GM and a Director
of Network to dispose of 10,000 shares of Common Stock which are owned
in his individual name. Each of Gildea and Network disclaim beneficial
ownership of all such 10,000 shares.
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None of Network, Gildea or, to the best knowledge of such parties, any
of the persons listed on Schedule I hereto, has, during the last five
years, (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (ii) been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Network acquired the Shares in open market purchases for $3.00 per
Share, for an agregate of $1,575,000 all of which funds were obtained
from the working capital of Network.
Gildea purchased in the open market an aggregate of 70,000 Gildea
Shares for which he has sole voting and dispositive power for cash in
the aggregate amount of $210,000 obtained solely from his personal
funds.
ITEM 4. PURPOSE OF TRANSACTION.
Network acquired and intends to hold the 525,000 Network Shares for
investment. Gildea intends to hold the 70,000 Gildea Shares for which
he has sole voting and dispositive power for investment.
The Company has agreed to provide a shelf registration statement with
the Securities & Exchange Commission covering the Network and Gildea
Shares. The Company also agreed to cause such shares of Common Stock to
be approved for listing on NASDAQ.
Network intends to review on a continuing basis its investment in the
Company. As of the date of this Schedule 13D, no determination has been
made by Network to acquire additional shares of capital stock of the
Company or to dispose of any shares of capital stock of the Company now
held by it, although Network may decide to so acquire or dispose of
shares of capital stock of the Company. Any such determination will
depend on market conditions prevailing from time to time and on other
conditions which may be applicable depending on the nature of the
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transaction or transactions involved. Except as specifically set forth
in this Item 4, neither Network nor Gildea has any plans or proposals
which relate to or would result in any of the actions or effects set
forth in items (a) through (j) of Item 4 of Schedule 13D, although
Network or Gildea may develop such plans or proposals.
ITEM 5 INTEREST IN SECURITIES OF THE ISSUER.
The aggregate percentage of shares of Common Stock reported which may
be deemed beneficially owned by Network and Gildea is based upon the
4,001,506 shares of Common Stock outstanding as reported by the Company
in its quarterly report on Form 10Q for the fiscal quarter ended
February 29, 1996. This Schedule 13D does not report 10,000 shares of
Common Stock held by William P. O'Donnell. Each of Network and Gildea
disclaim beneficial ownership of all such 10,000 shares.
(a) (i) Network is the direct beneficial owner of the 525,000 Network
Shares. Gildea may be deemed to be the indirect beneficial owner of the
525,000 Network shares. The 525,000 Network Shares represent
approximately 13.1% of the outstanding Common Stock (calculated in
accordance with Rule 13d-3).
(ii) The 70,000 Gildea shares beneficially owned by Gildea and the
525,000 Network shares that Gildea may be deemed to indirectly own
beneficially represent approximately 14.9% of the outstanding Common
Stock (calculated in accordance with Rule 13d-3).
(b) (i) Network and Gildea may be deemed to share the power to dispose of
the Network Shares.
(ii) Gildea has the sole power to vote or to direct the voting, and the
sole right to dispose of the 70,000 Gildea Shares.
(c) Except as set forth in this Schedule 13D, and except for the purchase
of 10,000 Shares by Mr. O'Donnell for $30,000 none of Network, Gildea
or, to the best knowledge of Network or Gildea, any person named on
Schedule I hereto owns any shares of Common Stock, and none has
purchased or sold any any shares of Common Stock during the past sixty
days.
(d) Except as set forth in this Schedule 13D, no person is known by Network
or Gildea to have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of the Network
Shares, or the Gildea Shares beneficially owned by Network or Gildea.
(e) Not applicable.
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ITEM 6 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Except as set forth in this Schedule 13D, there are no contracts,
arrangements, understandings or relationships (legal or otherwise)
among the persons referred to in Item 2 of this Schedule 13D or between
such persons and any other person with respect to any of the securities
of the Company, including, but not limited to, any relating to the
transfer or voting of any such securities, finder's fees, joint
ventures, loan or option agreements, puts or calls, guarantees of
profits, division of profits or loss or the giving or withholding of
proxies.
An affiliate of Gildea Management Company "GMC" has a consulting
arrangement with Ariel Fund Ltd whereby GMC is entitled to 11% of the
profits on an investment of 325,000 common shares of Barry's Jewelers,
Inc. held by Ariel Fund Ltd. (the "Ariel Shares"). This consulting
agreement is not in writing and GMC disclaims any beneficial ownership,
and has no control over the voting or disposition of the Ariel Shares.
ITEM 7 MATERIALS TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement dated May 10, 1996.
2. Investment Advisory Agreement dated February 26, 1996 by and between
GM and Network.
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SIGNATURE
After reasonable inquiry and to the best of their respective knowledge
and belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Dated: May 10, 1996
NETWORK FUND III, LTD.
By: /s/ John W. Gildea
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John W. Gildea
Chairman
/s/ John W. Gildea
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John W. Gildea
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SCHEDULE I
Reporting Person: Network Fund III, Ltd.
P.O. Box 219 Butterfield House
Grand Cayman, Cayman Islands, B.W. I.
Executive Officers, Directors and Controlling Person:
Name: John W. Gildea
Position: Director and Chairman
Principal Occupation
and Employment:
Business Address: Managing Director of Gildea Management Company, a
Delaware corporation ("GM"); the business address of
GM and Mr. Gildea is:
115 Putnam Avenue, Greenwich, CT 06830.
By virtue of being Managing Director of GM which under its Investment
Advisory Agreement with Network (see Exhibit 2) has the power to
dispose of any of the Network Shares which may be held by Network, and
the Chairman of Network, Mr. Gildea may be deemed to be a controlling
person of Network.
Name: William P. O'Donnell
Position: Director and Managing Director
Principal Occupation
and Employment: Managing Director of Gildea Management Company
Business Address: 115 Putnam Avenue
Greenwich, CT 06830
Citizenship: USA
Name: Peter Arthur Neil Bailey
Position: Director
Principal Occupation
and Employment:
Business Address: Director of Abacus Asset Management in Jersey,
Channel Islands, a member of Coopers & Lybrand
International, a limited liability association
incorporated in Switzerland; business address:
La Motte Chambers, La Motte Street, St.
Heiler, Jersey, Channel Islands, U.K.
JE1 1BJ
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Citizenship: U.K.
Name: Geoffrey William Fisher
Position: Director
Principal Occupation
and Employment:
Business Address: Director of Abacus Asset Management in Jersey,
Channel Islands, a member of Coopers & Lybrand
International, a limited liability association
incorporated in Switzerland; business address;
La Motte Chambers, LA Motte Street, St.
Heiler, Jersey, Channel Islands, U.K.
JE1 1BJ
Citizenship: U.K.
Name: Michael David de Figueiredo
Position: Director
Principal Occupation
and Employment:
Business Address: Director of Abacus (CI) Limited, a member of
Coopers & Lybrand International, a limited liability
association incorporated in Switzerland; business
address: La Motte Chambers, La Motte Street,
St. Heiler, Jersey, Channel Islands, U.K. JE1 1BJ
Citizenship: U.K.
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EXHIBIT INDEX
1. Joint Filing Agreement, dated May 10, 1996
2. Investment Advisory Agreement, dated February 26, 1996, by and between
GM and Network.
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AGREEMENT
The undersigned hereby agrees that this statement on Schedule 13D with
respect to beneficial ownership of shares of common stock of Barry's Jewelers,
Inc., a Delaware corporation is filed jointly on behalf of each of them.
Dated: May 10, 1996
NETWORK FUND III, LTD.
By: /s/ John W. Gildea
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John W. Gildea
Chairman
/s/ John W. Gildea
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John W. Gildea
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INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (the 'Agreement') is entered into as of
February 26, 1996 by and between GILDEA MANAGEMENT COMPANY, a Delaware
corporation (the 'Investment Advisor'), and NETWORK FUND III, LTD., a Cayman
Islands exempted company (the 'Fund').
WITNESSETH:
WHEREAS, the Fund has been formed as a closed-end investment company, the
objective of which is to achieve capital appreciation in accordance with the
investment objectives and strategies as more fully described in the Confidential
Private Placement Memorandum of the Fund dated February 1996 (the 'Memorandum');
and
WHEREAS, the Fund wishes to engage the Investment Advisor to provide
investment advisory services with respect to the Fund's assets; and
WHEREAS, the Investment Advisor wishes to accept the same upon the terms
and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained, the parties agree as follows:
1. Investment Management Services. In accordance with the provisions of the
Memorandum and Articles of Association of the Fund, and under the ultimate
supervision of the Board of Directors of the Fund (the 'Directors') from time to
time as provided therein, and in accordance with the investment objectives,
policies, guidelines and restrictions which are set forth in the Memorandum or
which are otherwise communicated to the Investment Advisor in writing by the
Fund, the Investment Advisor shall use its reasonable efforts to invest the
assets of the Fund according to the strategy set forth in the Memorandum.
Capitalized terms not otherwise defined herein shall be used herein as defined
in the Memorandum.
2. Authority of the Investment Advisor. The Investment Advisor shall have
full discretion and authority, without obtaining the Fund's prior approval, to
manage the investment and reinvestment of the assets of the Fund in such manner
as the Investment Advisor considers appropriate consistent with the Memorandum.
In furtherance of the foregoing, the Fund hereby designates and appoints the
Investment Advisor as its agent and attorney-in-fact, with full power and
authority and without the need for further approval of the fund (except as may
be required by law), to carry out the following with respect to the assets of
the Fund:
(a) to effect purchases and sales (including short sales) of (i)
securities of any type whatsoever, denominated in any currency, whether or
not issued by government entities, partnerships, trusts or corporations,
(ii) any put or call options thereon (including the writing of options,
whether covered or uncovered), and (iii) other securities and instruments
consistent with
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the Fund's investment policies and program;
(b) to make all decisions relating to the manner, method and timing of
investment transactions, and to select brokers and dealers for the execution,
clearance and settlement of any transactions;
(c) to borrow from banks, brokers or other financial institutions to the
extent permitted by the Memorandum and to pledge assets of the Fund in
connection therewith;
(d) to direct custodians to deliver funds or securities for the purpose of
effecting transactions, and to instruct custodians to exercise or abstain from
exercising any privilege or right attaching to such assets; and
(e) to make and execute, in the name and on behalf of the Fund, all such
documents (including, without limitation, customer agreements and other
documents in connection with the establishment and maintenance of brokerage
accounts) and to take all such other actions as the Investment Advisor considers
necessary or advisable to carry out its investment management duties hereunder.
3. Brokerage. In the course of selecting brokers, dealers, banks and
intermediaries to effect transactions for the Fund, the Investment Advisor may
agree to such commissions, fees and other charges on behalf of the Fund as the
Investment Advisor shall deem reasonable in the circumstances taking into
account all such factors as it deems relevant, including the quality of research
and other services made available to it (even if such services are not for the
exclusive benefit of the Fund). It is understood that the costs of such services
will not necessarily represent the lowest costs available and that the
Investment Advisor is under no obligation to combine or arrange orders so as to
obtain reduced charges.
4. Investments for the Accounts of Others and Allocation of Opportunities.
(a) It is understood that the Investment Advisor and its directors,
officers, employees and principals may from time to time purchase and sell
securities or other investment assets for their own accounts, for the accounts
of their families, for the account of any entity in which they have a beneficial
interest or for the accounts of others for whom they may provide investment
advisory or other services (collectively, 'Managed Accounts'), notwithstanding
the fact that the Fund may have or may take an investment position in the same
security; provided, however, that the Investment Advisor shall not cause the
Fund to purchase any asset from or sell any asset to the Investment Advisor, or
any of its directors, officers, employees or principals or any account or entity
controlled by such persons without the consent of the Fund.
(b) It is understood that when the Investment Advisor determines that it
would be appropriate for the Fund and one or more Managed Accounts to
participate in an investment opportunity, the Investment Advisor will seek to
execute orders for the Fund and for such Managed Accounts on an equitable basis.
In such situations, the Investment Advisor may place orders for the Fund and
each Managed Account simultaneously, and if all such orders are not filled at
the same price, the Investment Advisor may cause the Fund and each Managed
Account to pay or
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receive the average of the prices at which the orders were filled for the Fund
and all Managed Accounts. If all such orders cannot be fully executed under
prevailing market conditions, the Investment Advisor may allocate the securities
traded among the Fund and the Managed Accounts in a manner which it considers
equitable, taking into account the size of the order placed for the Fund and
each such Managed Account as well as any other factors which it deems relevant.
(c) The Investment Advisor will not organize any other investment fund with the
same objectives as the Fund (other than a parallel U.S. limited partnership for
U.S. investors) unless at least sixty percent (60%) of the capital of the Fund
has been invested in portfolio securities consistent with the Fund's objectives.
5. Compensation.
(a) For its services hereunder, the Investment Advisor shall be entitled to
receive a quarterly management fee from the Fund at an annual rate equal to
1.75% of the Net Value of the Fund (as defined in the Memorandum). The
management fee shall be calculated and payable in arrears after the end of each
calendar quarter based on the Net Value of the Fund as of the end of the
calendar quarter. The management fee shall be paid promptly to the Investment
Advisor after the close of each calendar quarter.
(b) In addition to the management fee, once the Fund has made aggregate
distributions to holders of its Common Shares equal to their initial investment
plus a 7% non-compounded annual return (the 'Preferred Return'), then the
Investment Advisor will receive distributions in its capacity as holder of the
Fund's Founders Shares until it has received cumulative distributions equal to a
1.75% non-compounded annual return on the Fund's capital, and thereafter
distributions will be made 80% to holders of Common Shares of the Fund and 20%
to the Investment Advisor in its capacity as holder of Founder Shares, in each
case as provided in the Memorandum and in the Articles and Memorandum of
Association of the Fund.
6. Scope of Liabilities. The Investment Advisor shall not be liable to the
Fund, its affiliates or shareholders for any losses, damages, expenses or claims
occasioned by any act or omission of the Investment Advisor in connection with
the performance of its services hereunder, other than as a result
of its own willful misconduct, gross negligence or reckless disregard of its
duties hereunder, or as otherwise required by applicable law.
7. Indemnification. The Fund shall indemnify the Investment Advisor (which
shall include solely for purposes of this Section 9 any of its directors,
officers, employees and shareholders) against and hold them harmless from any
expense, loss, liability or damage arising out of any claim asserted or
threatened to be asserted by any third party, in connection with the Investment
Advisor's serving or having served as such pursuant to this Agreement; provided,
however, that the Investment Advisor shall not be entitled to indemnification
with respect to any expense, loss, liability or damage which was caused by its
own gross negligence, willful misconduct or reckless disregard of its duties
hereunder. The Fund shall advance to the Investment Advisor the reasonable costs
and expenses of investigating and/or defending any such claim, subject to
receiving a written undertaking from the Investment Advisor to repay any such
amounts advanced to it in the event and to the extent of any subsequent
determination that the Investment Advisor was
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not entitled to indemnification hereunder. In the event that the Investment
Advisor is or becomes a party to any action or proceeding in respect of which
indemnification may be sought hereunder, the Investment Advisor shall promptly
notify the Fund thereof. Following such notice, the Fund shall be entitled to
participate therein and, to the extent that it may wish, to assume the defense
thereof with counsel reasonably satisfactory to the Investment Advisor. After
notice from the Fund to the Investment Advisor of an election so to assume the
defense thereof, the Fund will not be liable to the Investment Advisor hereunder
for any legal or other expense subsequently incurred by the Investment Advisor
in connection with the defense thereof other than reasonable costs of
investigation unless counsel for the Investment Advisor shall reasonably
determine that there is a conflict of interest which requires separate
representation of the parties. The Fund shall not be liable hereunder for any
settlement of any action or claim effected without its written consent thereto,
which consent shall not be unreasonably withheld, nor shall the Fund enter into
any settlement which shall impose any obligation on the Investment Advisor
without its written consent.
8. Independent Contractor. For all purposes of this Agreement, the
Investment Advisor shall be an independent contractor and not an employee or
agent of the Fund, nor shall anything herein be construed as making the Fund a
partner or co-venturer with the Investment Advisor or any of its affiliates.
Except as provided in this Agreement, the Investment Advisor shall not have
authority to bind, obligate or represent the Fund. Without limiting the
generality of the foregoing, the Investment Advisor shall have no authority
whatsoever (nor shall it have any duty) on behalf of the Fund to: (i)
communicate with shareholders of the fund or with the general public; (ii)
solicit sales of the Shares of the Fund or accept subscriptions therefor; (iii)
maintain the principal corporate records or books of account of the Fund; (iv)
disburse payments of dividends, legal and accounting fees, and directors' and
officers' salaries; or (v) make redemptions of the shares of the Fund.
9. Information Concerning Activities. The Investment Advisor shall send or
arrange that there be sent to the Fund confirmations of all transactions for its
account. The Investment Advisor shall also furnish from time to time such
further information and reports concerning the activities undertaken by the
Investment Advisor on behalf of the Fund as the Fund may reasonably request.
10. Expenses. All expenses incurred directly in connection with
transactions effected or positions held on behalf of the Fund pursuant to the
Investment Advisor's exercise of its duties hereunder (including, without
limitation, custodial fees, clearing fees, brokerage commissions, interest and
commitment fees on loans and debit balances, withholding or transfer taxes and
other expenses as described in the Memorandum) shall be paid or reimbursed by
the Fund. The Investment Advisor shall bear its own overhead and other internal
operating costs, except that the Investment Advisor may cause certain of such
expenses to be paid out of brokerage commissions generated by trading on behalf
of the Fund as described in the Memorandum.
11. Term, Termination, Renewal and Survival.
(a) The initial term of this Agreement shall commence on the date hereof
and shall continue until the final dissolution and liquidation of the Fund,
subject to termination by either party upon not less than thirty (30) days prior
written notice to the other in the event of any
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material breach by the other party of its obligations under this Agreement,
which breach is not remedied within such period.
(b) In the event of the termination of this Agreement, (i) the Investment
Advisor shall be entitled to the management fee accrued through the date of
termination, (ii) the provisions of Sections 6 and 7 shall survive any
termination, and (iii) the Investment Advisor shall have the right, at its
option, to resell the Founders Shares to the Fund at a purchase price equal to
the accrued but unpaid distributions due to the holders of Founders Shares
through the date of such termination based upon the Net Value of the Fund (as
defined in the Memorandum) as of such date.
12. Modification; Waiver. Except as otherwise expressly provided herein,
this Agreement shall not be amended nor shall any provision of this Agreement be
considered modified or waived unless evidenced by a writing signed by the
parties to be charged with such amendment, waiver or modification.
13. Entire Agreement; Binding Effect; Assignment. This Agreement represents
the entire agreement among the parties, shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, and their rights
and obligations hereunder shall not be assignable, transferable or delegable
without the written consent of the other party hereto. Any attempted assignment,
transfer or delegation hereof without such consent shall be void.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Cayman Islands, without giving effect to
conflicts of law.
15. Counterparts. This Agreement may be signed in any number of
counterparts. Any single counterpart or a set of counterparts signed in either
case by the parties hereto shall constitute a full and original agreement for
all purposes.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
NETWORK FUND III, LTD.
/S/ PETER BAILEY
By: .................................
Name: Peter Bailey
Title: Director
GILDEA MANAGEMENT COMPANY
/S/ WILLIAM P. O'DONNELL
By: .................................
Name: William P. O'Donnell
Title: Vice President
5
