SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)*
Preferred Income Management Fund Incorporated
(Name of Issuer)
Common Stock
(Title of Class of Securities)
74037Q10
(CUSIP Number)
Thomas R. Stephens, Esq.
Bartlit Beck Herman Palenchar & Scott
511 Sixteenth Street Suite 700
Denver, Colorado 80202
(303) 592-3100
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 20, 1997
(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 [ ].
(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 13d-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
disclosures 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).
(Continued on following page(s))
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Horejsi Enterprises, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Kansas
NUMBER OF 7 SOLE VOTING POWER
SHARES 2,071,430
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,071,430
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,071,430
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.0%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stewart R. Horejsi
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
14 TYPE OF REPORTING PERSON*
IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Larry L. Dunlap
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
14 TYPE OF REPORTING PERSON*
IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lola Brown Trust No. 1 B
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Kansas
NUMBER OF 7 SOLE VOTING POWER
SHARES 102,000
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 102,000
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
102,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.1%
14 TYPE OF REPORTING PERSON*
OO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
Amendment No. 7 to Statement on Schedule 13D
This amended statement on Schedule 13D relates to the Common Stock,
$.01 par value per share (the "Shares") of Preferred Income Management Fund
Incorporated, a Maryland corporation (the "Company"). Items 2, 3, 4, 5, 6 and 7
of this statement, previously filed by (i) Horejsi Enterprises, Inc. ( HEI ), as
a direct beneficial owner of the Shares, and (ii) Stewart R. Horejsi and Larry
L. Dunlap, by virtue of the relationships described previously in this
statement, are hereby amended as set forth below.
Item 2. Identity and Background
No change except for the addition of the following:
(a) In addition to HEI and Messrs. Horejsi and Dunlap, this
statement is also filed by The Lola Brown Trust No. 1B (the Brown Trust ) as
the direct holder of Shares. The Brown Trust, HEI, and Messrs. Horejsi and
Dunlap are referred to in this statement as the Reporting Persons. By signing
this statement, each Reporting Person agrees that this statement is filed on its
or his behalf.
As trustees of the Brown Trust, Messrs. Horejsi and Dunlap and
Susan Ciciora may be deemed to control the Brown Trust and may be deemed to
possess indirect beneficial ownership of the Shares held by the Brown Trust.
However, none of the trustees, acting alone, can vote or exercise dispositive
authority over Shares held by the Brown Trust. Accordingly, Messrs. Horejsi
and Dunlap and Ms. Ciciora disclaim beneficial ownership of the Shares
beneficially owned, directly or indirectly, by the Brown Trust.
(b) The business address of the Brown Trust are located at 253 N.
Santa Fe, POB 45, Salina, Kansas 67401.
(c) The Brown Trust is a trust organized by Lola Brown for the
benefit of her children and grandchildren.
(d) The Brown Trust has not been convicted in a criminal
proceeding in the past five years (excluding traffic violations or similar
misdemeanors).
(e) During the past five years, the Brown Trust was not a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person 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 of finding any
violation with respect to such laws.
(f) The Brown Trust is a trust organized under the laws of Kansas.
Item 3. Source and Amount of Funds or Other Consideration
No change except for the addition of the following:
The total amount of funds required by HEI to acquire the Shares
reported in Item 5(c) was $287,308 (including commissions). Such funds were
provided from HEI's reinvestment of dividends received on the Shares held by
HEI.
The total amount of funds required by the Brown Trust to acquire the
Shares reported in Item 5(c) was $1,450,930.60 (including commissions). Such
funds were or will be provided by the Brown Trust s cash on hand and margin
borrowings under accounts maintained by the Brown Trust with Merrill Lynch
International Bank Limited.
Item 4. Purpose of Transaction.
No change except for the addition of the following:
HEI purchased the Shares described in Item 5(c) of this statement in
order to increase its equity interest in the Company. The Brown Trust purchased
the Shares described in Item 5(c) to acquire an equity interest in the Company.
Depending upon their evaluation of the Company's investments and prospects, and
upon future developments (including, but not limited to, performance of the
Shares in the market, the effective yield on the Shares, availability of funds,
alternative uses of funds, and money, stock market and general economic
conditions), any of the Reporting Persons or other entities that may be deemed
to be affiliated with HEI or the Brown Trust may from time to time purchase
Shares, and any of the Reporting Persons or other entities that may be deemed to
be affiliated with HEI or the Brown Trust may from time to time dispose of all
or a portion of the Shares held by such person, or cease buying or selling
Shares. Any such additional purchases or sales of the Shares may be in open
market or privately-negotiated transactions or otherwise.
The fractional Share described in Item 5(c) was sold on HEI s behalf
in order to eliminate such fractional Share for record keeping purposes.
On January 16 and 17, 1997, Mr. Horejsi met with Robert T. Flaherty
of Flaherty & Crumrine, Inc., the Company's investment advisor and a member of
the Company's board of directors. During the meeting, Mr. Flaherty invited Mr.
Horejsi to join the Company's board of directors. Mr. Horejsi has not
determined whether to accept Mr. Flaherty's offer. Mr. Flaherty also requested
Mr. Horejsi's support for management's nominees to the board of directors.
During the meeting, Mr. Horejsi indicated to Mr. Flaherty that Mr. Horejsi did
not, at this time, favor conversion of the Company to an open-end investment
company or an issuer tender offer.
Item 5. Interest in Securities of the Issuer.
No change except for the addition of the following:
(a) HEI is the direct beneficial owner of 2,071,430 Shares, or
approximately 22.0% of the 9,416,743 Shares outstanding as of May 23, 1996,
according to information contained in the Company's 1996 proxy statement. By
virtue of the relationships previously reported in this statement, Mr. Horejsi
may be deemed to share indirect beneficial ownership of the Shares directly
beneficially owned by HEI. Mr. Horejsi disclaims all such beneficial ownership.
The Brown Trust is the direct beneficial owner of 102,000 Shares,
or approximately 1.1% of the 9,416,743 Shares outstanding as of May 23, 1996,
according to information contained in the Company's 1996 proxy statement. By
virtue of the relationships previously reported in this statement, Messrs.
Horejsi and Dunlap and Ms. Ciciora may be deemed to share indirect beneficial
ownership of the Shares directly beneficially owned by the Brown Trust. Messrs.
Horejsi and Dunlap and Ms. Ciciora disclaim all such beneficial ownership.
By virtue of the relationships and transactions described in this
statement, the HEI and the Brown Trust may be deemed to constitute a group. HEI
disclaims beneficial ownership of Shares directly beneficially owned by the
Brown Trust, and the Brown Trust disclaims beneficial ownership of Shares
directly beneficially owned by HEI.
(b) The Brown Trust has the direct power to vote and direct the
disposition of the Shares held by it. By virtue of the relationships described
in Item 2, Messrs. Horejsi and Dunlap and Ms. Ciciora may be deemed to share
the indirect power to vote and direct the disposition of the Shares held by the
Brown Trust.
(c) On December 31, 1996, HEI received 19,130.9096 Shares pursuant
to the Company s dividend reinvestment plan. On January 13, 1997, HEI sold
.9096 fractional Shares were sold on HEI s behalf at $14.375 per Share in a
transaction effected HEI by the administrator of the such plan.
The table below sets forth purchases of the Shares by the Brown
Trust. All of such purchases were effected by the Brown Trust on the New York
Stock Exchange.
<TABLE>
<CAPTION>
Approximate Price
Per Share
Date Amount of Shares (exclusive of commissions)
<S> <C> <C>
12/23/96 13,000 14.375
12/24/96 1,800 14.375
12/26/96 3,800 14.375
12/27/96 8,700 14.375
12/30/96 700 14.375
01/08/97 6,300 14.250
01/09/97 3,700 14.250
01/10/97 3,000 14.250
01/13/97 3,900 14.250
01/14/97 600 14.250
01/15/97 9,000 14.250
01/16/97 3,700 14.250
01/17/97 9,100 14.250
01/20/97 8,700 14.250
01/22/97 5,000 14.125
01/22/97 10,000 14.000
01/23/97 6,000 13.875
01/24/97 5,000 13.875
</TABLE>
(d) The Brown Trust has the right to receive and the power to
direct the receipt of dividends from, and proceeds from the sale of, the Shares
held by it.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
No change except for the addition of the following:
The Brown Trust is a party to a Lending and Letters of Credit
Services Terms Sheet with Merrill Lynch International Bank Limited. Margin
borrowings under the agreement bear interest at the average federal funds
effective daily rate plus 50 basis points and are due 90 days after demand.
Margin borrowings under the agreement are based on the collateral in accounts
with Merrill Lynch maintained by the Brown Trust. The foregoing summary of the
Brown Trust s agreement with Merrill Lynch is qualified in its entirety by
reference to the attached Exhibit 5, which is incorporated herein by this
reference.
Item 7. Material to be Filed as Exhibits.
No change except for the addition of the following:
Exhibit 5. Lending and Letters of Credit Services Terms Sheet
between the Lola Brown Trust 1 B and Merrill Lynch International
Bank Limited.
Exhibit 6. Joint Filing Agreement
Signature
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Date: January 27, 1997
/s/ Stewart R. Horejsi
Stewart R. Horejsi
/s/ Larry L. Dunlap
Larry L. Dunlap, individually, as Chairman
and President of Horejsi Enterprises, Inc.,
and as trustee of the Lola Brown Trust No.
1B
Exhibit 5
LENDING AND LETTERS OF CREDIT SERVICES TERMS SHEET
I. DEFINITIONS
In this Terms Sheet:
ACCOUNTS means all or any Collateral Accounts or Collateral Deposit Accounts
opened and/or maintained pursuant to, or for the purposes of, the Agreement;
ADVANCE means an advance made or to be made by the Bank to the Client under
the Agreement or, as the case may be, the outstanding principal amount of any
such advance;
ADVANCE VALUE means, at any date, the value of any item of Collateral
expressed as a Dollar Amount and determined by the Bank in accordance with
column A of the Schedule and Collateral Advance Value means, at any date, the
aggregate value (so determined) of all Collateral;
AGREEMENT means the Letter of which this Terms Sheet forms part together with,
in the case of Letters of Credit, the request for Issuance of any Letter of
Credit made by the Client to the Bank as referred to in Clause VI.A;
BANK MLIB Ltd (and other Merrill Lynch Bank, if applicable).
BASE RATE means the floating annual rate of interest determined by the Bank
based on a weighted average of rates on the second Business Day before the first
Business Day of each week the Bank offers deposits in the relevant currency to
leading banks in the London Inter Bank Market, and for such terms of one night,
one week and one month, or if any such deposits are not offered by the Bank at
the relevant time, the rate equal to its cost of such a deposit at the relevant
time (such floating annual rate to change when and as such base rate changes);
BUSINESS DAY means a day on which deposits in Dollars and any other relevant
currency may be dealt in on the London Inter Bank Market and banks are open in
London, New York City and, for the purposes of making payments in currencies
other than ECU, the principal financial center of the country of each such other
relevant currency and, for the purposes of making payments in ECU, a day on
which those banks which operate clearing system in ECU will clear payments in
ECU through such clearing system;
CLIENT means the Person(s) who has/have signed the acknowledgment at the foot
of the Letter to, and forming part of, this Agreement as Client and to whom the
Facility has been made available, subject to the terms hereof;
CLOSE OUT AN OPEN CONTRACT means in the case of a Foreign Exchange Contract
the making of a contract for the purchase against the Bought Currency (as
defined below) by the Client of an equal amount of any currency which the Client
has agreed to sell to the Bank (the Sold Currency ) against another currency
(the Bought Currency ) pursuant to an Open Contract previously entered into
having the same Value Date and otherwise matching that Open Contract so as to
create a level position in the Sold Currency and, to that extent, to fix in the
Bought Currency the amount of profit or loss arising to the Client from such
Open Contract and, in the case of an Option Contract, the making of an Option
Contract equal and opposite to such Open Contract relating to the same Value
Date and otherwise matching that Open Contract. Where only a part of an Open
Contract is closed out, the remaining part thereof shall, for the purposes of
the Agreement, be considered an Open Contract;
COLLATERAL means all Securities (including all certificates, stock notes and
other documents relating thereto) and cash balances (provided that such cash
balances are in currencies which are acceptable to the Bank) in the Accounts and
which are charged and pledged in favor of the Bank to its satisfaction;
COLLATERAL ACCOUNT means the one or more accounts in the control of the Bank
opened pursuant to, or used for the purposes of, the Agreement with or through a
member of the Merrill Lynch Group in respect of Securities purchased or owned by
the Indemnifier and entitled or marked MLIB/[Indemnifier s name] Collateral
Account , all such Collateral Accounts to be maintained under the complete
discretion of the Bank;
COLLATERAL DEPOSIT ACCOUNT means the one or more deposit accounts opened
and/or maintained by the Indemnifier with the Bank and/or, as the case may be,
by the Bank with a member of the Merrill Lynch Group pursuant to, or used for
the purposes of, the Agreement (there being a separate account or, as the case
may be, sub-account for each currency in which deposits are made) and entitled
MLIB/[Indemnifier s name] Blocked Account , all such Collateral Deposit
Accounts to be maintained under the complete discretion of the Bank;
DOLLARS(S) means the lawful currency of the United States of America;
DOLLAR AMOUNT means, at any date, the value expressed in Dollars of (as the
case may be) (1) an Advance, (2) any Letter of Credit Exposure, (3) any other
amount outstanding hereunder, or (4) any Collateral (recalculated, where in a
currency other than Dollars, as at that date, at the Bank s applicable spot rate
of exchange for the purchase of Dollars with the relevant currency or, in the
case of any Advance, to the extent the Client s foreign exchange liabilities are
hedged by an Open Contract, at the rate of exchange fixed for the purposes of
that Open Contract);
ECU means European Currency Units, being units of account for the time being
used in the European Monetary System;
EVENT OF DEFAULT means one of the events described in Clause XIX;
FACILITY means any or all of the facilities for the making of Advances, the
entering into of Foreign Exchange Contracts and/or Option Contracts and the
Issuance of Letters of Credit as are specified in the Letter to, and forming
part of, this Agreement;
FOREIGN EXCHANGE CONTRACT means a contract entered into by he Bank with the
Client under the Agreement to buy or sell against one currency agreed between
the Client and the Bank an amount of another currency agreed between the Client
and the Bank for forward settlement on a stated Value Date;
INDEMNIFIER means the Person(s) who has/have signed the acknowledgment at the
foot of the Letter to, and forming part of, this Agreement as Indemnifier, who
may be the same Persons(s) as the Client, and who has/have deposited Collateral
and, where the (Indemnifier is not the Client, has/have guaranteed the
obligations of the Client under the Agreement;
INTEREST PERIOD means a period by reference to which interest is calculated
and/or payable on an Advance;
LETTER OF CREDIT EXPOSURE means, in relation to a Letter of Credit at any
particular time, an amount (as conclusively determined by the Bank) equal to the
Bank s maximum outstanding liability (whether actual or contingent) under that
Letter of Credit at that time and Total Letter of Credit Exposure means, at
any time, an amount equal to the aggregate of its Letter of Credit Exposure
under each Letter of Credit at that time;
LETTERS OF CREDIT means all or any letters of credit (if any) issued by the
Bank pursuant to the Agreement;
LIBOR means, in relation to a particular Interest Period, the rate per annum
equal to the rate (as determined by the Bank) at which, at or about 11:00 a.m.
(London Time) or, in the case of Advances denominated in Sterling, or, in the
case of other currencies, on the second Business Day before, the first day of
that Interest Period, the Bank offers deposits to leading banks in the London
Inter Bank Market in an amount comparable to and in the currency of the relevant
Advance and for that Interest Period or, if no such deposits are offered by the
Bank at the relevant time, the rate equal to its cost of that Advance for that
Interest Period;
MAINTENANCE VALUE means, at any time, the value of any item of Collateral
expressed as a Dollar Amount and determined by the Bank in accordance with
column B of the Schedule and Collateral Maintenance Value means, at any date,
the aggregate value (so determined) of all Collateral;
MATURITY DATE means the date on which the Facility terminates pursuant to
Clause III;
MERRILL LYNCH GROUP means Merrill Lynch & Co. Inc. together with any company
(whether now existing or hereafter formed) of which Merrill Lynch & Co. Inc. is
or becomes a Subsidiary and all companies (whether now existing or hereafter
formed or acquired) which are Subsidiaries of Merrill Lynch & Co. Inc. or any
such company including, but not limited to, Merrill Lynch International & Co.
And Merrill Lynch, Pierce, Fencer & Smith, Inc. and any partnership,
association, firm or other organization (whether now existing or hereafter
formed or acquired) which is owned or controlled (whether directly or indirectly
and whether by the ownership of share capital, possession of voting powers,
contract or otherwise) by Merrill Lynch & Co. Inc. and/or any such company
and/or one or more of their Subsidiaries;
OPEN CONTRACT means a Foreign Exchange contract and/or an Option Contract
which has not been terminated in accordance with Clause XX.A.2 or closed out;
OPEN CONTRACT means a contract entered into by the Bank with the Client under
the Agreement for the purchase from, or sale to, the Client of an option to
purchase or sell one currency against an amount of another currency on a stated
Value Date, at the rate of exchange agreed between the Bank and the Client;
PERSON(S) includes/include any individual, company, corporation, firm,
partnership, joint venture, association, organization, trust, state or agency of
a state (in each case, whether or not having separate legal personality);
RELEVANT DATE means (as the case may be ) (1) the date of any payment pursuant
to Clause VII.A.3, (2) the date on which any losses, expenses, costs, damages,
claims, demands, charges or liabilities were made against or suffered, incurred
or sustained by the Bank, or (3) in the case of any other amount payable to the
Bank hereunder, the date of demand therefor by the Bank on the Client, or as the
case may be, the Indemnifier;
SCHEDULE means the schedule attached to the Letter to, and forming part of,
this Agreement as the same may be amended and/or supplemented from time to time
by the Bank in its absolute discretion;
SECURITIES means securities and instruments (including but not limited to
options, futures and bearer securities and instruments) and other rights and
things, in possession or in action, in each case acceptable to the Bank and of a
class detailed in Part 1 of the Schedule;
SUBSIDIARY means, at any time, in relation to a company, any other company
which is directly or indirectly controlled, or more than 50 percent of whose
issued or outstanding shares or stock having general voting power in ordinary
circumstances is beneficially owned, directly or indirectly, by that first
company;
SUM OUTSTANDING means, as of a particular date, the aggregate Dollar Amount of
all amounts (whether principal, accrued interest, fees, or otherwise)
outstanding hereunder, as at that date, including in respect of foreign exchange
transactions unrealized and realized losses (less any unrealized profit and any
profit realized before the applicable Value Date)(where losses and profit are as
determined by the Bank) under the Agreement but not including any Letter of
Credit Exposure;
VALUE DATE means the date of settlement of a Foreign Exchange Contract or, as
the case may be, pursuant to the exercise of an Option Contract.
II. PURPOSE
The client shall use the Facility to finance the purchase of Securities, for the
repayment of Advances, to reduce the Letter of Credit Exposure or for such other
purposes as may be agreed by the Bank.
III. TERM
The Facility shall terminate, and the Sum Outstanding shall be repaid, on the
Maturity Date (as specified in the Letter to, and forming part of, this
Agreement) or, if earlier, on 90 (ninety) days written notice given by the Bank
to the Client at any time.
IV. CONDITION PRECEDENT TO EACH ADVANCE
Without prejudice to (A) any other requirements of the Bank in relation to any
Advance, and (B) the right of the Bank to refuse to make an Advance in its
absolute discretion, the making of each Advance will be conditional on the
Client giving to the Bank notice satisfactory to the Bank not later than 12 noon
(London time) on the third Business Day before the proposed date (which must be
a Business Day) of the relevant Advance requesting the Advance of all or part of
the unused part of the Facility.
For this purpose, the unused part of the Facility shall be the amount of the
Facility, as specified in the Letter to, and forming part of, this Agreement, or
such other amount as the Bank shall specify as the amount of the Facility from
time to time, less the sum of (1) the aggregate Dollar Amount (as at the
proposed date of the Advance) of all outstanding Advances and of the Total
Letter of Credit Exposure, and (2) the aggregate Dollar Amount (as at the
proposed date of the Advance) of all outstanding interest capitalised pursuant
to Clause XVII.D.
V. FOREIGN EXCHANGE
A. The Bank shall be entitled, but not bound, to act on the request of
the Client to enter into a Foreign Exchange Contract and/or an
Option Contract.
B. One each applicable Value Date, any costs, expenses or losses
arising as a result of the Foreign Exchange Contract shall be either
paid by the Client to the Bank on that date or (if so requested by
the Client and subject always to the terms hereof) paid by the
Client on that date from the proceeds of an Advance.
VI. LETTERS OF CREDIT
A. The Bank shall be entitled, but not bound, to act on the request of
the Client for Issuance of a Letter of Credit made by the Client to
the Bank specifying the beneficiary, the amount and the expiry date
of such Letter of Credit.
B. Each of the Client and the Indemnifier agrees that:
B.1. the Bank shall be entitled to rely without further enquiry on
drafts and other documents presented under any Letter of
Credit which appear to be in order and duly signed;
B.2. neither the Bank nor its correspondents shall be responsible
for performance by any beneficiary of its obligations to the
Indemnifier or the Client, nor for any loss or damage to the
goods forming the subject of any Letter of Credit, however
caused, nor in the event of any misdescription,
misrepresentation, mistake, error or irregularity as to the
goods or quantity, quality, nature, size or value thereof, or
in the drafts or other documents;
B.3. all directions and correspondence relating to the Letters of
Credit are to be sent at the risk of the Client and the
Indemnifier, and the Bank shall not be liable or responsible
for any inaccuracy, interruption, error delay in transmission
or delivery by post, telegraph or cable or for any accuracy of
translation.
C. Subject to the law and customs and practices of trade existing in
the area where the relevant beneficiary is located or to the extent
it is otherwise agreed, or the same is inconsistent herewith, each
Letter of Credit shall be subject to, and performance by the Bank,
its correspondents and each beneficiary of a Letter of Credit shall
be governed by, the Uniform Customs and Practice for Documentary
Credits (1983 Revision, ICC Publication No. 400) or its subsequent
revisions.
VII. GUARANTEE AND INDEMNITIES
A. Each of the Client and the Indemnifier hereby unconditionally and
irrevocably;
A.1. agrees on demand to indemnify the Bank from and against all
losses, expenses, costs, actions, proceedings, damages,
claims, demands, charges or liabilities which the Bank may at
any time suffer, incur or sustain or which may be brought,
made or preferred against the Bank in relation to or arising
out of any Letter of Credit (including but not limited to, any
foreign exchange premium, commission, cost or loss involved in
purchasing or borrowing the amount of any payment in
connection therewith and any interest or other cost or loss
involved in funding, by whatever means and in whatever
currency the Bank may consider appropriate, the amount of any
payment in connection therewith);
A.2. authorizes the Bank on first claim or demand to make any
payment which may be, or may appear or purport to be, claimed
or demanded from the Bank in relation to or arising out of any
Letter of Credit without requiring or obtaining any evidence
or proof that the amount claimed or demanded is due and
payable and without notice or reference to or the agreement of
or further authority from the Indemnifier or the Client;
A.3 agrees that any payment which the Bank shall make in
accordance or purported accordance with a Letter of Credit
shall be binding on the Client and the Indemnifier and shall
be accepted by the Client and the Indemnifier as conclusive
evidence of the Bank s liability to make such payment
(notwithstanding that such payment may have been made after
the stated period of validity or expiry date of any Letter of
Credit, unless prior to such payment the relevant Letter of
Credit shall be have been returned to the Bank or otherwise
entirely cancelled in a manner in form and substance
satisfactory to the Bank);
A.4. agrees to pay to the Bank on demand and in the currency or
currencies specified by the Bank any amount payable to the
Bank under A.1 above, together with interest thereon in such
currency(ies) from the Relevant Date to the date on which the
Bank shall have received all amounts payable to it hereunder
at the rate per annum involved in funding for such period, by
whatever means (whether from the Bank s own resources and/or
deposits or borrowing from third parties and/or otherwise) and
in whatever currency the Bank may consider appropriate; and
A.5. as security for its obligations under the Agreement,
authorizes the Bank and each other member of the Merrill Lynch
Group to debit (without demand on, notice or reference to, or
further authority from, it) any then existing account of it
with the Bank and/or such member with the whole or any part of
any amount payable to the Bank under the Agreement and/or
interest thereon pursuant to A.4 above or XVII.E below,
whether or not any such account shall be overdrawn or may
become overdrawn by reason of such debit and whether or not
any such amount and/or interest is payable in the same
currency as that in which any such account is denominated.
B. The Indemnifier, if not the Client, hereby unconditionally and
irrevocably agrees that:
B.1. if for any reason the Client does not pay any sum payable by
it as provided in the Agreement by the time and on the date
specified in the Agreement and otherwise in the manner
specified in the Agreement (whether on the normal due date, on
acceleration or otherwise), the indemnifier will pay that sum
on that date and in that manner;
B.2. as between the Indemnifier and the Bank but without affecting
the Client s obligations, the Indemnifier shall be liable
under B.1 above and B.5 below as if it were the sole principal
debtor and not merely a surety. Accordingly, it shall not be
discharged, nor shall its liability be affected, by reason of:
B.2.a. any time, indulgence, waiver or consent at any time given to
the Client or any other Person,
B.2.b. any amendment to any other clause of the Agreement or to any
security or other guarantee or indemnity,
B.2.c. the making or absence of any demand on the Client or any other
Person for payment,
B.2.d. the enforcement or absence of enforcement of the Agreement or
of any security or other guarantee or indemnity,
B.2.e. the release of any such security, guarantee or indemnity,
B.2.f. The dissolution, amalgamation, reconstruction or
reorganization of the Client or any other Person or
B.2.g. the illegality, invalidity or unenforceability of or any
defect in any provision of the Agreement or any of the
Client s obligations under it or any other circumstance which
might otherwise constitute a legal or equitable discharge or
defence to it;
B.3. the obligations of the Indemnifier under B.1 above and B.5 below are
and will remain in full force and effect by way of continuing
security until no sum remains to be lent and until the Sum
Outstanding and all other sums expressed to be payable to the Bank
under the Agreement have been properly and duly paid in full and the
Total Letter of Credit Exposure is zero. Furthermore, those
obligations are additional to, and not instead of, any security or
other guarantee or indemnity at any time existing in favor of the
Bank, whether from the Client, the Indemnifier or otherwise. The
Indemnifier irrevocably waives all notices and demands whatsoever;
B.4. so long as any sum remains to be lent and until the Sum Outstanding
and all other sums expressed to be payable to the Bank under the
Agreement have been properly and duly paid in full and the Total
Letter of Credit Exposure is zero;
B.4.a. any right of the Indemnifier, by reason of performance of any
of its obligations under B.1 above or B.5 below, to be
indemnified by the Client or to take the benefit of or enforce
any security or other guarantee or indemnity shall be
exercised and enforced by the Indemnifier only in such manner
and on such terms as the Bank may require; and
B.4.b. any amount received or recovered by the Indemnifier as a
result of any exercise of any such right shall be held in
trust for the Bank and immediately paid to the Bank;
B.5. Indemnifier shall on demand indemnify the Bank against any funding
or other cost, loss, expense or liability (including loss of the
Spread (as defined below)) sustained or incurred by it as a result
of it being required for any reason to refund all or part of any
amount received or recovered by it in respect of any sum payable by
the Client under the Agreement;
B.6. amounts received or recovered by the Bank (otherwise than as a
result of a payment by the Client) in respect of any sum payable by
the Client under the Agreement may at the discretion of the Bank
reasonably exercised be placed in a suspense account and kept there
for such reasonable period as the Bank may decide; and
B.7. a notice from an officer of the Bank as to any amount payable to the
Bank hereunder shall, save for manifest error, be final, conclusive
and binding on the Indemnifier.
C. As a separate and alternative stipulation, the Indemnifier unconditionally
and irrevocably agrees that any sum expressed to be payable by the Client
under the Agreement but which is for any reason (whether or not now
existing and whether or not now known or becoming known to any party to
the Agreement) not recoverable from the Indemnifier on the basis of a
guarantee shall nevertheless be recoverable from it as if it were the sole
principal debtor and shall be paid by it to the Bank on demand.
VIII. ADVANCE VALUE
The Indemnifier shall deposit or transfer monies and/or Securities (and all
related documents as the Bank shall direct) with the Bank for the credit of the
Accounts, so that:
A. In relation to Advances and Letters of Credit, either:
A.1. as at the proposed date of each Advance and/or of Issuance of each
Letter of Credit, as the case may be, the aggregate of the Dollar
Amount of such Advance or, as the case may be, Letter of Credit
Exposure under the relevant Letter of Credit, and the Sum
Outstanding together with the Total Letter of Credit Exposure is not
greater than the Collateral Advance value; or
A.2. the aggregate Advance Value of the Collateral deposited
(specifically and solely in respect of that Advance or, as the case
may be, the Issuance of a particular Letter of Credit) on, or within
the three Business days falling before, the proposed date of each
Advance or, as the case may be, Issuance of such Letter of Credit is
equal to or exceeds the principal amount of the proposed Advance or
the Letter of Credit Exposure under the relevant Letter of Credit
respectively; and
B. In relation to Foreign Exchange Contracts and Option Contracts, as at the
proposed date of entry into the relevant contract, and after giving effect
thereto, the Sum Outstanding together with the Total Letter of Credit
Exposure is not greater than the Collateral Advance Value.
IX. MAINTENANCE VALUE
If, at any date, the aggregate of the Sum Outstanding and the Total Letter of
Credit Exposure exceeds the Collateral Maintenance Value, the Indemnifier shall,
within two Business Days of a request from the Bank, deposit or transfer monies
and/or Securities (and all related documents as the Bank shall direct) with the
Bank for credit of the Accounts such that the Collateral Maintenance Value (and
for the purposes only of this calculation Collateral Maintenance Value shall be
determined as if each of the percentages in column B of the Schedule had been
decreased by 5% (five percent)) equals or exceeds the aggregate of the Sum
Outstanding and the Total Letter of Credit Exposure.
X. COLLATERAL VALUE CALCULATION
For the purpose of determining Advance and Maintenance Values hereunder, the
value of Collateral shall be calculated, in the case of (A) Securities, as a
percentage of the Dollar Amount of the fair market value (which shall exclude
any unpaid dividend or accrued interest thereon and which shall be determined by
the Bank in its absolute discretion) of such Securities, and (B) cash balances,
as a percentage of the Dollar Amount of each deposit of each currency. The
percentages referred to above shall be fixed by, and may be changed by, the Bank
at or to such levels as (in its absolute discretion) it sees fit.
XI. FEES
A. The arrangement fee specified in the Letter to, and forming part of, this
Agreement shall be payable in such way, in such currencies and at such
times as specified in such Letter or as the Bank may otherwise allow.
B. In addition the Client shall at or before Issuance of each Letter of
Credit (or at such other times as the Bank may allow) pay to the Bank such
fees in such currencies in such respect of such Letter of Credit as the
Client and Bank shall have agreed.
XII. SECURITY
A. Each of the Client and the Indemnifier, as continuing security for the due
performance of all its obligations and payment of all its liabilities
hereunder (including in the case of the Indemnifier the guarantee of
foreign exchange transactions) and under any other agreement between it
and the Bank or any member of the Merrill Lynch Group and as beneficial
owner, hereby:
A.1. by this Charge assigns absolutely to the Bank all monies (and all
its right, title and interest to or in such monies) standing to the
credit (from time to time) of each of the Collateral Deposit
Accounts and each of the Collateral Accounts and of each other
account specified in the schedule hereto, provided always that if
the Client and the Indemnifier shall have paid all monies and
satisfied all liabilities, present or future, actual or contingent
for which they are now or may at any time or times after the date
hereof be indebted or liable to the Bank on any Account or in any
manner whatsoever and whether alone or jointly with any other
person, together with all interest, costs, commissions, charges and
expenses which the Bank may hereunder or in the course of its
business as banker charge against the Client or the Indemnifier and
all costs, charges and expenses (including all legal fees and
expenses) which the Bank may incur in enforcing or obtaining payment
from the Client or the Indemnifier or in attempting to do so, and if
the Bank is under no obligation to make available any further credit
or advance or facility hereunder to the Client, the Bank will at the
request and cost of the Client and the Indemnifier re-assign the
Collateral Deposit Accounts and the Collateral Accounts and the
other accounts as aforesaid (or such of them as are still subsisting
and vested in the Bank) to the Client or, as the case may be, the
Indemnifier.
A.2. charges and pledges in favor of the Bank by way of first fixed legal
mortgage all its interests in and rights in respect of Securities
deposited or transferred at the direction of the Bank for the credit
of the Collateral Accounts and all Securities from time to time held
therein or subject thereto and all proceeds of any realization or
redemption of all such securities;
A.3. charges and pledges in favor of the Bank all its interests in and
rights in respect of all Securities and other securities or property
deposited with the Bank and/or any other member of the Merrill Lynch
Group; and
A.4. (in the case of the Client) charges in favor of and assigns
absolutely to the Bank the full benefit of each Foreign Exchange
Contract and Option Contract.
B. The security hereby created shall affect all dividends, distributions and
interest on the Securities or other property hereby charged, whether
capital or income, and all property distributed, paid, accruing or offered
at any time on, to, in respect of, or in substitution for, any Securities
or other securities or property hereby charged.
C. The security hereby created shall be a continuing security notwithstanding
any intermediate payment or settlement of account and, without prejudice
to the generality of the foregoing, shall continue in full force and
effect until the Bank has executed a formal release of such security which
it may do from time to time in respect of the whole or part only of the
Collateral. Any withdrawal of any of the Collateral shall operate as a
release thereof and the provisions of the Agreement shall continue to
apply to the remainder of the Collateral.
D. None of the Collateral (nor the Indemnifier s right, title and interest to
or in the Collateral) shall be capable of being withdrawn, assigned,
transferred or otherwise disposed of or encumbered (whether in whole or in
part) except as specifically provided in the Agreement.
E. Neither the Bank nor any of its agents, representatives, correspondents or
nominees shall have any liability whatsoever for any failure to present
any Securities or other securities or property hereby charged for payment
of any principal, dividends, interest or any other amount payable in
respect thereof (whether at maturity, on redemption nor otherwise) or to
ensure that any such amounts are paid, received or collected, or to secure
that the correct amounts (if any) are paid or received, or for any failure
to take up any (or any offer of any) property paid, distributed, accruing
or offered at any time on, to, in respect of, or in substitution for, any
Securities or other securities or property hereby charged.
F. Each of the Client and the Indemnifier, at its expense, will do or cause
to be done all things which are either necessary or requested by the Bank
(1) to enable the Bank to enjoy, exercise or enforce its rights as a
secured party under the agreement (2) to evidence, and to establish and
maintain the perfection and first priority of, the Bank's security
interest in the Collateral. Without limiting the generality of the
foregoing, each of the Client and the Indemnifier, at its expense, will
execute and give or file, or both, all notices and documents in such
manner, to such person and at such places as may be requested by the Bank
to establish and maintain the perfection and first priority of the Bank's
security interest in the Collateral.
XIII. WITHDRAWALS
Until such time as the security hereby created shall become enforceable, and
provided that thereafter the aggregate of the Sum Outstanding and the Total
Letter of Credit Exposure does not exceed the Collateral Advance Value, the
Indemnifier may request the withdrawal of any of the Collateral and the Bank
shall consider but shall not be obliged to accede to such request.
XIV. PAYMENTS
A.1. On each date on which an Advance is to be made the Bank shall make
the same available to the Client before close of business at such
account of the Client as may be specified at the time of requesting
that Advance and which, in the case of payments in ECU, shall be
with a bank which is a member of an ECU clearing system. The amount
to be made available shall be, if the Advance is to be in Dollars,
the amount so requested by the Client and, in any other case, the
equivalent (as determined by the Bank) of that amount in the
relevant currency.
A.2. All payments due from the Client hereunder shall be made to such
account of the Bank as it shall notify to the Client (which, in the
case of payments in ECU, shall be with a bank which is a member of
an ECU clearing system) and in the currency in which they are due by
such time in the relevant financial center as is necessary to ensure
that the Bank receives:
A.2.a. in the case of Dollars, same day value funds,
A.2.b. in the case of ECU, immediately available and freely
transferable funds and
A.2.c. in the case of other currencies, such funds as may be
generally accepted for the settlement in the place of payment
of international payments in that currency, on the day in
question.
B. All payments by the Client and the Indemnifier shall be made free and
clear of any restrictions or conditions, without setoff or counterclaim,
and free and clear of, and (subject as hereinafter provided) without
deduction for, any taxes, deductions or withholdings of any nature. If
any such deduction or withholding is required by law to be made from any
payment, the Client or, as the case may be, the Indemnifier shall pay in
the same manner and at the same time such additional amounts as will
result in receipt by the Bank of such amount as would have been received
by it had not such deduction or withholding been required to be made.
XV. REPAYMENT
Each Advance shall be repaid by the Client in full and in the currency in which
it is denominated on the Maturity Date or on any earlier date of termination
pursuant to Clause XX.A.1 or XXIV.C.4.b.
XVI. PREPAYMENT
The Client may if it gives to the Bank not less than three Business Days prior
notice prepay (1) any Advance on which interest is calculated by reference to
LIBOR on the last day of any Interest Period relating thereto and (2) any
Advance on which interest is calculated by reference to Base Rate at any time.
Any such prepayment must be accompanied by accrued interest on the Advance
prepaid. Upon notice of any such prepayment the Bank may (in its absolute
discretion) close out any Open Contract.
XVII. INTEREST
A. Interest shall be calculated and payable on each Advance by reference to
successive Interest Periods. In the case of each Advance its first
Interest Period shall begin on the proposed date of that Advance and each
subsequent one shall begin on the last day of the previous one. Each
Interest Period shall be of 1, 3, 6 or 12 (one, three, six or twelve)
months duration (or such other period as may be agreed between the Client
and the Bank) as selected by the client in a notice received by the Bank
not later than 12:00 noon (London time) on the third Business Day before
the first day of that Interest Period. However, the Client may select an
Interest Period of 12 (twelve) months only if the Bank (in its absolute
discretion) agrees. If on the first day of any Interest Period it is
apparent that such Interest Period would otherwise extend beyond the
Maturity Date then such Interest Period shall instead end on the Maturity
Date and, subject thereto, any Interest Period for which no effective
selection notice is received shall be of 3 (three) months duration.
B. The rate of interest applicable for a particular Interest Period
shall be the rate per annum equal to the sum of the Spread (as
specified in the Letter to, and forming part of, this Agreement) and
LIBOR for that Interest Period and, where the Advance is denominated in
Sterling, the rate certified by the Bank on the first day of that
Interest Period to be that which expresses the additional cost to it of
making, maintaining or funding a Sterling loan for that Interest Period
as a result of complying with the reserve asset ratio, cash ratio,
secured deposit, special deposit, liquidity, monetary control and/or
other requirements for the time being of the Bank of England and/or
any other regulatory body or authority of the United Kingdom.
C. However, if the Client so elects, in relation to an Advance to be
denominated in Dollars or, if the Bank (in its absolute discretion)
agrees, any other currency, in the request for that Advance pursuant to
Clause IV that interest shall be calculated on that Advance by reference
to Base Rate, the provisions of A and B above shall apply and the rate of
interest applicable to that Advance shall be the rate per annum equal to
the sum of the Spread and the applicable Base Rate.
D. On the last day of each Interest Period or, where interest on any Advance
is calculated by reference to Base Rate, monthly, the Client shall pay the
unpaid interest accrued during that Interest Period or, as the case may
be, the preceding month, on the Advance to which it relates, in the
currency in which that Advance is denominated and at the rate(s)
applicable for that Interest Period or, as the case may be, month.
However, if the Bank (in its absolute discretion) so agrees, any unpaid
interest may be added to the amount of the advance to which it relates and
interest calculated in accordance with B or, as the case may be, C above
shall thereafter be paid thereon (and such capitalized interest shall not
come within the provisions of E below).
E. If the Client or the Indemnifier does not pay any sum payable hereunder
when due, it shall pay interest on the amount from time to time
outstanding in respect of that overdue sum for the period beginning on its
due date and ending on the date of its receipt by the Bank (both before
and after judgment). Interest shall be calculated from time to time at
the rate per annum (as determined by the Bank) equal to the sum of 1%, the
Spread and the rate equal to the Bank s cost (including in the case of
overdue amounts in Sterling the additional cost as contemplated by B
above) of that overdue sum for such periods as the Bank may from time to
time select; such interest shall be payable on demand. All interest
payable under this sub-clause which is not paid when due shall be added to
the overdue sum and bear itself interest accordingly.
XVIII. REPRESENTATIONS AND WARRANTIES
A. Each of the Client and the Indemnifier represents and warrants to the Bank
that:
A.1. (if a legal person)
A.1.a. each of them is a company, society or partnership duly
established and existing under the laws of the jurisdiction of
its incorporation or establishment and has the power and
authority to own its assets and to conduct the business which
it conducts; and
A.1.b. the acceptance of and performance under the Agreement by
each of them will not violate or exceed any borrowing or other
powers or restrictions granted or imposed under any law to
which it is subject, its constitutional documents or any
agreement, undertaking or licence to which it is a party or
which is binding on it or its assets.
A.2. all acts, conditions and things required to be done, fulfilled and
performed in order to enable each of them lawfully to enter into,
exercise its rights and perform its obligations under the Agreement
and to ensure that its obligations are legal, valid and binding have
been done, fulfilled and performed;
A.3. each of them has the power to enter into, exercise its rights and
perform and comply with its obligations under the Agreement and has
taken all necessary action to authorize the execution, delivery and
performance of the Agreement;
A.4. each of them will
A.4.a. obtain and maintain in effect all necessary consents and the
like of any governmental or other regulatory body or authority
applicable to its obligations under the Agreement;
A.4.b. comply with the terms of the same and with all applicable
laws, regulations and directives or the like (whether or not
having the force of law) of such bodies and authorities; and
A.4.c. forthwith upon demand by the Bank, deliver to the Bank copies
of all such consents and the like or such other evidence of
the existence of the same and such evidence of compliance with
the same and with any such laws, regulations, directives and
the like as the Bank may reasonably require;
A.5. their respective obligations under the Agreement are binding and
enforceable at law;
A.6. neither of them is in default under any agreement to which it is a
party or by which it may be bound and no litigation, arbitration or
administrative proceedings are current or pending, which default,
litigation, arbitration or administrative proceedings are material
in the context of the Agreement;
A.7. there are, to the best of their knowledge and belief, no
circumstances presently existing which could give rise to a claim,
and no claims outstanding, under any Letter of Credit; and
A.8. it is not necessary or advisable in order ensure the validity,
effectiveness, performance or enforceability of the Agreement
(including in particular the perfection of the security created by
or pursuant to the Agreement) that any documented be filed,
registered or recorded in any public office or elsewhere.
B. The Indemnifier further represents and warrants to the Bank that
B.1. except by the Agreement, the Indemnifier has not assigned,
transferred or otherwise disposed of the Collateral (or its rights,
title and interest to and in the Collateral), either in whole or in
part, nor agreed to do so, and will not at any time do so or agree
to do so, and the Indemnifier is and will at all times be the sole
beneficial owner of the same and all such Collateral is or, as the
case may be, will be freely transferable without the need of any (or
any further) action on the part of the Indemnifier; and
B.2. except for the security created by or pursuant to the Agreement, no
mortgage, charge, pledge, lien or other encumbrance or security of
any kind exists on or over the Collateral (or the Indemnifier's
right title and interest to and in the Collateral), either in whole
or in part, nor has the Indemnifier agreed to create any such other
security nor will it at any time do so or agree to do so.
B.3. The benefit the Indemnifier receives from participating in the
transaction will be at least equal to its liability with respect to
the Letter of Credit.
C. Each of the Client and the Indemnifier represents to the Bank that each of
the warranties in A above and the Indemnifier represents to the Bank that
each of the warranties in B above will be correct and complied with in all
respects during the continuance of the Agreement and/or so long as any sum
remains payable under the Agreement and/or so long as there is any Total
Letter of Credit Exposure as if repeated then by reference to the then
existing circumstances.
XIX. EVENTS OF DEFAULT
It shall be an Event of Default if:
A. The Client or the Indemnifier does not pay any sum payable by it under the
Agreement or under any other agreement with the Bank or with any other
member of the Merrill Lynch Group on its due date; or
B. The Client or the Indemnifier fails to provide information and/or
documents as requested by the Bank pursuant to Clause XXIV.C.2.a or the
Bank gives notice to the Client or the Indemnifier pursuant to Clause
XXIV.C.4.b; or
C. Any representation, warranty or statement by the Client or the Indemnifier
in the Agreement or in any document delivered under it is not complied
with or is or proves to have been incorrect in any respect when made or,
if it had been made on any later date by reference to the circumstances
then existing, would have been incorrect in any respect on that later
date; or
D. The Client or the Indemnifier fails duly to perform any one or more of its
other obligations under the Agreement or under any other agreement with
the Bank or with any other member of the Merrill lynch Group; or
E. At any date, the aggregate Dollar Amount of the aggregate of the Sum
Outstanding and the Total Letter of Credit Exposure exceeds 102.5 (one
hundred and two and a half) percent of the Collateral Maintenance value;
F. Any provision of the Agreement which is material to the interests of the
Bank is not (or is claimed by the Client or the Indemnifier not to be) in
full force and effect; or
G. The Bank determines that the security (in whole or in part) hereby created
is not in full force and effect or does not have the priority stated
herein; or
H. The Bank determines that it is or will become unlawful or contrary to any
directive or the like (whether or not having the force of law) of any
governmental or other regulatory body or authority for the Client, the
Indemnifier or the Bank to carry out all or any of its obligations
hereunder; or
I. A distress, attachment, execution or other legal process is levied,
enforced or sued out on or against any item of Collateral by any third
party; or
J. A distress, attachment, execution or other legal process is levied,
enforced or sued out on or against any other asset of the Client or the
Indemnifier or (if either or both is or are a body or bodies corporate)
any of their respective Subsidiaries and is not discharged or stayed
within 7 (seven) days; or
K. Any step is taken or legal proceeding is started by any person in the
bankruptcy of the Client or the Indemnifier or for the appointment of a
receiver, administrator, trustee or similar officer of the Client or the
Indemnifier or of any or all of the revenues and assets of the Client or
the Indemnifier or (if either or both is or are a body or bodies
corporate) the winding-up, administration, dissolution or reorganization
of the Client or the Indemnifier or any of their respective Subsidiaries
(except for the purpose of and followed by a reconstruction, amalgamation
or reorganization on terms approved by the Bank before that step is
taken); or
L. Any indebtedness of the Client or the Indemnifier in respect of monies
borrowed or raised (1) is not paid when due nor within any applicable
grace period in any agreement relating to that indebtedness, or (2)
becomes due and payable before its normal maturity by reason of a default
or event of default, however described; or
M. The Client or the indemnifier or (if either or both is or are a body or
bodies corporate) any of their respective Subsidiaries is insolvent, is
unable to pay its debts as they fall due, stops, suspends or threatens to
stop or suspend payment of all or a material part of its debts, begins
negotiations or takes any proceeding or other step with a view to
readjustment, rescheduling or deferral of all of its indebtedness or any
part of its indebtedness which it would or might otherwise be unable to
pay when due or proposes or makes a general assignment or an arrangement
or composition with or for the benefit of creditors; or
N. If the Client and/or the Indemnifier is acting in the capacity of trustee
of a trust for the purposes hereof, such trust ceases to be perfectly
constituted; or
O. (If an individual or individuals) the Client or the Indemnifier (or, in
the case joint Clients or Indemnifier, the sole survivor thereof) dies or
becomes or is declared (by appropriate authority) incompetent or of
unsound mind; or
P. The authority of any representative of the estate of a deceased or
incapacitated Client or Indemnifier is not (or is claimed by any third
party not to be) in full force and effect; or
Q. Any event occurs which under the laws of any relevant jurisdiction has an
effect equivalent to any of the events referred to in this Clause XIX.
XX. CANCELLATION, ACCELERATION AND ENFORCEMENT
The Client and the Indemnifier each agrees with the Bank (for itself and as
trustee of the benefit of the Client s and the Indemnifier s respective promises
for each member of the Merrill Lynch Group) as follows:
A. At any time after an Event of Default occurs, the Bank may:
A.1. by notice to the Client declare all Advances, accrued interest
thereon and any other sum then payable hereunder (other than the
Total Letter of Credit Exposure) and/or by notice to the Client and
the Indemnifier declare an amount equal to the Total Letter of
Credit Exposure to be immediately due and payable, whereupon they
shall become so due and payable, and/or declare the Facility to be
terminated, whereupon it shall so terminate. Without prejudice to
Clause XII or any other provision of the Agreement any amount so
received by the Bank in respect of the Total Letter of Credit
Exposure may be retained by the Bank for the purpose of payment
and/or paid in accordance with the relevant Letter(s) of Credit
and/or retained by the Bank for the purpose of application and/or
applied by the Bank in or towards satisfaction of the Client's
obligations under or in connection with the Agreement;
A.2. without notice to the Client or the Indemnifier, close out, on the
Client s behalf, all or any Open Contracts (in whole or from time to
time in part) as the Bank in its sole discretion may determine,
whereupon any costs, expenses and losses arising as a result shall
be immediately due and payable by the Client and the Indemnifier to
the Bank, or, at the Bank s option, by notice to the Client,
terminate all or any Open Contracts (in whole or from time to time
in part) as the Bank in its sole discretion may determine, whereupon
the obligations of the Bank and the Client to make payments to the
other shall to the extent provided in the notice be canceled and an
amount of compensation (calculated in accordance with paragraphs
A.2.a., A.2.b and A.2.c below) shall become due and payable by the
Client to the Bank (or vice versa):
A.2.a. there shall be ascertained in relation to each Open Contract
so terminated the difference between;
i) the amount of currency which the Bank was due to deliver to
the Client under that Open Contract; and
ii) the amount of the same currency which the Bank would be due
to deliver to the Client if on the date of termination of
each such Open Contract (the Open Contract Termination
Date ) it were to enter into a contract with the Client at
the rate of exchange at which, at or about 11:00 a.m.
(London time) on that Open Contract Termination Date, the
Bank could enter into a contract in the foreign exchange
market to purchase for delivery on the Value Date of that
Open Contract the same amount of the currency which the
Client was due to deliver under that Open Contract.
Where the amount in (i) exceeds the amount in (ii) the relevant
difference (converted where applicable as hereinafter provided)
is hereinafter called a Positive Amount and where the amount in
(ii) exceeds the amount in (i) a Negative Amount ;
A.2.b. If any such difference is in a currency other than Dollars, it
shall be converted into Dollars at the rate of exchange at
which, at or about 11:00 a.m. (London time) on the relevant
Open Contract Termination Date, the Bank could enter into a
contract on the foreign exchange market to purchase for
delivery on the Value Date of that Open Contract or on the
second Business Day after that Open Contract Termination Date
(whichever is later) that other currency in exchange for
Dollars;
A.2.c. There shall then be ascertained the difference between:
i) the sum of the Positive Amounts; and
ii) the sum of the Negative Amounts together with any costs and
expenses arising as a result of the close out.
If the amount in (ii) exceeds the amount in (i) the difference
shall be due and payable immediately by the Client and the
Indemnifier to the Bank. If the amount in (i) exceeds the amount
in (ii) the difference shall, subject to the Sum Outstanding and
all other sums expressed to be payable to the Bank under the
Agreement having been properly and duly paid in full and the
Total Letter of Credit Exposure being zero, be due and payable by
the Bank to the Client;
A.3 without notice to the Client or the Indemnifier and without
prejudice to any other right or remedy, dispose or procure the
disposal, by sale or otherwise, of any Securities or of any other
securities or property whatsoever in respect of any one or more of
the then existing accounts of the Client or the Indemnifier with the
Bank or any or all members of the Merrill Lynch Group, or otherwise
realize or procure the realization of the same, at such time or
times, in such manner, on such terms and at such price or prices
(whether payable or deliverable immediately, on a deferred basis or
by installments) without being responsible for any loss or
diminution in price, as it may think fit and further to exercise all
rights and remedies of a secured party under the Uniform Commercial
Code of the State of New York, including the right to take
possession of, collect and get in all or any part of the Collateral
and to proceed forthwith to sell, assign, give options to purchase,
contract to sell or otherwise dispose of and deliver the Collateral
or any part thereof in one or more parts at public or private sale
at any exchange, broker s board or at any of the Bank s offices or
elsewhere at such prices and on such terms as the Bank deems
appropriate, all without demand for performance, advertisement or
other notice of any kind and apply the proceeds thereof as follows:
A.3.a. first, in or towards payment of all costs and expenses
incurred by the Bank in connection with such disposal;
A.3.b. secondly, in or towards payment and satisfaction of all
sums and liabilities due to the Bank in respect of the
Agreement in such order and manner as the Bank may
determine;
A.3.c. thirdly, in or towards payment and satisfaction of any sums
and liabilities due from the Client or the Indemnifier to
the Bank on any other account and/or to any other member of
the Merrill Lynch Group in such order and manner as the
Bank many determine; and
A.3.d. fourthly, in payment of any surplus to the Indemnifier, the
Client or other Person entitled thereto.
PROVIDED ALWAYS that the Bank shall not be obliged to apply any part
of such proceeds in accordance with sub-clause A.3.d until all
liabilities (including future or contingent liabilities) of, and/or
amounts due to, the Bank under the Agreement have been discharged to
the satisfaction of the Bank and until after it has exercised all
set-offs and other rights which it is expressed to be entitled to
make or exercise under the Agreement. Until such time the proceeds
shall be held in such Collateral Deposit Account or other account
with the Bank as the Bank may (in its absolute discretion) decide.
Upon any disposal of any Securities or of other property made or
purported to be made under the provisions of this Clause a
certificate of any officer or employee of the Bank that a default
has occurred and that the power of disposal has become exercisable
shall be conclusive evidence of that fact in favor of any purchaser
or other Person to whom any of the Securities or other securities or
property may be transferred under such disposal and the Client and
the Indemnifier agree to indemnify the Bank on a full indemnity
basis against any claim which may be made against it by any such
purchaser or person by reason of any defect in title to such
Securities or other securities or property;
A.4. initiate, defend or take part in, on behalf of the Client and/or the
Indemnifier, any legal proceedings relating to the Securities, the
Agreement, any Advance or any Letter of Credit that it may, in its
absolute discretion, deem necessary;
A.5 make or take part in, on behalf of the Client or the Indemnifier,
any arrangement or composition with its creditors in relation to the
Securities, the Agreement, any Advance and any Letter of Credit;
B. In addition to any general lien or similar right to which it may be
entitled by law, the Bank and each other member of the Merrill Lynch Group
may at any time and without notice to the Client or the Indemnifier
combine and consolidate all or any one or more of the then existing
respective accounts of the Client and the Indemnifier with, and
liabilities of the Client or the Indemnifier, respectively, to, the Bank
or such member and/or any member of the Merrill Lynch Group and/or set off
or transfer any sum or sums standing to the credit of any one or more of
the Client s or the Indemnifier s respective accounts in or towards
satisfaction of any of the respective liabilities of the Client and the
Indemnifier to the Bank or any other member of the Merrill Lynch Group,
whether such respective liabilities of the Client and the indemnifier be
actual, future or contingent, primary or collateral and several or joint,
this right being in addition and without prejudice to any Securities or
other securities or property whatsoever which the Bank or such other
member of the Merrill Lynch Group may now or hereafter hold by way of
security;
C. Any or all Securities or other securities or property whatsoever held in
respect of any one or more of the then existing respective accounts of the
Client and the Indemnifier with any or all members of the Merrill Lynch
Group may be sold or realized by or on the instructions of any and each
such member at any time and without notice to the Client or the
Indemnifier by such member whenever in its discretion such member
considers it necessary or advisable (and the provisions of A.3 above shall
apply, with any necessary modification);
D. The Bank (and any other member of the Merrill Lynch Group) shall have the
authority to purchase one currency with another for the purposes of this
Clause XX.
XXI. BORROWING OF SECURITIES
A. The Indemnifier hereby authorizes the Bank at any date to lend to itself,
as principal or otherwise, or to others, any Securities subject to the
terms hereof irrespective of the Sum Outstanding and/or the Total Letter
of Credit Exposure as at that date.
B. Securities so borrowed by the Bank shall continue to be taken into account
in determining the Collateral Advance and Collateral Maintenance Values
and for all other purposes of the Agreement.
C. Until such time as the Facility is terminated or the security hereby
created shall become enforceable, whichever may first occur, the
Indemnifier shall (subject always to the security hereby created and the
provisions of the Agreement) have all the incidents of ownership of
Securities loaned to the Bank hereunder, including the right to transfer
them to others.
D. Principal, capital, dividends, interest and other amounts paid on borrowed
Securities will be automatically credited to an appropriate Collateral
Deposit Account.
E. No losses, charges or expenses nor any gain or benefit arising from the
borrowing of Securities by the Bank shall be borne by and/or benefit the
Indemnifier.
XXII. ASSIGNMENT
A. The Agreement shall benefit and be binding on the parties, their
respective successors (but subject to Clause XXIV) and any permitted
assignee or transferee of some or all of a party s rights or obligations
under the Agreement. Any reference in the Agreement to a party shall be
construed accordingly.
B. Neither the Client nor the Indemnifier may assign or transfer all or part
of its rights or obligations under the Agreement
C. The Bank may at any time assign all or part of its rights and/or
obligations under the Agreement. Any such assignee of such rights and
obligations shall be entitled to the full benefit of the Agreement to the
same extent as if it were an original party in respect of the rights or
obligations assigned or transferred to it.
D. The Bank may disclose to a potential assignee or any other Person who has
entered or proposes to enter into contractual arrangements with the Bank
in relation to or concerning the Agreement such information about the
Client, the Indemnifier and the Agreement as it may think fit.
XXIII. MISCELLANEOUS INDEMNITIES
A. The Client and the Indemnifier shall on demand indemnify the Bank against:
A.1. any increased cost (except to the extent that the Client is liable
to compensate it therefor as contemplated by Clause XVII.B) in
maintaining the Facility, the Accounts, all or any part of any
Advance, any Open Contract or any Letter of Credit or any other
amount outstanding under the Agreement or any reduction in the
effective return to the Bank under the Agreement or in the overall
return on its capital which, in the Bank s determination, is
sustained directly or indirectly as a consequence of, or of
compliance with, any present or future law or regulation or any
directive or the like (whether or not having the force of law) of
any governmental or other regulatory body or authority; and
A.2 any funding and any other costs, expense or liability (including
loss of profit and including taxes, any stamp duty or similar tax,
legal fees and Value Added Tax) sustained or incurred by the Bank
(1) in connection with the administration of, or in protecting or
enforcing the Bank s rights under, the Agreement and/or any
amendment thereto; (2) as a result of the occurrence or continuance
of any Event of Default; or (3) as a result of the receipt of
recovery by the Bank of all or any part of an Advance or an overdue
sum otherwise than on the last day of an Interest Period applicable
to that Advance or overdue sum.
B. The currency specified by the Bank under Clause VII.A.4 in respect of any
particular sum and otherwise the currency in which any other sum is due
under the Agreement (the Currency of Account ) shall be the sole currency
of account and payment in respect of that sum. Any amount received or
recovered by the Bank in respect of that sum in a currency other than the
appropriate Currency of Account (whether as a result of, or of the
enforcement of, a judgement or order of a court of any jurisdiction, in
the bankruptcy or winding up of the Client or, as the case may be, the
Indemnifier, the realization of any Collateral or otherwise) shall only
constitute a discharge to the Client; or, as the case may be, the
Indemnifier, to the extent of the amount in that Currency of Account which
the Bank is able, in accordance with its usual practice, to purchase with
the amount so received or recovered in that other currency on the date of
that receipt or recovery (or, if it is not practicable to make that
purchase on that date, on the first date on which it is practicable to do
so). If that amount in that Currency of Account is less than the amount
due to the Bank hereunder, the Client and/or the Indemnifier shall,
without prejudice to the generality of A.2 above, indemnify it against any
loss sustained by it as a result. In any event, the Client and/or the
Indemnifier shall indemnify the Bank against the cost of making any such
purchase.
XXIV. INTERPRETATION
A. Whenever two or more persons become parties to the Agreement as Clients or
as Indemnifiers, the words Client and Indemnifier , respectively shall,
in each Clause of the Agreement, mean and include each and all of those
Persons and (in the case of an individual) shall mean and include the
executors and administrators of that Person. In addition, all duties,
obligations and liabilities assumed by or imposed upon the Client and the
Indemnifier, respectively under this Agreement shall bind all such
respective Persons jointly and each of them severally. All duties,
obligations and liabilities assumed by or imposed on the Client and the
Indemnifier together under this Agreement shall be their joint and several
duties, obligations and liabilities.
B. Where any instruction, notice, demand or request is to be given by joint
Clients or joint Indemnifiers it shall be sufficient if such is given on
behalf of the joint Clients or joint Indemnifiers by one or more of the
joint Clients or joint Indemnifiers, respectively, and the Bank may rely
on such instruction, notice, demand or request as if the same were given
by each of the joint Clients of joint Indemnifiers, respectively.
C. In the event of the death or declared incapacity of any one of joint
Clients or of any one of joint Indemnifiers:
C.1. the surviving Client(s) or, as the case may be, Indemnifiers(s)
shall forthwith give the Bank written notice thereof;
C.2. the Bank shall have the right to determine whether the Facility
shall continue in the name of the surviving Client(s) or, as the
case may be, with the guarantee of the surviving Indemnifiers(s) and
in this regard may:
C.2.a. request such information and/or documents from the surviving
Client(s) or, as the case may be, the surviving
Indemnifiers(s) as it considers relevant and the surviving
Client(s) or, as the case may be, the surviving
Indemnifiers(s) shall supply the same within 14 (fourteen)
Business Days of the date of the Bank s request; and/or
C.2.b. seek legal opinions from legal counsel as to such matters
relevant to the continuance of the Facility and/or any
Letter(s) of Credit as the Bank may request; and/or
C.2.c. take any action it may deem, advisable with respect thereto;
C.3. pending written notice from the Bank under C.4 below:
C.3.a. the surviving Client(s) and/or the representatives(s) of the
estate of the deceased or incapacitated Client(s):
i) may (x) make any repayment or prepayment of any amount
outstanding hereunder and/or (y) close out any Open Contract;
ii) may not request the making of a new Advance or the Issuance
of any Letter of Credit or, subject to (i) above, the
opening of a new Foreign Exchange contract or Option
Contract; and
C.3.b. the surviving Indemnifiers and/or the representatives(s) of
the estate of the deceased or incapacitated Indemnifier:
i) may sell any Securities hereby charged provided that the
proceeds of such sale are credited to a Collateral Account or
Collateral Deposit Account;
ii) subject to (i) above, may not request any withdrawal of
Collateral;
C.4. the Bank may, at any time after such event or declared incapacity,
by written notice to the surviving Clients(s) and the surviving
Indemnifier(s) declare that either:
C.4.a. the Facility shall continue unaffected, subject to the terms
of the Agreement, in the name of the surviving Client(s) and
the rights and obligations of the surviving Indemnifier(s)
shall in any event continue unaffected, provided that the
estate of the deceased or incapacitated Client or, as the case
may be, Indemnifier, shall not be liable for any obligations
under the Facility incurred thereafter but those respective
estates shall remain liable to the Bank in respect of any sum
or loss in any way resulting from the completion of
transactions initiated, and all liabilities incurred, before
the date of such notice by the Bank; or
C.4.b. the Facility shall terminate, whereupon it shall so terminate
but in every other respect the Agreement shall continue
unaffected in the name of the surviving Client(s) or, as the
case may be, Indemnifier(s) and the estate of the deceased or
incapacitated Client or, as the case may be, Indemnifier shall
continue to be liable jointly and severally with the surviving
Client(s) or, as the case may be, Indemnifier(s) to the Bank
for (i) all amounts outstanding, (ii) all other obligations
under the Agreement and (iii) all liabilities incurred under
the Agreement at any time (whether before or after the date of
notice to the Bank pursuant to C.1 above) in respect of
Letters of Credit issued on or before but not after the date
of such notice to the Bank.
XXV. INFORMATION
During the continuance of the agreement and for as long as any sum remains
payable to the Bank under the Agreement and/or there is any Total Letter of
Credit Exposure, the Client and the Indemnifier shall each furnish to the Bank
such financial or other information as to its affairs and (in the case of a body
or bodies corporate) their respective Subsidiaries as may be requested by the
Bank.
XXVI. REMEDIES AND WAIVERS
No failure by the Bank to exercise, and no delay by the Bank in exercising, any
right will operate as a waiver thereof, nor will any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right. The authority to debit, charge and pledge and the right of
set-off and other rights and remedies provided in the Agreement are separate,
independent and cumulative and not exclusive of any other rights or remedies
(including any other security, right of set-off, lien, right to combine or
consolidate accounts or similar right to which the Bank is at any time entitled
anywhere, whether by operation of law or otherwise).
XXVII. PARTIAL INVALIDITY
If at any time any provision of the Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions of the
Agreement, nor the legality, validity or enforceability of such provisions under
the law of any other jurisdiction shall in any way be affected or impaired
thereby. If and to the extent that the security expressed to be created by or
pursuant to the Agreement is at any time and for any reason not effective as a
fixed charge, it shall instead take effect as a floating charge.
XXVIII. MISCELLANEOUS
A. All interest shall accrue from day to day and shall be calculated on the
basis of a 360 (three hundred and sixty) day year (365 (three hundred and
sixty five) days where market practice dictates, as determined by the Bank
in its absolute discretion) and the number of days elapsed.
B. The certificate of an officer or employee of the Bank or any member or the
Merrill Lynch Group as to any sum payable hereunder shall be conclusive
and binding on the Client and/or, as the case may be, the Indemnifier.
C. The Client and the Indemnifier shall immediately furnish to the Bank in
form and substance satisfactory to the Bank such documents and information
as the Bank may from time to time stipulate.
D. All communications and documents under the Agreement shall either be in
English or accompanied by a certified translation into English by a
translator acceptable to the Bank. If there is a conflict, the English
translation shall prevail over the original language version.
E. The English text of this Terms Sheet is the original authentic version and
shall prevail if there is a conflict between it and any translation into
another language.
F. The Bank will promptly give notice to the Client and the Indemnifier of
any amendment and/or supplement to the Schedule. However, no failure of
the Bank to give (or of the Client or the Indemnifier to receive) any such
notice shall affect the validity of the amendment or supplement in
question.
XXIX. SECURITY ADDITIONAL
The security hereby created shall be additional to any other indemnity,
guarantee or security held by the Bank at any time.
XXX. NOTICES
A. The Client, the Indemnifier and/or the Bank may from time to time issue
instructions, notices, demands or requests either orally or in writing
(but in writing only where so provided under the Agreement) via any
officer or employee of a member of the Merrill Lynch Group and any such
officer or employee shall have authority from the Bank to give or receive
on its behalf such instructions, notices, demands or requests which when
delivered to or by such officer or employee shall be deemed to have been
made by the Client or the Indemnifier, respectively direct to the Bank or
made by the Bank direct to the Client or the Indemnifier, respectively (as
the case may be). The Bank shall be entitled to rely on and shall not be
liable for any action taken or omitted to be taken in good faith pursuant
to instructions, notices, demands or requests so deemed given by the
Client or the Indemnifier or on any communication or document believed by
it to be genuine.
B. Each communication under the Agreement shall be addressed if to the Bank,
at its offices at Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY,
telex no: 887640 (or such other address or telex number as it may notify
to the Client and the Indemnifier); if to the Client or the Indemnifier,
at such address as the Client or the Indemnifier (as the case may be)
notifies to the Bank from time to time. Notices shall be deemed to have
been received five days after being posted and immediately in the case of
a telex or oral communication.
XXXI. GOVERNING LAW
A. The Agreement shall be governed by and construed in accordance with
English law.
B. In relation to any legal action or proceedings arising out of or in
connection with the Agreement ( Proceedings ), the Client and the
Indemnifier each, for the benefit of the Bank, irrevocably submits to the
jurisdiction of the courts of England and waives any objection to
Proceedings in such courts on the grounds of venue or on the grounds that
the Proceedings have been brought in an inconvenient forum. These
submissions shall not affect the right of any party from taking
Proceedings in any other court of competent jurisdiction nor shall the
taking of Proceedings in any other court of competent jurisdiction
preclude any party from taking Proceedings in any other court of competent
jurisdiction (whether concurrently or not).
C. The Client and the Indemnifier each irrevocably appoints the Person named
as its agent for service of process in the cover letter to, and forming
part of, this Agreement to receive for it and on its behalf service of
process in any Proceedings in England. Such service shall be deemed
completed on delivery to the process agent (wether or not it is forwarded
to and received by the Client or the Indemnifier). If for any reason the
process agent ceases to be able to act as such or no longer has an address
in London, the Client and the Indemnifier each irrevocably agrees to
appoint a substitute process agent acceptable to the Bank, and to deliver
to the Bank a copy of the new agent s or agents acceptance of that
appointment, within 30 (thirty) days.
Exhibit 6
Joint Filing Agreement
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, the undersigned hereby (i) agree to the joint filing with all
other Reporting Persons (as such term is defined the the statement on Schedule
13D described below) on behalf of each of them of a statement on Schedule 13D
(including amendments thereto) with respect to the Common Stock, par value $.01
per share, of Preferred Income Management Fund Incorporated and (ii) agree that
this Agreement be included as an Exhibit to such joint filing. This Agreement
may be executed in any number of counterparts all of which taken together shall
constitue one and the same instrument. In witness whereof, the undersigned
hereby execute this Agreement this 27th day of January, 1997.
Stewart R. Horejsi Larry L. Dunlap, individually, as
Trustee of the Lola Brown Trust No.
1B and as President of Horejsi
Enterprises, Inc.
Signature:
Stewart R. Horejsi
Signature:
Larry L. Dunlap
