<PAGE>1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
MUSTANG SOFTWARE, INC.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
62820W 10 7
(Cusip Number)
Richard J. Heming
Board of Director
Mustang Software Inc.
6200 Lake Ming Road
Bakersfield CA 93306
Telephone: (805) 873-2699
Fax: (805) 873-2474
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 16, 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 /X/.
<PAGE>2
SCHEDULE 13D
CUSIP NO. 62820W 10 7
- -------------------------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
Richard J. Heming
- -------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) / /
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
SOURCE OF FUNDS
4
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
U.S.A.
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
888,750 on January 21, 1997
NUMBER OF ------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
EACH ------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 888,750 on January 21, 1997
WITH
------------------------------------------------
10 SHARED DISPOSITIVE POWER
- -------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 888,750 on January 21, 1997
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES / /
- -------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 26.4% on January 21, 1997
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- -------------------------------------------------------------------------------
<PAGE>3
CUSIP NO. 62820W 10 7
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, no par value (the "Common
Stock") of Mustang Software, Inc. (the "Company"), a California corporation
with principal executive offices at 6200 Lake Ming Road, Bakersfield CA 93306.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Richard J. Heming. Mr. Heming's business
address is 6050 Alfred Harrel Hwy., Bakersfield CA 93306. Mr. Heming is a Board
of Director of the Company and is a citizen of the United States of America.
During the past five years, Mr. Heming has not been convicted in a
criminal proceeding and has not been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction, as a result of
which he 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 AND OTHER CONSIDERATION.
Not applicable.
ITEM 4. PURPOSE OF TRANSACTION.
This statement relates to the disposition of Common Stock of the Company,
not the acquisition thereof.
(a) Sales of the securities reported in Item 5 have resulted from sales
by Merrill Lynch, Pierce, Fenner & Smith Incorporated, as pledgee of the
reporting person (the "Pledgee"), under a margin loan (the "Margin Loan").
Additional sales of Common Stock pledged by the reporting person by the
Pledgee are expected in order to satisfy a balance of approximately $303,000
remaining on the Margin Loan at January 21, 1997. The number of shares sold
will depend on the price levels of the shares at the time of sale by the
Pledgee.
(b)-(j). The reporting person has no plans or proposals which relate to
any of the matters specified in Items 5(b)-(j) of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) See Items 11 and 13 on Page 2 of this Schedule 13D.
(b) See Items 7 through 10 on Page 2 of this Schedule 13D.
<PAGE>4
CUSIP NO. 62820W 10 7
(c) The following table describes all transactions in the Common Stock by
the reporting person within the last 60 days. All sales indicated in the
table, which the reporting person has been advised by the Pledgee were made in
the open market for the account of the Pledgee, reflect sales by the Pledgee
to partially satisfy the Margin Loan.
[S] [C] [C]
Number
of shares Price per
Date sold share
------------ ----------- --------------
1/13/97 10,000 $1.5000
10,000 $1.6250
1/14/97 5,000 $1.5000
1/15/97 5,000 $1.5000
1/16/97 5,000 $1.5000
1/21/97 15,000 $1.5000
------------
50,000
(d) Until the Margin Loan is satisfied, the Pledgee has the power to
direct the proceeds from the sales of the shares pledged by the reporting
person to secure the Margin Loan. The reporting person had pledged an
aggregate of 300,000 shares of Common Stock or approximately 8.9% of the
shares of Common Stock outstanding (before giving effect to sales of shares
reported herein) to secure the Margin Loan from Pledgee.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Reference is made to Exhibit 1 which contains the terms of the reporting
person's pledge to the Pledgee.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Merrill Lynch Cash Management Account Agreement
<PAGE>5
CUSIP NO. 62820W 10 7
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.
January 24, 1997
/s/ Richard J. Heming
------------------------------------
Richard J. Heming
CASH MANAGEMENT ACCOUNT AGREEMENT
INTRODUCTION
This Agreement contains the terms governing the Cash Management Account
financial service ("CMA Ser- ice"). I will read this Agreement and keep it
for my records because I know that by signing the CMA Application and
Agreement form or the CMA SubAccount Application and Agreement form (the
"Application and Agreement form(s)") I am agreeing to its terms.
DEFINITIONS
In this Agreement, "I", "me," "my" or "accountholder" means each person who
signs the CMA Application and Agreement form or the CMA SubAccount Application
and Agreement form. "You," "your" or "MLPF&S" means Merrill Lynch, Pierce,
Fenner & Smith Incorporated. "MLB&T" means Merrill Lynch Bank & Trust Co.
"BANK ONE" means BANK ONE, COLUMBUS, N.A. "MLNF" means Merrill Lynch National
Financial. "CHASE" means the Chase Manhattan Bank, N.A. MLB&T, MLNF, CHASE
and BANK ONE are referred to collectively as "Banks." The "Issuer" means
MLB&T or MLNF, whichever issues the Visa Cards from time to time.
"Card/Check Account" means the account(s) established for me by the Banks.
"Checks" means checks issued to me by BANK ONE for use with my Card/Check
Account. "Card" or "Cards" means one or more Classic Visa' cards issued to
me for use with my Card/Check Account. Unless the context requires otherwise,
"Card" or "Cards" also means one or more CMA Visa Gold Program cards issued
to me for use with my Card/Check Account if I subscribe to and am approved
for the CMA Visa Gold Program. The name of the issuer will appear on the
Card. The Card(s) issued to me if I subscribe to the CMA Visa Gold Pro-gram
will also be referred to as the "Visa Gold Program Card(s)." "Money Funds"
means the CMA money market funds. "Money Accounts" means the Money Funds and
any FDIC-insured money market deposit accounts opened for me through the
Insured Savings Account program.
For purposes of this Agreement, "securities and other property" means, but
is not limited to, money, securities, financial instruments and commodities
of every kind and nature and related contracts and options. This definition
includes securities or other property currently or hereafter held, carried
or maintained by you or by any of your affiliates, in your possession and
control, or in the possession and control of any such affiliate, for any
purpose, in and for any of my accounts now or hereafter opened, including
any account in which I may have an interest.
DESCRIPTION OF THE CMA SERVICE
1. The CMA Service consists of: (1) an MLPF&S securities account (referred
to as the "Securities Account"), which is either a cash account, or with the
Investor CreditLine" service, a margin account, (2) a choice of Money
Accounts, (3) if applicable, a Card/Check Account provided by the Banks and
(4) if applicable, optional CMA services as described in the Cash Management
Account Program Description.
DESCRIPTION OF THE CUA MASTER FINANCIAL- SERVICE
2. The CMA Master Financial Service consists of: (1) a master account
("Master CMA Account") established with the full CMA Service as described
above and (2) one or more related CMA SubAccounts established by or with the
consent of a Master CMA Accountholder. Each CMA SubAccount is entitled to
partial CMA service consisting of (1) a Securities Account, which is either a
cash account or, with the Investor CreditLine Service, a margin account,
(2) a choice of Money Accounts and (3) optional CMA services to the extent
eligible. A CMA SubAccount is not eligible for a Card/Check Account.
CMA SUBACCOUNT AUTHORIZATIONS
3. By signing the CMA SubAccount Application and Agreement form, each CMA
SubAccountholder designates the Master CMA Accountholder as his or her agent
for the purpose of receiving monthly CMA account statements and any notices
or other communications and authorizes MLPF&S to mail them to the address
designated by the Master CMA Accountholder from time to time. If applicable,
each CMA SubAccountholder also authorizes MLPF&S (subject to account
eligibility requirements) to accept telephonic instructions from the Master
CMA Accountholder for the transfer of funds through the CMA Funds Transfer
Service to such CMA SubAccount from the Master CMA Account and/or from such
CMA SubAccount to the Master CMA Account, as selected in the CMA SubAccount
Application and Agreement form. In the event any erroneous transfers are
made, the Master CMA Accountholder and the CMA SubAccountholder authorize
MLPF&S to initiate appropriate corrections. The foregoing authorizations
shall remain in full force and effect until written notice of revocation is
delivered to MLPF&S, after which the CMA SubAccount shall remain subject to
the terms of this Agreement to the extent it receives the CMA Service in
accordance with the policies of MLPF&S.
AGREEMENT REGARDING CASH, MONEY ACCOUNT BALANCES AND OTHER ASSETS AND FEES
4. Available free credit balances in my Securities Account will automatically
be invested or deposited at least once a week into the Money Account that I
have designated as my Primary Money Account. I understand that you may
reasonably withhold access to my Money Account balances until you are
satisfied that checks credited to my Securities Account have been collected.
You may satisfy amounts that I owe in connection with my CMA Service account
(such as debit balances in the Securities Account, amounts owing in my
Card/Check Account, or investments or deposits made for me that are later
reversed), from the assets in my Money Accounts (including funds obtained by
redeeming Money Funds shares) or from my Securities Account (including, if
applicable, by making loans to me). Certain fees, including an annual fee,
which are subject to change, will be charged to my account for the financial
services provided to me.
REPRESENTATIONS, ADDITIONAL TERMS AND AMENDMENTS
5. I have received a copy of the Money Funds' prospectuses, the Insured
Savings Account Fact Sheet and the Cash Management Account Program Description.
These documents shall be referred to in this Agreement as the "Documents."
The Documents contain additional terms governing the CMA Service. I agree
that these Documents are incorporated into this Agreement as though they
were fully set out in this Agreement. Subject to applicable law, you and
the Banks also have the right to amend the Documents by so notifying me in
writing. Unless the context otherwise requires, the term "Agreement" shall
include the Documents, as amended from time to time.
I agree that you and the Banks shall have the right to amend this Agreement,
by modifying or rescinding any of its existing provisions or by adding any
new provision, at any time by sending notice of the amendment to me. Any
such amendment shall be effective as of a date to be established by you and
the Banks, subject to applicable law.
I understand there may be additional documentation required by applicable
law or the policies and procedures of MLPF&S or the Banks. I agree to
promptly comply with any such requests for additional documents.
HEADINGS ARE DESCRIPTIVE
6. The heading of each provision of this Agreement is for descriptive
purposes only and shall not be deemed to modify or qualify any of the rights
or obligations set forth in each such provision.
JOINT ACCOUNTS AND JOINT AND SEVERAL LIABILITY
7. If more than one person signs this Agreement, each person shall be an
accountholder and their obligations under this Agreement shall be joint and
several. The legal ownership of the account shall be in such form as the
accountholders shall designate in the Application and Agreement form and as
reflected in the account title. In the event no designation is made, MLPF&S
is authorized to deal with the accountholders as tenants in common (without
right of survivorship).
Notwithstanding the choice of law provisions of Paragraph 11, which shall
govern the contractual obligations of the parties under this Agreement, the
legal ownership the account shall be governed by and interpreted under the
internal laws of the state of permanent residence of accountholders who are
U.S. citizens. Non-resident aliens agree that the form of joint ownership
designated for the account shall be governed (notwithstanding the laws of
any other jurisdiction to the contrary) by the internal laws of the State of
New York and, for purposes of determining all matters with regard to the
account, agree to submit to the jurisdiction of the courts of New York and
the Federal Courts in the Southern District of New York and consent to
service of process by certified mail to the account's address of record.
All accountholders agree that each accountholder has authority to transact
any business on behalf of the account as fully and completely as if each
accountholder were the sole owner of the account. Subject to MLPF&S
policies, MLPF&S may accept orders and instructions, written or oral, with
respect to the account from each accountholder, without notice to any other
accountholder, for the receipt, transfer and withdrawal of funds by check,
wire transfer or otherwise and for the purchase, sale, exchange, transfer or
other disposition of securities and other property (including margin
transactions and short sales if the accountholders have selected the
Investor CreditLine service). All accountholders further agree that all
securities and other property that MLPF&S may be holding for any of them,
either in this account or otherwise, shall be subject to a lien for the
discharge of the obligations of this account to MLPF&S, such lien to be in
addition to any rights and remedies MLPF&S may otherwise have.
In the event of the death of an accountholder, divorce of married account
holders, assignment of an accountholder's interest or other event that
causes a change in ownership of the account, all accountholders or the
surviving accountholder(s) as the case may be shall immediately give MLPF&S
written notice thereof, and MLPF&S may, in such event, take such action,
including requiring such documents or imposing such restrictions on the
account, as MLPF&S may deem necessary in the circumstances. The estate of
a deceased accountholder and a departing accountholder by assignment or
divorce shall remain liable, jointly and severally, with the remaining or
surviving accountholder(s), for any obligations of the account arising
before MLPF&S receives such notice, or incurred in liquidation of the
account or the adjustment of the interests of the accountholders.
In the event of any such change in ownership of the account, MLPF&S is
authorized to divide or retitle the account in accordance with the form of
legal ownership of the account as reflected on the records of MLPF&S, or
by written instructions of the remaining or surviving accountholder(s), or
by obtaining a court order, as MLPF&S may reasonably determine is
appropriate in the circumstances. Unless agreed otherwise among the
account holders in a writing provided to MLPF&S, joint accounts designated
"with right of survivorship" (e.g., JTWROS) shall vest the interest of a
deceased accountholder in the surviving accountholder(s) and accounts
designated "without right of survivorship" (e.g., TIC) shall entitle the
estate of a deceased accountholder and the surviving accountholder(s) to
equal shares of the account. All accountholders agree to indemnify MLPF&S
against any liability, loss or expense incurred from acting in accordance
with this Agreement in the event of a change in ownership of the account.
All statements, notices or other communications sent or given to one
accountholder by MLPF&S shall be considered notice to all accountholders.
In the event MLPF&S receives inconsistent instructions from two or more
accountholders, reasonably believes instructions received from one
accountholder are not mutually agreeable to all accountholders, or receives
a court order with respect to the account, MLPF&S may, but is not obligated
to, restrict activity in the account, require that all instructions be in
writing signed by all accountholders, suspend or terminate the CMA Service
and/or file an interpleader action in an appropriate court at the expense
of the accountholders.
TERMINATION OF THE CMA SERVICE
8. The Banks, you or I may terminate my subscription to the CMA Service,
including the use of my Checks or Cards, if applicable, at any time.
I shall remain responsible for authorized charges which arise before or
after termination.
If my subscription is terminated, you may redeem all my Money Fund shares
and, unless I advise you otherwise, withdraw all my Money Account deposit
balances. Also, I shall promptly return all unused Checks and any Cards to
you or the Banks. My failure to do so may result in a delay in your
complying with my instructions regarding the disposition of my assets with
you.
CREDIT INFORMATION
9. I authorize you, each of your affiliates, and the Banks, to request a
consumer report about me from one or more consumer reporting agencies for
the purposes of considering my subscription to the CMA Service, reviewing or
collecting any account opened for me, or for any other legitimate business
purpose. Upon my request, you will inform me of the name and address of
each consumer reporting agency from which you obtained a consumer report,
if any, in connection with my subscription or accounts. I also authorize
you, each of your affiliates, and the Banks to share any information you
may have or obtain about me for any legitimate business purpose.
AGREEMENT TO ARBITRATE CONTROVERSIES WITH MLPF&S
10. Arbitration is final and binding on the parties.
The parties are waiving their right to seek remedies in court,
including the right to jury trial.
Pre-arbitration discovery is generally more limited than and
different from court proceedings.
The arbitrators' award is not required to include factual findings or
legal reasoning and any party's right to appeal or to seek
modification of rulings by the arbitrators is strictly limited.
The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.
I agree that all controversies which may arise between us, including but
not limited to those involving any transaction or the construction,
performance, or breach of this or any other agreement between us, whether
entered into prior, on or subsequent to the date hereof, shall be determined
by arbitration. Any arbitration under this Agreement shall be conducted
only before the New York Stock Exchange, Inc., the American Stock Exchange,
Inc., or an arbitration facility provided by any other exchange, the
National Association of Securities Dealers, Inc., or the Municipal
Securities Rulemaking Board, and in accordance with its arbitration rules
then in force. I may elect in the first instance whether arbitration shall
be conducted before the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., other exchanges, the National Association of Securities
Dealers, Inc., or the Municip Securities Rulemaking Board, but if I fail to
make such election, by registered letter or telegram addressed to you at the
office where I maintain my account, before the expiration of five days
after receipt of a written request from you to make such election, then you
may make such election. Judgment upon the award of the arbitrators may be
entered in any court, state or federal, having jurisdiction. No person
shall bring a putative or certified class action to arbitration, nor seek
to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action; or who is a member of a
putative class who has not opted out of the class with respect to any
claims encompassed by the putative class action until: (I) Th class
certification is denied; (II) The class is decertified; or (iii) The
customer is excluded from the class by the court. Such forbearance to
enforce an agreement to arbitrate shall not constitute a waiver of any
rights under this Agreement to the extent stated herein.
APPLICABLE LAWS
11. This Agreement, with respect to all portions of the CMA Service,
including interest charges on loans you may make to me, will be governed
by and interpreted under the laws of the State of New York. The terms of
my agreement with MLB&T are governed by federal and New Jersey law. The
terms of my agreement with MLNF are governed by federal law and Utah law.
The terms of my agreement with CHASE, including those relating to finance
charges on overdrafts, are governed by federal and New York law. The terms
of my agreement with BANK ONE are governed by Ohio law.
PRESUMPTION OF RECEIPT OF COMMUNICATIONS
12. Communications may be sent to me at my address or at such other address
as I give you in writing. All communications so sent, whether by mail,
telegraph, messenger or otherwise, will be considered to have given to me
personally upon such sending, whether or not I actually receive them.
EXTRAORDINARY EVENTS
13. I agree that you and the Banks shall not be liable for loss caused
directly or indirectly by government restrictions, exchange or market
rulings, suspension of trading, war, strikes or other conditions beyond
your and the Banks' control.
SEPARABILITY
14. If any provision of this Agreement is held to be invalid, illegal,
void or unenforceable, by reason of any law, rule, administrative order or
judicial decision, such determination will not affect the validity of the
remaining provisions of this Agreement.
LIABILITY FOR COSTS OF COLLECTION
15. To the extent permitted by the laws of the State of New York, I agree
to pay you the reasonable costs and expenses of collection including
attorneys' fees, for any debit balance and any unpaid deficiency, that I
owe.
APPLICABLE RULES AND REGULATIONS
16. All transactions in my Securities Account shall be subject to the
constitution, rules, regulations, customs and usages of the exchange or
market and its clearing house, if any, on which such transactions are
executed by you or your agents, including your subsidiaries and affiliates.
Paragraphs 17 through 25 below apply only if I request that my Securities
Account be established with the Investor CreditLine service.
COLLATERAL REQUIREMENTS AND CREDIT CHARGES
17. I will maintain such securities and other property in my accounts
as you shall require from time to time. In accordance with your usual
custom, the monthly debit balance of such accounts shall be charged
interest at a rate permitted by the laws of the State of New York.
Unless I pay the interest charged to my Securities Account at the close
of a charge period, it will be added the opening balance for the next
charge period. Interest will then be charged upon the entire opening
balance of that next charge period which will, therefore, include any
such unpaid interest from the previous charge period.
CALLS FOR ADDITIONAL COLLATERAL-LIQUIDATION RIGHTS
18. a. You shall have the right to require additional collateral:
(1) in accordance with your general policies regarding your maintenance
requirements for the Investor CreditLine service, as such may be modified,
amended or supplemented from time to time; or
(2) if in your discretion you consider it necessary for your protection
at an earlier or later point in time than called for by said general
policies; or
(3) in the event that a petition in bankruptcy or for appointment of
a receiver is filed by or against me; or
(4) if an attachment is levied against my accounts; or
(5) in the event of my death.
b. If I do not provide you with additional collateral as you may require
in accordance with (a)(1) or (2), or should event described in (a)(3), (4)
or (5) occur (whether or not you elect to require additional collateral),
you shall have the right:
(1) to sell any or all securities and other property in my accounts with
you or with any of your affiliates, whether carried individually or jointly
with others;
(2) to buy any or all securities and other property which may be short
in such accounts; and
3) to cancel any open orders and to close any or all outstanding
contracts.
You may exercise any or all of your rights under (b)(1), (2) and (3) without
further demand for additional collateral, or notice of sale or purchase, or
other notice or advertisement. Any such sales or purchases may be made at
your discretion on any exchange or other market where such business is
usually transacted, or at public auction or private sale, and you may be the
purchaser for your own account. I understand that your giving of any prior
demand or call or prior notice of the time and place of such sale or purchase
shall not be considered a waiver of your right to sell or buy without any
such demand, call or notice as provided in this Agreement.
PURPOSE OF CREDIT
19. I understand and agree that any credit extended by you to me in
connection with my Securities Account is primarily for investment or
business purposes.
REPRESENTATIONS AS TO BENEFICIAL OWNERSHIP AND CONTROL
20. I represent that, with respect to securities against which credit is
or may be extended by you: (a) I am not the beneficial owner of more than
three percent (3%) of the number of outstanding shares of any class of
equity securities, and (b) I do not control, am not controlled by and am
not under common control with the issuer of any such securities. In the
event that any of the foregoing representations is inaccurate or becomes
inaccurate, I will promptly so advise you in writing.
SECURITY INTEREST IN FAVOR OF MLPF&S
21. All securities and other property shall be subject to a lien for the
discharge of all my indebtedness and any other obligations that I may owe
to you, and are to be held by you as security for the payment of any such
obligations or indebtedness to you in any account you maintain for me,
including any accounts in which I may have an interest. You shall have
the right to transfer securities and other property so held by you from
or to any other of such accounts whenever in your judgment you consider
such a transfer necessary for your protection. In enforcing your lien,
you shall have the discretion to determine which securities and property
are to be sold and which contracts are to be closed.
PAYMENT OF INDEBTEDNESS UPON DEMAND
22. I shall at all times be liable for the payment upon demand of any
debit balance or other obligations owing in any of my accounts with you.
I shall be liable to you for any deficiency remaining in any such accounts
in the event of the liquidation thereof, in whole or in part, by you or
by me. I will pay such obligations and indebtedness upon demand.
PLEDGE OF SECURITIES AND OTHER PROPERTY
23. Within the limitations imposed by applicable laws, rules and
regulations, all securities and other property may be pledged and repledged
by you from time to time, without notice to me, either separately or in
common with other such securities and other property, for any amount due
in my accounts, or for any greater amount. You may do so without retaining
in your possession or under your control for delivery a like amount of
similar securities or other property.
LENDING AGREEMENT
24. In return for your extension or maintenance of any credit in my
account, I acknowledge and agree that the securities in my account,
together with all attendant rights of ownership, may be lent to you or
lent out to others to the extent not prohibited by applicable laws, rules
and regulations. In connection with such securities loans, you may receive
and retain certain benefits to which I will not be entitled. I understand
that, in certain circumstances, such loans could limit my ability to
exercise voting rights, in whole or part, with respect to the securities
lent.
REPRESENTATION AS TO CAPACITY TO ENTER INTO AGREEMENT
25. I represent that no one except the person(s) signing this Agreement
has an interest in my account or accounts with you. If a natural person,
I represent that I am of full age, am not an employee of any exchange, nor
of any corporation of which any exchange owns a majority of the capital
stock, nor of a member of any exchange, nor of a member firm or member
corporation registered on any exchange, nor of a bank, trust company,
insurance company or any corporation, firm or individual engaged in the
business of dealing either as broker or as principal in securities, bills
of exchange, acceptances or other forms of commercial paper. If any of the
foregoing representations is inaccurate or becomes inaccurate, I will
promptly so advise you in writing.
Paragraphs 26 through 34 below do not apply to CMA SubAccounts.
Paragraphs 26 through 31 below apply only when the Card/Check Account is
used, including when Checks and/or Cards are obtained.
CARD OWNERSHIP
26. I certify that all information I have provided in the CMA Application
and Agreement, including in the CMA Check and Visa Information form, is
true and correct and that you and the Banks may rely on and verify such
information.
The Card remains the property of the Issuer and may be canceled by the
Issuer at any time without prior notice.
LIABILITY
27. I will be liable for all authorized transactions arising through the
use of the Card(s) and checks in connection with my Card/Check Account.
I will be responsible, on a continuing basis, for the safekeeping of my
Card(s) and Checks and shall not permit unauthorized persons to have access
to my Card(s) or Checks. I will also be responsible for reviewing my CMA
Monthly Statement in order to discover and report to MLPF&S the possible
unauthorized use of my Card(s) and Checks. I agree to notify MLPF&S
immediately if I believe or have reason to believe that my Card(s) or Checks
have been or may be used by an unauthorized person. Unless limited by law,
I will be responsible for any and all losses and damages that arise from any
breach of my undertakings to safeguard my Card(s) and Checks, to review my
CMA Monthly Statement for possible unauthorized activity and to promptly
report such to MLPF&S.
I also agree to pay the reasonable costs and expenses of collection of any
unpaid balance due, including any accrued finance charges, as a result of
any overdraft(s), including but not limited to attorneys' fees, to the
extent allowed by law, involved in such collection. I understand that the
Banks have not taken a security interest in any of the assets in my
Securities Account or Money Accounts pursuant to this Agreement.
PURCHASING POWER
28. I agree that I will not incur charges to my Card/ Check Account in
excess of my Purchasing Power. The Purchasing Power for my Card/Check
Account will be the total of any available free credit balance in my
Securities Account, the available balances in my Money Accounts, and, if
applicable, the available loan value of my securities in my Securities
Account. I understand that my Purchasing Power may fluctuate from day to
day.
TRANSACTIONS EXCEEDING PURCHASING POWER
29. I understand that I will be in default if I incur charges in my
Card/Check Account that exceed my Purchasing Power. If I am in default,
you may, among other things terminate my subscription to the CMA Service.
If I exceed my Purchasing Power, CHASE may accept the transaction amount
exceeding my Purchasing Power as an overdraft, and advance funds to you
or the Banks in the amount exceeding my Purchasing Power. If CHASE does so,
I will be notified and I agree that I will immediately pay CHASE the amount
of the overdraft and any applicable finance charge which is computed as
described in this section.
In each overdraft statement cycle, finance charges a figured by applying a
Daily Periodic Rate to the Average Daily Balance of overdrafts and by
multiplying the resulting figure by the number of days in that statement
cycle. The Average Daily Balance of overdrafts is calculated each day by
starting with the beginning balance of amounts I owe, adding any new
overdraft and subtracting any payments or credits received that day and
unpaid finance charges. This gives CHASE the daily balance of overdrafts.
The Average Daily Balance is calculated by adding all of the daily balances
of overdrafts in that statement cycle and dividing the total by the number
of days in the overdraft statement cycle. The Daily Periodic Rate that is
applied is disclosed in the Cash Management Account Program Description an
subject to change upon notice. Finance charges accrue from the date CHASE
accepts an overdraft until the payment is made.
Any payments that I make will be applied, as of the date of receipt by
CHASE, first to any accrued and unpaid finance charges and then to the
balance of overdraft in the order in which they were incurred.
OVERDRAFT NOTICES
30. If CHASE extends an overdraft to me, I will be notified in writing.
The initial overdraft notice will inform me the overdraft(s), which is due
and payable by me immediately, together with any accrued finance charges.
Subsequent overdraft notices from CHASE will detail among other disclosures,
any overdraft(s) plus finance charges imposed on such overdraft(s), payments
an credits and the balance due.
ACCOUNT INQUIRIES
31. I understand that inquiries and error allegations concerning my
Card/Check Account, any overdraft notices and my monthly statement should
be directed through MLPF&S.
Paragraphs 32 through 34 below apply only if I subscribe to the CMA Visa'
Gold Program.
AGREEMENT TO THE CMA VISA COLD PROGRAM
32. In addition to the following paragraphs, I understand that paragraphs
I through 16, 26 through 31 and, if account is established with the Investor
CreditLine service, 17 through 25 also apply to the CMA Visa Gold Program.
In the event I am applying for the CMA Visa Gold Program but I am not
approved for participation in that program, I apply for and authorize the
issuance of one or more Classic Visa cards and checks for use with my
account. In addition, if upon expiration of the Visa Gold Program Card(s)
issued to me, I do not qualify for reissue of such Card(s), I apply for
and authorize the issuance of Classic Visa Card(s) and Checks. If a Classic
Visa Card(s) and Checks are issued to me, I understand that this Agreement,
with the exception of paragraph through 34 remain in full force and effect.
LIMITATIONS AND DIRECT DEBITING OF MY ACCOUNT
33. I agree to pay MLNF for the Card purchases posted to my Card/Check
Account. I authorize MLPF&S to pay MLNF from the assets in my Money
Accounts (including by redeeming Money Fund shares or withdrawing ISA
account balances, if any), and/or from my Securities Account (including,
if applicable, by making loans to me). On my behalf, MLPF&S will pay MLNF,
pursuant to the terms of this Agreement and the Documents, on the fourth
Wednesday of each month for all Card purchases posted to my Card/Check
Account for that monthly period. However, if MLNF has not received and
accepted my signed Statement of Purpose form (Federal Reserve Form FR U-1),
I understand that the entire amount of the charges posted to my Card/Check
account will b debited from my account once the sum of my Visa card
purchases exceeds $100,000 in any monthly cycle. In addition, any
subsequent charges not exceeding $100,000 posted to my Card/Check account
during th same monthly cycle will be paid by direct debit to my account on
the fourth Wednesday of the month. I acknowledge that I have the right
under applicable federal law to receive advance notice of the varying
amounts of the debit described above but waive my right to do so, as long
as the amount does not exceed five hundred thousand dollars. If I choose,
I may elect have this payment made by another means which is otherwise
incompatible with MLPF&S operations. If I choose to have this payment made
by such other means, I will notify MLPF&S in writing of my desire to do so,
AGREEMENT NOT TO DISPOSE OF ASSETS
34. By subscribing to the CMA Visa Gold Program,
I agree that I will not dispose of my assets in my CMA Service a
ccount or any other account I may have with either MLPF&S or MLNF, if
such disposal will negative affect my ability to pay MLNF for Card
transactions. However, I may continue to trade securities in my Securities
Account.
