-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C12V+9V60W/Wt1bxti0X+swtli3nYdW+3ntdsTvhuaEG8WrzAqOyPaEFmBagtbnP re4BVOGvF/k0Ro1OYA51WQ== 0001021255-96-000006.txt : 19960921 0001021255-96-000006.hdr.sgml : 19960921 ACCESSION NUMBER: 0001021255-96-000006 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960919 SROS: NYSE GROUP MEMBERS: HOREJSI ENTERPRISES INC GROUP MEMBERS: LARRY L. DUNLAP GROUP MEMBERS: STEWART R. HOREJSI SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PREFERRED INCOME MANAGEMENT FUND INC CENTRAL INDEX KEY: 0000895422 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 954405635 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-46927 FILM NUMBER: 96632241 BUSINESS ADDRESS: STREET 1: C/O FLAHERTY & CRUMRINE INC STREET 2: 301 E COLORADO BLVD STE 720 CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8187957300 MAIL ADDRESS: STREET 1: 301 COLORADO BLVD STREET 2: STE 720 CITY: PASADENA STATE: CA ZIP: 91101 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HOREJSI ENTERPRISES INC CENTRAL INDEX KEY: 0001021255 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 253 NORTH SANTE FE STREET 2: P O BOX 45 CITY: SALINA STATE: KS ZIP: 67402-0045 MAIL ADDRESS: STREET 1: 253 NORTH SANTA FE STREET 2: P O BOX 45 CITY: SALINA STATE: KS ZIP: 67402 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* 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) September 9, 1996 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [X]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 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 967,300 SHARES BENEFICIALLY 8 SHARED VOTING POWER 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 967,300 REPORTING PERSON 10 SHARED DISPOSITIVE POWER 0 WITH 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 967,300 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.27% 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 0 SHARES BENEFICIALLY 8 SHARED VOTING POWER 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING PERSON 10 SHARED DISPOSITIVE POWER 0 WITH 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 0 SHARES BENEFICIALLY 8 SHARED VOTING POWER 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER 0 REPORTING PERSON 10 SHARED DISPOSITIVE POWER 0 WITH 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! Item 1. Security and Issuer. This Statement relates to the Common Stock, $.01 par value per share (the "Shares") of Preferred Income Management Fund Incorporated, a Maryland corporation (the "Company"). The principal executive offices of the Company are located c/o Flaherty & Crumrine Incorporated, 301 E. Colorado Boulevard, Suite 720, Pasadena, California 91101. Item 2. Identity and Background (a) This Statement is filed by Horejsi Enterprises, Inc., a Kansas corporation ( HEI ), as the direct beneficial owners of Shares, and (ii) by virtue of his positions with certain shareholders of HEI, by Stewart R. Horejsi, and (iii) by virtue of his positions with HEI and certain shareholders of HEI, by Larry L. Dunlap (collectively, the "Reporting Persons"). By signing this Statement, each Reporting Person agrees that this Statement is filed on its or his behalf. The Lola Brown Trust No. 1B (the Brown Trust ), Ernest Horejsi Trust No. 1B (the Ernest Horejsi 1B Trust ), Evergreen Atlantic LLC ( Evergreen ), and Stewart Horejsi Trust No. 2 (the Stewart Horejsi Trust ) are the holders of approximately 40%, 24%, 18% and 16%, respectively, of the outstanding shares of HEI. Mr. Horejsi is an agent of HEI, the Manager of Evergreen and one of three trustees of each of the Brown Trust and the Ernest Horejsi 1B Trust. Mr. Dunlap is the Chairman, President and Treasurer of HEI, and one of the three trustees of each of the Brown Trust, the Ernest Horejsi 1B Trust and the Stewart Horejsi Trust. Susan Ciciora owns approximately 1% of the outstanding shares of HEI, is a director of HEI and one of the three trustees of each of the Brown Trust, the Ernest Horejsi 1B Trust and the Stewart Horejsi Trust. Stephen C. Miller is a director of, and Secretary of, HEI. By virtue of the relationships described above and his roles with HEI and the primary stockholders of HEI, Mr. Horejsi may be deemed to control HEI and may be deemed to possess indirect beneficial ownership of the Shares held by HEI. However, Mr. Horejsi disclaims such beneficial ownership of the Shares beneficially owned, directly or indirectly, by HEI. (b) The principal executive offices of HEI and the business address of Mr. Horejsi are located at 253 N. Santa Fe, POB 45, Salina, Kansas 67401. The business address of Mr. Dunlap is located at 223 N. Santa Fe, POB 121, Salina, Kansas 67401. The business address of Ms. Ciciora is 1428 Coventry Court, Darien Illinois 60561 and the business address of Mr. Miller is 4888 Pearl East Circle, #202W, Boulder, Colorado 80301. (c) HEI is a holding company engaged through its affiliates in the retail sale of welding consumables, equipment and gases, the wholesale sale of bulk gases, leasing of cylinders to various wholesale and retail customers, and the financing of such activities. (d) Neither any of the Reporting Persons nor, to the best knowledge of such persons, any officer or director of HEI has been convicted in a criminal proceeding in the past five years (excluding traffic violations or similar misdemeanors). (e) During the past five years, neither any of the Reporting Persons nor, to the best knowledge of such persons, any officer or director of HEI, was 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) HEI is a Kansas corporation. Mr. Horejsi and all officers and directors of HEI are citizens of the United States. Item 3. Source and Amount of Funds or Other Consideration The total amount of funds required by HEI to acquire the Shares reported in Item 5(c) was $12,954,341.50 (including commissions). Such funds were or will be provided by HEI's cash on hand and margin borrowings under accounts maintained by HEI with Bear Stearns Securities Corp. and by HEI and related parties with Merrill Lynch, Pierce, Fenner & Smith Incorporated. Margin borrowings in the Bear Stearns account bear interest at the federal funds rate plus three-quarters of one percent and are due on demand. The foregoing description of HEI s customer agreement with Bear Stearns is qualified in its entirety by reference to the customer agreement attached as Exhibit 1. Margin borrowings from Merrill Lynch bear interest at the federal funds rate plus one half of one percent and are due on demand. Such margin borrowings are based on the combined collateral in accounts with Merrill Lynch maintained by each of HEI and the Brown Trust, the Ernest Horejsi 1B Trust, the Mildred B. Horejsi Trust and the Ernest Horejsi Trust. The foregoing description of HEI s account agreements with Merrill Lynch is qualified in its entirety by reference to the cash management account agreement and the working capital management account agreement attached as Exhibits 2 and 3, respectively. Item 4. Purpose of Transaction. HEI purchased the Shares described in Item 5 of this Statement in order to acquire an equity interest in the Company. Depending upon its 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 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 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. In early 1996, a representative of HEI contacted Flaherty & Crumrine Incorporated ( F&C ), the Company s investment advisor, to discuss the possibility that HEI might acquire F&C or some of F&C s business, including its advisory contract with the Company. No agreement or arrangement was reached between HEI and F&C in this regard. Except as described in this Item 4, none of the Reporting Persons nor, to the best knowledge of such persons, any other person named in Schedule B to this Statement has formulated any plans or proposals which relate to or would result in any matter required to be disclosed in response to paragraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) HEI is the direct beneficial owner of 967,300 Shares, or approximately 10.27% 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 reported under Item 2 of 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. (b) HEI 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, Mr. Horejsi may be deemed to share the indirect power to vote and direct the disposition of the Shares held by HEI. (c) The table below sets forth purchases of the Shares by the Reporting Persons during the last 60 days. All of such purchases were effected by HEI on the New York Stock Exchange.
Approximate Price Per Share Date Amount of Shares (exclusive of commissions) 07/22/96 20,000 12.875 07/23/96 28,400 12.875 07/24/96 24,800 12.875 07/25/96 4,000 12.875 07/29/96 400 13.000 07/29/96 80,000 13.000 07/31/96 20,000 13.000 07/31/96 80,000 13.125 08/02/96 7,000 13.375 08/02/96 25,000 13.375 08/02/96 15,000 13.250 08/02/96 3,000 13.250 08/05/96 10,000 13.250 09/09/96 27,800 13.250 09/09/96 15,200 13.375 09/09/96 15,000 13.500 09/09/96 68,100 13.625 09/09/96 73,200 13.750 09/10/96 65,000 13.750 09/10/96 13,200 13.625 09/11/96 40,500 13.750 09/11/96 14,500 13.625 09/12/96 15,000 13.750 09/12/96 38,000 13.875 09/16/96 87,500 13.875 09/16/96 300 13.750 09/17/96 12,700 13.875 09/18/96 28,000 13.875
(d) HEI 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. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. HEI is a party to a Customer Agreement with Bear Stearns Securities Corp. dated as of January 29, 1995. Margin borrowings under the agreement bear interest at the federal funds rate plus three quarters of one percent and are due upon demand. No borrowings are currently outstanding under the agreement. The foregoing summary of the agreement is qualified in its entirety by reference to the attached Exhibit 1, which is incorporated herein by this reference. HEI is a party to a Working Capital Management Account Agreement and a Cash Management Account Agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated. Margin borrowings under the agreements bear interest at the federal funds rate plus one half of one percent and are due upon demand. Margin borrowings from Merrill Lynch are based on the combined collateral in accounts with Merrill Lynch maintained by each of HEI and the Brown Trust, the Ernest Horejsi 1B Trust, the Mildred B. Horejsi Trust and the Ernest Horejsi Trust. As of September 18, 1996, $26,673,884.85 in borrowings were outstanding under such accounts, of which $6,255,219.95 was attributable to borrowings by HEI. The foregoing summary of HEI s agreements with Merrill Lynch is qualified in its entirety by reference to the attached Exhibit 2 and 3, which are incorporated herein by this reference. Other than set forth above, neither any of the Reporting Persons nor, to the best knowledge of such persons, any officer or director of HEI has any contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to securities of the Company, including, but not limited to, transfer or voting of any such securities, finder's fees, joint ventures, loans or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits. Exhibit 1. Customer Agreement dated as of January 29, 1995 between Horejsi Enterprises Inc. and Bear Stearns Securities Corp. Exhibit 2. Working Capital Management Account Agreement between Horejsi Enterprises Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated Exhibit 3. Cash Management Account Agreement between Horejsi Enterprises Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated 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: September 19, 1996 /s/ Stewart R. Horejsi Stewart R. Horejsi, individually /s/ Larry L. Dunlap Larry L. Dunlap, individually and as Chairman and President of Horejsi Enterprises, Inc. EX-1 2 EXHIBIT 1 TO SCHEDULE 13D Exhibit 1 BEAR STEARNS BEAR, STEARNS SECURITIES CORP. One Metrotech Center North Brooklyn, New York 11201-3859 (212) 272-1000 CUSTOMER AGREEMENT PLEASE READ CAREFULLY, SIGN AND RETURN This agreement ("Agreement") sets forth the terms and conditions under which Bear, Stearns Securities Corp., Bear, Stearns & Co. Inc., and their successors and assigns (collectively "Bear Stearns") will transact business with you including but not limited to the maintenance of your account(s). If these accounts are cash accounts and you have fully paid for all securities therein, the provisions of paragraphs 16 and 17 shall not bind you unless you enter into a margin transaction. 1. APPLICABLE LAW AND REGULATIONS. All transactions shall be subject to all applicable law and the rules and regulations of all federal, state and self-regulatory agencies, including, but not limited to, the Board of Governors of the Federal Reserve System and the constitution, rules and customs of the exchange or market (and clearing house) where executed. 2. SECURITY INTEREST AND LIEN. As security for the payment of all of your obligations and liabilities to Bear Stearns, Bear Stearns shall have a continuing security interest in all property in which you have an interest held by or through Bear Stearns or its affiliates, including, but not limited to, securities, commodity futures contracts, commercial paper, monies and any after- acquired property. In addition, in order to satisfy any such outstanding liabilities or obligations, Bear Stearns may, at any time and without prior notice to you, use, apply or transfer any such securities or property interchangeably. In the event of a breach or default under this Agreement, Bear Stearns shall have all rights and remedies available to a secured creditor under any applicable law in addition to the rights and remedies provided herein. 3. DEPOSITS ON TRANSACTIONS. Whenever Bear Stearns, in its sole discretion, considers it necessary for its protection, it may require you to deposit cash or collateral immediately in your account(s) prior to any applicable settlement date in order to assure due performance of your open contractual commitments. 4. BREACH, BANKRUPTCY OR DEFAULT. Any breach of this Agreement or the filing of a petition or other proceeding in bankruptcy, insolvency, or for the appointment of a receiver by or against you, the levy of an attachment against your account(s) with Bear Stearns, or your death, mental incompetence or dissolution, or any other grounds for insecurity, as determined by Bear Stearns in its sole discretion, shall constitute, at Bear Stearns' election, a default by you under all agreements Bear Stearns may then have with you, whether heretofore or hereafter entered into. In the event of default, Bear Stearns reserves the right to sell, without prior notice to you, any and all property in which you have an interest, held by or through Bear Stearns or any of its affiliates, to buy any or all property which may have been sold short, to cancel any or all outstanding transactions and/or to purchase or sell any other securities or property to offset market risk, and to offset any indebtedness you may have (either individually or jointly with others), after which you shall be liable to Bear Stearns for any remaining deficiency, loss, costs or expenses sustained by Bear Stearns in connection therewith. Such purchases and/or sales may be effected publicly or privately without notice or advertisement in such manner as Bear Stearns may in its sole discretion determine. At any such sale or purchase, Bear Stearns may purchase or sell the property free of any right of redemption. In addition, Bear Stearns shall have the right to set off and apply any amount owing from Bear Stearns or any of its affiliates to you against any indebtedness in your accounts, whether matured or unmatured. 5. FEES AND CHARGES. You understand that Bear Stearns may charge commissions and other fees for execution, custody or any other service furnished to you, and you agree to pay such commissions and fees at Bear Stearns' then prevailing rates. You understand that such commissions and fees may be changed from time to time, upon thirty days' prior written notice to you, and you agree to be bound thereby. 6. TRANSACTION REPORTS AND ACCOUNT STATEMENTS. Reports of the execution of orders and statements of your account(s) shall be conclusive if not objected to in writing within five days in the case of reports of execution, and ten days in the case of account statements, after such documents have been transmitted to you by mail or otherwise. 7. DEBIT BALANCES/TRUTH-IN-LENDING. You hereby acknowledge receipt of Bear Stearns' Truth-in-Lending disclosure statement. You understand that interest will be charged on any debit balances in your account(s), in accordance with the methods described in such statement or in any amendment or revision thereto which may be provided to you. Any debit balance which is not paid at the close of an interest period will be added to the opening balance for the next interest period. 8. CLEARANCE ACCOUNTS. Bear, Stearns Securities Corp. carries your account(s) as clearing agent for your broker. Unless Bear, Stearns Securities Corp. receives from you prior written notice to the contrary, Bear, Stearns Securities Corp. may accept from such other broker, without any inquiry or investigation (a) orders for the purchase or sale of securities and other property in your account(s) on margin or otherwise and (b) any other instructions concerning your account(s) or the property therein. You understand and agree that Bear Stearns shall have no responsibility or liability to you for any acts or omissions of such broker, its officers, employees or agents. You agree that your broker and its employees are third-party beneficiaries of this Agreement, and that the terms and conditions hereof, including the arbitration provision, shall be applicable to all matters between or among any of you, your broker and its employees, and Bear Stearns and its employees. 9. COSTS OF COLLECTION. You hereby authorize Bear Stearns to charge you for any reasonable direct or indirect costs of collection, including, but not limited to, attorneys' fees, court costs and other expenses. 10. IMPARTIAL LOTTERY ALLOCATION. You agree that, in the event Bear Stearns holds on your behalf bonds or preferred stocks in street name or bearer form which are callable in part, you will participate in the impartial lottery allocation system of the called securities in accordance with the rules of the New York Stock Exchange, Inc. or any other appropriate self-regulatory organization. When any such call is favorable, no allocation will be made to any account(s) in which Bear Stearns has actual knowledge that its officers, directors or employees have any financial interest until all other customers are satisfied on an impartial lottery basis. 11. WAIVER, ASSIGNMENT AND NOTICES. Neither Bear Stearns' failure to insist at any time upon strict compliance with this Agreement or with any of the terms hereof nor any continued course of such conduct on its part shall constitute or be considered a waiver by Bear Stearns of any of its rights or privileges hereunder. Any assignment of your rights and obligations hereunder or interest in any property held by or through Bear Stearns without obtaining the prior written consent of an authorized representative of Bear Stearns shall be null and void. Notices or other communications, including margin calls, delivered or mailed to the address provided by you, shall, until Bear Stearns has received notice in writing of a different address, be deemed to have been personally delivered to you. 12. FREE CREDIT BALANCES. You hereby direct Bear Stearns to use any free credit balance awaiting investment or reinvestment in your account(s) in accordance with all applicable rules and regulations and to pay interest thereon at such rate or rates and under such conditions as are established from time to time by Bear Stearns for such account(s) and for the amounts of cash so used. 13. RESTRICTIONS ON ACCOUNT. You understand that Bear Stearns, in its sole discretion, may restrict or prohibit trading of securities or other property in your account(s). 14. CREDIT INFORMATION AND INVESTIGATION. You authorize Bear Stearns and your broker, in their discretion, to make and obtain reports concerning your credit standing and business conduct. You may make a written request within a reasonable period of time for a description of the nature and scope of the reports made or obtained by Bear Stearns. 15. SHORT AND LONG SALES. In placing any sell order for a short account, you will designate the order as such and hereby authorize Bear Stearns to make the order as being "short." In placing any sell order for a long account, you will designate the order as such and hereby authorize Bear Stearns to make the order as being "long." The designation of a sell order as being for a long account shall constitute a representation that you own the security with respect to which the order has been placed, that such security may be sold without restriction in the open market and that, if Bear Stearns does not have the security in its possession at the time you place the order, you shall deliver the security by settlement date in good deliverable form or pay to Bear Stearns any losses or expenses incurred as a result of your failure to make delivery. 16. MARGIN ACCOUNTS. You hereby agree to deposit and maintain such margin in your margin account(s) as Bear Stearns may in its sole discretion require, and you agree to pay forthwith on demand any debit balance owing with respect to any of your margin account(s). Upon your failure to pay, or at any time Bear Stearns, in its discretion, deems necessary for its protection, whether with or without prior demand, call or notice, Bear Stearns shall be entitled to exercise all rights and remedies provided in paragraphs 2 and 4 above. No demand, calls, tenders or notices that Bear Stearns may have made or given in the past in any one or more instances shall invalidate your waiver of the requirements to make or give the same in the future. Unless you advise Bear Stearns to the contrary, you represent that you are not an affiliate (as defined in Rule 144(a)(I) under the Securities Act of 1933) of the issuer of any security held in your account(s). 17. CONSENT TO LOAN OR PLEDGE OF SECURITIES. Within the limits of applicable law and regulations, you hereby authorize Bear Stearns to lend either to itself or to others any securities held by Bear Stearns in your account(s), together with all attendant rights of ownership, and to use all such property as collateral for its general loans. Any such property, together with all attendant rights of ownership, may be pledged, repledged, hypothecated or rehypothecated either separately or in common with other such property for any amounts due to Bear Stearns thereon or for a greater sum, and Bear Stearns shall have no obligation to retain a like amount of similar property in its possession and control. 18. LEGALLY BINDING. You hereby agree that this Agreement and all the terms hereof shall be binding upon you and your estate, heirs, executors, administrators, personal representatives, successors and assigns. You agree that all purchases and sales shall be for your account(s) in accordance with your oral or written instructions. You hereby waive any and all defenses that any such instruction was not in writing as may be required by the Statute of Frauds or any other similar law, rule or regulation. 19. AMENDMENT; ENTIRE AGREEMENT. You agree that Bear Stearns may modify the terms of this Agreement at any time upon prior written notice. By continuing to accept services from Bear Stearns, you will have indicated your acceptance of any such modifications. If you do not accept such modifications, you must notify Bear Stearns in writing; your account may then be terminated by Bear Stearns, after which you will remain liable to Bear Stearns for all remaining liabilities or obligations. Otherwise, this Agreement may not be waived or modified absent a written instrument signed by an authorized representative of Bear Stearns. Except as set forth above, this Agreement represents the entire agreement and understanding between you and Bear Stearns concerning the subject matter hereof. 20. NEW YORK LAW TO GOVERN. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES DETERMINED, IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. 21. ARBITRATION. - 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. - 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 WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL: (I) THE 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 EXCEPT TO THE EXTENT STATED HEREIN. YOU AGREE, AND BY MAINTAINING AN ACCOUNT FOR YOU BEAR STEARNS AGREES, THAT CONTROVERSIES ARISING BETWEEN YOU AND BEAR STEARNS, ITS CONTROL PERSONS, PREDECESSORS, SUBSIDIARIES AND AFFILIATES AND ALL RESPECTIVE SUCCESSORS, ASSIGNS AND EMPLOYEES, WHETHER ARISING PRIOR TO, ON OR SUBSEQUENT TO THE DATE HEREOF, SHALL BE DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER THIS AGREEMENT SHALL BE HELD AT THE FACILITIES AND BEFORE AN ARBITRATION PANEL APPOINTED BY THE NEW YORK STOCK EXCHANGE, INC., THE AMERICAN STOCK EXCHANGE, INC., OR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (AND ONLY BEFORE SUCH EXCHANGES OR ASSOCIATION). YOU MAY ELECT ONE OF THE FOREGOING FORUMS FOR ARBITRATION, BUT IF YOU FAIL TO MAKE SUCH ELECTION BY REGISTERED MAIL OR TELEGRAM ADDRESSED TO BEAR, STEARNS SECURITIES CORP., 245 PARK AVENUE, NEW YORK, NEW YORK 10167, ATTENTION: CHIEF LEGAL OFFICER (OR ANY OTHER ADDRESS OF WHICH YOU ARE ADVISED IN WRITING), BEFORE THE EXPIRATION OF TEN DAYS AFTER RECEIPT OF A WRITTEN REQUEST FROM BEAR STEARNS TO MAKE SUCH ELECTION, THEN BEAR STEARNS MAY MAKE SUCH ELECTION. FOR ANY ARBITRATION SOLELY BETWEEN YOU AND A BROKER FOR WHICH BEAR STEARNS ACTS AS CLEARING AGENT, SUCH ELECTION SHALL BE MADE BY REGISTERED MAIL TO SUCH BROKER AT ITS PRINCIPAL PLACE OF BUSINESS. THE AWARD OF THE ARBITRATORS, OR OF THE MAJORITY OF THEM, SHALL BE FINAL, AND JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING JURISDICTION. 22. SEVERABILITY. If any provision herein is or should become inconsistent with any present or future law, rule or regulation of any sovereign government or regulatory body having jurisdiction over the subject matter of this Agreement, such provision shall be deemed to be rescinded or modified in accordance with any such law, rule or regulation. In all other respects, this Agreement shall continue to remain in full force and effect. 23. CAPACITY TO CONTRACT; CUSTOMER AFFILIATION. You represent that you are of legal age and that, unless you have notified Bear Stearns to the contrary, neither you nor any member of your immediate family is an employee of any exchange or member thereof, the National Association of Securities Dealers, Inc., or a member thereof, or of any corporation, firm or individual engaged in the business of dealing, as broker or principal, in securities, options or futures, or of any bank, trust company or insurance company. 24. EXTRAORDINARY EVENTS. Bear Stearns shall not be liable for losses caused directly or indirectly by government restrictions, exchange or market rulings, suspension of trading, war, strikes or other conditions beyond its control. 25. HEADINGS. The headings of the provisions hereof are for descriptive purposes only and shall not modify or qualify any of the rights or obligations set forth in such provisions. 26. TELEPHONE CONVERSATIONS. For the protection of both you and Bear Stearns, and as a tool to correct misunderstandings, you hereby authorize Bear Stearns at Bear Stearns' discretion and without prior notice to you, to monitor and/or record any or all telephone conversations, between you, Bear Stearns and any of Bear Stearns' employees or agents. If this is a Joint Account, both parties must sign. Persons signing on behalf of others should indicate the titles or capacities in which they are signing. BY SIGNING THIS AGREEMENT YOU ACKNOWLEDGE THAT: 1. THE SECURITIES IN YOUR MARGIN ACCOUNT(S) AND ANY SECURITIES FOR WHICH YOU HAVE NOT FULLY PAID, TOGETHER WITH ALL ATTENDANT OWNERSHIP RIGHTS, MAY BE LOANED TO BEAR STEARNS OR LOANED OUT TO OTHERS; AND 2. YOU HAVE RECEIVED A COPY OF THIS AGREEMENT. THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT PARAGRAPH 21. THIS AGREEMENT IS DATED AS OF JANUARY 29, 1996. LARRY L. DUNLAP (Typed or Printed Name) /S/ LARRY L. DUNLAP (Signature) LAURA RHODENBAUGH (Typed or Printed Name) /S/ LAURA RHODENBAUGH (Signature) Accepted By:__________________________ (Bear, Stearns Securities Corp.) ______________________________________ ______________________________________ (Mailing Address) ACCOUNT NO:___________________________ DATE:_________________________________ DATE:_________________________________ EX-2 3 EXHIBIT 2 TO SCHEDULE 13D Exhibit 2 WORKING CAPITAL MANAGEMENTSM ACCOUNT AGREEMENT This agreement ("WCMA Agreement") sets forth the terms and conditions governing the Working Capital Management account ("WCMA Account") financial service ("WCMA Service"). The Customer agrees to read this WCMA Agreement and keep it for its records because, by signing the WCMA Agreement ("WCMA Application"), the Customer is agreeing to its terms. It is understood that before the WCMA program, as hereinafter described, is provided, it will be necessary: (a) for MLPF&S to open a conventional Cash Securities Account or, Margin Securities Account (please check one) for the Customer (the "Securities Account"). DEFINITIONS In this WCMA Agreement, "Customer" means the business or organization on whose behalf the WCMA Application, which incorporates the WCMA Agreement by reference, is signed. "MLPF&S" means Merrill Lynch, Pierce, Fenner & Smith Incorporated. "MLB&T" means Merrill Lynch Bank & Trust Co. "MLNF" means Merrill Lynch National Financial. "Bank One" means Bank One, Columbus, N.A. "Chase" means Chase Manhattan Bank, N.A. MLB&T, MLNF, Bank One and Chase are referred to collec- tively as "Banks." "WCMA Check/Card Account" means the account(s) established by MLPF&S for Customer with one or more of the Banks. "WCMA Checks" means issued by Bank One to Customer for use with the WCMA Check/Card Account. "Card(s)" means one or more Visa cards issued by MLB&T or MLNF for use with the WCMA Check/ Card Account. "Money Funds" means the CMA(R) money market funds. "Money Accounts" means the Money Funds and any FDIC insured money market deposit accounts opened for the Customer through the Insured Savings" Account ("ISA") program. "Securi- ties Account" means an MLPF&S securities account established for the Customer, which is either a cash account, or if the Customer elects the WCMA Investor CreditLine service in its WCMA Application, a margin account. For purposes of this WCMA Agreement, "securities and other property" means, but is not limited to, money, securities, financial instruments and commodities of every kind and nature and all contracts and options relating thereto, whether for present or future delivery. The Customer hereby acknowledges that the WCMA Program will operate substantially as follows, and consents and agrees to the following terms and conditions: 1. DESCRIPTION OF THE WCMA SERVICE The WCMA Service is an integrated financial service linking three components: the Securities Account, a choice of several Money Accounts and the WCMA Check/Card Account. (A) SECURITIES ACCOUNT. The Securities Account may be used to purchase, sell and hold securities and other investments available from or through MLPF&S. If the Securities Account includes the WCMA Investor CreditLine service, it may also be utilized to purchase and sell securities on credit or to obtain loans based on the current margin loan value of securities in the Securities Account. The Customer agrees to pay normal brokerage fees for securities transactions in the Securities Account. (B) MONEY ACCOUNTS. The Customer acknowledges receipt of copies of the Prospectuses of the CMA no-load money market mutual funds (the "CMA Funds") and the Insured Savings Account Fact Sheet which contain a more complete description of the CMA Money Accounts and of the "Merrill Lynch Cash Management Account(R) Program Description for the Working Capital Managements Account," which documents, as amended from time to time, are incorporated herein by reference and made a part hereof. (C) MONEY ACCOUNT INVESTMENTS/DEPOSITS. Available free credit balances (i.e., any cash that may be transferred out of the Securities Account without giving rise to interest charges) will be automatically invested or deposited in the Money Account designated by the Customer as its "Primary Money Account" on each Business Day (as defined below), except as otherwise provided in this WCMA Agreement with respect to the application of funds to: (i) repay advances made, if applicable, from the WCMA Investor CreditLine service; (ii) reestablish the Minimum Money Account Balance under the WCMA Directed Reserve program; or (iii) pay other charges. Investments in Money Fund shares will be made at their current net asset value under the circumstances described in the Prospectuses of the Money Funds under "Purchase and Redemption of Shares." Free credit balances become available for investment or deposit through the Primary Money Account in the following manner: (i) with respect to (x) the proceeds of sales of securities, (y) deposits made by wire transfer or the Funds Transfer Service provided to Customers by MLPF&S ("FTS"), or (z) dividend or interest receipts, on the next Business Day following receipt; and, (ii) with respect to deposits from any other source, on the second Business Day following receipt, unless the deposit is made after the cut-off time for such deposits, in which case, on the third Business Day following receipt. The Customer agrees that its Money Account balances may be automatically redeemed or withdrawn to satisfy obligations arising in the Customer's Securities Account. If the Customer establishes an account with the WCMA Investor CreditLine service this will include shares constituting its Minimum Money Account Balance and amounts necessary to satisfy minimum equity requirements. If the Money Account designated by the Customer as its Primary Money Account is unavailable for any reason, MLPF&S is authorized, but not obligated to cause available free credit balances in the Securities Account to be invested in shares of the CMA Money Fund. Customers with the WCMA Investor CreditLine service may designate a Minimum Money Account Balance under the WCMA Directed ReserveSM program. Under certain circumstances, Money Account Balances representing the Minimum Money Account Balance may be redeemed or withdrawn by MLPF&S. (D) WCMA CHECK/CARD ACCOUNT. The Customer authorizes MLPF&S to open a WCMA Check/Card Account for the Customer with the Banks and agrees that WCMA Checks and Cards, if any, issued by the Banks shall be used solely in conjunction with the WCMA Service and subject to the terms and conditions of this WCMA Agreement. The representatives of the Customer designated in The WCMA Check and Card Instructions (the "Instructions") are authorized to write WCMA Checks on the Customer's WCMA Check/Card Account. The Customer shall, on a continuing basis, be responsible for the care and safekeeping of WCMA Checks provided by the Bank and for the review of the monthly statements provided by MLPF&S, in order promptly to discover and report to MLPF&S the possible unauthorized use of said checks. The customer shall permit only those persons authorized in the WCMA Application to sign checks on behalf of the company, to prepare, complete or issue WCMA Checks on the company's behalf or to have access to unissued WCMA Checks. The Customer shall be responsible for any and all losses and damages, indirect or consequential, that arise from or are attributable to the breach of the Customer's undertaking to safeguard its WCMA Checks, to review its monthly statements or to permit only designated persons to have access to or prepare, complete or issue WCMA Checks. The Customer agrees to notify MLPF&S immediately if it believes or has reason to believe that the Customer's WCMA Checks have been used or signed by an unauthorized person. If the Customer requests that WCMA Checks be printed with two or more signature lines for counter signature purposes, the Customer agrees that the requirement for more than one signature is for the Customer's internal purposes only, and neither MLPF&S nor the Bank shall have any responsibility or liability for the payment of any check without a counter signature or with an unauthorized counter signature. (E) CUSTODY OF SECURITIES. MLPF&S will hold all securities for the Customer's Securities Account either: (i) with an SEC-approved securities depository, where deposited securities are held in fungible bulk in the nominee name of such depository with any other securities of the same class of the same issuer belonging to other MLPF&S customers; or (ii) with a Federal Reserve member bank, where deposited securities are commingled in a book-entry account with securities belonging to other MLPF&S customers. The Customer's securities will at all times be separately identified on the books and records of MLPF&S as belonging to the Customer, and MLPF&S will exercise the due care expected of a professional custodian with respect to such securities. Notwithstanding the foregoing, MLPF&S shall not be responsible for any loss or damage with respect to the Customer's securities that may occur as a result of war, civil commotion, enemy action, or governmental acts or any other causes beyond the control of MLPF&S or such depository. (F) RESTRICTION ON SECURITIES TRANSACTIONS. The Customer agrees that under no circumstances shall the WCMA Check/Card Account be used to purchase shares of the Money Accounts or to effect transactions in the Securities Account or other MLPF&S accounts. 2. WCMA AVAILABILITY AND PAYMENT PROCEDURES For purposes of this WCMA Agreement, the total of: (i) any available free credit balances in the Securities Account; (ii) the available redemption value of shares or deposit balance of the Customer's Money Accounts (including any applicable Minimum Money Account Balance), subject to any delays in availability as previously described; and (iii)if applicable, the available margin loan value of the Customer's WCMA Investor CreditLine service constitutes the Customer's "WCMA Availability." (WCMA Availability may be referred to in some documents provided to the Customer as "Purchasing Power.") The Customer's WCMA Availability is used determine the total amount available to the Customer for the payment of WCMA Checks, Card transactions and other transfers of funds. MLPF&S may delay increasing WCMA Availability for up to 10 business days after the receipt of checks or other negotiable instruments used to reduce any applicable margin loan balance of the WCMA Investor CreditLine service. (A) TRANSACTIONS EXCEEDING WCMA AVAILABILITY. If a transaction exceeds the Customer's WCMA Availability, Chase or any successor to or assign of Chase may accept such transaction as an overdraft and advance funds to MLPF&S or the Banks in the amount exceeding the Customer's WCMA Availability. Any overdraft, together with any finance charges ("Finance Charge(s)") incurred, is immediately due and payable to Chase. In each overdraft statement cycle, Finance Charges are figured by applying a daily periodic rate of .049315% (18% ANNUAL PERCENTAGE RATE) to the Average Daily Balance of overdrafts and by multiplying the resulting figure by the number of days in that statement cycle. A daily overdraft balance is calculated each day by starting with the beginning balance of amounts owed, adding any new overdrafts and subtracting any payments or credits received that day and unpaid Finance Charges. The Average Daily Balance is then 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. Finance Charges accrue from the date Chase accepts an overdraft until the date payment is made. (B) PERIODIC OVERDRAFT BILLING STATEMENT. The Customer will receive periodic overdraft billing statement from Chase which will detail among other disclosures any overdraft(s) plus Finance Charges on the overdraft(s), payments and credits and the balance due. MLPF&S will promptly upon receipt of notice, make payment to the Bank for any WCMA Check or Card transactions, or initiate other transfers on the Customer's behalf to the extent of the Customer's WCMA Availability. Payments, including without limitations any fees payable in connection with the WCMA Service will be made in the following order: first, from any available free credit balances in the Securities Account; second, from the proceeds of redemption withdrawal beginning with the Primary Money Account and continuing in the order in which the Customer established its non-primary Money Accounts, if any, but excluding any applicable Minimum Money Account Balance; third, any applicable margin loans up to the available margin loan value of the Customer's WCMA Investor CreditLine; and fourth, from the proceeds of redemption of shares or withdrawals of any applicable Minimum Money Account Balance. 3. FUNDS TRANSFERS (A) GENERAL. Requests for wire transfers of funds will be transmitted to banks selected by MLPF&S as agent for the Customer. Such banks and any subsequent banks involved in the transfer may use various wire transfer systems, including the Fedwire system, when carrying out the Customer's request. The rights and obligations of the Customer, MLPF&S and any banks involved in carrying out the Customer's wire transfer requests are governed by Article 4A of the Uniform Commercial Code, and by applicable rules of automated clearing house associations or, for Fedwires, by Subpart B of Regulation J of the Federal Reserve Board of Governors. Transfers of funds throughout the banking system and related funds transfer and communications systems, including the Fedwire system, involve various risks which the Customer assumes in requesting wire transfers. Such risks include, but are not limited to the following: 1 ) the liability of banks with respect to wire transfers may be limited by law and by contract; in particular, their responsibility for processing transfers may be limited to relying upon identifying (e.g., account) numbers rather than account party names; 2) Customer may not be able to cancel or amend a wire transfer request once transmitted to a bank for processing; and 3) Fedwires are irreversible once transmitted by a bank and may not be recoverable. The Customer agrees that MLPF&S is acting as the Customer's agent in transmitting wire transfer requests to banks selected by MLPF&S and the Customer shall be regarded as the "sender" of such wire transfers. In addition to applicable law, the Customer's rights and obligations shall be governed by contracts that MLPF&S enters into with banks from time to time for wire transfers of its own and the Customer's funds. The Customer agrees that MLPF&S's security procedures, which include a confidential password to initiate transfers through the WCMA Funds Transfer Service, and the security procedures of banks that MLPF&S contracts with for transfers of funds are commercially reasonable. If MLPF&S notifies the Customer of changes in its own security procedures or if MLPF&S agrees to modified security procedures of such banks from time to time, the Customer's continued use of the Service to request wire transfers shall constitute the Customer's agreement that such changed security procedures are commercially reasonable. The Customer has a right to request information about applicable security procedures at any time. (B) WCMA FUNDS TRANSFER SERVICE. The Customer may elect to enroll in FTS by completing the WCMA Funds Transfer Service Enrollment Form ("FTS Enrollment Form"), which document, as amended from time to time, is hereby incorporated by reference and made a part hereof. If the Customer so elects, the Customer authorizes MLPF&S to initiate the transfer of funds on its behalf in accordance with instructions reasonably believed by MLPF&S to have been given from time to time by those persons designated by the Customer in its FTS Enrollment Form, which persons are deemed to be the Customer's agents and attorneys-in-fact. All FTS transfer requests must be accompanied by the number of the Securities Account and the confidential password ("FTS Password") selected by the Customer. Such transfers may be made by initiating credit or debit transfers to or from accounts at MLPF&S or at one or more financial institutions designated by the Customer in its FTS Enrollment Form, and the institutions participating in such transfers are hereby authorized to accept such debit or credit transfer instructions communicated by MLPF&S and to transfer funds in accordance therewith. In the event that erroneous transfers are made pursuant to FTS, MLPF&S is authorized to initiate debit or credit transfers to correct such erroneous transfers, provided that any such correction is made in accordance with applicable laws, rules, or regulations. For purposes of this WCMA Agreement, a FTS Password shall cease to be effective at the commencement of business by MLPF&S on the first Business Day following receipt of written or telephone notice of cancellation of the Customers FTS Password, directed to MLPF&S. The Customer shall not disclose its FTS Password to any person other than those persons that it has designated as authorized to initiate FTS transfers. The Customer understands that it shall be liable for all transfers of funds, whether or not actually authorized by the Customer, which are initiated by instructions which include the FTS Password of the Customer then in effect, as well as any and all losses and damages, direct, indirect or consequential, that arise from or are attributable to such transfers. The Customer understands and agrees that MLPF&S may accept debit and/or credit instructions to debit and/or credit an account in which the person(s) named in the FTS Enrollment Form may have an interest and MLPF&S shall have no obligation to ascertain the propriety of any such instructions. 4. TERMINATION OF THE CUSTOMER'S SUBSCRIPTION TO THE WCMA SERVICE MLPF&S may terminate the Customer's subscription to the WCMA Service at any time in its sole discretion. The Customer may terminate its subscription to the WCMA Service at any time upon notice to MLPF&S. Without limiting MLPF&S's rights in this regard, the deposit of checks followed by the prompt withdrawal of funds, for the primary purpose of earning dividends or interest on Money Account balances from the time MLPF&S advances funds on the Customer's behalf until checks so deposited are collected, is inconsistent with the WCMA Service. MLPF&S may terminate the Customer's subscription to the WCMA Service if, in its sole judgment, it appears to MLPF&S that the Customer is so acting. Should the Customer's subscription to the WCMA Service be terminated, MLPF&S may and is hereby authorized to redeem all shares of the Money Funds and unless otherwise directed at the time withdraw all ISA deposits owned by the Customer (including, if applicable, any shares and/or deposits representing the Minimum Money Account Balance), and to direct the liquidation of any securities or investments held by MLPF&S on behalf of the Customer, and apply the proceeds thereof to repay any amount payable by the Customer pursuant to this WCMA Agreement. MLPF&S shall have the right to set off any amount owing under this WCMA Agreement against any monies due to the Customer and any monies held in an account of the Customer with MLPF&S or any of its affiliates. All rights and remedies of MLPF&S existing at termination of the Customer's subscription to the WCMA Service shall survive and shall be in addition to all other rights and remedies available at law or equity. Upon termination of the Customer's subscription to the WCMA Service, the Customer shall promptly return all Cards and unused WCMA Checks to MLPF&S. Failure to return the Cards or such WCMA Checks to MLPF&S may result in a delay in complying with the Customer's instructions as to the disposition of the proceeds from the redemption or withdrawal of the Customer's Money Account balances and its Securities Account assets. 5. AUTHORIZATION WITH RESPECT TO CREDIT INFORMATION The Customer hereby authorizes MLPF&S and the Banks to obtain and disclose any and all financial and other information relating to the Customer to each other, to MLPF&S and to any affiliates of MLPF&S. 6. PERIODIC STATEMENTS AND NOTICES The Customer will receive a statement on a monthly basis from MLPF&S on its own behalf and as agent for the Banks, and any ISA participating depository institutions, which statement will describe transactions relating to the Customer's subscription to the WCMA Service. The statement of account, as stated, shall be deemed conclusive as to the Customer if not objected to within ten (10) days of mailing. It is therefore understood that the Customer should carefully and promptly review each monthly statement. Any notices or other communications by MLPF&S to the Customer's address listed in the WCMA Application or to such other address as may be designated from time to time in writing by the Customer, and all notices and other communications so sent by whatever means, shall be deemed to have been given personally to the Customer, upon such sending, whether or not actually received. 7. LIMITATIONS ON LIABILITY MLPF&S, the Banks, and any third parties providing services pursuant to this WCMA Agreement make no representations, warranties, or guarantees, express or implied, with respect to the WCMA Service or any services provided in accordance therewith, except as otherwise set forth in this WCMA Agreement. In no event shall MLPF&S, the Banks, or any third party providing services pursuant to this WCMA Agreement be liable for lost profits or any special, consequential, or exemplary damages of any nature resulting from the conduct of the WCMA Service, even if MLPF&S, the Banks, or any such third party has been notified of the possibility of such losses or damages, provided, however, that this shall not limit any party's liability for compensation damages due to negligence or willful misconduct. 8. EXTRAORDINARY EVENTS MLPF&S shall have no obligation to provide services in connection with the WCMA Service when and to the extent that MLPF&S or any party that provides services or facilities to MLPF&S in connection with the WCMA Service is prevented from doing so by government restrictions, exchange or market rulings, suspension of trading, electronic or telephone failures, labor dispute, war, or any other cause not within MLPF&S's or such other party's reasonable control. 9. REPRESENTATIONS, ADDITIONAL TERMS AND AMENDMENTS The Customer acknowledges receipt of copies of the Money Funds' prospectuses, the Insured Savings Account Fact Sheet and the Program Description of the Working Capital Management Account, which shall be referred to as the "Documents" for purposes of this WCMA Agreement. The Documents, which contain additional terms governing the WCMA Service, are incorporated into this WCMA Agreement and made a part hereof. MLPF&S and the Banks shall have the right to amend the Documents as provided in the next paragraph. Unless the context otherwise requires, the term "WCMA Agreement" shall include the Documents, as amended from time to time. The Customer agrees that MLPF&S shall have the right to amend this WCMA Agreement, by modifying or rescinding any of its existing provisions or by adding any new provision, by sending written notice at least 30 days before the effective date of the amendment. The Customer understands that there may be additional documentation required by applicable law or the policies and procedures of MLPF&S or the Banks. The Customer agrees to promptly comply with any such requests for additional documents. 10. MISCELLANEOUS (A) SEPARABILITY. If any provisions of this WCMA Agreement are held to be invalid, illegal, void or unenforceable by reason of any law, rule, administrative order, or judicial decision, all other provisions of this WCMA Agreement shall nevertheless remain in full force and effect. (B) JOINT AND SEVERAL LIABILITY. If there is more than one Customer signing this WCMA Agreement, their obligations under this WCMA Agreement shall be joint and several. (C) COSTS OF COLLECTION. To the extent permitted by applicable law the Customer agrees to pay the reasonable costs and expenses of collection, including attorneys' fees, for any unpaid balance in the Securities Account or other amounts owed by the Customer to MLPF&S or the Bank pursuant to this WCMA Agreement. (D) BUSINESS DAY. For purposes of this WCMA Agreement, "Business Day" means any day on which MLPF&S is open to the public for carrying on substantially all its business functions. (E) CAPTIONS AND HEADINGS. Captions and headings of this WCMA Agreement are not part of this WCMA Agreement and shall not be considered in its interpretation. (F) INTEGRATION. This WCMA Agreement, together with all other documents incorporated herein by reference or required by MLPF&S in connection herewith constitutes the entire understanding of the parties with respect to the subject matter hereof and may not be modified or altered except by a writing signed by the party/parties against which such modification or alteration is sought to be enforced. (G) APPLICABLE RULES AND REGULATIONS. All transactions in the Securities Account and all WCMA Investor CreditLine service transactions 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 MLPF&S or its agents, including subsidiaries and affiliates of MLPF&S. PARAGRAPH 11 APPLIES ONLY WHEN THE CARD PORTION OF THE CARD/CHECK ACCOUNT IS USED, INCLUDING WHEN CARDS ARE OBTAINED. 11. In connection with the Customer's subscription to the WCMA financial service, the Customer hereby requests that MLNF or MLB&T issue one or more Visa(R) cards to the Customer for use in conjunction with the Customer's subscription to the WCMA financial service (the "Card"). The Application will be considered accepted by MLB&T or MLNF when a Card is issued to the Customer, and the Customer agrees to be bound by the following terms and conditions: (A) OWNERSHIP. The Card remains the property of MLB&T or MLNF and may be canceled by MLB&T or MLNF at any time without prior notice. The Customer agrees to surrender the Card immediately upon the request of MLB&T, MLNF or MLPF&S. (B) LIABILITY. The Customer will be liable for all transactions made by the Customer, or by any person authorized to act on the Customer's behalf, through the use of the Card. (C) UNAUTHORIZED VISA CARD USE. The Customer may be liable for the unauthorized use of its Card in an amount up to $50. The Customer will not be liable for any unauthorized use which occurs after MLPF&S, MLNF or MLB&T has been notified orally or in writing of loss, theft or possible unauthorized use. Notice should be directed to the address or the phone number set forth in the Program Description for the Working Capital Management Account. (D) CASH MACHINE SERVICE. The Customer may elect to enroll in the Merrill Lynch Cash Machine Service. If the Customer has requested such service and a Personal Identification Number (the "PIN") chosen by the Customer has been approved by MLPF&S, MLNF or MLB&T, the Customer may obtain cash, subject to WCMA Availability (as that term is defined in this WCMA Agreement), at the machines designated by MLPF&S from time to time. during the hours that these machines are accessible to the general public. The Customer shall not disclose its PIN to any person other than those persons it has authorized to use the Cash Machine Service. (E) TERMINATION OF ACCOUNT. The Customer's right to use the Card will automatically be terminated if the Customer's subscription to the WCMA financial service is terminated by the Customer or MLPF&S. It is also understood that MLB&T or MLNF may terminate the Customer's right to use the Card at any time in its discretion without prior notice. If the Customer's right to use the Card is terminated for any reason, the Customer shall promptly return the Card to MLB&T, MLNF or MLPF&S. (F) ACCOUNT INQUIRIES. It is understood that inquiries and error allegations concerning the Card Account and the monthly statement should be directed through MLPF&S. (G) DESIGNATION. Certain individuals are designated in the WCMA Application as authorized to use Cards, execute sales drafts, or cash advances and use the Cash Machine Service, and each individually can do anything that the Customer can do under this WCMA Agreement. Any of these persons 'whose name and signature appear in the WCMA Application are each authorized to empower any person(s) whom he or she deems proper at any time to do any and all things that he or she is authorized to do. The designations and authorizations shall remain effective until MLB&T or MLNF receives notification in writing to the contrary. PARAGRAPH 12 APPLIES ONLY IF THE CUSTOMER REQUESTS THAT THE SECURITIES ACCOUNT BE ESTABLISHED WITH THE WCMA INVESTOR CREDITLINE SERVICE. 12. WCMA INVESTOR/CREDITLINE SERVICE The WCMA Investor CreditLine service permits the Customer to obtain loans from MLPF&S secured by eligible marginable and exempt securities. (A) MARGIN REQUIREMENTS AND CREDIT CHARGES. The Customer will maintain such securities and other property in the Securities Account for margin purposes as MLPF&S shall require from time to time; and the monthly debit balance of the Securities Account shall be charged, in accordance with MLPF&S's usual custom, with interest at a rate permitted by the laws of the State of New York. It is understood that the interest charge made to the Customer's Securities Account at the close of a charge period will, unless paid, be added to the opening balance for the next charge period and that interest will be charged upon such opening balance, including all interest so added. (B) SECURITY INTEREST. All securities or other property now or hereafter held, carried or maintained by MLPF&S or by any of its affiliates in MLPF&S's possession and control, or in the possession and control of any such affiliate, for any purpose, in or for any account of the Customer, now or hereafter opened, including any account in which the Customer may have an interest, shall be subject to a lien for the discharge of all the indebtedness and other obligations of the Customer to MLPF&S and are to be held by MLPF&S as security for the payment of any liability or indebtedness of the Customer to MLPF&S in any of said accounts. MLPF&S shall have the right to transfer securities and other property so held by MLPF&S from or to any of the accounts of the Customer whenever in its judgment MLPF&S considers such a transaction necessary for its protection. In enforcing its lien, MLPF&S shall have the discretion to determine which securities and property are to be sold and which contracts are to be closed. (C) REPRESENTATIONS AS TO BENEFICIAL OWNERSHIP AND CONTROL. The Customer represents that with respect to securities against which margin credit is or may be extended by MLPF&S: (i) the Customer is not the beneficial owner of more than three percent (3%) of the number of outstanding shares of any class of equity securities; and (ii) does not control, is not controlled by and is 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, the Customer will promptly so advise MLPF&S in writing. (D) CALLS FOR ADDITIONAL COLLATERAL--LIQUIDATION RIGHTS. (I) MLPF&S, IN ADDITION TO AND NOT IN LIEU OF ANY OTHER RIGHTS OR REMEDIES IT MAY HAVE UNDER THIS WCMA AGREEMENT, SHALL HAVE THE RIGHT TO REQUIRE ADDITIONAL COLLATERAL: (A) IN ACCORDANCE WITH ITS GENERAL POLICIES REGARDING ITS MARGIN MAINTENANCE AND REQUIREMENTS, AS SUCH MAY BE MODIFIED, AMENDED OR SUPPLEMENTED FROM TIME TO TIME; OR (B) IF IN ITS DISCRETION MLPF&S CONSIDERS IT NECESSARY FOR ITS PROTECTION AT AN EARLIER OR LATER POINT IN TIME THAN CALLED FOR BY SAID GENERAL POLICIES; OR (C) IN THE EVENT THAT A PETITION IN BANKRUPTCY OR FOR AN APPOINTMENT OF A RECEIVER IS FILED BY OR AGAINST THE CUSTOMER; OR (D) IF AN ATTACHMENT IS LEVIED AGAINST THE ACCOUNTS OF THE CUSTOMER; OR (E) IN THE EVENT OF THE DEATH OR DISSOLUTION OF THE CUSTOMER. (II) IF THE CUSTOMER DOES NOT PROVIDE MLPF&S WITH ADDITIONAL COLLATERAL AS MLPF&S MAY REQUIRE LN ACCORDANCE WITH (A) OR (B), OR SHOULD AN EVENT DESCRIBED IN (C), (D) OR (E) OCCUR (WHETHER OR NOT MLPF&S ELECTS TO REQUIRE ADDITIONAL COLLATERAL), MLPF&S SHALL HAVE THE RIGHT: (A) TO SELL ANY OR ALL SECURITIES AND OTHER PROPERTY IN THE ACCOUNTS OF THE CUSTOMER WITH MLPF&S OR WITH ANY OF ITS AFFILIATES, WHETHER CARRIED INDIVIDUALLY OR JOINTLY WITH OTHERS; (B) TO BUY ANY OR ALL SECURITIES AND OTHER PROPERTY WHICH MAY BE SHORT IN SUCH ACCOUNTS; AND (C) TO CANCEL ANY OPEN ORDERS AND TO CLOSE ANY OR ALL OUTSTANDING CONTRACTS. MLPF&S MAY EXERCISE ANY OR ALL OF ITS RIGHTS UNDER (II)(A), (B) AND (C) 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 THE DISCRETION OF MLPF&S ON ANY EXCHANGE OR OTHER MARKET WHERE SUCH BUSINESS IS USUALLY TRANSACTED, OR AT PUBLIC AUCTION OR PRIVATE SALE AND MLPF&S MAY NOT BE THE PURCHASER FOR ITS OWN ACCOUNT. IT IS UNDERSTOOD THAT THE GIVING OF ANY PRIOR DEMAND OR CALL OR PRIOR NOTICE OF THE TIME AND PLACE OF SUCH SALE OR PURCHASE BY MLPF&S SHALL NOT BE CONSIDERED A WAIVER OF ITS RIGHT TO SELL OR BUY WITHOUT ANY SUCH DEMAND, CALL OR NOTICE AS HEREIN PROVIDED. (E) PAYMENT OF INDEBTEDNESS UPON DEMAND. The Customer shall at all times be liable for the payment upon demand of any debit balance or other obligation owing in any of the accounts of the Customer with MLPF&S and the Customer shall be liable to MLPF&S for any deficiency remaining in any such accounts in the event of the liquidation thereof, in whole or in part, by MLPF&S or the Customer, and Customer shall make payment of such obligations upon demand. (F) PLEDGE OF SECURITIES AND OTHER PROPERTY. All securities and other property now or hereafter held, carried or maintained by MLPF&S in its possession or control in any of the accounts of the Customer may be pledged and repledged by MLPF&S from time to time, without notice to the Customer either separately or in common with other such securities and other property, for any amount due in the accounts of the Customer; or for any greater amount, and MLPF&S may do so without retaining in its possession or under its control for delivery a like amount of similar securities or other property. (G) LENDING AGREEMENT. Within the limitations imposed by applicable laws, rules and regulations, MLPF&S is hereby authorized to lend itself, as principal or otherwise, or to others, any securities held by MLPF&S on margin for any accounts of the Customer as collateral therefore either separately or with other securities. It is recognized that any losses or other detriment, or gains or other benefits, arising from any such lending of securities shall not accrue to the account of the Customer. 13. REPRESENTATION AS TO OWNERSHIP OF CUSTOMER The Customer represents that no one except the Customer has an interest in the account or accounts of the Customer with MLPF&S. The Customer represents that no person having an ownership interest in Customer is an employee of any exchange, or of any corporation of which any exchange owns a majority of the capital stock, or of a member of any exchange, or of a member firm, or member corporation registered on an exchange, or 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 foregoing representations is inaccurate or becomes inaccurate, the Customer will promptly so advise in writing. 14. APPLICABLE LAWS THIS WCMA AGREEMENT, WITH RESPECT TO ALL ASPECTS OF THE WCMA SERVICE, INCLUDING MARGIN INTEREST CHARGES, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCEPT AS FOLLOWS: THE TERMS OF THE CUSTOMER'S AGREEMENT WITH MLB&T INCLUDING THOSE RELATING TO THE ISSUANCE OF THE CARD ARE GOVERNED BY FEDERAL AND NEW JERSEY LAW. THE TERMS OF THE CUSTOMER'S AGREEMENT WITH MLNF, INCLUDING THOSE RELATING TO THE ISSUANCE OF THE CARD ARE GOVERNED BY FEDERAL AND UTAH LAW. THE TERMS OF TITLE CUSTOMER'S AGREEMENT WITH CHASE, INCLUDING THOSE RELATING TO FINANCE CHARGES, ARE GOVERNED BY FEDERAL AND NEW YORK LAW. THE TERMS OF THE CUSTOMER'S AGREEMENT WITH BANK ONE ARE GOVERNED BY OHIO LAW. 15. ARBITRATION OF CONTROVERSIES WITH MLPF&S - - 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. THE CUSTOMER AGREES THAT ALL CONTROVERSIES WHICH MAY ARISE BETWEEN THE CUSTOMER AND MLPF&S, INCLUDING, BUT NOT LIMITED TO, THOSE INVOLVING ANY TRANSACTION OR THE CONSTRUCTION, PERFORMANCE, OR BREACH OF THIS OR ANY OTHER AGREEMENT BETWEEN THE CUSTOMER AND MLPF&S, 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 OF WHICH MLPF&S IS A MEMBER, THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., OR THE MUNICIPAL SECURITIES RULEMAKING BOARD, AND IN ACCORDANCE WITH ITS ARBITRATION RULES THEN IN FORCE. THE CUSTOMER MAY ELECT IN THE FIRST INSTANCE WHETHER ARBITRATION SHALL BE CONDUCTED BEFORE THE NEW YORK STOCK EXCHANGE, INC., THE AMERICAN STOCK EXCHANGE, INC., OTHER EXCHANGE OF WHICH MLPF&S IS A MEMBER, THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., OR THE MUNICIPAL SECURITIES RULEMAKING BOARD, BUT IF THE CUSTOMER FAILS TO MAKE SUCH AN ELECTION, BY REGISTERED LETTER OR TELEGRAM ADDRESSED TO MLPF&S AT THE OFFICE WHERE THE CUSTOMER MAINTAINS THE ACCOUNT, BEFORE THE EXPIRATION OF FIVE DAYS AFTER RECEIPT OF A WRITTEN REQUEST FROM MLPF&S TO MAKE SUCH ELECTION, THEN MLPF&S MAY MAKE SUCH ELECTION. JUDGMENT UPON THE AWARD OF 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) THE 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 EXCEPT TO THE EXTENT STATED HEREIN. BY SIGNING THIS AGREEMENT, THE UNDERSIGNED CUSTOMER CONSENTS AND AGREES TO ALL OF THE FOREGOING TERMS AND CONDITIONS AND ACKNOWLEDGES (1)THAT, IN ACCORDANCE WITH PARAGRAPH 15 ON PAGE 7, THE CUSTOMER IS AGREEING IN ADVANCE TO ARBITRATE ANY CONTROVERSIES WHICH MAY ARISE WITH MLPF&S; (2) THAT, IF THE ACCOUNT IS BEING ESTABLISHED WITH THE INVESTOR CREDITLINE SERVICE, THEN PURSUANT TO PARAGRAPH 12 (G) CERTAIN OF THE CUSTOMER'S SECURITIES MAY BE LOANED TO MLPF&S OR LOANED OUT TO OTHERS, AND (3) RECEIPT OF A COPY OF THIS AGREEMENT. Name of Business: Horejsi Enterprises, Inc. Signature: /s/ Larry L. Dunlap Printed Name: Larry L. Dunlap Title (Examples: Chairman, President, Vice President, Managing Director, all General Partners, Sole Owner): Chairman Note: If this agreement is with a Partnership, all general partners must sign this page (continue below if necessary). Address_____________________________________ ____________________________________________ Note: 1 ) Check here if you want your WCMA account processed to request automatic borrowing power through the WCMA Investor CreditLine service. 2) Check here if you request MLB&Tor MLNF to issue one or more Visa Cards. EX-3 4 EXHIBIT 3 TO SCHEDULE 13D Exhibit 3 CASH MANAGEMENT ACCOUNT(R) AGREEMENT INTRODUCTION This Agreement contains the terms governing the Cash Management Account(R) financial service ("CMA(R) Service"). 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 SubAccountSM 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(R) 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 Program 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 SavingsSM 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(R) 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 CreditLineSM service, a margin account, (2) a choice of Money Accounts, (3) if applicable, a Card/Check Account provided by the Banks and (4) in applicable, optional CMA services as described in the Cash Management Account Program Description. DESCRIPTION OF THE CMA MASTER FINANCIALSM SERVICE 2. The CMA Master FinancialSM 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 SUBACCOUNTSM 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 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 the 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 rights 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 of 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 accountholders, 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 designed "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 activities 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 MUNICIPAL 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) THE 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 loan 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 the federal and New Jersey law. The terms of my agreement with MLNF are governed by federal 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 BANKONE 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 been given to me personally upon such sending, whether or not 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 provisions 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 attorney's 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 affiliates. PARAGRAPHS 17 THOUGH 25 BELOW APPLY ONLY IF I REQUEST THAT MY SECURITIES ACCOUNT BE ESTABLISHED WITH THE INVESTOR CREDITLINESM 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 to the opening balance for the next charge period. Interest will the 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 should have the right 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 you 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 an 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 purchase 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 of 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 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 beneficial owner of more than three percent (3%) of the number of outstanding shares of any class 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 representatives 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, of 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 attended 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 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 representatives is inaccurate or becomes inaccurate, I will promptly so advise you in writing. 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) or 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 my 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 and 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 agree that I will immediately pay CHASE the amount of the overdraft and any applicable finance charges which is computed as described in this section In each overdraft statement cycle, finance charges are figured by applying a Daily Periodic Rate to the Average Daily Balance of overdrafts and 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 overdrafts 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 and is Subject to change upon notice. Finance charges accrued from the date CHASE accepts an overdraft until the day payment is made. Any payments that I make will be applied, as of the day of receipt by Chase, first to any accrued and unpaid finance charges and then to the balance of overdrafts in the order in which the 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 of 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 and credits and the balance due. ACCOUNT INJURIES 31. I understand that inquires 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 GOLD PROGRAM 32. In addition to the following paragraphs, I understand that paragraphs 1 through 16, 26 through 31 and, if my 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 the participation in that program, I apply for and authorize the issuance of one more Classic Visa cards and checks for use with my CMA 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, either the exception of paragraphs 32 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 Fraud 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 Reserved Form FR U-1), I understand that the entire amount of the charges posted to my Card/Check account will be 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 $100,00 posted to my Card/Check account during the 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 to 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 to have this payment made by another means which is not 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 account or any other account I may have with wither MLPF&S or MLNF, if such disposal will negatively affect my ability to pay MLNF for Card transactions. However, I may continue to trade securities in my Securities Account. -----END PRIVACY-ENHANCED MESSAGE-----