Exhibit 10.09
SECURITIES ACCOUNT CONTROL AGREEMENT
SECURITIES ACCOUNT CONTROL AGREEMENT dated as of August 31,
2002 among Xxxxxx Xxxxxxx Charter XXXXXXXX X.X. (the "LIEN GRANTOR"), XXXXXX
XXXXXXX & CO. INCORPORATED (the "SECURED PARTY"), and XXXXXX XXXXXXX XX INC.
(the "SECURITIES INTERMEDIARY"). All references herein to the "UCC" refer to the
Uniform Commercial Code as in effect from time to time in [the State of New
York]. Terms defined in the UCC have the same meanings when used herein.
W I T N E S S E T H :
WHEREAS, the Lien Grantor is the entitlement holder with
respect to the Account (as defined below);
WHEREAS, the Lien Grantor pursuant to Section 6(f) of a
Commodity Futures Customer Agreement dated as of August 31, 2002 (the "CUSTOMER
AGREEMENT") has granted to the Secured Party a continuing security interest (the
"SECURITY INTEREST") in all right, title and interest of the Lien Grantor in, to
and under the Account, all financial assets credited thereto and all security
entitlements in respect thereof, whether now owned or existing or hereafter
acquired or arising; and
WHEREAS, the parties hereto are entering into this Agreement
in order to perfect the Security Interest in the Account, all financial assets
from time to time credited thereto and all security entitlements in respect
thereof;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Establishment of Account. The Securities
Intermediary confirms that:
(i) the Securities Intermediary has established the
account numbers listed on the attached Appendix A (which
Appendix may be amended in writing by the parties from time to
time) in the name of "Xxxxxx Xxxxxxx Charter Xxxxxxxx X.X."
(such account and any successor account, the "ACCOUNT"),
(ii) the Account is a "securities account" as defined
in Section 8-501 of the UCC,
(iii) the Securities Intermediary is acting as a
"securities intermediary" (as defined in Section 8-102 of the
UCC) in respect of the Account,
(iv) the Securities Intermediary shall, subject to
the terms of this Agreement, treat the Lien Grantor as
entitled to exercise the rights that comprise all financial
assets from time to time credited to the Account,
(v) all property delivered to the Securities
Intermediary by or on behalf of the Lien Grantor for credit to
the Account will be promptly credited to the Account, and
(vi) all financial assets (except cash) credited to
the Account will be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in
blank or credited to another securities account maintained in
the name of the Securities Intermediary and in no case will
any financial asset credited to the Account be registered in
the name of the Lien Grantor, payable to the order of the Lien
Grantor or specially indorsed to the Lien Grantor unless such
financial asset has been further indorsed to the Securities
Intermediary or in blank.
Section 2. "Financial Assets" Election. The parties hereto
agree that each item of property (whether investment property, financial asset,
security, instrument, cash or other property) credited to the Account shall be
treated as a "financial asset" within the meaning of Sections 8-102(a)(9) and
8-103 of the UCC.
Section 3. Entitlement Orders. The Securities Intermediary
agrees to comply with any "entitlement order" (as defined in Section 8-102 of
the UCC) originated by the Secured Party and relating to the Account or any
financial asset credited thereto without further consent by the Lien Grantor or
any other person. The Lien Grantor consents to the foregoing agreement by the
Securities Intermediary.
Section 4. Choice of Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York. The State of
New York shall be deemed to be the securities intermediary's jurisdiction with
respect to the Account, all financial assets credited thereto and all security
entitlements in respect thereof for purposes of the UCC (including, without
limitation, Section 8-110 thereof).
Section 5. Amendments. No amendment or modification of this
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.
Section 6. Notice of Adverse Claims. Except for the claims and
interests of the Secured Party and the Lien Grantor, and security interests in
favor of the Securities Intermediary, the Securities Intermediary does not know
of any claim to, or interest in, the Account, any financial asset credited
thereto or any security entitlement in respect thereof. If any person other than
the Lien Grantor, the Secured Party or the Securities Intermediary asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
attachment, execution or similar process) against the Account, any financial
asset credited thereto or any security entitlement in respect thereof, the
Securities Intermediary will promptly notify the Secured Party and the Lien
Grantor thereof.
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Section 7. Maintenance of Account. In addition to, and not in
lieu of, the obligation of the Securities Intermediary to honor entitlement
orders as agreed in Section 3 hereof, the Securities Intermediary agrees to
maintain the Account as follows:
(i) Lien Grantor Entitlement Orders; Notice of
Exclusive Control. So long as the Securities Intermediary has
not received a Notice of Exclusive Control (as defined below),
the Securities Intermediary may, subject to paragraph (ii)
below, comply with entitlement orders of the Lien Grantor or
any duly authorized agent of the Lien Grantor in respect of
the Account and any or all financial assets credited thereto.
After the Securities Intermediary receives a written notice
from the Secured Party that it is exercising exclusive control
over the Account (a "NOTICE OF EXCLUSIVE CONTROL"), the
Securities Intermediary will cease complying with entitlement
orders of the Lien Grantor and any of its agents.
(ii) Limits on Free Deliveries From Account.
Notwithstanding the provisions of paragraph (i) above, the
Securities Intermediary shall not, without specific prior
written consent of the Secured Party:
(a) accept or comply with any entitlement order
from the Lien Grantor, or any agent of the Lien
Grantor, withdrawing from the Account, or making a
free delivery of, any financial asset credited to
the Account,
(b) deliver any such financial asset to the Lien
Grantor or
(c) pay to the Lien Grantor any credit balance or
other cash amount credited to the Account.
provided that, until the Securities Intermediary receives a
Notice of Exclusive Control, the Securities Intermediary may
pay to the Lien Grantor amounts sufficient to pay all fees and
expenses of, and to fund all redemptions from, the Lien
Grantor in the ordinary course of business.
(iii) Voting Rights. Until the Securities
Intermediary receives a Notice of Exclusive Control, the Lien
Grantor shall be entitled to direct the Securities
Intermediary with respect to the voting of any financial
assets credited to the Account.
(iv) Statements and Confirmations. The Securities
Intermediary will promptly send copies of all statements,
confirmations and other correspondence concerning the Account
and/or any financial assets credited thereto simultaneously to
each of the Lien Grantor and the Secured Party at their
respective addresses specified in Section 12 hereof.
(v) Tax Reporting. All items of income, gain, expense
and loss recognized in the Account or in respect of any
financial assets credited thereto shall be reported to the
Internal Revenue Service and all state and local taxing
authorities under the name and taxpayer identification number
of the Lien Grantor.
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Section 8. Representations, Warranties and Covenants of the
Securities Intermediary. The Securities Intermediary makes the following
representations, warranties and covenants:
(i) The Account has been established as set forth in
Section 1 above and will be maintained in the manner set forth
herein until this Agreement is terminated. The Securities
Intermediary will not change the name or account number of the
Account without the prior written consent of the Secured
Party.
(ii) No financial asset credited to the Account is or
will be registered in the name of the Lien Grantor, payable to
the order of the Lien Grantor, or specially indorsed to the
Lien Grantor, unless such financial asset has been further
indorsed by the Lien Grantor to the Securities Intermediary or
in blank.
(iii) This Agreement is a valid and binding agreement
of the Securities Intermediary enforceable in accordance with
its terms.
(iv) The Securities Intermediary has not entered
into, and until the termination of this Agreement will not
enter into, any agreement with any person (other than the
Secured Party) relating to the Account and/or any financial
asset credited thereto pursuant to which it has agreed, or
will agree, to comply with entitlement orders of such person.
The Securities Intermediary has not entered into any other
agreement with the Lien Grantor or the Secured Party
purporting to limit or condition the obligation of the
Securities Intermediary to comply with entitlement orders as
agreed in Section 3 hereof.
Section 9. Successors. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
Section 10. Notices. Each notice, request or other
communication given to any party hereunder shall be in writing (which term
includes facsimile or other electronic transmission) and shall be effective (i)
when delivered to such party at its address specified below, (ii) when sent to
such party by facsimile or other electronic transmission, addressed to it at its
facsimile number or electronic address specified below, and such party sends
back an electronic confirmation of receipt or (iii) ten days after being sent to
such party by certified or registered United States mail, addressed to it at its
address specified below, with first class or airmail postage prepaid:
Lien Grantor: Xxxxxx Xxxxxxx Charter Xxxxxxxx X.X.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Secured Party:
Xxxxxx Xxxxxxx & Co. Incorporated
0 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Commodity Operations Manager
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Securities Intermediary:
Xxxxxx Xxxxxxx XX Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Managed Futures Department
Any party may change its address, facsimile number and/or e-mail address for
purposes of this Section by giving notice of such change to the other parties in
the manner specified above. Section
11. Termination. The rights and powers granted herein to the
Secured Party (i) have been granted in order to perfect the Security Interest,
(ii) are powers coupled with an interest and (iii) will not be affected by any
bankruptcy of the Lien Grantor or any lapse of time. The obligations of the
Securities Intermediary hereunder shall continue in effect until the Secured
Party has notified the Securities Intermediary in writing that the Transaction
Lien has been terminated pursuant to the terms of the Security Agreement.
Xxxxxx Xxxxxxx Charter xxxxxxxx X.X. by:
Demeter Management Corporation,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chairman
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title:
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XXXXXX XXXXXXX XX INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
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EXHIBIT A
[Letterhead of Secured Party]
[Date]
[Name and Address of Securities Intermediary]
Attention:
--------------------------
Re: Notice of Exclusive Control
---------------------------
Ladies and Gentlemen:
As referenced in the Securities Account Control Agreement
dated as of August 31, 2002 among Xxxxxx Xxxxxxx Charter Xxxxxxxx X.X. (the
"LIEN GRANTOR"), us and you (a copy of which is attached), we notify you that we
will hereafter exercise exclusive control over securities account number
__________ (the "ACCOUNT"), all financial assets from time to time credited
thereto and all security entitlements in respect thereof. You are instructed not
to accept any directions, instructions or entitlement orders with respect to the
Account or the financial assets credited thereto from the Lien Grantor or any of
its agents unless otherwise ordered by a court of competent jurisdiction.
You are instructed to deliver a copy of this notice by
facsimile transmission to the Lien Grantor.
Very truly yours,
XXXXXX XXXXXXX & CO.
INCORPORATED
By:
--------------------------------
Title:
cc: Xxxxxx Xxxxxxx Charter Xxxxxxxx X.X.
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Appendix A
Account numbers established by the Securities Intermediary for Xxxxxx Xxxxxxx
Charter Xxxxxxxx X.X.
1. [779-086801]
2. [779-086802]
3. [779-086803]
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