EXHIBIT 10.03
SECURITIES ACCOUNT CONTROL AGREEMENT
SECURITIES ACCOUNT CONTROL AGREEMENT dated as of May 1, 2000
among XXXXXX XXXXXXX XXXX XXXXXX SPECTRUM SELECT L.P. (the "LIEN GRANTOR"),
XXXXXX XXXXXXX & CO. INCORPORATED (the "SECURED PARTY"), and XXXX XXXXXX
XXXXXXXX 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 June 6, 2000 (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 Xxxx Xxxxxx Spectrum Select L.P." (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.
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.
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 Xxxx Xxxxxx Spectrum Select L.P.
c/o Demeter Management Corporation, General Partner
0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Secured Party:
Xxxxxx Xxxxxxx & Co. Incorporated
0 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Commodity Operations Manager
Securities Intermediary:
Xxxx Xxxxxx Xxxxxxxx Inc.
0 Xxxxx Xxxxx Xxxxxx
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 XXXX XXXXXX
SPECTRUM SELECT X.X. Xxxxxxx
Management Corporation, General Partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chairman
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ W. Xxxxxx Xxxxx
------------------------------------------------
Name: W. Xxxxxx Xxxxx
Title: Managing Director
XXXX XXXXXX XXXXXXXX INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
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
June 30, 2000 among Xxxxxx Xxxxxxx Xxxx Xxxxxx Spectrum Select L.P. (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 Xxxxxx Xxxxxxx Xxxx Xxxxxx Spectrum Select L.P.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
By:___________________________________
Title:
cc: Xxxxxx Xxxxxxx Xxxx Xxxxxx Spectrum Select L.P.
Appendix A
Account numbers established by the Securities Intermediary for Xxxxxx Xxxxxxx
Xxxx Xxxxxx Spectrum Select L.P.
1. 779-001042
2. 779-001092
