EXHIBIT 10.06
XXXX FUTURES INC.
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile (000) 000-0000
INTERNATIONAL FOREIGN EXCHANGE MASTER AGREEMENT
MASTER AGREEMENT dated as of August 1, 1997, by and between XXXX
FUTURES INC., a Delaware corporation and XXXX XXXXXX GLOBAL PERSPECTIVE
PORTFOLIO L.P.
SECTION 1. DEFINITIONS
Unless otherwise required by the context, the following terms
shall have the following meanings in the Agreement:
"Agreement" has the meaning given to it in Section 2.2.
"Base Currency", as to a Party, means the Currency agreed to as
such in relation to it in Part VII of the Schedule.
"Business Day" means for purposes of: (i) clauses (i), (vii) and
(xii) of the definition of Event of Default, a day which is a
Local Banking Day for the Non-Defaulting Party; (ii) solely in
relation to delivery of a Currency, a day which is a Local Banking
Day in relation to that Currency; and (iii) any other provision of
the Agreement, a day which is a Local Banking Day for the
applicable Designated Offices of both Parties; provided, however,
that neither Saturday nor Sunday shall be considered a Business
Day for any purpose.
"Close-Out Amount" has the meaning given to it in Section 5.1.
"Close-Out Date" means a day on which, pursuant to the provisions
of Section 5.1, the Non-Defaulting Party closes out Currency
Obligations or such a close-out occurs automatically.
"Closing Gain", as to the Non-Defaulting Party, means the
difference described as such in relation to a particular Value
Date under the provisions of Section 5.1.
"Closing Loss", as to the Non-Defaulting Party, means the
difference described as such in relation to a particular Value
Date under the provisions of Section 5.1.
"Confirmation" means a writing (including telex, facsimile, or
other electronic means from which it is possible to produce a hard
copy) evidencing an FX Transaction, and specifying:
(i) the Parties thereto and their Designated Offices through
which they are respectively acting,
(ii) the amounts of the Currencies being bought or sold and by
which Party,
(iii) the Value Date, and
(iv) any other term generally included in such a writing in
accordance with the practice of the relevant foreign
exchange market.
"Credit Support" has the meaning given to it in Section 5.2.
"Credit Support Document", as to a Party (the "first Party"),
means a guaranty, hypothecation agreement, margin or
security agreement or document, or any other document
containing an obligation of a third party ("Credit Support
Provider") or of the first Party in favor of the other Party
supporting any obligations of the first Party under the
Agreement.
"Credit Support Provider" has the meaning given to it in the
definition of Credit Support Document.
"Currency" means money denominated in the lawful currency of any
country or the Ecu.
"Currency Obligation" means any obligation of a Party to deliver a
Currency pursuant to an FX Transaction or the application of
Section 3.3(a) or (b).
"Custodian" has the meaning given to it in the definition of
Insolvency Proceeding.
"Defaulting Party" has the meaning given to it in the definition
of Event of Default.
"Designated Office(s)", as to a Party, means the office or offices
specified in Part II of the Schedule.
"Effective Date" means the date of this Master Agreement.
"Event of Default" means the occurrence of any of the following
with respect to a Party (the "Defaulting Party", the other Party
being the "Non-Defaulting Party"):
(i) the Defaulting Party shall (A) default in any payment when due
under the Agreement to the Non-Defaulting Party with respect
to any Currency Obligation and such failure shall continue for
two (2) Business Days after the Non-Defaulting Party has given
the Defaulting Party written notice of non-payment, or (B)
fail to perform or comply with any other obligation assumed by
it under the Agreement and such failure is continuing thirty
(30) days after the Non-Defaulting Party has given the
Defaulting Party written notice thereof;
(ii)the Defaulting Party shall commence a voluntary Insolvency
Proceeding or shall take any corporate action to authorize any
such Insolvency Proceeding;
(iii) a governmental authority or self-regulatory organization
having jurisdiction over either the Defaulting Party or its
assets in the country of its organization or principal office
(A) shall commence an Insolvency Proceeding with respect to
the Defaulting Party or its assets or (B) shall take any
action under any bankruptcy, insolvency or other similar law
or any banking, insurance or similar law or regulation
governing the operation of the Defaulting Party which may
prevent the Defaulting Party from performing its obligations
under the Agreement as and when due;
(iv)an involuntary Insolvency Proceeding shall be commenced with
respect to the Defaulting Party or its assets by a person
other than a governmental authority or self-regulatory
organization having jurisdiction over either the Defaulting
Party or its assets in the country of its organization or
principal office and such Insolvency Proceeding (A) results in
the appointment of a Custodian or a judgment of insolvency or
bankruptcy or the entry of an order for winding-up,
liquidation, reorganization or other similar relief, or (B) is
not dismissed within five (5) days of its institution or
presentation;
(v) the Defaulting Party is bankrupt or insolvent, as defined
under any bankruptcy or insolvency law applicable to it;
(vi)the Defaulting Party fails, or shall otherwise be unable,
to pay its debts as they become due;
(vii) the Defaulting Party or any Custodian acting on behalf of
the Defaulting Party shall disaffirm, disclaim or repudiate
any Currency Obligation;
(viii) any representation or warranty made or given or deemed made
or given by the Defaulting Party pursuant to the Agreement or
any Credit Support Document shall prove to have been false or
misleading in any material respect as at the time it was made
or given or deemed made or given and one (1) Business Day has
elapsed after the Non-Defaulting Party has given the
Defaulting Party written notice thereof;
(ix)the Defaulting Party consolidates or amalgamates with or
merges into or transfers all or substantially all its assets
to another entity and (A) the creditworthiness of the
resulting, surviving or transferee entity is materially weaker
than that of the Defaulting Party prior to such action, or (B)
at the time of such consolidation, amalgamation, merger or
transfer the resulting, surviving or transferee entity fails
to assume all the obligations of the Defaulting Party under
the Agreement by operation of law or pursuant to an agreement
satisfactory to the Non-Defaulting Party;
(x) by reason of any default, or event of default or other similar
condition or event, any Specified Indebtedness (being
Specified Indebtedness of an amount which, when expressed in
the Currency of the Threshold Amount, is in aggregate equal to
or in excess of the Threshold Amount) of the Defaulting Party
or any Credit Support Provider in relation to it: (A) is not
paid on the due date therefor and remains unpaid after any
applicable grace period has elapsed, or (B) becomes, or
becomes capable at any time of being declared, due and payable
under agreements or instruments evidencing such Specified
Indebtedness before it would otherwise have been due and
payable;
(xi)the Defaulting Party is in breach of or default under any
Specified Transaction and any applicable grace period has
elapsed, and there occurs any liquidation or early termination
of, or acceleration of obligations under, that Specified
Transaction or the Defaulting Party (or any Custodian on its
behalf) disaffirms, disclaims or repudiates the whole or any
part of a Specified Transaction;
(xii) (A) any Credit Support Provider of the Defaulting Party or
the Defaulting Party itself fails to comply with or perform
any agreement or obligation to be complied with or performed
by it in accordance with the applicable Credit Support
Document and such failure is continuing after any applicable
grace period has elapsed; (B) any Credit Support Document
relating to the Defaulting Party expires or ceases to be in
full force and effect prior to the satisfaction of all
obligations of the Defaulting Party under the Agreement,
unless otherwise agreed in writing by the Non-Defaulting
Party; (C) the Defaulting Party or any Credit Support Provider
of the Defaulting Party (or, in either case, any Custodian
acting on its behalf) disaffirms, disclaims or repudiates, in
whole or in part, or challenges the validity of, any Credit
Support Document; (D) any representation or warranty made or
given or deemed made or given by any Credit Support Provider
of the Defaulting Party pursuant to any Credit Support
Document shall prove to have been false or misleading in any
material respect as at the time it was made or given or deemed
made or given and one (1) Business Day has elapsed after the
Non-Defaulting Party has given the Defaulting Party written
notice thereof; or (E) any event set out in (ii) to (vii) or
(ix) to (xi) above occurs in respect of any Credit Support
Provider of the Defaulting Party; or
(xiii) any other condition or event specified in Part IX of the
Schedule or in Section 8.14 if made applicable to the
Agreement in Part XI of the Schedule.
"FX Transaction" means any transaction between the Parties for the
purchase by one Party of an agreed amount in one Currency against
the sale by it to the other of an agreed amount in another
Currency, both such amounts either being deliverable on the same
Value Date or, if the Parties have so agreed in Part VI of the
Schedule, being cash-settled in a single Currency, which is or
shall become subject to the Agreement and in respect of which
transaction the Parties have agreed (whether orally,
electronically or in writing): the Currencies involved, the
amounts of such Currencies to be purchased and sold, which Party
will purchase which Currency and the Value Date.
"Insolvency Proceeding" means a case or proceeding seeking a
judgment of or arrangement for insolvency, bankruptcy,
composition, rehabilitation, reorganization, administration,
winding-up, liquidation or other similar relief with respect to
the Defaulting Party or its debts or assets, or seeking the
appointment of a trustee, receiver, liquidator, conservator,
administrator, custodian or other similar official (each, a
"Custodian") of the Defaulting Party or any substantial part of
its assets, under any bankruptcy, insolvency or other similar law
or any banking, insurance or similar law governing the operation
of the Defaulting Party.
"LIBOR", with respect to any Currency and date, means the average
rate at which deposits in the Currency for the relevant amount and
time period are offered by major banks in the London interbank
market as of 11:00 a.m. (London time) on such date, or, if major
banks do not offer deposits in such Currency in the London
interbank market on such date, the average rate at which deposits
in the Currency for the relevant amount and time period are
offered by major banks in the relevant foreign exchange market at
such time on such date as may be determined by the Party making
the determination.
"Local Banking Day" means (i) for any Currency, a day on which
commercial banks effect deliveries of that Currency in accordance
with the market practice of the relevant foreign exchange market,
and (ii) for any Party, a day in the location of the applicable
Designated Office of such Party on which commercial banks in that
location are not authorized or required by law to close.
"Master Agreement" means the terms and conditions set forth in
this Master Agreement, including the Schedule.
"Matched Pair Novation Netting Office(s)", in respect of a Party,
means the Designated Office(s) specified in Part V of the
Schedule.
"Non-Defaulting Party" has the meaning given to it in the
definition of Event of Default.
"Novation Netting Office(s)", in respect of a Party, means the
Designated Office(s) specified in Part V of the Schedule.
"Parties" means the parties to the Agreement, including their
successors and permitted assigns (but without prejudice to the
application of clause (ix) of the definition Event of Default);
and the term "Party" shall mean whichever of the Parties is
appropriate in the context in which such expression may be used.
"Proceedings" means any suit, action or other proceedings relating
to the Agreement or any FX Transaction.
"Schedule" means the Schedule attached to and part of this Master
Agreement, as it may be amended from time to time by agreement of
the Parties.
"Settlement Netting Office(s)", in respect of a Party, means the
Designated Office(s) specified in Part V of the Schedule.
"Specified Indebtedness" means any obligation (whether present or
future, contingent or otherwise, as principal or surety or
otherwise) in respect of borrowed money, other than in respect of
deposits received.
"Specified Transaction" means any transaction (including an
agreement with respect thereto) between one Party to the Agreement
(or any Credit Support Provider of such Party) and the other Party
to the Agreement (or any Credit Support Provider of such Party)
which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity
linked swap, equity or equity index option, bond option, interest
rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of
these transactions) or any combination of any of the foregoing
transactions.
"Spot Date" means the spot delivery day for the relevant pair of
Currencies as generally used by the relevant foreign exchange
market.
"Threshold Amount" means the amount specified as such for each
Party in Part VIII of the Schedule.
"Value Date" means, with respect to any FX Transaction, the
Business Day (or where market practice in the relevant foreign
exchange market in relation to the two Currencies involved
provides for delivery of one Currency on one date which is a Local
Banking Day in relation to that Currency but not to the other
Currency and for delivery of the other Currency on the next Local
Banking Day in relation to that other Currency ("Split
Settlement") the two (2) Local Banking Days in accordance with
that market practice) agreed by the Parties for delivery of the
Currencies to be purchased and sold pursuant to such FX
Transaction, and, with respect to any Currency Obligation, the
Business Day (or, in the case of Split Settlement, Local Banking
Day) upon which the obligation to deliver Currency pursuant to
such Currency Obligation is to be performed.
SECTION 2. FX TRANSACTIONS
2.1 Scope of the Agreement. The Parties (through their respective
Designated Offices) may enter into FX Transactions, for such
quantities of such Currencies, as may be agreed subject to the
terms of the Agreement; provided that neither Party shall be
required to enter into any FX Transaction with the other Party.
Unless otherwise agreed in writing by the Parties, each FX
Transaction entered into between Designated Offices of the Parties
on or after the Effective Date shall be governed by the Agreement.
Each FX Transaction between any two Designated Offices of the
Parties outstanding on the Effective Date which is identified in
Part I of the Schedule shall also be governed by the Agreement.
2.2 Single Agreement. This Master Agreement, the terms agreed
between the Parties with respect to each FX Transaction (and, to
the extent recorded in a Confirmation, each such Confirmation),
and all amendments to any of such items shall together form the
agreement between the Parties (the "Agreement") and shall together
constitute a single agreement between the Parties. The Parties
acknowledge that all FX Transactions are entered into in reliance
upon such fact, it being understood that the Parties would not
otherwise enter into any FX Transaction.
2.3 Confirmations. FX Transactions shall be promptly confirmed by
the Parties by Confirmations exchanged by mail, telex, facsimile
or other electronic means from which it is possible to produce a
hard copy. The failure by a Party to issue a Confirmation shall
not prejudice or invalidate the terms of any FX Transaction.
2.4 Inconsistencies. In the event of any inconsistency between the
provisions of the Schedule and the other provisions of the
Agreement, the Schedule will prevail. In the event of any
inconsistency between the terms of a Confirmation and the other
provisions of the Agreement, the other provisions of the Agreement
shall prevail, and the Confirmation shall not modify the other
terms of the Agreement.
SECTION 3. SETTLEMENT AND NETTING
3.1 Settlement. Subject to Sections 3.2 and 3.3, each Party shall
deliver to the other Party the amount of the Currency to be
delivered by it under each Currency Obligation on the Value Date
for such Currency Obligation.
3.2 Settlement Netting. If, on any date, more than one delivery of
a particular Currency under Currency Obligations is to be made
between a pair of Settlement Netting Offices, then each Party
shall aggregate the amounts of such Currency deliverable by it and
only the difference between these aggregate amounts shall be
delivered by the Party owing the larger aggregate amount to the
other Party, and, if the aggregate amounts are equal, no delivery
of the Currency shall be made.
3.3 Novation Netting.
(a) By Currency. If the Parties enter into an FX Transaction
through a pair of Novation Netting Offices giving rise to a
Currency Obligation for the same Value Date and in the same
Currency as a then existing Currency Obligation between the
same pair of Novation Netting Offices, then immediately upon
entering into such FX Transaction, each such Currency
Obligation shall automatically and without further action be
individually canceled and simultaneously replaced by a new
Currency Obligation for such Value Date determined as follows:
the amounts of such Currency that would otherwise have been
deliverable by each Party on such Value Date shall be
aggregated and the Party with the larger aggregate amount
shall have a new Currency Obligation to deliver to the other
Party the amount of such Currency by which its aggregate
amount exceeds the other Party's aggregate amount, provided
that if the aggregate amounts are equal, no new Currency
Obligation shall arise. This Section 3.3 shall not affect any
other Currency Obligation of a Party to deliver any different
Currency on the same Value Date.
(b) By Matched Pair. If the Parties enter into an FX Transaction
between a pair of Matched Pair Novation Netting Offices then
the provisions of Section 3.3(a) shall apply only in respect
of Currency Obligations arising by virtue of FX Transactions
entered into between such pair of Matched Pair Novation
Netting Offices and involving the same pair of Currencies and
the same Value Date.
3.4 General.
(a) Inapplicability of Sections 3.2 and 3.3. The provisions of
Sections 3.2 and 3.3 shall not apply if a Close-Out Date has
occurred or a voluntary or involuntary Insolvency Proceeding
or action of the kind described in clause (ii), (iii) or (iv)
of the definition of Event of Default has occurred without
being dismissed in relation to either Party.
(b) Failure to Record. The provisions of Section 3.3 shall apply
notwithstanding that either Party may fail to record the new
Currency Obligations in its books.
(c) Cutoff Date and Time. The provisions of Section 3.3 are
subject to any cut-off date and cut-off time agreed between
the applicable Novation Netting Offices and Matched Pair
Novation Netting Offices of the Parties.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 Representations and Warranties. Each Party represents and
warrants to the other Party as of the Effective Date and as of the
date of each FX Transaction that: (i) it has authority to enter
into the Agreement (including such FX Transaction); (ii) the
persons entering into the Agreement (including such FX
Transaction) on its behalf have been duly authorized to do so;
(iii) the Agreement (including such FX Transaction) is binding
upon it and enforceable against it in accordance with its terms
(subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally
and applicable principles of equity) and does not and will not
violate the terms of any agreements to which such Party is bound;
(iv) no Event of Default, or event which, with notice or lapse of
time or both, would constitute and Event of Default, has occurred
and is continuing with respect to it; and (v) it acts as principal
in entering into each FX Transaction; and (vi) if the Parties have
so specified in Part XV of the Schedule, it makes the
representations and warranties set forth in such Part XV.
4.2 Covenants. Each Party covenants to the other Party that: (i)
it will at all times obtain and comply with the terms of and do
all that is necessary to maintain in full force and effect all
authorizations, approvals, licenses and consents required to
enable it lawfully to perform its obligations under the Agreement;
(ii) it will promptly notify the other Party of the occurrence of
any Event of Default with respect to itself or any Credit Support
Provider in relation to it; and (iii) if the Parties have set
forth additional covenants in Part XVI of the Schedule, it makes
the covenants set forth in such Part XVI.
SECTION 5 CLOSE-OUT AND LIQUIDATION
5.1 Manner of Close-Out and Liquidation. (a) Close-Out. If an
Event of Default has occurred and is continuing, then the
Non-Defaulting Party shall have the right to close-out all, but
not less than all, outstanding Currency Obligations (including any
Currency Obligation which has not been performed and in respect of
which the Value Date is on or precedes the Close-Out Date) except
to the extent that in the good faith opinion of the Non-Defaulting
Party certain of such Currency Obligations may not be closed-out
under applicable law. Such close-out shall be effective upon
receipt by the Defaulting Party of notice that the Non-Defaulting
Party is terminating such Currency Obligations. Notwithstanding
the foregoing, unless otherwise agreed by the Parties in Part X of
the Schedule, in the case of an Event of Default in clause (ii),
(iii) or (iv) of the definition thereof with respect to a Party
and, if agreed by the Parties in Part IX of the Schedule, in the
case of any other Event of Default specified and so agreed in Part
IX with respect to a Party, close-out shall be automatic as to all
outstanding Currency Obligations, as of the time immediately
preceding the institution of the relevant Insolvency Proceeding or
action. The Non-Defaulting Party shall have the right to liquidate
such closed-out Currency Obligations as provided below.
(b) Liquidation. Liquidation of Currency Obligations terminated by
close-out shall be effected as follows:
(i) Calculating Closing Gain or Loss. The Non-Defaulting
------------------------------------ Party shall calculate
in good faith, with respect to each such terminated
Currency Obligation, except to the extent that in the good
faith opinion of the Non-Defaulting Party certain of such
Currency Obligations may not be liquidated as provided
herein under applicable law, as of the Close-Out Date or as
soon thereafter as reasonably practicable, the Closing
Gain, or, as appropriate, the Closing Loss, as follows:
(A) for each Currency Obligation calculate a "Close-Out
Amount" as follows:
(1) in the case of a Currency Obligation whose Value
Date is the same as or is later than the Close-Out
Date, the amount of such Currency Obligation; or
(2) in the case of a Currency Obligation whose Value
Date precedes the Close-Out Date, the amount of
such Currency Obligation increased, to the extent
permitted by applicable law, by adding interest
thereto from and including the Value Date to but
excluding the Close-Out Date at overnight LIBOR;
and
(3) for each such amount in a Currency other than the
Non-Defaulting Party's Base Currency, convert such
amount into the Non-Defaulting Party's Base
Currency at the rate of exchange at which, at the
time of the calculation, the Non-Defaulting Party
can buy such Base Currency with or against the
Currency of the relevant Currency Obligation for
delivery (x) if the Value Date of such Currency
Obligation is on or after the Spot Date as of such
time of calculation for the Base Currency, on the
Value Date of that Currency Obligation or (y) if
such Value Date precedes such Spot Date, for
delivery on such Spot Date (or, in either case, if
such rate of exchange is not available, conversion
shall be accomplished by the Non-Defaulting Party
using any commercially reasonable method); and
(B) determine in relation to each Value Date: (1) the sum
of all Close-Out Amounts relating to Currency
Obligations under which the Non-Defaulting Party would
otherwise have been entitled to receive the relevant
amount on that Value Date; and (2) the sum of all
Close-Out Amounts relating to Currency Obligations
under which the Non-Defaulting Party would otherwise
have been obliged to deliver the relevant amount to the
Defaulting Party on that Value Date; and
(C) if the sum determined under (B)(1) is greater than the
sum determined under (B)(2), the difference shall be
the Closing Gain for such Value Date; if the sum
determined under (B)(1) is less than the sum determined
under (B)(2), the difference shall be the Closing Loss
for such Value Date.
(ii) Determining Present Value. To the extent permitted by
--------------------------- applicable law, the
Non-Defaulting Party shall adjust the Closing Gain or
Closing Loss for each Value Date falling after the Close-Out
Date to present value by discounting the Closing Gain or
Closing Loss from and including the Value Date to but
excluding the Close-Out Date, at LIBOR with respect to the
Non-Defaulting Party's Base Currency as at the Close-Out
Date or at such other rate as may be prescribed by
applicable law.
(iii) Netting. The Non-Defaulting Party shall aggregate the
following amounts so that all such amounts are netted into a
single liquidated amount payable to or by the Non-Defaulting
Party: (x) the sum of the Closing Gains for all Value Dates
(discounted to present value, where appropriate, in
accordance with the provisions of Section 5.1(b)(ii)) (which
for the purposes of this aggregation shall be a positive
figure); and (y) the sum of the Closing Losses for all Value
Dates (discounted to present value, where appropriate, in
accordance with the provisions of Section 5.1(b)(ii)) (which
for the purposes of the aggregation shall be a negative
figure).
(iv) Settlement Payment. If the resulting net amount is positive,
it shall be payable by the Defaulting Party to the
Non-Defaulting Party, and if it is negative, then the
absolute value of such amount shall be payable by the
Non-Defaulting Party to the Defaulting Party.
5.2 Set-Off Against Credit Support. Where close-out and
liquidation occurs in accordance with Section 5.1, the
Non-Defaulting Party shall also be entitled (i) to set off the net
payment calculated in accordance with Section 5.1(b)(iv) which the
Non-Defaulting Party owes to the Defaulting Party, if any, against
any credit support or other collateral ("Credit Support") held by
the Defaulting Party pursuant to a Credit Support Document or
otherwise (including the liquidated value of any non-cash Credit
Support) in respect of the Non-Defaulting Party's obligations
under the Agreement or (ii) to set off the net payment calculated
in accordance with Section 5.1(b)(iv) which the Defaulting Party
owes to the Non-Defaulting Party, if any, against any Credit
Support held by the Non-Defaulting Party (including the liquidated
value of any non-cash Credit Support) in respect of the Defaulting
Party's obligations under the Agreement; provided that, for
purposes of either such set-off, any Credit Support denominated in
a Currency other than the Non-Defaulting Party's Base Currency
shall be converted into such Base Currency at the spot price
determined by the Non-Defaulting Party at which, at the time of
calculation, the Non-Defaulting Party could enter into a contract
in the foreign exchange market to buy the Non-Defaulting Party's
Base Currency in exchange for such Currency.
5.3 Other Foreign Exchange Transactions. Where close-out and
liquidation occurs in accordance with Section 5.1, the
Non-Defaulting Party shall also be entitled to close-out and
liquidate, to the extent permitted by applicable law, any other
foreign exchange transaction entered into between the Parties
which is then outstanding in accordance with provisions of Section
5.1, with each obligation of a Party to deliver a Currency under
such a foreign exchange transaction being treated as if it were a
Currency Obligation under the Agreement.
5.4 Payment and Late Interest. The net amount payable by one Party
to the other Party pursuant to the provisions of Sections 5.1 and
5.3 above shall be paid by the close of business on the Business
Day following the receipt by the Defaulting Party of notice of the
Non-Defaulting Party's settlement calculation, with interest at
overnight LIBOR from and including the Close-Out Date to but
excluding such Business Day (and converted as required by
applicable law into any other Currency, any costs of conversion to
be borne by, and deducted from any payment to, the Defaulting
Party). To the extent permitted by applicable law, any amounts
owed but not paid when due under this Section 5 shall bear
interest at overnight LIBOR (or, if conversion is required by
applicable law into some other Currency, either overnight LIBOR
with respect to such other Currency or such other rate as may be
prescribed by such applicable law) for each day for which such
amount remains unpaid. Any addition of interest or discounting
required under this Section 5 shall be calculated on the basis of
a year of such number of days as is customary for transactions
involving the relevant Currency in the relevant foreign exchange
market.
5.5 Suspension of Obligations. Without prejudice to the foregoing,
so long as a Party shall be in default in payment or performance
to the other Party under the Agreement and the other Party has not
exercised its rights under this Section 5, or, if "Adequate
Assurances" is specified as applying to the Agreement in Part XI
of the Schedule, during the pendency of a reasonable request to a
Party for adequate assurances of its ability to perform its
obligations under the Agreement, the other Party may, at its
election and without penalty, suspend its obligation to perform
under the Agreement.
5.6 Expenses. The Defaulting Party shall reimburse the
Non-Defaulting Party in respect of all out-of-pocket expenses
incurred by the Non-Defaulting Party (including fees and
disbursements of counsel, including attorneys who may be employees
of the Non-Defaulting Party) in connection with any reasonable
collection or other enforcement proceedings related to the
payments required under the Agreement.
5.7 Reasonable Pre-Estimate. The Parties agree that the amounts
recoverable under this Section 5 are a reasonable pre-estimate of
loss and not a penalty. Such amounts are payable for the loss of
bargain and the loss of protection against future risks and,
except as otherwise provided in the Agreement, neither Party will
be entitled to recover any additional damages as a consequence of
such losses.
5.8 No Limitation of Other Rights; Set-Off. The Non-Defaulting
Party's rights under this Section 5 shall be in addition to, and
not in limitation or exclusion of, any other rights which the
Non-Defaulting Party may have (whether by agreement, operation of
law or otherwise), and, to the extent not prohibited by law, the
Non-Defaulting Party shall have a general right of set-off with
respect to all amounts owed by each Party to the other Party,
whether due and payable or not due and payable (provided that any
amount not due and payable at the time of such set-off shall, if
appropriate, be discounted to present value in a commercially
reasonable manner by the Non-Defaulting Party). The Non-Defaulting
Party's rights under this Section 5.8 are subject to Section 5.7.
SECTION 6. FORCE MAJEURE, ACT OF STATE, ILLEGALITY OR IMPOSSIBILITY
6.1 Force Majeure, Act of State, Illegality or Impossibility. If
either Party is prevented from or hindered or delayed by reason of
force majeure or act of state in the delivery or receipt of any
Currency in respect of a Currency Obligation or if it becomes or,
in the good faith judgment of one of the Parties, may become
unlawful or impossible for either Party to make or receive any
payment in respect of a Currency Obligation, then the Party for
whom such performance has been prevented, hindered or delayed or
has become illegal or impossible shall promptly give notice
thereof to the other Party and either Party may, by notice to the
other Party, require the close-out and liquidation of each
affected Currency Obligation in accordance with the provisions of
Sections 5.1 and, for such purposes, the Party unaffected by such
force majeure, act of state, illegality or impossibility (or, if
both Parties are so affected, whichever Party gave the relevant
notice) shall perform the calculation required under Section 5.1
as if it were the Non-Defaulting Party. Nothing in this Section
6.1 shall be taken as indicating that the Party treated as the
Defaulting Party for the purpose of calculations required by
Section 5.1 has committed any breach or default.
6.2 Transfer to Avoid Force Majeure, Act of State, Illegality or
Impossibility. If Section 6.1 becomes applicable, unless
prohibited by law, the Party which has been prevented, hindered or
delayed from performing shall, as a condition to its right to
designate a close-out and liquidation of any affected Currency
Obligation, use all reasonable efforts (which will not require
such Party to incur a loss, excluding immaterial, incidental
expenses) to transfer as soon as practicable, and in any event
before twenty (20) days after it gives notice under Section 6.1,
all its rights and obligations under the Agreement in respect of
the affected Currency Obligations to another of its Designated
Offices so that such force majeure, act of state, illegality or
impossibility ceases to exist. Any such transfer will be subject
to the prior written consent of the other Party, which consent
will not be withheld if such other Party's policies in effect at
such time would permit it to enter into transactions with the
transferee Designated Office on the terms proposed, unless such
transfer would cause the other Party to incur a material tax or
other cost.
SECTION 7. PARTIES TO RELY ON THEIR OWN EXPERTISE
Each Party will be deemed to represent to the other Party on the
date on which it enters into an FX Transaction that (absent a
written agreement between the Parties that expressly imposes
affirmative obligations to the contrary for that FX Transaction):
(i)(A) it is acting for its own account, and it has made its own
independent decisions to enter into that FX Transaction and as to
whether that FX Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such advisors as it has
deemed necessary; (B) it is not relying on any communication
(written or oral) of the other Party as investment advice or as a
recommendation to enter into that FX Transaction, it being
understood that information and explanations related to the terms
and conditions of an FX Transaction shall not be considered
investment advice or a recommendation to enter into that FX
Transaction; and (C) it has not received from the other Party any
assurance or guarantee as to the expected results of that FX
Transaction; (ii) it is capable of evaluating and understanding
(on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of
that FX Transaction; and (iii) the other Party is not acting as a
fiduciary or an advisor for it in respect of that FX Transaction.
SECTION 8. MISCELLANEOUS
8.1 Currency Indemnity. The receipt or recovery by either Party
(the "first Party") of any amount in respect of an obligation of
the other Party (the "second Party") in a Currency other than that
in which such amount was due, whether pursuant to a judgment of
any court or pursuant to Section 5 or 6, shall discharge such
obligation only to the extent that, on the first day on which the
first Party is open for business immediately following such
receipt or recovery, the first Party shall be able, in accordance
with normal banking practice, to purchase the Currency in which
such amount was due with the Currency received or recovered. If
the amount so purchasable shall be less than the original amount
of the Currency in which such amount was due, the second Party
shall, as a separate obligation and notwithstanding any judgment
of any court, indemnify the first Party against any loss sustained
by it. The second Party shall in any event indemnify the first
Party against any costs incurred by it in making any such purchase
of Currency.
8.2 Assignment. Neither Party may assign, transfer or charge or
purport to assign, transfer or charge its rights or its
obligations under the Agreement to a third party without the prior
written consent of the other Party and any purported assignment,
transfer or charge in violation of this Section 8.2 shall be void.
8.3 Telephonic Recording. The Parties agree that each Party and
its agents may electronically record all telephonic conversations
between them and that any such recordings may be submitted in
evidence to any court or in any Proceedings for the purpose of
establishing any matters pertinent to the Agreement.
8.4 Notices. Unless otherwise agreed, all notices, instructions
and other communications to be given to a Party under the
Agreement shall be given to the address, telex (if confirmed by
the appropriate answerback), facsimile (confirmed if requested) or
telephone number and to the individual or department specified by
such Party in Part III of the Schedule. Unless otherwise
specified, any notice, instruction or other communication given in
accordance with this Section 8.4 shall be effective upon receipt.
8.5 Termination. Each of the Parties may terminate the Agreement
at any time by seven (7) days' prior written notice to the other
Party delivered as prescribed in Section 8.4, and termination
shall be effective at the end of such seventh day; provided,
however, that any such termination shall not affect any
outstanding Currency Obligations, and the provisions of the
Agreement shall continue to apply until all the obligations of
each Party to the other under the Agreement have been fully
performed.
8.6 Severability. In the event any one or more of the provisions
contained in the Agreement should be held invalid, illegal or
unenforceable in any respect under the law of any jurisdiction,
the validity, legality and enforceability of the remaining
provisions contained in the Agreement under the law of such
jurisdiction, and the validity, legality and enforceability of
such and any other provisions under the law of any other
jurisdiction shall not in any way be affected or impaired thereby.
The Parties shall endeavor in good faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible
to that of the invalid, illegal or unenforceable provisions.
8.7 No Waiver. No indulgence or concession granted by a Party and
no omission or delay on the part of a Party in exercising any
right, power or privilege under the Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any
such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
8.8 Master Agreement. Where one of the Parties to the Agreement is
domiciled in the United States, the Parties intend that the
Agreement shall be a master agreement, as referred to in 11 U.S.C.
Section 101(53B)(C) and 12 U.S.C. Section 1821(e)(8)(D)(vii).
8.9 Time of Essence. Time shall be of the essence in the
Agreement.
8.10 Headings. Headings in the Agreement are for ease of reference
only.
8.11 Payments Generally. All payments to be made under the
Agreement shall be made in same day (or immediately available) and
freely transferable funds and, unless otherwise specified, shall
be delivered to such office of such bank, and in favor of such
account as shall be specified by the Party entitled to receive
such payment in Part IV of the Schedule or in a notice given in
accordance with Section 8.4.
8.12 Amendments. No amendment, modification or waiver of the
Agreement will be effective unless in writing executed by each of
the Parties.
8.13 Credit Support. A Credit Support Document between the Parties
may apply to obligations governed by the Agreement. If the Parties
have executed a Credit Support Document, such Credit Support
Document shall be subject to the terms of the Agreement and is
hereby incorporated by reference in the Agreement. In the event of
any conflict between a Credit Support Document and the Agreement,
the Agreement shall prevail, except for any provision in such
Credit Support Document in respect of governing law.
8.14 Adequate Assurances. If the Parties have so agreed in Part XI
of the Schedule, the failure by a Party to give adequate
assurances of its ability to perform any of its obligations under
the Agreement within two (2) Business Days of a written request to
do so when the other Party has reasonable grounds for insecurity
shall be an Event of Default under the Agreement.
8.15 Correction of Confirmations. Unless either Party objects to
the terms contained in any Confirmation sent by the other Party or
sends a corrected Confirmation within three (3) Business Days of
receipt of such Confirmation, or such shorter time as may be
appropriate given the Value Date of the FX Transaction, the terms
of such Confirmation shall be deemed correct and accepted absent
manifest error. If the Party receiving a Confirmation sends a
corrected Confirmation within such three (3) Business Days, or
shorter period, as appropriate, then the Party receiving such
corrected Confirmation shall have three (3) Business Days, or
shorter period, as appropriate, after receipt thereof to object to
the terms contained in such corrected Confirmation.
SECTION 9. LAW AND JURISDICTION
9.1 Governing Law. The Agreement shall be governed by, and
construed in accordance with the laws of the jurisdiction set
forth in Part XII of the Schedule without giving effect to
conflict of laws principles.
9.2 Consent to Jurisdiction. (a) With respect to any Proceedings,
each Party irrevocably (i) submits to the non-exclusive
jurisdiction of the courts of the jurisdiction set forth in Part
XIII of the Schedule and (ii) waives any objection which it may
have at any time to the laying of venue of any Proceedings brought
in any such court, waives any claim that such Proceedings have
been brought in an inconvenient forum and further waives the right
to object, with respect to such Proceedings, that such court does
not have jurisdiction over such Party. Nothing in the Agreement
precludes either Party from bringing Proceedings in any other
jurisdiction nor will the bringing of Proceedings in any one or
more jurisdictions preclude the bringing of Proceedings in any
other jurisdiction.
(b) Each Party irrevocably appoints the agent for service of
process (if any) specified with respect to it in Part XIV of the
Schedule. If for any reason any Party's process agent is unable to
act as such, such Party will promptly notify the other Party and
within thirty (30) days will appoint a substitute process agent
acceptable to the other Party.
9.3 Waiver of Jury Trial. Each Party irrevocably waives any and
all right to trial by jury in any Proceedings.
9.4 Waiver of Immunities. Each Party irrevocably waives, to the
fullest extent permitted by applicable law, with respect to itself
and its revenues and assets (irrespective of their use or intended
use), all immunity on the grounds of sovereignty or other similar
grounds from (i) suit, (ii) jurisdiction of any courts, (iii)
relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether
before or after judgment) and (v) execution or enforcement of any
judgment to which it or its revenues or assets might otherwise be
entitled in any Proceedings in the courts of any jurisdiction and
irrevocably agrees, to the extent permitted by applicable law,
that it will not claim any such immunity in any Proceedings.
IN WITNESS WHEREOF, the Parties have caused the Agreement to be duly
executed by their respective authorized officers as of the date first written
above.
XXXX FUTURES INC.
By /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Executive Vice President
XXXX XXXXXX GLOBAL PERSPECTIVE PORTFOLIO L.P.
By Demeter Management Corporation
General Partner
By /s/ Xxxx Xxxxxx
-------------------------------------------
Name: Xxxx Xxxxxx
Title: President
SCHEDULE
Schedule to the International Foreign Exchange Master Agreement
dated as of August 1, 1997
between Xxxx Xxxxxx Global Perspective Portfolio L.P. ("Party A") and Xxxx
Futures Inc. ("Party B").
Part I. Scope of Agreement
The Agreement shall apply to all foreign exchange transactions
outstanding between any two Designated Offices of the Parties on
the Effective Date.
It shall be understood that Party A shall typically be conducting
its foreign exchange transactions under the Agreement through its
Trading Advisors who shall be disclosed by Party A to Party B from
time to time by notice. The Trading Advisors will act as Party A's
agents for all purposes hereunder until further notice.
Part II. Designated Offices
Each of the following shall be a Designated Office:
Party A:
c/o Demeter Management
Corporation
Two Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Party B:
Xxxx Futures Inc.
Xxx Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Part III. Notices:
If sent to Party A:
Address: c/o Demeter Management Corporation
Two World Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Name of Individual or Department to whom Notices are to be sent:
Xxxxxx X. Xxxxxx
With copies to Party A's designated Trading Advisors.
If sent to Party B:
Address: Xxxx Futures Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Name of Individual or Department to whom Notices are to be sent:
Xxxxx Xxxxxxx
Part IV. Payment Instructions
Name of Bank and Office, Account Number and Reference with respect
to relevant Currencies:
Party A Party B
Citibank, X.X. Xxxxxx Trust & Savings Bank, Chicago
ABA: 021-000089 ABA: 071.000.288
Account Name: Xxxx Xxxxxx For the Account of Xxxx Futures Inc.,
Xxxxxxxx, Inc. Chicago Customer Segregated
Account No. 00000000 Account No. 000-000-0
FFC: Xxxx Xxxxxx Global FFC: Xxxx Xxxxxx Global
Perspective Portfolio L.P., Perspective Portfolio L.P.,
Account # (As Party B is Account # (As Party A is notified
notified from time to time) from time to time)
Part V. Netting
A. Settlement Netting Offices
Each of the following shall be a Settlement Netting Office:
Party A: Same as in Part II.
Party B: Same as in Part II.
B. Novation Netting Offices
Each of the following shall be a Novation Netting Office:
Party A: Same as in Part V-A.
Party B: Same as in Part V-A.
.
C. Matched Pair Novation Netting Offices
Each of the following shall be a Matched Pair Novation Netting
Office:
Party A: Not Applicable.
Party B: Not Applicable.
.
Part VI. Cash Settlement of FX Transactions
The following provision shall apply:
The definition of FX Transaction in Section 1 shall include
foreign exchange transactions for the purchase and sale of one
Currency against another but which shall be settled by the
delivery of only one Currency based on the difference between
exchange rates as agreed by the Parties as evidenced in a
Confirmation. Section 3.1 is modified so that only one Currency
shall be delivered for any such FX Transaction in accordance with
the formula agreed by the Parties. Section 5.1(b)(i)(A) is
modified so that the Close-Out Amount for any such FX Transaction
for which the cash settlement amount has been fixed on or before
the Close-Out Date pursuant to the terms of such FX Transaction
shall be equal to the Currency Obligation arising therefrom
(increased by adding interest in the manner provided in clause
(A)(2) if the Value Date precedes the Close-Out Date) and for any
such FX Transaction for which the cash settlement amount has not
yet been fixed on the Close-Out Date pursuant to the terms of such
FX Transaction, the Close-Out Amount shall be as determined by the
Non-Defaulting Party in good faith and in a commercially
reasonable manner.
Part VII. Base Currency
Party A's Base Currency is the United States dollar.
Party B's Base Currency is the United States dollar.
Part VIII. Threshold Amount
For purposes of clause (x) of the definition of Event of Default:
Party A's Threshold Amount is 3% of Party A's equity capital as
evidenced by Party A's latest financial statements.
Party B's Threshold Amount is 3% of Party B's equity capital as
evidenced by Party B's latest financial statements.
Part IX. Additional Events of Default
The following provisions which are checked shall constitute Events
of Default:
None.
[ ] (a) occurrence of garnishment or provisional garnishment
against a claim against the Defaulting Party acquired by
the Non-Defaulting Party. The automatic termination
provisions of Section 5.1 [shall] [shall not] apply to
either Party that is a Defaulting Party in respect of this
Event of Default.
[ ] (b) suspension of payment by the Defaulting Party or any
Credit Support provider in accordance with the Bankruptcy
Law or the Corporate Reorganization Law in Japan. The
automatic termination provision of Section 5.1 [shall]
[shall not] apply to either Party that is a Defaulting
Party in respect of this Event of Default.
[ ] (c) disqualification of the Defaulting Party or any Credit
Support Provider by any relevant xxxx clearing house
located in Japan. The automatic termination provision of
Section 5.2 [shall][shall not] apply to either Party that
is a Defaulting Party in respect of this Event of Default.
Part X. Automatic Termination
The automatic termination provision of Section 5.1 shall not apply
to Party A as Defaulting Party in respect of clause (ii), (iii) or
(iv) of the definition of Event of Default.
The automatic termination provision of Section 5.1 shall not apply
to Party B as Defaulting Party in respect of clause (ii), (iii) or
(iv) of the definition of Event of Default.
Part XI. Adequate Assurances
Adequate Assurances under Section 8.14 shall apply to the
Agreement.
Part XII. Governing Law
In accordance with Section 9.1 of the Agreement, the Agreement
shall be governed by the laws of the State of New York.
Part XIII. Consent to Jurisdiction
In accordance with Section 9.2 of the Agreement, each Party
irrevocably submits to the non-exclusive jurisdiction of the
courts of the State of New York and the United States District
Court located in the Borough of Manhattan in New York City.
Part XIV. Agent for Service of Process
Not applicable.
Part XV. Certain Regulatory Representations
A. The following FDICIA representation shall not apply:
1. Party A represents and warrants that it qualifies as a
"financial institution" within the meaning of the Federal
Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") by virtue of being a:
[ ] broker or dealer within the meaning of FDICIA;
[ ] depository institution within the meaning of FDICIA;
[ ] futures commission merchant within the meaning of
FDICIA;
[ ] "financial institution" within the meaning of
Regulation EE (see below).
2. Party B hereby represents and warrants that it qualifies as a
"financial institution" by virtue of being a:
[ ] broker or dealer within the meaning of FDICIA;
[ ] depository institution within the meaning of FDICIA;
[ ] futures commission merchant within the meaning of
FDICIA;
[ ] "financial institution" within the meaning of
Regulation EE (see below).
3. A Party representing that it is a "financial institution" as
that term is defined in 12 C.F.R. Section 231.3 of Regulation
EE issued by the Board of Governors of the Federal Reserve
System ("Regulation EE") represents that:
(a) it is willing to enter into financial contracts" as a
counterparty "on both sides of one or more financial
markets" as those terms are used in Section 231.3 of
Regulation EE; and
(b) during the 15-month period immediately preceding the
date it makes or is deemed to make this representation,
it has had on at least one (1) day during such period,
with counterparties that are not its affiliates (as
defined in Section 231.2(b) of Regulation EE) either:
(i) one or more financial contracts of a total gross
notional principal amount of $1 billion
outstanding; or
(ii)total xxxxx xxxx-to-market positions (aggregated
across counterparties) of $100 million; and
(c) agrees that it will notify the other Party if it no
longer meets the requirements for status as a financial
institution under Regulation EE.
4. If both Parties are financial institutions in accordance with
the above, the Parties agree that the Agreement shall be a
netting contract, as defined in 12 U.S.C. Section 4402(14), and
each receipt or payment or delivery obligation under the
Agreement shall be a covered contractual payment entitlement or
covered contractual payment obligation, respectively, as
defined in FDICIA.
B. The following ERISA representation shall apply:
Each Party represents and warrants that it is neither (i) an
"employee benefit plan" as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 which is subject to Part 4
of Subtitle B of Title I of such Act; (ii) a "plan" as defined in
Section 4975(e)(1) of the Internal Revenue Code of 1986; nor (iii)
an entity the assets of which are deemed to be assets of any such
"employee benefit plan" or "plan" by reason of the U.S. Department
of Labor's plan asset regulation, 29 C.F.R.
Section 2510.3-101.
C. The following CFTC eligible swap participant representation shall
apply:
Each Party represents and warrants that it is an "eligible swap
participant" under, and as defined in, 17 C.F.R. Section 35.1.
Part XVI. Additional Covenants
The following covenant[s] shall apply to the Agreement:
A. Party B covenants and agrees that when Party A or an agent for
Party A requests Party B to an FX Transaction, Party B will do a
back-to-back principal trade and the price of the FX Transaction
to Party A will be the same price at which Party B effects its
back-to-back trade with its counterparty, and Party B will not
profit from any xxxx-up or spread on the FX Transaction.
B. With respect to each FX Transaction, Party A shall pay to Party B
a round-turn fee as follows. For FX Transactions not having a
Party B-imposed forward date, the fee shall be $4.30 per
round-turn ($2.15 per side) for each $85,000 equivalent of the
Currency in the FX Transaction. For FX Transactions with a Party
B-imposed forward date restriction, the fee shall be $5.00 per
round-turn ($2.50 per side) for each $135,000 equivalent of the
Currency in the FX Transaction.
C. Party A shall post margin with Party B with respect to all FX
Transactions in an amount equal to 3.0% of the value of such FX
Transactions on major currencies and 5.0% of the value of such FX
Transactions on minor currencies. All calls for margin shall be
made by Party B orally or by written notice to Xxxx Xxxxxx
Xxxxxxxx, and each such call for margin shall be met by Party A
within three hours after Xxxx Xxxxxx Xxxxxxxx has received such
call by wire transfer (by federal bank wire system) to the
account of Party B. Party B shall accept as margin any
instrument deemed acceptable as margin under the rules of the
Chicago Mercantile Exchange. Upon oral or written request by
Xxxx Xxxxxx Xxxxxxxx, Party B shall, within three hours after
receipt of any such request, wire transfer (by federal bank wire
system) to Xxxx Xxxxxx Xxxxxxxx for Party A's account any margin
funds held by Party B in excess of the margin requirements
specified hereby. Notwithstanding Part VI above, all payments,
unless otherwise agreed to, shall be paid in U.S. dollars.
