EXHIBIT 10.2
CUSTOMER AGREEMENT
This Customer Agreement ("Agreement") between UBS Securities LLC ("UBS-S
LLC") and ________________ ("Customer") shall govern the purchase and sale by
UBS-S LLC of certain futures contracts, options thereon and options contracts
for the account and risk of Customer through one or more accounts carried by
UBS-S LLC on behalf and in the name of Customer (collectively, the "Account"),
as more fully described below.
1. UBS-S LLC'S AUTHORIZATION TO ACT AS BROKER
Customer authorizes UBS-S LLC, acting through employees and agents selected
by it in its sole discretion, to purchase and sell for the Account contracts for
future delivery of financial instruments, foreign currency or precious metals
and any other instruments and commodities and for option contracts for which
UBS-S LLC has notified Customer that UBS-S LLC is prepared to execute
transactions (collectively, "Contracts") within or outside the United States of
America in accordance with Customer's instructions.
2. CUSTOMER'S REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties. Customer represents and warrants as
follows:
(i) Authority. Customer has full right, power and authority to enter
into this Agreement, and the person executing this Agreement on behalf
of Customer is authorized to do so. This Agreement is binding on
Customer and enforceable against Customer in accordance with its
terms;
(ii) Lawful Agreement. Customer may lawfully establish and open the
Account for the purpose of effecting purchases and sales of Contracts
through UBS-S LLC. Transactions entered into pursuant to this
Agreement will not violate any "Applicable Law" (as defined below) to
which Customer is subject or any agreement to which Customer is
subject or a party and the execution, delivery and performance of this
Agreement by Customer require no action by or in respect of or filing
with any governmental body, agency or official;
(iii) Customer's Statements. The statements made to UBS-S LLC by
Customer regarding Customer's futures trading (including any financial
statements submitted therewith) are true and correct to the best of
Customer's knowledge;
(iv) Interest or Control of Account. If any person or entity has, or
during the term of this Agreement will have, any interest in the
Account other than Customer, Customer hereby agrees to so notify UBS-S
LLC immediately (and no later than within one business day); and
(v) Designation. If Customer is not a citizen or resident of the
United States, Customer has been informed by UBS-S LLC of Commodity
Futures Trading Commission ("CFTC") Regulations concerning the
designation of a futures commission merchant as the agent of foreign
brokers, customers of a foreign broker and foreign traders for certain
purposes as set forth in CFTC Regulation (S)15.05 and concerning
special calls for information from futures commission merchants,
foreign brokers and members of contract markets as set forth in CFTC
Regulation (S)21.03.
(b) Notice of Change. Customer shall immediately (and no later than
within one business day) notify UBS-S LLC in writing if any of the
representations contained herein materially change or cease to be true and
correct.
3. APPLICABLE LAW
The Account and all transactions and agreements in respect of the Account
shall be subject to the regulations of all applicable Federal, state and
self-regulatory agencies or authorities, including but not limited to: (a) the
provisions of the Commodity Exchange Act, as amended, and any rules,
regulations, orders and interpretations promulgated thereunder by the CFTC; (b)
the constitution, by-laws, rules, regulations, orders and interpretations of the
contract market (and its clearing house, if any) on which such transactions are
executed and cleared, and any relevant registered futures association,
including, without limitation, the National Futures Association ("NFA"); and (c)
custom and usage of the trade. All such provisions, rules, regulations, orders,
interpretations, constitution, by-laws, custom and usage are hereinafter
collectively referred to as "Applicable Law."
4. RELIANCE ON INSTRUCTIONS
UBS-S LLC shall be entitled to rely on any instructions, notices and
communications, whether oral or in writing, that it believes to be that of an
individual authorized to act on behalf of Customer, including, but not limited
to, any individual identified in writing by Customer as authorized to act on its
behalf, and Customer shall be bound thereby. Customer hereby waives any defense
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.
5. ACCEPTANCE OF ORDERS; POSITION LIMITS
(a) Acceptance of Orders. UBS-S LLC shall have the right to limit the
size of open positions (net or gross) of Customer with respect to the Account at
any time and to refuse acceptance of orders to establish new positions (whether
such refusal or limitation is required by, and whether such refusal is based on
position limits imposed under, Applicable Law). UBS-S LLC shall immediately
notify Customer of its rejection of any order. Unless specified by Customer,
UBS-S LLC may designate the exchange or other markets (including, without
limitation, GLOBEX) on which it will attempt to execute orders.
(b) Position Limits. Customer shall not, either alone or in combination
with others, violate any position or exercise limit established by or under
Applicable Law. If Customer intends at any time to exceed such position limits,
Customer shall cause to be filed an application with the CFTC or the relevant
contract market requesting authorization for Customer to exceed such position
limits and shall provide UBS-S LLC with a copy of such application and such
other information as UBS-S LLC may reasonably request with respect to such
application. Customer shall immediately (and no later than within one business
day) notify UBS-S LLC of any positions for which Customer is required to file
reports under Applicable Law, including any large trader reports filed with the
CFTC or any contract market. Customer shall indemnify and hold UBS-S LLC
harmless from and against all claims, damages, fines or assessments of any kind
whatsoever, including reasonable attorneys' fees in connection with the defense
thereof, made and incurred in connection with any violation by Customer of its
obligations under this Section 5(b).
6. ORIGINAL AND VARIATION MARGIN; PREMIUMS; OTHER CONTRACT OBLIGATIONS
With respect to every Contract purchased, sold or cleared for the Account,
Customer shall make, or cause to be made, all applicable original margin,
variation margin, intra-day margin and premium payments, and perform all other
obligations attendant to transactions or positions in such Contracts, as may be
required by Applicable Law or by UBS-S LLC in its sole and absolute discretion.
Requests for margin deposits and/or premium payments may, at UBS-S LLC's
election, be communicated to Customer orally, telephonically or in writing.
Margin requirements established by UBS-S LLC may exceed the margin requirements
set by any contract market or clearing organization on which transactions are
executed or cleared or caused to be executed or cleared by UBS-S LLC or any
agent thereof for Customer and may be changed by UBS-S LLC without prior notice
to Customer. Except as otherwise provided herein, all such margin and premium
payments shall be in the form, as UBS-S LLC permits, of cash in U.S. dollars,
securities of the U.S. Government, or a combination thereof. If at any time
Customer fails timely to deposit or maintain required margin, or Customer fails
timely to make any premium payments, UBS-S LLC may at any time, without further
notice to Customer, close out Customer's open position in whole or in part and
take any action it deems appropriate.
7. SECURITY INTEREST AND RIGHTS RESPECTING COLLATERAL
All Contracts, cash, securities, and/or other property of Customer,
including all proceeds of all such property such as profits from Account
transactions (collectively, the "Collateral") now or at any future time in the
Account or otherwise held by UBS-S LLC or its affiliates, any clearing house
through which trades of the Account are executed and/or positions are held, or
any other entity authorized to act as an agent of UBS-S LLC or Customer, hereby
are pledged to UBS-S LLC and shall be subject to a general lien and security
interest in UBS-S LLC's favor to secure any indebtedness or other amounts at any
time owing from Customer to UBS-S LLC, and to secure any and all other
obligations and liabilities of Customer to UBS-S LLC (collectively, the
"Customer's Liabilities"). Customer hereby grants UBS-S LLC the right to borrow,
pledge, repledge, hypothecate, rehypothecate, loan or invest any of the
Collateral without notice to Customer, and without any obligation to pay or to
account to Customer for any interest, income or benefit that may be derived
therefrom. UBS-S LLC shall be under no obligation to deliver to Customer the
identical Collateral in the Account, but shall only be under an obligation to
deliver to Customer Collateral of like or equivalent kind and amount. The rights
of UBS-S LLC set forth above shall be qualified by any applicable requirements
for segregation of customer's property under Applicable Law.
8. PAYMENT OBLIGATIONS OF CUSTOMER
(a) Charges to the Account. With respect to every Contract purchased,
sold or cleared for the Account, Customer shall pay UBS-S LLC upon demand and
UBS-S LLC hereby is authorized to charge Customer's Account for: (i) all
brokerage charges, give-up fees, commissions and service fees as UBS-S LLC may
from time to time charge; (ii) all contract market, clearing house, clearing
member, NFA or CFTC fees or charges, fines or penalties; (iii) any tax imposed
on such transactions by any competent taxing authority; (iv) the amount of any
trading losses in the Account; (v) any debit balance or deficiency in the
Account; (vi) interest and service charges on any debit balances or deficiencies
in the Account, any advances or any loan (including interest on the amount of
variation margin calls, until satisfaction of such calls, when the Customer
posts U.S. Treasury Bills for original margin purposes), at the rate customarily
charged by UBS-S LLC (which may be at the prevailing and/or allowable rates
according to the laws of the State of Illinois) from the day any such deficit
was incurred to (but not including) the day of payment (calculated on the basis
of a 360 day year and for the actual number of days elapsed for all deficits,
except for those denominated in foreign currencies for which generally accepted
accounting principles require that the interest rate shall be calculated
otherwise), together with costs and reasonable attorneys' fees incurred in
collecting any such deficit; (vii) all storage and delivery service fees; and
(viii) any other amounts owed by Customer to UBS-S LLC with respect to the
Account or any transactions therein.
(b) Payment in U.S. Dollars. Any and all payment obligations of
Customer, if not deducted from Customer's Account as permitted hereunder, shall
be made upon demand in immediately available U.S. dollars to UBS-S LLC or at
such other place and at such time and in such manner as UBS-S LLC notifies
Customer. The obligation of Customer to make all payments due hereunder shall
not be discharged or satisfied by any tender, or any recovery pursuant to any
judgment, which is expressed in or converted into any other currency other that
U.S. dollars, except to the extent that such tender or recovery shall result in
the actual receipt by UBS-S LLC of the full amount of such U.S. dollars
expressed to be payable in respect of such amounts. Customer agrees that its
obligations to make payment in U.S. dollars as aforesaid shall be enforceable as
an alternative or additional cause of action for the purpose of recovery of the
amount (if any) by which such actual receipt shall fall short of the full amount
of U.S. dollars expressed to be payable in respect of such amount due hereunder,
and shall not be affected by judgment being obtained for other sums due
hereunder.
(c) Setoff. Any Collateral may at any time or from time to time
without notice or compliance with any condition precedent (which notice hereby
is expressly waived) be setoff, appropriated and applied by UBS-S LLC against
any and all payment obligation of Customer hereunder including, but not limited
to, any deficit balance in the Account, in such manner as UBS-S LLC in its
discretion may determine.
(d) Gross-Up. All payments made by Customer to UBS-S LLC hereunder
will be made without setoff or counterclaim free and clear and without deduction
or withholding for, any present or future taxes, levies, assessments or other
charges of whatever nature, now or hereinafter imposed by
-2-
any jurisdiction or by any agency, state or other political subdivision or
taxing authority thereof or therein, and all interest, penalties, or similar
liabilities with respect thereto (collectively, "Taxes"). If any Taxes are so
levied or imposed, Customer agrees to pay the full amount of such Taxes, and
such additional amounts as may be necessary so that every net payment of all
amounts due hereunder, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein. Customer will
furnish to UBS-S LLC within thirty days after the date the payment of any Taxes
is due pursuant to Applicable Law certified copies of tax receipts evidencing
such payment by Customer.
9. DELIVERY PROCEDURES; OPTIONS ALLOCATION PROCEDURE
(a) Instructions. Customer will provide UBS-S LLC with instructions
either to liquidate Contracts previously established by Customer, make or take
delivery under any such Contracts, or exercise options entered into by Customer,
within such time limits as may be specified by UBS-S LLC. UBS-S LLC shall have
no responsibility to take any action on behalf of Customer, including, without
limitation, exercising option Contracts, unless and until UBS-S LLC receives
oral or written instructions reasonably acceptable to UBS-S LLC indicating the
action UBS-S LLC is to take. Any instructions, if given orally to UBS-S LLC,
shall immediately be confirmed in writing by Customer. Funds sufficient to take
delivery pursuant to such Contract or deliverable grade commodities to make
delivery pursuant to such Contract must be delivered to UBS-S LLC at such time
as UBS-S LLC may require in connection with any delivery.
(b) Allocation Procedures. Short option Contracts may be subject to
exercise at any time. Exercise notices received by UBS-S LLC with respect to
option Contracts sold by Customer may be allocated to Customer pursuant to a
random allocation procedure, and Customer shall be bound by any such allocation
of exercise notices. Such notices may be allocated to Customer after the close
of trading on the day on which such notices have been allocated to UBS-S LLC by
the applicable contract market. In the event of any allocation to Customer,
unless UBS-S LLC has previously received instructions from Customer, UBS-S LLC's
sole responsibility shall be to use its best efforts to notify Customer by
telephone of such allocation at any time before trading commences on the first
day on which such option Contracts are traded on the applicable contract market
following the day on which the applicable contract market has allocated such
notices to UBS-S LLC.
(c) Failure to Provide Instructions. If Customer fails to comply with any
of the foregoing obligations, UBS-S LLC may, in its sole and absolute
discretion, liquidate any open positions, make or receive delivery of any
commodities or instruments, or exercise or allow the expiration of any options,
in such manner and on such terms as UBS-S LLC, in its sole and absolute
discretion, deems necessary or appropriate. Any such action taken shall be in
the sole and absolute discretion of UBS-S LLC and Customer shall remain fully
liable for all costs, losses, expenses, liabilities and damages (including
special, indirect and consequential damages, penalties and fines) which UBS-S
LLC may be required to pay or which it has sustained in connection with such
transactions and for any remaining debit balance in the Account.
10. EVENTS OF DEFAULT; UBS-S LLC'S REMEDIES
(a) Events of Default. As used herein, each of the following shall be
deemed an "Event of Default": (i) the commencement of a case under any
bankruptcy, insolvency or reorganization law or similar law effecting creditors'
rights of any jurisdiction, or the filing of a petition for the appointment of a
receiver by or against Customer, an assignment made by Customer for the benefit
of creditors, an admission in writing by Customer that it is insolvent or is
unable to pay its debts when they mature, or the suspension by the Customer of
its usual business or any material portion thereof; (ii) the issuance of any
warrant or order of attachment against the Account or the levy of a judgment
against the Account; (iii) if Customer is an employee benefit plan, the
termination of Customer or the filing by Customer of a notice of intent to
terminate with the Pension Benefit Guaranty Corporation (or other similar
governmental agency or body of any jurisdiction), or the receipt of a notice of
the Pension Benefit Guaranty Corporation's (or other similar governmental
agency's or body's) intent to terminate Customer, or the inability of Customer
to pay benefits under the relevant employee benefit plan when due; (iv) the
failure by Customer to deposit or maintain margins, to pay required premiums, or
to make payments required by Section 8 hereof and such failure is not cured
within one business day of Customer's receipt of notice of such failure from
UBS-S LLC; (v) UBS-S LLC acting in good faith in a commercially reasonable
manner determines that the Collateral in Customer's Account, regardless of
current marked quotations, is inadequate to secure the Account and Customer's
obligations to UBS-S LLC hereunder; (vi) the Account shall incur a deficit
balance and such deficit balance is not cured within one business day of
customer's receipt of notice of such deficit from UBS-S LLC; (vii) the failure
by Customer to perform, in any material respect, its obligations respecting
delivery, exercise or a notice of allocation of exercise, payment for delivery,
or settlement under Contracts held in the Account (it being understood that any
failure to comply with any Applicable Law shall be deemed material); or (viii)
the failure by Customer, in any material respect, to perform any of its other
obligations hereunder (it being understood that any failure to comply with any
Applicable Law shall be deemed material) and such material failure is not cured
within one business day of Customer's receipt of notice of such material failure
from UBS-S LLC.
(b) Remedies. Upon the occurrence of an Event of Default, UBS-S LLC shall
have the right, in addition to any other remedy available to UBS-S LLC at law or
in equity, and in addition to any other action UBS-S LLC may deem appropriate
under the circumstances, to liquidate any or all open Contracts held in or for
the Account, sell any or all of the securities or other property of Customer
held by UBS-S LLC and to apply the proceeds thereof to any amounts owed by
Customer to UBS-S LLC, borrow or buy any options, securities, Contracts or other
property for the Account and cancel any unfilled orders for the purchase or sale
of Contracts for the Account, or take such other or further actions as UBS-S
LLC, in its reasonable discretion, deems necessary or appropriate for its
protection, all without demand for margin and without notice or advertisement.
In the event UBS-S LLC's position would not be jeopardized thereby, UBS-S LLC
will make reasonable efforts under the circumstances to notify Customer prior to
taking any such action. Any such liquidation, sale, purchase, borrowing or
cancellation shall be made at the discretion of UBS-S LLC acting in good faith
in a commercially reasonable manner on a contract market, through a clearing
house, on other markets, at public auction or by private transaction. Customer
acknowledges and agrees that a prior demand or margin call of any kind from
UBS-S LLC or prior notice from UBS-S LLC shall not be considered a waiver of
UBS-S LLC's right to take any action without notice or demand. In any
transaction described above, UBS-S LLC may sell any Collateral to itself or its
affiliates or buy any Collateral from itself or its affiliates. UBS-S LLC may,
to the extent permitted by law, purchase the whole or any part thereof free from
any right of redemption. In all cases, Customer shall remain liable for and
shall pay to UBS-S LLC on demand the amount of any deficiency in its Account
resulting from any such transaction, and Customer shall reimburse, compensate
and indemnify UBS-S LLC for any and all costs, losses, penalties, fines,
-3-
taxes and damages which UBS-S LLC may incur, including reasonable attorneys'
fees incurred in connection with the exercise of its remedies and the recovery
of any such costs, losses, penalties, fines, taxes and damages.
11. EXCULPATION AND INDEMNIFICATION
(a) Exculpation. Neither UBS-S LLC nor any of its managing directors,
officers, employees or affiliates shall be liable for any costs, losses,
penalties, fines, Taxes and damages sustained or incurred by Customer other than
as a result of UBS-S LLC's negligence or reckless or intentional misconduct or
breach of this Agreement. Without limiting the generality of the foregoing,
neither UBS-S LLC nor any of its managing directors, officers, employees or
affiliates shall have any responsibility or liability to Customer hereunder for
any costs, losses, penalties, fines, Taxes and damages, including consequential,
incidental or special damages, sustained or incurred by Customer, (i) in
connection with the performance or non-performance by any contract market,
clearing house, clearing firm or other third party (including other exchange
members, banks and floor brokers) to UBS-S LLC of its obligations in respect of
any Contract or other property of Customer; (ii) as a result of any prediction,
recommendation or advice made or given by a representative of UBS-S LLC whether
or not made or given at the request of Customer; (iii) as a result of any delay
in the performance or non-performance of any of UBS-S LLC's obligations
hereunder to the extent that losses arising therefrom are, directly or
indirectly, caused by the occurrence of any contingency beyond the control of
UBS-S LLC including, but not limited to, the unscheduled closure of an exchange
or contract market or delays in the transmission of orders due to breakdowns or
failures of transmission or communication facilities, execution, and/or trading
facilities or other systems; (iv) as a result of any action taken by UBS-S LLC,
its managing directors, officers, employees, agents (including other clearing
firms through which transactions are effected on behalf of Customer) or floor
brokers, to comply with Applicable Law; or (v) for any acts or omissions of
those neither employed nor supervised by UBS-S LLC. Moreover, UBS-S LLC shall
have no responsibility for compliance by Customer with any law or regulation
governing Customer's conduct as a fiduciary, if applicable.
(b) Force Majeure and Acts of State. In the event that UBS-S LLC's
performance of any of its obligations and undertakings hereunder shall be
interrupted or delayed by any occurrence not occasioned by the conduct of either
party hereto, whether such occurrence shall be an act of God or the common enemy
or the result of war, riot, civil commotion, sovereign conduct or other acts of
State, or the act or conduct of any person or persons not party or privy hereto,
then UBS-S LLC shall be excused from performance for such period of time as is
reasonably necessary after such occurrence to remedy the effects thereof and
neither UBS-S LLC nor any of its managing directors, officers, employees or
affiliates shall be directly or indirectly responsible for losses occasioned
thereby.
(c) Indemnification. Customer agrees to indemnify and hold UBS-S LLC
harmless from and against any and all costs (including reasonable attorneys'
fees), losses, penalties, fines, taxes and damages ("Losses") incurred by UBS-S
LLC as a result of any action taken or not taken by UBS-S LLC in reliance upon
any instructions, notices and communications which UBS-S LLC believes to be that
of an individual authorized to act on behalf of Customer, or in connection with
UBS-S LLC's recovery of any such Losses, except for such Losses which arise out,
are based upon or related to UBS-S LLC' negligence, reckless or intentional
misconduct or breach of this Agreement. UBS-S LLC agrees to indemnify and hold
harmless Customer from and against any and all Losses which arise out, are based
upon or related to UBS-S LLC' negligence, reckless or intentional misconduct or
breach of this Agreement.
12. TERMINATION
This Agreement is not exclusive and runs for successive one year terms to
be renewed automatically each year unless terminated. This Agreement may be
terminated by the Customer or UBS-S LLC without penalty upon thirty (30) days'
prior written notice to the other party (except where an Event of Default has
occurred or in UBS-S LLC's reasonable discretion, there has been a material
adverse change in the Customer's financial position, in which case, only prior
written notice will be required); provided, however, that any such termination
shall not relieve either party of any obligations in connection with any debit
or credit balance in the Account or other liability or obligation arising or
accruing prior to such termination.
13. LIQUIDATION OF OFFSETTING POSITIONS
UBS-S LLC shall liquidate any Contract for which an offsetting order is
entered by Customer, unless Customer instructs UBS-S LLC not to liquidate such
Contract and to maintain the offsetting Contracts as open positions; provided,
that UBS-S LLC shall not be obligated to comply with any such instructions given
by Customer if Customer fails to provide UBS-S LLC with any representations,
documentation or information reasonably requested by UBS-S LLC or if, in UBS-S
LLC's reasonable judgment, any failure to liquidate such offsetting Contracts
against each other would result in a violation of Applicable Law.
14. REPORTS AND OBJECTIONS
(a) All confirmations, purchase and sale notices, correction notices and
account statements (collectively, "Reports") shall be submitted to Customer and
shall be conclusive and binding on Customer unless Customer notifies UBS-S LLC
of any objection thereto prior to the opening of trading on the contract market
on which such transaction occurred on the business day following the day on
which Customer receives such Report; provided, that with respect to monthly
statements, Customer may notify UBS-S LLC of any objection thereto within five
business days after receipt of such monthly statement, provided the objection
could not have been raised at the time any prior Report was received by Customer
as provided for above. Any such notice of objection, if given orally to UBS-S
LLC, shall immediately (and in no event later than within one business day) be
confirmed in writing by Customer.
(b) Customer consents to the electronic delivery of Reports via facsimile,
electronic mail, computer networks (e.g., local area networks, commercial
on-line services and SwisKey) or other electronic means agreed upon by Customer
and UBS-S LLC. Customer may revoke its consent at any time upon
-4-
reasonable notice to UBS-S LLC.
15. FOREIGN CURRENCY TRANSACTIONS
In the event that the Customer directs UBS-S LLC to enter into any Contract
on an exchange on which such transactions are effected in a currency other than
the U.S. dollar, any profit or loss arising as a result of a fluctuation in the
exchange rate affecting such currency will be entirely for the account and risk
of the Customer. All initial and subsequent deposits for margin purposes, and
the return to the Customer of any funds, are expected to be made in the currency
of contract settlement. Should the Customer elect to deposits funds other than
the currency of settlement or instruct UBS-S LLC to convert funds which are
already on deposit in another currency, UBS-S LLC shall debit or credit the
Account of Customer at a rate of exchange determined by UBS-S LLC in its sole
discretion on the basis of the then prevailing market rate of exchange for such
foreign currency.
16. UBS-S LLC'S RESPONSIBILITY
UBS-S LLC is not acting as a fiduciary, foundation manager, commodity pool
operator, commodity trading advisor or investment adviser in respect of any
Account opened by Customer and UBS-S LLC shall have no responsibility hereunder
for compliance with any law or regulation governing the conduct of fiduciaries,
foundation managers, commodity pool operators, commodity trading advisors or
investment advisers.
17. ADVICE
All advice communicated by UBS-S LLC with respect to any Account opened by
Customer hereunder is incidental to the conduct of UBS-S LLC's business as a
futures commission merchant, does not constitute an offer to sell or the
solicitation of an offer to buy any Contract, and such advice will not serve as
the primary basis for any decision by or on behalf of Customer. UBS-S LLC shall
have no discretionary authority, power or control over any decisions made by or
on behalf of Customer in respect of the Account, regardless of whether Customer
relies on the advice of UBS-S LLC in making any such decision. Any such advice,
although based upon information from sources UBS-S LLC believes to be reliable,
may be incomplete or inaccurate, may not be verified and may be changed without
notice to Customer. UBS-S LLC makes no representation as to the accuracy,
completeness, reliability or prudence of any such advice or information or as to
the tax consequences of Customer's futures or options trading. UBS-S LLC is a
separate and independent corporate entity, distinct from its affiliates and it
shall be free to purchase and sell Contracts for any affiliates without
limitation or restriction. The relationship between UBS-S LLC and Customer as
described herein shall not affect any provisions of credit to Customer by UBS AG
or any other subsidiary of UBS AG. Moreover, Customer acknowledges that UBS-S
LLC and its managing directors, officers, employees and affiliates may take or
hold positions in, or advise other customers concerning, contracts which are the
subject of advice from UBS-S LLC to Customer. The positions and advice of UBS-S
LLC and its managing directors, officers, employees and affiliates may be
inconsistent with or contrary to positions of, and the advice given by, UBS-S
LLC to Customer.
18. FINANCIAL AND OTHER INFORMATION
Customer agrees to furnish appropriate financial statements to UBS-S LLC
and to inform UBS-S LLC of any material changes in the financial position of
Customer and to furnish promptly such other information concerning Customer as
UBS-S LLC reasonably requests. UBS-S LLC is authorized from time to time to
contact banks, financial institutions and credit agencies for verification of
the financial condition of Customer. Customer agrees that UBS-S LLC may, from
time to time, share with its branches, agencies and affiliates, certain
non-public information concerning Customer.
19. RECORDING
UBS-S LLC, in its sole and absolute discretion, may record, on tape or
otherwise, any telephone conversation between UBS-S LLC and Customer involving
their respective officers, agents and employees. Customer hereby agrees and
consents to such recording, with or without the use of an automatic tone warning
device, and waives any right Customer may have to object to the use or
admissibility into evidence of such recording in any legal proceeding between
Customer and UBS-S LLC or in any other proceeding to which UBS-S LLC is a party
or in which UBS -S LLC's records are subpoenaed. Customer acknowledges that
UBS-S LLC may erase such recordings after a reasonable period of time.
20. ACCOUNTS INTRODUCED BY OTHER BROKERS
If UBS-S LLC is carrying the Account of Customer as executing or clearing
broker by arrangement with another broker through whose courtesy the Account has
been introduced to UBS-S LLC, then, until receipt from Customer of written
notice to the contrary, UBS-S LLC may accept from such other broker, without
inquiry or investigation by UBS-S LLC, (i) orders for the purchase or sale in
the Account of Contracts, and (ii) any other instructions concerning the
Account. UBS-S LLC shall not be responsible or liable for any acts or omissions
of such other broker or its employees.
21. SEVERABILITY
If any provision of this Agreement is, or at any time becomes, inconsistent
with any present or future Applicable Law, and if any of these authorities have
jurisdiction over the subject matter of this Agreement, the inconsistent
provision shall be deemed superseded or modified to conform with such law, rule
or regulation but in all other respects, this Agreement shall continue and
remain in full force and effect.
-5-
22. BINDING EFFECT
This Agreement shall be binding on and inure to the benefit of the parties
and their successors. UBS-S LLC shall have the right to transfer or assign this
Agreement (and thereby the Account) to any successor entity or to another
properly registered futures commission merchant in its sole and absolute
discretion and without then obtaining the consent of Customer. Customer hereby
expressly consents to any such transfer and assignment.
23. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties and
supersedes any prior agreements between the parties as to the subject matter
hereof. No provision of this Agreement shall in any respect be waived, altered,
modified, or amended unless such waiver, alteration, modification or amendment
is signed by the party against whom such waiver, alteration, modification or
amendment is to be enforced.
24. INSTRUCTIONS, NOTICES OR COMMUNICATIONS
(a) Except as specifically otherwise provided in this Agreement, all
instructions, notices or other communications may be oral or written. All oral
instructions, unless custom and usage of trade dictate otherwise, shall be
promptly confirmed in writing. All written instructions, notices or other
communications shall be addressed as follows:
(i) if to UBS-S LLC:
UBS Securities LLC
000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Client Services Representative
(ii) if to Customer at the address as indicated on the New Account
Information Form.
(b) All instructions, notices or other communications sent, whether by
mail, telex, facsimile transmission or otherwise, shall be deemed given when
deposited in the mail, or sent by telex or facsimile transmission or other
electronic means acceptable to the recipient thereof, and deemed delivered to
Customer personally, whether actually received by Customer or not. All
instructions, notices or other communications to UBS-S LLC shall be directed to
UBS-S LLC's office at the address listed above or such other addresses as UBS-S
LLC may hereafter direct to Customer in writing.
25. RIGHTS AND REMEDIES CUMULATIVE
All rights and remedies arising under this Agreement as amended and
modified from time to time are cumulative and not exclusive of any rights or
remedies which may be available at law or otherwise.
26. NO WAIVER
No failure on the part of UBS-S LLC to exercise, and no delay in
exercising, any contractual right will operate as a waiver thereof, nor will any
single or partial exercise by UBS-S LLC of any right preclude any other or
future exercise thereof or the exercise of any other partial right.
27. GOVERNING LAW
THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT AND THE RIGHTS,
OBLIGATIONS AND REMEDIES OF THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO PRINCIPLES
OF CHOICE OF LAW.
28. CONSENT TO JURISDICTION
Any litigation between UBS-S LLC and Customer relating to this Agreement or
transactions hereunder shall take place in the Courts of the State of Illinois
located in Xxxx County or in the United States District Court for the Northern
District of Illinois, and the parties agree to submit to such exclusive
jurisdiction. Customer consents to the service of process by the mailing to
Customer of copies of such court filing by certified mail to the address of
Customer as it appears on the books and records of UBS-S LLC, such service to be
effective ten days after mailing. Customer hereby waives irrevocably any
immunity to which it might otherwise be entitled in any arbitration, action at
law, suit in equity or any other proceeding arising out of or based on this
Agreement or any transaction in connection herewith.
29. WAIVER OF JURY TRIAL
Customer hereby waives trial by jury in any action or proceeding arising
out of or relating to this Agreement or any transaction in connection herewith.
30. ACCEPTANCE OF AGREEMENT
This Agreement shall not be deemed to be accepted by UBS-S LLC or become a
binding contract between Customer and UBS-S LLC until
-6-
approved by a duly authorized officer of UBS-S LLC in writing.
31. CUSTOMER ACKNOWLEDGEMENTS
(a) CUSTOMER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED AND UNDERSTANDS THE
FOLLOWING DISCLOSURE STATEMENTS FURNISHED HEREWITH (check where applicable):
( ) Risk Disclosure Statement for Futures and Options
(b) (The following must be completed by Customers who will engage in
transactions for hedging purposes only.) Customer has indicated on the New
Account Information Form that the Account is for hedging purposes. Customer
represents that it is familiar with CFTC and exchange laws, rules, regulations,
and advisories concerning hedging. Unless Customer specifically notifies UBS-S
LLC to the contrary in writing with respect to any transaction, all transactions
effected for the Account will be bona fide hedging transactions as described in
Section 4a of the Commodity Exchange Act, as amended, and Rule 1.3(z)
promulgated thereunder (a copy of which may be obtained from UBS-S LLC upon
request). As such, in accordance with CFTC Rule 190.06, Customer may specify
whether, in the unlikely event of UBS-S LLC's bankruptcy, Customer prefers that
the trustee liquidate open commodity contracts in the Account without seeking
Customer's instructions. Accordingly, in the event of UBS-S LLC's bankruptcy,
the trustee should (check one of the following):
( ) Attempt to contact Customer for instructions regarding the disposition of
open contracts in the Account.
( ) Liquidate open commodity contracts without seeking Customer's instructions.
This instruction may be changed at any time by written notice sent to UBS-S LLC.
32. SERIES DISCLAIMER.
The parties hereto acknowledge and agree that the Customer is a wholly-owned
subsidiary of The Frontier Fund, a Delaware statutory trust (the " Trust") and
that the Trust is organized in series pursuant to Sections 3804(a) and
3806(b)(2) of the Delaware Statutory Trust Act. As such, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to each series of the Trust shall be enforceable against the assets of
such series of the Trust only, and not against the assets of the Trust generally
or the assets of any other series of the Trust or against the Trustee of the
Trust. There may be several series of the Trust created pursuant to the
Declaration of Trust and Trust Agreement of the Trust.
-7-
IN WITNESS WHEREOF, Customer has executed this Agreement on the date
indicated below.
__________________________________
("Customer")
By:______________________________ _________________________________ ___________________
Print Name and Title Signature Date
By:______________________________ _________________________________ ___________________
Print Name and Title Signature Date
-------------------------------------------------------------------------------------------
ATTESTED BY:
By:______________________________ _________________________________ ___________________
Print Name and Title Signature Date
-------------------------------------------------------------------------------------------
ACCEPTED BY UBS SECURITIES LLC
By:______________________________ _________________________________ ___________________
Print Name and Title Signature Date
By:______________________________ _________________________________ ___________________
Print Name and Title Signature Date
-8-
CONSENT TO TRANSFER FUNDS
The undersigned acknowledges that UBS-S LLC may, until it receives a
written notice of revocation with respect thereto, in its sole and absolute
discretion and without prior notice to the undersigned, transfer any funds,
securities, commodities, Contracts or other property from any account maintained
by the undersigned to any other account of the undersigned maintained by UBS-S
LLC or any of its affiliates. UBS-S LLC will promptly confirm in writing each
transfer of funds, securities, commodities, Contracts or other property pursuant
hereto. UBS-S LLC shall not be liable for making or failing to make any transfer
authorized hereby.
Signature:_________________________________ Signature:
Date:______________________________________ Date:
Name & Title - Please Print _______________ Name & Title - Please Print
______________________________________
CROSS TRADE CONSENT
The undersigned consents to transactions whereby UBS-S LLC, its officers,
directors, employees or subsidiaries or other customers of UBS-S LLC or of the
servicing floor broker may be from time to time on the opposite side of orders
for physicals or for purchase or sale of futures contracts and option contracts
placed for the undersigned's Account in conformity with regulations of the
Commodity Futures Trading Commission and the by-laws, rules and regulations of
the contract market (and its clearing house, if any) on which such order is
executed.
Signature:_________________________________ Signature:
Date:______________________________________ Date:
Name & Title - Please Print _______________ Name & Title - Please Print
______________________________________
-9-
POWER OF ATTORNEY LIMITED TO PURCHASES AND SALES
OF FUTURES CONTRACTS
The undersigned hereby authorizes ___________________________ (the "Advisor") as
his/her agent and attorney to buy, sell and trade in commodities and/or futures
contracts and options thereon, in accordance with UBS SECURITIES LLC ("UBS-S
LLC") terms and conditions for the undersigned's account and risk and in the
undersigned's name through UBS-S LLC as brokers. The undersigned hereby agrees
to indemnify and hold UBS-S LLC harmless from and to pay UBS-S LLC promptly on
demand any and all losses arising therefrom or debit balance due thereon. The
undersigned confirms it has received a copy of Advisor's Disclosure Document. If
not, the undersigned has attached a written explanation of the reason(s)
therefor.
In all such purchases, sales or trades UBS-S LLC is authorized to follow the
instructions of the Advisor in every respect concerning the undersigned's
account with UBS-S LLC; and the Advisor is authorized to act for the undersigned
and on the undersigned's behalf in the same manner and with the same force and
effect as the undersigned might or could do with respect to such purchases,
sales or trades as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or trades. The
undersigned understands that UBS-S LLC is in no way responsible for any loss to
the undersigned occasioned by the actions of the Advisor and that UBS-S LLC does
not, by implication or otherwise, endorse the operating methods of the Advisor.
The undersigned hereby ratifies and confirms any and all transactions with UBS-S
LLC heretofore or hereafter made by the Advisor for the undersigned's account.
This authorization and indemnity is in addition to (and in no way limits or
restricts) any rights which UBS-S LLC may have under any other agreement or
agreements between the undersigned and UBS-S LLC. This authorization and
indemnity is a continuing one and shall remain in full force and effect until
revoked by the undersigned by a written notice addressed to UBS-S LLC but such
revocation shall not affect any liability in any resulting transaction initiated
prior to such revocation. This authorization and indemnity shall inure to the
benefit of UBS-S LLC and any successors or assigns.
___________________________________ Signature: ___________________________
(Name of Customer - Please Print) Date: ___________________________
Name & Title - Please Print _____
________________________________
-10-
ACCOUNT TRANSFER FORM
_____________________
Date
________________________________________
Current Broker Name
________________________________________
Address
________________________________________
City, State Zip Code
Attn: Account Transfers
Dear Sir:
Please be advised that I (we) wish to transfer all open positions and/or equity
in account number(s) _______________________________________________ maintained
at your firm to UBS SECURITIES LLC, 000 Xxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000
effective on the close of business on ___________________________ . You are
hereby directed to immediately transfer all open positions in the account(s) and
to issue a check representing the net available cash to UBS SECURITIES LLC In
addition, all securities, certificates, warehouse receipts, etc. are to be
transferred immediately.
Please contact UBS SECURITIES LLC's account transfer department at (203)
719-5178 with any questions.
INDIVIDUAL OR JOINT ACCOUNTS PARTNERSHIP ACCOUNTS
____________________________________________ ___________________________________________
Signature of Customer Signature of General Partner
____________________________________________ ___________________________________________
Printed Name Printed Name
____________________________________________ ___________________________________________
Signature of Customer Signature of General Partner
____________________________________________ ___________________________________________
Printed Name Printed Name
CORPORATE ACCOUNTS TRUST ACCOUNTS
____________________________________________ ___________________________________________
Account Name Account Name
____________________________________________ ___________________________________________
Signature of Authorized Officer Signature of Trustee
____________________________________________ ___________________________________________
Printed Name Printed Name
-11-
