EXHIBIT 10.02
AMENDED AND RESTATED CUSTOMER AGREEMENT
THIS AMENDED AND RESTATED CUSTOMER AGREEMENT (this
"Agreement"), made as of the 1st day of December, 1997, by and between DWFCM
INTERNATIONAL ACCESS FUND L.P., a Delaware limited partnership (the "Customer"),
and XXXX XXXXXX XXXXXXXX INC., a Delaware corporation ("DWR");
W I T N E S S E T H :
WHEREAS, the Customer was organized pursuant to a Certificate
of Limited Partnership filed in the office of the Secretary of State of the
State of Delaware on October 22, 1993, and a Limited Partnership Agreement dated
as of October 22, 1993, between Demeter Management Corporation, a Delaware
corporation ("Demeter"), acting as general partner (in such capacity, the
"General Partner"), and the limited partners of the Customer to trade, buy,
sell, spread or otherwise acquire, hold, or dispose of commodities (including,
but not limited, to foreign currencies, mortgage-backed securities, money market
instruments, financial instruments, and any other securities or items which are,
or may become, the subject of futures contract trading), domestic and foreign
commodity futures contracts, commodity forward contracts, foreign exchange
commitments, options on physical commodities and on futures contracts, spot
(cash) commodities and currencies, and any rights pertaining thereto
(hereinafter referred to collectively as "futures interests") and securities
(such as United States Treasury bills) approved by the Commodity Futures Trading
Commission (the "CFTC") for investment of customer funds, and to engage in all
activities incident thereto;
WHEREAS, the Customer (which is a commodity pool) and the
General Partner (which is a registered commodity pool operator) have entered
into a management agreement (the "Management Agreement") with a certain trading
advisor (the "Trading Advisor"), which provides that the Trading Advisor has
authority and responsibility, except in certain limited situations, to direct
the investment and reinvestment of the assets of the Customer in futures
interests under the terms set forth in the Management Agreement;
WHEREAS, the Customer and DWR entered into that certain
Amended and Restated Customer Agreement dated as of September 1, 1996 (the
"Customer Agreement"), whereby DWR agreed to perform futures interests brokerage
and certain other services for the Customer; and
WHEREAS, the Customer and DWR wish to amend and restate the
Customer Agreement to set forth the terms and conditions upon which DWR will
continue to perform certain non-clearing futures interests brokerage and certain
other services for the Customer;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not defined herein shall
have the meaning given to them in the Customer's most recent prospectus as filed
with the Securities and Exchange Commission (the "Prospectus") relating to the
offering of units of limited partnership interest of the Customer (the "Units")
and in any amendment or supplement to the Prospectus.
2. Duties of DWR. DWR agrees to act as a non-clearing
commodity broker for the Customer and introduce the Customer's account to Xxxx
Futures, Inc. ("CFI") for execution and clearing of futures interests
transactions on behalf of the Customer in accordance with instructions provided
by the Trading Advisor, and the Customer agrees to retain DWR as a non-clearing
commodity broker for the term of this Agreement.
DWR agrees to furnish to the Customer as soon as practicable
all of the information from time to time in its possession which Demeter, as the
general partner of the Customer, is required to furnish to the Limited Partners
pursuant to the Limited Partnership Agreement as from time to time in effect and
as required by applicable law, rules, or regulations and to perform such other
services for the Customer as are set forth herein and in the Prospectus.
3. Obligations and Expenses.
(a) Except as otherwise set forth herein, the
Customer, and not DWR, shall be responsible for all taxes, management and
incentive fees to the Trading Advisor, brokerage commissions to DWR, and all
extraordinary expenses incurred by it. In addition, the Customer, and not DWR,
shall pay the charges of CFI for executing and clearing the Customer's futures
interests trades (as described in paragraph 5(b) below).
(b) The Customer will pay its ordinary administrative
expenses, subject to a cap of 0.25% per year of the Customer's average month-end
Net Assets, including expenses for services provided by third parties selected
by the General Partner and reimbursement of all out-of-pocket expenses incurred
by such persons and by the General Partner and its affiliates in providing
services to the Customer. Such expenses shall include legal, accounting and
auditing expenses (including expenses incurred in preparing reports and tax
information to Limited Partners and regulatory authorities and expenses for
specialized administrative services), printing and duplication expenses, mailing
expenses, and filing fees. The General Partner or its affiliates shall pay any
ordinary administrative expenses which exceed the cap.
4. Agreement Nonexclusive. DWR shall be free to render
services of the nature to be rendered to the Customer hereunder to other persons
or entities in addition to the Customer, and the parties acknowledge that DWR
may render such services to additional entities similar in nature to the
Customer, including other partnerships organized with Demeter as their general
partner. It is expressly understood and agreed that this Agreement is
nonexclusive and that the Customer has no obligation to execute any or all of
its trades for futures interests through DWR. The parties acknowledge that the
Customer may utilize such other broker or brokers as Demeter may direct from
time to time. The Customer's utilization of an additional commodity broker shall
neither terminate this Agreement nor modify in any regard the respective rights
and obligations of the Customer and DWR hereunder.
5. (a) Compensation of DWR. The Customer will pay brokerage
commissions to DWR at a roundturn rate (but charged on a half-turn basis) of 80%
of DWR's published non-member rates for speculative accounts (which covers both
the taking and liquidation of a position), and substantially equivalent rates
for currency forward contract transactions in the forward contract and interbank
markets.
The Customer will pay DWR brokerage commissions for currency
forward contract transactions at rates established with reference to the
brokerage commission rate charged on exchange-traded currency futures contracts.
DWR may from time to time adjust the United States dollar size of currency
forward contracts so that the brokerage commission rate charged on such
contracts will approximate the rate charged on exchange-traded currency futures
contracts of similar United States dollar value. DWR shall also charge the
Partnership brokerage commissions for rollovers of forward contract positions.
(b) Compensation of CFI. The Customer will pay
certain charges of CFI for executing and clearing trades for the Customer
pursuant to that certain Customer Agreement dated as of December 1, 1997, among
the Customer, CFI and DWR. In addition, DWR shall pay CFI certain charges with
respect to the execution and clearance of trades for the Customer as agreed from
time to time between DWR and CFI.
(c) Notwithstanding the foregoing, brokerage
commissions, together with transaction fees and costs including those paid by
the Customer to CFI, with respect to the Trading Advisor's allocated Net Assets
will be capped at 13/20 of 1% per month (in the event the Trading Advisor
employs multiple trading systems in trading on behalf of the Customer, the
foregoing cap is applied on a per trading system basis) of the Customer's Net
Assets allocated to the Trading Advisor or trading system as of the last day of
each month (a maximum 7.8% annual rate). In addition, the aggregate of (i)
brokerage commissions and transaction fees and costs payable by the Customer,
and (ii) net excess interest and compensating balance benefits to DWR (after
crediting the Customer with interest) shall not exceed 14% annually of the
Customer's average month-end Net Assets during each calendar year.
(d) Any brokerage commissions, and transaction fees
and costs in excess of such caps shall be borne or paid by DWR or an affiliate
and shall not be reimbursed by the Customer. The foregoing caps may not be
increased except as permitted in the Customer's Limited Partnership Agreement,
as amended from time to time.
6. Investment Discretion. The parties recognize that DWR shall
have no authority to direct the futures interests investments to be made for the
Customer's account. However, the parties agree that DWR, and not the Trading
Advisor, shall have the authority and responsibility with regard to the
investment, maintenance, and management of the Customer's assets that are held
in segregated or secured accounts, as provided in Section 7 hereof.
7. Investment of Customer Funds. The Customer shall deposit
its assets in accounts with DWR. The Customer's assets deposited with DWR will
be segregated or secured in accordance with the Commodity Exchange Act and CFTC
regulations. DWR will credit the Customer with interest income at month-end in
an amount equal to 80% of the Customer's average daily Net Assets for the month
at a rate equal to the average yield on the 13-week U.S. Treasury Bills issued
during such month. All of such funds will be available for margin for the
Customer's trading. For the purpose of such interest payments, Net Assets will
not include monies due to the Customer on or with respect to forward contracts
and other futures interests but not actually received by it from banks, brokers,
dealers and other persons. The Customer understands that it will not receive any
other interest income on its assets and that DWR will receive interest income
from CFI, as agreed from time to time by DWR and CFI, on the Customer's assets
deposited as margin with CFI. The Customer's funds will either be invested along
with other customer segregated and secured funds of DWR or held in non-interest
bearing bank accounts. The Customer's assets held by DWR may be used solely as
margin for the Customer's trading.
Ownership of the right to receive interest on the Customer's
assets pursuant to the preceding paragraph shall be reflected and maintained and
may be transferred only on the books and records of DWR. Any purported transfer
of such ownership shall not be effective or recognized until such transfer shall
have been recorded on the books and records of DWR.
8. Standard of Liability and Indemnity. Subject to Section 2
hereof, DWR and its affiliates (as defined below) shall not be liable to the
Customer, the General Partner or Limited Partners, or any of its or their
respective successors or assigns, for any act, omission, conduct, or activity
undertaken by or on behalf of the Customer pursuant to this Agreement which DWR
determines, in good faith, to be in the best interests of the Customer, unless
such act, omission, conduct, or activity by DWR or its affiliates constituted
misconduct or negligence.
The Customer shall indemnify, defend and hold harmless DWR and
its affiliates from and against any loss, liability, damage, cost or expense
(including attorneys' and accountants' fees and expenses incurred in the defense
of any demands, claims, or lawsuits) actually and reasonably incurred arising
from any act, omission, conduct or activity undertaken by DWR on behalf of the
Customer pursuant to this Agreement, including, without limitation, any demands,
claims or lawsuits initiated by a Limited Partner (or assignee thereof),
provided that (i) DWR has determined, in good faith, that the act, omission,
conduct, or activity giving rise to the claim for indemnification was in the
best interests of the Customer, and (ii) the act, omission, conduct, or activity
that was the basis for such loss, liability, damage, cost, or expense was not
the result of misconduct or negligence. Notwithstanding anything to the contrary
contained in the foregoing, neither DWR nor any of its affiliates shall be
indemnified by the Customer for any losses, liabilities, or expenses arising
from or out of an alleged violation of federal or state securities laws unless
(a) there has been a successful adjudication on the merits of each count
involving alleged securities law violations as to the particular indemnitee, or
(b) such claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction as to the particular indemnitee, or (c) a court of
competent jurisdiction approves a settlement of the claims against the
particular indemnitee and finds that indemnification of the settlement and
related costs should be made, provided, with regard to such court approval, the
indemnitee must apprise the court of the position of the SEC, and the positions
of the respective securities administrators of Massachusetts, Missouri,
Tennessee and/or those other states and jurisdictions in which the plaintiffs
claim they were offered or sold Units, with respect to indemnification for
securities laws violations before seeking court approval for indemnification.
Furthermore, in any action or proceeding brought by a Limited Partner in the
right of the Customer to which DWR or any affiliate thereof is a party
defendant, any such person shall be indemnified only to the extent and subject
to the conditions specified in the Delaware Revised Uniform Limited Partnership
Act, as amended, and this Section 8. The Customer shall make advances to DWR or
its affiliates hereunder only if: (i) the demand, claim, lawsuit, or legal
action relates to the performance of duties or services by such persons to the
Customer; (ii) such demand, claim, lawsuit, or legal action is not initiated by
a Limited Partner; and (iii) such advances are repaid, with interest at the
legal rate under Delaware law, if the person receiving such advance is
ultimately found not to be entitled to indemnification hereunder.
DWR shall indemnify, defend and hold harmless the Customer and
its successors or assigns from and against any losses, liabilities, damages,
costs, or expenses (including in connection with the defense or settlement of
claims; provided DWR has approved such settlement) incurred as a result of the
activities of DWR or its affiliates, provided, further, that the act, omission,
conduct, or activity giving rise to the claim for indemnification was the result
of bad faith, misconduct or negligence.
The indemnities provided in this Section 8 by the Customer to
DWR and its affiliates shall be inapplicable in the event of any losses,
liabilities, damages, costs, or expenses arising out of, or based upon, any
material breach of any warranty, covenant, or agreement of DWR contained in this
Agreement to the extent caused by such breach. Likewise, the indemnities
provided in this Section 8 by DWR to the Customer and any of its successors and
assigns shall be inapplicable in the event of any losses, liabilities, damages,
costs, or expenses arising out of, or based upon, any material breach of any
warranty, covenant, or agreement of the Customer contained in this Agreement to
the extent caused by such breach.
As used in this Section 8, the term "affiliate" of DWR shall
mean: (i) any natural person, partnership, corporation, association, or other
legal entity directly or indirectly owning, controlling, or holding with power
to vote 10% or more of the outstanding voting securities of DWR; (ii) any
partnership, corporation, association, or other legal entity 10% or more of
whose outstanding voting securities are directly or indirectly owned,
controlled, or held with power to vote by DWR; (iii) any natural person,
partnership, corporation, association, or other legal entity directly or
indirectly controlling, controlled by, or under common control with, DWR; or
(iv) any officer or director of DWR. Notwithstanding the foregoing, "affiliates"
for purposes of this Section 8 shall include only those persons acting on behalf
of DWR within the scope of the authority of DWR, as set forth in this Agreement.
9. Term. This Agreement shall continue in effect until
terminated by either party giving not less than 60 days' prior written notice of
termination to the other party. Any such termination by either party shall be
without penalty.
10. Complete Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the matters referred to herein,
and no other agreement, verbal or otherwise, shall be binding as between the
parties unless in writing and signed by the party against whom enforcement is
sought.
11. Assignment. This Agreement may not be assigned by either
party without the express written consent of the other party.
12. Amendment. This Agreement may not be amended except by the
written consent of the parties and provided such amendment is consistent with
the Limited Partnership Agreement.
13. Notices. All notices required or desired to be delivered
under this Agreement shall be in writing and shall be effective when delivered
personally on the day delivered, or when given by registered or certified mail,
postage prepaid, return receipt requested, on the day of receipt, addressed as
follows (or to such other address as the party entitled to notice shall
hereafter designate in accordance with the terms hereof):
if to the Customer:
DWFCM INTERNATIONAL ACCESS FUND L.P.
c/o Demeter Management Corporation
Two World Trade Center, 62nd Floor
New York, New York 10048
Attn: Xxxx X. Xxxxxx
President
if to DWR:
XXXX XXXXXX XXXXXXXX INC.
Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx
Executive Vice President
14. Survival. The provisions of this Agreement shall survive
the termination of this Agreement with respect to any matter arising while this
Agreement was in effect.
15. Headings. Headings of Sections herein are for the
convenience of the parties only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
16. Incorporation by Reference. The Futures Customer Agreement
annexed hereto is hereby incorporated by reference herein and made a part hereof
to the same extent as if such document were set forth in full herein. If any
provision of this Agreement is or at any time becomes inconsistent with the
annexed document, the terms of this Agreement shall control.
IN WITNESS WHEREOF, this Agreement has been executed for and
on behalf of the undersigned as of the day and year first above written.
DWFCM INTERNATIONAL ACCESS FUND L.P.
By: Demeter Management Corporation,
General Partner
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
President
XXXX XXXXXX XXXXXXXX INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Executive Vice President
FUTURES CUSTOMER AGREEMENT
In consideration of the acceptance by Xxxx Xxxxxx Xxxxxxxx Inc. ("DWR") of one
or more accounts of the undersigned ("Customer") (if more than one account is
carried by DWR, all are covered by this Agreement and are referred to
collectively as the "Account") and DWR's agreement to act as Customer's broker
for the execution, clearance and/or carrying of transactions for the purchase
and sale of commodity interests, including commodities, commodity futures
contracts and commodity options, Customer agrees as follows:
1. APPLICABLE RULES AND REGULATIONS - The Account and each transaction
therein shall be subject to the terms of this Agreement and to (a) all
applicable laws and the regulations, rules and orders (collectively
"regulations") of all regulatory and self-regulatory organizations
having jurisdiction and (b) the constitution, by-laws, rules,
regulations, orders, resolutions, interpretations and customs and
usages (collectively "rules") of the market and any associated
clearing organization (each an "exchange") on or subject to the rules
of which such transaction is executed and/or cleared. The reference in
the preceding sentence to exchange rules is solely for DWR's
protection and DWR's failure to comply therewith shall not constitute
a breach of this Agreement or relieve Customer of any obligation or
responsibility under this Agreement. DWR shall not be liable to
Customer as a result of any action by DWR, its officers, directors,
employees or agents to comply with any rule or regulation.
2. PAYMENTS TO DWR - Customer agrees to pay to DWR immediately on request
(a) commissions, fees and service charges as are in effect from time
to time together with all applicable regulatory and self-regulatory
organization and exchange fees, charges and taxes; (b) the amount of
any debit balance or any other liability that may result from
transactions executed for the account; and (c) interest on such debit
balance or liability at the prevailing rate charged by DWR at the time
such debit balance or liability arises and service charges on any such
debit balance or liability together with any reasonable costs and
attorney's fees incurred in collecting any such debit balance or
liability. Customer acknowledges that DWR may charge commissions at
other rates to other customers.
3. CUSTOMER'S DUTY TO MAINTAIN ADEQUATE MARGIN - Customer shall at all
times and without prior notice or demand from DWR maintain adequate
margins in the account so as continually to meet the original and
maintenance margin requirements established by DWR for Customer. DWR
may change such requirements from time to time at DWR's discretion.
Such margin requirements may exceed the margin requirements set by any
exchange or other regulatory authority and may vary from DWR's
requirements for other customers. Customer agrees, when so requested,
immediately to wire transfer margin funds and to furnish DWR with
names of bank officers for immediate verification of such transfers.
Customer acknowledges and agrees that DWR may receive and retain as
its own any interest, increment, profit, gain or benefit directly or
indirectly, accruing from any of the funds DWR receives from Customer.
4. DELIVERY; OPTION EXERCISE
(a) Customer acknowledges that the making or accepting of
delivery pursuant to a futures contract may involve a much
higher degree of risk than liquidating a position by offset.
DWR has no control over and makes no warranty with respect
to grade, quality or tolerances of any commodity delivered
in fulfillment of a contract.
(b) Customer agrees to give DWR timely notice and immediately on
request to inform DWR if Customer intends to make or take
delivery under a futures contract or to exercise an option
contract. If so requested, Customer shall provide DWR with
satisfactory assurances that Customer can fulfill Customer's
obligation to make or take delivery under any contract.
Customer shall furnish DWR with property deliverable by it
under any contract in accordance with DWR's instructions.
(c) DWR shall not have any obligation to exercise any long
option contract unless Customer has furnished DWR with
timely exercise instructions and sufficient initial margin
with respect to each underlying futures contract.
5. FOREIGN CURRENCY - If DWR enters into any transaction for Customer
effected in a currency other than U.S. dollars: (a) any profit or loss
caused by changes in the rate of exchange for such currency shall be
for Customer's account and risk and (b) unless another currency is
designated in DWR's confirmation of such transaction, all margin for
such transaction and the profit or loss on the liquidation of such
transaction shall be in U.S. dollars at a rate of exchange determined
by DWR in its discretion on the basis of then prevailing market rates
of exchange for such foreign currency.
6. DWR MAY LIMIT POSITIONS HELD - Customer agrees that DWR, at its
discretion, may limit the number of open positions (net or gross)
which Customer may execute, clear and/or carry with or acquire through
it. Customer agrees (a) not to make any trade which would have the
effect of exceeding such limits, (b) that DWR may require Customer to
reduce open positions carried with DWR and (c) that DWR may refuse to
accept orders to establish new positions. DWR may impose and enforce
such limits, reduction or refusal whether or not they are required by
applicable law, regulations or rules. Customer shall comply with all
position limits established by any regulatory or self-regulatory
organization or any exchange. In addition, Customer agrees to notify
DWR promptly if customer is required to file position reports with any
regulatory or self-regulatory organization or with any exchange.
7. NO WARRANTY AS TO INFORMATION OR RECOMMENDATION - Customer
acknowledges that:
(a) Any market recommendations and information DWR may
communicate to Customer, although based upon information
obtained from sources believed by DWR to be reliable, may be
incomplete and not subject to verification;
(b) DWR makes no representation, warranty or guarantee as to,
and shall not be responsible for, the accuracy or
completeness of any information or trading recommendation
furnished to Customer;
(c) recommendations to Customer as to any particular transaction
at any given time may differ among DWR's personnel due to
diversity in analysis of fundamental and technical factors
and may vary from any standard recommendation made by DWR in
its market letters or otherwise; and
(d) DWR has no obligation or responsibility to update any market
recommendations or information it communicates to Customer.
Customer understands that DWR and its officers, directors,
affiliates, stockholders, representatives or associated persons may have
positions in and may intend to buy or sell commodity interests which are the
subject of market recommendations furnished to Customer, and that the market
positions of DWR or any such officer, director, affiliate, stockholder,
representative or associated person may or may not be consistent with the
recommendations furnished to Customer by DWR.
8. LIMITS ON DWR DUTIES; LIABILITY - Customer agrees:
(a) that DWR has no duty to apprise Customer of news or of the
value of any commodity interests or collateral pledged or in
any way to advise Customer with respect to the market;
(b) that the commissions which DWR receives are consideration
solely for the execution, reporting and carrying of
Customer's trades;
(c) that if Customer has authorized any third party or parties
to place orders or effect transactions on behalf of Customer
in any Account, each such party has been selected by
Customer based on its own evaluation and assessment of such
party and that such party is solely the agent of Customer,
and if any such party allocates commodity interests among
its customers, Customer has reviewed each such party's
commodity interest allocation system, has satisfied itself
that such allocation system is fair and will seek recovery
solely from such party to recover any damages sustained by
Customer as the result of any allocation made by such party;
and
(d) to waive any and all claims, rights or causes of action
which Customer has or may have against DWR or its officers,
employees and agents (i) arising in whole or in part,
directly or indirectly, out of any act or omission of any
person, whether or not legally deemed an agent of DWR, who
refers or introduces Customer to DWR or places orders for
Customer and (ii) for any punitive damages and to limit any
claims arising out of this Agreement or the Account to
Customer's direct out-of-pocket damages.
9. EXTRAORDINARY EVENTS - Customer shall have no claim against DWR for
any loss, damage, liability, cost, charge, expense, penalty, fine or
tax caused directly or indirectly by (a) governmental, court,
exchange, regulatory or self-regulatory organization restrictions,
regulations, rules, decisions or orders, (b) suspension or termination
of trading, (c) war or civil or labor disturbance, (d) delay or
inaccuracy in the transmission or reporting of orders due to a
breakdown or failure of computer services, transmission or
communication facilities, (e) the failure or delay by any exchange to
enforce its rules or to pay to DWR any margin due in respect of
Customer's Account, (f) the failure or delay by any bank, trust
company, clearing organization or other person which, pursuant to
applicable exchange rules, is holding Customer funds, securities or
other property to pay or deliver the same to DWR or (g) any other
cause or causes beyond DWR's control.
10. INDEMNIFICATION OF DWR - Customer agrees to indemnify, defend and hold
harmless DWR and its officers, employees and agents from and against
any loss, cost, claim, damage (including any consequential cost, loss
or damage), liability or expense (including reasonable attorneys'
fees) and any fine, sanction or penalty made or imposed by any
regulatory or self-regulatory authority or any exchange as the result,
directly or indirectly, of:
(a) Customer's failure or refusal to comply with any provision
of this Agreement or perform any obligation on its part to
be performed pursuant to this Agreement; and
(b) Customer's failure to timely deliver any security, commodity
or other property previously sold by DWR on Customer's
behalf.
11 NOTICES; TRANSMITTALS - DWR shall transmit all communications to
Customer at Customer's address, telefax or telephone number set forth
in the accompanying Futures Account Application or to such other
address as Customer may hereafter direct in writing. Customer shall
transmit all communications to DWR (except routine inquiries
concerning the Account) to 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Futures Compliance Officer. All payments and deliveries to
DWR shall be made as instructed by DWR from time to time and shall be
deemed received only when actually received by DWR.
12. CONFIRMATION CONCLUSIVE - Confirmation of trades and any other notices
sent to Customer shall be conclusive and binding on Customer unless
Customer or Customer's agent notifies DWR to the contrary (a) in the
case of an oral report, orally at the time received by Customer or its
agent or (b) in the case of a written report or notice, in writing
prior to opening of trading on the business day next following receipt
of the report. In addition, if Customer has not received a written
confirmation that a commodity interest transaction has been executed
within three business days after Customer has placed an order with DWR
to effect such transaction, and has been informed or believes that
such order has been or should have been executed, then Customer
immediately shall notify DWR thereof. Absent such notice, Customer
conclusively shall be deemed estopped to object and to have waived any
such objection to the failure to execute or cause to be executed such
transaction. Anything in this Section 12 withstanding, neither
Customer nor DWR shall be bound by any transaction or price reported
in error.
13. SECURITY INTEREST - All money and property ("collateral") now or at
any future time held in Customer's Account, or otherwise held by DWR
for Customer, is subject to a security interest in DWR's favor to
secure any indebtedness at any time owing to it by Customer. DWR, in
its discretion, may liquidate any collateral to satisfy any margin or
Account deficiencies or to transfer the collateral to the general
ledger account of DWR.
14. TRANSFER OF FUNDS - At any time and from time to time and without
prior notice to Customer, DWR may transfer from one account to another
account in which Customer has any interest, such excess funds,
equities, securities or other property as in DWR's judgment may be
required for margin, or to reduce any debit balance or to reduce or
satisfy any deficits in such other accounts except that no such
transfer may be made from a segregated account subject to the
Commodity Exchange Act to another account maintained by Customer
unless either Customer has authorized such transfer in writing or DWR
is effecting such transfer to enforce DWR's security interest pursuant
to Section 13. DWR promptly shall confirm all transfers of funds made
pursuant hereto to Customer in writing.
15. DWR'S RIGHT TO LIQUIDATE CUSTOMER POSITIONS - In addition to all other
rights of DWR set forth in this Agreement:
(a) when directed or required by a regulatory or self-regulatory
organization or exchange having jurisdiction over DWR or the
Account;
(b) whenever, in its discretion, DWR considers it necessary for
its protection because of margin requirements or otherwise;
(c) if Customer or any affiliate of Customer repudiates,
violates, breaches or fails to perform on a timely basis any
term, covenant or condition on its part to be performed
under this Agreement or another agreement with DWR;
(d) if a case in bankruptcy is commenced or if a proceeding
under any insolvency or other law for the protection of
creditors or for the appointment of a receiver, liquidator,
trustee, conservator, custodian or similar officer is filed
by or against Customer or any affiliate of Customer, or if
Customer or any affiliate of Customer makes or proposes to
make any arrangement or composition for the benefit of its
creditors, or if Customer (or any such affiliate) or any or
all of its property is subject to any agreement, order,
judgment or decree providing for Customer's dissolution,
winding-up, liquidation, merger, consolidation,
reorganization or for the appointment of a receiver,
liquidator, trustee, conservator, custodian or similar
officer of Customer, such affiliate or such property;
(e) DWR is informed of Customer's death or mental incapacity; or
(f) if an attachment or similar order is levied against the
Account or any other account maintained by Customer or any
affiliate of Customer with DWR;
DWR shall have the right to (i) satisfy any obligations due DWR out of
any Customer's property in DWR's custody or control, (ii) liquidate
any or all of Customer's commodity interest positions, (iii) cancel
any or all of Customer's outstanding orders, (iv) treat any or all of
Customer's obligations due DWR as immediately due and payable, (v)
sell any or all of Customer's property in DWR's custody or control in
such manner as DWR determines to be commercially reasonable, and/or
(vi) terminate any or all of DWR's obligations for future performance
to Customer, all without any notice to or demand on Customer. Any sale
hereunder may be made in any commercially reasonable manner. Customer
agrees that a prior demand, call or notice shall not be considered a
waiver of DWR's right to act without demand or notice as herein
provided, that Customer shall at all times be liable for the payment
of any debit balance owing in each account upon demand whether
occurring upon a liquidation as provided under this Section 15 or
otherwise under this Agreement, and that in all cases Customer shall
be liable for any deficiency remaining in each Account in the event of
liquidation thereof in whole or in part together with interest thereon
and all costs relating to liquidation and collection (including
reasonable attorneys' fees).
16. CUSTOMER REPRESENTATIONS, WARRANTIES AND AGREEMENTS - Customer
represents and warrants to and agrees with DWR that:
(a) Customer has full power and authority to enter into this
Agreement and to engage in the transactions and perform its
obligations hereunder and contemplated hereby and (i) if a
corporation or a limited liability company, is duly
organized under the laws of the jurisdiction set forth in
the accompanying Futures Account Application, or (ii) if a
partnership, is duly organized pursuant to a written
partnership agreement and the general partner executing this
Agreement is duly authorized to do so under the partnership
agreement;
(b) Neither Customer nor any partner, director, officer, member,
manager or employee of Customer nor any affiliate of
Customer is a partner, director, officer, member, manager or
employee of a futures commission merchant introducing
broker, exchange or self-regulatory organization or an
employee or commissioner of the Commodity Futures Trading
Commission (the "CFTC"), except as previously disclosed in
writing to DWR;
(c) The accompanying Futures Account Application and Personal
Financial Statements, if applicable, (including any
financial statements furnished in connection therewith) are
true, correct and complete. Except as disclosed on the
accompanying Futures Account Application or otherwise
provided in writing, (i) Customer is not a commodity pool or
is exempt from registration under the rules of the
Commission, and (ii) Customer is acting solely as principal
and no one other than Customer has any interest in any
Account of Customer. Customer hereby authorizes DWR to
contact such banks, financial institutions and credit
agencies as DWR shall deem appropriate for verification of
the information contained herein.
(d) Customer has determined that trading in commodity interests
is appropriate for Customer, is prudent in all respects and
does not and will not violate Customer's charter or by-laws
(or other comparable governing document) or any law, rule,
regulation, judgment, decree, order or agreement to which
Customer or its property is subject or bound;
(e) As required by CFTC regulations, Customer shall create,
retain and produce upon request of the applicable contract
market, the CFTC or the United States Department of Justice
documents (such as contracts, confirmations, telex
printouts, invoices and documents of title) with respect to
cash transactions underlying exchanges of futures for cash
commodities or exchange of futures in connection with cash
commodity transactions;
(f) Customer consents to the electronic recording, at DWR's
discretion, of any or all telephone conversations with DWR
(without automatic tone warning device), the use of same as
evidence by either party in any action or proceeding arising
out of the Agreement and in DWR's erasure, at its
discretion, of any recording as part of its regular
procedure for handling of recordings;
(g) Absent a separate written agreement between Customer and DWR
with respect to give-ups, DWR, in its discretion, may, but
shall have no obligation to, accept from other brokers
commodity interest transactions executed by such brokers on
an exchange for Customer and proposed to be "given-up" to
DWR for clearance and/or carrying in the Account;
(h) DWR, for and on behalf of Customer, is authorized and
empowered to place orders for commodity interest
transactions through one or more electronic or automated
trading systems maintained or operated by or under the
auspices of an exchange, that DWR shall not be liable or
obligated to Customer for any loss, damage, liability, cost
or expense (including but not limited to loss of profits,
loss of use, incidental or consequential damages) incurred
or sustained by Customer and arising in whole or in part,
directly or indirectly, from any fault, delay, omission,
inaccuracy or termination of a system or DWR's inability to
enter, cancel or modify an order on behalf of Customer on or
through a system. The provisions of this Section 16(h) shall
apply regardless of whether any customer claim arises in
contract, negligence, tort, strict liability, breach of
fiduciary obligations or otherwise; and
(i) If Customer is subject to the Financial Institution Reform,
Recovery and Enforcement Act of 1989, the certified
resolutions set forth following this Agreement have been
caused to be reflected in the minutes of Customer's Board of
Directors (or other comparable governing body) and this
Agreement is and shall be, continuously from the date
hereof, an official record of Customer.
Customer agrees to promptly notify DWR in writing if any of the
warranties and representations contained in this Section 16 becomes
inaccurate or in any way ceases to be true, complete and correct.
17. SUCCESSORS AND ASSIGNS - This Agreement shall inure to the benefit of
DWR, its successors and assigns, and shall be binding upon Customer
and Customer's executors, trustees, administrators, successors and
assigns, provided, however, that this Agreement is not assignable by
Customer without the prior written consent of DWR.
18. MODIFICATION OF AGREEMENT BY DWR; NON-WAIVER PROVISION - This
Agreement may only be altered, modified or amended by mutual written
consent of the parties, except that if DWR notifies Customer of a
change in this Agreement and Customer thereafter effects a commodity
interest transaction in an account, Customer agrees that such action
by Customer will constitute consent by Customer to such change. No
employee of DWR other than DWR's General Counsel or his or her
designee, has any authority to alter, modify, amend or waive in any
respect any of the terms of this Agreement. The rights and remedies
conferred upon DWR shall be cumulative, and its forbearance to take
any remedial action available to it under this Agreement shall not
waive its right at any time or from time to time thereafter to take
such action.
19. SEVERABILITY - If any term or provision hereof or the application
thereof to any persons or circumstances shall to any extent be
contrary to any exchange, government or self-regulatory regulation or
contrary to any federal, state or local law or otherwise be invalid or
unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as
to which it is contrary, invalid or unenforceable, shall not be
affected thereby.
20. CAPTIONS - All captions used herein are for convenience only, are not
a part of this Agreement, and are not to be used in construing or
interpreting any aspect of this Agreement.
21. TERMINATION - This Agreement shall continue in force until written
notice of termination is given by Customer or DWR. Termination shall
not relieve either party of any liability or obligation incurred prior
to such notice. Upon giving or receiving notice of termination,
Customer will promptly take all action necessary to transfer all open
positions in each account to another futures commission merchant.
22. ENTIRE AGREEMENT - This Agreement constitutes the entire agreement
between Customer and DWR with respect to the subject matter hereof and
supersedes any prior agreements between the parties with respect to
such subject matter.
23. GOVERNING LAW; CONSENT TO JURISDICTION -
(a) In case of a dispute between Customer and DWR arising out of
or relating to the making or performance of this Agreement
or any transaction pursuant to this Agreement (i) this
Agreement and its enforcement shall be governed by the laws
of the State of New York without regard to principles of
conflicts of laws, and (ii) Customer will bring any legal
proceeding against DWR in, and Customer hereby consents in
any legal proceeding by DWR to the jurisdiction of, any
state or federal court located within the State and City of
New York in connection with all legal proceedings arising
directly, indirectly or otherwise in connection with, out
of, related to or from Customer's Account, transactions
contemplated by this Agreement or the breach thereof.
Customer hereby waives all objections Customer, at any time,
may have as to the propriety of the court in which any such
legal proceedings may be commenced. Customer also agrees
that any service of process mailed to Customer at any
address specified to DWR shall be deemed a proper service of
process on the undersigned.
(b) Notwithstanding the provisions of Section 23 (a)(ii),
Customer may elect at this time to have all disputes
described in this Section resolved by arbitration. To make
such election, Customer must sign the Arbitration Agreement
set forth in Section 24. Notwithstanding such election, any
question relating to whether Customer or DWR has commenced
an arbitration proceeding in a timely manner, whether a
dispute is within the scope of the Arbitration Agreement or
whether a party (other than Customer or DWR) has consented
to arbitration and all proceedings to compel arbitration
shall be determined by a court as specified in Section 23
(a)(ii).
24. ARBITRATION AGREEMENT (OPTIONAL) - Every dispute between Customer and
DWR arising out of or relating to the making or performance of this
Agreement or any transaction pursuant to this Agreement, shall be
settled by arbitration in accordance with the rules, then in effect,
of the National Futures Association, the contract market upon which
the transaction giving rise to the claim was executed, or the National
Association of Securities Dealers as Customer may elect. If Customer
does not make such election by registered mail addressed to DWR at 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000; Attention: Deputy
General Counsel, within 45 days after demand by DWR that the Customer
make such election, then DWR may make such election. DWR agrees to pay
any incremental fees which may be assessed by a qualified forum for
making available a "mixed panel" of arbitrators, unless the
arbitrators determine that Customer has acted in bad faith in
initiating or conducting the proceedings. Judgment upon any award
rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
IN ADDITION TO FOREIGN FORUMS, THREE FORUMS EXIST FOR THE RESOLUTION
OF COMMODITY DISPUTES: CIVIL COURT LITIGATION, REPARATIONS AT THE
COMMODITY FUTURES TRADING COMMISSION ("CFTC") AND ARBITRATION
CONDUCTED BY A SELF-REGULATORY OR OTHER PRIVATE ORGANIZATION.
THE CFTC RECOGNIZES THAT THE OPPORTUNITY TO SETTLE DISPUTES BY
ARBITRATION MAY IN SOME CASES PROVIDE MANY BENEFITS TO CUSTOMERS,
INCLUDING THE ABILITY TO OBTAIN AN EXPEDITIOUS AND FINAL RESOLUTION OF
DISPUTES WITHOUT INCURRING SUBSTANTIAL COSTS. THE CFTC REQUIRES,
HOWEVER, THAT EACH CUSTOMER INDIVIDUALLY EXAMINE THE RELATIVE MERITS
OF ARBITRATION AND THAT YOUR CONSENT TO THIS ARBITRATION AGREEMENT BE
VOLUNTARY.
BY SIGNING THIS AGREEMENT, YOU (1) MAY BE WAIVING YOUR RIGHT TO XXX IN
A COURT OF LAW AND (2) ARE AGREEING TO BE BOUND BY ARBITRATION OF ANY
CLAIMS OR COUNTERCLAIMS WHICH YOU OR DWR MAY SUBMIT TO ARBITRATION
UNDER THIS AGREEMENT. YOU ARE NOT, HOWEVER, WAIVING YOUR RIGHT TO
ELECT INSTEAD TO PETITION THE CFTC TO INSTITUTE REPARATIONS
PROCEEDINGS UNDER SECTION 14 OF THE COMMODITY EXCHANGE ACT WITH
RESPECT TO ANY DISPUTE WHICH MAY BE ARBITRATED PURSUANT TO THIS
AGREEMENT. IN THE EVENT A DISPUTE ARISES, YOU WILL BE NOTIFIED IF DWR
INTENDS TO SUBMIT THE DISPUTE TO ARBITRATION. IF YOU BELIEVE A
VIOLATION OF THE COMMODITY EXCHANGE ACT IS INVOLVED AND IF YOU PREFER
TO REQUEST A SECTION 14 "REPARATIONS" PROCEEDINGS BEFORE THE CFTC, YOU
WILL HAVE 45 DAYS FROM THE DATE OF SUCH NOTICE IN WHICH TO MAKE THAT
ELECTION.
YOU NEED NOT AGREE TO THIS ARBITRATION AGREEMENT TO OPEN AN ACCOUNT
WITH DWR. See 17 CFR 180.1-180.5. ACCEPTANCE OF THIS ARBITRATION
AGREEMENT REQUIRES A SEPARATE SIGNATURE ON PAGE 8.
25. CONSENT TO TAKE THE OTHER SIDE OF ORDERS (OPTIONAL) - Without its
prior notice, Customer agrees that when DWR executes sell or buy
orders on Customer's behalf, DWR, its directors, officers, employees,
agents, affiliates, and any floor broker may take the other side of
Customer's transaction through any account of such person subject to
its being executed at prevailing prices in accordance with and subject
to the limitations and conditions, if any, contained in applicable
rules and regulations.
26. AUTHORIZATION TO TRANSFER FUNDS (OPTIONAL) - Without limiting other
provisions herein, DWR is authorized to transfer from any segregated
account subject to the Commodity Exchange Act carried by DWR for the
Customer to any other account carried by DWR for the Customer such
amount of excess funds as in DWR's judgment may be necessary at any
time to avoid a margin call or to reduce a debit balance in said
account. It is understood that DWR will confirm in writing each such
transfer of funds made pursuant to this authorization within a
reasonable time after such transfer.
27. SUBORDINATION AGREEMENT (APPLIES ONLY TO ACCOUNTS WITH FUNDS HELD IN
FOREIGN COUNTRIES) - Funds of customers trading on United States
contract markets may be held in accounts denominated in a foreign
currency with depositories located outside the United States or its
territories if the customer is domiciled in a foreign country or if
the funds are held in connection with contracts priced and settled in
a foreign currency. Such accounts are subject to the risk that events
could occur which hinder or prevent the availability of these funds
for distribution to customers. Such accounts also may be subject to
foreign currency exchange rate risks.
If authorized below, Customer authorizes the deposit of funds into
such foreign depositories. For customers domiciled in the United
States, this authorization permits the holding of funds in regulated
accounts offshore only if such funds are used to margin, guarantee, or
secure positions in such contracts or accrue as a result of such
positions. In order to avoid the possible dilution of other customer
funds, a customer who has funds held outside the United States agrees
by accepting this subordination agreement that his claims based on
such funds will be subordinated as described below in the unlikely
event both of the following conditions are met: (1) DWR is placed in
receivership or bankruptcy, and (2) there are insufficient funds
available for distribution denominated in the foreign currency as to
which the customer has a claim to satisfy all claims against those
funds.
By initialing the Subordination Agreement below, Customer agrees that
if both of the conditions listed above occur, its claim against DWR's
assets attributable to funds held overseas in a particular foreign
currency may be satisfied out of segregated customer funds held in
accounts denominated in dollars or other foreign currencies only after
each customer whose funds are held in dollars or in such other foreign
currencies receives its pro-rata portion of such funds. It is further
agreed that in no event may a customer whose funds are held overseas
receive more than its pro-rata share of the aggregate pool consisting
of funds held in dollars, funds held in the particular foreign
currency, and non-segregated assets of DWR.
**OPTIONAL ELECTIONS
The following provisions, which are set forth in this agreement, need not be
entered into to open the Account. Customer agrees that its optional elections
are as follows:
SIGNATURE REQUIRED FOR EACH
ELECTION
ARBITRATION AGREEMENT:
(Agreement Paragraph 24)
------------------------------
CONSENT TO TAKE THE OTHER SIDE OF ORDERS:
(Agreement Paragraph 25) X /s/ Xxxx X. Xxxxxx
------------------------------
AUTHORIZATION TO TRANSFER FUNDS:
(Agreement Paragraph 26)
------------------------------
ACKNOWLEDGEMENT TO SUBORDINATION AGREEMENT
(Agreement Paragraph 27) X /s/ Xxxx X. Xxxxxx
------------------------------
(Required for accounts holding
non-U.S. currency)
--------------------------------------------------------------------------------
HEDGE ELECTION
Customer confirms that all transactions in the Account will [ ]
represent bona fide hedging transactions, as defined by the
Commodity Futures Trading Commission, unless DWR is notified
otherwise not later than the time an order is placed for the
Account [check box if applicable]:
Pursuant to CFTC Regulation 190.06(d), Customer specifies and agrees, with
respect to hedging transactions in the Account, that in the unlikely event of
DWR's bankruptcy, it prefers that the bankruptcy trustee [check appropriate
box]:
A. Liquidate all open contracts without first seeking [ ]
instructions either from or on behalf of Customer.
B. Attempt to obtain instructions with respect to the [ ]
disposition of all open contracts. (IF NEITHER BOX IS
CHECKED, CUSTOMER SHALL BE DEEMED TO ELECT A)
--------------------------------------------------------------------------------
ACKNOWLEDGEMENT OF RECEIPT OF RISK DISCLOSURE STATEMENTS
The undersigned each hereby acknowledges its separate receipt from DWR, and its
understanding of each of the following documents prior to the opening of the
account:
o Risk Disclosure Statement for o Project A(TM) Customer Information
Futures and Options (in the Statement
form prescribed by CFTC
Regulation 1.55(c))
o LME Risk Warning Notice o Questions & Answers on Flexible
Options Trading at the CBOT
o Xxxx Xxxxxx Order Presumption o CME Average Pricing System Dis-
for After Hours Electronic closure Statement
Markets
o NYMEX ACCESS(SM) Risk Disclosure o Special Notice to Foreign Brokers
Statement and Foreign Traders
o Globex(R) Customer Information
and Risk Disclosure Statement
--------------------------------------------------------------------------------
REQUIRED SIGNATURES
The undersigned has received, read, understands and agrees to all the provisions
of this Agreement and the separate risk disclosure statements enumerated above
and agrees to promptly notify DWR in writing if any of the warranties and
representations contained herein become inaccurate or in any way cease to be
true, complete and correct.
DWFCM INTERNATIONAL ACCESS FUND L.P.
--------------------------------------------------------------------------------
CUSTOMER NAME(S)
By: DEMETER MANAGEMENT CORPORATION
By: /s/ Xxxx X. Xxxxxx December 1, 1997
------------------------------------------------- --------------------------
AUTHORIZED SIGNATURE(S) DATE
Xxxx X. Xxxxxx, President
--------------------------------------------------------------------------------
(If applicable, print name and title of signatory)
