EXHIBIT 10.03
SECURITIES ACCOUNT CONTROL AGREEMENT
SECURITIES ACCOUNT CONTROL AGREEMENT dated as of June 30, 2000 among
XXXXXX XXXXXXX XXXX XXXXXX SPECTRUM COMMODITY L.P. (the "LIEN GRANTOR"), XXXXXX
XXXXXXX & CO. INCORPORATED (the "SECURED PARTY"), and XXXX XXXXXX XXXXXXXX INC.
(the "SECURITIES INTERMEDIARY"). All references herein to the "UCC" refer to the
Uniform Commercial Code as in effect from time to time in the State of New York.
Terms defined in the UCC have the same meanings when used herein.
W I T N E S S E T H :
WHEREAS, the Lien Grantor is the entitlement holder with respect to
the Account (as defined below);
WHEREAS, the Lien Grantor pursuant to Section 6(f) of a Commodity
Futures Customer Agreement dated as of June 30, 2000 (the "CUSTOMER AGREEMENT")
has granted to the Secured Party a continuing security interest (the "SECURITY
INTEREST") in all right, title and interest of the Lien Grantor in, to and under
the Account, all financial assets credited thereto and all security entitlements
in respect thereof, whether now owned or existing or hereafter acquired or
arising; and
WHEREAS, the parties hereto are entering into this Agreement in
order to perfect the Security Interest in the Account, all financial assets from
time to time credited thereto and all security entitlements in respect thereof;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Establishment of Account. The Securities Intermediary
confirms that:
(i) the Securities Intermediary has established the account
numbers listed on the attached Appendix A (which Appendix may be
amended in writing by the parties from time to time) in the name of
"Xxxxxx Xxxxxxx Xxxx Xxxxxx Spectrum Commodity L.P." (such account
and any successor account, the "ACCOUNT"),
(ii) the Account is a "securities account" as defined in
Section 8-501 of the UCC,
(iii) the Securities Intermediary is acting as a "securities
intermediary" (as defined in Section 8-102 of the UCC) in respect of
the Account,
(iv) the Securities Intermediary shall, subject to the terms
of this Agreement, treat the Lien Grantor as entitled to exercise
the rights that comprise all financial assets from time to time
credited to the Account,
(v) all property delivered to the Securities Intermediary by
or on behalf of the Lien Grantor for credit to the Account will be
promptly credited to the Account, and
(vi) all financial assets (except cash) credited to the
Account will be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the
Securities Intermediary and in no case will any financial asset
credited to the Account be registered in the name of the Lien
Grantor, payable to the order of the Lien Grantor or specially
indorsed to the Lien Grantor unless such financial asset has been
further indorsed to the Securities Intermediary or in blank.
SECTION 2. "Financial Assets" Election. The parties hereto agree
that each item of property (whether investment property, financial asset,
security, instrument, cash or other property) credited to the Account shall
be treated as a "financial asset" within the meaning of Sections
8-102(a)(9) and 8-103 of the UCC.
SECTION 3. Entitlement Orders. The Securities Intermediary agrees to
comply with any "entitlement order" (as defined in Section 8-102 of the
UCC) originated by the Secured Party and relating to the Account or any
financial asset credited thereto without further consent by the Lien
Grantor or any other person. The Lien Grantor consents to the foregoing
agreement by the Securities Intermediary.
SECTION 4. Choice of Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York. The
State of New York shall be deemed to be the securities intermediary's
jurisdiction with respect to the Account, all financial assets credited
thereto and all security entitlements in respect thereof for purposes of
the UCC (including, without limitation, Section 8-110 thereof).
SECTION 5. Amendments. No amendment or modification of this
Agreement or waiver of any right hereunder shall be binding on any party
hereto unless it is in writing and is signed by all the parties hereto.
SECTION 6. Notice of Adverse Claims. Except for the claims and
interests of the Secured Party and the Lien Grantor, and security interests
in favor of the Securities Intermediary, the Securities Intermediary does
not know of any claim to, or interest in, the Account, any financial asset
credited thereto or any security entitlement in respect thereof. If any
person other than the Lien Grantor, the Secured Party or the Securities
Intermediary asserts any lien, encumbrance or adverse claim (including any
writ, garnishment, judgment, attachment, execution or similar process)
against the Account, any financial asset credited thereto or any security
entitlement in respect thereof, the Securities Intermediary will promptly
notify the Secured Party and the Lien Grantor thereof.
SECTION 7. Maintenance of Account. In addition to, and not in lieu
of, the obligation of the Securities Intermediary to honor entitlement
orders as agreed in Section 3 hereof, the Securities Intermediary agrees to
maintain the Account as follows:
(i) Lien Grantor Entitlement Orders; Notice of Exclusive
Control. So long as the Securities Intermediary has not received a
Notice of Exclusive Control (as defined below), the Securities
Intermediary may, subject to paragraph (ii) below, comply with
entitlement orders of the Lien Grantor or any duly authorized agent
of the Lien Grantor in respect of the Account and any or all
financial assets credited thereto. After the Securities Intermediary
receives a written notice from the Secured Party that it is
exercising exclusive control over the Account (a "NOTICE OF
EXCLUSIVE CONTROL"), the Securities Intermediary will cease
complying with entitlement orders of the Lien Grantor and any of its
agents.
(ii) Limits on Free Deliveries From Account. Notwithstanding
the provisions of paragraph (i) above, the Securities Intermediary
shall not, without specific prior written consent of the Secured
Party:
(a) accept or comply with any entitlement order from
the Lien Grantor, or any agent of the Lien Grantor,
withdrawing from the Account, or making a free delivery of,
any financial asset credited to the Account,
(b) deliver any such financial asset to the Lien
Grantor or
(c) pay to the Lien Grantor any credit balance or
other cash amount credited to the Account.
provided that, until the Securities Intermediary receives a Notice
of Exclusive Control, the Securities Intermediary may pay to the
Lien Grantor amounts sufficient to pay all fees and expenses of, and
to fund all redemptions from, the Lien Grantor in the ordinary
course of business.
(iii) Voting Rights. Until the Securities Intermediary
receives a Notice of Exclusive Control, the Lien Grantor shall be
entitled to direct the Securities Intermediary with respect to the
voting of any financial assets credited to the Account.
(iv) Statements and Confirmations. The Securities
Intermediary will promptly send copies of all statements,
confirmations and other correspondence concerning the Account and/or
any financial assets credited thereto simultaneously to each of the
Lien Grantor and the Secured Party at their respective addresses
specified in Section 12 hereof.
(v) Tax Reporting. All items of income, gain, expense and
loss recognized in the Account or in respect of any financial assets
credited thereto shall be reported to the Internal Revenue Service
and all state and local taxing authorities under the name and
taxpayer identification number of the Lien Grantor.
SECTION 8. Representations, Warranties and Covenants of the
Securities Intermediary. The Securities Intermediary makes the following
representations, warranties and covenants:
(i) The Account has been established as set forth in Section
1 above and will be maintained in the manner set forth herein until
this Agreement is terminated. The Securities Intermediary will not
change the name or account number of the Account without the prior
written consent of the Secured Party.
(ii) No financial asset credited to the Account is or will be
registered in the name of the Lien Grantor, payable to the order of
the Lien Grantor, or specially indorsed to the Lien Grantor, unless
such financial asset has been further indorsed by the Lien Grantor
to the Securities Intermediary or in blank.
(iii) This Agreement is a valid and binding agreement of the
Securities Intermediary enforceable in accordance with its terms.
(iv) The Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any
agreement with any person (other than the Secured Party) relating to
the Account and/or any financial asset credited thereto pursuant to
which it has agreed, or will agree, to comply with entitlement
orders of such person. The Securities Intermediary has not entered
into any other agreement with the Lien Grantor or the Secured Party
purporting to limit or condition the obligation of the Securities
Intermediary to comply with entitlement orders as agreed in Section
3 hereof.
SECTION 9. Successors. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
SECTION 10. Notices. Each notice, request or other communication
given to any party hereunder shall be in writing (which term includes
facsimile or other electronic transmission) and shall be effective (i) when
delivered to such party at its address specified below, (ii) when sent to
such party by facsimile or other electronic transmission, addressed to it
at its facsimile number or electronic address specified below, and such
party sends back an electronic confirmation of receipt or (iii) ten days
after being sent to such party by certified or registered United States
mail, addressed to it at its address specified below, with first class or
airmail postage prepaid:
Lien Grantor: Xxxxxx Xxxxxxx Xxxx Xxxxxx Spectrum Commodity L.P.
c/o Demeter Management Corporation, General Partner
0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Secured Party:
Xxxxxx Xxxxxxx & Co. Incorporated
0 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Commodity Operations Manager
Securities Intermediary:
Xxxx Xxxxxx Xxxxxxxx Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Managed Futures Department
Any party may change its address, facsimile number and/or e-mail address
for purposes of this Section by giving notice of such change to the other
parties in the manner specified above.
SECTION 11. Termination. The rights and powers granted herein to the
Secured Party (i) have been granted in order to perfect the Security
Interest, (ii) are powers coupled with an interest and (iii) will not be
affected by any bankruptcy of the Lien Grantor or any lapse of time. The
obligations of the Securities Intermediary hereunder shall continue in
effect until the Secured Party has notified the Securities Intermediary in
writing that the Transaction Lien has been terminated pursuant to the terms
of the Security Agreement.
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Spectrum Commodity X.X. Xxxxxxx
Management Corporation, General Partner
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President and Chairman
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ W. Xxxxxx Xxxxx
Name: W. Xxxxxx Xxxxx
Title: Managing Director
XXXX XXXXXX XXXXXXXX INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
EXHIBIT A
[Letterhead of Secured Party]
[Date]
[Name and Address of Securities Intermediary]
Attention: ________________________
Re: Notice of Exclusive Control
Ladies and Gentlemen:
As referenced in the Securities Account Control Agreement dated as
of June 30, 2000 among Xxxxxx Xxxxxxx Xxxx Xxxxxx Spectrum Commodity L.P. (the
"LIEN GRANTOR"), us and you (a copy of which is attached), we notify you that we
will hereafter exercise exclusive control over securities account number
__________ (the "ACCOUNT"), all financial assets from time to time credited
thereto and all security entitlements in respect thereof. You are instructed not
to accept any directions, instructions or entitlement orders with respect to the
Account or the financial assets credited thereto from the Lien Grantor or any of
its agents unless otherwise ordered by a court of competent jurisdiction.
You are instructed to deliver a copy of this notice by facsimile
transmission to Xxxxxx Xxxxxxx Xxxx Xxxxxx Spectrum Commodity L.P.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
By: _____________________________
Title:
cc: Xxxxxx Xxxxxxx Xxxx Xxxxxx Spectrum Commodity L.P.
Appendix A
Account numbers established by the Securities Intermediary for Xxxxxx Xxxxxxx
Xxxx Xxxxxx Spectrum Commodity L.P.
1. 779-001042
2. 779-001092
