EXHIBIT 10.05
FORM OF
CUSTOMER AGREEMENT
THIS CUSTOMER AGREEMENT (this "Agreement"), made as of the
____ day of __________, 2002, by and between XXXXXX XXXXXXX CHARTER XXXXXXXX
X.X., a Delaware limited partnership (the "Customer"), and XXXXXX XXXXXXX XX
INC., a Delaware corporation ("Xxxxxx Xxxxxxx XX");
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 ________ __, 2002, and a Limited Partnership Agreement
dated as of ________ __, 2002, 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 ("Limited
Partners"), 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
other securities on a limited basis, 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 the
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; and
WHEREAS, the Customer and Xxxxxx Xxxxxxx XX wish to enter into
this Customer Agreement to set forth the terms and conditions upon which Xxxxxx
Xxxxxxx XX will perform 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 Xxxxxx Xxxxxxx XX. Xxxxxx Xxxxxxx XX agrees to
act as a non-clearing commodity broker for the Customer and introduce the
Customer's account to Xxxxxx Xxxxxxx & Co. Incorporated ("MS&Co.") and Xxxxxx
Xxxxxxx & Co. International Limited ("MSIL") 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
Xxxxxx Xxxxxxx XX as a non-clearing commodity broker for the term of this
Agreement.
Xxxxxx Xxxxxxx XX 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. Except as otherwise set forth
herein and in the Prospectus, the Customer, and not Xxxxxx Xxxxxxx XX, shall be
responsible for all taxes, management and incentive fees to the Trading Advisor,
brokerage fees to Xxxxxx Xxxxxxx XX, and all extraordinary expenses incurred by
it. Xxxxxx Xxxxxxx XX shall pay all of the offering and ordinary administrative
expenses of the Customer (including, but not limited to, legal, accounting, and
auditing fees, printing costs, filing fees, escrow fees, marketing costs and
expenses and other related expenses) and all charges of MS&Co. and MSIL for
executing and clearing the Customer's futures interests trades (as described in
paragraph 5 below), and shall not be reimbursed therefor.
4. Agreement Nonexclusive. Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX. 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 Xxxxxx
Xxxxxxx XX hereunder.
5. Compensation of Xxxxxx Xxxxxxx XX. The Customer will pay
brokerage fees to Xxxxxx Xxxxxxx XX at a monthly flat-rate. The Customer will
pay to Xxxxxx Xxxxxxx XX a monthly flat-rate fee of [1/12 of 6.75%] of the
Customer's Net Assets (a [6.75%] annual rate) as of the first day of each month.
Xxxxxx Xxxxxxx XX will receive such brokerage fees irrespective of the number of
trades executed on the Customer's behalf.
Xxxxxx Xxxxxxx XX will pay or reimburse the Customer, from
brokerage fees received by it, all charges of MS&Co. and MSIL for executing and
clearing trades for the Customer, including floor brokerage fees, exchange fees,
clearinghouse fees, NFA fees, "give up" fees, any taxes (other than income
taxes), any third party clearing costs incurred by MS&Co. and MSIL, and costs
associated with taking delivery of futures interests. For purposes of clarity,
Xxxxxx Xxxxxxx XX does not pay or reimburse the Customer for the xxxx-up,
spread, or other profit of MS&Co. included as a part of the transaction price on
each foreign currency forward contract trade executed with MS&Co. pursuant to
the Foreign Exchange and Options Master Agreement between MS&Co. and the
Customer.
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From time to time, Xxxxxx Xxxxxxx XX may increase or decrease
brokerage fees to be charged to the Customer; provided, however, that: (i)
notice of such increase is mailed to each Limited Partner at least five business
days prior to the last date on which a "Request for Redemption" must be received
by the General Partner with respect to the applicable Redemption Date; and (ii)
such notice shall describe the redemption and voting rights of Limited Partners.
Notwithstanding the foregoing, the Customer's expenses are
subject to the following limits: (a) if the Customer were to pay roundturn
brokerage commissions, the brokerage commissions (excluding transaction fees and
costs) payable by the Customer to Xxxxxx Xxxxxxx XX shall not exceed 80% of
Xxxxxx Xxxxxxx DW's published non-member rates for speculative accounts and (b)
the aggregate of (i) brokerage commissions (or fees) payable to Xxxxxx Xxxxxxx
XX, (ii) transaction fees and costs payable by the Customer, and (iii) net
excess interest and compensating balance benefits to Xxxxxx Xxxxxxx XX (after
crediting the Customer with interest as described in the Prospectus) shall not
exceed 14% annually of the Customer's average month-end Net Assets during each
calendar year.
6. Investment Discretion. The parties recognize that Xxxxxx
Xxxxxxx XX shall have no authority to direct the futures interests investments
to be made for the Customer's account. However, the parties agree that Xxxxxx
Xxxxxxx XX, 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 Xxxxxx Xxxxxxx XX. The Customer's assets deposited
with Xxxxxx Xxxxxxx XX will be segregated or secured in accordance with the
Commodity Exchange Act and CFTC regulations. Xxxxxx Xxxxxxx XX will credit the
Customer with interest income at month-end at the rate earned by Xxxxxx Xxxxxxx
XX on its U.S. Treasury xxxx investments with customer segregated funds as if
100% of the Customer's average daily funds (including cash and securities) held
in the Customer's account with Xxxxxx Xxxxxxx XX during the month were invested
in U.S. Treasury bills at that rate. All of such funds will be available for
margin for the Customer's trading. Xxxxxx Xxxxxxx XX will also credit the
Customer with 100% of the interest income Xxxxxx Xxxxxxx XX receives from MS&Co.
and MSIL with respect to the Customer's assets deposited as margin with MS&Co.
and MSIL. The Customer understands that it will not receive any other interest
income on its assets. The Customer's funds will either be invested along with
other customer segregated and secured funds of Xxxxxx Xxxxxxx XX or held in
non-interest bearing bank accounts. The Customer's assets held by Xxxxxx Xxxxxxx
XX 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 Xxxxxx Xxxxxxx XX. 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 Xxxxxx
Xxxxxxx XX.
8. Standard of Liability and Indemnity. Subject to Section 2
hereof, Xxxxxx Xxxxxxx XX 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
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which Xxxxxx Xxxxxxx XX determines, in good faith, to be in the best interests
of the Customer, unless such act, omission, conduct, or activity by Xxxxxx
Xxxxxxx XX or its affiliates constituted misconduct or negligence.
The Customer shall indemnify, defend and hold harmless Xxxxxx
Xxxxxxx XX 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
Xxxxxx Xxxxxxx XX 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) Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX 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 Xxxxxx
Xxxxxxx XX 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.
Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX has approved such
settlement) incurred as a result of the activities of Xxxxxx Xxxxxxx XX 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
Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX
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contained in this Agreement to the extent caused by such breach. Likewise, the
indemnities provided in this Section 8 by Xxxxxx Xxxxxxx XX 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 Xxxxxx
Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX; (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 Xxxxxx Xxxxxxx XX;
(iii) any natural person, partnership, corporation, association, or other legal
entity directly or indirectly controlling, controlled by, or under common
control with, Xxxxxx Xxxxxxx XX; or (iv) any officer or director of Xxxxxx
Xxxxxxx XX. Notwithstanding the foregoing, "affiliates" for purposes of this
Section 8 shall include only those persons acting on behalf of Xxxxxx Xxxxxxx XX
and performing services for Customer within the scope of the authority of Xxxxxx
Xxxxxxx XX, 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 Prospectus.
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:
XXXXXX XXXXXXX CHARTER XXXXXXXX X.X.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
President and Chairman
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if to Xxxxxx Xxxxxxx XX:
XXXXXX XXXXXXX XX INC.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
Senior 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.
XXXXXX XXXXXXX CHARTER XXXXXXXX X.X.
By: Demeter Management Corporation,
General Partner
By: _________________________________
Xxxxxx X. Xxxxxx
President and Chairman
XXXXXX XXXXXXX XX INC.
By: _________________________________
Xxxxxx X. Xxxxxx
Senior Vice President
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FUTURES CUSTOMER AGREEMENT
In consideration of the acceptance by Xxxxxx Xxxxxxx XX Inc. ("Xxxxxx Xxxxxxx
XX") of one or more accounts of the undersigned ("Customer") (if more than one
account is carried by Xxxxxx Xxxxxxx XX, all are covered by this Agreement and
are referred to collectively as the "Account") and Xxxxxx Xxxxxxx DW'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 Xxxxxx
Xxxxxxx DW's protection and Xxxxxx Xxxxxxx DW's failure to comply therewith
shall not constitute a breach of this Agreement or relieve Customer of any
obligation or responsibility under this Agreement. Xxxxxx Xxxxxxx XX shall
not be liable to Customer as a result of any action by Xxxxxx Xxxxxxx XX,
its officers, directors, employees or agents to comply with any rule or
regulation.
2. PAYMENTS TO XXXXXX XXXXXXX XX - Customer agrees to pay to Xxxxxx Xxxxxxx XX
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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX maintain adequate
margins in the account so as continually to meet the original and
maintenance margin requirements established by Xxxxxx Xxxxxxx XX for
Customer. Xxxxxx Xxxxxxx XX may change such requirements from time to time
at Xxxxxx Xxxxxxx DW's discretion. Such margin requirements may exceed the
margin requirements set by any exchange or other regulatory authority and
may vary from Xxxxxx Xxxxxxx DW's requirements for other customers.
Customer agrees, when so requested, immediately to wire transfer margin
funds and to furnish Xxxxxx Xxxxxxx XX with names of bank officers for
immediate verification of such transfers. Customer acknowledges and agrees
that Xxxxxx Xxxxxxx XX may receive and retain as its own any interest,
increment, profit, gain or benefit directly or indirectly, accruing from
any of the funds Xxxxxx Xxxxxxx XX 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.
Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX timely notice
and immediately on request to inform Xxxxxx Xxxxxxx XX if
Customer intends to make or take delivery under a futures
contract or to exercise an option contract. If so requested,
Customer shall provide Xxxxxx Xxxxxxx XX with satisfactory
assurances that Customer can fulfill Customer's obligation to
make or take delivery under any contract. Customer shall
furnish Xxxxxx Xxxxxxx XX with property deliverable by it
under any contract in accordance with Xxxxxx Xxxxxxx DW's
instructions.
(c) Xxxxxx Xxxxxxx XX shall not have any obligation to
exercise any long option contract unless Customer has
furnished Xxxxxx Xxxxxxx XX with timely exercise instructions
and sufficient initial margin with respect to each underlying
futures contract.
5. FOREIGN CURRENCY - If Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx DW'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 Xxxxxx Xxxxxxx XX in its discretion on the basis of then prevailing
market rates of exchange for such foreign currency.
6. XXXXXX XXXXXXX XX MAY LIMIT POSITIONS HELD - Customer agrees that Xxxxxx
Xxxxxxx XX, 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 Xxxxxx Xxxxxxx XX may require
Customer to reduce open positions carried with Xxxxxx Xxxxxxx XX and (c)
that Xxxxxx Xxxxxxx XX may refuse to accept orders to establish new
positions. Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX 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 Xxxxxx
Xxxxxxx XX may communicate to Customer, although based upon
information obtained from sources believed by Xxxxxx Xxxxxxx
XX to be reliable, may be incomplete and not subject to
verification;
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(b) Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx DW's
personnel due to diversity in analysis of fundamental and
technical factors and may vary from any standard
recommendation made by Xxxxxx Xxxxxxx XX in its market letters
or otherwise; and
(d) Xxxxxx Xxxxxxx XX has no obligation or responsibility to
update any market recommendations or information it
communicates to Customer.
Customer understands that Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX or any such officer, director, affiliate,
stockholder, representative or associated person may or may not be consistent
with the recommendations furnished to Customer by Xxxxxx Xxxxxxx XX.
8. LIMITS ON XXXXXX XXXXXXX XX DUTIES; LIABILITY - Customer agrees:
(a) that Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX 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 Xxxxxx
Xxxxxxx XX, who refers or introduces Customer to Xxxxxx
Xxxxxxx XX 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.
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9. EXTRAORDINARY EVENTS - Customer shall have no claim against Xxxxxx Xxxxxxx
XX 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 Xxxxxx
Xxxxxxx XX 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 Xxxxxx Xxxxxxx
XX or (g) any other cause or causes beyond Xxxxxx Xxxxxxx DW's control.
10. INDEMNIFICATION OF XXXXXX XXXXXXX XX - Customer agrees to indemnify, defend
and hold harmless Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX on
Customer's behalf.
11 NOTICES; TRANSMITTALS - Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX (except routine inquiries concerning
the Account) to 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Futures
Compliance Officer. All payments and deliveries to Xxxxxx Xxxxxxx XX shall
be made as instructed by Xxxxxx Xxxxxxx XX from time to time and shall be
deemed received only when actually received by Xxxxxx Xxxxxxx XX.
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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX 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 Xxxxxx
Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX shall
be bound by any transaction or price reported in error.
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13. SECURITY INTEREST - All money and property ("collateral") now or at any
future time held in Customer's Account, or otherwise held by Xxxxxx Xxxxxxx
XX for Customer, is subject to a security interest in Xxxxxx Xxxxxxx DW's
favor to secure any indebtedness at any time owing to it by Customer.
Xxxxxx Xxxxxxx XX, 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 Xxxxxx Xxxxxxx XX.
14. TRANSFER OF FUNDS - At any time and from time to time and without prior
notice to Customer, Xxxxxx Xxxxxxx XX may transfer from one account to
another account in which Customer has any interest, such excess funds,
equities, securities or other property as in Xxxxxx Xxxxxxx DW'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 Xxxxxx Xxxxxxx XX is effecting such
transfer to enforce Xxxxxx Xxxxxxx DW's security interest pursuant to
Section 13. Xxxxxx Xxxxxxx XX promptly shall confirm all transfers of funds
made pursuant hereto to Customer in writing.
15. XXXXXX XXXXXXX DW'S RIGHT TO LIQUIDATE CUSTOMER POSITIONS - In addition to
all other rights of Xxxxxx Xxxxxxx XX set forth in this Agreement:
(a) when directed or required by a regulatory or self-regulatory
organization or exchange having jurisdiction over Xxxxxx
Xxxxxxx XX or the Account;
(b) whenever, in its discretion, Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX;
(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) Xxxxxx Xxxxxxx XX is informed of Customer's death or mental
incapacity; or
-5-
(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 Xxxxxx Xxxxxxx XX;
Xxxxxx Xxxxxxx XX shall have the right to (i) satisfy any obligations
due Xxxxxx Xxxxxxx XX out of any Customer's property in Xxxxxx Xxxxxxx
DW'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
Xxxxxx Xxxxxxx XX as immediately due and payable, (v) sell any or all
of Customer's property in Xxxxxx Xxxxxxx DW's custody or control in
such manner as Xxxxxx Xxxxxxx XX determines to be commercially
reasonable, and/or (vi) terminate any or all of Xxxxxx Xxxxxxx DW'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 Xxxxxx Xxxxxxx DW'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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx
XX;
(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 Xxxxxx Xxxxxxx XX to contact such banks,
financial institutions and credit agencies as Xxxxxx Xxxxxxx
XX shall xxxx appropriate for verification of the information
contained herein.
-6-
(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 Xxxxxx
Xxxxxxx DW's discretion, of any or all telephone conversations
with Xxxxxx Xxxxxxx XX (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
Xxxxxx Xxxxxxx DW'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
Xxxxxx Xxxxxxx XX with respect to give-ups, Xxxxxx Xxxxxxx XX,
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 Xxxxxx Xxxxxxx XX for clearance
and/or carrying in the Account;
(h) Xxxxxx Xxxxxxx XX, 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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx DW'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.
-7-
Customer agrees to promptly notify Xxxxxx Xxxxxxx XX 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
Xxxxxx Xxxxxxx XX, 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 Xxxxxx Xxxxxxx XX.
18. MODIFICATION OF AGREEMENT BY XXXXXX XXXXXXX XX; NON-WAIVER PROVISION - This
Agreement may only be altered, modified or amended by mutual written
consent of the parties, except that if Xxxxxx Xxxxxxx XX 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
Xxxxxx Xxxxxxx XX other than Xxxxxx Xxxxxxx DW'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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX. 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 Xxxxxx Xxxxxxx XX 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 XXXXXX XXXXXXX XX
ARISING OUT OF OR RELATING TO THE MAKING OR PERFORMANCE OF
THIS AGREEMENT OR ANY TRANSACTION PURSUANT TO THIS AGREEMENT
-8-
(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 XXXXXX XXXXXXX XX IN, AND CUSTOMER HEREBY
CONSENTS IN ANY LEGAL PROCEEDING BY XXXXXX XXXXXXX XX 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 XXXXXX XXXXXXX XX 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 XXXXXX XXXXXXX XX 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 XXXXXX
XXXXXXX XX) 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
Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX at
000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000; Attention: Deputy
General Counsel, within 45 days after demand by Xxxxxx Xxxxxxx XX that the
Customer make such election, then Xxxxxx Xxxxxxx XX may make such election.
Xxxxxx Xxxxxxx XX 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.
-9-
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 Xxxxxx Xxxxxxx XX 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 Xxxxxx Xxxxxxx XX
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 Xxxxxx Xxxxxxx XX. 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 Xxxxxx Xxxxxxx XX executes
sell or buy orders on Customer's behalf, Xxxxxx Xxxxxxx XX, 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.
-10-
26. AUTHORIZATION TO TRANSFER FUNDS (OPTIONAL) - Without limiting
other provisions herein, Xxxxxx Xxxxxxx XX is authorized to transfer
from any segregated account subject to the Commodity Exchange Act
carried by Xxxxxx Xxxxxxx XX for the Customer to any other account
carried by Xxxxxx Xxxxxxx XX for the Customer such amount of excess
funds as in Xxxxxx Xxxxxxx DW'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 Xxxxxx Xxxxxxx XX 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) Xxxxxx Xxxxxxx XX 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 Xxxxxx
Xxxxxxx DW'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 Xxxxxx Xxxxxxx XX.
-11-
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
---------------------------------
AUTHORIZATION TO TRANSFER FUNDS:
(Agreement Paragraph 26) X
---------------------------------
ACKNOWLEDGEMENT TO SUBORDINATION AGREEMENT
(Agreement Paragraph 27) X
---------------------------------
(Required for accounts holding
non-U.S. currency)
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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 Xxxxxx Xxxxxxx XX 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
Xxxxxx Xxxxxxx DW'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) [ ]
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ACKNOWLEDGEMENT OF RECEIPT OF RISK DISCLOSURE STATEMENTS
The undersigned each hereby acknowledges its separate receipt from Xxxxxx
Xxxxxxx XX, and its understanding of each of the following documents prior to
the opening of the account:
* Risk Disclosure Statement for Futures and Options (in the * Project A TM Customer Information Statement
form prescribed by CFTC Regulation 1.55(c))
* LME Risk Warning Notice * Questions & Answers on Flexible Options Trading at the
CBOT
* [Xxxxxx Xxxxxxx] Order Presumption for After Hours * CME Average Pricing System Disclosure Statement
Electronic Markets
* NYMEX ACCESS SM Risk Disclosure Statement * Special Notice to Foreign Brokers and Foreign Traders
* 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 Xxxxxx Xxxxxxx XX in writing if any of the
warranties and representations contained herein become inaccurate or in any way
cease to be true, complete and correct.
XXXXXX XXXXXXX CHARTER XXXXXXXX X.X.
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CUSTOMER NAME(S)
By: DEMETER MANAGEMENT CORPORATION
By:
--------------------------------------------- ------------------------
AUTHORIZED SIGNATURE(S) DATE
Xxxxxx X. Xxxxxx, President and Chairman
-------------------------------------------------------------------------------
(If applicable, print name and title of signatory)
