CUSTOMER AGREEMENT BETWEEN
(Broker/Dealer) AND
COLONIAL NEWPORT GREATER CHINA FUND
In consideration of acceptance by {Broker/Dealer}, a futures
commissions merchant (hereinafter "Broker" or "FCM"), of an account for Colonial
Newport Greater China Fund ("Customer"), Broker and Customer agree as follows:
1. Customer authorizes Broker to purchase and sell futures contracts
and option contracts thereon ("Contracts") traded on duly registered boards of
trade for Customer's account in accordance with Customer's oral or written
instructions. Customer hereby waives any defense that any such instruction was
not in writing as may be required by the Statute of Frauds or any other law,
rule or regulation.
2. Customer shall in connection with Contract transactions pay Broker
(1) brokerage and commission charges as agreed upon by Xxxxxx and Customer from
time to time, (2) any charges imposed on any transaction undertaken for Customer
by the exchange or clearinghouse through which it is executed and any tax or fee
imposed on such transactions by any competent authority or self-regulatory
organization, (3) any margin required by any exchange on which Contract
transactions are effected by Broker for Customer due to the variation in value
of one or more outstanding Contracts purchased or sold by Customer ("Variation
Margin") in accordance with Paragraph 7 hereof, and (4) interest and service
charges on any Customer deficit balances at the rates customarily charged by
Xxxxxx, together with Xxxxxx's costs and attorney's fees incurred in collecting
such deficit. Such payments shall be made in Federal funds to Broker at such
address as Broker may designate.
3. A detailed statement of all transactions for or on the Customer's
behalf shall be furnished to Customer on a daily and a monthly basis. Such
statements shall be conclusive and binding on the Customer unless the customer
notifies Broker of any objection within five business days from the day the
Customer receives such statement; provided however that with respect to monthly
statements only the Customer may make such objection within ten business days.
4. Customer shall timely deposit and maintain in the Safekeeping
Account at all times Initial Margin for Customer's account in accordance with
the Procedural Agreement. Customer shall timely pay to Broker the amount of any
additional or Variation Margin with respect to Customer's open positions on
Contracts in accordance with the Procedural Agreement. If upon notice expiration
of all notice periods set forth in the Procedural Agreement, Customer still
fails to provide additional or Variation Margin or if Customer fails to deposit
or maintain in the Safekeeping Account the required Initial Margin, Broker may
without further notice to Customer take any action set forth in Sections 9 and
11 hereof.
5. Customer shall make timely delivery of or payment for financial
instruments in compliance with the terms of the Contracts purchased or sold by
Customer through Broker unless such Contracts have been terminated by an
offsetting purchase or sale prior to the delivery date. Customer shall advise
Broker of its intentions with respect to the delivery of or payment for such
financial instruments, and Broker shall be entitled to receive appropriate
assurances with respect thereto.
6. Customer acknowledges that (a) any trading recommendations and
market or other information communicated to Customer by Broker are incidental to
the conduct of Xxxxxx's business as a futures commission merchant and do not
constitute an offer to sell or the solicitation of an offer to buy any Contracts
or instrument that is the subject of any Contract; (b) such recommendation and
information, although based upon information obtained from sources believed by
Broker to be reliable, may be incomplete, may not be verified, and may be
changed without notice to Customer; and (c) Broker makes no representation,
warranty or guarantee as to the accuracy or completeness of any market or other
information or trading recommendation furnished to Customer. Customer
understands that officers, employees, or affiliates of Broker may have a
position in, may intend to, and may, buy or sell, Contracts or instruments that
are the subject of Contracts, including Contracts which are the subject of
information or recommendations furnished to Customer, and that the position or
transactions of any such officer, employees, or affiliates may or may not be
consistent with the recommendations furnished by Broker to Customer.
7. All transactions by Broker on Customer's behalf shall be subject to
the applicable constitution, by-laws, rules, regulations, customs, usages,
rulings, and interpretations of the contract market and its clearinghouse on
which such transactions are executed or cleared by Broker or its agents for
Customer's account, and to all applicable governmental acts and statutes (such
as the Commodity Exchange Act) and to rules and regulations made thereunder;
Broker shall not be liable to Customer as a result of any action taken by Broker
or its agents to comply with any such constitution, by-law, rule, regulation,
custom, usage, ruling, interpretation, act or statute.
8. Broker shall have no responsibility for delays in the transmission
of orders due to (a) breakdown or failure of transmission or communication
facilities, or (b) any other cause beyond Broker's control. Broker shall have no
responsibility for compliance by Customer with any law or regulation governing
Customer's conduct as a fiduciary.
9. In the event that (a) Customer shall be dissolved, become insolvent
or in any other way terminate, (b) fail to deposit or maintain initial margin or
make payment of additional or variation margin, as set forth in Section 4 hereof
or (c) in the event Broker reasonably feels that it is necessary to its
protection, Broker my close out Customer's open Contracts in whole or in part,
sell any or all of Customer's property held by Broker, buy any securities or
other property for Customer's account, and cancel any outstanding orders and
commitments made by Broker on behalf of Customer. Subject to Broker's obligation
to use best efforts to obtain a fair and reasonable price, any such sale,
purchase, or cancellation may be made at Broker's discretion on the contract or
other market or through the clearinghouse where such business is then
transacted, at public auction or at private sale, without advertising the same
and without notice to Customer, and without prior tender, demand or call upon
Customer. Customer shall remain liable for and shall pay to Broker the amount of
any deficiency resulting from any transaction described above.
10. As used above, the term insolvent means that (a) an order, judgement
or decree has been entered under the bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution of liquidation or
similar law (herein called the "Bankruptcy Law") or any jurisdiction
adjudicating the Customer insolvent; or (b) the Customer has petitioned or
applied to any tribunal for, or consented to, the appointment of, or taking
possession by, a trustee, receiver, liquidator or similar official, of the
Customer or commenced a voluntary case under the Bankruptcy Law of the United
States or any proceedings relating to the Customer under the Bankruptcy Law of
any other jurisdiction, whether now or hereafter in effect; or (c) any such
petition or application has been filed, or any such proceedings commenced,
against the Customer and the Customer by any act has indicated its approval
thereof, consent thereto or acquiescence therein, or an order for relief has
been entered in an involuntary case against Customer under the Bankruptcy Law of
the United States, as now or hereafter constituted, or an order, judgement or
decree has been entered therein appointing any such trustee, receiver,
liquidator or similar official, approving the petition in any such proceedings,
and such order, judgement or decree remains unstayed and in effect for more than
30 days.
11. If at any time Customer fails to deliver to Broker any property
previously sold by Broker on Customer's behalf or fails to deliver financial
instruments in compliance with Contracts, Customer authorizes Broker in its
discretion to borrow or to buy any property necessary to make delivery thereof,
and Customer shall pay Broker for any cost, loss and damage which Broker may be
required to pay thereon, and for any cost, loss and damage which Broker may
sustain from its inability to borrow or buy any such property.
12. All communications to Customer shall be to: Colonial Newport
Greater China Fund, Attention: Xxxxxxx X. Xxxxxx, Esq. or to such other
address as Customer may hereafter direct Broker in writing to use. All
communications to Broker shall be to: {Broker/Dealer address}
13. This Agreement, the Procedural Agreement and the Safekeeping
Agreement referred to in the Procedural Agreement contain the entire agreement
between the parties and supersede any prior agreements between the parties as to
the subject matter of this Agreement. Subject to Section 7 hereof, no provision
of this Agreement shall in any respect be waived, altered, modified, or amended
unless such waiver, alteration, modification, or amendment be committed to in
writing and signed by Customer and a duly authorized officer of Broker.
14. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
_________________.
15. This Agreement shall inure to the benefit of Broker and Customer
and their respective successors and assigns.
16. If any term or provision hereof, or the application thereof to any
person or circumstances, shall to any extent be contrary to any exchange or
government regulation or otherwise 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, and it shall be enforced to the
fullest extent permitted by regulation and law.
17. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any thereof shall not preclude or
inhibit the exercise of additional rights and remedies.
18. This Agreement is executed on behalf of the Trustees of the Customer
as Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding upon the assets and property of
the Customer.
19. Customer represents that (a) Customer will promptly notify Broker in
writing if any of the above representations shall materially change or cease to
be true and correct; (b) Customer has read and understands the Commodity Futures
Trading Commission Risk Disclosure Statement, the Options on Futures Risk
Disclosure Statement (under separate cover) and the Margin Disclosure Statement;
and (c) no person or entity has any interest in or control of the account to
which this Agreement pertains other than Customer and the persons designated by
Customer as set forth in Paragraph 1 hereof.
20. Customer and Xxxxxx agree to promptly furnish appropriate financial
statements to each other to show any material changes in their financial
positions and to furnish such other information concerning each other as each
may reasonably request.
21. Where the context hereof requires, the singular shall import the
plural and the masculine shall import the feminine and neuter.
22. Broker shall be entitled to rely on any instruction received from
any person identified in writing to Broker by Customer and such instruction
shall bind Customer. Customer agrees to hold Xxxxxx harmless against any action
taken by Xxxxxx in reliance upon this provision.
23. Customer hereby represents that it will seek to comply with all
applicable CFTC Rules and Regulations.
24. This Agreement shall become a binding contract between Customer and
Broker when signed by both parties.
COLONIAL NEWPORT GREATER CHINA FUND
By:
Title:
Date:
APPROVED:
{Broker/Dealer}
By:
Title:
Date:
SAFEKEEPING AGREEMENT
Colonial Newport Greater China Fund ("Depositor") and {Broker/Dealer} a futures
commission merchant (hereinafter "Broker") have interests in the subject
Safekeeping Account pursuant to a certain Procedural Agreement among Broker,
Depositor, and {Bank} ("Custodian") which Procedural Agreement governs over any
inconsistent provisions in this Safekeeping Agreement.
Attention: {Bank}
Gentlemen:
The Depositor hereby requests the Custodian to open and maintain a
Safekeeping Account, which shall be a subaccount under the Custodian Agreement,
dated _________________ between Depositor, and Custodian (the "Custodian
Agreement") and in the name of "{Broker/Dealer} Commodity Customer Funds for
the benefit of Colonial Newport Greater China Fund" for all monies and
securities now or hereafter deposited with you for the initial margin in futures
and option contracts transactions.
In such safekeeping capacity you are limited to holding the securities
related monies in safekeeping for the Depositor and dealing with them as herein
expressed unless otherwise mutually agreed in writing.
You shall make deliveries of securities and monies only as the
Depositor may direct, and you are authorized and directed to:
1. Collect income and principal on bearer securities in the account;
2. Dispose of the monies received from income collections,
maturity, redemption, sale, or other disposition of the securities pursuant
to said Procedural Agreement;
3. Send a daily confirmation of receipts and disbursements to the
Depositor;
4. Provide a monthly list of securities to the Depositor and to the
Broker;
5. On reasonable request, confirm to Xxxxxx and Depositor all
account charges and positions.
This agreement is executed by an officer of the Depositor, thereunto
duly authorized on behalf of the Trustees of the Depositor as Trustees and not
individually. The Trustees shall have no personal liability hereunder and the
sole recourse available to an aggrieved party for damages shall be against the
assets and property of the Depositor.
The general conditions of the Safekeeping Agreement shall be those of
the Custodian Agreement between Depositor and Custodian.
The compensation of the Custodian for its services hereunder shall be
payable as the Depositor and Custodian shall agree. No change in compensation
shall be applicable to this account except upon written notice to Depositor.
All communications from the Custodian shall be sent to the Depositor
pursuant to the Custodian Agreement, and to Broker at {Broker/Dealer Address},
or at such other address as the Depositor shall from time to time direct.
Neither the Broker nor the Depositor is a foreign citizen; if this
citizenship status changes, the Depositor or Broker, as applicable, will
promptly notify the Custodian in writing.
Either the Depositor or the Custodian, subject to the Procedural
Agreement, may close this account at any time.
Accepted: Very truly yours,
{Bank} Colonial Newport Greater China Fund
By: By:
Title: Title:
Date: Date:
Acknowledged and Approved:
on behalf of:
{Broker/Dealer}
By:
Title:
Date:
PROCEDURAL AGREEMENT
AMONG {Broker/Dealer}
COLONIAL NEWPORT GREATER CHINA FUND ("CUSTOMER")
AND {Bank}
WHEREAS the undersigned Colonial Newport Greater China Fund has
opened a trading account with the undersigned {Broker/Dealer} (hereinafter
"Broker"), a registered futures commission merchant acting as broker/dealer for
Customer in the purchase and sales of futures and options on futures contracts
(together "Contracts") traded on a commodity exchange or market or board of
trade; and
WHEREAS, in connection with the opening of the trading account,
Customer and Broker have entered into a Customer Agreement which requires
Customer to deposit as collateral the initial margin with respect to each
Contract as required by the rules and regulations of the Chicago Mercantile
Exchange, the Chicago Board of Trade, the Commodity Exchange, and such other
exchanges on which Broker may effect or cause to be effected transactions as
Broker for Customer (the "Initial Margin"); and
WHEREAS Customer, Broker, and the undersigned {Bank} ("Custodian")
have entered into a Safekeeping Agreement establishing a Safekeeping Account
entitled {Broker/Dealer} Customer Funds for the benefit of Colonial Newport
Greater China Fund" which Custodian agrees to maintain for the custody of the
Initial Margin which Customer is required to deposit and maintain; and
WHEREAS the Customer Agreement and the Safekeeping Agreement both
provide that the rights and duties of the parties thereto are subject to the
provisions of this Agreement.
NOW, THEREFORE, IT IS AGREED THAT:
1. Customer shall deposit and maintain as collateral in the
Safekeeping Account such Initial Margin as shall be required from time to time
by Broker or the exchange on which transactions are effected or caused to be
effected by Broker as Broker for Customer. Customer may deposit amounts in
excess of such requirements. The designation "Customer Funds" in the Safekeeping
Account title is intended to indicate the status of the Safekeeping Account
under the Commodity Exchange Act and Commodity Futures Trading Commission
regulations; however, the provisions of this agreement shall be controlling as
to the rights of the parties in the collateral deposited in the Safekeeping
account.
2. The Initial Margin deposited and maintained in the Safekeeping
Account, created pursuant to the Safekeeping Agreement, shall be in the form of
cash or U.S. Government Treasury Bills (valued at the current market value less
10% of the principal value thereof) or of a combination thereof Customer may
substitute U.S. Government Treasury Bills of equal or greater value upon prior
approval by Broker and receipt of such approval by Custodian. Custodian shall
have no responsibility or liability to any part for ascertaining or monitoring
or otherwise with respect to the value or valuation of any such Treasury Bills
or other securities, nor shall the Custodian have any responsibility for or
liability with respect to the adequacy of any "Initial" or other margin. Any
separate interest payments on securities held in the Safekeeping Account shall
be credited by Custodian in Federal funds to such demand deposit accounts
designated in instructions from Customer on the date that such interest has been
finally received by Custodian in good collected funds unless notice has been
provided to Custodian pursuant to Paragraph (b) of section 5 below, and such
interest is required to meet additional Variation Margin requirements in
accordance with the procedure provided in Paragraphs (a), (b) and (c) of Section
5. Amounts due on securities which mature or are redeemed will be credited to
the Safekeeping Account in Federal funds on the date such amounts are finally
received by the Custodian as good collected funds.
3. With respect to the deposit of Initial Margin, Custodian shall
be directed by Xxxxxxxx's custodian order to segregate specified assets in the
Safekeeping Account, and Custodian shall promptly provide Broker and Customer
with a written confirmation of each transfer into or out of the Safekeeping
Account.
4. Withdrawals of Initial Margin from the Safekeeping Account shall
be effected upon receipt by the Custodian of both Customer's custodian order and
Xxxxxx's prior written approval of such withdrawal. Broker shall, upon request
of the Customer, inform Customer of the amount of any excess Initial Margin in
the Safekeeping Account.
5. Broker shall have access to the collateral only in accordance
with the following:
(a) If notice by Xxxxxx is given to Customer that additional
margin is required by any exchange on which transactions are effected by Broker
for the Customer due to variation in the value of one or more futures contracts
held in the trading account ("Variation Margin") prior to 11:30 A.M. New York
time on a day on which Broker is open for business, which Variation Margin
shall first have been satisfied from any amounts currently credited to the
Customer's trading account with Broker in connection with which the Variation
Margin is required, the Customer shall transfer to Broker such Variation Margin
not later than 3:00 P.M. on the same day. If notice by Xxxxxx to the Customer
is given of the need for Variation Margin subsequent to 11:30 A.M. but prior to
4:00 P.M. New York time on a day on which Broker is open for business, the
Customer shall provide such Variation Margin to Broker not later than 10:30
A.M. New York time on the next succeeding day on which Xxxxxx is open for
business. Notice by Xxxxxx to the Customer of the receipt of Variation Margin
shall be given promptly.
(b) If Broker has not received the required Variation Margin as
provided in Paragraph 5(a), Broker may give notice ("Notice") to Custodian and
Customer of Customer's failure to provide Variation Margin, the amount of
Variation Margin required and that all conditions precedent to Broker's right to
direct disposition of the funds in the Safekeeping Account have been satisfied.
Without prejudice to any rights of Broker hereunder, Custodian shall promptly
reconvey Broker's Notice to Customer. Custodian shall not permit any action to
be taken with respect to the Initial Margin held in the Safekeeping Account
until further notice from Broker. Upon Broker giving such further notice to
Custodian, Broker shall have access to the Initial Margin held in the
Safekeeping Account, and Custodian shall upon instruction of Broker (as provided
for in Paragraph 5(c)) immediately transfer from the Safekeeping Account to or
for the account of Broker such amount of the Initial Margin as Broker shall have
specified. Custodian shall then promptly inform the Customer of its actions
taken pursuant to the instruction of Broker
(c) As Broker elects, it may instruct Custodian pursuant to Paragraph 5(b)
to transfer specific, U.S. Treasury Bills and/or cash, to Broker to provide for
payment to Broker of the amount of Variation Margin that Broker shall have
specified. Custodian shall take instructions solely from Broker with respect to
the transfer of cash and/or U.S. Treasury Bills to Broker. Custodian in no event
shall be liable either to Customer or Broker for acting in accordance with such
instructions. In the event that Xxxxxx receives U.S. Treasury Bills, it shall
have the right to sell or otherwise dispose of such securities and shall remit
to the Customer any proceeds of such sale or disposition in excess of the amount
of Variation Margin specified in instructions from Broker to Custodian. Broker
shall give consideration to any timely request by the Customer with respect to
particular securities to be sold and shall sell any securities in the principal
market for such securities, and if such market is closed, sell them in a manner
commercially reasonable for such securities.
(d) Custodian shall retain in the Safekeeping Account any
collateral in excess of the amount of Variation Margin specified in instructions
from Broker to Custodian including any proceeds from the sale of securities by
Broker in excess of such amount, if such proceeds are deposited by Customer with
Custodian.
6. Broker shall promptly credit to the trading account any
Variation Margin to Customer resulting from the variation in value of one or
more Contracts purchased or sold by Customer in accordance with the rules of any
exchange on which Contract transactions are effected by Broker for Customer. At
Customer's direction, Broker shall transfer trading account balances to Customer
in Federal funds to the Custodian or such bank account in Customer's name as
Customer shall otherwise direct. Customer may give such directions to Broker by
telephone, confirmed thereafter in writing.
7. If Custodian, upon timely receipt by the appropriate account
officer of clear unambiguous instructions from Broker given in full compliance
with the provisions of this Agreement, to release collateral, negligently or
willfully fails to take the action specified in such instuctions as provided
herein in a timely fashion and the Customer incurs a loss by reason thereof,
Custodian shall indemnify the Customer for any such direct loss but in no event
shall Custodian be liable for consequential damages or losses.
8. Unless otherwise provided, all notices or other communications
called for by this Agreement shall be given by the most reasonable means
possible including by telephone. If a notice or communication is not given or
made in writing, it shall be confirmed by facsimile transmission by the close of
business on the day on which the oral notice or communication was given, and a
written confirmation shall be provided to appropriate parties promptly within a
reasonable time after the oral notice is given. If there shall be any conflict
between oral instructions, notices, or other communications and written
confirmation thereof, such conflict shall be resolved in favor of the written
confirmation provided, however, Custodian shall be completely protected if it
shall have acted upon oral instruction, notice or communication prior to timely
receipt by it of such written confirmation.
9. Any and all expenses of establishing, maintaining, or terminating
the Safekeeping Account, including without limitation any and all expenses
incurred by Custodian in connection with the Safekeeping Account, shall be borne
by Customer.
10. This Agreement and the Safekeeping Account shall terminate upon
written consent of Customer and Broker, whereupon Custodian, subject to its
receipt of all amounts due and owing or accrued hereunder and under the
Safekeeping Agreement, shall transfer to Customer, or to a substitute Custodian
designated by Customer, all property held in the Safekeeping Account in excess
of Initial or Variation Margin or any other monies due and owing to Broker. The
Agreement also shall terminate upon the termination of the Custodian Agreement
between the Custodian and the Customer.
11. This Agreement shall be construed according to, and the rights
and liabilities of the parties hereto shall be governed by, the laws of The
Commonwealth of Massachusetts.
12. Except as specifically provided herein, this Agreement does not,
and shall not in any way affect any other agreements entered into among the
parties hereto and any actions taken or omitted by any party hereunder shall not
affect any rights of any other party hereunder.
13. No amendment of this Agreement shall be effective unless in
writing and signed by all the parties hereto by persons thereunto duly
authorized.
14. Written communications hereunder shall be, except as otherwise
required hereunder, hand-delivered or mailed first class postage prepaid, except
that written notice of termination shall be sent by certified mail addressed:
(a) If to Custodian, to:
{Bank Address}
(b)(1) If to Customer, to:
Colonial Newport Greater China Fund
Newport Fund management, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx
(2) With copies to:
Xxxxxxx X. Xxxxxx
Colonial Newport Greater China Fund
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 02111
(c) If to Broker to:
{Broker/Dealer Address}
15. This Agreement is executed by an officer of the Customer
thereunto duly authorized on behalf of the Trustees of the Customer as Trustees
and not individually. The Trustees shall have no personal liability hereunder
and the sole recourse available to an aggrieved party for damages shall be
against the assets and property of the Customer.
COLONIAL NEWPORT GREATER CHINA FUND
By:
Authorized Signature
Title:
Date:
{BANK}
By:
Authorized Signature
Title:
Date:
{BROKER/DEALER}
By:
Authorized Signature
Title:
Date:
