EXHIBIT 10.09
FORM OF
SECURITIES ACCOUNT CONTROL AGREEMENT
SECURITIES ACCOUNT CONTROL AGREEMENT dated as of
_______________ __, 2002 among Xxxxxx Xxxxxxx Charter XXXXXXXX X.X. (the "Lien
Grantor"), XXXXXX XXXXXXX & CO. INCORPORATED (the "Secured Party"), and XXXXXX
XXXXXXX XX 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 ________________ __, 2002 (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 Charter Xxxxxxxx X.X." (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.
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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.
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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 Charter Xxxxxxxx X.X.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Secured Party:
Xxxxxx Xxxxxxx & Co. Incorporated
0 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Commodity Operations Manager
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Securities Intermediary:
Xxxxxx Xxxxxxx XX Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
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 CHARTER XXXXXXXX X.X.
by: Demeter Management Corporation,
its General Partner
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: President and Chairman
XXXXXX XXXXXXX & CO. INCORPORATED
By: __________________________________
Name:
Title:
XXXXXX XXXXXXX XX INC.
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
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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 ______________ __, 2002 among Xxxxxx Xxxxxxx Charter Xxxxxxxx X.X.
(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 the Lien Grantor.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
By: ______________________________
Title:
cc: Xxxxxx Xxxxxxx Charter Xxxxxxxx X.X.
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Appendix A
Account numbers established by the Securities Intermediary for Xxxxxx Xxxxxxx
Charter Xxxxxxxx X.X.
1.
2.
3.
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