EXHIBIT 10.04
JWH Global Portfolio Trust
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Customer Name Account Number
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CASH BULLION
ACCOUNT AGREEMENT
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CIS FINANCIAL SERVICES, INC.
Suite 2300
233 S. Wacker Drive
Chicago, Illinois 60606
CASH BULLION ACCOUNT AGREEMENT
JWH Global Portfolio Trust
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Customer Name Account Number
TO: CIS Financial Services, Inc.
233 S. Wacker Drive, Suite 2300
Chicago, Illinois 60606
In consideration of the Agreement of CIS Financial Services, Inc. ("CISFS") to
act as broker for the undersigned (hereinafter referred to as the "Customer") in
any over-the-counter ("O.T.C.") Cash Bullion transactions, the Customer agrees,
in respect to all such O.T.C. Cash Bullion accounts which the Customer now has
or may at any time have with CISFS or its successors, including accounts from
time to time closed and then reopened (each an "Account"), as follows:
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1. SCOPE OF THIS AGREEMENT; RISKS.
All transactions, and all Contracts entered into between CISFS and the
Customer, shall be governed by the terms of this Agreement except to the
extent (if any) that CISFS shall agree in writing or notify the Customer
in writing or by telex or facsimile that other or additional terms apply.
Any proposals for, additions to, or modifications of this Agreement,
absent written agreement by CISFS to the contrary, are hereby void. The
terms of each Contract (as defined below) shall be as set forth in the
confirmation relating thereto sent by CISFS to the Customer. The
Customer understands and recognizes that transactions in Cash Bullion
are unregulated by any governmental entity or self-regulatory
organization and that the activities of CISFS with respect to such
transactions are therefore not supervised or subject to oversight.
Bearing this in mind, the Customer represents that it is aware of
the risks inherent in the trading of Cash Bullion and is financially
able to bear such risks and withstand any losses incurred.
2. DEFINITIONS.
For the purposes of this Agreement the following definitions apply:
(a) BUSINESS DAY means, with respect to the United States, any day on
which banks are open for business (other than a Saturday or Sunday)
in New York City, and with respect to any country other than the
United States, any day on which banks are open for business (other
than a Saturday or Sunday) in the principal financial center of
the relevant country.
(b) CONTRACT means an agreement between CISFS and the Customer for the
delivery of a specified number of troy ounces of bullion of a
specified precious metal in return for a specified amount of U.S.
dollars on a specified Value Date. Furthermore, "Contract" means a
Spot Contract or a Forward Contract (as defined below), or both,
as the context of this Agreement requires.
(c) DAILY CUTOFF means the point in time selected each Business Day by
CISFS after which any Contract entered into will be considered to
have as its Trade Date the next Business Day. The Daily Cutoff
will occur at a time selected solely by CISFS and may vary from
day to day.
(d) FEDERAL BANKRUPTCY CODE means The Bankruptcy Code of 1978, 11
U.S.C. Section 101, et seq.
(e) A FORWARD CONTRACT means a Contract where the Value Date is at least
one Business Day later than the Business Day that would be the Value
Date if the Contract were a Spot Contract. No Forward Contract shall
have a Value Date later than the Business Day which is nine months
after the spot Value Date.
(f) MARKET VALUE means the U.S. Dollar Value, determined by CISFS in its
sole discretion, that CISFS determines it would receive if it sold
the relevant collateral for immediate delivery in the relevant
market.
(g) OPEN POSITION means any Contract that has not settled.
(h) A SPOT CONTRACT means a Contract where the Value Date is the second
Business Day following the Trade Date.;
(i) TRADE DATE with respect to any Contract means the date on which the
Contract is entered into between CISFS and the Customer, except in
the case of any Contract entered into after the Daily Cutoff.
(j) U.S. DOLLAR VALUE means the amount of U.S. Dollars at any moment
in time which would result from the conversion of the relevant
number of troy ounces of bullion into U.S. Dollars at CISFS' then
prevailing bullion rates for buying or selling bullion.
(k) VALUE DATE means, with respect to any Contract, the applicable
settlement date specified in the confirmation relating to the
particular Contract. A Value Date must be a Business Day in the
United Kingdom.
Other capitalized terms in this Agreement shall have those meanings provided
for herein.
3. HYPOTHECATION; COLLATERAL; ADDITIONAL COLLATERAL.
(a) The Customer agrees that securities, including Collateral
securities, and other property in the Customer's Account(s) may be
carried in CISFS' general loans and may be pledged, repledged,
hypothecated or rehypothecated separately or in common with other
securities and property for the sum due to CISFS thereon or for a
greater sum and without regard to whether or not such securities or
property remain in the possession and control of CISFS.
(b) As security for the Customer's obligations to CISFS hereunder, the
Customer agrees to deposit and maintain collateral with CISFS at its
head office in Chicago, Illinois, or other location or account as
CISFS may direct ("the Collateral Account") as follows:
(i) Only instruments in such form as specified in Schedule 2 of
this Agreement shall be acceptable to CISFS as Collateral for
the purposes of this Agreement. CISFS may change said schedule
by notifying the Customer in writing. Any change shall be
effective immediately upon receipt of such notice by the
Customer. The value of any Collateral provided by the Customer
shall be subject to the haircuts listed in Schedule 2 of this
Agreement. CISFS' acceptance of any Collateral may be subject
to other limitations and/or qualifications specified in
Schedule 2 of this Agreement. The Customer shall execute and
deliver such separate pledge or deposit agreements including
without limitation, security agreements or financing
statements, as may be requested by CISFS. Such Collateral,
together with the Contracts and all other monies, securities,
treasury bills and other property of the Customer now or any
time hereafter delivered, conveyed,
transferred, assigned or paid to CISFS or coming into CISFS'
possession in any manner whatsoever are hereby pledged to
CISFS and shall be subject to a security interest in CISFS'
favor for the discharge of the Customer's obligations to
CISFS under this Agreement and the Contracts. The Customer
hereby represents and warrants to CISFS that the Customer holds
good and marketable title to all Collateral and that the
Collateral delivered to CISFS is free and clear of any and all
liens, claims, pledges or encumbrances of any kind.
(ii) The Customer agrees to maintain at all times with
CISFS Collateral in such form and in such amount as
CISFS may from time to time request orally or in
writing. The Customer acknowledges that any changes
regarding the amount and form of Collateral may also
result in a request for additional Collateral. The
Customer shall respond to such requests by immediately
supplying sufficient additional Collateral.
iii) In all cases, Collateral shall be deemed received by
CISFS when such Collateral shall be actually received
in the Collateral Account and CISFS shall be notified
of such receipt as determined by CISFS in its sole
discretion.
(c) CISFS will monitor on a daily basis, or more frequently
as CISFS solely determines, the Customer's Collateral
Account in the following manner:
(i) CISFS will compute the Customer's "Total U.S.
Dollar Market Value of Collateral" by aggregating
(a) the U.S. Dollars in the Collateral Account,
(b) the U.S. Dollar Value of any Foreign Currencies
in the Collateral Account, and (c) the U.S. Dollar
Value of the Market Value, as determined solely by
CISFS, of other Collateral in the Collateral Account,
subject to any and all haircuts, limitations, and
qualifications listed in Schedule 2 of this
Agreement, and (d) the U.S. dollar value of any
specified bullion in the collateral account
(ii) CISFS will compute the Customer's "Net U.S. Dollar
Value of Gains and Losses on Open Positions" as
follows:
For each Open Position, the gain or loss, if any, is
computed by assuming that the relevant Contract is
offset in the market at the relevant bullion rate
then prevailing for the Value Date of the Contract,
as determined solely by CISFS. The U.S. Dollar Value
of the gain or loss of each Open Position will be
aggregated together to determine the "Net U.S.
Dollar Value of Gains and Losses on Open Positions."
(iii) CISFS will compute the Customer's "Net Collateral"
by netting together the "Net U.S. Dollar Value of
Gains and Losses on Open Positions" and the "Total
U.S. Dollar Market Value of Collateral."
(iv) CISFS will compute the Customer's "Total Required
Initial Collateral" and "Total Required Maintenance
Collateral" amounts in the following manner:
(1) The "Total Required Initial Collateral" is
determined by aggregating the "Required Initial
Collateral" for all Open Positions.
(2) The "Unit-Equivalent" of each Open Position
will be multiplied by the amount specified in
Schedule 3 of this Agreement as the "Required
Maintenance Collateral per Unit-Equivalent" to
determine the "Required Maintenance Collateral"
for the particular Open Position.
(3) The "Total Required Maintenance Collateral"
is determined by aggregating the "Required
Maintenance Collateral" for all Open Positions.
(4) CISFS may change Schedule 3 of this Agreement
at any time by notifying the Customer verbally
or in writing. Any change shall be effective
immediately upon such notification. The
Customer acknowledges that any changes regarding
Schedule 3 of this Agreement may result in a
request for additional Collateral. The Customer
shall respond to such requests by immediately
supplying sufficient additional Collateral.
(d) The Customer agrees to maintain the Collateral Account
at all times so that
the "Total U.S. Dollar Market Value of
Collateral" is greater than or equal to
the "Total Required Initial Collateral. CISFS
reserves the right to retain gains on open
positions.
(e) If at any time the condition listed in part (d) of
section 3 of this Agreement is not met, the Customer shall
be deemed to have a "Collateral Deficiency" and shall be
obligated to immediately deliver sufficient additional
Collateral to CISFS, and/or offset open positions so as
to meet all of the said conditions.
(i) When the Customer has a "Collateral Deficiency," it
shall not create any new positions, and may trade
only to offset existing positions.
(ii) If CISFS determines, in its sole discretion, that
the Customer has a Collateral Deficiency, CISFS
shall have the right to offset, close out, and/or
liquidate any open positions in the Customer's
Account, and any such offsetting, closing out,
and/or liquidating transactions may be made in
a manner solely determined by CISFS.
(iii) The Customer agrees that additions to Collateral
are due and must be paid immediately upon
determination by CISFS, in its sole discretion, that
there is a need for additional Collateral in any of
the Customer's Accounts. The Customer hereby
represents that it is able to effect same-day
payment of U.S. Dollar funds to CISFS.
(f) The Customer shall not make a request for the withdrawal
of Collateral if the requested withdrawal will cause the
condition listed in part (d) of section 3 of this
Agreement to not be met.
4. TRADING.
(a) The Customer acknowledges CISFS' right to limit, without
notice to the Customer, the number and/or size of Open
Positions which the Customer may maintain or acquire
through CISFS.
(b) CISFS reserves the right to refuse to accept any order.
(c) With respect to any Open Position which has as its
Value Date the same date as the Value Date which would
apply for Spot Contracts involving spot bullion and
entered into on the current day, CISFS reserves the right
to require the Customer to offset the Open Position in
the market or roll it in the market to a later Value Date.
(d) If for any reason CISFS is unable to execute a Contract
with its counterparty at the price quoted to the Customer,
CISFS will have no obligation to the Customer to enter
into the Contract with the Customer at the quoted price.
(e) The Customer recognizes that bullion rates it may
view on electronic market information screens (e.g.
Reuters, Telerate, etc.) are only indications of bullion
rates, and may or may not reflect actual bullion rates
available to CISFS or the Customer.
5. OFFSETTING CONTRACTS.
Whenever there may exist in any of or between any of the Customer's
bullion accounts two or more open and opposite Contracts providing for
the purchase and sale of the same bullion on the same Value Date,
CISFS may, in its sole discretion, elect to treat the Contracts as a
single transaction, and upon the Value Date of the Contracts, the net
difference between the amounts payable under the contracts, and/or
the net difference between the quantities of bullion deliverable
thereunder, shall be paid and/or delivered, as the case may be.
6. DELIVERY OF BULLION .
Delivery of bullion shall be made to an approved London vault specified
by the purchaser. All payments to be made in U.S. Dollars shall be made
by wire transfer of immediately available funds to a bank in London
specified by the purchaser. CISFS will require payment of amounts due
to it on any day simultaneously with or prior to payment of amounts due
from it on that day. CISFS and the Customer shall both exchange, make
use of, and periodically update and confirm standing payment
instructions.
7. EVENTS OF DEFAULT.
The occurrence of one or more of the following events shall constitute a
"Default" under this agreement:
(a) The Customer shall fail to pay any amount hereunder or under any
Contract when due;
(b) The Customer shall (i) have an order for relief entered with respect
to it under the Federal Bankruptcy Code, (ii) not pay, or admit in
writing its inability to pay its debts generally as they become due,
(iii) make an assignment for the benefit of creditors, (iv) apply
for, seek, consent to or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar
official for it or any substantial part of its property,
(v) institute any proceedings seeking an order for relief under
the Federal Bankruptcy Code or seeking to adjudicate it a bankrupt
or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or fail to file an answer or
other pleading denying the material allegations of any such
proceeding filed against it, (vi) take any corporate action
to authorize or affect any of the foregoing actions set forth
in this subparagraph, or (vii) fail to contest in good faith any
appointment or proceeding described in (c) below;
(c) Without the application, approval or consent of the Customer, a
receiver, trustee, examiner, liquidator, or similar official shall
be appointed for the Customer or any substantial part of its
property, or a proceeding described in (b) above shall be instituted
against the Customer and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of
30 consecutive days;
(d) Any court, government or governmental agency shall condemn, seize or
otherwise appropriate or take custody or control of all or any
substantial portion of the property of the Customer;
(e) Any representation or warranty made by the Customer in this
Agreement or the Contracts shall be materially false as of the date
on which it was made, or Customer shall fail or omit to state any
fact which is necessary to make the representations and warranties
herein not misleading;
(f) The Customer shall fail to comply with any of the terms or
provisions of this Agreement or of any Contract;
(g) The Customer fails to deliver sufficient additional Collateral upon
request from CISFS;
(h) The Customer shall fail to perform any term or provision of any
Agreement to which it is a party, including but not limited to
any bullion contract, the effect of which is to cause an event of
default or termination or similar event howsoever defined pursuant
to any such agreement or
(i) CISFS, in its sole discretion, considers it necessary for its
protection to terminate this Agreement and exercises its remedies as
provided below.
8. REMEDIES.
In the event any Default occurs, CISFS is authorized to offset and to
sell or purchase for the Customer's account any Contract in any manner
which CISFS shall deem necessary in its sole discretion and to dispose
of, as CISFS deems appropriate, any or all of the Collateral held by
CISFS and any of the Customer's other property or assets at any time
held by CISFS or Cargill Investor Services, Inc. It is understood and
agreed that any prior tender, demand or call of any kind from CISFS, or
prior notice from CISFS, of the time and place of such sale or purchase
shall not be considered a waiver of CISFS' right to sell or purchase any
Collateral or to offset at any time as herein provided, nor shall CISFS'
failure to make such a demand or call waive CISFS' right to take such
action without such tender, demand, call or notice in the future. After
deducting costs and expenses incurred in connection with any such
actions, CISFS may apply any remaining proceeds to the payment of any
other obligations the Customer may owe to CISFS pursuant to this
Agreement or any Contract, and in the event such proceeds are
insufficient for payment of all such obligations, the Customer shall,
within 24 hours of CISFS giving notice orally or in writing, pay to CISFS
the amount of such deficit, together with interest thereon for each day
such deficit is outstanding and remains unpaid until paid at a rate
per annum, on a 365 day year/actual number of days elapsed basis, equal
to an overdraft rate determined by CISFS in its sole discretion for
the relevant Foreign Currency, or the Prime Rate (as quoted by Chase
Manhattan Bank, New York) plus two percent for U.S. Dollars, plus all
costs of collection, including reasonable attorneys' fees.
Without limiting anything in the foregoing, if any Default as described
in Section 8(b) or 8(c) occurs, then all amounts due or to become due by
the Customer under this Agreement and under all Contracts shall
immediately become due and payable, the Collateral Account shall be
deemed closed, all Contracts shall be deemed Offset and all Collateral
shall be deemed to have been applied to the obligations for the Customer
under this Agreement and any Contracts all without any election, notice
or action by CISFS and all without any liability on CISFS' part to the
Customer or any third party. If any other Default shall occur, CISFS
may, by notice either orally or in writing to the Customer, declare any
or all amounts due or to become due by the Customer under this
Agreement or under any Contracts to be due and payable, whereupon
all of such amounts as CISFS shall designate shall become immediately
due and payable and CISFS may take any and all of the following
actions, all without any liability on CISFS' part to the Customer or any
third party: (i) close the Cash and Collateral Account; (ii) offset, sell
or assign any or all Contracts; and (iii) apply the Collateral as
provided above.
Nothing in the foregoing shall be deemed to waive, limit, terminate,
modify, or otherwise change any rights or remedies available to CISFS of
law or in equity, or the Customer's liability to CISFS for the payment
of any debit balance owing in the accounts of the Customer with CISFS.
The Customer is liable for any deficiency remaining in any such account
or on any Contracts in the event of the offset or liquidation thereof, in
whole or in part.
9. AUTHORIZATION TO TRANSFER BETWEEN ACCOUNTS.
CISFS may, without notice, transfer any money or other property
interchangeably between any accounts of the Customer with CISFS
or any of its affiliates, including Cargill Investor Services, Inc.,
except that any transfer from a futuresor securities account
which is subject to regulations under the Commodity Exchange
Act, Securities Act of 1933 or Securities Exchange Act of 1934,
to a non-regulated account and/or a Foreign Exchange Account
shall have such other authorization by the Customer as is required
by such laws and their regulations. The Customer authorizes CISFS to
debit immediately any margin or collateral payment called for to
any of its accounts including Cash Bullion Accounts showing a balance
in its favor.
10. MATTERS PRECEDENTS; CORPORATE RESOLUTION.
CISFS shall not be required to enter into any Contracts with the Customer
unless and until all legal matters incident to such Contracts shall be
satisfactory to CISFS and its counsel, the provisions of paragraph 3(b)
are met to the satisfaction of CISFS and its counsel, a duly executed
copy of this Agreement is furnished to CISFS by the Customer, the
Customer establishes the Collateral Account, and the Customer's standing
payment instructions are furnished to CISFS. In addition, within 10
days of the date of this Agreement, the Customer (if a partnership or
corporation) shall deliver to CISFS a certified copy of (i) an
authorizing resolution of the Customer Board of Directors substantially
in the form attached hereto or otherwise as acceptable to CISFS; and (ii)
the names, titles, signatures, and phone numbers, including home phone
numbers where applicable, of the persons duly authorized by the Customer
to execute and deliver this Agreement and to initiate transactions in
O.T.C. cash bullion for the Customer's account. CISFS shall be entitled
to rely on any such evidence until informed in writing by the Customer
of any change.
11. SEPARATE CONTRACTS.
Each Contract for the purchase and sale of Bullion hereunder is a
separate Contract even though more than one such Contract may be
included on a single confirmation.
12. TRUST ACCOUNTS.
If this Agreement is extended to a trust, joint ownership, or
partnership, the Customer hereby agrees to indemnify, defend,
save and hold free and harmless CISFS for any losses, costs and
expenses resulting from breach of any fiduciary duty or allegation
thereof.
13. LIMITATION OF LIABILITY.
CISFS will not be responsible for delays or failures in the delivery
of any Bullion or relevant currency within the time specified for the
delivery thereof to the extent the failure is caused by a breakdown
of communication facilities or by any other cause beyond CISFS'
reasonable control.
14. COLLECTION EXPENSES.
The Customer agrees to pay any and all losses, costs, expenses, internal
charges and fees, including attorneys' fees, which attorneys may be
employees of CISFS or its affiliates, paid or incurred by CISFS in
connection with the collection and enforcement of this Agreement,
the Collateral and the Contracts.
15. ARBITRATION.
Any controversy arising out of or relating to transactions in this
Account, this Agreement or the breach hereof or thereof
shall be settled by arbitration pursuant to the commercial
arbitration rules of the American Arbitration Association. Judgment upon
any award entered by the arbitrators may be entered in any court of
competent jurisdiction. Any such action must be brought within two years
after the date of cause the action accrued.
16. FULL DISCLOSURE.
The Customer additionally represents to CISFS that the information
provided by the customer in connection with this agreement is full,
complete and accurate and CISFS is entitled to rely on this information
until CISFS receives written notice from the customer of any change in
such information.
17. NOTIFICATION.
Any notices and other communications may be transmitted to the Customer
at the address, telephone or facsimile number given herein, or at such
other address, telephone or facsimile number as the Customer hereafter
shall notify CISFS in writing, and all notices or communications shall
be deemed transmitted when telephoned, faxed or deposited in the mail by
CISFS or CISFS' representative, whether actually received by the Customer
or not. Confirmations, and account statements shall be deemed accurate
unless objected to in writing within ONE business day from the date of
such notice and such objection(s) delivered to CISFS at 233 South Wacker
Drive, Suite 2300, Chicago, Illinois, 60604, Attention: Treasurer,
facsimile number (312) 460-4739, telephone number (312) 460-4000. In the
event the Customer fails to receive a faxed confirmation within
ONE Business Day of the date of the transaction, the Customer agrees to
notify CISFS at the above address via fax immediately.
18. GOVERNING LAW.
This Agreement is made under and shall be governed by laws of the State
of New York in all respects, including construction and performance.
This Agreement shall be binding upon you and/or your estate, executors,
administrators, successors and/or assigns.
19. DISCLAIMER.
The Customer acknowledges that CISFS is ultimately owned by Cargill,
Incorporated and is under the common control of Cargill, Incorporated
with Cargill Investor Services, Inc. The Customer further acknowledges
that the market recommendations of CISFS, if any, may or may not be
consistent with the market position or intentions of Cargill,
Incorporated or their subsidiaries and/or affiliates. The market
recommendations of CISFS, if any, are based upon information believed to
be reliable, but CISFS cannot and does not guarantee the accuracy
or completeness thereof or represent that following such recommendations
will eliminate or reduce the risks inherent in transactions in cash
bullion .
20. TELEPHONE RECORDINGS.
CISFS is hereby granted permission to record telephone conversations
between its employees and the Customer. The Customer agrees that such
recordings may be used as evidence by either party in any disputes
between CISFS and the Customer.
The undersigned, CIS INVESTMENTS, INC. (Print), hereby represents to CISFS
that it is the managing owner of a Delaware business trust known as JWH
GLOBAL PORTFOLIO TRUST (the "Trust"). In consideration of the opening of one
or more cash bullion accounts with CISFS for and in the name of the Trust,
the undersigned further represents that as the managing owner in the Trust,
it has proper authority to sign this Agreement and all related documents on
behalf of the Trust and, for the account and risk of the Trust, to buy, sell,
and trade in cash bullion in said account in accordance with CISFS' terms
and conditions.
CIS INVESTMENTS, INC.,
Managing Owner
By:
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- ---------------------------- L. Carlton Anderson
Date Vice President
POWER OF ATTORNEY:
Power of Attorney Limited to Purchases and Sales
of Cash Bullion
The undersigned hereby authorizes JOHN W. HENRY & COMPANY, INC. as the
undersigned's agent and attorney in fact to buy, sell and trade in cash
bullion in accordance with CISFS' terms and conditions for the undersigned's
account and risk and in the undersigned's name on CISFS' books. The
undersigned hereby agrees to indemnify and hold CISFS harmless from and to
pay CISFS promptly on demand any and all losses arising therefrom or debit
balance due thereon.
In all such purchases, sales or trades CISFS is authorized to follow the
instructions of the aforesaid agent in every respect concerning the
undersigned's account with CISFS; and the aforesaid agent is authorized to
act for the undersigned and in the undersigned's behalf in the same manner
and with the same force and effect as the undersigned might or could do with
respect to such purchases, sales or trades as well as with respect to all
other things necessary or incidental to the furtherance or conduct of such
purchases, sales or trades.
The undersigned hereby ratifies and confirms any and all transactions with
CISFS heretofore or hereafter made by the aforesaid agent for the
undersigned's account.
This authorization and indemnity is in addition to (and in no way limits or
restricts) any rights which CISFS may have under any other agreement or
agreements between the undersigned and CISFS.
This authorization and indemnity is a continuing one and shall remain in full
force and effect until revoked by the undersigned by a written notice
addressed to CISFS and delivered to its office at 233 S. Wacker Drive, Suite
2300, Chicago, Illinois 60606, but such revocation shall not affect any
liability in any way resulting from transactions initiated prior to such
revocation. This authorization and indemnity shall endure to the benefit of
CISFS and of any successors or assigns.
Customer:
JWH GLOBAL PORTFOLIO TRUST
By: CIS Investments, Inc., Managing Owner
By:
----------------------------------
- ---------------------------- L. Carlton Anderson
Date Vice President
SCHEDULE 1
The precious metals under this agreement are:
Gold
Silver
Platinum
Palladium
SCHEDULE 2
CISFS considers as acceptable collateral the following:
1. Immediately-available U.S. Dollar funds for variation losses.
2. Immediately available U.S. dollar funds for Total Required Initial
Collateral.
3. U.S. government securities for Total Required Initial Collateral.
SCHEDULE 3
Greater than or equal to the prevailing futures equivalent initial margin
requirements for Gold, Silver and Platinum as defined by the COMEX Division
of NYMEX and by the NYMEX.
Initial and Maintenance margins on open positions will be determined by
creating an exchange-equivalent "unit" contract and charging a per-unit
margin on the basis of current COMEX and NYMEX margin requirements. For Gold
and Palladium, each 100 troy ounces equals one "unit"; in Platinum each 50
troy ounces equals one "unit"; and in Silver each 5,000 troy ounces equals on
e"unit".
For example:
If the Customer trades 20,000 ounces of Gold against the U.S. Dollar and a
"unit" is defined as 100 troy ounces of Gold, and the initial and maintenance
margin requirements on 1 "unit" of Gold are $1,100.00 and $825.00
respectively, the required margin for the trade is:
200 units x $1,100.00 Initial Requirement = $220,000.00
200 units x $825.00 Maintenance Requirement = $165,000.00
CASH BULLION ACCOUNT AGREEMENT SUPPLEMENT
THIS CASH BULLION ACCOUNT AGREEMENT SUPPLEMENT, made as of the ____
day of ________, 1996, by and between JWH Global Portfolio Trust (the
"Trust") and CIS Financial Services, Inc., a Delaware Corporation (the
"Dealer").
W I T N E S S E T H :
WHEREAS, the Trust has been organized to engage in the speculative
trading of all commodity interests, including futures contracts, options on
futures contracts, and spot and forward contracts in currencies and precious
metals ("Commodity Interests");
WHEREAS, the Trust will allocate a portion of its total assets (the
"Trading Assets") to trading forward contracts in precious metals (the "Cash
Bullion Contracts");
WHEREAS, the Trust and Cargill Investor Services, Inc. ("CIS"), an
affiliate of the Dealer, have entered into a customer agreement (the
"Customer Agreement") of even date herewith under which CIS will act as
Commodity Interest broker for the Trust, will hold the Trust's assets in
brokerage accounts, and from time to time either transmit or transfer a
portion of such assets to or from the Dealer;
WHEREAS, the Trust and the Dealer have, as of the date hereof,
entered into a Cash Bullion Account Agreement (which, together with this Cash
Bullion Account Agreement Supplement shall be referred to as the "Cash
Bullion Agreement") setting forth certain terms and conditions upon which the
Dealer shall provide services to the Trust related to its trading of Cash
Bullion Contracts; and
WHEREAS, the Trust and the Dealer wish to enter into this Cash
Bullion Account Agreement Supplement which sets forth certain terms and
conditions upon which the Dealer will serve as a dealer for the trading of
Cash Bullion Contracts on behalf of the Trust for the term of the Cash
Bullion Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS. Initially capitalized terms used herein and not
otherwise defined shall have the meanings assigned them in the Cash Bullion
Account Agreement annexed hereto.
2. DUTIES OF THE DEALER WITH RESPECT TO CASH BULLION CONTRACT
TRADING. With respect to trading by the Trust in Cash
Bullion Contracts, the Dealer shall at the request of the Trust's trading
advisor obtain competitive quotes for Cash Bullion Contracts from Cash
Bullion Contract dealers with whom the Dealer has a Cash Bullion Contract
trading relationship ("Counterparties") and relay those quotes to the trading
advisor. If requested by the trading advisor, the Dealer shall in its own
name enter into a Cash Bullion Contract with the Counterparty selected by the
Dealer and shall simultaneously enter into an identical Cash Bullion Contract
with the Trust at the same price.
3. COMPENSATION TO THE DEALER. Dealer shall be compensated for
its services hereunder by CIS and not by the Trust.
4. NET-OUT ON BANKRUPTCY
a. Notwithstanding any other provisions hereof, of any Cash
Bullion Contract or any other agreement between the parties, in the event
either party (the "Defaulting Party") shall: (a) become bankrupt or
insolvent, however evidenced, or be unable to pay its debts as they fall due,
(b) file a petition or otherwise commence a proceeding under any bankruptcy,
insolvency or similar law or have any such petition filed or proceeding
commenced against it, or have a liquidator, administrator, receiver or
trustee appointed with respect to it or any substantial portion of its
assets, or (c) default in the payment or performance of any obligation to the
other party (the "Non-Defaulting Party") hereunder, under a Cash Bullion
Contract or otherwise; then in any such event, the Non-Defaulting Party shall
have the right immediately and at any time(s) thereafter to liquidate any or
all outstanding Cash Bullion Contracts from time to time by:
(i) closing out each Cash Bullion Contract being liquidated at
its Market Value at such time (so that a settlement payment in an amount
equal to the difference between such Market Value and the Contract Value of
such Cash Bullion Contract shall be due to the purchaser of Currency under
that Cash Bullion Contract if such Market Value is greater than such Contract
Value and with such settlement payment being due to the seller of Currency
under that Cash Bullion Contract if the opposite is the case) and
(ii) setting off (A) all settlement payments which Dealer owes
to the Trust as a result of such close-out, plus (at the Non-Defaulting
party's election) any other amounts which Dealer owes the Trust hereunder or
under a Cash Bullion Contract, plus any Collateral Dealer then holds, against
(B) all settlement payments which the Trust owes to Dealer as a result of
such close-out hereunder or under a Cash Bullion Contract, so that all such
payments shall be netted to a single liquidated amount payable by one party
to the other.
The net amount due after such liquidation shall be paid by the
close of business on the next business day.
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b. The Non-Defaulting Party's rights under this Section 4 shall
be in addition to, and not in limitation of, any other rights which the
Non-Defaulting Party may have (whether by agreement, operation of law or
otherwise).
5. TERM. The Cash Bullion Agreement shall continue in effect for
the term of the Customer Agreement between the Trust and CIS and will
terminate simultaneously with the Customer Agreement. In addition the Cash
Bullion Agreement may be terminated by the Trust at any time on 60 days'
written notice to the Dealer, provided that any open Cash Bullion Contract
which the Dealer held prior to the notice of termination shall be held by the
Dealer and this Cash Bullion Agreement shall continue to be in effect with
respect to such Cash Bullion Contracts until the applicable settlement date
of such Cash Bullion Contracts.
6. INCORPORATION BY REFERENCE. The Cash Bullion Account
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 Cash Bullion Account Agreement Supplement
is or at any time becomes inconsistent with the annexed document, the terms
of this Cash Bullion Account Agreement Supplement shall control.
7. ACKNOWLEDGMENT. The Dealer acknowledges that the obligations
of this Agreement are not binding against the Unitholders individually but
are binding only upon the assets and property of the Trust, and that, in the
event of any obligation or claim arising hereunder against the Trust, no
resort shall be had to any Unitholder's personal property for the
satisfaction of such obligation or claim.
8. COMPLETE AGREEMENT. The Cash Bullion Agreement constitutes
the entire agreement between the parties with respect to the matters referred
to herein, and no other agreement, oral or otherwise, shall be binding as
between the parties unless in writing and signed by the party against whom
enforcement is sought.
9. ASSIGNMENT. This Cash Bullion Agreement may not be assigned
by a party without the express written consent of the other party.
10. AMENDMENT. This Cash Bullion Agreement may not be amended
except by the written consent of the parties hereto.
11. SURVIVAL. The provisions of this Cash Bullion Agreement shall
survive the termination of this Cash Bullion Agreement with respect to any
matter arising while this Cash Bullion Agreement is in effect.
12. HEADINGS. Headings of sections herein are for the convenience
of the parties only and are not intended to be part of
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or to affect the meaning or interpretation of this Cash Bullion Agreement.
13. NO WAIVER. No failure or delay on the part of any party
hereto in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. Any waiver granted hereunder
must be in writing and shall be valid only in the specific instance in which
given.
IN WITNESS WHEREOF, the parties hereto have executed this Cash Bullion
Account Agreement Supplement as of the day and year first above written.
JWH GLOBAL PORTFOLIO TRUST
By: CIS INVESTMENTS, INC.,
a Managing Owner
By:
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L. Carlton Anderson
Vice President
CIS FINANCIAL SERVICES, INC.
By:
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Name:
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Title:
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