EXHIBIT 10.03
JWH Global Trust
- -------------------------------------- --------------------------
Customer Name Account Number
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
FOREIGN EXCHANGE
ACCOUNT AGREEMENT
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CIS FINANCIAL SERVICES, INC.
Suite 2300
233 S. Wacker Drive
Chicago, Illinois 60606
FOREIGN EXCHANGE ACCOUNT AGREEMENT
JWH Global Trust
- -------------------------------------- --------------------------
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.") Foreign Exchange transactions, the Customer
agrees, in respect to all such O.T.C. Foreign Exchange 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:
================================================================================
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 telecopy 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 Foreign Exchange 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 Foreign Exchange 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 amount of a specified currency in return for
a specified amount of a different specified currency for settlement
on a specified Value Date. The amounts of the two currencies are
related by a specified price or rate. 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) FOREIGN CURRENCY means the lawful currencies of the applicable
countries as specified in Schedule 1 attached to this Agreement,
which schedule may be amended from time to time by mutual agreement
of CISFS and the Customer.
(f) 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 six months
after the spot Value Date.
(g) 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.
(h) OPEN POSITION means any Contract that has not settled.
(i) A SPOT CONTRACT means a Contract where the Value Date is the second
Business Day following the Trade Date; provided, however, that with
respect to any Spot Contract involving the European Currency Unit
(ECU), the Value Date is the third Business Day following the Trade
Date; provided further, however, that with respect to any Spot
Contract involving only U.S. Dollars and Canadian Dollars, the Value
Date is the next Business Day following the Trade Date.
(j) 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, but
before the next U.S. Business Day, which shall have as its Trade
Date the next U.S. Business Day.
(k) 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 Foreign
Currency into U.S. Dollars at CISFS' then prevailing exchange rates
for buying or selling, as applicable, such Foreign Currency.
(l) 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 States and, for each Foreign Currency specified in the
Contract, the country in which the Foreign Currency is the lawful
currency.
Other capitalized terms in this Agreement shall have those meanings provided for
herein.
2
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.
(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 foreign exchange rate then prevailing for the Value Date
of the Contract, as determined solely by CISFS. The U.S. Dollar
Value of these computed gains and/or losses, if any, is computed by
assuming that the gain or loss is converted into U.S. Dollars in
the market at the relevant foreign exchange 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) For each Open Position that involves a particular set of two
currencies, (e.g. all Contracts involving only British Pounds
and German Marks) the quantity of that currency specified as
the "Defined Currency" in Schedule 3 of this Agreement shall
be divided by the quantity specified as the "Defined Quantity"
in Schedule 3 of this Agreement. The result, which will be
negative in instances when the Customer is short the first
currency of the currency pair, and positive otherwise, will be
called the "Unit-Equivalent."
(2) The "Unit-Equivalent" of each Open Position will be multiplied
by the amount specified in Schedule 3 of this Agreement as the
"Required Initial Collateral per Unit- Equivalent" to
determine the "Required Initial Collateral" for the particular
Open Position.
(3) The "Total Required Initial Collateral" is determined by
aggregating the "Required Initial Collateral" for all Open
Positions.
(4) 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.
(5) The "Total Required Maintenance Collateral" is determined by
aggregating the "Required Maintenance Collateral" for all Open
Positions.
(6) 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 following three conditions are met:
(i) the "Total U.S. Dollar Market Value of Collateral" is greater than
or equal to (USD) 250,000.00 (Two hundred fifty thousand), AND
(ii) the "Total U.S. Dollar Market Value of Collateral" is greater than
or equal to the "Total Required Initial Collateral," AND
(iii) The "Net Collateral" is greater than or equal to the "Total
Required Maintenance Collateral."
(e) If at any time one or more of the conditions listed in part (d) of
section 3 of this Agreement are 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
3
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 any of the conditions 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
the same two currencies 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 exchange rates it may view on electronic
market information screens (e.g. Reuters, Telerate, etc.) are only
indications of exchange rates, and may or may not reflect actual
exchange rates available to CISFS or the Customer.
5. OFFSETTING CONTRACTS.
Whenever there may exist in any of or between any of the Customer's foreign
exchange accounts two or more open and opposite Contracts providing for the
purchase and sale of the same foreign currency 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 currency deliverable thereunder, shall be paid
and/or delivered, as the case may be.
6. DELIVERY OF FOREIGN CURRENCY.
Delivery of foreign currency shall be made to the bank specified by the
purchaser in a major city in the country in which the foreign currency is
the legal tender. Unless otherwise agreed to by CISFS and the Customer in
writing, the foreign currency shall be deliverable by cable or wire
transfer. All payments to be made in U.S. Dollars shall be made by wire
transfer of immediately available funds to a bank in a major U.S. city
specified by the purchaser. CISFS may 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
foreign exchange 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
4
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 and such
notice 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 commodity or 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 Foreign Exchange 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. foreign
exchange 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. DEATH; INCOMPETENCY.
If the Customer should die or become incompetent, any pending order shall
be validly executed by CISFS, up to the time it receives written notice of
the death or incompetence of the Customer, and CISFS is hereby indemnified
against any loss arising therefrom.
12. SEPARATE CONTRACTS.
Each Contract for the purchase and sale of Foreign Currency hereunder is a
separate Contract even though more than one such Contract may be included
on a single confirmation.
13. JOINT ACCOUNTS; TRUST ACCOUNTS.
If this Agreement is extended to more than one natural person as the
Customer, all such natural persons agree to be jointly and severally liable
for the obligations assumed in this Agreement. If this Facility 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.
14. LIMITATION OF LIABILITY.
CISFS will not be responsible for delays or failures in the delivery of any
Foreign 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.
15. 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 Contract.
16. 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 of
action accrued.
17. 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.
18. NOTIFICATION.
Any notices and other communications may be transmitted to the Customer at
the address, telephone or telefax number given herein, or at such other
address, telephone or telefax 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, telefax 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.
19. 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.
20. 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
5
market recommendations of CISFS, if any, may or may not be consistent with
the market position or intentions of Cargill, Incorporated, Cargill
Investors Services, Inc. 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 foreign currency.
21. 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.
6
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 Trust (the "Trust"). In consideration of the opening of one or more
foreign exchange accounts with CISFS for and in the name of the Trust, the
undersigned further represents that as the managing owner of 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 foreign currencies in said account in accordance with CISFS'
terms and conditions.
CIS INVESTMENTS, INC.,
Managing Owner
By:_____________________________________
_____________________________ L. Carlton Anderson
Date Vice President
POWER OF ATTORNEY:
Power of Attorney Limited to Purchases and Sales
of Foreign Exchange
The undersigned hereby authorizes John W. Henry & Company, INC. as the
undersigned's agent and attorney in fact to buy, sell and trade in foreign
currencies 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 enure to the benefit of CISFS and of any
successors or assigns.
Customer:
JWH GLOBAL TRUST
By: CIS Investments, Inc.
By:_____________________________________
__________________________ L. Carlton Anderson
Date Vice President
8
Schedule 1
The Foreign Currencies under this Agreement are:
Australian Dollar
Belgian Franc
British Pound
Canadian Dollar
Danish Kroner
Dutch Guilder
European Currency Unit (ECU)
Finnish Markka
French Franc
German Mark
Greek Drachma
Hong Kong Dollar
Indian Rupee
Italian Lira
Japanese Yen
Malaysian Ringgit
New Zealand Dollar
Norwegian Krona
Saudi Riyal
Singapore Dollar
Spanish Peseta
Swedish Kroner
Swiss Franc
Thai Baht
9
Schedule 2
CISFS considers as acceptable collateral the following:
1. Immediately-available U.S. Dollar funds.
2. Immediately available Foreign Currency deposits (only those currencies
listed in Schedule 1).
10
SCHEDULE 3 11/1/95
REQUIRED REQUIRED REQUIRED REQUIRED
INITIAL MAINTENANCE INITIAL MAINTENANCE
COLLATERAL COLLATERAL COLLATERAL COLLATERAL
CURRENCY DEFINED DEFINED PER UNIT- PER UNIT- CURRENCY DEFINED DEFINED PER UNIT- PER UNIT-
PAIR CURRENCY QUANTITY EQUIVALENT EQUIVALENT PAIR CURRENCY QUANTITYY EQUIVALENT EQUIVALENT
- -----------------------------------------------------------------------------------------------------------------------------------
AUD-CAD CAD 100,000 1,215 911 GBP-AUD AUD 100,000 1,485 1,114
AUD-CHF AUD 100,000 4,590 3,443 GBP-BEF BEF 2,500,000 2,800 2,100
AUD-DEM AUD 100,000 2,700 2,025 GBP-CAD CAD 100,000 2,565 1,924
AUD-ESP ESP 8,000,000 1,900 1,425 GBP-CHP GBP 62,500 1,755 1,316
AUD-FRF AUD 100,000 2,700 2,025 GBP-DEM DEM 125,000 1,755 1,316
AUD-JPY AUD 100,000 4,050 3,038 GBP-ECU ECU 62,500 1,500 1,125
AUD-NZD AUD 100,000 1,300 975 GBP-ESP ESP 8,000,000 1,300 925
AUD-USD AUD 100,000 1,148 861 GBP-FIM FIM 450,000 1,700 1,275
CAD-CHF CAD 100,000 3,915 2,936 GBP-FRF FRF 500,000 1,350 1,013
CAD-FRF CAD 100,000 2,025 1,519 GBP-ITL ITL 100,000,000 1,800 1,350
CAD-JPY CAD 100,000 3,915 2,936 GBP-JPY GBP 62,500 3,780 2,835
CHF-BEF BEF 2,500,000 1,900 1,425 GBP-NLG NLG 150,000 2,200 1,650
CHF-DKK DKK 500,000 2,200 1,650 GBP-NOK NOK 500,000 1,200 900
CHF-ESP ESP 8,000,000 2,400 1,800 GBP-NZD NZD 125,000 2,100 1,575
CHF-FIM FIM 450,000 2,200 1,650 GBP-SEK SEK 500,000 1,600 1,200
CHF-FRF FRF 500,000 1,350 1,013 GBP-USD GBP 62,500 2,093 1,570
CHF-ITL ITL 100,000,000 2,800 2,100 NLG-BEF BEF 2,500,000 2,800 2,100
CHF-JPY CHF 125,000 2,565 1,924 NLG-DKK DKK 500,000 2,300 1,725
CHF-NLG NLG 150,000 3,100 2,325 NLG-FRF NLG 150,000 2,700 2,025
DEM-BEF BEF 2,500,000 1,600 1,200 NZD-BEF NZD 125,000 2,200 1,650
DEM-CAD CAD 100,000 2,160 1,620 NZD-CAD CAD 100,000 1,100 825
DEM-CHF DEM 125,000 1,215 911 NZD-CHF NZD 125,000 2,500 1,875
DEM-DKK DEM 125,000 1,400 1,050 NZD-DEM NZD 125,000 2,100 1,575
DEM-ESP ESP 8,000,000 1,800 1,350 NZD-ESP ESP 8,000,000 1,600 1,200
DEM-FIM DEM 125,000 1,300 975 NZD-FIM NZD 125,000 2,000 1,500
DEM-FRF DEM 125,000 945 709 NZD-FRF NZD 125,000 2,100 1,575
DEM-ITL ITL 100,000,000 2,500 1,875 NZD-ITL ITL 100,000,000 1,800 1,350
DEM-JPY DEM 125,000 2,430 1,823 NZD-JPY NZD 125,000 2,200 1,650
DEM-NLG DEM 125,000 2,400 1,800 NZD-SEK SEK 500,000 1,800 1,350
DEM-NOK NOK 500,000 800 600 NZD-USD NZD 125,000 900 675
DEM-SEK SEK 500,000 1,600 1,200 SEK-DKK SEK 500,000 1,400 1,050
DKK-BEF BEF 2,500,000 1,500 1,125 SEK-ESP ESP 8,000,000 1,400 1,050
ECU-AUD AUD 100,000 2,100 1,575 SEK-FIM SEK 500,000 1,300 975
ECU-BEF ECU 62,500 1,600 1,200 SEK-JPY SEK 500,000 2,000 1,500
ECU-CAD CAD 100,000 2,300 1,725 SEK-NOK SEK 500,000 1,300 975
ECU-CHF ECU 62,500 1,800 1,350 USD-BEF BEF 2,500,000 2,700 2,025
ECU-DEM ECU 62,500 1,600 1,200 USD-CAD CAD 100,000 912 684
ECU-DKK ECU 62,500 1,400 1,050 USD-CHF CHF 125,000 3,915 2,936
ECU-ESP ESP 8,000,000 1,400 1,050 USD-DEM DEM 125,000 2,565 1,924
ECU-FIM ECU 62,500 1,900 1,425 USD-DKK DKK 500,000 2,400 1,800
ECU-FRE ECU 62,500 1,500 1,125 USD-ESP ESP 8,000,000 1,900 1,425
ECU-ITL ITL 100,000,000 1,700 1,275 USD-FIM FIM 450,000 3,100 2,325
ECU-JPY ECU 62,500 1,800 1,350 USD-FRF FRF 500,000 2,025 1,519
ECU-KLG ECU 62,500 2,000 1,500 USD-GRD GRD 17,500,000 2,300 1,725
ECU-NZD NZD 125,000 1,600 1,200 USD-HKD HKD 600,000 200 150
ECU-SEK SEK 500,000 1,500 1,125 USD-INR INR 2,500,000 1,200 900
ECU-USD ECU 62,500 2,200 1,650 USD-ITL ITL 100,000,000 1,900 1,425
ESP-ITL ITL 100,000,000 1,800 1,350 USD-JPY JPY 12,500,000 4,725 3,544
ESP-JPY ESP 8,000,000 1,700 1,275 USD-MYR MYR 200,000 900 675
FIM-NOK NOK 500,000 900 675 USD-NLG NLG 150,000 1,000 750
FRF-BEF BEF 2,500,000 1,500 1,125 USD-NOK NOK 500,000 2,200 1,650
FRF-ESP ESP 8,000,000 1,500 1,125 USD-SAR SAR 300,000 2,700 2,025
FRF-ITL ITL 100,000,000 2,300 1,725 USD-SEK SEK 500,000 1,900 1,425
FRF-JPY FRF 500,000 2,363 1,772 USD-SGD SGD 125,000 1,100 825
FRF-SEK SEK 500,000 1,700 1,275 USD-THB THB 2,000,000 1,700 1,275
11
FOREIGN EXCHANGE ACCOUNT AGREEMENT SUPPLEMENT
THIS FOREIGN EXCHANGE ACCOUNT AGREEMENT SUPPLEMENT, made as of the
____ day of ________, 1997, by and between JWH Global 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 spot and forward contracts in currencies (the
"Forex 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 Foreign Exchange Account Agreement (which, together with this Foreign
Exchange Account Agreement Supplement shall be referred to as the "Forex
Agreement") setting forth certain terms and conditions upon which the Dealer
shall provide services to the Trust related to the Trust's trading of Forex
Contracts; and
WHEREAS, the Trust and the Dealer wish to enter into this Foreign
Exchange Account Agreement Supplement which sets forth certain terms and
conditions upon which the Dealer will serve as a dealer for the trading of Forex
Contracts on behalf of the Trust for the term of the Forex 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 Foreign Exchange
Account Agreement annexed hereto.
2. DUTIES OF THE DEALER WITH RESPECT TO FOREX CONTRACT TRADING.
With respect to trading by the Trust in Forex Contracts,
the Dealer shall at the request of the Trust's trading advisor obtain
competitive quotes for Forex Contracts from Forex Contract dealers with whom the
Dealer has a Forex 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 Forex Contract with the Counterparty
selected by the Dealer and shall simultaneously enter into an identical Forex
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. INTEREST ON TRUST ASSETS. For purposes of this Section, the
term Trust Assets shall mean the total equity, from time to time, held in all
of the one or more accounts of the Trust carried by the Dealer consisting of
all cash and cash equivalents, valued at cost (including any amounts
deposited as original margin) plus or minus the net profit or loss accruing
on open spot and forward positions. On the 5th business day of each month,
the Dealer shall credit the Trust with interest income, with respect to
assets denominated in dollars, on 100% of the Trust's average daily Trust
Assets on deposit with the Dealer during the previous month at a rate equal
to the average yield on 90-day U.S. Treasury bills auctioned during such
previous month and with respect to Trust Assets denominated in currencies
other than dollars, on the average daily assets at the applicable rates as set
forth in the Prospectus. In computing Trust Assets for purposes of computing
interest income, Trust Assets shall exclude monies due the Trust with respect
to unrealized gain on forward contracts. Trust Assets shall also exclude
accrued but unpaid interest income and interest income, therefore, is not
compounded within each month. The Trust will not receive any other interest
income on its assets held by the Dealer.
5. NET-OUT ON BANKRUPTCY
a. Notwithstanding any other provisions hereof, of any Forex
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 Forex 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 Forex Contracts from time to time
by:
(i) closing out each Forex 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 Forex
Contract shall be due to the purchaser of Currency under that Forex 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 Forex 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
Forex 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 Forex 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.
-2-
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).
6. TERM. The Forex 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 Forex Agreement may
be terminated by the Trust at any time on 60 days' written notice to the Dealer,
provided that any open Forex Contract which the Dealer held prior to the notice
of termination shall be held by the Dealer and this Forex Agreement shall
continue to be in effect with respect to such Forex Contracts until the
applicable settlement date of such Forex Contracts.
7. INCORPORATION BY REFERENCE. The Foreign Exchange 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 Foreign Exchange Account Agreement Supplement
is or at any time becomes inconsistent with the annexed document, the terms of
this Foreign Exchange Account Agreement Supplement shall control.
8. 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.
9. COMPLETE AGREEMENT. The Forex 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.
10. ASSIGNMENT. This Forex Agreement may not be assigned by a party
without the express written consent of the other party.
11. AMENDMENT. This Forex Agreement may not be amended except by the
written consent of the parties hereto.
12. SURVIVAL. The provisions of this Forex Agreement shall survive
the termination of this Forex Agreement with respect to any matter arising while
this Forex Agreement is in effect.
13. HEADINGS. Headings of sections herein are for the convenience of
the parties only and are not intended to be part of or to affect the meaning or
interpretation of this Forex Agreement.
-3-
14. 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 Foreign
Exchange Account Agreement Supplement as of the day and year first above
written.
JWH GLOBAL TRUST
By: CIS INVESTMENTS, INC.,
a Managing Owner
By:
--------------------------
L. Carlton Anderson
Vice President
CIS FINANCIAL SERVICES, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
-4-