EXHIBIT 10.01 (f)
MORGAN STANLEY INTERNATIONAL
MORGAN STANLEY SECURITIES LIMITED
TERMS AND CONDITIONS OF DEALING IN
FINANCIAL AND COMMODITY FUTURES AND OPTIONS
1. DEFINITIONS
(A) In these terms and conditions, the following words and phrases shall bear
the following meanings:
"this Agreement" means the agreement comprising these terms and
conditions and any covering letter hereto and any additional documents
accompanying these terms and conditions, each as from time to time
amended and/or supplemented;
"Asset" means currencies, securities, investments, deposits or financial
instruments (including futures or option contracts) or physical assets;
"Broker" means such member of an Exchange and/or Clearing House as is
instructed by MSI to enter into a futures or option contract on an
Exchange and/or clear the same;
"Charges" means the sums payable to MSI in respect of fees charged under
this Agreement;
"Clearing House" means any clearing house providing settlement or
clearing or similar services for, or as part of, an Exchange;
"Client" means the person with whom MSI has entered into this Agreement;
"Client Contract" means a futures or option contract between MSI and the
Client which is matched by a Contract and is identical in its terms
except as to parties;
"Client Money" means all initial and variation Margin, option premiums
and all other sums received from or due to the Client pursuant to this
Agreement which is "Client Money" as defined by Regulation 2.1 of the
Regulations;
"close out" means the entering into of a Contract equal and opposite to a
Contract previously entered into (and each matching a Client Contract) so
as to create a level position in relation to the Assets underlying the
Contracts, or
1
in relation to the Contracts themselves and fix the amount of profit or
loss arising from such Contracts (and with respect to the corresponding
Client Contract); and the terms "closed out Contract" and "closing out"
shall be construed accordingly;
"Connected Company" means a subsidiary or holding company (in each case
construed in accordance with Section 736 of the Companies Act 1985 or any
statutory modification or re-enactment thereof) of MSI or a subsidiary of
any such holding company;
"Contract" means a futures or option contract entered into by MSI on an
Exchange or, where sub-Clause 2(B) applies, with or through a Broker;
"Contracted-out Client Money" means all initial and variation Margin,
option premiums and all other sums received from or due to, the Client
pursuant to this Agreement, which sums are not to be treated as "Client
Money" as defined by Regulation 2.1 of the Regulations;
"Exchange" means any exchange, market or association of dealers in any
part of the world on which Assets and/or futures or option contracts are
bought and sold;
"a futures or option contract" means a contract, for future delivery
and/or settlement, to (1) buy or sell an Asset and/or (2) pay or receive
a sum of money by reference to an index or formula;
"LOCH" means London Options Clearing House Limited;
"London Traded Options" means traded options dealt in on The
International Stock Exchange;
"Margin" means the amount of cash (including premiums) as may from time
to time be demanded by MSI from the Client for the purpose of protecting
MSI against any loss or risk of loss on present, future or contemplated
Contracts and/or Client Contracts;
"Margin Account" means an account with such bank or banks as MSI may from
time to time determine designed in such a way as to identify the contents
of such account as being client monies;
"MSI" means Morgan Stanley International and/or, as the context requires,
MSSL, each contracting for itself and, in relation to sub-Clause 2(H),
(I), (K) 8(I), (J), (N), (S) and (T), as trustee for the relevant
Connected Companies, directors, officers and/or employees;
2
"MSSL" means Morgan Stanley Securities Limited;
"Open Contract" means a Contract which has not been closed out and which
has not yet matured;
"the Regulations" means The Financial Services (Clients' Money)
Regulations 1987;
"Securities" means such securities, investments and financial instruments
as the Client may, with the agreement of MSI, deposit with, or transfer
to, MSI by way of Margin;
"Taxes" means taxes, duties, imposts and fiscal charges of any nature,
whether of the United Kingdom or elsewhere in the world and whenever
imposed, including value added taxes and stamp and other documentary
taxes;
"The International Stock Exchange" means The International Stock Exchange
of the United Kingdom and the Republic of Ireland;
"Transaction" means the entering into of a Contract, closing out or
effecting delivery and/or settlement of a Contract (which term shall
include exercise or allocation of an option Contract);
"TSA" means The Securities Association.
(B) Words importing the singular shall, where the context permits, include
the plural and vice versa. The expression "person" shall include any
firm, partnership, association of persons and body corporate and any such
persons acting jointly and the personal representatives or successors in
title of any such person. Where the Client comprises two or more persons
the liabilities and obligations hereunder shall be joint and several.
References to "writing" shall include telex, cable, facsimile
transmission and telegram. References to statutory provisions and
regulations shall include any modification or re-enactment or re-making
thereof.
(C) Headings are for convenience only and shall not affect the
interpretation hereof.
2. DEALING
(A) MSI shall be entitled, but not bound, to act on a request from the Client
to carry out a Transaction (whether directly or through a Broker).
Transactions may, where so permitted under the Rules of TSA, be carried
out either on, or in accordance with, the rules of an Exchange which is
not a recognised or designated investment Exchange. Transactions will
not relate to off-Exchange
3
futures and options contracts unless the Client has entered into a
supplemental agreement for such business.
(B) MSI may designate a Broker to execute and/or clear futures or option
contracts subject to such conditions as MSI may impose. MSI may
designate a Broker outside the United Kingdom who has agreed with MSI
that:
(1) Client Money received by the Broker in relation to a margined
Transaction will be held in segregated bank account; and
(2) MSI's customer account with it will be credited with Client Money or
collateral provided to the Broker by MSI in respect of margined
Transactions to the value of that Client Money or collateral.
(C) If MSI carries out a Transaction on the request of the Client or pursuant
to Clause 5 below:
(1) a corresponding Client Contract shall come into existence on the
purchase or sale of a Contract or, as the case may be, exercise and
allocation of an option Contract in respect of which the underlying
Asset is a futures Contract and cease to exist on closing out or on
settlement and/or delivery of the Contract; and
(2) the Client shall have the obligations in relation to the Transaction
and the corresponding Client Contract as are herein mentioned.
(D) As soon as practicable after it has carried out a Transaction MSI shall
confirm details of that Transaction to the Client. MSI shall provide to
the Client at agreed intervals a statement of the Client's overall
trading (and Margin) positions with MSI at the then available current
market price.
(E) If MSI shall decline to carry out a Transaction it shall promptly notify
the Client accordingly. MSI shall have no liability for any expense,
loss or damage incurred by the Client by reason of any omission so to
notify the Client otherwise than as a result of the bad faith or wilful
default of MSI and in no event shall MSI have any liability for any
consequential or special damage, whether arising from bad faith, wilful
default, or otherwise.
(F) In respect of every Client Contract, MSI shall have made or placed an
equivalent Contract on the floor of the relevant market for execution or
shall, where sub-Clause 2(B) applies, have entered into an equivalent
Contract with or through a Broker and MSI shall thus have an interest in
the Transaction.
(G) Any contract which MSI acquires as a result of the instructions of the
Client will, unless the position has been closed out, result in the
Client becoming
4
liable to MSI in relation to the corresponding Client Contract for actual
delivery of its underlying Asset or payment of the relevant price under,
and subject to, the rules of the relevant Exchange and/or Clearing House.
(H) The relationship between MSI and the Client is as described in this
Agreement. Neither that relationship nor the services MSI provides nor
any other matter will give rise to any fiduciary or equitable duties on
the part of MSI or of any Connected Company which would prevent or hinder
MSI or any Connected Company doing business for or with the Client,
acting as both principal or agent, doing business with Connected
Companies and other investors or generally acting as provided in this
Agreement. MSI and any Connected Company may (without disclosing the
same to the Client) carry out any Transaction for the Client (whether or
not pursuant to a Discretionary Trading Authorisation) or give advice or
make recommendations without being liable to account to the Client for
any profit or gain accruing to MSI or any Connected Company while MSI or
any Connected Company has a relationship, arrangement or interest that is
material in relation to the Transaction, advice or recommendation
concerned. Such relationship, arrangement or interest may include by way
of example (but without limitation):
(1) trading or dealing in futures or option contracts or in any Asset (or
any other asset which does or may form part of such Asset) underlying
any Contract or Client Contract;
(2) acting or having acted or seeking to act as a financial adviser or
lending banker to the issuer (or any of its associated companies) of
the Assets the subject of a Transaction;
(3) sponsoring or having sponsored or underwriting or having underwritten
or otherwise participating or having participated in the Assets the
subject of a Transaction;
(4) receiving or having received payments or other benefits for giving
business to the Broker with which the Client's order is placed;
(5) being or having been an associated company of the issuer (or any of
its associated companies) of the Assets the subject of a Transaction;
and/or
(6) advising or having advised a company in connection with a take-over
bid, merger or acquisition by or for it or an associated company.
MSI may, in its absolute discretion, decline to carry out a Transaction
or to give advice or to make a recommendation to the Client where MSI has
an interest in respect thereof which will or may conflict with that of
the Client.
5
(I) Neither MSI nor any Connected Company shall be under any duty to disclose
to the Client any act, matter or thing which comes to the notice of MSI
or any Connected Company or any employee, director or agent of MSI or any
Connected Company in the course of MSI or any Connected Company rendering
similar services to others or in the course of carrying on any other
business whether or not such disclosure would be a breach of duty or
confidence to any other person.
(J) At its discretion, MSI may aggregate a Client's order with an order of a
person unconnected with MSI and/or an order of MSI and/or an order of a
person connected with MSI. Such aggregation may operate on some
occasions to the Client's advantage and on other occasions to his
disadvantage.
(K) MSI, its Connected Companies and each of their directors, officers or
employees may act upon and use research reports and recommendation (or
any conclusions which they may express or the research or analysis on
which they may be based) which they have received or of which they may
have knowledge before the same are provided (if at all) to the Client and
shall not be under any obligation when carrying out Transactions with or
for the Client to take account of any such research reports or
recommendations.
3. CLEARING
(A) MSI shall not be liable to the Client (in respect of the relevant Client
Contract, any matching Contract or otherwise) if the relevant Exchange,
Clearing House and/or Broker has ceased for any reason (including netting
off MSI's positions with it) to recognise the existence of any Contract
or fails to perform or close out any Contract, but the fact that the
relevant Exchange, Clearing House and/or Broker has so ceased or failed
shall not affect the Client's obligations and liabilities hereunder in
respect of Contracts which it has instructed MSI to open and which have
not been closed out or in respect of other obligations or liabilities of
the Client arising therefrom.
(B) If the relevant Exchange and/or Clearing House and/or Broker requires any
alteration in the terms or conditions of any Contract matching a Client
Contract (including the Assets subject to it), MSI may without referring
to the Client take all actions as may, in MSI's absolute discretion, be
necessary, desirable or expedient to comply therewith or as a result
thereof or to avoid or mitigate loss thereunder and all such actions
shall be binding upon the Client and such alteration deemed incorporated
into the corresponding Client Contract.
(C) The Client shall, forthwith upon request by MSI, take such action and
supply to MSI in relation to the corresponding Client Contract such
information in
6
relation to the delivery and/or settlement, and/or, if a purchased option
Contract, exercise or allocation, of any Contract which has not been
closed out as MSI may request.
(D) Notwithstanding sub-Clause (C) above, the Client shall promptly take all
action necessary (including the supply of information) to enable due
settlement and/or delivery by MSI in accordance with the rules and
regulations of the relevant Exchange and/or Clearing House and/or
requirements of any Broker, of any Contract which it has instructed MSI
to open and which has not been closed out, at the time such Contract
falls due under its terms to be performed (including, where applicable,
on any nominated delivery day).
(E) (1) Unless MSI shall in its absolute discretion determine otherwise,
equal and opposite Contracts and Client Contracts (closing out being
determined on a "first in, first out" basis, except where MSI exercises
its discretion as aforesaid) will automatically fix the amount of profit
or loss in relation to each other.
(2) Subject to sub-Clause 2(A) and to the rules and regulations of the
relevant Exchange and/or Clearing House and/or requirements of the
relevant Broker and subject to any further requirements notified by MSI
to the Client, the Client may at any time before the date for performance
of a Client Contract request MSI to close out the matching Contract or,
if a purchased option Contract, exercise the same. If such closing out
or exercise results in a sum of money being due to MSI and/or to the
relevant Exchange, Clearing House and/or Broker, MSI shall notify the
Client of that amount, which shall be payable forthwith by the Client to
MSI.
(F) MSI shall (subject to, and only upon compliance by the Client with, its
obligations under sub-Clauses 3(C), (D) and E(2) and subject to sub-
Clauses 3(A), 3(B), 4(C) and 5(B)), upon receipt of any sums and/or
Assets (including documents of title thereto) payable or receivable
pursuant to a Transaction, deliver such sums and/or Assets to the Client
in respect of the corresponding Client Contract, subject to the deduction
of any Charges or Taxes.
(G) In respect of an option Contract matching a Client Contract:
(1) the Client, if a buyer, shall pay to MSI on demand any premium
payable under the rules of the relevant Exchange and/or Clearing
House ("the premium") which sum shall be paid by MSI into the Margin
Account as Margin; and
(2) MSI shall, on receipt from the relevant Exchange, Clearing House
and/or Broker, pay into the Margin Account as Margin, for the account
of the
7
Client, any premium payable under the rules of the relevant
Exchange and/or Clearing House, provided that the Client may be
required to pay further Margin in respect of the relevant Contract
and corresponding Client Contract.
(H) Where the relevant Clearing House and/or Broker does not allocate long
Open Contracts at maturity direct to a specific account of MSI or to
short Client Contracts, or vice versa, MSI shall have complete discretion
to allocate the same at random or in a way which seems to it to be most
equitable as between clients, and if dealings on MSI's own account are
involved at the same time, allocation will be to all clients first (on
the above basis) with MSI receiving no allocation until all relevant
Client Contracts have been satisfied.
4. THE MARGIN TRUST ACCOUNT
(A) In respect of all present, future or contemplated Contracts and Client
Contracts, the Client shall pay to MSI upon demand such sums by way of
Margin as MSI may in its absolute discretion from time to time require.
(B) MSI shall as soon as practicable pay or credit (1) all Client Money to a
Margin Account with such Approved Bank (as defined in the Financial
Regulations of TSA and which may be MSI or a Connected Company) as MSI
may from time to time determine and (2) all Contracted-out Client Money
to a Margin Account with such bank as MSI may from time to time determine
(which may be MSI or a Connected Company), in each case denominated in
the currency of the relevant Contract or, if agreed by MSI and the
Client, denominated in another currency. The Client shall bear all risk
and cost in respect of any conversion of currency in a Margin Account,
and any such conversion shall be made by MSI at such market rate or rates
as MSI, in its absolute discretion, deems appropriate.
(C) MSI shall (subject, in the case of Client Money to the terms of the trust
declared under Regulation 2.2(1) of the Regulations from the effective
date thereof) hold all Client Money and all Contracted-out Client Money
in a Margin Account on trust in the following order of priority:
(1) for MSI to the extent of all sums due or which may become due to MSI
or payable by MSI on behalf of the Client under or pursuant to this
Agreement and, thereafter,
(2) for the Client to the extent of any surplus which is, following the
payment of all sums due to or payable by MSI under sub-Clause (1)
above, due to the Client.
8
(D) MSI is empowered to withdraw Client Money and Contracted-out Client Money
held in a Margin Account for the purpose set out in Rule 100.05b of the
Financial Regulations of TSA and, in addition, for the purposes of paying
to any Broker and/or Clearing House and/or Exchange and/or other parties
all margins, premiums and other sums on futures and option contracts
demanded or due from MSI in respect of its clients and for the purposes
of Clause 4(H) and, in relation to Contracted-out Client Money, for any
other purposes which MSI considers appropriate.
(E) No interest shall be paid in respect of Client Money or Contracted-out
Client Money. In respect of Client Money this differs from the
provisions of Regulation 2.3 of the Regulations from the effective date
thereof.
(F) Subject, in the case of Client Money, to the terms of Regulation 2.2 of
the Regulations, any loss incurred on any Asset or on default by any
Exchange, Clearing House and/or Broker in respect of Margin paid by MSI
shall be borne by all clients of MSI at the date of such loss pari passu
in proportion to their respective entitlement to monies in the relevant
Margin Account as such date, and MSI shall not be liable for any loss
suffered by the Client as a result of the default by any bank with whom
MSI maintains a Margin Account.
(G) MSI is authorised to hold Client Money in a Margin Account with an
approved Bank outside the United Kingdom (or, in the case of Contracted-
out Client Money, any bank outside the United Kingdom) selected by MSI in
its absolute discretion. Where such Approved Bank refuses to give MSI
acknowledgement of the notice required to be given to it under regulation
100.03 of the Financial Regulations of TSA (notice that monies are trust
monies), such Client Money may not be protected as effectively as if it
were held in a client bank account in the United Kingdom.
(H) MSI shall, in its discretion as to the terms thereof and any rate of
return earned thereon, have power to invest, realise such investment
and/or reinvest any sums standing to the credit of a Margin Account in
any Asset it thinks fit, and whether or not with, through or in a
Connected Company and whether or not by leaving the same on deposit with
any Clearing House and/or any Broker. The limitations on the type of or
method of investment contained in the Trustee Investments Act 1961 shall
not apply.
(I) (1) Sums due to MSI from the Client by way of Margin pursuant to Clause
4(a) may, in the absolute discretion of MSI, be satisfied by way of
deposit or transfer of Securities and the provisions of this sub-
clause 4(1) shall apply to such Securities.
9
(2) The Client, as beneficial owner and as continuing security for all
its liabilities and obligations under this Agreement, hereby charges,
free of any adverse interest whatsoever:
(a) by way of first fixed equitable charge, all Securities the
certificates or documents of title to which it has deposited or
may hereafter deposit with MSI (or as MSI may direct) by way of
Margin ("Deposited Securities"); and
(b) by way of first fixed legal charge, all Securities title to which
it has transferred or may hereafter transfer to MSI or as MSI may
direct) by way of margin ("Transferred Securities").
(3) Certificates or documents of title to any Securities may be held (a)
by or on behalf of MSI or any of its associated companies (which
where required by the Rules of TSA, are listed in the relevant
Schedule to the covering letter hereto) (being Connected Companies),
(b) by any of the persons listed in the Schedule hereto (in each case
as such Schedules may be amended from time to time by MSI on giving
notice to the Client) or (c) by any other person permitted under the
Rules of TSA.
(4) The Client shall, upon request by MSI, forthwith execute all such
transfers and other documents as may be necessary to enable MSI or
its nominee (which may be any of the persons specified in sub-Clauses
4(I)(2) or (3) above) to be registered as the owner of, or otherwise
obtain legal title to, Deposited Securities.
(5) MSI shall hold all Securities for the purposes of sub-Clause 4(C) and
(D) and Clause 5 and for such purposes may, without prior notice,
free of any interest of the Client therein:
(a) deposit, charge or pledge the same with or to the order of any
Exchange, Clearing House and/or Broker and on terms that (1)
such Exchange or Clearing House may deal with the same in
accordance with their rules, (2) the Broker may deal with the
same in accordance with such rules and/or any agreement made
with MSI and (3) such Exchange, Clearing House and/or Broker may
enforce such deposit, charge or pledge in satisfaction of all or
any obligations of MSI to such Exchange, Clearing House and/or
Broker; and
(b) register, sell, realise, charge, borrow against or otherwise deal
with the same upon such terms (including as to the consideration
received therefor) as it may in its absolute discretion think fit
(without being responsible for any loss or diminution in price)
and
10
any consideration received therefor shall be placed upon
receipt to the credit of the Margin Account.
If Securities are denominated in a different currency from that in
which any relevant cost, damages, loss, liability or expense is
denominated, MSI may convert any amount realised at such rate as it
may reasonably consider appropriate at the relevant time.
(6) The Client undertakes neither to create nor to have outstanding any
security interest whatsoever on or over any of the Securities (except
for the security created hereby).
(7) Subject to MSI being satisfied that all costs, damages, losses,
liabilities and expenses incurred pursuant to this Agreement have been
satisfied, discharged or otherwise released, MSI may re-transfer or,
as the case may be, re-deliver any certificates or documents of title
relating to any relevant Securities to the Client at any time and
shall do so upon request.
(8) Pending such re-transfer or re-delivery MSI shall place any monies
paid to MSI by way of income in respect of Securities, net of any
Taxes payable by MSI (whether by withholding or otherwise) in respect
of such income to the credit of the Margin Account and the Client may
direct MSI as to the exercise of any voting or other rights attached
to or conferred on any Securities which are required to be exercised
by MSI. References in this paragraph to MSI shall include references
to any person specified in sub-Clauses 4(I)(2) or (3) above.
(9) Subject to sub-Clause 4(I) and Clause 5, unless otherwise agreed in
writing, documents of title or documents evidencing title to
Securities shall not be lent by MSI or by any person specified in sub-
Clauses 4(I)(2) or (3) above to any third party and money shall not be
borrowed by MSI or any such person on the Client's behalf against the
security of those documents.
(J) As further security for all obligations of the Client under this
Agreement, MSI shall have the right to retain (and apply as set out below
all of the Client's property at any time held by MSI or any Connected
Company for any purpose, including, but not limited to, property (other
than as aforesaid) held in any other accounts of the Client with MSI or
any Connected Company, irrespective of whether or not MSI has made any
advances in connection with such property, and MSI may, without notice,
transfer and re-transfer from time to time any money or other property
between any such accounts. The Client shall execute such documents and
take such other action as MSI shall reasonably request in order to
perfect MSI's rights with respect to any security referred to in this
sub-Clause (J).
11
5. MSI'S RIGHTS
(A) MSI may, at any time without prior notice in its absolute discretion, and
shall if the Client shall fail for five business days to meet a call for
Margin from MSI in respect of a Transaction carried out on an Exchange
which is a recognised or designated investment exchange (unless otherwise
permitted under TSA Rules), take such steps as it may consider necessary
or desirable to comply with or perform, cancel or satisfy any obligations
of MSI to the relevant Exchange, Clearing House and/or Broker in respect
of any Contract or Contracts acquired on the instructions of the Client
or otherwise to protect the position of MSI, including closing out and/or
performing any or all such Open Contracts, and may for such purpose:
(1) buy or sell the Asset underlying any Open Contract in any manner
howsoever and including from itself or any Connected Company; and/or
(2) initiate new long or short positions in order to establish a spread
or straddle; and/or
(3) borrow, buy or sell any currency; and/or
(4) apply any Margin.
to each case so that all sums expended on liabilities incurred by MSI in
excess of any sums held in the Margin Account for the Client shall be
paid by the Client to MSI on demand.
(B) On the exercise of MSI's rights under sub-Clause (A) above:
(1) MSI shall not be obliged to deliver to the Client in respect of any
corresponding Client Contract the underlying Asset (which may be
registered in the name of MSI or its nominee (which may be a
Connected Company) and MSI or such nominee may be the custodian of
the document(s) of title or certificate(s) evidencing title to such
Asset) or any money received or receivable on closing out until all
sums due from and liabilities of the Client to MSI are satisfied or
discharged to the satisfaction of MSI and (a) if such sums and/or
liabilities shall not be satisfied or discharged to the satisfaction
of MSI, MSI may sell or realise the underlying Asset upon such terms
(including as to the consideration received therefor) as it may in
its absolute discretion think fit (without being responsible for any
loss or diminution in price) and any consideration received therefor
shall be placed upon receipt to the credit of the Margin Account, and
(b) any income in respect of such Asset paid
12
to MSI net of any Taxes payable by MSI (whether by withholding or
otherwise) in respect of such income shall be placed upon receipt to
the credit of the Margin Account; and
(2) all amounts owing to MSI hereunder shall, if MSI shall so determine,
become immediately payable.
6. FEES
(A) Fees will be payable in respect of each Contract at such rates as MSI
may from time to time notify to the Client and such fees will comprise
either a commission or a mark-up or mark-down on the fee payable by MSI
to any Exchange, Clearing House and/or Broker in respect of the
relevant Transaction and/or such other amounts as may be agreed from
time to time by MSI and the Client. If there is an element of mark-up
or mark-down, this will be shown on the relevant contract note or
confirmation where required by the TSA Rules.
(B) MSI may share its charges with a Connected Company or Companies. If MSI
has shared any charge with any third party who is not a Connected
Company, the particulars of such charges will be available to the
Client on written request.
7. INTRODUCED BUSINESS
(A) MSI may introduce the Client to an overseas Connected Company, and the
Client hereby authorises MSI on its behalf to expressly invite any such
Connected Company to call the Client with a view to such Connected
Company entering into investment transactions from time to time with or
for the Client. If such Connected Company agrees to do so:
(1) the Client shall have a direct relationship solely with such
Connected Company and, in any dispute between, or claim against, the
Client and/or any such Connected Company, the Client shall have no
recourse to MSI;
(2) the Client may place orders with MSI acting on behalf of such
Connected Company for specific transactions to be executed by such
Connected Company. In relation to such transactions, MSI shall act
as agent only for such Connected Company and not as agent for the
Client and nothing done by MSI in connection with any such
transaction shall constitute MSI the agent of the Client.
13
(B) In relation to any such investment transaction only the following clauses
of this Agreement shall apply as between MSI and the Client: 1, 2(H),
(I), (K), 8(A), (B), (D), (G)-(N), (O)(2), (P), (S) and 10.
(C) Any such Connected Company will not be an authorised person subject to
the rules and regulations made under the Financial Services Act 1986 for
the protection of investors.
8. GENERAL
(A) Under the rules of the relevant Exchange and/or Clearing House or other
regulatory organisations or applicable laws or regulation MSI may be
required to disclose particulars concerning the Client and the Client's
dealings. MSI is authorised by the Client to make any such disclosure.
(B) (1) Any instructions, notices, demands, confirmations or requests to be
given by the Client or MSI hereunder may be given orally or in
writing to the last address notified, in accordance with this sub-
Clause, by the relevant party to the other. Any confirmation as
referred to in sub-Clause 2(D) above shall be deemed correct and
conclusive and binding upon the Client if not objected to in writing
within the earlier of five days of despatch by MSI or one day of
receipt by the Client. Communications under sub-Clause 2(A) and 8(M)
and any objection pursuant to the preceding sentence of this sub-
Clause shall be deemed received only if actually delivered. All
communications (except under sub-Clauses 2(A) and 8(M)) shall be
deemed to have been received at the time when, in the ordinary
course, they would have been received.
(2) MSI shall be entitled to rely on the instructions of any person who
is or appears to MSI to be a person designated in the attached
Certificate or otherwise authorised by the Client for the purposes if
this Agreement.
(3) MSI shall be entitled to rely on, and shall not be liable for any
actions taken or omitted to be taken in good faith pursuant to, at
instruction, notice, demand or request hereunder (or anything which
purports to be or MSI reasonably believes to be an instruction,
notice, demand or request hereunder) whether or not received in
writing.
(C) The Client shall pay on demand interest on any sums due or owing to MSI
hereunder from the date when the same are due until future settlement (as
well after as before judgment) at the rate of 2 per cent per annum above
the base rate or prime rate (or local equivalent thereof) of the bank at
which MSI (or, if there is more than one such bank, the one determined by
MSI in its absolute discretion) has Margin Account in the relevant
currency.
14
(D) (1) The Client warrants that it will obtain, and maintain in effect, in
relation to this Agreement, each Client Contract, matching Contract
and Transaction, all necessary consents or approvals of any
governmental or other regulatory body or authority or Exchange and
that it will comply with the terms of the same and with all applicable
laws, regulations and directives of such bodies and authorities. The
Client shall, forthwith upon demand by MSI, deliver to MSI copies of
all such consents or approvals or such other evidence of the existence
of any such consents or approvals and such evidence of compliance with
such and with any such laws, regulations and directives as MSI may
reasonably require.
(2) The Client shall:
(a) provide to MSI upon demand all such information as may be
required to be filed or disclosed pursuant to the byelaws and
rules of any Exchange, Clearing House or other regulatory
authority or to any applicable law, rule or regulation, in each
case regarding MSI, the Client, any Client Contract, matching
Contract, Transaction or this Agreement.
(b) file (within any applicable time periods) such reports, letters
and other communications as may be required from time to time by
any governmental or other regulatory body or authority or any
Exchange or Clearing House regarding MSI, the Client, any Client
Contract, matching Contract, Transaction or this Agreement; and
(c) send a copy of all such reports referred to in paragraph (b)
above to MSI promptly upon such filing, and MSI may forward copy
of the same to any relevant Broker.
(E) All Client Contracts and all Transactions shall be subject to this
Agreement and (in respect of any Exchange and/or Clearing House of which
MSI is a member) the construction, byelaws, rules and/or regulations of
the relevant Exchange and/or Clearing House and to any applicable laws
(which term shall include the regulations of any governmental or quasi-
governmental agency) whether imposed on the Client or MSI and so that:
(1) in the event of any conflict between (a) this Agreement and (b) any
such constitution, byelaws, rules, regulations and/or laws, the
latter shall prevail; and
(2) MSI shall be entitled to take or omit to take any action it considers
fit or appropriate in order to ensure compliance with the same and
all such actions so taken shall be binding upon the Client.
15
(F) All sums expressed to be payable by the Client hereunder are exclusive of
all applicable Taxes. Such Taxes shall be payable to MSI by the Client
at the same time as the sums to which those Taxes relate.
(G) This Agreement shall apply to all Transactions, Client Contracts and
transactions pursuant to clause 7 to the exclusion of any other terms and
conditions which might otherwise apply by virtue of any course of
dealing. This Agreement may be amended and/or supplemented by MSI giving
to the Client written notice thereof (which, in the case of a private
Client, shall take affect seven days after despatch) or by written
agreement between MSI and the Client. By the Client's acceptance of this
Agreement, the Client acknowledges that MSI has not made, and the Client
is not relying upon, any statements, representations, promises or
undertakings whatsoever that are not contained herein.
(H) The Client's rights and obligations under this Agreement and any Contract
and/or Client Contract are not capable of assignment. Any purported
assignment thereof shall be in breach of the Client's obligations
hereunder and shall be invalid.
(I) The Client shall upon demand indemnify and keep indemnified MSI and its
Connected Companies and any of its or their directors, officers or
employees against any cost, expense, damage, loss or liability whatsoever
which may be suffered or incurred by any of them directly or indirectly
(including those incurred to a Broker, Exchange, Clearing House or other
regulatory authority) as a result of, or in connection with, or arising
out of, this Agreement or any Contract acquired or Transaction effected
on the instructions of the Client or in relation to a corresponding
Client Contract or arising out of any act or omission by MSI or by any
such other person permitted hereunder (including in any such case any
costs of enforcing the same).
(J) If any action or proceeding is brought by or against MSI or a Connected
Company by or against a third party in relation to this Agreement or any
Contract acquired or Transaction effected on the instructions of the
Client or in relation to a corresponding Client Contract or arising out
of any act or omission by MSI or any such Connected Company permitted
hereunder, the Client agrees to cooperate to the fullest extent possible
in the defence or prosecution of such action or proceeding.
(K) Time shall be of the essence in relation to all matters arising hereunder
or pursuant hereto.
(L) MSI shall not be liable to the Client for the non-performance of its
obligations hereunder by reason of any cause beyond MSI's reasonable
control, including breakdown or failure of transmission or communication
or computer facilities,
16
postal or other strikes or similar industrial action and/or the failure
of any relevant Exchange, Clearing House and/or Broker for any reason to
perform its obligations. In no event shall MSI have any liability for any
consequential or special damage, whether arising from bad faith, wilful
default, fraud or otherwise.
(M) Either party can terminate this Agreement without penalty upon receipt of
notice in writing by the other, provided that such termination shall not
affect:
(1) the rights or liabilities of either party in respect of Contracts and
any corresponding Client Contracts for which an instruction has
already been given by the Client and accepted by MSI or in respect of
which there is an outstanding liability to MSI and shall be without
prejudice to MSI's rights to all Margin and sums in the Margin
Account, and this Agreement shall apply thereto until all such
Contracts have been closed out or settlement and/or delivery effected
and all such liabilities discharged; and
(2) any warranties given by the Client under this Agreement which shall
survive such termination.
(N) Neither MSI nor any of its Connected Companies, nor any of its or their
directors, officers or employees shall have any responsibility or
liability whatsoever, whether in negligence or otherwise, (1) in respect
of any advice or opinion which may be given to the Client concerning or
in pursuance of this Agreement or any Contract, Client Contract or
Transaction, or (2) for any expense, loss or damage suffered by the
Client as a result of MSI carrying out the instructions of the Client or
carrying out or failing to carry out any actions permitted under this
Agreement.
(O) (1) MSI will not carry out any Transaction at the Client's request on
the basis that such request evidences an expectation on the Client's
part that the client is acting as agent for or on behalf of another
and that MSI is to be responsible to the Client's principal as its
direct customer for the execution of such Transaction (or for certain
material aspects of such Transaction) and no Transaction carried out
by MSI will be on the basis that such Transaction is investment
business regulated by TSA with or for the Client as an intermediary
(within the meaning of the Rules of TSA).
(2) Without prejudice to sub-Clause (1) above, the Client undertakes
that if in relation to any Contract and/or Client Contract it is
acting as agent for or on behalf of another, then:
17
(a) in doing so, it is expressly authorised by its principal to
instruct MSI in relation to that Contract and/or Client Contract
upon the terms of this Agreement;
(b) its principal will be jointly and severally liable with it to MSI
in respect of all obligations and liabilities to be performed by
the Client pursuant to and in respect of such Contract and/or
Client Contract entered into hereunder or in pursuance hereof;
and
(c) notwithstanding paragraph (b) above, it will nevertheless be
jointly and severally liable to MSI with its principal as if it
were a principal in respect of all such obligations and
liabilities.
(P) MSI will not be bound to act in accordance with the instructions of any
person other than the Client (and shall be entitled to act in accordance
with all instructions given by or purporting to be given by the Client)
and the liabilities of MSI hereunder shall be fully discharged by
performing such in favour of the Client, notwithstanding any instructions
that MSI may receive from the principal of the Client, and any notice
that MSI may receive that the authority of the Client to act on behalf of
its principal has been revoked or varied, and references to the word
"Client" herein shall be construed accordingly.
(Q) Where the Client is a company whose business includes acting as trustee
and MSI is dealing with or for the Client in the Client's capacity as a
trustee of more than one trust, this Agreement shall apply to the Client
in each of such capacities and MSI shall not be required to treat the
Client differently in respect of any capacity.
(R) MSI may use telephone voice recording procedures in connection with
receiving instructions or communications and such voice records will be
accepted by the Client as conclusive evidence of the instructions or
communications recorded.
(S) The rights and remedies, powers and privileges of MSI contained herein
are cumulative and not exclusive of any rights or remedies provided by
law. No failure to exercise or delay in exercising the same shall
operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof. MSI shall in no
circumstances be obliged to close out Contracts or take any other action
in respect of open Contracts acquired on the instruction of the Client,
and, in particular, (subject to sub-Clause 5(A) above) no failure of the
Client to pay Margin when demanded shall be taken to oblige MSI to close
out any relevant Contract to which such Margin is attributable.
18
(T) Neither MSI nor any Connected Company shall be responsible to the Client
for the solvency, actions or omissions of any person with whom it or they
deal or transact business or who is appointed by MSI or any Connected
Company in good faith on the Client's behalf or for any loss, theft or
non-delivery of any of the Client's money and/or documents of title to
investments held by a third party, but MSI or such Connected Company, as
the case may be, will make available to the Client, when and to the
extent reasonably so requested, any rights that it may have against any
such person.
9. LONDON TRADED OPTIONS
(A) All Transactions in relation to London Traded Options will be carried out
by MSSL.
(B) The Client hereby confirms that it has received, read, understood,
completed and signed the Letter of Authority which has been supplied to
the Client by MSI in accordance with the requirements of The
International Stock Exchange.
(C) The Client shall make available to MSSL cover or collateral and/or Margin
securing written option contracts in such form and in such amounts and at
such times as shall be demanded by MSSL for deposit with or to the order
of LOCH.
(D) If the Client instructs MSSL to carry out a transaction in relation to
London Traded Options, then in relation to that transaction these Terms
and Conditions shall apply save that:
(1) the words "(and each matching a Client Contract)" and "(and with
respect to the corresponding Client Contract)" shall be deleted from
the definition of "close out" in sub-Clause (A).
(2) sub-Clauses 2(C)(1), (F), 3(H) and 4(I) shall not apply.
(3) in sub-Clauses 3(E)(2), (G), 4(A), 8(H)-(J), 8(M)-(O) references to
"Client Contract" shall be ignored; and
(4) in sub-Clauses 2(C)(2), (G), (H), 3(A)-(C), 3(E)(2), (F), 5(B), 8(D),
(E) and (G) references to "futures or option contracts" and "Client
Contracts" shall be construed as references to "Contracts" and
"corresponding" and "matching" shall be ignored.
(E) The Client hereby agrees to comply with the Rules and Regulations and
Permanent Notices of The International Stock Exchange from time to time
in force and authorises MSSL, in its absolute discretion, to act in
accordance therewith or as permitted thereunder.
19
10. GOVERNING LAW
(A) This Agreement and all Client Contracts shall be subject to and construed
in accordance with English law. All disputes shall be subject to the
jurisdiction of the English courts, to which the Client hereby submits.
(B) It is hereby irrevocably agreed that any suit, action, claim or
proceeding (together in this sub-Clause referred to as "Proceedings")
arising out of or in connection with this Agreement or any Client
Contract may be brought in the English courts and any objection that
either MSI or the Client may have now or hereafter to the laying of the
venue of such Proceedings in any such court and any claim that any such
Proceedings have been brought in an inconvenient forum is hereby waived.
(C) To the extent that the Client may be entitled in any jurisdiction to
claim for itself or for its property or assets immunity in respect of its
obligations under this Agreement or any Client Contract from service of
process, jurisdiction, suit, judgment, execution, attachment (whether
before judgment, in aid of execution or otherwise) or legal process or to
the extent that in any such jurisdiction there may be attributed to the
Client or its property or assets such immunity (whether or not claimed),
the Client hereby waives such immunity to the fullest extent permitted by
the laws of such jurisdiction.
I/We hereby agree to the above Terms and Conditions which I/we have read and
understood.
Signed: /s/ Mark F. Dalton
-------------------
Name(s): Mark F. Dalton
--------------
Title: President, Second Management Company, Inc., General Partner
------------------------------------------------------------
Authorised signatory(ies)
for and on behalf of
Tudor Fund For Employees L.P.
- ----------------------------------
Name of Client
Date: 4/12/90
-------
20
CUSTOMER AGREEMENT
In consideration of E D F Man International Inc. (the "Company") carrying and
maintaining one or more accounts (the "Account") of the undersigned customer
("Customer"), as broker for the execution, clearance and/or carrying of
transactions for the purchase and sale of futures contracts, commodities,
forward contracts, options on futures contracts, forward contracts and
commodities and similar interests (collectively "Commodities"), the Customer
hereby agrees with the Company as follows:
(1) DEFINITIONS. As used in this Agreement, the following terms shall have the
meanings as indicated:
(a) "Affiliate" shall mean any corporation, partnership, or other organization
which controls, is controlled by, or is under common control with the
Company.
(b) "Exchange" shall mean any contract market, exchange, board of trade or other
market on or subject to the Rules of which transactions are effected under
this Agreement and their respective clearing associations.
(c) Regulations" shall mean any rule, regulation, ruling or order (including
any interpretations thereof) of the Commodity Futures Trading Commission
("CFTC") or any other governmental body (federal, state or local) having
jurisdiction.
(d) "Property" shall mean property of every kind and nature, real and personal,
including without limitation cash in any currency, securities, Commodities,
and any equity in any Account with the Company or any affiliate of the
Company.
(e) "Rules" shall mean any provision of the constitution, charter, by-laws,
rules, regulations, rulings, interpretations and resolutions, as well as any
custom, usage, practice or procedure, of any Exchange or any Self-Regulatory
Organization.
(f) "Self-Regulatory Organization" shall mean any commodity or securities self-
regulatory organization, including without limitation the National Futures
Association, the National Association of Securities Dealers, Inc. and the
Municipal Securities Rule making Board.
(2) APPLICABLE RULES. The Account and each transaction therein shall be subject
to this Agreement, all Regulations, and all Rules of the Exchange where executed
and any Self-Regulatory Organization, as any of the foregoing may be modified
from time to time. Customer agrees that the Company shall not be liable to
Customer for any action taken by the Company to comply with any Rules or
Regulations.
(3) RELATIONSHIP OF PARTIES. Unless the Company indicates otherwise, the
Company is acting solely as broker in any transactions made for the Customer.
The Company shall have no obligations other than to act in accordance with the
instructions of the Customer and to provide the Customer with any information
with respect to any position of the Customer (to the extent explicitly required
by law or by any applicable Rules or Regulations). The Company shall have no
obligation to effect any transaction or (except as directed by the Customer) to
close out any position in any Account.
(4) Trading Recommendations. Customer acknowledges that (a) any trading
recommendations and market or other information communicated to Customer by any
agent or employee of the Company or any affiliate of the Company does not
constitute an offer to sell or the solicitation of an offer to buy any financial
instrument, security, or Commodities; (b) any such recommendations and
information, although based upon information obtained from sources believed by
the Company to be reliable, may be incomplete, may not be verified and may be
changed without notice to Customer; (c) any such recommendations and information
will not serve as the primary basis for Customer's investment or trading
decisions; (d) the Company makes no representation, warranty or guarantee with
respect thereto or with respect to the tax consequences of Customer's
transactions; (e) the Company or one or more of its affiliates (including
employees, officers or directors of any thereof) may have positions in and may
buy or sell Commodities that are the subject of information or recommendations
furnished to Customer, and that the position or transactions of the Company or
any such affiliate may not be consistent with the information or recommendations
furnished to Customer; and (f) the Company has no responsibility for the
recommendation or action of any commodity trading advisor or other party in
connection with Customer's Accounts or any transaction therein, and Customer
retains full responsibility for all trading decisions with respect to such
Accounts.
(5) COMMISSIONS and Fees. Customer shall pay such brokerage commission rates (at
the rates in effect at time of liquidation) and such other charges as the
Company and Customer shall agree from time to time (whether or not other
customers pay lower commissions or charges) and shall pay any costs or expenses
incurred in connection with transactions in any Account, including without
limitation any taxes, transaction fees, charges, fines, penalties or other
expenses imposed by any Exchange, Self-Regulatory Organization or govenmental
authority. Debit balances in any Account will be charged with interest at a rate
equal to the prime rate as quoted by Chemical Bank from time to time and shall
be paid in full by Customer on demand.
(6) MARGINS AND PREMIUMS. Customer shall at all times pay on demand and
continuously maintain original and variation margin for Customer's Accounts in
such form and amounts as may be required by the Company in its sole discretion,
which requirements may exceed those established by Exchange Rules or for other
clients and may be changed without prior notice to Customer. Once established,
these requirements may apply to existing as well as new positions. Customer
shall also promptly pay the premium required in connection with the purchase of
any options.
(7) SECURITY. (a) As security for the timely payment and performance in full of
all obligations of Customer to the Company or any affiliate of the Company
arising in connection with any Account or transaction effected under this
Agreement, Customer hereby pledges and assigns to the Company and grants the
Company a lien on and security interest in and right of setoff against any and
all of Customer's Property in any Account or otherwise in the custody or control
of the Company or any affiliate of the Company at any time for any purpose
(whether held as margin, for safekeeping or otherwise). Customer will take such
actions and execute and deliver such documents as the Company may reasonably
require from time to time to perfect the lien and security interest granted here
under.
(b) In the event that:
(i) Customer commences a voluntary case, or an involuntary case is commenced
against the Customer, under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect. or a receiver, liquidation,
trustee, custodian, sequestrator, or other similar official is appointed or
takes possession (before or after the commencement of any such voluntary or
involuntary case) of Customer or any of its property, or Customer is
insolvent, makes a general assignment for the benefit of creditors, or
fails generally to pay debts as they become due, or any similar event shall
occur;
(ii) Customer shall take any corporate or other action to effect a dissolution,
liquidation, reorganization, winding up of its affair or any similar event;
(iii) Customer shall fail or refuse to pay margin or any other sum as and when
due pursuant to this Agreement or shall breach or default in the
performance of any other obligation of Customer under this Agreement;
(iv) the Company determines, in its sole discretion, with or without regard to
market quotations, that any collateral or margins deposited with it to
secure any Account of the Customer is inadequate and Customer shall fail
to pay additional margin or deposit additional collateral upon demand by
Company; or
(v) an attachment is levied against any Account; then and in any such event,
the Company may at its election (but need not) take any one or more of the
following actions (in addition to any other rights or remedies the Company
may have at law, in equity, under this Agreement or otherwise):
(A) sell, exercise, offset or otherwise liquidate any or all securities or
Commodities in any Account;
(B) buy in, offset or otherwise liquidate any or all securities or Commodities
short in any Account;
(C) buy or sell securities or Commodities, or enter into and or liquidate
straddle or spread positions, in order to liquidate or reduce the risk
associated with carrying any securities or Commodities long or short in any
Account;
(D) cancel any outstanding orders, close out any or all outstanding contracts,
close any Account, sell, set off against or otherwise dispose of any
Property of Customer in any Account or in the custody or control of the
Company or any affiliate of the Company (whether held as margin or for
safekeeping or otherwise) and satisfy any obligation Customer may have to
it (either directly or by way of guarantee or sure tyship) out of any such
Property or the proceeds from the sale or other disposition thereof; and
(E) exercise all rights and remedies of a secured party under the Uniform
Commercial Code and under other applicable law.
Any action referred to herein may be taken without (or following Any) demand for
margin or additional margin, without notice to Customer (or to the successors or
assigns of Customer) of sale or purchase or other notice or advertisement
(except such notice as nay be required by law) whether or not the ownership
interest shall be solely that of Customer or jointly with others (all and each
of which demands, advertisements and/or notices are hereby expressly Waived). In
all cases, a prior demand, call or notice of the time or lace of sale or
purchase shall not be considered a waiver of the company's right to sell or to
buy without demand, call or notice IS herein provided. Any purchase, sale,
offset or liquidation of securities, Commodities or other Property may be made
in any commercially reasonable manner according to the Company's judgment and in
its sole discretion either by direct sale or purchase in the same market and for
delivery in the same month, or in another market or another month, or by spread
or straddle transactions, and nay be made in its sole discretion on any Exchange
or other recognized market or elsewhere it deems appropriate. The Company will
not be liable for any losses incurred or any damages suffered y Customer in
taking any such action, whether or not any such loss or damage is occasioned by
negligence on its part or on the art of any person acting under its
instructions. In the event that the property held and applied by it pursuant to
this Agreement is insufficient for the payment in full of all liabilities of
Customer due to the Company, Customer shall remain liable for and shall promptly
pay the deficit upon demand, together with interest thereon and all costs of
collection (including legal fees and expenses).
(8) Making Delivery; Liquidation Instructions. Customer agrees
to give the Company timely notice immediately if Customer intends to make or
take delivery under a futures contract or to exercise an option contract. If so
requested by the Company, Customer shall satisfy the Company that Customer can
fulfill its obligations to make or take delivery and shall furnish the Company
with property deliverable by Customer under any contract in accordance with the
Company's directions. The Company shall not have any obligation to exercise any
long option contract unless Customer has furnished the Company with timely
exercise instructions and sufficient initial margin with respect to each
underlying futures contract. If the Company sells any property at Customer's
direction and Customer fails for any reason to supply the Company with such
property, the Company may (but shall not be obligated to) borrow or buy for
Customer any property necessary to make such delivery.
(9) Reports of Execution. Customer agrees that reports of execution of orders
sent by the Company to Customer shall be binding and conclusive on Customer
unless, in the case of an oral report, Customer objects at the time the report
is received by Customer or its agent; and in the case of a written report,
Customer objects prior to the opening of trading on the second business day
following the day Customer has received the report. In addition, if after
Customer has placed an order with the Company and has not received a written or
verbal confirmation thereof in accordance with the Company's practice, Customer
immediately shall notify the Company thereof. If Customer fails to notify the
Company as set forth in this section, Customer agrees that Customer conclusively
shall be deemed estopped to object and to have waived any objection to the
Company's execution or failure to execute any transaction. However, nothing
contained in this section shall bind either the Company or Customer with respect
to any transaction or price reported in error.
(10) Handling of Orders. The Company may use, in its sole discretion, such
equipment, methods and procedures in connection with the transmission, handling
and processing of orders from Customer as the Company may deem to be advisable.
The Company, for and on behalf of Customer, is authorized and directed in its
sole discretion to select floor brokers and, on markets where the Company is not
a clearing member, clearing brokers which will act as Customer's broker and
agent in the execution, clearing and/or carrying of transactions for Customer,
which brokers may be affiliates of the Company or may be non-affiliated agents,
and the Company shall be responsible only for using good faith and reasonable
care in the initial selection of such brokers. Unless the Company and Customer
have entered into a separate written agreement for "give-ups", the Company in
its sole discretion, may, but shall not be obligated to, accept from other
brokers contracts executed by such brokers on an Exchange for Customer and
proposed to be given-up to the Company for clearance and/or carrying in the
account.
(11) Communications; Recording AU reports of transactions, statements, notices
and other communications to Customer under this Agreement may be transmitted to
the address, telephone number, or telecopy number, specified by Customer, or to
such other address, telephone number or telecopy number, as the Customer may
thereafter specify by written notice. AU such reports, statements, notices and
other communications shall be deemed delivered when telephoned, or when
delivered in person, or when deposited in the United States mail, or when
received by a transmitting agent for telecopy or other electronic transmission,
whether or not actually received by Customer. Customer consents to the
electronic lecording of any or all telephone conversations with the Company
(without automatic tone warning devices), and the use of same in any action or
proceeding arising out of this Agreement.
(12) Currency Exchange Rates If any transaction is effected in a foreign
currency, any profit or loss arising as a result of a fluctuation in the
exchange rate affecting such currency will be entirely for the account and risk
of Customer. AU margin deposits shall be made in United States currency, unless
the Company requests any such deposit in the currency of some other country, in
which case such deposit shall be made in such currency. When any position is
liquidated, the Company shall debit or credit the account of Customer in United
States currency at the rate of exchange determined by the Company in its sole
discretion on the basis of the then prevailing money rates for such foreign
currency, unless Customer shall have given the Company specific written
instructions to make such debit or credit in the foreign currency involved.
(13) Funds on Deposit in Non-US. Banking Institutions Funds of Customer trading
on United States contract markets may be held in accounts denominated in a
foreign currency with depositories located outside the United States or its
territories if Customer is domiciled in a foreign country or if the funds are
held in connection with contracts priced and settled in a foreign currency. Such
accounts are subject to the risk that events could occur which would hinder or
prevent the availability of these funds for distribution to Customer. Such
accounts may also be subject to foreign currency exchange rate risks.
Customer authorizes the deposit of funds into such foreign depositories. For
Customer domiciled in the United States, this authorization permits the holding
of funds in regulated accounts offshore only if such funds are used to margin,
guarantee, or secure positions in such contracts or accrue as a result of such
positions.
In order to avoid the possible dilution of other Customer funds, if Customer has
funds held outside the United States, Customer further agrees that its claims
based on such funds will be subordinated in the unlikely event both of the
following conditions are met (I) Customer's futures commission merchant is
placed in receivership or bankruptcy; and (2) there are insufficient funds
available for distribution denominated in the foreign currency as to which
Customer has a claim to satisfy all claims against those funds.
Customer agrees that if both of the conditions listed above occur, Customer's
claims against the Company's assets attributable to funds held overseas in a
particular foreign currency may be satisfied out of segregated customer funds
held in accounts denominated in dollars or other foreign currencies only after
each customer whose funds are held in dollars or in such other foreign
currencies receives its pro rata portion of such funds. It is further agreed
that in no event may Customer whose funds are held overseas receive more than
its pro-rata share of the aggregate pool consisting of funds held in dollars,
funds held in the particular foreign currency, and non-segregated assets of the
Company.
(14) Emergency Actbns In addition to any other rights and remedies the Company
may have under tbis Agreement, any Regulations or any Rules, the Company is
authorized to take such steps as it, in its sole discretion, considers necessary
or appropriate in the event any Exchange, Self-Regulatory Organization or
governmental authority orders emergency or other action, including without
limitation steps to liquidate securities Commodities or other Property carried
in an Account of the Customer or transferring any such securities, Commodities
or other Property of the Customer to another firm.
(15) Position Limits The Company at any time upon notice to customer in its sole
discretion may limit the number of positions which Customer may maintain or
acquire through the Company and may decline to accept any orders or exercise
notices, require that positions in Customer's Accounts be transferred to another
firm and liquidate any such positions not so transferred pon demand. Customer
agrees not to exceed any position limits established by the CFTC or any
Exchange, whether acting alone or with others, and to promptly advise the
Company if Customer is required to file any reports on positions.
(16) Customer Representation, Warranties and Agreements. Customer represents and
warrants to and agrees with the Company that:
(a) Customer has full power and authority to enter into this Agreement and to
engage in the transactions and perform its obligations hereunder and
contemplated hereby; the execution, delivery and performance of this
Agreement by Customer requires no action by or in respect of or filing with
any governmental body, agency or official and does not and will not violate
a Customer's charter or by-laws (or other comparable governing document) or
any law, rule, regulation, judgment, decree, order or agreement to which
Customer or its property is subject or bound; and Customer (i) if a
corporation, is duly organized under the laws of its jurisdiction of
incorporation or (ii) if a partnership, is duly organized pursuant to a
written partnership agreement and the general partner executing this
Agreement is duly authorized to do so under the partnership agreement;
(b) Neither Customer nor (if Customer is other than an individual) any partner,
director, officer or employee of Customer nor any affiliate of Customer is
a partner, officer, director, or employee of a futures commission merchant,
introducing
broker, Exchange or Self-Regulatory Organization or an employee or
commissioner of the CFTC, except as previously disclosed in writing to the
Company;
(c) Except as disclosed in writing to the Company, (i) customer is not a
commodity trading advisor or a commodity pool operator or is exempt from
registration under the rules of the CFTC and (ii) Customer is acting solely
as principal and no one other than Customer has any interest in any Account
of Customer, and
(d) Customer has furnished true, complete and correct information concerning
the Account and its financial condition, shall advise the Company of any
material change in its financial condition and agrees that the Company may
cause an investigation to be made concerning its credit standing and
reputation;
(17) CFIC Regulations. Customer is aware that CFTC Regulation 1.35(a-2X2)
requires Customer to create, retain and produce upon the request of the CFTC,
the United States Department of Justice and the applicable exchange
documentation of cash transactions underlying exchanges of futures for cash
commodities or exchanges of futures in connection with cash commodity
transactions and, if Customer effects any such exchange of futures, it will
fully comply with Regulation 1.35(a-2X2). If Customer maintains separate
Accounts in which, pursuant to CFTC Rule I .46(d)(6), offsetting positions are
not closed out, Customer understands at, if held open, offsetting long and short
positions in the separate Accounts may result in the charging of additional
margins although offsetting positions will result in no additional market gain
or loss. If a foreign person, Customer acknowledges being informed by the
Company that (i) CFTC Regulation 15.05 designates a futures commission merchant
("FCM") such as the Company, as the agent of foreign brokers, customers of
foreign brokers, and foreign traders for certain purposes, and (ii) CFTC
Regulation 21.03 authorizes the CFTC to request, when unusual market
circumstances exist, certain account information from domestic FCM's as well as
foreign brokers and traders.
(18) Extraordinary Events. Customer Shall have no claim against the Company or
any of its Affiliates for any loss, damage, liability, cost, charge, expense,
penalty, fine or tax caused directly or indirectly by (a) any law, Regulation,
Rule or court order, (b) suspension or termination of trading, (c) war, civil or
labor disturbance, (d) delay or inaccuracy in the transmission or reporting of
orders due to a breakdown or failure of transmission or communication failities,
(e) failure or delay for any reason of any broker selected by the Company on
behalf of Customer to fulfill its obligations or to pay in full amounts owed to
the Company in respect to contracts, (f) failure or delay by any Exchange to
enforce its rules or to pay to the Company any margin due in respect of
customers account, (g) failure or delay by any entity which, consistent with
Regulations, is holding customer segregated funds, securities or other property,
to pay or deliver same to the Company or (h) any other causes beyond the
Company's control.
(19) Indemnification. Customer hereby agrees to pay, indemnify the Company, its
affiliates and their respective shareholders, directors, officers, employees and
agents against, and hold each of the foregoing harmless from, any liability,
cost or expense (including without limitation reasonable legal fees and
expenses, amounts paid in settlement of any claims, interest and any fines or
penalties imposed by any Exchange, Self-Regulatory Organization or governmental
agency) any of them may incur or be subjected to with respect to any Account of
Customer or any transaction or position therein, or as a result of any violation
by Customer of any of its obligations under this agreement Customer shall pay on
demand any cost of collection incurred in collecting any sums owing by Customer
under this Agreement and any cost incurred by any of the foregoing in
successfully defending against any claims asserted by Customer, in each case
including without limitation reasonable legal fees and expenses.
(20) Introducing Broker. Customer understands that a party who introduces a
customer to an FCM or who places orders on behalf of such customer may be deemed
to be the "agent" of that FCM and in such situation, as a matter of law, such
FCM may be liable to such customer for any acts and/or omissions of such party.
Customer expressly agrees to waive any and all claims, rights or causes of
action which Customer has or may have against the Company and its officers
employees and agents arising in whole or in part directly or indirectly, out of
any act or omission of such party.
(21) Automated Trading. The Company, on behalf of Customer, is authorized and
empowered to place orders through one or more elec- tronic automated trading
systems (each a "System") maintained or operated by an Exchange. In
consideration of the Company making one or more Systems, including without
limitation GLOBEX services, available, in whole or in part directly or
indirectly, to Customer, Customer agrees that neither the Company, any Exchange,
the Chicago Mercantile Exchange ("CME"), the Board of Trade of the City of
Chicago ("CBOT"), any other exchange whose products may be traded on the GLOBEX
System, the GLOBEX Joint Venture, L.P. ("JV"), P-M-T Limited Partnership, Ceres
Trading Limited Partnership, GLOBEX Corporation Reuters America Inc., nor any
other entities controlling, controlled by or under common control with such
entities, nor their respective directors, officers or employees, shall be liable
for any losses damages, costs or expenses (including, but not limited to, loss
of profits loss of use, incidental or consequential damages), regardless of the
cause, arising from any fault delay, omission, inaccuracy or termination of
services on any Systems or the inability to enter, alter, cancel or modify
orders, or any other cause in connection with the furnishing, performance,
maintenance, or use of or capability to use all or any part of a system, the
GLOBEX System, or any JV, CME or CBOT facility or service and Customer agrees
not to assert any claims against any of there foregoing with respect thereto.
The provisions of this section shall apply regardless of whether Customer's
claim arises in contract negligence, tort strict liability, breach of fiduciary
obligation or otherwise.
(22) jurisdiction, Venue, Waiver of Jury Trial In any action or proceeding with
respect to this Agreement which is not subject to arbitration as provided in the
annexed Arbitration Agreement Customer hereby submits and agrees to the
jurisdiction and venue by the federal, state and local courts in the Borough of
Manhattan, City and State of New York, waives any and all objections to personal
jurisdiction and agrees that process may be served on Customer in any such
action or proceeding by United States registered mail directed to the Customer
at the address referred to in section 11 or in accordance with the provision of
any law or fees applicable to the court in which such action or proceedings is
brought with respect to service of process on non-residents. The Customer hereby
waives trial by jury in any such action or proceeding under this Agreement.
(23) Termination. This Agreement may be terminated by either party at any time
by written notice to the other, provided, however that any such termination
shall not affect any transactions theretofore entered into and shall not relieve
either party of any obligations in connection with any debit balance or credit
balance or other liability or obligation accruing prior to such termination.
(24) Miscellaneous. (a) No provisions in this Agreement shall in any respect be
waived or amended, except in writing signed by the party charged with such
waiver or amendment, or by written notice delivered by the Company to Customer.
If after such delivery Customer places an order or gives instructions with
respect to the account no waiver or amendment of this Agreement may be implied
from any course of dealing between the parties.
(b) This Agreement and the documents annexed hereto constitute the entire
agreement between the parties. Customer has not relied on any statements,
representations, or understandings not set forth therein.
(c) This Agreement shall be construed in accordance with the laws of the State
of New York without giving effect to principles of conflicts of law. If any term
or provision of this agreement or the application thereof to any person or
circumstance, shall be held invalid or unenforceable by any court Exchange,
Self-Regulatory Organization, arbitrator or arbitration panel, the remainder of
this Agreement, or the application of such Provision to other persons or
circumstances, shall not be affected thereby.
(d) This Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, personal representatives, successors and
assigns. This Agreement shall be continuous and shall cover each and every
account which Customer may open or reopen with the Company and each and every
transaction effected or position carried by the Company with or for Customer.
(e) No waiver of any breach of or default under any provision of this
Agreement shall be deemed to constitute a waiver of a breach of or default under
any other provision of this Agreement or of any other breach of or default under
the same provision. Any failure on the Company's part to exercise any right
privilege or remedy under this Agreement or applicable laws, Regulations or the
Rules of any Exchange or Self-Regulatory Organization, and any waiver by the
Company of the exercise of any such right privilege or remedy at any time or
with respect to any event shall not constitute a waiver of its right to exercise
that or any other right privilege or remedy at any other time or with respect to
any other event and shall not give rise to any right privilege or remedy on the
part of Customer, it being understood that such rights, privileges and remedies
are for the Company's protection. Without limiting the generality of the
foregoing, it is understood that the Company's granting Customer an extension
of time to meet a demand for margin on any occasion or series of occasions shall
not entitle Customer to any other extensions of time with respect to any other
demands for margin on any other occasion.
CUSTOMER NAME: ______________________________________
SIGNATURE: ______________________________________
PRINT NAME TITLE: ______________________________________
DATE: ______________________________________
CORPORATE COMMODITY CLIENT AGREEMENT
In consideration of your accepting its account and your agreement to act as its
broker and/or dealer, the Undersigned Corporation agrees to the following
with respect to any of its accounts with Lehman Brothers Inc. ("LB" or "Lehman")
for the purchase and sale of commodities, contracts for the future delivery
thereof, commodity options and forward commodity and foreign exchange contracts:
1. All transactions for its accounts shall be subject to the regulations of all
applicable federal, state and self-regulatory agencies, domestic and foreign,
including but not limited to the exchanges and the constitution, rules and
customs, as the same may be constituted from time to time, of the exchange or
market (and their clearing associations, if any) where executed. Actual
deliveries are intended on all transactions. This paragraph is solely for your
protection and your failure to comply with any such constitutions, regulations,
rules and/or customs shall not be a breach of this agreement and shall not
relieve the Corporation of any of its obligations under this agreement. The
Corporation also agrees not to exceed any applicable position limits set by any
government agency as well as limits established by any foreign or domestic
exchanges and boards of trade (hereinafter "exchanges") for its own account,
acting alone or in concert with others, and to promptly advise LB if it is
required to file reports of its commodity positions with the Commodity Futures
Trading Commission (CFTC) or any exchange. The Corporation represents that it is
the sole owner of its accounts and that no person other than you has any
interest therein. The Corporation agrees to notify you of the identity of any
other person who controls the trading of the account, has a financial interest
of 10% or more in the account or the identity of any other account in which the
Corporation has a 10% ownership interest. The Corporation shall maintain its
accounts in accordance with and shall be solely responsible for compliance with
the rules, regulations and/or guidelines issued by any federal, state or
administrative bodies having oversight or regulatory authority over its
activities, and any statutes governing its activities.
2. The word "property" herein means securities of all kinds, monies, options,
commodities, and contracts for the future delivery of, or otherwise relating to,
commodities or securities and all property, including, but not limited to,
property customarily dealt in by brokerage firms.
3. The Corporation understands that you have, at your discretion, the right to
limit positions in its accounts, to decline to accept any orders and to require
that its accounts be transferred to another firm or be closed. The Corporation
understands that if it does not promptly transfer its positions upon your demand
you have the right to liquidate positions in its accounts at your discretion.
The Corporation understands that you act as agent and not as principal for your
customers' commodity futures and commodity options transactions which are
effected on exchanges. Consequently, you do not guarantee the performance of the
obligations of any party to the futures or options contracts purchased and/or
sold by your customers. The Corporation understands you may, and generally do
act as principal in cash, forward and foreign commodity transactions.
4. Any property belonging to the Corporation or in which it has an interest held
by you or any of your subsidiaries or affiliates or carried in any account shall
be subject to a general lien and security interest for the discharge of its
obligations to you, wherever or however arising and without regard to whether or
not you have made advances with respect to such property, and you are hereby
authorized to sell and/or purchase any and all such property without notice to
satisfy such general lien and security interest. The Corporation irrevocably
appoints you as its attorney-in-fact with power of substitution to execute any
documents for the perfection or registration of such general lien and security
interest.
5. The Corporation agrees to maintain such collateral and/or margin as you may
from time to time in your discretion require and to pay immediately on demand
any amount owing with respect to any of its accounts. Against a "short" position
in any commodity contract, prior to the maturity thereof, the Corporation will
give you instructions to cover or furnish you with all necessary delivery
documents, and in default thereof, you may, without demand or notice, cover the
liability in the manner deemed most appropriate by you, or if an order to buy in
such contracts cannot, or should not in your sole judgment, be executed under
prevailing conditions, you may procure the actual commodity and either make
delivery thereof upon any terms or take any other action you deem appropriate.
If it fails to remit delivery documents in a timely manner, the Corporation also
understands that it will be responsible for substantial penalties and late
charges which may be assessed against you or it pursuant to the rules of the
particular exchange.
In the event the Corporation fails to deposit sufficient funds to pay for any
commodities, commodity options, commodity futures contracts, forward commodity
and foreign exchange contracts and/or to satisfy any demands for original and/or
variation margin, or whenever in your discretion you consider it necessary, you
may, without prior demand or notice, when and if you deem appropriate
notwithstanding any rule of any exchange, liquidate the positions in its
account, hedge and/or offset those positions in the cash or other market or
otherwise, sell any property belonging to the Corporation or in which it has an
interest, cancel any open orders for the purchase and sale of any property, and
you may borrow or buy any property required to make delivery against any sales,
including a short sale, effected for it, all at its sole risk. Such sale or
purchase may be public or private and may be made without advertising or notice
to the Corporation and in such manner as you may in your discretion determine,
and no demands, tenders or notices which you make or give shall invalidate its
aforesaid waiver. At any such sale you may purchase the property free of any
right of redemption aNd the Corporation agrees not to make any claim against
you concerning the manner of sale or timing thereof. The proceeds of such
transactions are to be applied to reduce any indebtedness owing to you.
The Corporation acknowledges that it shall be liable for all losses whether or
not the account is liquidated and for any debts and deficiencies in its accounts
including all debts and deficiencies resulting from a liquidation of its
account.
6. The Corporation agrees to pay storage and delivery charges and service fees
charged to its accounts. The Corporation also agrees to pay interest charges
upon its accounts at the prevailing and/or allowable rates according to the laws
of the State of New York, as determined by you at the time of the acceptance of
this agreement in your New York office and thereafter for any advances, loans,
debts, as well as on the amount of variation margin calls until the satisfaction
of such calls where the account uses U.S. Treasury bills for original margin
purposes. The Corporation understands you retain as your own any interest,
increment, profit, gain or benefit, direct or indirect, resulting from or
relating to the investment of funds held in commodity customer segregated
accounts, non-regulated accounts, and foreign futures and foreign options
secured amount accounts.
The Corporation understands that you charge commissions for execution of
transactions which commissions are charged upon each transaction except for
commodity futures transactions, for which commissions are generally charged upon
liquidation. Commission rates shall be those prevailing at the time commissions
are charged. Commission rates may be changed from time to time without notice to
the Corporation and it agrees to be bound thereby.
7. This agreement shall be binding upon the Corporation, its successors and
assigns and in the event of dissolution, liquidation, bankruptcy or any similar
act, you may cancel or complete any open orders for the purchase
1
or sale of any property; you may place orders for the sale of property which
you may be carrying for it and for which payment has not been made; or buy any
property of which its accounts may be short, or any part thereof, under the same
terms and conditions as hereinabove stated, as though the Corporation was still
in existence, without prior notice to its successors and assigns, and without
prior demand upon any of them.
8. Written confirmation of actual transactions and/or orders, purchase and sales
notices, correction notices and statements of its accounts shall be conclusive
if not objected to in writing within seven days after mailing by you to the
Corporation. In the event the Corporation fails to receive any such
confirmations or notices for its account within ten days from the date of a
transaction in its account, the Corporation agrees to notify you immediately in
writing. Communications mailed to it at the address specified hereon shall,
until you have received notice in writing of a different address, be deemed to
have been personally delivered to it and the undersigned agrees to waive all
claims resulting from failure to receive such communications.
9. The Corporation understands that you are not responsible for any losses
resulting directly or indirectly from any government restriction, exchange
ruling, suspension of trading, actions of independent floor brokers or other
persons beyond your control, war, strike, national disaster or computer hardware
or software malfunction, delay in mails or any other delay or inaccuracy in the
transmission of orders or other information because of a breakdown or failure of
transmission or communication facilities. Commodity information, all price
quotations or trade reports given to it are also subject to change and errors as
well as delays in reporting and the Corporation acknowledges that reliance upon
such information is at its own risk. The Corporation understands that it is
bound to the actual executions of transactions on the exchanges and that you are
not bound by erroneous reports of executions, prices or quantities transmitted
to it.
10. The Corporation understands that you may act as a dealer or broker in the
purchase and sale of gold and silver bullion and other precious and non-ferrous
metals ("metals"), and that you will inform the Corporation of the capacity in
which you are acting on any particular transaction upon its request. If you act
as broker, the Corporation understands that you do not warrant the authenticity
of metals.
In the event the Corporation asks you to store metals rather than to carry them
on an unallocated basis it understands that its metals will be placed in a
depository selected by you and may be commingled with your own metals and those
of other customers. All taxes, postage, shipping, insurance expenses and storage
fees will be the Corporation's responsibility. The Corporation agrees to
promptly pay for the metals purchased and promptly ship conforming metals sold
pursuant to instructions from you.
11. The Corporation acknowledges that you are hereby specifically authorized,
for your account and benefit, from time to time and without notice to it, either
separately or with others, to lend, pledge, repledge, hypothecate or
rehypothecate, either to yourself or to others, any and all property (including
but not limited to metals, warehouse receipts, securities or other negotiable
instruments) held by you in any of its accounts and you shall not at any time be
required to deliver to it such identical property but may fulfill your
obligations by delivery of property of the same kind and amount.
12. If the Corporation initiates a commodity contract on an exchange where such
transaction is effected in a currency other than U.S. dollars, any profit or
loss from a fluctuation in the exchange rate of such currency will be for its
account and risk. Unless the Corporation gives you contrary written instructions
you will debit and credit its account, after such a contract is liquidated, in
U.S. dollars at an exchange rate determined by you in your discretion based on
prevailing money markets. It agrees to make all margin deposits in U.S. dollars
unless you in your discretion require otherwise. Unless the Corporation
instructs you otherwise, monies it deposits with you in currency other than U.S.
dollars and unrealized profits in currencies other than U.S. dollars, are not
intended to margin, guarantee or secure transactions on United States contract
markets.
13. If a provision herein is or becomes inconsistent with any law or regulation
of any government or a regulatory body having jurisdiction, the provision shall
be deemed to be rescinded or modified in accordance with any such law or
regulation. In all other respects, this agreement shall continue and remain in
full force and effect.
Your failure to insist at any time upon strict compliance with this agreement or
with any of its terms or any continued course of such conduct on your part shall
not constitute or be a waiver by you of any of your rights.
14. If the Corporation's account has been introduced to you and is carried by
you only as a clearing broker, the Corporation agrees that you are not
responsible for the conduct of the introducing broker and your sole
responsibilities relate to the execution, clearing and bookkeeping of
transactions in the account.
15. This agreement is governed by the laws of the State of New York without
reference to the conflicts of law provisions thereof. The Corporation agrees
that you may, in your sole discretion, initiate proceedings in the courts of any
jurisdiction in which the Corporation is resident or in which its assets are
situated. In any legal action pemmitted by or against the Corporation, the
Corporation agrees that the United States courts sitting in the State of New
York shall have jurisdiction over it, and that the venue of any such action
shall be the Southern District of New York. The Corporation hereby waives any
objection to such jurisdiction and venue.
16. Any modifications of this agreement must be in writing and accepted by an
authorized officer of LB in writing and no other employee of LB is authorized to
make any representations contrary to the terms of this agreement.
17. CFTC REG. (S)15.05 - DESIGNATION OF LB AS AGENT OF REIGN BROKERS, CUSTOMERS
OF HREIGN BROKERS AND REIGN TRADERS; AND REG. (S)21.03 SELECTED SPECIAL CALLS -
DUTIES OF HREIGN BROKERS, DOMESTIC AND FOREIGN TRADERS, FUTURES COMMISSION
MERCHANTS AND CONTRACT MARKETS.
If the Corporation is a foreign trader or foreign broker it understands that
pursuant to CFTC Regulation 15.05, you are its agent (and in the case of a
foreign broker the agent of its customers) for purposes of accepting delivery
and service of any communications issued by the CFTC with respect to any futures
or options contracts which are or have been maintained in accounts carried
byyou. Service or delivery of any such communication shall constitute valid and
effective service or delivery upon the Corporation (and if it is a foreign
broker, upon its customers). The Corporation understands that said regulation
requires you to transmit the communication promptly to it (or its customer) in a
manner which is reasonable under the circumstances or specified by the CFTC. The
Corporation also understands CFTC Regulation 21.03 requires it to provide to the
CFTC upon special call, market information concerning its options and futures
trading (or its customers') as outlined in the regulation. If the Corporation
fails to respond to the special call, the CFTC may direct the appropriate
contract market and all brokers to prohibit further trades for or on its behalf
(or for its customers) in the contract specified in the call unless such trades
offset existing open contracts. Special calls are made where the information
requested would assist the CFTC in determining whether a threat of market
manipulation, corner, squeeze or other market disorder existed. Under Regulation
21.03(9) if the Corporation believes it is aggrieved by the action taken by the
CFTC it shall have the opportunity for a prompt hearing after the Commission
acts. (The Corporation understands that copies of Reg. (S)15.05 and (S)21.03 are
available from any LB Investment Representative.)
Acknowledgement of Separate Risk Disclosure Statement and Corporate Commodity
Client Agreement
[ ] BY CHECKING THIS BOX, THE CORPORATION HEREBY ACKNOWLEDGES THAT IT HAS
RECEIVED A SEPARATE RISK DISCLOSURE STATEMENT REQUIRED BY CFTC REGULATION
(S)1.55 PRIOR TO THE OPENING OF THIS ACCOUNT AND UNDERSTANDS IT.
THE CORPORATION AREES TO THE TERMS AND CONDITIONS OF THE "COMMODITY CLIENT
AGREEMENT" AND AUTHORIZES YOU TO OPEN A COMMODITY ACCOUNT IN THE NAME OF SAID
CORPORATION.
Date:_____________________ Signature:________________________________________
Address:_________________________________ Title/Position_____________________
-----------------
LISTED DERIVATIVES GROUP
FUTURES CUSTOMER AGREEMENT
This Futures Customer Agreement ("Agreement") between CS First Boston and the
customer named below ("Customer") shall govern the purchase and sale by, CS
First Boston of futures contracts and options thereon (collectively,
"Contracts") for the account and risk of Customer through one or more accounts
carried by CS First Boston on behalf and in the name of Customer (collectively,
the "Account").
1. APPLICABLE LAW.
The Account and all transactions and agreements in respect of the Account shall
be subject to all applicable Federal, state, exchange, clearing house and self-
regulatory agency, rules, regulations and interpretations and custom and usage
of the trade. All such rules, regulations, interpretations, custom and usage are
hereinafter collectively referred to as "Applicable Law." (Please refer to
Section 8, paragraph (h) of this Agreement.) Provisions contained in and
remedies provided by this Agreement which are additional to or more expansive
than any provisions contained in or remedies provided by any other agreement
with customer (including, without limitation, provisions or remedies that cover
the same subject matter) shall not be deemed to be in conflict with each other,
and all such provisions and remedies shall be applicable and available.
2. CUSTOMER'S REPRESENTATIONS AND WARRANTIES.
Customer represents and warrants that (a) Customer has full right, power and
authority, to enter into this Agreement, and the person executing this Agreement
on behalf of Customer is authorized to do so; (b) this Agreement is binding on
Customer and enforceable against Customer in accordance with its terms; (c)
Customer may, lawfully establish and open the Account for the purpose of
effecting purchases and sales of Contracts through CS First Boston; (d) Customer
has determined that trading in futures contracts is appropriate for customer, is
prudent in all respects and transactions entered into pursuant to this Agreement
will not violate any applicable law (including any Applicable Law) to which
Customer is subject or any agreement to which Customer is subject or a party;
(e) all information provided by Customer in the Account Application preceding
this Agreement (which Application and the information contained therein hereby
is incorporated into this Agreement) is true and correct and Customer shall
immediately (and in no event later than within one business day) notify CS
First Boston of any change in such information; (f) Customer understands that CS
First Boston acts as agent, and not as principal, in the execution of futures
contracts; (g) except as disclosed in writing to CS First Boston, Customer is
acting solely as principal and not as agent for any other party and no other
customer has any interest in Customer's Account; (h) any trading recommendations
and market or other information communicated to Customer by CS First Boston,
although based upon information obtained from sources believed by CS First
Boston to be reliable, may be incomplete, may not be verified, may be changed
without notice to Customer, and CS First Boston makes no representation,
warranty or guarantee as to the accuracy or completeness of any such information
or recommendation; and (i) Customer expressly, agrees to waive any and all
claims, rights or causes of action which Customer has or may have against CS
First Boston and its officers, employees and/or agents arising in whole or in
part, directly or indirectly, out of any act or ommission of a party who refers
or introduces Customer to CS First Boston or who places orders on behalf of
Customer.
------------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS
-----------------
LISTED DERIVATIVES GROUP
3. PAYMENT OBLIGATIONS OF CUSTOMER.
Customer shall immediately pay CS First Boston upon demand (a) all brokerage
charges, giveup fees, commissions and service fees as CS First Boston may from
time to time charge; (b) all contract market, clearing house, NFA or clearing
member fees or charges or any other regulatory fees and service charges incurred
with respect to each transaction; (c) any tax imposed on such transactions by
any competent taxing authority; (d) the amount of any trading losses in the
Account; (e) any debit balance or deficiency in the Account; (f) any advances
made by CS First Boston to or for the benefit of Customer, (g) any obligation of
Customer to CS First Boston incurred in respect of a trade executed in
connection herewith, (h) interest on any debit balances or deficiencies in the
Account, at the overnight rate customarily charged by CS First Boston, together
with costs and reasonable attorneys' fees incurred in collecting any such debit
balance or deficiency; and (i) any other amounts owed by Customer to CS First
Boston with respect to the Account or any transactions therein.
4. CUSTOMER'S EVENTS OF DEFAULT: CS FIRST BOSTON'S REMEDIES.
(a) Events of Default. As used herein, each of the following shall be deemed an
"Event of Default": (i) the commencement of a case under any Federal or
state bankruptcy, insolvency or reorganization law or other law for the
protection of creditors, or the filing of a petition for the appointment of
a receiver, liquidator, trustee, conservator, or custodian by or against
Customer, an assignment made by Customer for the benefit of creditors, an
admission in writing by Customer that it is insolvent or is unable to pay
its debts when they mature, or the suspension by the Customer of its usual
business or anv material portion thereof; (ii) the issuance of any warrant
or order of attachment against the Account or the levy of a judgment against
the Account; (iii) any representation or warrant, made by Customer was
incorrect or untrue in any material respect when made or repeated or deemed
to have been made or repeated, (iv) if Customer states that it will not
perform any obligation to CS First Boston under this Agreement or in
connection with any trades executed by CS First Boston on Customer's behalf,
(v) if CS First Boston believes that it may be unable to apply, without
delay property that it is holding or expects to receive from Customer
against any obligations to CS First Boston under this Agreement or in
connection with any trades executed by CS First Boston on Customer's behalf,
(vi) if Customer fails upon demand by CS First Boston to satisfy any debit
balance in its account that remains outstanding for one business day or
more, (vii) if Customer is an individual, Customer dies or is judicially
declared incompetent, (viii) if Customer is an employee benefit plan, the
termination of Customer or the filing by Customer of a notice of intent to
terminate with a governmental agency or body, or the receipt of a notice
of intent to terminate Customer from a governmental agency or body, or the
inability of Customer to pay benefits under the relevant employee benefit
plan when due; (ix) the failure by Customer to deposit or maintain margins
as required by CS First Boston with or without a prior demand for such
margin by CS First Boston, to pay required premiums, or to make payments
upon demand as required by Section 3 hereof; or (x) the failure by Customer
to perform, in any material respect, its obligations hereunder.
(b) Remedies. Upon the occurrence of an Event of Default, or in the event
Customer fails to honor a margin request within one business day, or as
short a period of time as CS First Boston shall advise Client, of the
request being made, or in the event CS First Boston, in its sole and
absolute discretion, considers it necessary for its protection, CS First
Boston shall have the right, in addition to any other remedy available to CS
First Boston at law or in equity, and in addition to any other action CS
First Boston may deem appropriate under the
-----------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS
-------------------------
Listed Derivatives Group
circumstances, to cancel or liquidate at any time deemed appropriate by CS First
Boston any or all open Contracts held in or for the Account, sell any or all of
the securities or other property of Customer held by CS First Boston whether or
not the ownership interest shall be solely Customer's or held jointly with
others and to apply the proceeds thereof to any amounts owed by Customer to CS
First Boston, borrow or buy any options, securities, Contracts or other property
for the Account and immediately cancel any unfilled orders for the purchase or
sale of Contracts for the Account, or take such other or further actions CS
First Boston, in its reasonable discretion, deems necessary or appropriate for
its protection, all without demand for margin and without notice or
advertisement. Any such action may be made at the discretion of CS First
Boston. All purchases or sales pursuant to this Section 4 may be effected in
public or private purchases in whatever manner and with whichever party CS First
Boston deems appropriate and at such price(s) as CS First Boston may deem
satisfactory. In the event CS First Boston's position would not be jeopardized
thereby, CS First Boston will make reasonable efforts under the circumstances to
notify Customer prior to taking any such action, except that Customer agrees
that CS First Boston or the failure to previously enforce any provision of this
Agreement shall have the right to take any, and all action pursuant to this
Section 4 without any notice of default, demand for margin or additional margin,
notice to Customer of sale or purchase, or other notice or advertisement. A
prior demand or margin call of any kind from CS First Boston or prior notice
from CS First Boston or the failure to previously enforce anv provision of this
Agreement shall not be considered a waiver of CS First Boston's right to take
any, action as described herein without notice or demand. In the event CS First
Boston exercises and, remedies available to it under this Agreement, Customer
shall reimburse, compensate, indentify, defend and hold harmless CS First
Boston for any and all costs, losses, penalties, fines, taxes and damages that
CS First Boston may incur, including reasonable attorneys, fees incurred in
connection with the exercise of its remedies and the recovery of any such costs,
losses, penalties, fines, taxes and damages.
5. LIMITATION OF LIABILITY.
CS First Boston shall have no responsibility or liability to Customer hereunder
(i) in connection with the performance or non-performance by any contract
market, clearing house, clearing firm or other third party (including floor
brokers and banks) to CS First Boston of its obligations in respect of any
Contract or other property of Customer, in particular CS First Boston shall not
be liable to Customer if any such third party makes an error in filling orders
or fails to fill an order for Customer; (ii) as a result of any prediction,
recommendation or advice made or given by a representative of CS First Boston
whether or not made or given at the request of Customer; (iii) as a result of CS
First Boston's reliance on any instructions, notices and con-Lmunications that
it believes to be that of an individual authorized to act on behalf of Customer;
(iv) as a result of any delay in the performance or non-performance of any of CS
First Boston's obligations hereunder directly or indirectly caused by the
occurrence of any contingency beyond the control of CS First Boston including,
but not limited to, the unscheduled closure of an exchange or contract market or
delays in the transmission of orders due to breakdowns or failures of
transmission or communication facilities, execution, and/or trading facilities
or other systems (including, without limitation, GLOBEX, ACCESS, or other
electronic trading systems, facilities or services), it being understood that CS
First Boston shall be excused from performance of its obligations hereunder for
such period of time as is reasonably necessary after such occurrence to remedy
the effects therefrom; (v) as a result of any action taken by CS First Boston or
its floor brokers to comply with Applicable law; (vi) as a result of any actions
taken by CS First Boston in connection with the exercise of the available
remedies pursuant to Section 4; or (vii) for any acts or omissions of those
neither employed nor supervised by CS First Boston. CS First Boston shall
------------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS
- -------------------------
LISTED DERIVATIVES GROUP
not be responsible for any loss, liability, damage or expense except to the
extent that such loss, liability, damage or expense arises from its gross
negligence or willful misconduct. In no event will CS First Boston be liable to
Customer for consequential, incidental or special damages hereunder.
6. GENERAL AGREEMENTS. The parties agree that:
(a) CS FIRST BOSTON'S RESPONSIBILITY. CS First Boston is not acting as a
fiduciary, foundation manager, commodity pool operator, commodity trading
advisor or investment advisor in respect of any Account opened by Customer.
CS First Boston shall have no responsibility hereunder for compliance with
any law or regulation governing the conduct of fiduciaries, foundation
managers, commodity pool operators, commodity trading advisors or
investment advisors.
(b) ADVICE. All advice or market information communicated by CS First Boston
with respect to any Account opened by Customer hereunder is incidental to
the conduct of CS First Boston's business as a futures commission
merchant and such advice or information does not constitute an offer to buy
or sell or the solicitation of an offer to buy or sell any contract and
will not serve as the primary basis for any decision by or on behalf of
Customer. CS First Boston shall have no discretionary authority, power or
control over any decisions made by or on behalf of Customer in respect of
the Account, regardless of whether Customer relies on the advice of CS
First Boston in making any such decision. Customer acknowledges that CS
First Boston and its managing directors, officers, employees and affiliates
may take or hold positions in, or advise other customers concerning,
contracts that are the subject of advice from CS First Boston to Customer.
The positions and advice of CS First Boston and its managing directors,
officers, employees and affiliates may be inconsistent with or contrary to
positions of, and the advice given by, CS First Boston to Customer.
(c) RECORDING. CS First Boston, in its sole and absolute discretion, may
record, on tape or otherwise, any telephone conversation between CS First
Boston and Customer involving their respective officers, agents and
employees, and Customer hereby agrees and consents thereto.
(d) ACCEPTANCE OF Orders; POSITION LIMITS.
(i) CS First Boston shall have the right, whenever in its discretion it
deems such action necessary or desirable, to limit the size of open
positions (net or gross) of Customer with respect to the Account at
any time and to refuse acceptance of orders to establish new
positions, whether such refusal, reduction or limitation is required
by, or based on position limits imposed under, Applicable Law. CS
First Boston shall immediately notify Customer of its rejection of any
order. Unless specified by Customer, CS First Boston may designate the
exchange or other markets (including, without limitation, GLOBEX or
ACCESS) on which it will attempt to execute orders to notify CS First
Boston promptly if Customer is required to file such reports, and
(ii) Customer shall comply with all position limit rules and shall file or
cause to be filed all applications or reports required under
Applicable Law with the CFTC or the relevant contract market or
clearing house, and shall provide CS First Boston with a copy of such
applications or reports and such other information as CS First Boston
may reasonably request in connection therewith.
------------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS 4
- ------------------------
LISTED DERIVATIVES GROUP
(e) ORIGINAL AND VARIATION MARGIN; PREMIUMS; OTHER CONTRACT Obligations.
Customer shall make, or cause to be made, all applicable original margin,
variation margin, intra-day margin, additional margin and premium payments,
and perform all other obligations attendant to transactions or positions in
such Contracts, as may be required by Applicable Law or by CS First Boston,
in its sole discretion. Requests for margin deposits and/or premium payments
may, at CS First Boston's election, be communicated to Customer orally,
telephonically or in writing. Customer margin deposits and/or premium
payments shall be made by wire transfer to CS First Boston's Customer
Segregated Account and shall be in U.S. dollars unless CS First Boston
specifically requests otherwise. Any outstanding debit balances in the
Customer Accounts shall accrue interest, in accordance with CS First
Boston's usual custom, at a rate permitted by the laws of the State of New
York. Any such interest unpaid at the end of a charge period (such period
being determined by CS First Boston from time to time in its sole
discretion) will be added automatically to the opening balance in such
Customer Accounts for the next charge period.
(f) SECURITY INTEREST AND RIGHTS RESPECTING COLLATERAL. Except to the extent
proscribed by Applicable Law not subject to waiver, all Contracts, cash,
securities, and/or any other property of Customer (either individually or
jointly held with others) whatsoever (collectively, the "Collateral") at any
time held by CS First Boston or its affiliates, or carried by others for the
Account, hereby are pledged to CS First Boston and shall be subject to a
general lien and security interest in CS First Boston's favor to secure any,
indebtedness or other amounts, obligations and/or liabilities at any time
owing from Customer to CS First Boston (collectively, the "Customer's
Liabilities"). Customer hereby grants CS First Boston the right to borrow,
pledge, repledge, hypothecate, rehypothecate, loan or invest any of the
Collateral, including utilizing the Collateral to purchase United States
Government Treasury obligations pursuant to repurchase agreements or reverse
repurchase agreements with any party, in each case without notice to
Customer, and without any obligation to pay or to account to Customer for
any interest, income or benefit that may, be derived therefrom. The rights
of CS First Boston set forth above shall be qualified by any applicable
requirements for segregation of customers'property under Applicable Law.
(g) REPORTS AND Objections. All confirmations, (purchase and sale notices,
correction notices) and account statements (collectively, "Statements")
shall be submitted to Customer and shall be conclusive and binding on
Customer unless Customer notifies CS First Boston of any objection thereto
prior to the opening of trading on the contract market on which such
transaction occurred on the business day following the day on which Customer
receives such Statement; provided, that with respect to monthly Statements,
Customer may notify CS First Boston of any objection thereto within ten
business days after receipt of such monthly Statement, provided the
objection could not have been raised at the time any prior Statement was
received by Customer as provided for above. Any such notice of objection, if
given orally to CS First Boston, shall immediately (and no later than within
one business day) be confirmed in writing by Customer.
------------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS
- ------------------------
LISTED DERIVATIVES GROUP
(h) DELIVERY PROCEDURES; OPTIONS ALLOCATION PROCEDURES.
(i) CS First Boston shall liquidate any Contract for which an offsetting
order is entered by Customer, unless Customer instructs CS First
Boston not to liquidate such Contract and to maintain the offsetting
Contracts as open positions, provided, that CS FIRST Boston shall not
be obligated to comply with any such instructions given by Customer if
Customer fails to provide CS First Boston with any representations,
documentation or information reasonably requested by CS First Boston
or if, in CS First Boston's reasonable judgment, any failure to
liquidate such offsetting Contracts against each other would result in
a violation of applicable laws.
(ii) Customer will provide CS First Boston with instructions either to
liquidate Contracts previously established by Customer, make or take
delivery under any such Contracts, or exercise options entered into by
Customer, within such time limits as may be specified by CS First
Boston. CS First Boston shall have no responsibility to take any
action on behalf of Customer or positions in the Account unless and
until CS First Boston receives oral or written instructions reasonably
acceptable to CS First Boston indicating the action CS First Boston is
to take, except that CS First Boston may liquidate any or all
Contracts when authorized or required by the exchange or contract
market on which such Contracts were executed. Funds sufficient to take
delivery pursuant to such Contract or deliverable grade commodities to
make delivery pursuant to such Contract must be delivered to CS First
Boston at such time as CS First Boston may require in connection with
any delivery. CS FIRST BOSTON IS SPECIFICALLY AUTHORIZED TO TRANSFER
TO CUSTOMER'S CASH ACCOUNT ON THE SETTLEMENT DAY FOLLOWING A PURCHASE
MADE IN THAT ACCOUNT, EXCESS FUNDS AVAILABLE IN ANY OF CUSTOMER'S
OTHER ACCOUNTS, INCLUDING BUT NOT LIMITED TO ANY FREE BALANCE IN ANY
MARGIN ACCOUNT OR IN ANY NON-REGULATED FUTURES ACCOUNT, SUFFICIENT TO
MAKE FULL PAYMENT OF THIS CASH PURCHASE. CUSTOMER AGREES THAT ANY
DEBIT OCCURRING IN ANY OF CUSTOMER'S ACCOUNTS MAY BE TRANSFERRED BY CS
FIRST BOSTON, AT ITS OPTION, TO CUSTOMER'S MARGIN ACCOUNT.
(iii)Customer shall have sole responsibility to exercise in a proper and
timely manner any right, privilege or obligation of every option in a
Customer Account. Failure to do so could result in substantial loss to
Customer. CS First Boston shall not have any obligation to exercise
any long option contracts unless Customer has furnished CS First
Boston with timely exercise instructions and sufficient initial margin
with respect to each underlying futures contract. CS First Boston
shall not be obligated, except within a reasonable period of time
following receipt of Customer's instruction, to close out any
positions in any Customer Account.
(iv) Short option Contracts may be subject to exercise at any time.
Exercise notices received by CS First Boston from the applicable
contract market with respect to option Contracts sold by Customer may
be allocated to Customer pursuant to a random allocation procedure,
and Customer shall be bound by any such allocation of exercise
notices. In the event of any allocation to Customer, unless CS First
Boston has previously received instructions from Customer, CS First
Boston's sole responsibility shall be to use its best efforts to
notify Customer of such allocation.
(v) If Customer fails to comply with any of the foregoing obligations and
Customer is required to make delivery of any security, commodity or
other property and is unable to deliver same, CS First Boston may, in
its sole and absolute discretion, liquidate any open positions, make
or receive delivery of any commodities, securities or other property,
or exercise or allow the expiration of any options, in
------------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS
- ---------------------------
LISTED DERIVATIVES GROUP
such manner and on such terms as CS First Boston, in its sole and
absolute discretion, deems necessary or appropriate, and Customer shall
indemnify and hold CS First Boston harmless as a result of any action
taken or not taken by CS First Boston in connection therewith or
pursuant to Customer's instructions.
(i) FINANCIAL AND OTHER INFORMATION. Customer shall provide to CS First
Boston such financial information regarding Customer as CS First Boston
may from time to time reasonably request to determine Customer's
financial condition and Customer's ability to perform its obligations
under this Agreement or in connection with any Contracts executed by CS
First Boston on Customer's behalf.. Customer shall notify CS First
Boston immediately (and no later than within one business day) if the
financial condition of Customer changes materially and adversely from
that shown in the most recent financial information theretofore provided
to CS First Boston. An investigation may be conducted pertaining to
Customer's credit standing and business and/or to verify any financial
information furnished to CS First Boston by Customer.
(j) CURRENCY EXCHANGE RISK. If Customer enters into any Contract on an
Exchange on which transactions are effected in a foreign currency, then
Customer shall bear all risk and cost in respect of the conversion of
currencies incident to transactions effected on behalf of Customer
pursuant hereto, including any loss arising as a result of a fluctuation
in the exchange rate affecting such foreign currency.
(k) TRANSACTIONS ON SIMEX. If Customer intends to engage in transactions on
the Singapore International Monetary Exchange Limited ("SIMEX") through
CS First Boston, then Customer agrees that, with respect to transactions
on SIMEX, notwithstanding anything to the contrary herein, (a) the
phrase "(as defined in the Companies Act, Cap 50)" shall be added after
the word "subsidiary" wherever the latter shall appear in this
Agreement, and (b) the phrase "(excluding Saturdays)" shall be added
after the phrase "business days" wherever the latter shall appear in
this Agreement.
7. TERMINATION.
This Agreement may be terminated at any time by Customer or CS First Boston
by written notice to the other. Termination shall not affect any transaction
entered into prior to receipt of such notice and shall not relieve either
party of any obligations in connection with any, debt or credit balance or
other liability or obligation incurred prior to such receipt. In the event of
such notice, Customer shall either close out open positions in the Account or
arrange for such open positions to be transferred to another futures
commission merchant. Upon satisfaction by Customer of all of Customer's
liabilities, CS First Boston shall transfer to another futures commission
merchant all Contracts, if any, then held for the Account, and shall transfer
to Customer or to another futures commission merchant, as Customer may
instruct, all cash, securities and other property held in the Account,
whereupon this Agreement shall terminate.
8. MISCELLANEOUS.
(a) SEVERABILITY. If any provision of this Agreement is, or at any time
becomes, inconsistent with any present or future law, rule or regulation
of any exchange or other market, sovereign government or regulatory body
thereof, and if any of these authorities have jurisdiction over the
subject matter of this Agreement, the inconsistent provision shall be
deemed superseded or modified to conform with such law, rule or
regulation but in all other respects, this Agreement shall continue and
remain in full force and effect.
------------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS
- ------------------------
LISTED DERIVATIVES GROUP
(b) BINDING EFFECT. This Agreement shall be binding on and inure to the
benefit of the parties and their successors. CS First Boston shall have the
right to transfer or assign this Agreement (and thereby the Account) to any
successor entity or to another properly registered futures commission
merchant in its sole and absolute discretion and without obtaining the
consent of Customer. Customer shall not assign any of its rights or
obligations under this Agreement without the prior written consent of CS
First Boston, and any such attempted assignment without such consent shall
be ineffective.
(c) ENTIRE AGREEMENT. This Agreement contains the entire agreement between the
parties and supersedes any prior agreements between the parties as to the
subject matter hereof. No provision of this Agreement shall in any respect
be waived, altered, modified, or amended unless such waiver, alteration,
modification or amendment is in writing and signed by the party against
whom such waiver, alteration, modification or amendment is to be enforced.
(d) CURRENCY DENOMINATION. Unless another currency is designated in the
confirmations reporting transactions entered into by Customer, all margin
deposits in connection with such transactions, and a debit or credit in the
Account, shall be stated in United States dollars.
(e) INSTRUCTIONS, NOTICES OR COMMUNICATIONS. Except as specifically otherwise
provided in this Agreement, all instructions, notices or other
communications may be oral or written. All oral instructions, unless custom
and usage of trade dictate otherwise, shall be promptly confirmed in
writing. All written instructions, notices or other communications shall be
addressed as follows:
(i) if to CS First Boston:
CS FIRST BOSTON
5 World Trade Center, 7th Floor
New York, New York 10048
Attention: Futures Department
(ii) if to Customer at the address as indicated on the Futures Account
Application.
(f) RIGHTS AND REMEDIES CUMULATIVE. All rights and remedies arising under this
Agreement as amended and modified from time to time are cumulative and not
exclusive of any rights or remedies which may be available at law or
otherwise.
(g) NO WAIVER. No failure on the part of CS First Boston to exercise, and no
delay in exercising, any contractual right will operate as a waiver thereof,
nor will any single or partial exercise by CS First Boston of any right
preclude any other or future exercise thereof or the exercise of any other
partial right.
(h) GOVERNING LAW. THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT AND THE
RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CHOICE OF LAW.
(i) CONSENT TO JURISDICTION. ANY LITIGATION BETWEEN CS FIRST BOSTON AND CUSTOMER
RELATING TO THIS AGREEMENT OR TRANSACTIONS HEREUNDER SHALL TAKE PLACE IN THE
COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.
CUSTOMER CONSENTS TO THE SERVICE OF PROCESS BY THE MAILING TO CUSTOMER OF
COPIES OF SUCH COURT
------------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS
- -------------------------
LISTED DERIVATIVES GROUP
FILING BY CERTIFIED MAIL TO THE ADDRESS OF CUSTOMER AS IT APPEARS ON THE BOOKS
AND RECORDS OF CS FIRST BOSTON, SUCH SERVICE TO BE EFFECTIVE TEN DAYS AFTER
MAILING. CUSTOMER HEREBY WAIVES IRREVOCABLY ANY IMMUNITY TO WHICH IT MIGHT
OTHERWISE BE ENTITLED IN ANY ACTION AT LAW, SUIT IN EQUITY OR ANY OTHER
PROCEEDING ARISING OUT OF OR BASED ON THIS AGREEMENT OR ANY TRANSACTION IN
CONNECTION HEREWITH.
(j) WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES. Customer hereby waives a trial by
jury in any action arising out of or relating to this Agreement or any
transaction in connection therewith. Furthermore, no party to this Agreement
will attempt to obtain an award of punitive damages against the other.
(k) CUSTOMER ACKNOWLEDGMENTS.
(i) CUSTOMER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED AND UNDERSTANDS THE
FOLLOWING DISCLOSURE STATEMENTS PRESCRIBED BY THE CFTC AND FURNISHED
HEREWITH (CHECK WHERE APPLICABLE):
[ ] RISK DISCLOSURE STATEMENT
(CFTC Rule 1.55(b) transcribed in full on pages 1-2 of Booklet 2 - Risk
Disclosure Statements)
[ ] OPTIONS DISCLOSURE STATEMENT
(CFTC Rule 33.7 transcribed in full on pages 3-12 of Booklet 2 - Risk
Disclosure Statements)
[ ] DISCLOSURE STATEMENT FOR NON-CASH MARGIN
(CFTC Rule 190.10 transcribed in full on page 16 of Booklet 2 - Risk
Disclosure Statements)
[ ] FOREIGN FUTURES AND FOREIGN OPTIONS RISK DISCLOSURE STATEMENT
(CFTC Rule 30.6 transcribed in full on pages 1-2 of Booklet 2 - Risk
Disclosure Statements)
(ii) IF CUSTOMER HAS INDICATED ON the FUTURES ACCOUNT APPLICATION THAT ORDERS
PLACED FOR THE ACCOUNT REPRESENT BONA FIDE HEDGING TRANSACTIONS, PLEASE
COMPLETE THE FOLLOWING. You should note that CFTC Regulation (S)190.06
permits you to specify whether, in the unlikely event of CS First
Boston's bankruptcy, you prefer the bankruptcy trustee to liquidate or
transfer to another futures commission merchant all positions in the
Account. Accordingly, Customer hereby elects as follows: (check one)
[ ] LIQUIDATION
[ ] TRANSFER TO ANOTHER FUTURES COMMISSION MERCHANT
IF NEITHER ALTERNATIVE IS CHECKED, CUSTOMER WILL BE DEEMED TO HAVE ELECTED TO
HAVE ALL POSITIONS LIQUIDATED. THIS ELECTION MAY BE CHANGED AT ANY TIME BY
WRITTEN NOTICE.
(iii) CUSTOMER ACKNOWLEDGES THAT UNLESS THIS IS A HEDGE ACCOUNT,
INVESTMENT IN FUTURES AND OPTIONS ON FUTURES CONTRACTS IS SPECULATIVE, INVOLVES
A HIGH DEGREE OF RISK AND IS SUITABLE ONLY FOR PERSONS WHO CAN ASSUME THE RISK
OF SUBSTANTIAL LOSSES. CUSTOMER ALSO UNDERSTANDS THAT BECAUSE OF THE LOW MARGIN
NORMALLY REQUIRED IN COMMODITY FUTURES AND ON SHORT POSITIONS IN OPTIONS ON
FUTURES, PRICE CHANGES in FUTURES CONTRACTS MAY RESULT IN SIGNIFICANT LOSSES,
WHICH LOSSES MAY EXCEED THE MARGIN
------------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS
- ----------------------
LISTED DERIVATIVES GROUP
DEPOSIT. PURCHASERS OF OPTIONS ON FUTURES MAY LOSE THE ENTIRE AMOUNT OF
THE PREMIUM PAID.
IN WITNESS WHEREOF, Customer has executed this Agreement on the date indicated
below.
CORPORATION/PARTNERSHIPS:
By:___________________________________ Date:__________________________
Authorized Officer/General Partner
Name:_________________________________ Title:_________________________
(Print) (Print)
INDIVIDUAL/JOINT ACCOUNT:
By:___________________________________ By:____________________________
Individual Secondary Party (Joint Account)
Date:_____________ Name:_____________ Date:____________ Name:__________
(Print) (Print)
REMINDER: PLEASE BE SURE TO CHECK THE APPROPRIATE BOXES IN SECTIONS 8(K) (I)
AND (II) ABOVE.
-----------------------------------
[LOGO] CS FIRST BOSTON GLOBAL CLEARING ACROSS MARKETS
FUTURES CUSTOMER AGREEMENT BEAR STEARNS SECURITIES CORP.
("AGREEMENT") One Metrotech Center North
Brooklyn, NY 11201-3859
ACCOUNT TITLE_____________________________
ACCOUNT NUMBER____________________________
PLEASE READ CAREFULLY
In consideration of Bear, Stearns Securities Corp., its successors and assigns,
("BSSC") acting as Futures Commission Merchant and carrying one or more
commodity futures accounts for the undersigned, ("Customer") its successors and
assigns, and when applicable, in consideration of Bear, Stearns & Co. Inc.
acting as Customer's introducing broker (Bear, Stearns & Co. Inc. and BSSC are
sometimes hereinafter collectively referred to as the "Brokers"), it is agreed
to with respect to all accounts, whether on margin or otherwise, which the
Customer now has or may at any future time have with the Brokers that:
1. AUTHORIZATION TO ACT AS BROKER
Customer authorizes the Brokers to purchase and sell futures contracts and
option contracts thereon ("Contracts") traded on duly registered contract
markets and exchanges located within and outside the United States, off-exchange
transactions where permitted by law, and spot, forward and option contracts
(including over-the-counter foreign currency spot, forward and option contracts)
for Customer's account in accordance with Customer's oral or written
instructions. The Brokers shall rely on any oral or written instructions
received from any person whom the Brokers believe, in good faith, to have been
an authorized person. The Brokers will be fully protected in acting on such
instructions. The Customer hereby waives any claim or defense that any such
instruction was not in writing as may be required by the Statute of Frauds or
any other law, rule, or regulation.
2. SUBJECT TO LAW AND EXCHANGE RULES
All transactions by the Brokers on Customer's behalf shall be subject to the
applicable constitution, by-laws, rules, resolutions, regulations, customs,
usages, rulings, and interpretations of the contract market and its
clearinghouse on which such transactions are executed or cleared by BSSC or its
agents for Customer's accounts, and to all applicable govermnental acts and
statutes (such as the Commodity Exchange Act) and to rules and regulations made
thereunder.
Further, Customer represents that it has reviewed the registration
requirements of the Commodity Futures Trading Commission, the National Futures
Association, and/or such other regulatory bodies applicable to Customer, and
that it is either appropriately registered or is not required to be so
registered.
The Brokers shall not be liable to Customer as a result of any action taken by
the Brokers or their agents to comply with any such constitution, by-laws,
resolutions, regulations, customs, usages, rulings, interpretations, acts, or
statutes.
3. COMMISSIONS, CHARGES AND FEES
Customer, in connection with such transactions, agrees to pay BSSC:
(A) Brokerage and commission charges as agreed upon by the Brokers and Customer
from time to time.
(B) Any charges, fees, fines or penalties imposed on any transaction undertaken
for Customer by the contract market and/or the clearinghouse through which it is
executed and any tax or fee imposed on such transactions by any competent
authority or self-regulatory organization.
(C) Any interest and/or service charges on any Customer deficit balances or any
other amounts due from Customer at the rates customarily charged by BSSC
together with the Brokers' costs and attorney's fees incurred in collecting such
deficit.
(D) Such payments shall be made promptly in Federal funds to BSSC at such
address as BSSC may designate.
4. MARGINS AND PREMIUMS
Customer agrees to maintain such margin, option premium and/or collateral as
BSSC in its sole discretion may require from time to time and will pay on demand
any amounts owing with respect to any of Customer's accounts.
Margin requirements established by BSSC for Customer's accounts may exceed the
margin required of BSSC by a contract market or clearing organization or the
margin required by BSSC of its other customers. BSSC may change margin
requirements for Customer at its sole discretion at any time.
5. DELIVERY OR EXERCISE OF DELIVERY INSTRUCTIONS
In the event that BSSC undertakes to make or take delivery of futures contracts,
exercise options or effect the sale of any property on behalf of Customer,
Customer will provide BSSC with the same at the time, in the manner and under
the terms and conditions necessary for BSSC to effect delivery thereof or to
purchase as required.
(A) Customer will provide BSSC with notice of intention to accept delivery on
long futures contracts at least five business days prior to the last trading day
for the contracts. At that time Customer will also indicate its financial
ability to pay for the contracts and the means and time by which funds will be
made available to BSSC.
(B) If Customer intends to make delivery on a short position, Customer must
notify BSSC at least five business days prior to the intended delivery date or
the last trading day, whichever comes first. At tnat time Customer will also
indicate the location of the commodities to be delivered and will certify to
BSSC that the commodities comply fully with the delivery specifications of the
contract market on which the contracts trade.
(C) BSSC may, from time to time, demand deposits or other assurances of
performance relating to the delivery of commodities which may be beyond those
specified by the contract market on which the contracts are traded. If Customer
fails to so supply BSSC with the same, then BSSC, in addition to any other right
to remedy it may have, is authorized by Customer to, in its sole discretion,
borrow or buy any commodities necessary to make delivery thereof at the sole
risk and expense of Customer.
(D) In the event of cash settlement of a contract, Customer must provide BSSC
with the cash one ( I ) business day before settlement.
6. OPTIONS
If this Agreement applies to options on futures contracts, Customer acknowledges
and agrees that Customer has full responsibility for taking or
1
failing to take action to exercise any option contract in Customer's account and
that in no event will the Brokers take action to exercise any option contract in
the Customer's account without instructions from the Customer. Customer further
acknowledges and agrees that such option contract may be subject to automatic
exercise pursuant to applicable law.
Customer understands that exercise notices may be allocated to the Customer's
account pursuant to a random allocation procedure and agrees that the Customer
shall be bound by any allocation of exercise notices to the Customer pursuant
thereto. Customer understands that such notices may be assigned to the account
after the close of trading on the day on which such notices have been assigned
to BSSC. In such event, BSSC's sole responsibility shall be to use its best
efforts to place a telephone call to the Customer at any time before trading
commences on the next day on which such option contracts are traded on the
applicable contract market and, if an authorized representative of the Customer
is present, to inform the authorized representative of the Customer of such
allocation. In the event that BSSC makes such call, but no authorized
representative of the Customer is present, the Brokers shall have no
responsibility to take any action on behalf of the Customer unless BSSC has
previously received from the Customer written instruction acceptable to BSSC
indicating the action BSSC is to take in such event.
7. EXCHANGE FOR PHYSICALS ("EFP")
If this Agreement applies to EFP transactions, the Customer acknowledges
familiarity with all rules and regulations applicable to Customer's EFP
transactions and certifies to the Brokers Customer's possession of all required
records documenting each underlying cash transaction. Customer agrees to produce
such records to the Brokers upon their request. Customer agrees to indemnify and
hold the Brokers harmless from all costs, claims, fines or penalties the Brokers
may incur resulting from an EFP transaction requested by the Customer.
8. HEDGE ACCOUNT
If this is a hedge account, all orders which the Customer gives for the
purchase or sale of futures or options contracts for the Customer's accounts
will represent bona fide hedges in accordance with accepted definitions of hedge
transactions under the Commodity Exchange Act, if applicable, and any amendments
or interpretations thereto which may be made in the future by the Commodity
Futures Trading Commission, any state or self-regulatory organization, or any
court of competent jurisdiction, if applicable. Should orders be placed for the
purchase or sale of contracts which are not hedge transactions, the Customer
will advise the Brokers to that effect.
9. COMMUNICATIONS
Reports, confirmations, statements, notices and any other communication may be
transmitted to Customer at the address designated in this Agreement, or to such
address as Customer may designate in writing to BSSC, Attn: Director, Futures
Operations, 1 Metrotech Center North, Brooklyn, NY 11201-3859. All
communications so sent, whether by mail, messenger, telegraph, or otherwise
shall be deemed transmitted when deposited in the United States mail, or when
received by a transmitting agent, and will be deemed to have been delivered to
Customer personally, whether actually received by Customer or not. All
communications to Bear, Stearns Securities Corp. shall be to its office at One
Metrotech Center North, Brooklyn, New York 11201-3859 or to such other address
as BSSC shall hereafter direct Customer, in writing, to use.
10. CONFIRMATION AND STATEMENTS
A detailed trade confirmation of all transactions for or on Customer's behalf
shall be furnished to Customer. A detailed monthly statement of all transactions
for or on Customer's behalf shall be funished to Customer on a monthly basis.
Confirmations of transactions and orders, correction notices and monthly
statements of account shall be conclusive if not objected to in writing to One
Metrotech Center North, Brooklyn, New York, 11201-3859 within one (1) business
day following the day on which Customer receives the written notice from BSSC;
if a confirmation is reported to Customer orally, it is conclusive unless
objected to at the time of such report. In the event that Customer fails to
receive any such confirmation of transactions and orders, correction notices or
monthly statements of account within five (5) business days from the date of a
transaction, or solely in connection with a monthly statement of account, within
(5) days after the last business day of the preceding month, Customer will
notify BSSC immediately.
In addition to oral notification of objections, Customer must also provide
written notification to BSSC at One Metrotech Center North, Brooklyn, New York
11201-3859, Attn: Director, Futures Operations, or to such other person as BSSC
shall hereafler direct Customer, in writing, to notify. If Customer fails to
give BSSC such notification, Customer will be deemed to have adopted and
ratified the transactions and to have waived any right to have them removed from
the account.
11. CURRENCY FLUCTUATION RISK
In the event that BSSC is directed to enter into any transactions for Customer
which are effected in and/or margin deposits are made in curencies other than in
United States dollars:
(A) Any profits or losses arising as a result of the fluctuation in the exchange
rate affecting such currency will be entirely for the account and risk of the
Customer.
(B) All initial and subsequent deposits for margin purposes shall be made in
United States dollars in such amounts as BSSC, in its sole discretion, may
designate.
(C) Unless otherwise agreed to by the Customer and the Brokers in writing, when
such transaction is established or liquidated, BSSC shall credit or debit the
account in United States Dollars at an exchange rate determined by BSSC. This
rate will be based on the prevailing money market rates available at the time
of the transaction.
12. CUSTOMER ACKNOWLEDGMENTS
Customer acknowledges that:
(A) Any trading recommendations and market or other information communicated to
Customer by the Brokers is incidental to the conduct of the Brokers' business as
Futures Commission Merchants.
(B) Such recommendations and information, although based upon information
obtained from sources believed by the Brokers to be reliable, may be incomplete,
may not be verified, and may be changed without notice to Customer.
(C) The Brokers make no representation, warranty or guarantee as to the accuracy
or completeness of any market or other information or trading recommendation
finished to Customer.
(D) Customer understands that the Brokers, their managing directors, officers,
employees, and/or affiliates may have a position in, may intend to, and may, buy
or sell contracts or instruments that are the subject of contracts, including
contracts which are the subject of information or recommendations furnished to
Customer, and that the position or transactions of the Brokers, their managing
directors, employees, officers and/or affiliates may or may not be consistent
with the recommendations furnished by the Brokers to Customer.
(E) All decisions by the Customer or its agent(s), whether or not utilizing any
advice of the Brokers, their employees and officers, are solely within the power
and discretion of the Customer.
13. LIQUIDATION
In the event that:
(A) Customer commences a voluntary case, or an involuntary case is commenced
against Customer under any applicable bankruptcy, insolvency
2
or other similar law now or hereafter in effect, or a receiver, liquidator,
trustee, custodian, sequestrater or other similar official is appointed or takes
possession (before or after the commencement of any such action) of Customer, or
Customer is insolvent, makes any general assignment for the benefit of
creditors, or fails generally to pay debts as they become due, or any similar
event takes place;
(B) Customer takes any corporate action to effect a dissolution, liquidation,
reorganization, winding up of its affairs or any similar event;
(C) Customer fails or refuses to deposit or maintain initial margin and/or
collateral or fails to provide additional or variation margin and/or collateral,
as set forth in Section 4 hereof;
(D) Customer has a breach or default under this Agreement or any other agreement
with a Bear Stearns entity;
(E) BSSC in its sole discretion, determines with or without regard to market
quotations that the collateral or margin deposited with BSSC to secure
Customer's positions is inadequate; or,
(F) The Brokers, in either of their discretion, determine that it is necessary
for their own protection then:
Any and all property belonging to the Customer and held by BSSC or by any of
its affiliates will be subject to a priority lien for the discharge of
Customer's obligation to BSSC. To satisfy this lien, BSSC may close out
Customer's open contracts in whole or in part, sell any or all of Customer's
property held by BSSC and by any of its affiliates, buy any securities or other
property for Customer's account(s) to cover existing short positions, and cancel
any outstanding orders and commitments made by BSSC and/or its affiliates on
behalf of Customer. For the purpose of this Agreement the word "property" means
securities of any kind, monies, options, commodities and contracts for the
future delivery of or otherwise relating to, commodities and securities and all
property customarily dealt in by brokerage firms or pledged to secure an account
Subject to BSSC's and its affiliates' obligations to use best efforts to
obtain a fair and reasonable price, any such sale, purchase, or cancellation may
be made at BSSC's and/or its aff liates' sole discretion on the contract or
other market or through the clearinghouse where such business is then
transacted, at public auction or at private sale, without advertising the same
and without notice to Customer, and without prior tender, demand or call upon
Customer. Customer shall remain liable for and shall pay to BSSC the amount of
any deficiency resulting from any transactions described above.
14. LIMITATIONS OF LIABILITY AND INDEMNIFICATION
BSSC retains the right to limit the number of open positions which Customer may
acquire or maintain at BSSC. BSSC will attempt to execute all orders which it
may, in its sole discretion, choose to accept for the purchase or sale of
contracts, options or other property in accordance with the oral or written
instructions of Customer. However, the Brokers shall not be held liable in any
way for Customer error or for delays in transmission of an order and the Brokers
shall not be liable in any way for delays in execution of any order due to the
breakdown or failure of transmission or communication facilities, or any other
cause beyond the Brokers' control.
Further, neither the Brokers nor their managing directors, officers, employees
and agents shall have any responsibility for compliance by Customer with any law
or regulation governing its conduct.
In the event that the Brokers and/or their affiliates are parties to any
claim, dispute or other litigation or otherwise incur any expense or loss in
connection with Customer's obligations or liabilities arising from Customer's
accounts or this Agreement, Customer shall indemnify and reimburse the Brokers
and/or their affiliates for all loss and expense incurred, including the
Brokers' and/or their affiliates' reasonable attorneys fees.
15. TAPING
The parties hereto agree that any party may electronically record all telephone
conversations among each other and that such recordings among the parties may be
used to establish compliance with this Agreement or in resolving any dispute
under this Agreement.
16. INTRODUCED ACCOUNT
Bear, Stearns & Co. Inc. or another firm may be the introducing broker on this
account. The Introducing Broker's ("IB") account executive(s) are the Customer's
broker(s) for purposes of solicitation and the taking and conveying of orders
for execution. The IB will supervise its employees for compliance with all
applicable rules and regulations in connection with the IB's activities
undertaken in connection with this Agreement. If any of the Customer's
account(s) are carried by any Bear Steams entity as clearing agent for the
Customer, unless such Bear Stearns entity receives from the Customer or another
broker of the Cusstomer prior written notice to the contrary, it may accept from
such other broker, without any inquiry or investigation: (a) orders for the
purchase or sale of securities and other property in the Customer's account(s)
on margin or otherwise and (b) any other instructions concerning the Customer's
account(s) or the property therein. The Customer understands and agrees that
BSSC shall have no responsibility or liability to the Customer for any acts or
omissions of such broker, its officers, employees or agents. The Customer agrees
that the Customer's broker and its employees are third-party beneficiaries of
this Agreement and that the terms and conditions hereof, including the
arbitration provision, if executed, shall be applicable to all matters between
or among the Customer, its agents, the Customer's broker and its employees and
BSSC and its employees.
17. MISCELLANEOUS
Any rights BSSC has under this Agreement for purposes of cross collateralization
and Customer default may be exercised by any of BSSC's affiliates in connection
with assets and positions of Customer with such affiliates whether governed by
agreement or otherwise. As security for the payment of all Customer's
obligations and liabilities to a Bear Steams' entity, each Bear Stearns entity
shall have a continuing priority security interest in all property in which
Customer has an interest held by or through a Bear Stearns entity. Further, in
order to satisfy any outstanding liability or obligation of Customer at a Bear
Stearns entity, such entities may, at any time and without prior notice, use,
apply or transfer any such securities, property, assets or collateral
interchangeably. En the event of a breach or default under this Agreement or any
other agreement Customer may have with any Bear Stearns entity, each Bear
Stearns entity shall have all rights and remedies available to a secured
creditor under any applicable law in addition to the rights and remedies
provided herein.
18. GOVERNING LAW AND JURISDICTION
If any provisions herein are or should become inconsistent with any present or
future law, rule or regulation of any sovereign government or regulatory body
having jurisdiction over the subject matter of this Agreement, such provisions
shall be deemed to be rescinded or modified in accordance with any such law,
rule or regulation. In all other respects this Agreement shall continue and
remain in full force and effect. THIS AGREEMENT AND ITS TERMS SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. With respect to any suit, action or proceedings
("Proceedings") relating to this Agreement, each Party irrevocably (i) submits
to the non-exclusive jurisdiction of the courts of the
3
State of New York and the United States District Court located in the Borough of
Manhattan in New York City, and (ii) waives any objection which it may have at
any time to the laying of venue of any Proceedings brought in any such court,
waives any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such Proceedings,
that such court does not have jurisdiction over such Party. Nothing in this
Agreement precludes any Party from bringing Proceedings in any other
jurisdiction nor will the bringing of Proceedings in any one or more
jurisdictions preclude the bringing of Proceedings in any other jurisdiction.
Each Party irrevocably waives any and all right to trial by jury in any
Proceedings arising out of or relating to this Agreement. Each Party hereby
irrevocably waives, to the fullest extent pemmitted by applicable law, with
respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar
grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of
injunction, order for specific perfommance or for recovery of property, (iv)
attachment of its assets (whether before or after judgment) and (v) execution or
enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any Proceedings in the courts of any jurisdiction and
irrevocably agrees, to the extent permitted by applicable law, that it will not
claim any such immunity in any Proceedings.
Customer also may have the option of resolving any disputes by arbitration. If
Customer agrees to arbitration, the accompanying Arbitration Agreement must be
acknowledged.
19. BINDING EFFECT
Subject to Section 18 hereof, no provision of this Agreement shall in any
respect be waived, altered, modified, or amended unless such waiver, alteration,
modification, or amendment is committed to in writing and signed by Customer and
a duly authorized official of the Brokers.
This Agreement shall inure to the benefit of the Brokers and their respective
successors or assigns, whether by merger, consolidation or otherwise. This
Agreement shall also be binding on Customer and/or its successors, assigns,
administrators, and other legal representatives whether by merger, consolidation
or other, provided that Customer may not assign this Agreement without the prior
written consent of the Brokers.
The rights and remedies conferred upon the parties hereto shall be cumulative,
and the exercise or waiver of any thereof shall not preclude or inhibit the
exercise of additional rights and remedies.
This Agreement shall continue until signed notice of revocation is received by
or from Customer and in the case of such revocation the Agreement shall continue
effective as to transactions entered into prior thereto, until those positions
are either closed out or transferred.
20. FINANCIAL STATEMENTS
Customer agrees to provide financial statements in certified or audited form to
the Brokers as the Brokers request with this Agreement and to provide annual
updates to those statements. Customer further agrees to furnish such other
infommation relevant to the account as the Brokers may reasonably request.
Customer agrees to promptly notify each of the Brokers in writing should there
be any material change in Customer's financial condition, business or prospects.
21. ERISA/PENSION LIMITATION
It is hereby understood, acknowledged and accepted by the underlying Customer,
Pension Trustee, Trustee and Advisor, if any, that if this is an ERISA or
pension account, the Brokers shall not be deemed to be acting as fiduciaries
---
under the federal ERISA statute or any similar federal, state and/or foreign
statute.
All advice with respect to contracts transmitted to the Customer or its
agents by the Brokers are incidental to the conduct of the Brokers' respective
business as introducing broker and clearing broker and such advice will not
serve as the primary basis for any decision by the Customer. All decisions by
the Customer or its agents, whether or not utilizing any advice of the Brokers,
their employees and officers, are solely within the power and discretion of the
Customer. Any such advice, although based upon infommation from sources the
Brokers believe to be reliable, may be incomplete, may not be verified and may
be changed without notice to the Customer. The Brokers make no representation or
warranty as to the accuracy, completeness, reliability or prudence of any such
advice or information.
22. CPO and CTA REGISTRATION
Customer and Advisor, if any, have reviewed the registration requirements of the
Commodity Exchange Act, the National Futures Association and all applicable
foreign regulations pertinent to commodity pool operators and commodity trading
advisors and each has determined that it is in compliance with such
requirements.
23. INTEREST ON DEBIT BALANCES
Customer agrees to pay interest on any debit balance in its account from the
date such debit is incurred to the date of its payment in full. The rate of
interest charged shall be determined by the Brokers at their sole discretion,
may change from time to time and will appear on Customer's monthly statements.
In no event, however, shall such rate exceed three percent (3%) above the
Brokers' Call Money Rate or the highest rate allowable under New York law. The
Brokers' Call Money Rate is the rate quoted daily by the Brokers at their
offices in New York based upon the broker's call rates posted by various
financial institutions (such as the call money rates published by the Wall
Street Journal and the New York Times) and the rate of interest charged the
Brokers for their own borrowings. Interest shall be computed daily and
calculated on the basis of a 360-day year. Any debit balance which is not paid
at the close of an interest period will be added to the opening balance for the
next interest period. Since the rate of interest charged is related to the
Brokers' Call Money Rate, changes in the Brokers' Call Money Rate will cause
corresponding changes in the rate charged to Customer, which changes will be
made without prior notice to Customer. If Brokers change the rate of interest
charged to Customer for any other reason, Customer will be given at least 30
days' prior written notice thereof.
24 LANGUAGE GOVERNING LAW
THIS AGREEMENT IS EXECUTED IN THE ENGLISH LANGUAGE ONLY, WHICH LANGUAGE SHALL
PREVAIL IN THE EVENT OF ANY CONTROVERSY.
25. EXTRAORDINARY EVENTS
The Brokers shall not be liable for losses caused directly or indirectly by
government restrictions, exchange or market rulings, suspension of trading, war,
strikes or other conditions beyond their control.
4