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EXHIBIT 10.1
CUSTOMER AGREEMENT
XXXXXXX XXXXX XXXXXX DIVERSIFIED 2000 FUTURES FUND L. P.
This Agreement made and entered into as of the ____ day of
September, 1999, by and between XXXXXXX XXXXX BARNEY DIVERSIFIED 2000 FUTURES
FUND L. P., a New York limited partnership (the "Partnership"), and XXXXXXX
XXXXX XXXXXX INC., a Delaware corporation ("SSB").
W I T N E S S E T H :
WHEREAS, the Partnership has been organized to engage in the
speculative trading of commodity interests, including, but not limited to,
futures contracts, options and forward contracts; and
WHEREAS, the Partnership and SSB wish to enter into this
Agreement setting forth the terms and conditions upon which SSB will perform
brokerage and other services for the Partnership;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, it is agreed as follows:
1. Appointment of Broker/Dealer and Opening of Account. The
Partnership hereby appoints SSB as its commodity broker/dealer through whom the
Partnership will execute trades in commodity interests including futures
contracts, options and forward contracts. As soon as practicable following the
conclusion of the Initial Offering Period (as defined in the Selling Agreement)
of the units of limited partnership interest in the Partnership (the "Units"),
provided at least 15,000 Units are sold, the Partnership shall deposit or cause
to be deposited the partners' capital contributions in a commodity brokerage
account with SSB, and will maintain all of its assets, as they from time to time
exist, in such account except for such amounts as may be necessary or desirable
to be maintained in a bank account to facilitate the payment of Partnership
expenses, redemptions or distributions. The Partnership shall execute such other
documents as shall be necessary or appropriate to permit SSB to perform its
services hereunder.
2. Services of SSB. SSB agrees to use its best efforts to
effect transactions for the Partnership's account and agrees to assist the
Partnership or its general partner, Xxxxx Xxxxxx Futures Management Inc. (the
"General Partner"), in (a) calculating the Partnership's Net Assets and Net
Asset Value (as such terms are defined in the Partnership's Limited Partnership
Agreement) at such times as may be required, (b) calculating any fees due the
Partnership's trading advisors (the "Advisors"; each individually an "Advisor"),
(c) preparing and confirming financial information for annual or interim audits
and reports and (d) establishing procedures for effecting redemptions, cash
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distributions and the liquidation of the Partnership upon termination. SSB
further agrees to furnish clerical and bookkeeping support for the
administration of the Partnership.
3. (a) Brokerage and Other Fees. The Partnership shall pay to
SSB a monthly brokerage fee equal to 9/20 of 1% of month-end Net Assets of the
Partnership allocated to the Advisors (5.4% per year) in lieu of brokerage
commissions on a per trade basis. The Partnership shall also pay all National
Futures Association, exchange, clearing, user, give-up, and floor brokerage
fees, or shall reimburse SSB for all such fees previously paid by SSB on behalf
of the Partnership. This fee may be increased or decreased at any time at SSB's
discretion upon notice to the Partnership.
(b) Reimbursement of Offering Expenses. The Partnership shall
reimburse SSB for the total amount of the offering and organizational expenses
of the Initial Offering Period, plus interest at the prime rate quoted by The
Chase Manhattan Bank in equal installments over the first 24 months after
trading commences.
4. Payment of Interest. All of the assets of the Partnership
which are deposited in the Partnership's accounts at SSB will be deposited and
maintained in cash. During the term of this Agreement, SSB will, within ten (10)
days following the end of each calendar month, credit the Partnership's
brokerage accounts with a sum representing interest on eighty percent (80%) of
the average daily equity maintained in cash in such accounts during such month
(i.e., the sum of the daily cash balances in such accounts divided by the total
number of calendar days in that month) at a 30-day Treasury xxxx rate determined
weekly by SSB based on the average non-competitive yield on 3-month U. S.
Treasury bills maturing in 30 days (or on the maturity date closest thereto)
from the date on which such weekly rate is determined. The equity maintained in
cash in the account on Saturdays, Sundays and holidays shall be the equity
maintained in cash in the account as of the close of business on the next
preceding business day.
5. Trading Authorization. The General Partner has entered into
Management Agreements with each of Beacon Management Corporation, Bridgewater
Associates, Inc., Xxxxxxxx & Company Inc. and Rabar Market Research as the
Partnership's Advisors pursuant to which the Advisor shall have discretion to
order purchases and sales of commodity interests including futures contracts,
options and forward contracts. SSB is hereby authorized to execute all orders
placed by the Advisors for the account of the Partnership until notified by the
General Partner to the contrary, and shall have no obligation to inquire into
the reason for or method of determining such orders, nor any obligation to
monitor such orders in relation to the Partnership's trading policies. The
provisions of this Paragraph
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designated in the future by the General Partner.
6. Terms of the Account. The following terms and conditions
shall be applicable to the Partnership's account:
(a) The word "property" is used herein to mean securities of
all kinds, monies, options, commodities and contracts for the future delivery
of, or otherwise relating to, commodities or securities and all property usually
and customarily dealt in by brokerage firms.
(b) All transactions for the Partnership's account shall be
subject to the regulations of all applicable federal, state and self-regulatory
agencies including, but not limited to, the various commodity exchanges and the
constitution, rules and customs, as the same may be constituted from time to
time, of the exchange or market (and its clearing house, if any) where executed.
Actual deliveries are intended on all transactions. The Partnership also agrees
not to exceed the speculative position limits for its own account, acting alone
or in concert with others, and promptly to advise SSB if it is required to file
reports of its commodity positions with the Commodity Futures Trading
Commission.
(c) Any and all property belonging to the Partnership, or in
which it may have an interest, held by SSB or carried in the Partnership's
account (either individually or jointly with others) shall be subject to a
general lien for the discharge of the Partnership's obligations to SSB, wherever
or however arising and without regard to whether or not SSB has made advances
with respect to such property, and SSB is hereby authorized to sell and/or
purchase any and all property in the Partnership's account without notice to
satisfy such general lien.
(d) The Partnership agrees to maintain such collateral and/or
margin as SSB may, in its discretion, require from time to time and will pay on
demand any amount owing with respect to its account. Against a "short" position
in any commodity contract, prior to the maturity thereof, the Partnership will
give SSB instructions to cover, or furnish SSB with all necessary delivery
documents, and in default thereof, SSB may, without demand or notice, cover the
contracts, or if an order to buy in such contracts cannot be executed under
prevailing conditions, SSB may procure the actual commodity and make delivery
thereof upon any terms and by any method which may be feasible. It is further
agreed that if the Partnership fails to receive sufficient funds to pay for any
commodities and commodity futures contracts and/or to satisfy any demands for
original and/or variation margin, SSB may, without prior demand and notice, sell
any property held by it in the Partnership's account and any loss resulting
therefrom will be charged to the Partnership's account.
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(e) SSB may, whenever in its discretion it considers it
necessary for its protection, sell any or all property held in the Partnership's
account, cancel any open orders for the purchase or sale of any property with or
without notice to the Partnership, and SSB may borrow or buy in any property
required to make delivery against any sales, including a short sale, effected
for the Partnership. Such sale or purchase may be public or private and may be
made without advertising or notice to the Partnership and in such manner as SSB
may, in its discretion, determine, and no demands, calls, tenders or notices
which SSB may make or give in any one or more instances shall invalidate the
aforesaid waiver on the Partnership's part. At any such sale SSB may purchase
the property free of any right of redemption and the Partnership shall be liable
for any deficiency in its account.
(f) SSB and the Partnership agree that the parties shall have
the right to offset any unrealized gains and losses on the Partnership's open
positions and to net any open orders for the purchase or sale of any property of
the Partnership.
(g) The Partnership agrees to pay service fees and/or
interest charges upon its account monthly at the prevailing and/or allowable
rates according to the laws of the State of New York, as determined by SSB at
the time of the acceptance of this Agreement in its New York office and
thereafter.
(h) If any provisions herein are or should become
inconsistent with any present or future law, rule or regulation of any sovereign
government or a regulatory body having jurisdiction over the subject matter of
this Agreement, such provision 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.
(i) The Fund hereby consents that SSB, its agents, or floor
brokers handling SSB orders, may, without prior notice, execute the Fund's
orders in which SSB's directors, officers, employees, agents, or the floor
broker, may directly or indirectly, become the buyer to Fund's sell order or the
seller to Fund's buy order, provided that such executions are made in accordance
with applicable exchange rules and any applicable provisions of the Commodity
Exchange Act or regulations of the CFTC.
7. Indemnification. (a) In any action, suit, or proceeding to
which SSB was or is a party or is threatened to be made a party by reason of the
fact that it is or was the commodity broker for the Partnership (other than an
action by or in the right of the Partnership), the Partnership shall indemnify
and hold harmless SSB, subject to subparagraph (c), against any loss, liability,
damage, cost, expense (including attorneys' fees and accountants' fees),
judgments and amounts paid in settlement
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actually and reasonably incurred by it in connection with such action, suit or
proceeding if SSB acted in good faith and in a manner it reasonably believed to
be in the best interests of the Partnership, except that no indemnification
shall be made in respect of any claim, issue or matter which as to SSB
constituted negligence, misconduct or breach of its fiduciary obligations to the
Partnership, unless, and only to the extent that, the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all circumstances of the case, SSB is
fairly and reasonably entitled to indemnification for such expenses which such
court shall deem proper; and further provided that no indemnification shall be
available from the Partnership if such indemnification is prohibited by Section
16 of the Partnership Agreement. The termination of any action, suit or
proceeding by judgment, order or settlement shall not, of itself, create a
presumption that SSB did not act in good faith, and in a manner which it
reasonably believed to be in or not opposed to the best interests of the
Partnership.
(b) To the extent that SSB has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in
subparagraph (a) above, or in defense of any claim, issue or matter therein, the
Partnership shall indemnify it against the expenses, including attorneys' fees,
actually and reasonably incurred by it in connection therewith.
(c) Any indemnification under subparagraph (a) above, unless
ordered by a court, shall be made by the Partnership only as authorized in the
specific case and only upon a determination by independent legal counsel in a
written opinion that indemnification is proper in the circumstances because SSB
has met the applicable standard of conduct set forth in subparagraph (a) above.
(d) The term SSB as used in this Paragraph 7 shall include
SSB, its officers, directors, stockholders, employees and affiliates.
8. Termination. This Agreement may be terminated at any time
by either party hereto upon notice to the other, in which event the brokerage
accounts shall be closed and all positions open at such time shall be liquidated
or shall be transferred to another broker as directed by the Partnership.
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9. Miscellaneous. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. This Agreement shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties hereto as of the day and year first above written.
XXXXXXX XXXXX XXXXXX DIVERSIFIED 2000 FUTURES FUND
L.P.
By: Xxxxx Xxxxxx Futures Management Inc.
(General Partner)
By:
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Xxxxx X. Xxxxx
President and Director
XXXXXXX XXXXX BARNEY INC.
By:
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Name:
Title:
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