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EXHIBIT 10.3
Clearing, Credit Facility and Securities Borrowing Agreement
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Regarding Option and Futures Contracts Traded at the
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Deutsche Terminborse (DTB) As Well As the Trading in Related Values
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Between
MeesPierson N.V., Niederlassung Frankfurt
Xxxxxxxxxxxxx 0-00
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
-hereinafter "MPF"-
and
Hull Trading GmbH
Xxxxxxxxxxxxxxxx 0-0
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
-hereinafter "Client"-
Whereas:
MPF is a member of the Deutsche Terminborse GmbH (hereinafter "DTB") in the
capacity of a General Clearing Member (GCM).
The Client is, as a Non-Clearing Member (NCM), a member of the DTB in the
capacity of market maker principal. Pursuant to the rules and regulations of the
DTB, the Client is obliged to clear all its transactions on the DTB through a
General Clearing Member.
MPF is prepared to offer its services as General Clearing Member subject to the
following conditions and provisions.
The parties hereby agree as follows:
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PART I
Definitions
1. Definitions
1.1 In this Agreement the terms hereinafter listed shall have the following
meaning:
DTB Rules: Exchange Rules of DTB
(Borsenordnung fur die DTB)
Clearing Conditions for Trading at the DTB (Clearing-
Bedingungen fur den Handel an der DTB)
Conditions for Trading at the DTB
(Bedingungen fur den Handel an der DTB)
Fee Regulations of the DTB
(Gebuhrenordnung fur die DTB)
Arbitration Rules for the DTB
(Schiedsgerichtsordnung der DTB)
NCM-GCM-Clearing Agreement
(NCM-GCM-Clearing Vereinbarung)
DKV: Deutscher Kassenverein Aktiengesellschaft
Underlying Values: The values underlying the options or futures
contracts traded at the DTB.
Net Liq.: Net liquidation balance: The balance of the Client's
rights and duties as they appear from MPF's books,
calculated daily by MPF on the basis of the closing
prices determined by the DTB.
Haircut: The overnight risk computed on a daily basis by MPF
as a deduction of the market value of securities
(e.g. stocks, options, bonds, futures) long and
short in the account of the Client held with MPF.
Credit Limit: The maximum amount which the Client is allowed to
draw under the Credit Facility.
Size of the Position: The mathematical financial absolute value of all
which the Client can claim or possess as stated in
MPF's books (credit), decreased by the mathematical
financial absolute value of all which the Client owes
as stated in MPF's books (debit).
Time Value: The amount by which the premium exceeds the intrinsic
value of an option.
Collateral Value: The values of securities, rights, claims, moneys,
goods and monetary values given as security which MPF
has determined in accordance with Article 16.
General Clearing Member (GCM): General Clearing Member of the DTB.
Related Values Values which are determined, at the discretion of
MPF, to be related to trading on the DTB; this shall
always include the Underlying Values.
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1.2 All terms defined in the DTB Rules and used in this Agreement shall have
the meaning as defined in the DTB Rules unless otherwise defined herein.
2. COMMENCEMENT AND DURATION
2.1 This Agreement comes into force after it has been signed by the parties and
will apply for an indefinite period of time until notice is given pursuant
to the provisions set out in this Agreement.
2.2 This Agreement is exclusive. The Client will not simultaneously enter into
a clearing agreement with another General Clearing Member.
2.3 This Agreement shall replace any existing clearing and credit facility
agreements.
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PART II
Clearing Activities
3. Contracts
3.1 The present Agreement pertaining to the clearing activities is based on the
rules of the DTB, i.e., Exchange Rules, Clearing Conditions, Conditions for
Trading, Fee Regulation and Arbitration Rules as amended from time to time,
which form an integral part of this Agreement.
3.2 For the duration of this Agreement and based on the Client's direct orders
to the DTB and for the Client's account and risk, MPF enters into options
and futures contracts resulting from the Client's transactions in
Tradeable Contracts on the DTB with the DTB in its own name and for the
Client's account and risk.
3.3 Based on the Client's direct orders to the DTB and for its account and
risk, MPF will hold "long positions" and "short positions" in options and
futures contracts. The Client is responsible for closing or exercising
these positions against the DTB. MPF will also accept as property and hold
on behalf of the Client the Underlying Values delivered on account of
Assignments, Allocations or Exercises.
3.4 Should MPF decide it desirable, it has the authority to set binding
restrictions or limits from time to time with regard to the number and/or
type of options or futures contracts or transactions in Related Values.
Such restrictions will be confirmed in writing to the Client, also
mentioning the date and duration.
3.5 At all times, the Client is obliged to enable MPF to fulfil, upon first
request, any payment and delivery obligations towards the DTB ensuing from
the options and futures contracts. The Client must do so, for example, by
providing MPF with sufficient cash and Underlying Values or by having
sufficient credit at its disposal with MPF to fulfil these obligations. The
Client has an obligation towards MPF to fulfil or deliver all which MPF, to
the Client's account and risk, must fulfil or deliver towards the DTB or
third parties pursuant to this Agreement.
4. Services Pertaining to Clearing Activities
4.1 MPF will, at the Client's order, buy or sell, acquire title to and hold for
the Client's benefit or deliver Related Values, all of the foregoing in its
own name, but for the Client's account and risk. The Client will strictly
adhere to any of MPF's procedures as provided to Client in writing from
time to time regarding the buying and selling of Related Values. Unless
otherwise agreed upon by parties in writing MPF is not obliged to hold the
Related Values it has accepted in its name for the benefit of the Client in
segregated accounts. MPF is furthermore only obliged to deliver upon the
Client's request an equal amount of the type of Related Values MPF has
received through book entry with the DKV. Until such time as the Client has
requested delivery, MPF shall be entitled to dispose of the Related Values.
4.2 The Client is not permitted to execute, for clearance by MPF, transactions
in either Underlying Values, or in securities, currencies, goods or values
which are not Underlying Values without MPF's mediation or permission,
such permission not to be unreasonably withheld.
4.3 At all times, the Client is obliged to enable MPF to promptly fulfill any
obligations ensuing from transactions in Underlying Values, for example by
providing MPF with sufficient cash and Underlying Values or by having
sufficient credit at its disposal with MPF in order to be able to meet
these obligations. The Client has an obligation towards MPF to fulfil or
deliver all which MPF must fulfil or deliver towards DTB or any third party
pursuant to this Agreement.
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5. Accounts and Administration
5.1 MPF will keep accounts of all rights and obligations obtained from options
and futures contracts for the Client's risk and account as well as the
Underlying Values which MPF has received, delivered or will deliver and
amounts of money received or paid. For that purpose MPF will open any
account and sub-accounts it may deem necessary in the Client's name in its
books, in the currencies in which is traded.
5.2 The following items will be either credited or debited to the
aforementioned accounts:
- all options and futures contracts and transactions in Underlying
Values entered into for the Client's account and risk;
- premiums received or paid;
- Underlying Values received or delivered as a result of Exercises,
Allocations or Assignments;
- the exercise price received or paid, dividends or any dividend tax
paid or received;
- costs, reimbursements, commissions, and interest owed by the Client;
- cash withdrawals;
- money drawn by the Client under the credit facility (if applicable);
- time deposits entered into by the Client;
- the actual closing value of the Underlying Values borrowed by the
Client as calculated pursuant to the DTB Rules.
5.3 Each Trading Day before official hours and each Expiration Day, MPF
will (subject to force majeure) provide the Client with a statement of
the state of affairs of the account and positions as at the end of the
previous Trading Day. This statement consists of the following
positions:
- position review statement
- unsettled position report
- daily confirmation report
- DTB margin requirements
- daily position report
- daily cash position report.
5.4 The statement provided by MPF pursuant to article 5.3 does not only serve
to inform the Client but also to confirm all transactions entered into for
the Client's account and risk. On the day on which the information is
provided, the Client is obliged to report immediately to MPF any incorrect
or incomplete entries and have these corrected.
Should MPF observe any mistakes made in the statement, MPF is obliged to
inform the Client of said mistakes without delay. Except for intent or
gross negligence, MPF is not liable for any losses resulting from incorrect
or incomplete statements by MPF.
If the Client has no comments regarding the statement or passes such
comment on after the time limit imposed by this section, the statement
shall be regarded as having been approved and serves as full proof of the
contents.
6. Orders, Exercises, Assignments
6.1 The Client must place all orders regarding option contracts or futures
contracts through its own computer system which is linked to the DTB
system.
6.2 Information regarding Assignments is available from the DTB computer system
and has to be obtained by the Client at its own risk.
6.3 If the Client was assigned one or several option series and does not have
the Underlying Values to be delivered on the first Trading Day after the
official day of exercise of the option, the Client
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will either instruct MPF to purchase such Underlying Values or the Client
will instruct MPF to borrow the respective Underlying Values in order to
make the respective deliveries. The costs incurred by MPF resulting from an
untimely delivery of the Underlying Values shall be borne by the Client.
The purchase price including commissions and possible disbursements or the
costs of borrowing securities will be debited to the account of the Client.
6.4 In the event of an Assignment by the DTB MPF will deliver or accept the
relevant Underlying Values to the Client's account and risk.
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PART III
GRANTING OF CREDIT (CREDIT FACILITY)
7. CREDIT FACILITY
7.1 The Client will have disposal of a credit facility to an amount and on
conditions determined by the parties. The aforementioned particularities
will be set out in a credit letter which will form an integral part of this
Agreement (Appendix 1). The Client will only be allowed to enter into
credit agreements required for the financing of its activities with MPF.
7.2 The credit facility granted shall solely be used to finance the Client's
trading activities which are, at the discretion of MPF, related to trading
on the DTB and shall not be used for any other purposes.
7.3 The Client can dispose of the credit facility in the way of i) a current
account advance or ii) an advance for a fixed period.
An advance for a fixed period may be obtained for a minimum period of 1 day
at a minimum amount of DM 5,000,000 for "Inland" advances and for a minimum
period of 1 week with a minimum amount of DM 1 million for "Ausland"
advances. MPF may refuse advances with a life either shorter or longer
and/or to a smaller amount without giving grounds for doing so.
7.4 Credit which has been granted, in whatever form, may be canceled without
delay at all times and under any circumstances by giving two weeks notice.
A cancellation with immediate effect shall be allowed if there is an
important reason.
7.5 The credit facility shall also end in the event of and upon termination of
this Clearing, Credit and Securities Borrowing Agreement.
7.6 MPF's customer statement, as defined in article 5.3, shall be regarded as
full proof of the granting of the credit facility, as well as of the size
and the form of the credit.
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PART IV
Securities Borrowing (Borrowing Facility)
8. Borrowing Agreement
8.1 Upon the Client's request and after the parties have come to an agreement
with regard to the amount of securites to be borrowed and the duration, MPF
may provide the Client through the securities borrowing system of the DKV
or any other securities borrowing channel with securities quoted on an
officially recognized stock exchange under a borrowing agreement. The
result of the foregoing will hereinafter be called the Borrowing Agreement.
Securities which have been borrowed for the purpose of fulfilling the
Client's delivery obligations ensuing from the sale of securities to third
parties, which the Client does not yet possess, (so-called unsettled short
stock positions), as well as obligations resulting from exercised, assigned
and/or tendered options or futures contracts can only be used for that
purpose.
8.2 Hereby MPF is irrevocably authorized by the Client, but not obliged, to
enter into a Borrowing Agreement with the Client in the event the Client
has the obligation to deliver securities to third parties which it does not
have in its portfolio on the first trading day after the transaction
resulting in the obligation to deliver securities.
8.3 MPF's customer statement, as defined in article 5.3, shall serve as full
proof of the existence of the Borrowing Agreement and of the number and
type of securities which have been borrowed.
8.4 MPF will deliver to the Client the securities to be borrowed in
unencumbered ownership free from attachments, security rights or
encumbrances or other third party rights. MPF guarantees towards the Client
its power of disposal and indemnifies the Client against execution or
possible defects.
8.5 The borrowed securities will be delivered by book entry transfer through
the DKV to the Client's credit or to the credit of the party to which an
obligation to deliver exists, unless the Client requests a different manner
of delivery. MPF will attempt to arrange for the delivery to take place on
the settlement date agreed to upon entering into the securities
transaction.
8.6 Client declares that it is aware of the fact that MPF in turn borrows the
securities to be lent to the Client from third parties and is therefore
dependent on same. MPF can therefore not be held liable in the event that
MPF should not be able to lend securities to the Client.
9. Costs
9.1 Any costs and charges which may ensue from the delivery or redelivery of
borrowed securities are to the Client's account.
10. End of the Agreement/ Demandability
10.1 Subject to divergent written agreements, a Borrowing Agreement shall apply
for an indefinite period of time until notice is given by either of the
parties.
10.2 All Borrowing Agreements shall end if and when this Clearing, Credit
Facility and Securities Borrowing Agreement ends.
10.3 The parties may furthermore end a Borrowing Agreement by way of a written
notice in due observance of a notice period of two Trading Days, or one
Trading day, provided however that in the latter, notice is given before
10:00 a.m. Frankfurt time.
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10.4 In all events in which MPF cannot in reason be required to allow the
Borrowing Agreement to continue, MPF is allowed to terminate the Borrowing
Agreement with immediate effect.
10.5 In the event the Agreement terminated pursuant to the aforementioned
paragraphs, does not end on a Trading Day or ends on a day on which no
trade can take place in the borrowed securities, the period shall be
extended until the next trading day.
11. REDELIVERY
11.1 On the day on which a Borrowing Agreement ends pursuant to what has been
set out in this Agreement, the Client will redeliver to MPF through a
credit of MPF's account with the DKV a like amount of the borrowed
securities in unencumbered ownership free from attachments. The breach of
the foregoing obligation shall be subject to assessment to Client of any
costs or fines imposed upon MPF by the lender of the borrowed securities as
stipulated by the agreement(s) in place between MPF and the lender of the
securities.
11.2 Borrowed securities have to be returned to MPF in case of conversion-,
compensation- or other purchase offers two banking days prior to the
beginning of the time period for the acceptance or submission of such
offers. If the borrowed securities are not returned on time MPF will
purchase the respective number of securities on account of Client on the
next trading day and debit the Client for the purchase price including
disbursements. If such purchase is not possible the provision under 11.1
shall apply.
11.3 If certain securities are taken from the collective deposit of securities
with the DKV into a separate deposit because the remaining term is less
than six months or for assignment purposes the securities have been divided
into series or groups or have been terminated early, the borrowed
securities out of the respective category of securities have to be returned
not later than five trading days prior to the maturity date or the date
announced by the DKV for the split-up of the series for assignment
purposes.
12. RIGHTS RELATED TO SECURITIES
12.1 During the period in which the Client is borrowing securities, all and any
rights related to the securities will be exercised by the Client on the
understanding that the Client is obliged to reimburse MPF for, or to
deliver, any distributions it has received or rights it has been granted.
These rights will include, but not be restricted to:
(i) distributions in cash including dividends, interest or principals;
(ii) distributions by way of securities
(iii) rights granted to obtain securities;
(iv) voting rights.
12.2 The Client will exercise the rights set out in the foregoing paragraph
solely after consultation with and approval by MPF.
12.3 The Client is obliged to fully reimburse MPF for monetary distributions on
the day on which these are made payable. In the event a distribution is
made in the same securities as those which have been borrowed, the
distributed securities will be regarded as being part of the loan. The
Client will deliver to MPF any other rights or distributions on the day on
which they are made payable.
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PART V
General Provisions
13. The Client's Equity / Private Capital / Solvency / Liquidity
13.1 At all times, the Client will meet the requirements set by MPF with regard
to the Client's solvency and liquidity. In particular the Client will at
all times meet the requirements set from time to time by MPF with regard to
the capital requirements and the relations between the Net Liquidation
Value (Net Liq.) and the Haircut as determined by MPF. At all times the Net
Liq. has to be of a positive value. MPF's requirements which apply when
this Agreement is signed have been set out in Appendix 3 of this Agreement.
Any specific requirements will be notified to the Client by MPF in writing.
13.2 At all times, the Client will maintain a Net Liq. which exceeds the total
amount of Time Value included in its position as determined by MPF.
13.3 If at any time the Client should not comply with what has been set out in
the foregoing paragraphs it will immediately, without any warning, summons
or proof of default being required, take steps to end the infringement of
the foregoing paragraphs and meet all instructions or (trading)
restrictions set by MPF without delay. Should the Client fail to take any
steps or fail to comply with the aforementioned instructions or (trading)
restrictions, MPF has the discretionary power to take all steps it deems
advisable in order to end the infringement without prejudice to the
exercise of other powers by MPF pursuant to this Clearing, Credit Facility
and Securities Borrowing Agreement.
13.4 Without MPF's prior written consent, the Client is not allowed to transfer
to any third party as collateral any part of its capital, securities,
claims, and movable property, or to encumber these with any security
rights, encumbrances or other third party rights, or to place them at the
disposal of third parties or grant any other rights thereupon.
14. Information Provided to MPF and Third Parties/Applicable Rules
14.1 MPF has the irrevocable authority to provide to the DTB any information
concerning the Client to which they are entitled pursuant to the DTB-Rules.
14.2 Upon request, the Client will provide full information regarding its
financial position and all business data requested by MPF, such as for
example the Articles of Association and extracts from public or court
registers. Within 10 months of the closing of the financial year, the
Client will make available a copy of the annual accounts. Additionally, the
Client will immediately inform MPF of any facts or circumstances which
might influence the exercising of its activities in the short or long run,
including changes in its financial position, legal entity and the Client's
or its representatives' or authorized agents' authority.
14.3 At all times, the parties will strictly adhere to the provisions set out in
the DTB-Rules and all directions given and exercise orders set by the DTB
pursuant to the foregoing regulations. At all times, the parties will
familiarize themselves with the contents of the aforementioned regulations,
enforcement decisions and directives, so that any unfamiliarity therewith
will be to the relevant party's own account. MPF may at all times, without
further consultation, rely on the correctness of any information or order
of the DTB.
14.4 If MPF should suffer financial damage due to the Client's infringement of
the foregoing paragraph, for example because the DTB takes (disciplinary)
measures against MPF, the Client will reimburse the former for that damage,
inclusive of interest and costs. The Client shall indemnify MPF in this
matter.
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15. Fees Owed, Costs and Interest Rates
15.1 With regard to services rendered by MPF pursuant to this Agreement
(clearing, financial records, credit facility, security borrowing facility)
the Client owes fees, reimbursements, costs and interest in accordance with
the tariffs determined by MPF from time to time.
Said tariffs may by adjusted by MPF, of which adjustment the Client will be
informed 30 days beforehand in writing. The tariffs applicable upon the
signing of this Agreement have been set out in Appendix 4 of this
Agreement. If the Client does not agree to an adjustment covered by this
paragraph, the Client may terminate this agreement by giving MPF 30 days
notice in writing within the 30 day period following notification of the
adjustment by MPF. The Client grants MPF the irrevocable authority to debit
to Client's account fees, reimbursements, costs and interest to which MPF
is entitled.
15.2 All costs related to the establishment of collateral pursuant to this
Agreement shall be to the Client's account.
15.3 The Client shall pay all reasonable costs incurred inside and outside a
court of law, including the costs of legal counsel and legal costs incurred
with regard to proceedings or disputes between MPF and the Client in which
judgment has been awarded against the Client. Any costs incurred by MPF
with regard to legal proceedings or disputes between the Client and a third
party, in which MPF becomes involved, shall be to the Client's account.
15.4 MPF shall pay all reasonable costs incurred inside and outside a court of
law, including the costs of legal counsel and legal costs incurred with
regard to proceedings or disputes between MPF and the Client in which
judgment has been awarded against MPF.
16. Collateral
16.1 The Client is obliged to provide MPF with collateral in the reasonable
amount and form requested by MPF for all which MPF may, for whatever
reason, claim from the Client whether or not due. The foregoing shall
include provisional claims, claims under time limit or future claims. The
Client is obliged to render its full cooperaton to all that which may be
useful or necessary to establish the collateral.
In the event the collateral given is to MPF's exclusive opinion no longer
sufficient, or acceptable or threatens to become insufficient or
unacceptable, taking into account the coverage value whicn MPF has assigned
to it, the Client will, upon the first request, settle an additional or
replacement collateral to the amount and form requested by MPF within the
reasonable time to be set by MPF. For clearing activities provision of
collateral is based on the calculation modus prescribed by the DTB for the
provision or securities by NCM to a GCM.
Collateral shall be valued as follows: cash deposits at 100%, acceptable
bank guaranties at the nominal amount of the guaranty, other securities at
current market value adjusted at MPF's sole discretion for risk and
liquidity.
MPF will calculate on each Trading Day the amount of collateral to be
provided and the value of the collateral which have been provided by the
Client. If the value of the amount provided does not meet the required
amount, Client is obliged to provide additional collateral within a period
of time to be set by MPF.
If the value of the collateral provided exceeds not for only a temporary
period of time all claims of MPF against the Client resulting from this
Agreement MPF shall waive the exceeding amount of collateral upon request
by the Client.
16.2 All securities, claims, rights (hereinafter also including options and
futures contracts) cash, goods or other values, which MPF, for whatever
reason, acquires (whether or not in its own name) for
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the Client's benefit, as well as of the Client's rights and claims towards
MPF, will hereby be pledged to MPF as collateral as referred to in the
foregoing paragraph. The aforementioned right of pledge shall in each case
be regarded as automatically established at the moment at which MPF
commences to keep the securities, rights, claims, cash, goods or other
values or when rights or claims arise.
16.3 MPF has the authority to pledge to the DTB, or to provide as collateral for
any claims by the DTB in any other manner, securities accepted by the DTB
or cash which it has been given as collateral by the Client.
16.4 All securities, rights, claims, cash, goods, or other values pledged by the
Client to MPF must be free unencumbered of any other security rights or
encumbrances, or any attachments or garnishments or third party rights or
whatever nature.
16.5 MPF has the exclusive authority to exercise all rights related to or
ensuing from the pledge securities, rights, claims, cash, goods and other
values.
16.6 MPF shall at all times be entitled to set off all and any claims it has
against the Client, whether or not due and payable or whether or not
contingent, against any counterclaims of the Client on MPF whether due and
payable or not, regardless of the currency in which such claims are
denominated. If, however, the claim of MPF on the Client or the
counterclaim of the Client on MPF is not yet due and payable - and provided
MPF's claim and the Client's counterclaim are denominated in the same
currency - MPF shall not exercise its right of set-off except in the event
an attachment is levied upon the Client's counterclaim or recovery is
sought from such counterclaim in any other way, or in the event a right in
rem is created thereon or the Client assigns his counterclaim.
Claims denominated in foreign currency shall be set off at the rate of
exchange of the day of set-off.
If possible, MPF shall inform the Client in advance that it will exercise
its rights of set-off.
17. Trading Practice
17.1 At all times the Client has an obligation towards MPF to exercise the
utmost diligence in the manner in which it trades on the DTB, other German
exchanges and on foreign exchanges, if applicable, and the manner in which
it manages its options and futures contracts and disposes of same or enters
into obligations with regard to same.
17.2 MPF is authorized to require the Client that the Client takes steps to
decrease the risk involved with already existing positions in options and
futures contracts and/or Underlying Values to the degree reasonably desired
by MPF.
MPF also has the authority to introduce restrictions with regard to the
Size of the Position in general and with regard to the Size of the specific
Positions in options and futures contracts, positions in Underlying Values
and the amount of credit withdrawn in particular.
17.3 Should the Client fail to take measures to adjust the Size of its
Positions, or the risk related to its positions, to the limits or
restrictions set by MPF, MPF has the discretionary power to take all
measures it deems advisable to adjust the Size of the Positions or the risk
related to the positions to the established limits and restrictions. The
foregoing without prejudice to MPF's other powers pursuant to this
Agreement and the law.
17.4 The Client is obligated to provide MPF with a power of attorney in the form
of Appendix 5 hereto, pursuant to which MPF can act on behalf of the Client
in accordance with section 17.3 hereof.
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17.5 Any liability of MPF for failing to exercise any right pursuant to section
17.2. or 17.3 hereof is herewith excluded unless in case of intent or
gross negligence.
17.6 The Client must ensure that it can be contacted at all times.
18. Measures to be taken by MPF
18.1 Events
In the following events, MPF is authorized to take one or more of the
measures set out in article 18.2 without prejudice to MPF's other rights in
pursuance of this Clearing, Credit Facility and Securities Borrowing
Agreement and the law.
a) In the event the Client does not, does not correctly or timely comply
with any obligation ensuing from this Clearing, Credit Facility and
Securities Borrowing Agreement or an agreement related hereto, or in the
event of an occurrence which, in MPF's opinion may result in the Client's
inability to comply with, or to sufficiently or timely comply with its
obligations.
b) In the event the Client's membership of the DTB ends, the Client's
membership is suspended, or any other disciplinary measures, given whatever
name or to whatever extent, are taken by the DTB.
c) In the event of the Client's suspension of payments or bankruptcy.
d) In the event an attachment or garnishment is exercised on any part of
the Client's assets.
e) In the event the Client loses full control of a substantial part of its
assets or loses the power to act independently.
f) In the event of the Client's liquidation or dissolution in so far the
Client is a legal entity.
g) In the event the Client, is placed under the control of an administrator
or, as a private person, under the control of a xxxx.
18.2 Measures
a) This Clearing, Credit Facility and Securities Borrowing Agreement and
all agreements related thereto may be terminated immediately without the
observance of any term of notice. In that event all MPF's claims towards
the Client will immediately become payable upon demand, to the extent this
was not already the case.
b) The execution of this Agreement and all agreements related thereto may
be suspended.
c) MPF may demand from the Client or its legal successor to liquidate the
options and futures contracts and Underlying Values within the fixed time
to be set by MPF.
d) MPF may on its own initiative and without prior consultation or approval
from Client, for the account and risk of the Client or its legal
successors, close, open or exercise options and/or futures contract
positions, dispose of Underlying Values or sell or buy Underlying Values.
In such cases, MPF will act on the basis of the power of attorney to be
provided in the form of Appendix 5 hereto.
e) Collateral that has been established may be sold, which includes the
liquidation by sale and transfer of the entire options and futures contract
position and Underlying Values to third parties.
f) Claims announcing legal interest.
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g) Take all other measures which MPF deems advisable in order to protect
its interests.
18.3 The Client is liable towards MPF for any damages, including consequential
damage which MPF may suffer due to the Client's act of default. The Client
will fully indemnify MPF for any third party claims, regarding damages,
costs (of whatever nature) and interest which MPF may incur due to the
Client's act of default.
19. MPF'S Liability
19.1 MPF is obliged to award damages to the Client for any damage which the
Client might suffer due to an act of default or any other act committed by
MPF, but only in the event that the damage is the result of intent or gross
negligence. Consequential damage is expressly excluded.
19.2 In the event however, that the damage is the result of measures taken as
referred to in articles 13.3, 17.3, 17.4, and 18.2 of this Agreement, MPF
shall only be liable in case of intent or gross negligence.
19.3 MPF shall also not be liable with regard to measures taken in order to
comply with obligations ensuing from the DTB rules.
19.4 To the extent that MPF acts as an intermediary towards third parties,
acting in its own name for account and risk of the Client, it is always
understood that MPF shall not be liable for any failure of whatever nature
in the performance of obligations by said third party.
20. Amendments
20.1 Amendments to this Agreement and the accompanying appendices can only be
done in writing.
21. Termination
21.1 Without prejudice to the provisions in the parts pertaining to the Clearing
and Credit Facility and the Securities Borrowing Facility the parties may
terminate this Agreement in writing by giving notice with due observance
of a term of one month.
21.2 In the event circumstances occur as a result of which MPF cannot be
reasonably expected to continue its relation with the Client, MPF is
entitled, without prejudice to what has been provided in this Agreement, to
terminate this Agreement immediately in writing without further notice.
21.3 This Agreement shall end upon the termination of the Client's membership of
the DTB.
21.4 In the events set out in the foregoing paragraphs, MPF will transfer the
options and futures contracts positions and Underlying Values to another
General Clearing Member of the Client's choice and release the collateral,
after the Client has met all of MPF's claims towards the Client, or settle
all accounts and pay out the proceeds to the Client. It for whatever reason
such transfer should not occur within any fixed time set by MPF or in the
case of a settlement of the accounts, MPF has the authority to liquidate
the Client's position and, to the extent required, sell any collateral.
22. Applicable Law/General Business Conditions of the German Private Banks/Venue
22.1 The laws of the Federal Republic of Germany shall apply to this Agreement.
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22.2 The parties further agree the application of the General Business
Conditions of the German Private Banks, a copy of which is enclosed hereto
as Appendix 6.
22.3 All disputes ensuing from or related to this Agreement will be brought
before the competent court in Frankfurt am Main unless disputes arising
from clearing activities have to be brought before the arbitration court of
the DTB.
23. TRADE ON FOREIGN EXCHANGES/OTC TRADING
23.1 This Agreement only applies to the Client's activities on the DTB and does
not apply to the trade on other (foreign) exchanges. The Client shall not
without prior permission from MPF develop, either directly or indirectly,
activities on exchanges other than the DTB or activities in OTC products.
23.2 With regard to the trade on exchanges other than the DTB, MPF will issue
rules with regard to which this Agreement will be applied as analogous as
possible provided, however, that approva1 has been granted.
24. CHARACTER OF OBLIGATIONS
24.1 All the Client's obligations which ensue from this Agreement and its
related agreements shall be unseverable.
24.2 In the event the Client carries out its activities in the form of an
interest grouping of persons, such as a partnership firm or general
partnership, all of its members will be jointly and severally liable
towards MPF.
26. FORCE MAJEURE
25.1 Neither MPF nor Client shall be liable if any failure is the result of
force majeure, inclusive of, but not restricted to, international
conflicts; violent and armed actions; riots; natural disasters.
26. LIMITATIONS OF LIABILITY
26.1 MPF shall not be liable for measures taken or acts of default committed by
the DTB, or foreign exchanges or exchange organizations; actions of
domestic or foreign governmental authorities, disturbances among MPF's
personnel or the personnel of third parties whose services MPF employs;
boycotts; failures in the electricity supply or failure or impediments in
the means of communication or equipment or computer systems of MPF or third
parties whose services MPF employs, inclusive of failures caused by
capacity shortages of the equipment, means of communication or systems. If
such a situation should occur, MPF will take any measures which it may
reasonably be expected to take in order to diminish its negative effect for
the Client.
26.2 In the execution of the Client's order and of other agreements concluded
with the Client, MPF has the authority to employ the services of third
parties as well as the authority to deposit the Client's goods and other
values deposited with third parties in MPF's name. MPF is not liable for
any shortcomings of said third parties if MPF demonstrates that it has
exercised due diligence in its choice of that third party. In the event
MPF is not liable for any shortcomings of said third parties, it will, in
the event the Client has suffered damages, support the Client as much as
possible to rectify that damage.
27. NO WAIVERS/EXERCISE OF POWERS
27.1 In the event MPF exercises only one or more of its powers ensuing from this
Agreement or the law, this will never be interpreted as the waiving of any
rights or powers or entail that MPF is
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limited in exercising any right or power. The fact that MPF has been
awarded certain rights or powers does not imply that MPF is obliged to
exercise said powers.
28. Severability
28.1 In the event that any provision of this Agreement is or becomes invalid,
the validity of the other provisions shall remain unaffected. This shall
also apply in the event that this Agreement is incomplete with respect to
certain provisions intended by the parties but not formally included in
this Agreement. In such case, the parties shall replace the invalid or
missing provision by a valid provision which comes as close as possible to
the provision initially intended by the parties.
This agreed in duplicate:
Frankfurt am Main, 16 October, 1995 Frankfurt 23/10/95
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Place, Date
/s/ Authorized Signatory /s/ Authorized Signatory
----------------------------------- -------------------------
MeesPierson N.V., Hull Trading GmbH
Niederlassung Frankfurt By:
/s/ Authorized Signatory /s/ Authorized Signatory
----------------------------------- -------------------------
MeesPierson N.V., Hull Trading GmbH
Niederlassung Frankfurt By:
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