Exhibit 10.05
CUSTOMER AGREEMENT
THIS CUSTOMER AGREEMENT (this "Agreement"), made as of the
31st day of August, 2002, by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CHARTER ▇▇▇▇▇▇▇▇ ▇.▇., a
Delaware limited partnership (the "Customer"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ INC., a
Delaware corporation ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇");
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Customer was organized pursuant to a Certificate
of Limited Partnership filed in the office of the Secretary of State of the
State of Delaware on March 26, 2002, 2002, and a Limited Partnership Agreement
dated as of March 26, 2002, between Demeter Management Corporation, a Delaware
corporation ("Demeter"), acting as general partner (in such capacity, the
"General Partner"), and the limited partners ("Limited Partners") of the
Customer, to trade, buy, sell, spread or otherwise acquire, hold, or dispose of
commodities (which may include foreign currencies, mortgage-backed securities,
money market instruments, financial instruments, and any other securities or
items which are, or may become, the subject of futures contract trading),
domestic and foreign commodity futures contracts, commodity forward contracts,
foreign exchange commitments, options on physical commodities and on futures
contracts, spot (cash) commodities and currencies, and any rights pertaining
thereto (hereinafter referred to collectively as "futures interests") and
securities (such as United States Treasury securities) approved by the Commodity
Futures Trading Commission (the "CFTC") for investment of customer funds and
other securities on a limited basis, and to engage in all activities incident
thereto;
WHEREAS, the Customer (which is a commodity pool) and the
General Partner (which is a registered commodity pool operator) have entered
into a management agreement (the "Management Agreement") with a certain trading
advisor (the "Trading Advisor") which provides that the Trading Advisor has the
authority and responsibility, except in certain limited situations, to direct
the investment and reinvestment of the assets of the Customer in futures
interests under the terms set forth in the Management Agreement; and
WHEREAS, the Customer and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ wish to enter into
this Customer Agreement to set forth the terms and conditions upon which ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ will perform non-clearing futures interests brokerage and certain
other services for the Customer;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not defined herein shall
have the meaning given to them in the Customer's prospectus, dated July 29, 2002
(as the same may be amended from time to time) as filed with the Securities and
Exchange Commission (the "Prospectus") relating to the offering of units of
limited partnership interest of the Customer (the "Units") and in any amendment
or supplement to the Prospectus.
2. Duties of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ agrees to
act as a non-clearing commodity broker for the Customer and introduce the
Customer's account to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("MS&Co.") and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. International Limited ("MSIL") for execution and clearing of
futures interests transactions on behalf of the Customer in accordance with
instructions provided by the Trading Advisor, and the Customer agrees to retain
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ as a non-clearing commodity broker for the term of this
Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ agrees to furnish to the Customer as soon as
practicable all of the information from time to time in its possession which
Demeter, as the general partner of the Customer, is required to furnish to the
Limited Partners pursuant to the Limited Partnership Agreement as from time to
time in effect and as required by applicable law, rules, or regulations and to
perform such other services for the Customer as are set forth herein and in the
Prospectus.
3. Obligations and Expenses. Except as otherwise set forth
herein and in the Prospectus, the Customer, and not ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, shall be
responsible for all taxes, management and incentive fees to the Trading Advisor,
brokerage fees to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, and all extraordinary expenses incurred by
it. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall pay all of the offering and ordinary administrative
expenses of the Customer (including, but not limited to, legal, accounting, and
auditing fees, printing costs, filing fees, escrow fees, marketing costs and
expenses and other related expenses) and all charges of MS&Co. and MSIL for
executing and clearing the Customer's futures interests trades (as described in
paragraph 5 below), and shall not be reimbursed therefor.
4. Agreement Nonexclusive. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall be free to
render services of the nature to be rendered to the Customer hereunder to other
persons or entities in addition to the Customer, and the parties acknowledge
that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ may render such services to additional entities similar
in nature to the Customer, including other partnerships organized with Demeter
as their general partner. It is expressly understood and agreed that this
Agreement is nonexclusive and that the Customer has no obligation to execute any
or all of its trades for futures interests through ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. The
parties acknowledge that the Customer may utilize such other broker or brokers
as the General Partner may direct from time to time. The Customer's utilization
of an additional commodity broker shall neither terminate this Agreement nor
modify in any regard the respective rights and obligations of the Customer and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ hereunder.
5. Compensation of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. The Customer shall pay
brokerage fees to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ at a monthly flat-rate. The Customer will
pay to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ a monthly flat-rate fee of 1/12 of 6.75% of the
Customer's Net Assets (a 6.75% annual rate) as of the first day of each month.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ will receive such brokerage fees irrespective of the number of
trades executed on the Customer's behalf.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall pay or reimburse the Customer, from
brokerage fees received by it, all charges of MS&Co. and MSIL for executing and
clearing trades for the Customer, including floor brokerage fees, exchange fees,
clearinghouse fees, NFA fees, "give up" fees, any taxes (other than income
taxes), any third party clearing costs incurred by MS&Co. and MSIL, and costs
associated with taking delivery of futures interests. For purposes of clarity,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ does not pay or reimburse the Customer for the ▇▇▇▇-up,
spread, or other profit of MS&Co. included as a part of the transaction price on
each foreign currency forward contract trade executed with MS&Co. pursuant to
the Foreign Exchange and Options Master Agreement between MS&Co. and the
Customer.
-2-
From time to time, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ may increase or decrease
brokerage fees to be charged to the Customer; provided, however, that: (i)
notice of such increase is mailed to each Limited Partner at least five business
days prior to the last date on which a "Request for Redemption" must be received
by the General Partner with respect to the applicable Redemption Date; and (ii)
such notice shall describe the redemption and voting rights of Limited Partners.
Notwithstanding the foregoing, the Customer's expenses are
subject to the following limits: (a) if the Customer were to pay roundturn
brokerage commissions, the brokerage commissions (excluding transaction fees and
costs) payable by the Customer to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall not exceed 80% of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's published non-member rates for speculative accounts and (b)
the aggregate of (i) brokerage commissions (or fees) payable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇, (ii) transaction fees and costs payable by the Customer, and (iii) net
excess interest and compensating balance benefits to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ (after
crediting the Customer with interest as described in the Prospectus) shall not
exceed 14% annually of the Customer's average month-end Net Assets during each
calendar year.
6. Investment Discretion. The parties recognize that ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ shall have no authority to direct the futures interests investments
to be made for the Customer's account. However, the parties agree that ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇, and not the Trading Advisor, shall have the authority and
responsibility with regard to the investment, maintenance, and management of the
Customer's assets that are held in segregated or secured accounts, as provided
in Section 7 hereof.
7. Investment of Customer Funds. The Customer shall deposit
its assets in accounts with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. The Customer's assets deposited
with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ will be segregated or secured in accordance with the
Commodity Exchange Act and CFTC regulations. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ will credit the
Customer with interest income at month-end at the rate earned by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ on its U.S. Treasury ▇▇▇▇ investments with customer segregated funds as if
100% of the Customer's average daily funds (including cash and securities) held
in the Customer's account with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ during the month were invested
in U.S. Treasury bills at that rate. All of such funds will be available for
margin for the Customer's trading. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ will also credit the
Customer with 100% of the interest income ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ receives from MS&Co.
and MSIL with respect to the Customer's assets deposited as margin with MS&Co.
and MSIL. The Customer understands that it will not receive any other interest
income on its assets. The Customer's funds will either be invested along with
other customer segregated and secured funds of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ or held in
non-interest bearing bank accounts. The Customer's assets held by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ may be used solely as margin for the Customer's trading.
Ownership of the right to receive interest on the Customer's
assets pursuant to the preceding paragraph shall be reflected and maintained and
may be transferred only on the books and records of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. Any
purported transfer of such ownership shall not be effective or recognized until
such transfer shall have been recorded on the books and records of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇.
8. Standard of Liability and Indemnity. Subject to Section 2
hereof, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ and its affiliates (as defined below) shall not be
liable to the Customer, the General Partner or Limited Partners, or any of its
or their respective successors or assigns, for any act, omission, conduct, or
activity undertaken by or on behalf of the Customer pursuant to this Agreement
which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ determines, in good faith, to be in the best interests
of the Customer, unless such act, omission, conduct, or activity by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ or its affiliates constituted misconduct or negligence.
-3-
The Customer shall indemnify, defend and hold harmless ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ and its affiliates from and against any loss, liability, damage, cost
or expense (including attorneys' and accountants' fees and expenses incurred in
the defense of any demands, claims, or lawsuits) actually and reasonably
incurred arising from any act, omission, conduct or activity undertaken by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ on behalf of the Customer pursuant to this Agreement,
including, without limitation, any demands, claims or lawsuits initiated by a
Limited Partner (or assignee thereof), provided that (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ has
determined, in good faith, that the act, omission, conduct, or activity giving
rise to the claim for indemnification was in the best interests of the Customer,
and (ii) the act, omission, conduct, or activity that was the basis for such
loss, liability, damage, cost, or expense was not the result of misconduct or
negligence. Notwithstanding anything to the contrary contained in the foregoing,
neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ nor any of its affiliates shall be indemnified by the
Customer for any losses, liabilities, or expenses arising from or out of an
alleged violation of federal or state securities laws unless (a) there has been
a successful adjudication on the merits of each count involving alleged
securities law violations as to the particular indemnitee, or (b) such claims
have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the particular indemnitee, or (c) a court of competent
jurisdiction approves a settlement of the claims against the particular
indemnitee and finds that indemnification of the settlement and related costs
should be made, provided, with regard to such court approval, the indemnitee
must apprise the court of the position of the SEC, and the positions of the
respective securities administrators of Massachusetts, Missouri, Tennessee
and/or those other states and jurisdictions in which the plaintiffs claim they
were offered or sold Units, with respect to indemnification for securities laws
violations before seeking court approval for indemnification. Furthermore, in
any action or proceeding brought by a Limited Partner in the right of the
Customer to which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ or any affiliate thereof is a party
defendant, any such person shall be indemnified only to the extent and subject
to the conditions specified in the Delaware Revised Uniform Limited Partnership
Act, as amended, and this Section 8. The Customer shall make advances to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ or its affiliates hereunder only if: (i) the demand, claim, lawsuit,
or legal action relates to the performance of duties or services by such persons
to the Customer; (ii) such demand, claim, lawsuit, or legal action is not
initiated by a Limited Partner; and (iii) such advances are repaid, with
interest at the legal rate under Delaware law, if the person receiving such
advance is ultimately found not to be entitled to indemnification hereunder.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall indemnify, defend and hold harmless
the Customer and its successors or assigns from and against any losses,
liabilities, damages, costs, or expenses (including in connection with the
defense or settlement of claims; provided ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ has approved such
settlement) incurred as a result of the activities of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ or its
affiliates, provided, further, that the act, omission, conduct, or activity
giving rise to the claim for indemnification was the result of bad faith,
misconduct or negligence.
The indemnities provided in this Section 8 by the Customer to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ and its affiliates shall be inapplicable in the event of any
losses, liabilities, damages, costs, or expenses arising out of, or based upon,
any material breach of any warranty, covenant, or agreement of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
contained in this Agreement to the extent caused by such breach. Likewise, the
indemnities provided in this Section 8 by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ to the Customer and
any of its successors and assigns shall be inapplicable in the event of any
losses, liabilities, damages, costs, or expenses arising out of, or based upon,
any material breach of any warranty, covenant, or agreement of the Customer
contained in this Agreement to the extent caused by such breach.
-4-
As used in this Section 8, the term "affiliate" of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ shall mean: (i) any natural person, partnership, corporation,
association, or other legal entity directly or indirectly owning, controlling,
or holding with power to vote 10% or more of the outstanding voting securities
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇; (ii) any partnership, corporation, association, or other
legal entity 10% or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held with power to vote by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇;
(iii) any natural person, partnership, corporation, association, or other legal
entity directly or indirectly controlling, controlled by, or under common
control with, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇; or (iv) any officer or director of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇. Notwithstanding the foregoing, "affiliates" for purposes of this
Section 8 shall include only those persons acting on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
and performing services for Customer within the scope of the authority of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇, as set forth in this Agreement.
9. Term. This Agreement shall continue in effect until
terminated by either party giving not less than 60 days' prior written notice of
termination to the other party. Any such termination by either party shall be
without penalty.
10. Complete Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the matters referred to herein,
and no other agreement, verbal or otherwise, shall be binding as between the
parties unless in writing and signed by the party against whom enforcement is
sought.
11. Assignment. This Agreement may not be assigned by either
party without the express written consent of the other party.
12. Amendment. This Agreement may not be amended except by the
written consent of the parties and provided such amendment is consistent with
the Prospectus.
13. Notices. All notices required or desired to be delivered
under this Agreement shall be in writing and shall be effective when delivered
personally on the day delivered, or when given by registered or certified mail,
postage prepaid, return receipt requested, on the day of receipt, addressed as
follows (or to such other address as the party entitled to notice shall
hereafter designate in accordance with the terms hereof):
if to the Customer:
Demeter Management Corproation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chairman
-5-
if to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Director
14. Survival. The provisions of this Agreement shall survive
the termination of this Agreement with respect to any matter arising while this
Agreement was in effect.
15. Headings. Headings of Sections herein are for the
convenience of the parties only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
16. Incorporation by Reference. The Futures Customer Agreement
annexed hereto is hereby incorporated by reference herein and made a part hereof
to the same extent as if such document were set forth in full herein. If any
provision of this Agreement is or at any time becomes inconsistent with the
annexed document, the terms of this Agreement shall control.
IN WITNESS WHEREOF, this Agreement has been executed for and
on behalf of the undersigned as of the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CHARTER ▇▇▇▇▇▇▇▇ ▇.▇.
By: Demeter Management Corporation,
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chairman
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Director
-6-
FUTURES CUSTOMER AGREEMENT
In consideration of the acceptance by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Inc. ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇") of one or more accounts of the undersigned ("Customer") (if more than one
account is carried by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, all are covered by this Agreement and
are referred to collectively as the "Account") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's agreement
to act as Customer's broker for the execution, clearance and/or carrying of
transactions for the purchase and sale of commodity interests, including
commodities, commodity futures contracts and commodity options, Customer agrees
as follows:
1. APPLICABLE RULES AND REGULATIONS - The Account and each transaction
therein shall be subject to the terms of this Agreement and to (a) all
applicable laws and the regulations, rules and orders (collectively
"regulations") of all regulatory and self-regulatory organizations
having jurisdiction and (b) the constitution, by-laws, rules,
regulations, orders, resolutions, interpretations and customs and
usages (collectively "rules") of the market and any associated clearing
organization (each an "exchange") on or subject to the rules of which
such transaction is executed and/or cleared. The reference in the
preceding sentence to exchange rules is solely for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's
protection and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's failure to comply therewith shall
not constitute a breach of this Agreement or relieve Customer of any
obligation or responsibility under this Agreement. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
shall not be liable to Customer as a result of any action by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇, its officers, directors, employees or agents to comply with
any rule or regulation.
2. PAYMENTS TO ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ - Customer agrees to pay to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ immediately on request (a) commissions, fees and service
charges as are in effect from time to time together with all applicable
regulatory and self-regulatory organization and exchange fees, charges
and taxes; (b) the amount of any debit balance or any other liability
that may result from transactions executed for the account; and (c)
interest on such debit balance or liability at the prevailing rate
charged by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ at the time such debit balance or
liability arises and service charges on any such debit balance or
liability together with any reasonable costs and attorney's fees
incurred in collecting any such debit balance or liability. Customer
acknowledges that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ may charge commissions at other
rates to other customers.
3. CUSTOMER'S DUTY TO MAINTAIN ADEQUATE MARGIN - Customer shall at all
times and without prior notice or demand from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
maintain adequate margins in the account so as continually to meet the
original and maintenance margin requirements established by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ for Customer. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ may change such requirements
from time to time at ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's discretion. Such margin
requirements may exceed the margin requirements set by any exchange or
other regulatory authority and may vary from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's
requirements for other customers. Customer agrees, when so requested,
immediately to wire transfer margin funds and to furnish ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ with names of bank officers for immediate verification of such
transfers. Customer acknowledges and agrees that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ may
receive and retain as its own any interest, increment, profit, gain or
benefit directly or indirectly, accruing from any of the funds ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ receives from Customer.
-2-
4. DELIVERY; OPTION EXERCISE
(a) Customer acknowledges that the making or accepting of delivery
pursuant to a futures contract may involve a much higher
degree of risk than liquidating a position by offset. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ has no control over and makes no warranty with
respect to grade, quality or tolerances of any commodity
delivered in fulfillment of a contract.
(b) Customer agrees to give ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ timely notice and
immediately on request to inform ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ if Customer
intends to make or take delivery under a futures contract or
to exercise an option contract. If so requested, Customer
shall provide ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ with satisfactory assurances
that Customer can fulfill Customer's obligation to make or
take delivery under any contract. Customer shall furnish
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ with property deliverable by it under any
contract in accordance with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's instructions.
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall not have any obligation to exercise
any long option contract unless Customer has furnished ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ with timely exercise instructions and sufficient
initial margin with respect to each underlying futures
contract.
5. FOREIGN CURRENCY - If ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ enters into any transaction for
Customer effected in a currency other than U.S. dollars: (a) any profit
or loss caused by changes in the rate of exchange for such currency
shall be for Customer's account and risk and (b) unless another
currency is designated in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's confirmation of such
transaction, all margin for such transaction and the profit or loss on
the liquidation of such transaction shall be in U.S. dollars at a rate
of exchange determined by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ in its discretion on the
basis of then prevailing market rates of exchange for such foreign
currency.
6. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ MAY LIMIT POSITIONS HELD - Customer agrees that
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, at its discretion, may limit the number of open
positions (net or gross) which Customer may execute, clear and/or carry
with or acquire through it. Customer agrees (a) not to make any trade
which would have the effect of exceeding such limits, (b) that ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ may require Customer to reduce open positions carried with
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ and (c) that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ may refuse to accept
orders to establish new positions. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ may impose and
enforce such limits, reduction or refusal whether or not they are
required by applicable law, regulations or rules. Customer shall comply
with all position limits established by any regulatory or
self-regulatory organization or any exchange. In addition, Customer
agrees to notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ promptly if Customer is required to
file position reports with any regulatory or self-regulatory
organization or with any exchange.
7. NO WARRANTY AS TO INFORMATION OR RECOMMENDATION - Customer acknowledges
that:
(a) Any market recommendations and information ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
may communicate to Customer, although based upon information
obtained from sources believed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ to be
reliable, may be incomplete and not subject to verification;
-3-
(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ makes no representation, warranty or
guarantee as to, and shall not be responsible for, the
accuracy or completeness of any information or trading
recommendation furnished to Customer;
(c) recommendations to Customer as to any particular transaction
at any given time may differ among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's
personnel due to diversity in analysis of fundamental and
technical factors and may vary from any standard
recommendation made by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ in its market letters
or otherwise; and
(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ has no obligation or responsibility to
update any market recommendations or information it
communicates to Customer.
Customer understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ and its officers,
directors, affiliates, stockholders, representatives or associated persons may
have positions in and may intend to buy or sell commodity interests which are
the subject of market recommendations furnished to Customer, and that the market
positions of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ or any such officer, director, affiliate,
stockholder, representative or associated person may or may not be consistent
with the recommendations furnished to Customer by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
8. LIMITS ON ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ DUTIES; LIABILITY - Customer agrees:
(a) that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ has no duty to apprise Customer of news
or of the value of any commodity interests or collateral
pledged or in any way to advise Customer with respect to the
market;
(b) that the commissions which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ receives are
consideration solely for the execution, reporting and carrying
of Customer's trades;
(c) that if Customer has authorized any third party or parties to
place orders or effect transactions on behalf of Customer in
any Account, each such party has been selected by Customer
based on its own evaluation and assessment of such party and
that such party is solely the agent of Customer, and if any
such party allocates commodity interests among its customers,
Customer has reviewed each such party's commodity interest
allocation system, has satisfied itself that such allocation
system is fair and will seek recovery solely from such party
to recover any damages sustained by Customer as the result of
any allocation made by such party; and
(d) to waive any and all claims, rights or causes of action which
Customer has or may have against ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ or its
officers, employees and agents (i) arising in whole or in
part, directly or indirectly, out of any act or omission of
any person, whether or not legally deemed an agent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇, who refers or introduces Customer to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ or places orders for Customer and (ii) for any
punitive damages and to limit any claims arising out of this
Agreement or the Account to Customer's direct out-of-pocket
damages.
-4-
9. EXTRAORDINARY EVENTS - Customer shall have no claim against ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ for any loss, damage, liability, cost, charge, expense,
penalty, fine or tax caused directly or indirectly by (a) governmental,
court, exchange, regulatory or self-regulatory organization
restrictions, regulations, rules, decisions or orders, (b) suspension
or termination of trading, (c) war or civil or labor disturbance, (d)
delay or inaccuracy in the transmission or reporting of orders due to a
breakdown or failure of computer services, transmission or
communication facilities, (e) the failure or delay by any exchange to
enforce its rules or to pay to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ any margin due in
respect of Customer's Account, (f) the failure or delay by any bank,
trust company, clearing organization or other person which, pursuant to
applicable exchange rules, is holding Customer funds, securities or
other property to pay or deliver the same to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ or (g)
any other cause or causes beyond ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's control.
10. INDEMNIFICATION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ - Customer agrees to indemnify,
defend and hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ and its officers, employees
and agents from and against any loss, cost, claim, damage (including
any consequential cost, loss or damage), liability or expense
(including reasonable attorneys' fees) and any fine, sanction or
penalty made or imposed by any regulatory or self-regulatory authority
or any exchange as the result, directly or indirectly, of:
(a) Customer's failure or refusal to comply with any provision of
this Agreement or perform any obligation on its part to be
performed pursuant to this Agreement; and
(b) Customer's failure to timely deliver any security, commodity
or other property previously sold by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ on
Customer's behalf.
11 NOTICES; TRANSMITTALS - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall transmit all
communications to Customer at Customer's address, telefax or telephone
number set forth in the accompanying Futures Account Application or to
such other address as Customer may hereafter direct in writing.
Customer shall transmit all communications to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ (except
routine inquiries concerning the Account) to ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Futures Compliance Officer. All payments and
deliveries to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall be made as instructed by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ from time to time and shall be deemed received only when
actually received by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
12. CONFIRMATION CONCLUSIVE - Confirmation of trades and any other notices
sent to Customer shall be conclusive and binding on Customer unless
Customer or Customer's agent notifies ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ to the contrary
(a) in the case of an oral report, orally at the time received by
Customer or its agent or (b) in the case of a written report or notice,
in writing prior to opening of trading on the business day next
following receipt of the report. In addition, if Customer has not
received a written confirmation that a commodity interest transaction
has been executed within three business days after Customer has placed
an order with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ to effect such transaction, and has
been informed or believes that such order has been or should have been
executed, then Customer immediately shall notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
thereof. Absent such notice, Customer conclusively shall be deemed
estopped to object and to have waived any such objection to the failure
to execute or cause to be executed such transaction. Anything in this
Section 12 withstanding, neither Customer nor ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall
be bound by any transaction or price reported in error.
-5-
13. SECURITY INTEREST - All money and property ("collateral") now or at any
future time held in Customer's Account, or otherwise held by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ for Customer, is subject to a security interest in ▇▇▇▇▇▇
▇▇▇▇▇▇▇ DW's favor to secure any indebtedness at any time owing to it
by Customer. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, in its discretion, may liquidate any
collateral to satisfy any margin or Account deficiencies or to transfer
the collateral to the general ledger account of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
14. TRANSFER OF FUNDS - At any time and from time to time and without prior
notice to Customer, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ may transfer from one account to
another account in which Customer has any interest, such excess funds,
equities, securities or other property as in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's
judgment may be required for margin, or to reduce any debit balance or
to reduce or satisfy any deficits in such other accounts except that no
such transfer may be made from a segregated account subject to the
Commodity Exchange Act to another account maintained by Customer unless
either Customer has authorized such transfer in writing or ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ is effecting such transfer to enforce ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's
security interest pursuant to Section 13. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ promptly
shall confirm all transfers of funds made pursuant hereto to Customer
in writing.
15. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW'S RIGHT TO LIQUIDATE CUSTOMER POSITIONS - In addition
to all other rights of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ set forth in this Agreement:
(a) when directed or required by a regulatory or self-regulatory
organization or exchange having jurisdiction over ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ or the Account;
(b) whenever, in its discretion, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ considers it
necessary for its protection because of margin requirements or
otherwise;
(c) if Customer or any affiliate of Customer repudiates, violates,
breaches or fails to perform on a timely basis any term,
covenant or condition on its part to be performed under this
Agreement or another agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇;
(d) if a case in bankruptcy is commenced or if a proceeding under
any insolvency or other law for the protection of creditors or
for the appointment of a receiver, liquidator, trustee,
conservator, custodian or similar officer is filed by or
against Customer or any affiliate of Customer, or if Customer
or any affiliate of Customer makes or proposes to make any
arrangement or composition for the benefit of its creditors,
or if Customer (or any such affiliate) or any or all of its
property is subject to any agreement, order, judgment or
decree providing for Customer's dissolution, winding-up,
liquidation, merger, consolidation, reorganization or for the
appointment of a receiver, liquidator, trustee, conservator,
custodian or similar officer of Customer, such affiliate or
such property;
(e) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ is informed of Customer's death or mental
incapacity; or
-6-
(f) if an attachment or similar order is levied against the
Account or any other account maintained by Customer or any
affiliate of Customer with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇;
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall have the right to (i) satisfy any obligations
due ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ out of any Customer's property in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
DW's custody or control, (ii) liquidate any or all of Customer's
commodity interest positions, (iii) cancel any or all of Customer's
outstanding orders, (iv) treat any or all of Customer's obligations due
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ as immediately due and payable, (v) sell any or all
of Customer's property in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's custody or control in
such manner as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ determines to be commercially
reasonable, and/or (vi) terminate any or all of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's
obligations for future performance to Customer, all without any notice
to or demand on Customer. Any sale hereunder may be made in any
commercially reasonable manner. Customer agrees that a prior demand,
call or notice shall not be considered a waiver of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's
right to act without demand or notice as herein provided, that Customer
shall at all times be liable for the payment of any debit balance owing
in each account upon demand whether occurring upon a liquidation as
provided under this Section 15 or otherwise under this Agreement, and
that in all cases Customer shall be liable for any deficiency remaining
in each Account in the event of liquidation thereof in whole or in part
together with interest thereon and all costs relating to liquidation
and collection (including reasonable attorneys' fees).
16. CUSTOMER REPRESENTATIONS, WARRANTIES AND AGREEMENTS - Customer
represents and warrants to and agrees with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 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 and (i) if a
corporation or a limited liability company, is duly organized
under the laws of the jurisdiction set forth in the
accompanying Futures Account Application, 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 any partner, director, officer, member,
manager or employee of Customer nor any affiliate of Customer
is a partner, director, officer, member, manager or employee
of a futures commission merchant introducing broker, exchange
or self-regulatory organization or an employee or commissioner
of the Commodity Futures Trading Commission (the "CFTC"),
except as previously disclosed in writing to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇;
(c) The accompanying Futures Account Application and Personal
Financial Statements, if applicable, (including any financial
statements furnished in connection therewith) are true,
correct and complete. Except as disclosed on the accompanying
Futures Account Application or otherwise provided in writing,
(i) Customer is not a commodity pool or is exempt from
registration under the rules of the Commission, and (ii)
Customer is acting solely as principal and no one other than
Customer has any interest in any Account of Customer. Customer
hereby authorizes ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ to contact such banks,
financial institutions and credit agencies as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ shall ▇▇▇▇ appropriate for verification of the information
contained herein.
-7-
(d) Customer has determined that trading in commodity interests is
appropriate for Customer, is prudent in all respects and does
not and will not violate 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;
(e) As required by CFTC regulations, Customer shall create, retain
and produce upon request of the applicable contract market,
the CFTC or the United States Department of Justice documents
(such as contracts, confirmations, telex printouts, invoices
and documents of title) with respect to cash transactions
underlying exchanges of futures for cash commodities or
exchange of futures in connection with cash commodity
transactions;
(f) Customer consents to the electronic recording, at ▇▇▇▇▇▇
▇▇▇▇▇▇▇ DW's discretion, of any or all telephone conversations
with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ (without automatic tone warning
device), the use of same as evidence by either party in any
action or proceeding arising out of the Agreement and in
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's erasure, at its discretion, of any
recording as part of its regular procedure for handling of
recordings;
(g) Absent a separate written agreement between Customer and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ with respect to give-ups, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇,
in its discretion, may, but shall have no obligation to,
accept from other brokers commodity interest transactions
executed by such brokers on an exchange for Customer and
proposed to be "given-up" to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ for clearance
and/or carrying in the Account;
(h) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, for and on behalf of Customer, is
authorized and empowered to place orders for commodity
interest transactions through one or more electronic or
automated trading systems maintained or operated by or under
the auspices of an exchange, that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ shall not
be liable or obligated to Customer for any loss, damage,
liability, cost or expense (including but not limited to loss
of profits, loss of use, incidental or consequential damages)
incurred or sustained by Customer and arising in whole or in
part, directly or indirectly, from any fault, delay, omission,
inaccuracy or termination of a system or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's
inability to enter, cancel or modify an order on behalf of
Customer on or through a system. The provisions of this
Section 16(h) shall apply regardless of whether any customer
claim arises in contract, negligence, tort, strict liability,
breach of fiduciary obligations or otherwise; and
(i) If Customer is subject to the Financial Institution Reform,
Recovery and Enforcement Act of 1989, the certified
resolutions set forth following this Agreement have been
caused to be reflected in the minutes of Customer's Board of
Directors (or other comparable governing body) and this
Agreement is and shall be, continuously from the date hereof,
an official record of Customer.
-8-
Customer agrees to promptly notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ in writing if any
of the warranties and representations contained in this Section 16
becomes inaccurate or in any way ceases to be true, complete and
correct.
17. SUCCESSORS AND ASSIGNS - This Agreement shall inure to the benefit of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, its successors and assigns, and shall be binding
upon Customer and Customer's executors, trustees, administrators,
successors and assigns, provided, however, that this Agreement is not
assignable by Customer without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇.
18. MODIFICATION OF AGREEMENT BY ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇; NON-WAIVER PROVISION -
This Agreement may only be altered, modified or amended by mutual
written consent of the parties, except that if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
notifies Customer of a change in this Agreement and Customer thereafter
effects a commodity interest transaction in an account, Customer agrees
that such action by Customer will constitute consent by Customer to
such change. No employee of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
DW's General Counsel or his or her designee, has any authority to
alter, modify, amend or waive in any respect any of the terms of this
Agreement. The rights and remedies conferred upon ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
shall be cumulative, and its forbearance to take any remedial action
available to it under this Agreement shall not waive its right at any
time or from time to time thereafter to take such action.
19. SEVERABILITY - If any term or provision hereof or the application
thereof to any persons or circumstances shall to any extent be contrary
to any exchange, government or self-regulatory regulation or contrary
to any federal, state or local law or otherwise be invalid or
unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as
to which it is contrary, invalid or unenforceable, shall not be
affected thereby.
20. CAPTIONS - All captions used herein are for convenience only, are not a
part of this Agreement, and are not to be used in construing or
interpreting any aspect of this Agreement.
21. TERMINATION - This Agreement shall continue in force until written
notice of termination is given by Customer or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
Termination shall not relieve either party of any liability or
obligation incurred prior to such notice. Upon giving or receiving
notice of termination, Customer will promptly take all action necessary
to transfer all open positions in each account to another futures
commission merchant.
22. ENTIRE AGREEMENT - This Agreement constitutes the entire agreement
between Customer and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ with respect to the subject
matter hereof and supersedes any prior agreements between the parties
with respect to such subject matter.
-9-
23. GOVERNING LAW; CONSENT TO JURISDICTION -
(A) IN CASE OF A DISPUTE BETWEEN CUSTOMER AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
ARISING OUT OF OR RELATING TO THE MAKING OR PERFORMANCE OF
THIS AGREEMENT OR ANY TRANSACTION PURSUANT TO THIS AGREEMENT
(I) THIS AGREEMENT AND ITS ENFORCEMENT SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS, AND (II) CUSTOMER WILL BRING ANY LEGAL
PROCEEDING AGAINST ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ IN, AND CUSTOMER HEREBY
CONSENTS IN ANY LEGAL PROCEEDING BY ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ TO THE
JURISDICTION OF, ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
STATE AND CITY OF NEW YORK IN CONNECTION WITH ALL LEGAL
PROCEEDINGS ARISING DIRECTLY, INDIRECTLY OR OTHERWISE IN
CONNECTION WITH, OUT OF, RELATED TO OR FROM CUSTOMER'S
ACCOUNT, TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE
BREACH THEREOF. CUSTOMER HEREBY WAIVES ALL OBJECTIONS
CUSTOMER, AT ANY TIME, MAY HAVE AS TO THE PROPRIETY OF THE
COURT IN WHICH ANY SUCH LEGAL PROCEEDINGS MAY BE COMMENCED.
CUSTOMER ALSO AGREES THAT ANY SERVICE OF PROCESS MAILED TO
CUSTOMER AT ANY ADDRESS SPECIFIED TO ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ SHALL
BE DEEMED A PROPER SERVICE OF PROCESS ON THE UNDERSIGNED.
(B) NOTWITHSTANDING THE PROVISIONS OF SECTION 23 (A)(II), CUSTOMER
MAY ELECT AT THIS TIME TO HAVE ALL DISPUTES DESCRIBED IN THIS
SECTION RESOLVED BY ARBITRATION. TO MAKE SUCH ELECTION,
CUSTOMER MUST SIGN THE ARBITRATION AGREEMENT SET FORTH IN
SECTION 24. NOTWITHSTANDING SUCH ELECTION, ANY QUESTION
RELATING TO WHETHER CUSTOMER OR ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ HAS
COMMENCED AN ARBITRATION PROCEEDING IN A TIMELY MANNER,
WHETHER A DISPUTE IS WITHIN THE SCOPE OF THE ARBITRATION
AGREEMENT OR WHETHER A PARTY (OTHER THAN CUSTOMER OR ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇) HAS CONSENTED TO ARBITRATION AND ALL PROCEEDINGS
TO COMPEL ARBITRATION SHALL BE DETERMINED BY A COURT AS
SPECIFIED IN SECTION 23 (A)(II).
24. ARBITRATION AGREEMENT (OPTIONAL) - Every dispute between Customer and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ arising out of or relating to the making or
performance of this Agreement or any transaction pursuant to this
Agreement, shall be settled by arbitration in accordance with the
rules, then in effect, of the National Futures Association, the
contract market upon which the transaction giving rise to the claim was
executed, or the National Association of Securities Dealers as Customer
may elect. If Customer does not make such election by registered mail
addressed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇; Attention: Deputy General Counsel, within 45 days after
demand by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ that the Customer make such election, then
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ may make such election. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ agrees to
pay any incremental fees which may be assessed by a qualified forum for
making available a "mixed panel" of arbitrators, unless the arbitrators
determine that Customer has acted in bad faith in initiating or
conducting the proceedings. Judgment upon any award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
-10-
IN ADDITION TO FOREIGN FORUMS, THREE FORUMS EXIST FOR THE RESOLUTION OF
COMMODITY DISPUTES: CIVIL COURT LITIGATION, REPARATIONS AT THE
COMMODITY FUTURES TRADING COMMISSION ("CFTC") AND ARBITRATION CONDUCTED
BY A SELF-REGULATORY OR OTHER PRIVATE ORGANIZATION.
THE CFTC RECOGNIZES THAT THE OPPORTUNITY TO SETTLE DISPUTES BY
ARBITRATION MAY IN SOME CASES PROVIDE MANY BENEFITS TO CUSTOMERS,
INCLUDING THE ABILITY TO OBTAIN AN EXPEDITIOUS AND FINAL RESOLUTION OF
DISPUTES WITHOUT INCURRING SUBSTANTIAL COSTS. THE CFTC REQUIRES,
HOWEVER, THAT EACH CUSTOMER INDIVIDUALLY EXAMINE THE RELATIVE MERITS OF
ARBITRATION AND THAT YOUR CONSENT TO THIS ARBITRATION AGREEMENT BE
VOLUNTARY.
BY SIGNING THIS AGREEMENT, YOU (1) MAY BE WAIVING YOUR RIGHT TO ▇▇▇ IN
A COURT OF LAW AND (2) ARE AGREEING TO BE BOUND BY ARBITRATION OF ANY
CLAIMS OR COUNTERCLAIMS WHICH YOU OR ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ MAY SUBMIT TO
ARBITRATION UNDER THIS AGREEMENT. YOU ARE NOT, HOWEVER, WAIVING YOUR
RIGHT TO ELECT INSTEAD TO PETITION THE CFTC TO INSTITUTE REPARATIONS
PROCEEDINGS UNDER SECTION 14 OF THE COMMODITY EXCHANGE ACT WITH RESPECT
TO ANY DISPUTE WHICH MAY BE ARBITRATED PURSUANT TO THIS AGREEMENT. IN
THE EVENT A DISPUTE ARISES, YOU WILL BE NOTIFIED IF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
INTENDS TO SUBMIT THE DISPUTE TO ARBITRATION. IF YOU BELIEVE A
VIOLATION OF THE COMMODITY EXCHANGE ACT IS INVOLVED AND IF YOU PREFER
TO REQUEST A SECTION 14 "REPARATIONS" PROCEEDINGS BEFORE THE CFTC, YOU
WILL HAVE 45 DAYS FROM THE DATE OF SUCH NOTICE IN WHICH TO MAKE THAT
ELECTION.
YOU NEED NOT AGREE TO THIS ARBITRATION AGREEMENT TO OPEN AN ACCOUNT
WITH ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. See 17 CFR 180.1-180.5. ACCEPTANCE OF THIS
ARBITRATION AGREEMENT REQUIRES A SEPARATE SIGNATURE ON PAGE 8.
25. CONSENT TO TAKE THE OTHER SIDE OF ORDERS (OPTIONAL) - Without its prior
notice, Customer agrees that when ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ executes sell or
buy orders on Customer's behalf, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, its directors,
officers, employees, agents, affiliates, and any floor broker may take
the other side of Customer's transaction through any account of such
person subject to its being executed at prevailing prices in accordance
with and subject to the limitations and conditions, if any, contained
in applicable rules and regulations.
26. AUTHORIZATION TO TRANSFER FUNDS (OPTIONAL) - Without limiting other
provisions herein, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ is authorized to transfer from any
segregated account subject to the Commodity Exchange Act carried by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ for the Customer to any other account carried by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ for the Customer such amount of excess funds as in
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's judgment may be necessary at any time to avoid a
margin call or to reduce a debit balance in said account. It is
understood that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ will confirm in writing each such
transfer of funds made pursuant to this authorization within a
reasonable time after such transfer.
-11-
27. SUBORDINATION AGREEMENT (APPLIES ONLY TO ACCOUNTS WITH FUNDS HELD IN
FOREIGN COUNTRIES) - Funds of customers 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 the 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 hinder or prevent the availability of these funds for
distribution to customers. Such accounts also may be subject to foreign
currency exchange rate risks.
If authorized below, Customer authorizes the deposit of funds into such
foreign depositories. For customers 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, a
customer who has funds held outside the United States agrees by
accepting this subordination agreement that his claims based on such
funds will be subordinated as described below in the unlikely event
both of the following conditions are met: (1) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ is
placed in receivership or bankruptcy, and (2) there are insufficient
funds available for distribution denominated in the foreign currency as
to which the customer has a claim to satisfy all claims against those
funds.
By initialing the Subordination Agreement below, Customer agrees that
if both of the conditions listed above occur, its claim against ▇▇▇▇▇▇
▇▇▇▇▇▇▇ DW'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 a 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
-12-
OPTIONAL ELECTIONS
The following provisions, which are set forth in this agreement, need not be
entered into to open the Account. Customer agrees that its optional elections
are as follows:
SIGNATURE REQUIRED FOR EACH
ELECTION
ARBITRATION AGREEMENT:
(Agreement Paragraph 24)
------------------------------
CONSENT TO TAKE THE OTHER SIDE OF ORDERS:
(Agreement Paragraph 25) X
------------------------------
AUTHORIZATION TO TRANSFER FUNDS:
(Agreement Paragraph 26) X
------------------------------
ACKNOWLEDGEMENT TO SUBORDINATION AGREEMENT
(Agreement Paragraph 27) X
------------------------------
(Required for accounts holding
non-U.S. currency)
--------------------------------------------------------------------------------
HEDGE ELECTION
Customer confirms that all transactions in the Account will represent bona / /
fide hedging transactions, as defined by the Commodity Futures Trading
Commission, unless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ is notified otherwise not later than
the time an order is placed for the Account [check box if applicable]:
Pursuant to CFTC Regulation 190.06(d), Customer specifies and agrees, with
respect to hedging transactions in the Account, that in the unlikely event of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DW's bankruptcy, it prefers that the bankruptcy trustee [check
appropriate box]:
A. Liquidate all open contracts without first seeking instructions / /
either from or on behalf of Customer.
B. Attempt to obtain instructions with respect to the disposition of all / /
open contracts. (IF NEITHER BOX IS CHECKED, CUSTOMER SHALL BE DEEMED
TO ELECT A)
--------------------------------------------------------------------------------
ACKNOWLEDGEMENT OF RECEIPT OF RISK DISCLOSURE STATEMENTS
The undersigned each hereby acknowledges its separate receipt from ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇, and its understanding of each of the following documents prior to
the opening of the account:
* Risk Disclosure Statement for Futures and Options (in the form
prescribed by CFTC Regulation 1.55(c))
* LME Risk Warning Notice
* [▇▇▇▇▇▇ ▇▇▇▇▇▇▇] Order Presumption for After Hours Electronic Markets
* NYMEX ACCESSSM Risk Disclosure Statement
* Globex(R) Customer Information and Risk Disclosure Statement
* Project A TM Customer Information Statement
* Questions & Answers on Flexible Options Trading at the CBOT
* CME Average Pricing System Disclosure Statement
* Special Notice to Foreign Brokers and Foreign Traders
--------------------------------------------------------------------------------
REQUIRED SIGNATURES
The undersigned has received, read, understands and agrees to all the provisions
of this Agreement and the separate risk disclosure statements enumerated above
and agrees to promptly notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ in writing if any of the
warranties and representations contained herein become inaccurate or in any way
cease to be true, complete and correct.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CHARTER ▇▇▇▇▇▇▇▇ ▇.▇.
--------------------------------------------------------------------------------
CUSTOMER NAME(S)
By: DEMETER MANAGEMENT CORPORATION, General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------- ----------------------------
AUTHORIZED SIGNATURE(S) DATE
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and Chairman
--------------------------------------------------------------------------------
(If applicable, print name and title of signatory)
