Common use of Options Exercise Clause in Contracts

Options Exercise. (a) If Customer has a long commodity option, futures option or swaption in the Account that it wishes to exercise, it must provide WFS written instructions to exercise the option or swaption no less than one (1) business day prior to the last trading day of the option or swaption. Customer shall provide WFS sufficient funds and the necessary documents for such exercise no later than the exercise day. (b) Certain option contracts sold by Customer are subject to exercise at any time and the rules of the relevant Exchange or Clearinghouse may provide for the automatic exercise of options that are “in-the-money” at the time of expiration. Exercise notices received by WFS from the applicable Exchange or Clearing Organization with respect to any option contract sold by WFS’ Customers will be allocated among such Customers (including Customer) pursuant to WFS’ usual allocation procedure and Customer shall be bound by any allocation made to it pursuant to such procedure. Such notices may be allocated to Customer after the close of trading on the day on which such notices have been allocated to WFS by the applicable Exchange or Clearing Organization. WFS may change its allocation method at any time, without notice to Customer. (c) Subject to the foregoing, WFS shall have no responsibility for any action that it takes or fails to take with respect to any option contract (including, without limitation, any responsibility to exercise any option contract purchased by Customer) unless and until WFS receives acceptable and timely instructions from Customer indicating the action to be taken. (d) If Customer fails to perform its obligations under this Section, WFS may, but is not obligated to, take any action it deems, in its sole discretion, that such action is required by Applicable Law or is necessary for its protection or the protection of any of its affiliates, including, without limitation, abandoning, liquidating, making or taking delivery or exercise on behalf of Customer. Customer will be liable for any deficiency in the Account that may result therefrom. WFS shall have no liability for any action that it takes or fails to take with respect to any Derivative.