Exhibit No. 10.01
Fimat USA, Inc.
CUSTOMER AGREEMENT
In consideration of the acceptance by FIMAT USA, Inc. ("FIMAT") of one or more
accounts (the "Account(s)") of the undersigned ("Customer"), and of FIMAT acting
as broker for Customer, the Customer agrees as follows:
I. RISKS AND AUTHORITY
A. RISKS OF COMMODITY TRADING. In addition to the Commodity Futures
Trading Commission ("CFTC") mandated Risk Disclosure Statement
attached hereto, Customer understands that (i) Customer may be trading
in commodity futures contracts, options on commodity futures
contracts, foreign futures contracts and options on foreign futures
contracts (collectively, "Commodity Futures Contracts"), securities
and securities options (collectively, "Securities"), derivative
instruments, spot and forward contracts, physical commodities, cash
and other properties and options thereon (collectively, "Other Account
Instruments") and/or currencies and foreign exchange contracts and
options thereon ("Forex," and together with Commodity Futures
Contracts, Securities, Other Account Instruments and Forex being
herein collectively defined as "Commodities"), and such trading is
highly speculative, (ii) prices are subject to sharp upward and
downward movements, (iii) price fluctuations may result in losses
which substantially exceed the capital in Customer's Account(s), (iv)
on trading days on which the subject of Customer's trading reaches its
permissible exchange price limit, trading may cease, as a result of
which Customer may be locked into substantial losses, and (v) in
transactions on exchanges on which foreign currency is used, any
profit or loss may be affected by exchange rate fluctuations. Customer
is willing and able, financially and otherwise, to assume the risks of
such trading. Customer recognizes that assurance of profit or freedom
from loss is impossible to guaranty. Customer has received no
assurance and will place no orders in reliance on any such assurance
or similar representations. Customer understands that FIMAT may
without notice to Customer exercise any of the remedies listed in
Sections III.O and IV hereof if Customer fails to maintain adequate
margin or if any other event of default occurs. Customer agrees to
review carefully each confirmation statement FIMAT sends Customer and
notify FIMAT immediately in accordance with Section III.F hereof.
B. FIMAT'S AUTHORITY AND RESPONSIBILITY. Customer authorizes FIMAT to
purchase and sell Commodities, as agent for Customer's Account(s) in
accordance with the oral or written instructions of Customer or
persons authorized in writing to act, or persons reasonably believed
by FIMAT to be acting, on Customer's behalf. Unless Customer specifies
to the contrary, FIMAT is authorized to execute all orders on any
exchange or other market where such business is conducted which may be
deemed by FIMAT, in its sole discretion, to be appropriate. Customer
hereby waives any defense that any such instruction was not in
writing, as may be required by any law, rule or regulation. FIMAT
agrees to provide the services contemplated hereunder in any
commercially reasonable manner.
Customer authorizes FIMAT or its agents to investigate Customer's
credit standing and in connection therewith to contact such banks
(including, without limitation, any of FIMAT's Affiliates, such as
Societe Generale), financial institutions and credit agencies, as
FIMAT shall deem appropriate to verify information regarding Customer.
Customer authorizes FIMAT, in its sole discretion, to provide and/or
exchange any financial information with respect to Customer with any
of FIMAT's Affiliates.
C. INTRODUCED ACCOUNTS (ONLY IF APPLICABLE). Customer understands that
Customer's Account(s) with FIMAT was introduced to FIMAT by an
Intermediary (as defined in Section II.F below), and that, except for
companies which are members of the FIMAT Group, the Intermediary is an
independent business entity which is not in any way affiliated with or
an agent of FIMAT. Customer hereby authorizes FIMAT to accept all
orders and instructions from its Intermediary and hereby ratifies all
orders and instructions which FIMAT believes in good faith to have
been transmitted by its Intermediary on Customer's behalf, which FIMAT
is authorized to act upon. If Customer is dealing with an
Intermediary, make all checks payable to, and wire all funds directly
to "FIMAT USA, Inc." FIMAT INTERMEDIARIES DO NOT HANDLE CUSTOMER
FUNDS, EXCEPT TO FORWARD TO FIMAT CHECKS MADE OUT TO FIMAT.
D. Customer Representations and Warranties. Except as disclosed in
writing to FIMAT prior to execution an( delivery of this Agreement or
in a subsequent written notice from Customer to FIMAT, Customer
represents an( warrants as follows: (1) Customer is not (a) a general
partner, officer, director, more than ten percent owner correspondent,
agent (or person associated with an agent), associated person, or
employee of a futures commission merchant, commodity trading advisor,
commodity pool operator, or an introducing broker, (b) a relative,
spouse, o: relative of a spouse of any of the foregoing persons who
shares the same home with any such person, (c) a member of an exchange
or a director or employee of an exchange, bank, trust company,
insurance company, or regulator or self-regulatory organization, or
(d) engaged individually or as an employee in the business of dealing,
as broke or principal, in Commodities other items, documents of title
relating to Commodities, bills of exchange
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acceptances, or other forms of commercial paper, and if Customer
becomes so employed or engaged Customer will promptly notify FIMAT in
writing; (2) Customer, if applicable, (a) is duly organized and in
good standing under the laws of the jurisdiction in which it was
organized and in all jurisdictions where it is qualified to do
business; (b), has the requisite capacity, power and authority to
execute, deliver and perform its obligations under this Agreement and
such Other Agreement, including without limitation, the granting of
any security interests in the Collateral as contemplated hereby and
thereby; (c) none of the execution, delivery or performance by
Customer of its obligations under this Agreement or such Other
Agreement conflict with the provisions of any material contract,
agreement or instrument binding upon you or your properties, or the
provisions of any law, statute, rule, regulation or decree, order or
determination of any court of law applicable to Customer; and (d) no
consent, authorization, permit or filing is required in connection
with the execution, delivery and performance by Customer of this
Agreement or such Other Agreement, except those that have been
obtained or made and filings necessary to create, perfect and retain
any security interest in, or lien upon, any Collateral for any of
Customer's obligations to FIMAT; (3) Customer, if an individual, is of
sound mind, legal age and legal competence; (4) no person other than
Customer has or will have an interest in Customer's Account(s) except
as otherwise disclosed in writing to FIMAT and (5) all the information
provided in the Customer Application is true, correct and complete as
of the date hereof and that Customer will promptly notify FIMAT of any
material changes in such information.
E. CUSTOMER IS PRINCIPAL. Unless Customer has advised FIMAT in writing
otherwise prior to execution and delivery of this Agreement,
Customer is acting for Customer's Account(s) as principal and not as
agent in transactions under this Agreement. Customer will give
written notice to FIMAT before granting any person or entity any
interest in Customer's Account(s) or undertaking to act as agent for
any party with respect to Customer's Account(s).
II. DEFINITIONS (As used in the singular or plural)
A. AFFILIATE. "Affiliate" includes Societe Generale, FIMAT International
Banque, SA and any of their affiliates or subsidiaries.
B. AGREED BY FIMAT. "Agreed by FIMAT" means an agreement in writing under
the hand of a person whose name and signature at the material time
appear on a list of authorized signatories maintained by FIMAT at its
offices. A copy of the list is available for inspection upon
reasonable notice at FIMAT's offices during usual business hours.
C. APPLICABLE LAW. "Applicable Law" shall have the meaning set forth in
Section III.A.3 below.
D. COLLATERAL. "Collateral" means all of Customer's right, title and
interest in and to all goods and other property, including without
limitation, Commodities, the Account(s), inventory, documents,
accounts, general intangibles, chattel paper and all proceeds of such
property including but not limited to interest on or profits from the
Account(s). Any property en route to or allocated by any third party
to FIMAT and/or any Affiliate shall be deemed "Collateral" for
purposes of this Agreement.
E. COMMODITY EXCHANGE. "Commodity Exchange" means any exchange,
association, contract market or clearing association, whether
incorporated or unincorporated, or persons who are engaged in the
business of buying or selling any commodity or receiving the same for
sale on consignment.
F. INTERMEDIARY. "Intermediary" includes an introducing broker, fully
disclosed futures commission merchant, foreign broker, or any other
person or entity acting in a similar capacity.
G. LIABILITY. "Liability" means all Customer's obligations direct or
indirect to FIMAT or its Affiliates of whatever form and however
arising, including any indebtedness now or hereafter existing under
this Agreement or any Other Agreement or any debit balances in the
Account(s).
H. OTHER AGREEMENT. "Other Agreement" means any and all agreements,
documents and instruments (including, without limitation, promissory
note(s), security agreement(s), pledge agreement(s) and guaranty(s))
executed by or on behalf of Customer in favor of FIMAT and/or an
Affiliate, as such agreements, documents and instruments may be
amended, supplemented or otherwise modified. from time to time in
accordance with their respective terms.
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III. TERMS OF TRANSACTIONS
A. APPLICABLE RULES AND TERMS. The Account(s) and all transactions and
agreements in respect of the Account(s) shall be subject to:
1. the terms of this Agreement and any other terms Agreed by FIMAT
and Customer;
2. FIMAT's terms from time to time in effect with respect to the
specific type of transaction and the terms of FIMAT's
confirmation of the transaction, except to the extent
specifically inconsistent with Subsection III.A.1 above;
3. the regulations of all applicable Federal, state and
self-regulatory agencies or authorities, including but not
limited to: (i) the provisions of the Commodity Exchange Act, as
amended, and any rules, regulations, orders and interpretations
promulgated thereunder by the CFTC; and (ii) the constitution, by
laws, rules, regulations, orders and interpretations of the
Commodity Exchange (and its clearing house, if any) on which such
transactions are executed and cleared, and any relevant
registered futures association, including, without limitation,
the National Futures Association ("NFA"), except to the extent
Subsections III.A.1 or III.A.2 above provide more specific
restrictions. All such provisions, rules, regulations, orders,
interpretations, constitution, by-laws, custom and usage are
hereinafter collectively referred to as "Applicable Law;" and
4. customary practice in the trade, except to the extent
specifically inconsistent with Subsections III.A.1, III.A.2, or
III.A.3 above.
B. MARGIN. Customer will pay to FIMAT (and only to FIMAT) all amounts
FIMAT requires as margin or to satisfy any other of Customer's
obligations under this Agreement in U.S. Dollars in immediately
available funds, unless otherwise agreed, as FIMAT requires. FIMAT at
any time may change the margin requirements with respect to Customer's
Account(s) for existing positions as well as for new positions. The
required margin may exceed the margin required by the Commodity
Exchange (and its clearing house, if any) on which trades are cleared
on behalf of Customer.
FIMAT HAS NO OBLIGATION TO NOTIFY CUSTOMER OF ANY INSUFFICIENCY OF
MARGIN IN CUSTOMER'S ACCOUNT(S) PRIOR TO EXERCISING RIGHTS AND
REMEDIES UNDER SECTION IV OF THIS AGREEMENT.
C. FEES AND COMMISSIONS. Customer will pay the fees and commissions FIMAT
charges from time to time. FIMAT may share its fees, commissions and
amounts accruing on Customer's Account(s) with persons that introduce
Customer to FIMAT or provide other services to FIMAT.
D. INTEREST. If Customer fails to pay FIMAT in immediately available
funds any sum when due, then unless otherwise provided in any, Other
Agreement, Customer will pay interest to FIMAT on the unpaid sum,
while outstanding, at the lesser of (i) the maximum legal rate or (ii)
150% of the publicly announced prime lending rate of Societe Generale
New York Branch as in effect from time to time while the unpaid sum is
outstanding, compounded monthly. Customer acknowledges that FIMAT may
receive and retain as its own any increment or interest accruing from
any of the funds FIMAT receives from Customer.
E. NO STANDARD REQUIREMENT. FIMAT has no obligation to impose uniform
margin requirements, to publish details of fees or commissions, or to
charge uniform fees, commissions or interest rates.
F. CONFIRMATIONS AND STATEMENTS. FIMAT will promptly confirm in writing
all transactions undertaken for Customer's Account(s). Customer shall
timely review all confirmations received from FIMAT to check that the
description of the transactions is accurate and that no transaction is
omitted. Customer is conclusively bound by FIMAT's confirmations and
statements of Customer's Account(s) if Customer does not object in
writing before the earlier of ten days following transmission to
Customer or by market opening on the day following Customer's actual
receipt of such confirmation statements. With respect to transactions
which Customer authorizes but for which no confirmation is received,
Customer shall be deemed to have waived all objections unless FIMAT
has received Customer's written request for a copy of the confirmation
within five days of the transaction date. Customer understands that
Customer should direct inquiries to FIMAT at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Compliance Department, or
such other address as FIMAT may hereafter provide Customer. For the
reporting of any alleged unauthorized trades or other trade
improprieties, FIMAT authorizes and will accept "collect" telephone
calls to the Compliance Department at (▇▇▇) ▇▇▇-▇▇▇▇. FIMAT is not
bound by prices or transactions reported in error on confirmations and
statements of Customer's Account(s).
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Customer hereby authorizes FIMAT to transmit to it all confirmation
and other statements of account activity, funds and positions by
facsimile transmission or through the Internet to such address as
Customer designates on the Customer Application, or as Customer
designates from time in a writing addressed to the Compliance
Department, as set forth in this paragraph. FIMAT reserves the right
to assess its standard charge from time to time in effect for
confirmation and other statements of account activity, funds and
positions provided to customer through any other medium, as well as
for duplicate statements of any kind. This authorization shall be;
perpetual, unless revoked in writing by Customer in a writing
addressed to the Compliance Department, as set forth in this
paragraph.
G. CAPACITY OF FIMAT; FLOOR BROKERS AND OTHERS; INDEMNIFICATION. FIMAT
will execute Customer's; transactions solely as agent of Customer. In
executing transactions on a Commodity Exchange, FIMAT may utilize
floor brokers (who may be employees or other agents of FIMAT), and
will be responsible for reasonable care in the selection of such
brokers, but will not be responsible to Customer for negligence or
misconduct of an independent floor broker if, at the time the floor
broker was selected, the floor broker was authorized to act as suck
under the rules of the relevant Commodity Exchange and the appropriate
regulatory agency. FIMAT will not be responsible to Customer in the
event of error, failure, negligence, or misconduct on the part of any
Intermediary, commodity trading advisor, or other person acting on
Customer's behalf and, without limiting the foregoing, FIMAT has no
obligation to investigate the facts surrounding any transaction in
Customer's Account(s) which is introduced by such Intermediary,
commodity trading advisor, or other person. Customer will indemnify
FIMAT and hold it harmless from and against any and all liabilities,
penalties, losses, and expenses, including legal expenses, incurred by
FIMAT as a result of any error, failure, negligence, or misconduct on
the part of any such Intermediary, commodity trading advisor, or other
person acting on Customer's behalf. FIMAT shall not responsible for
any loss or damage caused, directly or indirectly, from any delays or
inaccuracies in the transmission of orders, including but not limited
to our automated order routing systems, or other information d to a
breakdown in or. failure of any transmission or communication
facilities for any reason including those reasons described in Section
V.D. hereof. FIMAT shall only be liable for actions or inactions by
FIMAT which amount to gross negligence or fraud. Customer also agrees
that FIMAT shall not be liable to Customer for any losses, costs;
expenses, or other damages sustained by Customer in the event of any
failure or delay by any exchange, market, clearing house, bank or
other depository institution where any of Customer's funds or other
assets are maintained; or a failure or delay by any member, bank or
agent of any of the foregoing, or a failure or delay by any of the
foregoing to enforce its rules, to fulfill its obligations, or to make
any payment, for any reason whatsoever. Customer waives any claim,
cause of action or right as against FIMAT, its employees or agents
which may arise or occur as a result thereof.
H. Transaction Limits; Acceptance of Orders. FIMAT, solely for its own
benefit and the benefit of other customers, may limit the number of
transactions FIMAT executes, and the open positions FIMAT maintains or
acquires, for Customer. Customer, acting alone or in concert with
others, will not make any trade through FIMAT which would have the
effect of exceeding the lower of limits imposed by FIMAT, the
Commodity Exchange on which the transactions are executed, or any
regulatory agency. If Customer exceeds its limit, FIMAT may require.
the transfer of Customer's positions to another firm, or FIMAT may
liquidate some or all of the Customer's positions as FIMAT elects in
its sole discretion. Customer agrees to promptly advise FIMAT if
Customer is required to file reports of its positions to the CFTC or
any Commodity Exchange.
I. Liquidation of Offsetting Positions. FIMAT shall liquidate any
contract for which an offsetting order is entered by Customer on a
first in, first out ("FIFO") basis, unless Customer instructs FIMAT
not to liquidate such contract and to maintain the offsetting
contracts as open positions; provided, that FIMAT shall not be
obligated to comply with any such instructions given by Customer if
Customer fails to provide FIMAT with any representations,
documentation or information reasonably requested by FIMAT or if in
FIMAT's reasonable judgment, any failure, to liquidate such offsetting
contracts against each other on a FIFO basis would result in a
violation of Applicable Law.
J. Separate Accounts. Pursuant to CFTC Rule 1.46(e)(1), if FIMAT
maintains or directs the trading for more than one account for
Customer then, if held open, offsetting long and short positions in
the separate accounts may result in the charging of additional fees
and commissions and the payment of additional margin, although
offsetting positions will result in no additional market gain or loss.
K. Failure of Delivery. At least five business days prior to the earlier
of first notice or last trading day of the delivery month, Customer
must advise FIMAT whether Customer intends to take or make delivery,
as the case may be, of items purchased and sold by FIMAT at Customer's
direction, and, if delivery is intended, Customer must demonstrate to
FIMAT's satisfaction Customer's ability to perform Customer's delivery
obligations, in any manner required by FIMAT including, without
limitation, by depositing with FIMAT the funds or documents necessary
for
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delivery. If Customer fails to so advise FIMAT or to demonstrate
satisfactorily Customer's ability to perform, then without notice or
demand to Customer, FIMAT may, but shall have no duty to, liquidate
such positions on terms FIMAT deems reasonable, or take any other
action FIMAT deems reasonable, including taking or making delivery as
the case may be. If Customer fails to supply FIMAT, in a timely
manner, with any item FIMAT has sold Customer's direction, FIMAT may
borrow or purchase the item from any party, including an Affiliate, to
make the delivery. FIMAT has no duty to borrow or purchase the item.
Customer shall comply fully with Applicable Laws relating to taking or
making any delivery, and shall, if taking delivery, take all steps as
provided thereunder ensure that all items to be delivered are in
compliance with Applicable Law. Customer will hold harmless and
indemnify FIMAT for all liabilities, penalties, losses, and expenses,
including any legal expenses and any penalty imposed by any Commodity
Exchange, FIMAT incurs or reasonably anticipates incurring if Customer
fails timely (1) to take good delivery of any item FIMAT has purchased
at Customer's direction, (2) to supply FIMAT with or otherwise make
good delivery of any item FIMAT has sold at Customer's direction, or
otherwise, in connection with a delivery, or (3) to comply with
Applicable Law, and FIMAT may in the event of any such failure,
apparent failure, or otherwise withhold from Customer's Account(s)
with FIMAT or any Affiliates the amount (however denominated)
estimated by FIMAT as sufficient to satisfy the above indemnity, for
application as FIMAT deems appropriate.
L. FORWARDING AND STORAGE OF MATERIAL. If FIMAT on Customer's behalf
arranges for packaging, shipping storage, or insurance, FIMAT's only
liability will be for gross negligence or willful misconduct in the
making of the arrangements.
M. REIMBURSEMENT FOR TAXES, ETC. Customer will indemnify FIMAT for all
taxes, levies, imposts, duties, charges and fees (including legal
expenses) incurred in connection with any sale, purchase, forwarding
or storage.
N. PAYMENT. Customer's payments must be in freely transferable and
immediately available funds to FIMAT account at a bank designated by
FIMAT and without deduction for any taxes, imposts, duties, charges,
or fees, free and clear of any withholding, restrictions, or
conditions of any nature when received by FIMAT. Payment may not be
effected by the delivery of bank notes or other legal tender unless
Agreed by FIMAT. FIMAT may withhold any delivery until it receives
payment in the foregoing manner.
O. CLOSEOUT. Whenever FIMAT in its sole discretion, considers it
necessary for Customer's protection or FIMAT's protection, FIMAT may,
but is not obligated to, refuse to accept new positions and/or close
out otherwise liquidate Customer's positions, and Customer will be
liable for any deficiency in Customer's Account that may result
therefrom.
P. OPTIONS EXERCISE. Customer agrees that if Customer has a commodity
option position with FIMAT and does provide timely instructions
regarding the exercise of a commodity option on the last day of
trading in that option. FIMAT, in its sole discretion and without
prior notice to Customer, is authorized to exercise or abandon (i.e.
let expire) the option. Customer further agrees that any exercise or
abandonment of an option by FIMAT pursuant to this Agreement shall be
for Customer's sole account and risk and FIMAT shall have no liability
with respect thereto, and FIMAT shall have no duty to exercise such
authority. Customer further agrees that, without FIMAT's written
consent, Customer may not, on any day, exercise more than 20 options
contracts with FIMAT unless Customer has margin with FIMAT in excess
of the amount of margin FIMAT requires for the futures contract
Customer would be assigned as a result of such exercise.
Customer acknowledges that FIMAT's confirmation of purchase and sale
statements will reflect option expiration dates that FIMAT obtains
from sources generally believed to be reliable, and FIMAT will be
responsible only for gross negligence, willful misconduct or fraud in
connection therewith. If Customer holds options with a Friday
expiration date, it is possible that, if a grantor, Customer could be
assigned a futures position after the expiration of the option on
Friday, and on some exchanges, as late as Saturday morning.
Q. ADJUSTMENTS. On rare occasion FIMAT may, in error, not fill Customer's
order or fill Customer's order at a price which is less favorable than
the price which could have been obtained if the error had not
occurred. In these circumstances, FIMAT will give Customer the filled
order and cash adjust Customer's Account(s) so as to restore the price
at which the order could have been executed had the error not
occurred. Customer agrees however that when correcting its error,
FIMAT obtains a position at a better price than Customer's order could
have been filled at, Customer will only receive the fill Customer
could have obtained if Customer's orders had been executed without
error (and FIMAT will receive any difference).
R. EXCHANGE OF PHYSICAL FOR FUTURES TRANSACTION. Customer agrees to
create, retain, and produce, upon request a Commodity Exchange, the
CFTC, or the United States Department of Justice, documentation of
cash transaction
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underlying exchanges of futures for cash commodities or exchanges of
futures in connection with cash commodities transactions in accordance
with Applicable Law. Documentation means those documents customarily
generated in accordance with cash market practices and/or required by
the relevant Commodity Exchange or regulatory authority which
demonstrate the existence and nature of the underlying cash
transactions, including, but not limited to, contracts, confirmation
statements, telex printouts, invoices, and warehouse receipts or other
documents of title.
S. DIRECT ORDER TRANSMITTAL CLIENT DISCLOSURE. On occasion, when FIMAT's
offices are closed, Customer may request that FIMAT grant it authority
to place orders directly with one or more of FIMAT's non-U.S.
Affiliates for execution on non-U.S. exchanges, or for transactions on
U.S. exchanges to be executed on GLOBEX, NYMEX ACCESS or other
electronic trading systems. If FIMAT grants Customer such authority,
the following conditions shall apply: (1) the order(s) Customer places
with FIMAT's non-U.S. Affiliate will be for FIMAT's omnibus account
maintained directly or indirectly with FIMAT's non-U.S. Affiliate; (2)
Customer will be a client of FIMAT and not of the non-U.S. Affiliate;
(3) all monies, securities and property of Customer will be maintained
log FIMAT; and (4) unless Customer objects within five days after
receipt of this Agreement, FIMAT may assume Customer consents to these
conditions.
IV. SECURITY AGREEMENT AND DEFAULT PROVISIONS
A. SECURITY INTEREST. Customer hereby grants FIMAT a security interest in
the Collateral and proceeds thereof, security for the prompt payment
and performance of any and all Liabilities.
B. FIMAT'S RIGHTS RESPECTING COLLATERAL. Customer will sign and deliver
all agreements, instruments, certificates and documents FIMAT requests
to create, perfect, preserve and protect the security interest in any
of the Collateral, accompanied by such instruments of assignment and
transfer and in such form as FIMAT should reasonably request. Customer
appoints FIMAT as Customer's agent to sign, deliver, complete and file
any such agreements, instruments, certificates and documents on
Customer's behalf. FIMAT has no obligation to return the identical
item of Collateral, but only to replace the item with property of like
kind and substantially similar quantity, subject to adjustment for
quantity variations at then prevailing market prices. FIMAT may, at
any time and without limitations except those imposed by law, pledge,
re-pledge, hypothecate, loan or invest any Collateral without notice
to Customer or the obligation to account to Customer for any interest,
income, or other benefit from any of the Collateral. Customer agrees
to permit FIMAT and/or its agents and representatives at any time to
inspect any of the Collateral and make abstracts or copies from any of
Customer's books and records pertaining to the Collateral. The right
is expressly granted to FIMAT, in its sole discretion, to notify
warehousemen, consignees, bailees or any other persons in possession
of Collateral of FIMAT's security interest therein. Unless Agreed by
FIMAT, the undersigned will not file or authorize or permit to be
filed in any jurisdiction any such financing or like statement in
which FIMAT is not named as the sole secured party. Upon the request
of FIMAT Customer shall, at Customer's expense, keep insured all
Collateral which is tangible property for full value, with such
coverage as FIMAT may approve, and the policies shall be duly endorsed
in FIMAT's favor and delivered to FIMAT.
C. EVENTS OF DEFAULT. In addition to any "Event of Default" which may be
defined in any Other Agreement, and not by way of limitation of any
right FIMAT otherwise has to demand payment at any time of any of the
Liabilities, the following events shall constitute an "Event of
Default": (1) Customer breaches, repudiates, or defaults in any way on
any agreement with FIMAT or any Affiliate (including Customer's
agreement to provide margin) or with a third party; or (2) FIMAT, in
its sole discretion, determines that it has sufficient grounds for
insecurity with respect to Customer's performance of any obligation to
any person and Customer fails to provide assurance of performance of
the obligation satisfactory to FIMAT; or (3) any proceeding is
commenced by or against Customer under any bankruptcy, insolvency,
relief of debtor, or similar law, or Customer makes an assignment for
the benefit of creditors, a receiver, trustee, conservator, liquidator
or similar officer is appointed for Customer or any of Customer's
property; or (4) Customer's Account(s) are attached or levied against;
or (5) any of Customer's representations to FIMAT or any Affiliate,
whenever or wherever made, were misleading when made or deem made or
later becomes untrue; or (6) Customer dies, is disabled or becomes
legally incompetent; or (7) Customer or any organization of which
Customer is a member suspends or threatens to suspend the transaction
of its usual business, or any proceeding is commenced with respect to
any of Customer's property or any such organization; or (8) Customer
is a party to any merger, consolidation or sale of all or
substantially all of its assets unless Agreed by FIMAT prior thereto;
or (9) FIMAT has reason to believe that any of the foregoing is likely
to occur imminently.
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D. FIMAT's Remedies Upon Default.
l. Customer absolutely and unconditionally agrees that upon the
occurrence of an Event of Default, FIMAT, on behalf of itself and
as agent for any Affiliate, may exercise any one or more of the
following remedies (except that, upon the occurrence of any Event
of Default set forth in Section IV.C.(3) above, the remedies
specified in subparagraphs a, b, c, and g below shall thereupon
be deemed for all purposes to have been exercised, immediately
and without action by FIMAT), with only such notice as is
required by Applicable Law and cannot be waived, without
prejudice to any other remedies:
a. FIMAT, on its own behalf and/or on behalf of any of its
Affiliates, may terminate any or all of FIMAT's and/or any
Affiliates obligations to Customer for future performance;
b. FIMAT, on its own behalf and/or on behalf of any of its
Affiliates, may treat any or all of Customer's Liabilities
and/or Customer's obligations to any Affiliates, including
credit or debit balances, as immediately due, and may treat
all limits, margin facilities and call tolerance facilities
in place as revoked;
c. FIMAT, on its own behalf and/or on behalf of any of its
Affiliates, may consolidate Customer's Account(s) or any of
them at FIMAT and/or any Affiliates;
d. FIMAT, on its own behalf and/or on behalf of any of its
Affiliates, may sell any or all non-cash Collateral held
long by FIMAT and/or any Affiliates;
e. FIMAT, on its own behalf and/or on behalf of any of its
Affiliates, may close out or hedge for Customer's Account(s)
any or all open positions in Customer's Account(s) at FIMAT
and/or any Affiliates pursuant to Section III.O above or
otherwise, in any manner it deems reasonable under the
circumstances;
f. FIMAT, on its own behalf and/or on behalf of any of its
Affiliates, may borrow, lend, sell or buy from any party,
including itself and/or any Affiliates, any property
necessary to cover or hedge any or all positions in
Customer's Account(s) at FIMAT and/or any Affiliates; and
g. FIMAT, on its own behalf and/or on behalf of any of its
Affiliates, may offset the proceeds of the sale of non-cash
Collateral, cash Collateral, and sums owing Customer by
FIMAT and/or Affiliates (including any sums arising from the
operation of this Section D), against Customer's Liabilities
and Customer's obligations to any Affiliates, without
prejudice to FIMAT's right to recover the balance of
Customer's Liabilities and any Affiliates' right to recover
the balance of Customer's obligations to them.
Customer appoints FIMAT as Customer's agent to sign,
complete, and deliver any and all documents necessary or
desirable to carry out the foregoing. None of FIMAT nor any
of its Affiliates, nor any of its agents or representatives
will be responsible for losses or lost profits, accrued or
anticipated, resulting from any position or transaction
entered to enforce the foregoing remedies. Customer waives
the right of set off in any action brought by FIMAT to
collect amounts owned by Customer to FIMAT.
Customer will indemnify and hold harmless FIMAT and its
Affiliates, and their respective agents and representatives from
any liabilities, penalties, losses, costs and expenses, including
but not limited to reasonable attorney fees (whether the
reasonable fees and charges of external legal counsel and/or the
costs and charges, if any, allocated by internal legal
department), which FIMAT and/or any Affiliates incur in
connection with (i) the exercise of any remedy hereunder or under
any Other Agreement, (ii) the care or custody of the Collateral
and defending or asserting the rights and claims of FIMAT and/or
any Affiliates in respect thereof, and (iii) meeting any
obligation of FIMAT and/or any Affiliates which would otherwise
fail to be performed by reason of an Event of Default.
-13-
V. MISCELLANEOUS
A. GOVERNING LAW AND SUBMISSION TO JURISDICTION.
All disputes between FIMAT and Customer including, but not limited to,
disputes arising directly or indirectly as a result of, or the
relationship established as a result of, this Agreement, shall be
governed by the substantive laws of the State of New York, without
regard to principles of choice of law. Notwithstanding any provision
of Applicable Law, Customer agrees to commence all actions of any kind
against FIMAT within one year of the event giving rise to any dispute.
Customer irrevocably submits to the jurisdiction of the courts of New
York and of the Federal Courts of the Southern District of New York
with respect to litigation relating to all such disputes, including,
but not limited to, disputes arising directly or indirectly as a
result of or the relationship established as a result of this
Agreement and transactions subject to this Agreement, agrees to
commence actions and proceedings and assert claims for relief
involving them only in such courts (unless Customer has otherwise
agreed to arbitrate all disputes against FIMAT, in which case such
arbitration shall be held only in New York City), and consents to
service of process by the mailing of copies to Customer by certified
mail to Customer's address as it appears on the books of FIMAT. Such
service shall be effective ten days after mailing.
B. WAIVER OF JURY TRIAL. CUSTOMER HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO, BUT NOT LIMITED
TO, DISPUTES ARISING DIRECTLY OR INDIRECTLY AS A RESULT OF, OR THE
RELATIONSHIP ESTABLISHED AS A RESULT OF, THIS AGREEMENT OR ANY
TRANSACTION IN CONNECTION THEREWITH. CUSTOMER'S WAIVER OF TRIAL BY
JURY IS A PREREQUISITE TO, AND INDUCEMENT OF FIMAT TO OFFER, THE
OPENING OF CUSTOMER'S ACCOUNT(S).
C. APPLICABLE LAW AND NOTES FOR GERMAN CLIENTS. Contrary to German Law,
the substantive law of New York does not distinguish between binding
and non-binding terminal (futures) transactions (see paragraph 53 of
the German Borsengesetz). All trades under this Agreement are
therefore binding market transactions. Customer acknowledges that
under German Law futures trading gives rise to an imperfect obligation
(as provided in paragraphs 762 and 764 of the Burgerliches Gesetzbuch
("BGB") and paragraph 58 of the German Borsengesetz). Customer also
acknowledges that under paragraph 814 of the BGB disclosure of this
fact removes any and all rights Customer might otherwise have as a
result of the "Differenzeinwand" (paragraph 812 of the BGB). Customer
credit balance held by FIMAT will be applied to fulfill, discharge and
perform the transaction(s) and as an advance performance or down
payment to cover any transaction(s) trading costs.
D. Force Majeure; Warranty and Disclaimer of Warranties. FIMAT shall not
be liable for any delay in performance or for non-performance of its
obligations caused by any event beyond the reasonable control of
FIMAT. FIMAT may, without liability, cancel this Agreement or any
particular transaction contemplated hereunder if its performance is
delayed or rendered impossible due to any such event. FIMAT's sole
warranty is that any commodity delivered by it will conform to the
description on any confirmation prepared and delivered by FIMAT with
respect thereto. FIMAT EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED.
E. NON-WAIVER; NON-ASSIGNMENT; TIME OF THE ESSENCE. This Agreement and
the Other Agreements, if any, constitute the entire Agreement between
FIMAT and Customer with respect to the subject matter hereof and
supersede all other understandings, agreements, or communications
concerning such subject matter. Any oral representations, warranties,
inducements, or agreements made by any representative of FIMAT
inconsistent with the provisions of this Agreement are excluded and
will not bind FIMAT. FIMAT will be bound by waivers and modifications
of any of the terms of this Agreement, any other written agreement, or
any transaction, or any attempted assignment by Customer of any right
or interest in this Agreement, any other agreement, or any
transaction, only if Agreed by FIMAT (as defined). Such agreement will
bind FIMAT only in relation to the waiver, modification, or
assignment, to which FIMAT has consented in writing. Customer hereby
waives the right to claim estoppel or forbearance unless Agreed by
FIMAT. Any agreement by FIMAT to forbear liquidation, pursuant to any
of its rights and remedies hereunder, may be revoked by FIMAT upon 24
hours notice to Customer (unless a shorter time is commercially
reasonable under the circumstances), which notice Customer hereby
deems reasonable. FIMAT's failure to exercise any right or remedy is
not a waiver of the right or remedy not exercised or any other right
or remedy. Time is of the essence in the performance of Customer's
obligations.
F. BINDING EFFECT. This Agreement covers all of Customer's Account(s)
with FIMAT, is binding on Customer and Customer's estate, legal
representatives, successors and assigns and inures to the benefit of
FIMAT and its successors and assigns.
-14-
G. COMMUNICATIONS. Communications may be sent to Customer by mail, telex,
telegraph, facsimile transmission, messenger, or other reasonable
means at its current address shown on FIMAT's records, and are deemed
received when Customer actually receives them or 24 hours after they
are sent, whichever first, occurs. FIMAT, in its sole discretion, may
record, on tape or otherwise, any telephone conversation between FIMAT
and Customer involving their respective officers, agents and
employees. Customer hereby agrees and consents to such recording, with
or without the use of an automatic tone warning device, and waives any
right Customer may have to object to the use or admissibility into
evidence of such recording in any legal proceeding between Customer
and FIMAT or in any other proceeding to which FIMAT is a party or in
which FIMAT's records are subpoenaed. Customer acknowledges that FIMAT
may erase such recordings after a reasonable period of time. FIMAT
shall be entitled to rely on any instructions, notices and
communications, whether oral or in writing, that it believes to be
that of an individual authorized to act on behalf of Customer as
authorized to act on its behalf, and Customer shall be bound thereby.
Customer hereby waives any defense that any such instruction was not
in writing as may be required by the Statute of Frauds or any other
similar law, rule or regulation. Customer will indemnify FIMAT and
hold FIMAT harmless from and against all liabilities, penalties,
losses, and expenses, including legal expenses, incurred by FIMAT as a
result of FIMAT's acting upon such instructions.
H. NON-EXECUTION. Any failure by Customer to duly sign this Agreement is
not a waiver by FIMAT of any rights it otherwise has against Customer.
I. FIMAT HAS NO RESPONSIBILITY FOR ADVICE. FIMAT is not acting as
fiduciary, foundation manager, commodity pool operator, commodity
trading advisor or investment adviser in respect of any Account(s)
opened by Customer and FIMAT shall have no responsibility hereunder
for compliance with any law or regulation governing the conduct of
fiduciaries, foundation managers, commodity pool operators, commodity
trading advisors or investment advisers. Customer will not enter into
any transaction with FIMAT, and will not hold FIMAT responsible for
losses, as a result of any prediction, recommendation, or
representation made by any representative of FIMAT. Any information or
advice communicated by FIMAT, although based upon information from
sources FIMAT believes to be reliable, may be incomplete or
inaccurate, may not be verified, and may be changed without notice to
Customer. FIMAT makes no representation as to the accuracy,
completeness, reliability or prudence of any such information or
advice or as to the tax consequences of Customer's futures or options
trading.
J. APPOINTMENT OF AGENT. Customer's appointment of an agent on the
"Trading and Fee Payment Authorization Limited to Purchases and Sales
of Commodities" form ("Trading Authorization"), if applicable, is
notice to FIMAT that the person so designated (the "Agent") is
Customer's agent in respect of Customer's Account(s) with FIMAT,
with complete authority on Customer's behalf to place orders for
purchases and sales, including short sales, for cash or on margin, of
Commodities other items in respect of which Customer may from time to
time enter into transactions in one or more of Customer's Account(s)
with FIMAT, for immediate or future delivery, to effect delivery and
performance of the orders and of the obligations undertaken in
connection with the orders, to borrow funds from FIMAT to finance any
of the transactions, to lend or pledge Customer's properties with MAT
and otherwise to secure Customer's Liabilities, withdraw or direct the
payment of monies, securities, commodities, or other property from
Customer's Account(s) with FIMAT, including to compensate Agent for
its services, to settle Customer disputes with FIMAT or between
Customer or any other party with whom FIMAT deals for Customer or with
whom Customer deals through FIMAT as broker for the third party, and.
to sign and deliver on Customer's behalf notices and other documents
and to take all other actions necessary or desirable to carry out the
terms of this Agreement. Customer agrees to notify FIMAT promptly in
writing of the revocation or modification of the Agent's authority.
Customer will indemnify FIMAT and hold FIMAT harmless from and against
all liabilities, penalties, losses, and expenses, including legal
expenses, incurred by FIMAT in acting as instructed by the Agent and
in continuing to act in reliance on the Trading Authorization after
revocation or modification but prior to FIMAT's receipt of written
notice thereof.
K. TERMINATION. Customer may terminate this Agreement, at any time when
Customer has no Liabilities and no open positions which could give
rise to subsequent Liabilities, upon the actual receipt by FIMAT of
written notice of termination. FIMAT may terminate this Agreement at
any time upon mailing or delivery of written notice of termination to
Customer, provided that any such termination will not affect any
transactions theretofore entered into and will not relieve either
party of any obligations in connection with any debt or credit balance
or other liability or obligation incurred prior to the termination.
-15-
L. MULTIPLE PARTIES. If any Account(s) established pursuant to this
Agreement is on behalf of more than one person:
1. each signing person is jointly and severally liable for the
full and timely performance of all the obligations of all
signing persons in connection with this Agreement and any
account established and any transaction effected under this
Agreement; and the terms hereof shall survive the legal
incompetence or death of any or all signing persons;
2. in connection with any Account(s) established under this
Agreement, FIMAT may act upon any order, request or instruction
from any one signing person without the necessity of
confirmation from any other;
3. the delivery of any report, statement, notice or other
communication to any one signing person is deemed to have been
to all of the signing persons;
4. FIMAT may deliver any Collateral of any of the signing persons
to any one or more of the signing persons, and make payments
from any Account(s) established pursuant to this Agreement to
or upon the order or direction of any one of them, and FIMAT is
under no obligation to inquire into the purpose of any request
for the delivery of any such Collateral or the making of any
such payment, or to see to the disposition or application
thereof; and
5. unless FIMAT is advised otherwise in writing, the interest of
the signing persons in any Account(s) established under this
Agreement shall be deemed to be a joint tenancy with rights of
survivorship and not a tenancy in common.
M. SEVERABILITY. If any provision of this Agreement, or the application
of such provision to any person or circumstances, is held invalid,
the remainder of this Agreement, and the application of such
provision to persons or circumstances other than these as to which
it is held invalid, shall not be affected thereby.
N. CAPTIONS. Captions used in this Agreement are used for convenience
and neither form an integral part of this Agreement nor limit the
applicability or affect the meaning of any of the Agreement's
provisions.
VI. ELECTRONIC TRADING SYSTEMS
FIMAT may make available to Customer the ability to trade, directly or
indirectly (in whole or in part), through electronic trading systems
(ETS) such as GLOBEX or ACCESS or other electronic systems. The
sponsoring organizations or such systems may make certain information
available and in some cases require special disclosures for these
systems. To the extent these disclosures are required and other
information is available, it has been set forth in the accompanying
booklet entitled "Exchange Disclosures and Notices," which Customer
acknowledges receiving by signing below.
VII. ACCEPTANCE OF AGREEMENT
This Agreement shall not be deemed to be accepted by FIMAT or become a
binding contract between Customer and FIMAT until approved by a duly
authorized officer of FIMAT in writing in accordance with its internal
procedures. Customer represents, unless Customer has executed the Joint
Tenants Agreement; the Partnership Authorization; the Certificate of
Corporate Resolution; or the Trust Authorization, that this is an
individual account and, no one else has an interest in this account and
Customer has authority and capacity to enter into this Agreement.
VIII. OTHER AGREEMENTS AMONG THE PARTIES; CONFLICTS
Customer acknowledges that in addition to this Agreement, FIMAT may
request that Customer and/or any Affiliate of Customer to execute and
deliver such agreement(s), instrument(s) and document(s) as FIMAT may
prescribe, which agreement(s), instrument(s) and documents upon their
execution, shall become an Other Agreement. In the event of a conflict
between the provisions of this Agreement and the provisions of any Other
Agreement, the provisions of this Agreement shall govern to the extent
the underlying transactions relate to futures contracts or options
thereon.
-16-
IX. FOR HEDGE CUSTOMERS ONLY
CUSTOMER WARRANTS, BY INITIALLING IN A BOX BELOW, THAT IT WILL ENGAGE IN
BONA FIDE HEDGING TRANSACTIONS PURSUANT TO CFTC REGULATION 1.3(z). IN THE
EVENT OF BANKRUPTCY, CUSTOMER PREFERS THAT THE TRUSTEE (PLEASE INITIAL
CHOICE)
[ ] LIQUIDATE [ ] NOT LIQUIDATE
OPEN COMMODITY CONTRACTS IN CUSTOMER'S HEDGE ACCOUNT WITHOUT SEEKING ITS
INSTRUCTIONS.
PLEASE ACKNOWLEDGE YOUR AGREEMENT AND CONSENT TO THIS CUSTOMER AGREEMENT BY
SIGNING BELOW.
BY SIGNING BELOW, CUSTOMER ALSO ACKNOWLEDGES THAT CUSTOMER HAS RECEIVED AND
UNDERSTANDS THE FOLLOWING ATTACHED DISCLOSURE STATEMENT PRESCRIBED BY THE CFTC:
Please initial if received and understood:
[ ] Risk Disclosure Statement
for Futures and Options
Attached at pg. 1
ACCOUNT NAME:
--------------------------------
BY:
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Authorized Signature Date Name (Please Print)
BY:
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Authorized Signature Date Name (Please Print)