Exhibit 10.02
COMMODITY FUTURES CUSTOMER AGREEMENT
This Commodity Futures Customer Agreement ("Agreement"), dated as of
December 31, 1997, between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇")
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Tangible Asset Fund L.P. (the "Customer"), and acknowledged
and agreed to by ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. ("DWR"), shall govern the purchase
and sale by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of commodity futures contracts and options thereon
(collectively, "Contracts") for the account and risk of Customer through one or
more accounts carried by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf and in the name of Customer
(collectively, the "Account").
1. APPLICABLE LAW. The Account and all transactions and agreements in
respect of the Account shall be subject to all applicable Federal, state,
exchange, clearinghouse and self-regulatory agency rules, regulations and
interpretations and custom and usage of the trade. All such rules, regulations,
interpretations, custom and usage are hereinafter collectively referred to as
"Applicable Law."
2. CUSTOMER'S REPRESENTATIONS AND WARRANTIES. Customer represents and
warrants that: (a) Customer has full right, power and authority to enter into
this Agreement, and the person executing this Agreement on behalf of Customer is
authorized to do so; (b) this Agreement is binding on Customer and enforceable
against Customer in accordance with its terms; (c) Customer may lawfully
establish and open the Account for the purpose of effecting purchases and sales
of Contracts through ▇▇▇▇▇▇ ▇▇▇▇▇▇▇; (d) transactions entered into pursuant to
this Agreement will not violate any applicable law (including any Applicable
Law) to which Customer is subject or any agreement to which Customer is subject
or a party; and (e) all information provided by Customer in the Account
Application preceding this Agreement (which Application and the information
contained therein hereby is incorporated into this Agreement) is true and
correct and Customer shall immediately (and in no event later than within one
business day) notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of any change in such information.
3. PAYMENT & INTEREST OBLIGATIONS.
(a) BROKERAGE FEE. Customer will pay to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ upon demand
(a) a monthly flat-rate fee of 1/12 of 3.65% of Customer's Net Assets (an
3.65% annual rate) as of the first day of each month; (b) any tax imposed
on such transactions by any competent taxing authority; (c) the amount of
any trading losses in the Account; (d) any debit balance or deficiency in
the Account; (e) interest on any debit balances or deficiencies in the
Account, at the overnight rate customarily charged by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
together with costs and reasonable attorneys' fees incurred in collecting
any such debit balance or deficiency; and (f) any other amounts owed by
Customer to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ with respect to the Account or any transactions
therein. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ will pay, from the brokerage fees received by it,
all costs of executing trades by Customer, including floor brokerage fees,
exchange fees, clearinghouse fees, NFA fees, "give up" or transfer fees,
any costs associated with taking delivery on Contracts.
(b) PAYMENT TO DWR. In connection with the sale to investors by DWR
of units of limited partnership interest ("Units") in Customer and the
obligation of DWR and its employees to provide certain continuing services
to those investors, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall pay to DWR each month, from the
brokerage fee that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ receives from Customer, an amount equal
to 1/4 of 1% (a 3.0% annual rate) of Customer's Net Assets as of the first
day of each month.
(c) PAYMENT OF INTEREST. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ will credit Customer at each
month-end with interest income as if 80% of Customer's average daily Net
Assets for the month were invested at a rate based on U. S. Treasury
Bills. All of such funds will be available for margin for Customer's
trading. For the purpose of such interest payments, Net Assets do not
include monies due to Customer on or with respect to Contracts but not
actually received by it from banks, brokers or dealers. Customer's funds
will either be invested together with other Customer segregated funds or
will be held in non-interest-bearing bank accounts. In either case,
Customer will be credited with interest at the most recent 3-month U.S.
Treasury ▇▇▇▇ auction rate as of the first closing for the sale of Units
and as of every 13 weeks thereafter (as if 80% of Customer's assets were
invested in U.S. Treasury Bills at such rate); ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ will retain
and pay to DWR any interest earned in excess of the interest paid to
Customer. To the extent that the assets of Customer are held in
non-interest-bearing bank accounts, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, DWR or their
affiliates will benefit from compensating balance treatment in connection
with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ designation of a bank or banks in which Customer's
assets are deposited, i.e., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, DWR or their affiliates will
receive favorable loan rates from such bank or banks by reason of such
deposits. To the extent that such benefits to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, DWR or their
affiliates exceed the interest ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is obligated to credit to
Customer, they will not be shared with Customer, but will be retained by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, DWR or their affiliates and shared among them as they
shall agree from time to time. Ownership of the right by Customer to
receive interest on Customer's assets pursuant to this 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(d) CAPS ON BROKERAGE AND INTEREST. Notwithstanding the foregoing,
the aggregate of (i) brokerage fees payable by Customer, and (ii) the net
excess interest and compensating balance benefits to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, DWR
or their affiliates (after crediting Customer with interest as described
above) cannot exceed 14% annually of Customer's average month-end Net
Assets during each calendar year; provided, however, that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
will not be responsible for monitoring such limitation.
(e) In connection with DWR's receipt of any fees, interest or other
payments as required above, DWR represents and warrants that such payments
will not violate any Applicable Law to which DWR is subject or any
agreement to which DWR is subject or a party. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ will not be
responsible for any errors or omissions in the calculation of the above
referenced fees, interest and other payment resulting from inaccurate
information or data provided to it by Customer, DWR, or any of their
respective officers, employees or agents for use in making such
calculations.
(f) DEFINITION OF CUSTOMER'S "NET ASSETS." As used in this Section 3,
Customer's "Net Assets" shall be determined in accordance with Section
7(d)(1) of Customer's Limited Partnership Agreement.
4. CUSTOMER'S EVENTS OF DEFAULT; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ REMEDIES.
(a) EVENTS OF DEFAULT. As used herein, each of the following shall be
deemed an "Event of Default": (i) the commencement of a case under any
Federal or state bankruptcy, insolvency or reorganization law, or the
filing of a petition for the appointment of a receiver by or against
Customer, an assignment made by Customer for the benefit of creditors, an
admission in writing by Customer that it is insolvent or is unable to pay
its debts when they mature, or the suspension by Customer of its usual
business or any material portion thereof; (ii) the issuance of any warrant
or order of attachment against the Account or the levy of a judgment
against the Account; (iii) the failure by Customer to deposit or maintain
margins, to pay required premiums, or to make payments required by Section
3 hereof; and (iv) the failure by Customer to perform, in any material
respect, its obligations hereunder.
(b) REMEDIES. Upon the occurrence of an Event of Default or in the
event ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in its sole and absolute discretion, considers it
necessary for its protection, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have the right, in
addition to any other remedy available to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at law or in
equity, and in addition to any other action ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may ▇▇▇▇
appropriate under the circumstances, to liquidate any or all open
Contracts held in or for the Account, sell any or all of the securities or
other property of Customer held by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and to apply the
proceeds thereof to any amounts owed by Customer to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, borrow
or buy any options, securities, Contracts or other property for the
Account, and cancel any unfilled orders for the purchase or sale of
Contracts for the Account, or take such other or further actions which
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in its reasonable discretion, deems necessary or
appropriate for its protection, all without demand for margin and without
notice or advertisement. Any such action may be made at the discretion of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in any commercially reasonable manner. In the event ▇▇▇▇▇▇
▇▇▇▇▇▇▇'▇ position would not be jeopardized thereby, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ will
make reasonable efforts under the circumstances to notify Customer prior
to taking any such action. A prior demand or margin call of any kind from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or prior notice from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall not be considered
a waiver of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ right to take any action without notice or
demand. In the event ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ exercises any remedies available to it
under this Agreement, Customer shall reimburse, compensate and indemnify
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ for any and all costs, losses, penalties, fines, taxes and
damages that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may incur, including reasonable attorneys'
fees incurred in connection with the exercise of its remedies and the
recovery of any such costs, losses, penalties, fines, taxes and damages.
5. STANDARD OF LIABILITY AND INDEMNITY.
(a) STANDARD OF LIABILITY. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and its affiliates (as
defined below) shall not be liable to Customer, the limited partners of
Customer ("Limited Partners"), or any of its or their respective
successors or assigns, for any act, omission, conduct, or activity
undertaken by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of Customer which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
determines, in good faith, to be in the best interests of Customer, unless
such act, omission, conduct, or activity by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or its
affiliates constituted misconduct or negligence. Without limiting the
foregoing, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have no responsibility or liability to
Customer hereunder (i) in connection with the performance or
non-performance by an contract market, clearing house, clearing firm or
other third party (including floor brokers and banks) to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of
its obligations in respect of any Contract or other property of Customer;
(ii) as a result of any prediction, recommendation or advice made or given
by a representative of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ whether or not made or given at the
request of Customer; (iii) as a result of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ reliance on any
instructions, notices and communications that it believes to be that of an
individual authorized to act on behalf of Customer; (iv) as a result of
any delay in the performance or non-performance of any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇
obligations hereunder directly or indirectly caused by the occurrence of
any contingency beyond the control of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ including, but not
limited to, the unscheduled closure of an exchange or contract market or
delays in the transmission of orders due to breakdowns or failures of
transmission or communication facilities, execution, and/or trading
facilities or other systems (including, without limitation, GLOBEX,
ACCESS, or other electronic trading systems, facilities or services), it
being understood that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be excused from performance of
its obligations hereunder for such period of time as is reasonably
necessary after such occurrence to remedy the effects therefrom; (v) as a
result of any action taken by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or its floor brokers to
comply with Applicable Law; or (vi) for any acts or omissions of those
neither employed nor supervised by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. In no event ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ be liable to Customer for consequential, incidental or special
damages hereunder.
(b) INDEMNIFICATION BY CUSTOMER. 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 Customer,
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 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 the foregoing,
no indemnification of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or its affiliates by Customer shall
be permitted for any losses, liabilities or expenses arising from or out
of an alleged violation of federal or state securities laws unless (i)
there has been a successful adjudication on the merits of each count
involving alleged securities law violations as to the particular
indemnitee, or (ii) such claims have been dismissed with prejudice on the
merits by a court of competent jurisdiction as to the particular
indemnitee, or (iii) 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 that
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 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 5. 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
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.
(c) INDEMNIFICATION BY ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall
indemnify, defend and hold harmless Customer and its successors or assigns
from and against any losses, liabilities, damages, costs and expenses
(including in connection with the defense or settlement of claims;
provided ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has approved such settlement) incurred as a direct
result of the activities of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or its affiliates, provided
that the act, omission, conduct, or activity giving rise to the claim for
indemnification was the result of bad faith, misconduct or negligence.
(d) LIMITATION ON INDEMNITIES. The indemnities provided in this
Section 5 by 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
agreement of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ contained in this Agreement to the extent
caused by such event. Likewise, the indemnities provided in this Section 5
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to 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
representation, warranty or agreement of Customer contained in this
Agreement to the extent caused by such event.
(e) DEFINITION OF "AFFILIATE." As used in this Section 5, 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 5 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.
6. GENERAL AGREEMENTS. The parties agree that:
(a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ RESPONSIBILITY. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is not acting as
a fiduciary, foundation manager, commodity pool operator, commodity
trading advisor or investment adviser in respect of any Account opened by
Customer. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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.
(b) ADVICE. All advice communicated by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ with respect to
any Account opened by Customer hereunder is incidental to the conduct of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ business as a futures commission merchant and such advice
will not serve as the primary basis for any decision made by or on behalf
of Customer in respect of the Account, regardless of whether Customer
relies on the advice of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in making any such decision.
Customer acknowledges that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and its managing directors,
officers, employees and affiliates may take or hold positions in, or
advise other Customers concerning, contracts that are the subject of
advice from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to Customer. The positions and advice of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and its managing directors, officers, employees and affiliates may
be inconsistent with or contrary to positions of, and the advice given by,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to Customer.
(c) RECORDING. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in its sole and absolute discretion,
may record, on tape or otherwise, any telephone conversation between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Customer involving their respective officers, agents
and employees, and Customer hereby agrees and consents thereto.
(d) ACCEPTANCE OF ORDERS; POSITION LIMITS.
(i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have the right to limit the size of
open positions (net or gross) of Customer with respect to the Account
at any time and to refuse acceptance of orders to establish new
positions, whether such refusal or limitation is required by, or
based on position limits imposed under, Applicable Law. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ shall immediately notify Customer of its rejection of any
order. Unless specified by Customer, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may designate the
exchange or other markets (including, without limitation, GLOBEX or
ACCESS) on which it will attempt to execute orders.
(ii) Customer shall file or cause to be filed all applications
or reports required under Applicable Law with the CFTC or the
relevant contract market or clearinghouse, and shall provide ▇▇▇▇▇▇
▇▇▇▇▇▇▇ with a copy of such applications or reports and such other
information as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may reasonably request in connection
therewith.
(e) ORIGINAL AND VARIATION MARGIN; PREMIUMS; OTHER CONTRACT
OBLIGATIONS. Customer shall make, or cause to be made, all applicable
original margin, intra-day margin and premium payments, and perform all
other obligations attendant to transactions or positions in such
Contracts, as may be required by Applicable Law or by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
Requests for margin deposits and/or premium payments may, at ▇▇▇▇▇▇
▇▇▇▇▇▇▇'▇ election, be communicated to Customer orally, telephonically or
in writing. Customer margin deposits and/or premium payments shall be made
by wire transfer to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ Customer Segregated Account and shall
be in U.S. dollars unless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ specifically requests otherwise.
(f) SECURITY INTEREST AND RIGHTS RESPECTING COLLATERAL. Except to the
extent proscribed by Applicable Law not subject to waiver, all Contracts,
cash, securities, and/or any other property of Customer whatsoever
(collectively, the "Collateral") at any time held by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or its
affiliates, or carried by others for the Account, hereby are pledged to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and shall be subject to a general lien and security
interest in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ favor to secure any indebtedness or other
amounts, obligations and/or liabilities at any time owing from Customer to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (collectively, the "Customer's Liabilities"). Customer
hereby grants ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ the right to borrow, pledge, repledge,
hypothecate, rehypothecate, loan or invest any of the Collateral,
including utilizing the Collateral to purchase United States Government
Treasury obligations pursuant to repurchase agreements or reverse
repurchase agreements with any party, in each case without notice to
Customer and without any obligation to pay or to account to Customer for
any interest, income or benefit that may be derived therefrom, except to
the extent set forth in Section 3 hereof. The rights of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ set
forth above shall be qualified by any applicable requirements for
segregation of Customers' property under Applicable Law.
(g) REPORTS AND OBJECTIONS. All confirmations, purchase and sale
notices, correction notices and account statements (collectively,
"Statements") shall be submitted to Customer and shall be conclusive and
binding on Customer unless Customer notifies ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of any
objection thereto prior to the opening of trading on the contract market
on which such transaction occurred on the business day following the day
on which Customer receives such Statement; provided that, with respect to
monthly Statements, Customer may notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of any objection
thereto within five business days after receipt of such monthly Statement,
provided the objection could not have been raised at the time any prior
Statement was received by Customer as provided for above. Any such notice
of objection, if given orally to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, shall immediately (and no
later than within one business day) be confirmed in writing by Customer.
(h) DELIVERY PROCEDURES; OPTIONS ALLOCATION PROCEDURE.
(i) Customer will provide ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ with instructions
either to liquidate Contracts previously established by Customer,
make or take delivery under any such Contracts, or exercise options
entered into by Customer, within such time limits as may be specified
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have no responsibility to
take any action on behalf of Customer or positions in the Account
unless and until ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ receives oral or written instructions
reasonably acceptable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ indicating the action ▇▇▇▇▇▇
▇▇▇▇▇▇▇ is to take. Funds sufficient to take delivery pursuant to
such Contract or deliverable grade commodities to make delivery
pursuant to such Contract must be delivered to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at such
time as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may require in connection with any delivery.
(ii) Short option Contracts may be subject to exercise at any
time. Exercise notices received by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ from the applicable
contract market with respect to option Contracts sold by Customer may
be allocated to Customer pursuant to a random allocation procedure,
and Customer shall be bound by any such allocation of exercise
notices. In the event of any allocation to Customer, unless ▇▇▇▇▇▇
▇▇▇▇▇▇▇ has previously received instructions from Customer, ▇▇▇▇▇▇
▇▇▇▇▇▇▇'▇ sole responsibility shall be to use its best efforts to
notify Customer of such allocation.
(iii) If Customer fails to comply with any of the foregoing
obligations, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may, in its sole and absolute discretion,
liquidate any open positions, make or receive delivery of any
commodities or instruments, or exercise or allow the expiration of
any options, in such manner and on such terms as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in
its sole and absolute discretion, deems necessary or appropriate, and
Customer shall indemnify and hold ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ harmless as a result
of any action taken or not taken by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in connection
therewith or pursuant to Customer's instructions.
(i) FINANCIAL AND OTHER INFORMATION. Customer shall provide to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ such financial information regarding Customer as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
may from time to time reasonably request. Customer shall notify ▇▇▇▇▇▇
▇▇▇▇▇▇▇ immediately (and no later than within one business day) if the
financial condition of Customer changes materially and adversely from that
shown in the most recent financial information theretofore provided to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇. An investigation may be conducted pertaining to Customer's
credit standing and business.
(j) CURRENCY EXCHANGE RISK. Customer shall bear all risk and cost in
respect of the conversion of currencies incident to transactions effected
on behalf of Customer pursuant hereto.
7. TERMINATION. This Agreement may be terminated at any time by Customer
or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ upon ten (10) days' prior written notice to the other. In the
event of such notice, Customer shall either close out open positions in the
Account or arrange for such open positions to be transferred to another futures
commission merchant. Upon satisfaction by Customer of all of Customer's
Liabilities, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall transfer to another futures commission
merchant all Contracts, if any, then held for the Account, and shall transfer to
Customer or to another futures commission merchant, as Customer may instruct,
all cash, securities and other property held in the Account, whereupon this
Agreement shall terminate.
8. MISCELLANEOUS.
(a) SEVERABILITY. If any provision of this Agreement is, or at any
time becomes, inconsistent with any present or future law, rule or
regulation of any exchange or other market, sovereign government or
regulatory body thereof, and if any of these authorities have jurisdiction
over the subject matter of this Agreement, the inconsistent provision
shall be deemed superseded or modified to conform with such law, rule or
regulation but in all other respects, this Agreement shall continue and
remain in full force and effect.
(b) BINDING EFFECT. This Agreement shall be binding on and inure to
the benefit of the parties and their successors. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have
the right to transfer or assign this Agreement (and thereby the Account)
to any successor entity or to another properly registered futures
commission merchant only upon obtaining the prior consent of Customer.
(c) ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties and supersedes any prior agreements between the
parties as to the subject matter hereof. No provision of this Agreement
shall in any respect be waived, altered, modified, or amended unless such
waiver, alteration, modification, or amendment is signed by the party
against whom such waiver, alteration, modification, or amendment is to be
enforced.
(d) CURRENCY DENOMINATION. Unless another currency is designated in
the confirmations reporting transactions entered into by Customer, all
margin deposits in connection with such transactions, and a debit or
credit in the Account, shall be stated in United States dollars, and
margin requirements, debits or credits expressed in another currency shall
be converted into United States dollars at a rate of exchange determined
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in its sole and absolute discretion, on the basis of
the then prevailing money market rates of exchange for such foreign
currency.
(e) INSTRUCTIONS, NOTICES OR COMMUNICATIONS. Except as specifically
otherwise provided in this Agreement, all instructions, notices or other
communications may be oral or written. All oral instructions, unless
custom and usage of trade dictate otherwise, shall be promptly confirmed
in writing. All written instructions, notices or other communications
shall be addressed as follows:
(i) if to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Commodity Operations Manager
(ii) if to Customer, at the address as indicated on the Commodity
Account Application.
(f) RIGHTS AND REMEDIES CUMULATIVE. All rights and remedies arising
under this Agreement as amended and modified from time to time are
cumulative and not exclusive of any rights or remedies which may be
available at law or otherwise.
(g) NO WAIVER. No failure on the part of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to exercise,
and no delay in exercising, any contractual right will operate as a waiver
thereof, nor will any single or partial exercise by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of any
right preclude any other or future exercise thereof or the exercise of any
other partial right.
(h) GOVERNING LAW. THE INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT AND THE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW.
(i) CONSENT TO JURISDICTION. ANY LITIGATION BETWEEN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
AND CUSTOMER RELATING TO THIS AGREEMENT OR TRANSACTIONS HEREUNDER SHALL
TAKE PLACE IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH
OF MANHATTAN OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK. CUSTOMER CONSENTS TO THE SERVICE OF PROCESS BY THE
MAILING TO CUSTOMER OF COPIES OF SUCH COURT FILING BY CERTIFIED MAIL TO
THE ADDRESS OF CUSTOMER AS IT APPEARS ON THE BOOKS AND RECORDS OF ▇▇▇▇▇▇
▇▇▇▇▇▇▇, SUCH SERVICE TO BE EFFECTIVE TEN DAYS AFTER MAILING. CUSTOMER
HEREBY WAIVES IRREVOCABLY ANY IMMUNITY TO WHICH IT MIGHT OTHERWISE BE
ENTITLED IN ANY ARBITRATION, ACTION AT LAW, SUIT IN EQUITY OR ANY OTHER
PROCEEDING ARISING OUT OF OR BASED ON THIS AGREEMENT OR ANY TRANSACTION IN
CONNECTION HEREWITH.
(j) WAIVER OF JURY TRIAL. Customer hereby waives a trial by jury in
any action arising out of or relating to this Agreement or any transaction
in connection therewith.
(k) AGREEMENT NON-EXCLUSIVE. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be free to render
services of the nature to be rendered to Customer hereunder to other
persons or entities in addition to Customer, and the parties acknowledge
that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may render such services to additional entities
similar in nature to Customer. It is expressly understood and agreed that
this Agreement is non-exclusive and that Customer has no obligation to
execute any or all of its trades for futures interests through ▇▇▇▇▇▇
▇▇▇▇▇▇▇. The parties acknowledge that Customer may execute and clear
trades for futures interests through such other broker or brokers as
Customer may direct from time to time. Customer's utilization of one or
more additional commodity brokers shall neither terminate this Agreement
nor modify in any regard the respective rights and obligations of Customer
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(l) CUSTOMER ACKNOWLEDGMENTS.
(i) CUSTOMER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED AND
UNDERSTANDS THE FOLLOWING DISCLOSURE STATEMENT PRESCRIBED BY THE CFTC
AND FURNISHED HEREWITH (please initial):
[ X ] RISK DISCLOSURE STATEMENT
FOR FUTURES OPTIONS
(Appendix A to CFTC Rule 1.55(c) transcribed in
full on pages 1-3 of Booklet 2 -- Risk
Disclosure Statements)
(II) IF CUSTOMER HAS INDICATED ON THE COMMODITY FUTURES ACCOUNT
APPLICATION THAT ORDERS PLACED FOR THE ACCOUNT REPRESENT BONA FIDE
HEDGING TRANSACTIONS, PLEASE COMPLETE THE FOLLOWING. You should note
that CFTC Regulation ss.190.06 permits you to specify whether, in the
unlikely event of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ bankruptcy, you prefer the
bankruptcy trustee to liquidate all positions in the Account.
Accordingly, Customer hereby elects as follows: (PLEASE INITIAL):
[ ] LIQUIDATE [ ] NOT LIQUIDATE
IF NEITHER ALTERNATIVE IS INITIALED, CUSTOMER WILL BE DEEMED TO HAVE
ELECTED TO HAVE ALL POSITIONS LIQUIDATED. THIS ELECTION MAY BE CHANGED AT ANY
TIME BY WRITTEN NOTICE.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first indicated above.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ TANGIBLE ASSET FUND L.P.
By: Demeter Management Corporation, General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Principal
Acknowledged and Agreed
(as to Section 3(b), (c) and (d))
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
REMINDER: PLEASE BE SURE TO INITIAL THE APPROPRIATE BOXES IN
SECTIONS 8(K)(1)(I)ABOVE.