EXHIBIT 10.11
COMMODITY FUTURES CUSTOMER AGREEMENT
BETWEEN
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ SPECTRUM TECHNICAL L.P.
AND
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
This Commodity Futures Customer Agreement ("Agreement"), dated as of June
6, 2000 between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Spectrum Technical L.P. ("Customer"), and acknowledged and
agreed to ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., the non-clearing commodity broker for the
Customer ("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, clearing house 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 AND INTEREST OBLIGATIONS.
(a) COMPENSATION PAYMENTS TO ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. Customer shall pay
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ upon demand (a) all floor brokerage charges, give-up fees,
contract market, clearing house, National Futures Association ("NFA") or
clearing member fees or charges; (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; and (e) any other amounts
owed by Customer to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ with respect to the Account or any
transactions therein. DWR shall pay ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ such charges with respect to
the execution and clearing of trades for Customer as DWR and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
shall agree from time to time.
(b) PAYMENT OF INTEREST. The Customer's assets deposited with ▇▇▇▇▇▇
▇▇▇▇▇▇▇ will be segregated or secured in accordance with the Commodity Exchange
Act and regulations of the Commodity Futures Trading Commission ("CFTC") and
will be invested in accord with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ customary practice for
investment of its futures customer funds. All of Customer's funds will be
available for margin for the Customer's trading. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall pay to DWR
at each month-end interest on Customer's funds in its possession as agreed
between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and DWR from time to time. The Customer understands that
it will not receive any interest income on its assets held by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ other than that paid by DWR pursuant to the Customer's DWR Customer
Agreement. DWR shall pay ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ interest on any debit balances in the
Account at such rates as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and DWR shall agree from time to time.
(c) NETTING. The parties agree that all payment obligations of
Customer to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ under this Agreement and all payment obligations of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to Customer under this Agreement will be netted against each
other to result in one net payment amount.
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 the 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) if Customer is
an employee benefit plan, the termination of Customer or the filing by Customer
of a notice of intent to terminate with a governmental agency or body, or the
receipt of a notice of intent to terminate Customer from a governmental agency
or body, or the inability of Customer to pay benefits under the relevant
employment benefit plan when due; (iv) the failure by Customer to deposit or
maintain margins, to pay required premiums, or to make payments required by
Section 3 hereof; (v) 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 ▇▇▇▇▇▇
▇▇▇▇▇▇▇, 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 INDEMNIFICATION.
(a) STANDARD OF LIABILITY. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and its affiliates (as
defined below) shall not be liable to Customer, the general partner or the
limited partners, or any of its or their respective
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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 interest of the 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 any contract market,
clearing house, clearing firm or other third party (including floor brokers not
selected by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 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 the foregoing, no indemnification of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or its
affiliates by Customer shall be permitted for any losses, liabilities or
expenses arising from or out of any 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
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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 or 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, FURTHER, that the act, omission,
conduct or activity giving rise to the claim for indemnification was the result
of bad faith, misconduct or negligence of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or its affiliates.
(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 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 breach.
(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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ agrees to furnish to the Customer as soon as
practicable all of the information from time to time in its possession which
Customer may be required to furnish to its limited partners pursuant to its
limited partnership agreement and as otherwise required by Applicable Law.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall disclose such information regarding itself and its
affiliates (including, without limitation, financial statements) as may be
required by the Customer for SEC, CFTC and state blue sky disclosure purposes.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ agrees to notify the applicable trading advisor for the Customer
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(each a "Trading Advisor") immediately upon discovery of any error committed by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or any of its agents with respect to a trade for the Customer's
account which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ believes was not executed or cleared in accordance
with proper instructions given by the Customer, its Trading Advisors or any
other authorized agent of Customer. Errors made by floor brokers appointed or
selected by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall constitute errors made by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
However, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall not be responsible for errors committed by the
Trading Advisors.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ agrees to report to DWR its own errors and the
errors of any Trading Advisor for the Account which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ becomes aware
of, provided that such reporting may be via telephone. Notwithstanding the
foregoing, the failure to comply with such reporting obligation does not
increase ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ liability for its own errors beyond that otherwise
expressly set forth in this Agreement, nor does it make ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in any
way responsible for errors committed by the Trading Advisors.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ acknowledges that the other partnerships of
which Demeter Management Corporation (the general partner of Customer) is the
general partner, do not constitute affiliates of the Customer.
(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. Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Customer, DWR and their
respective officers, agents and employees, in their sole and absolute
discretion, may record, on tape or otherwise, any telephone conversation between
or among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Customer or DWR with respect to the Account and
transactions therein and each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Customer and DWR 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 clearing house, and shall
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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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the Customer specifically
agree otherwise. All Contracts for the Account shall be margined at the
applicable exchange or clearing house minimum rates for speculative accounts.
(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 held by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, 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. The rights of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ set forth above shall be qualified by any applicable requirements
for segregation of customers' property under Applicable Law. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
commits to Customer that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ will not issue a Notice of Exclusive
Control under the Control Agreement between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and DWR unless ▇▇▇▇▇▇
▇▇▇▇▇▇▇ determines there is a default under this Agreement.
(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
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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 thirty (30) days by 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. Notwithstanding the foregoing, in the event ▇▇▇▇▇▇
▇▇▇▇▇▇▇ is required by a regulatory authority to transfer the account to another
futures commission merchant or in the event that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ abandons the
Futures Commission Merchant ("FCM") business, then ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have the
right to terminate this Agreement by written notice effective the date contained
therein, provided that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ cooperates in the transfer of open
positions to another FCM and that the termination of the Agreement is not made
effective earlier than the completion of the transfer.
8. MISCELLANEOUS.
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(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 in its sole and absolute discretion and without obtaining the
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
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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.
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(k) CUSTOMER ACKNOWLEDGEMENTS.
(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 Section.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, Customer has executed this Agreement on the date
indicated below.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ SPECTRUM TECHNICAL L.P.
("Customer")
By: DEMETER MANAGEMENT CORPORATION, GENERAL PARTNER
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------------
(Signature) (Date)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and Chairman
----------------------------------------------------------
(Name & Title - Please Print)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
/s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇ 6/6/00
----------------------------------------------------------
(Signature) (Date)
W. ▇▇▇▇▇▇ ▇▇▇▇▇, Managing Director
----------------------------------------------------------
(Name & Title - Please Print)
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ACKNOWLEDGED AND AGREED (AS TO SECTION 3(A) AND (B))
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------------
(Signature) (Date)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
----------------------------------------------------------
(Name & Title - Please Print)
11