FUTURES CUSTOMER AGREEMENT
Exhibit
10.1
In
consideration of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
(“MLPFS”) or any of its affiliates (collectively, “▇▇▇▇▇▇▇ ▇▇▇▇▇”) acting as
broker or as principal for the purpose of effecting transactions in domestic
or
foreign futures contracts, physical commodities, options on domestic and foreign
futures or physicals contracts, forward contracts, foreign exchange
transactions, or any other transactions similar to the
foregoing (hereinafter collectively referred to as “Contracts”),
▇▇▇▇▇▇▇ ▇▇▇▇▇ Alternative Investments LLC (“MLAI”) enters into this agreement on
behalf of the entities listed on Exhibit 1 (each a Customer and referred to
as
“Customer” or “you” or “your” as the case may be) for which it is the sponsor
and/or manager (and such Exhibit 1 may be amended from time to
time). In connection therewith, Customer hereby consents and
agrees that:
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1.
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Applicable
Law. Any and all transactions for one or more accounts
opened pursuant to this Agreement (collectively, the “Account”) shall be
subject to all applicable federal, state, local and foreign laws,
rules
and regulations, including rules, regulations and interpretations
of any
applicable board of trade, designated contract market, derivatives
transaction execution facility, organized exchange, national securities
exchange or other trading facility (collectively, “board of trade”), and
custom and usage of the trade. All such laws, rules,
regulations, interpretations, custom and usage are hereinafter
collectively referred to as “Applicable Law.”
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2.
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Customer’s
Representations and Warranties. Customer represents and
warrants that:
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(a)
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Customer
has the requisite capacity, power and authority to execute, deliver
and
perform its obligations under this Agreement, including, without
limitation, the granting of a security interest in its Account and
any
collateral accounts as contemplated hereby;
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(b)
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Orders
and instructions for the purchase and sale of Contracts (which orders
and
instructions may be written or oral), including authorization to
transfer
collateral and/or funds of Customer, shall be given to ▇▇▇▇▇▇▇ ▇▇▇▇▇
by or
on behalf of Customer and ▇▇▇▇▇▇▇ ▇▇▇▇▇ may rely upon any such orders
or
instructions from any person who ▇▇▇▇▇▇▇ ▇▇▇▇▇ reasonably believes
is
authorized by Customer to transmit such orders or instructions. Any
orders
and instructions acted upon in good faith by ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall
be
binding upon Customer;
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(c)
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Customer
has read and understands the Risk Disclosure Statement for Futures
and
Options and any other risk disclosure statement required to be provided
to
Customer by ▇▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to Applicable Law;
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(d)
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Customer
has reviewed the registration requirements pertinent to (i) commodity
pool
operators and commodity trading advisors of the Commodity Futures
Trading
Commission (“CFTC”) and the National Futures Association (“NFA”) in
accordance with the requirements of the Commodity Exchange Act, as
amended
(the “Act”) and the regulations promulgated thereunder, and (ii)
investment advisers of the Securities and Exchange Commission (“SEC”) and
any applicable state in accordance with the requirements of the Investment
Advisers Act of 1940, as amended (the “Advisers Act”) and state advisory
laws, and has determined that Customer and any Authorized Person
of
Customer are in compliance with such requirements to the extent
applicable;
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(e)
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MLPFS
is not acting as a fiduciary, trustee, foundation manager, commodity
pool
operator, commodity trading advisor or investment adviser in respect
of
any Account opened by Customer, and MLPFS shall have no responsibility
hereunder for compliance with any law or regulation governing the
conduct
of fiduciaries, trustees, foundation managers, commodity pool operators,
commodity trading advisors or investment advisers;
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(f)
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The
information provided by Customer in the accompanying Customer New
Account
Information Form (Appendix B) is
true, complete, and accurate in every material respect and Customer
shall
promptly notify MLPFS in writing if any such information changes
in any
material respect, regardless of whether Customer has previously furnished
financial information to MLPFS;
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(g)
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▇▇▇▇▇▇▇
▇▇▇▇▇ Alternative Investments (“MLAI”), an affiliate of MLPFS, is the
sponsor and/or manager of the Customer and MLPFS acknowledges the
fiduciary obligations which MLAI has to Customer.
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Upon
the
execution or acceptance for clearing of any transactions by ▇▇▇▇▇▇▇ ▇▇▇▇▇ on
Customer’s behalf, Customer shall be deemed to repeat all of the foregoing
representations and warranties made by it.
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3.
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Payment
Obligations of
Customer. Customer shall pay ▇▇▇▇▇▇▇ ▇▇▇▇▇ upon demand;
(a) all brokerage charges, give-up fees, commissions and service
fees as
▇▇▇▇▇▇▇ ▇▇▇▇▇ may from time to time charge; (b) all board of trade,
clearing house, NFA or clearing member fees or charges; (c) any tax
imposed on such transactions by any competent taxing authority; (d)
the
amount of any trading losses in the Account; (e) any debit balance
or
deficiency in the Account, with interest thereon, together with any
costs
and reasonable attorneys’ fees (including unallocated costs of ▇▇▇▇▇▇▇
▇▇▇▇▇’▇ in-house attorneys) incurred in collecting any such debit balance
or deficiency; and (f) any other amounts owed by Customer to ▇▇▇▇▇▇▇
▇▇▇▇▇
with respect to any Account or any transactions therein. With
respect to brokerage commissions, you agree to pay the brokerage
commission (which commissions may be distributed by ▇▇▇▇▇▇▇ ▇▇▇▇▇
to more
than one person) and other charges as ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall establish
from
time to time for your Account specified in the Customers’ private
placement memorandum (the “Memorandum”) (whether or not other Customers
pay lower commissions or charges) and to pay any costs or expenses
incurred in connection with transactions in your Account. You
acknowledge that ▇▇▇▇▇▇▇ ▇▇▇▇▇ may share its fees, commissions and
amounts
accruing on your Account with persons or entities that introduce
you to
▇▇▇▇▇▇▇ ▇▇▇▇▇ or provide other services to ▇▇▇▇▇▇▇
▇▇▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ may, from time to time, share in or
receive fees, rebates or other payments from third parties with respect
to
transactions executed for you in each case as contemplated by the
Memorandum.
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4.
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Events
of Default;
MLPFS’ Remedies. An “Event of Default” shall have
occurred if: (a) Customer does not meet initial or maintenance margin
requirements on its open Contracts; (b) Customer fails to perform
its
obligations respecting delivery, exercise or a notice of allocation
of
exercise, payment for delivery or settlement under Contracts held
in your
Account; (c) Customer fails in any way to perform any of its other
material obligations hereunder promptly after receipt of notice of
such
failure; (d) there is a material adverse change in Customer’s financial
condition; (e) Customer files or has filed against it a petition
for
liquidation, reorganization or the appointment of a receiver for
all or a
substantial portion of Customer’s assets under any bankruptcy, insolvency
or other similar law; (f) Customer fails to pay its debts generally
as
they become due or Customer makes an assignment for the benefit of
creditors; or (g) Customer has a breach or default under this Agreement
(other than those listed in this Paragraph 4). If an
Event of Default occurs, MLPFS shall have each of the following rights
(in
addition to any other right
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or
remedy it may have at law, in equity or under this Agreement): to
sell,
exercise, or offset any or all securities, any Contracts or other
property
long in any account with ▇▇▇▇▇▇▇ ▇▇▇▇▇; to buy in or offset any or
all
securities, any Contracts or other property short in any account
with
▇▇▇▇▇▇▇ ▇▇▇▇▇; to liquidate any of your securities, Contracts or
other
property in any account with ▇▇▇▇▇▇▇ ▇▇▇▇▇ (whether electronically,
by
open outcry, by exchange of futures for physicals (“EFP”) transactions,
exchange of futures for swaps (“EFS”) transactions or by any other legal
and lawful means permitted under the rules of any applicable board
of
trade); to treat any or all of Customer’s obligations due ▇▇▇▇▇▇▇ ▇▇▇▇▇ as
immediately due and payable; to treat all limits, margin facilities
and
call tolerance facilities in place as revoked; and to apply any cash,
securities or other property of Customer held by or on behalf of
▇▇▇▇▇▇▇
▇▇▇▇▇ toward any amount payable by Customer hereunder; or to cancel
any
outstanding orders for any account with ▇▇▇▇▇▇▇ ▇▇▇▇▇.
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Any
action referred to herein may be taken only after ▇▇▇▇▇▇▇ ▇▇▇▇▇ has made
reasonable efforts under the circumstances to contact Customer and Advisor
(as
defined in Paragraph 5 below), if applicable, provided that
▇▇▇▇▇▇▇ ▇▇▇▇▇’▇
position shall not be jeopardized thereby. Any such sales, purchases
or other offsets or liquidations may be made in ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇ reasonable
exercise of discretion on any board of trade or other market where such business
is then usually transacted, and on any such sale or purchase ▇▇▇▇▇▇▇ ▇▇▇▇▇
may
be the purchaser or seller for its own account, it being understood that a
prior
demand, or call, or prior notice of the time and place of such sale or purchase
shall not be considered a waiver of ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇ right to sell or buy without
demand or notice as herein provided. Customer shall at all times be
liable for the payment of any debit balance owing in its Account with ▇▇▇▇▇▇▇
▇▇▇▇▇ upon demand and shall be liable for any deficiency remaining in any such
Account in the event of the liquidation thereof in whole or in part by Customer
or by ▇▇▇▇▇▇▇ ▇▇▇▇▇.
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5.
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Advice;
Recommendations. Any advice communicated by MLPFS with
respect to any Contract transmitted to Customer by MLPFS is incidental
to
the conduct of MLPFS’ business as a broker-dealer/futures commission
merchant and such advice shall not serve as the primary basis for
any
decision by or on behalf of Customer. All decisions by
Customer, whether or not utilizing any advice of MLPFS, are solely
within
the power and discretion of Customer and/or its duly appointed commodity
trading advisor or investment adviser (collectively referred to as
the
“Advisor”). MLPFS makes no representation or warranty as to the
accuracy, completeness, reliability or prudence of any such advice
or
information. Customer and Advisor, if applicable, acknowledges
and agrees that MLPFS and its officers or employees may take or hold
positions in, or make recommendations to other customers concerning
Contracts which are the subject of recommendations from MLPFS to
Customer,
and, if applicable, to Advisor, which positions and recommendations
may be
consistent with or contrary to recommendations to Customer or Advisor.
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6.
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Margin. Customer
agrees to maintain collateral and/or margin in such amount and form
as the
relevant exchange or clearing house may from time to time in
its discretion require and you further agree to pay immediately on
demand
any amount owing in respect of your Account. Customer hereby
grants to ▇▇▇▇▇▇▇ ▇▇▇▇▇ the right to pledge, repledge, hypothecate,
rehypothecate, loan, invest or substitute any margin delivered to
▇▇▇▇▇▇▇
▇▇▇▇▇ from time to time without notice to Customer (i) in accordance
with
Paragraph 7 of this Agreement and (ii) otherwise to the extent permitted
by Applicable Law.
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7.
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Security
Interest. Any and all Contracts and all securities,
investment property, cash or other property posted by Customer as
margin
with MLPFS in this Account or any related collateral account shall
be
subject to, and Customer hereby grants to MLPFS, a general lien and
security interest and right of set-off for the discharge of Customer’s
liabilities and obligations to MLPFS, wherever and however arising
and
without regard to whether or not MLPFS has made
advances
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with
respect to such property. Customer hereby irrevocably appoints
MLPFS as its attorney-in-fact with power of substitution to execute
any
documents for the perfection or registration of such general lien
and
security interest. Customer shall not cause or allow any of the
collateral held in its Account, whether now owned or hereafter acquired,
to be or become subject to any other lien, security interest, mortgage
or
encumbrance of any nature, without the prior written approval of
MLPFS.
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8.
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Position
Limits. Customer shall comply with all position
limit rules imposed by Applicable Law, including filing any required
reports and submitting requests for exemptions, and shall obtain
any
necessary exceptions, consents or exemptions.
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9.
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EFP/EFS
Transactions. Customer acknowledges that if it engages
in EFP or EFS transactions, it is familiar with all rules and regulations
applicable to such transactions and certifies to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Customer’s
possession of all required records documenting each underlying cash
transaction. Customer agrees to produce such records to ▇▇▇▇▇▇▇
▇▇▇▇▇ upon its request. Customer agrees to indemnify and hold
▇▇▇▇▇▇▇ ▇▇▇▇▇ harmless from all costs, claims, fines or penalties
that
▇▇▇▇▇▇▇ ▇▇▇▇▇ may incur resulting from an EFP or EFS transaction
entered
into by Customer, except for any cost, claim, fine or penalty resulting
from ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇ gross negligence or willful misconduct.
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10.
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London
Metal Exchange
(“LME”) Transactions. Customer acknowledges that its
counterparty in respect of all transactions conducted on the LME
is
▇▇▇▇▇▇▇ ▇▇▇▇▇ International, which is a member of the
LME. MLPFS acts as agent in respect of transactions involving
LME-registered client contracts.
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11.
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MLPFS’
Responsibility. Customer understands that, except where
required by a particular board of trade, MLPFS acts as agent and
not as
principal for Customer’s futures and commodity options transactions which
are effected on boards of trade. MLPFS does not guarantee the
performance of the obligations of any party to the futures or commodity
options contracts purchased and/or sold by Customer. MLPFS shall
not be
liable to Customer for any claims, costs, expenses, damages or losses
arising out of or in connection with this Agreement, for any
conduct undertaken or omitted in good faith, and in the belief that
such
conduct or omission was in, or not opposed to, the best interests
of
Customer; provided, that such conduct or omission did not constitute
gross
negligence or intentional misconduct on the part of
MLPFS. MLPFS shall not be liable to Customer for
claims, costs, expenses, damages or losses due to circumstances beyond
MLPFS’ control, or due to the negligence, dishonesty, bad faith or
misfeasance of any third party chosen by MLPFS in good
faith. In no respect by way of limiting the
foregoing exculpatory provisions but rather by way of greater certainty,
MLPFS shall not be liable to Customer for any actions or omissions
of: (i) any third party Advisor; (ii) any broker,
dealer or counterparty unaffiliated with ▇▇▇▇▇▇▇ ▇▇▇▇▇ chosen
by MLPFS in good faith; or (iii) any broker, dealer or
counterparty chosen by third party Advisor.
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12.
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Delivery
Procedures. Prior to the last trading day in the case of
positions in open futures and options, and at least two business
days
prior to the value date in the case of forward contracts, or in any
event
at such earlier time as ▇▇▇▇▇▇▇ ▇▇▇▇▇ may reasonably require, Customer
agrees that it shall give ▇▇▇▇▇▇▇ ▇▇▇▇▇ instructions to liquidate
or make
or take delivery under such futures or forward contracts, or to liquidate,
exercise or allow the expiration of such options and shall deliver
to
▇▇▇▇▇▇▇ ▇▇▇▇▇ sufficient funds and any documents required in connection
with any such exercise or delivery. (Customer understands and acknowledges
that option positions may be subject to automatic exercise procedures.
▇▇▇▇▇▇▇ ▇▇▇▇▇ will exercise all in-the-money
option
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positions
that are subject to automatic exercise unless Customer advises ▇▇▇▇▇▇▇
▇▇▇▇▇ to the contrary.) If Customer fails to comply with any of the
foregoing obligations, ▇▇▇▇▇▇▇ ▇▇▇▇▇ may, at its discretion and in
any
commercially reasonable manner, liquidate any open positions, make
or
receive delivery of any securities, commodities or instruments, or
exercise or allow the expiration of any option. Customer shall remain
fully liable for all costs, expenses, and liabilities incurred by
▇▇▇▇▇▇▇
▇▇▇▇▇ in connection with such transactions and for any remaining
debit
balance.
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13.
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Confirmations
and
Statements; Consent for Electronic Delivery. Customer
shall timely review all confirmations and statements received from
MLPFS
to verify that the description of the transactions is accurate and
complete. Confirmations and statements of Customer’s Account
shall be conclusive if not objected to in writing no later than (i)
one
business day after electronic transmission or posting by MLPFS, or
(ii)
three business days after mailing by MLPFS. With respect to monthly
statements, written objection to matters inconsistent with previously
furnished confirmations and statements must be made within five business
days after transmission, posting or mailing by MLPFS. Customer may
consent
to the electronic delivery of confirmations and statements by executing
the Consent for Electronic Delivery of Confirmations and Statements
in
Appendix G hereto.
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14.
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Option
Expiration
Dates. Customer acknowledges that ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇
confirmation of purchase and sale statements shall reflect option
expiration dates that ▇▇▇▇▇▇▇ ▇▇▇▇▇ obtains from sources generally
believed to be reliable, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be responsible only
for
gross negligence or willful misconduct in connection therewith.
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15.
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Use
of
Brokers. ▇▇▇▇▇▇▇ ▇▇▇▇▇, for and on behalf of Customer,
is authorized in its sole discretion to select floor brokers and,
on
boards of trade where ▇▇▇▇▇▇▇ ▇▇▇▇▇ is not a clearing member, unaffiliated
clearing brokers, which will act as brokers and agents in connection
with
transactions in Contracts for the Account. ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall
not be liable for the malfeasance or nonperformance of any such third
party broker, so long as ▇▇▇▇▇▇▇ ▇▇▇▇▇ uses due care in the selection
of
such broker. Customer is authorized, subject to ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇
approval and documentation requirements, if any, to select and engage
execution brokers to execute transactions for the Customer’s Account and
to negotiate the commissions to be paid to such execution broker
by
▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of Customer. Any such execution broker
or any floor broker used under any circumstances to execute any
transaction, other than an employee of ▇▇▇▇▇▇▇ ▇▇▇▇▇, shall not be
deemed
to be an agent of ▇▇▇▇▇▇▇ ▇▇▇▇▇.
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16.
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Authorization
to
Transfer Funds. Customer authorizes ▇▇▇▇▇▇▇ ▇▇▇▇▇ to
transfer to or from the regulated futures Account of Customer to
any other
accounts of Customer such excess funds as may be required to avoid
a
margin call or for any other reason not in conflict with the Act
and the
regulations promulgated thereunder. (For this purpose, “regulated” means
any contract governed by the Act at the time of such
transaction.) Any such transfer shall be in compliance with the
Act and the regulations promulgated thereunder. It is
understood that, within a reasonable time after making any such transfer,
▇▇▇▇▇▇▇ ▇▇▇▇▇ shall confirm the same in writing to Customer.
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17.
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Currency
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. In no event shall ▇▇▇▇▇▇▇
▇▇▇▇▇ be required to effect or be responsible for the conversion
of funds
in anticipation of changes in prevailing rates of exchange.
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18.
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Foreign
Traders or
Brokers. If you are a foreign trader or foreign broker,
you understand that pursuant to CFTC Regulation 15.05, ▇▇▇▇▇▇▇ ▇▇▇▇▇
is
your agent (and in the case of a foreign broker, the agent of your
customers) for purposes of accepting delivery and service of
any
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communications
issued by the CFTC with respect to any futures or options contracts
which
are or have been maintained in accounts carried by ▇▇▇▇▇▇▇ ▇▇▇▇▇.
Service
or delivery of any such communication shall constitute valid and
effective
service or delivery upon you (and if you are a foreign broker, upon
your
customers). You understand that said regulation requires ▇▇▇▇▇▇▇
▇▇▇▇▇ to
transmit the communication promptly to you (or your customer) in
a manner
which is reasonable under the circumstances or specified by the CFTC.
You
also understand that CFTC Regulation 21.03 requires you to provide
to the
CFTC, upon special call, market information concerning your futures
and
options trading (or that of your customers) as outlined in the regulation.
If you fail to respond to the special call, the CFTC may direct the
appropriate contract market and all brokers to prohibit further trades
for
or on your behalf (or for or on behalf of your customers) in the
contract
specified in the call unless such trades offset existing open contracts.
Special calls are made where the information requested would assist
the
CFTC in determining whether a threat of market manipulation, corner,
squeeze or other market disorder existed. Under CFTC Regulation 21.03(g),
if you believe you are aggrieved by the action taken by the CFTC,
you
shall have the opportunity for a prompt hearing after the action
has been
taken. (You understand that copies of CFTC Regulations 15.05 and
21.03 are
available from ▇▇▇▇▇▇▇ ▇▇▇▇▇ upon request.)
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19.
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Indemnification. Customer
shall indemnify and hold harmless MLPFS from and against any claims,
costs, expenses, damages or losses (including, without limitation,
from
and against any judgment, settlement, attorneys’ fees and other costs or
expenses incurred in connection with the defense of any actual or
threatened action or proceeding) suffered or sustained by MLPFS with
respect to your Account or any transaction or position therein of
by
reason of the fact that MLPFS is or was connected in any respect
with
Customer; provided, that the conduct or omission which led to such
claim,
cost, expense, damage or loss met the standard of exculpation set
forth in
Section 11 above.
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Without
limiting the generality of the foregoing, Customer agrees to reimburse MLPFS
on
demand for any cost of collection incurred by MLPFS, including reasonable
attorneys’ fees , in collecting any sums owing MLPFS under this Agreement and
any cost incurred by the MLPFS in successfully defending against any
claims asserted by Customer, in each case including, without limitation,
interest and expenses.
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20.
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Intentionally
left blank
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21.
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Hedge
Agreement
(Optional - Appendix D).
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The
Customer and, if applicable, Advisor, each as to itself, by signing the optional
Hedge Agreement found at Appendix D hereto, shall
thereby represent and warrant that the Account is a non-speculative account
and
every order given for the purchase or sale of Contracts for the Account, except
with prior written notice to the contrary to ▇▇▇▇▇▇▇ ▇▇▇▇▇, shall be (i) a
bona
fide hedging transaction as that term is defined in Regulation 1.3(z) of the
Rules and Regulations of the CFTC or (ii) a risk management or other
non-speculative position for which relief has been granted under the rules
of a
board of trade to permit reduced margin levels for such
transactions.
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22.
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Advisors. Any
decision, instruction, action or authorization of a third party Advisor
selected by Customer that is furnished to MLPFS with respect to the
Account shall constitute the decision, instruction, action or
authorization of Customer. Any communication, notice, report,
statement, advice or information given to Advisor by MLPFS or received
from Advisor by MLPFS in respect of the Account shall be deemed to
have
been given to, or received from, Customer, as the case may be.
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23.
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Acknowledgements. Customer
acknowledges and agrees that ▇▇▇▇▇▇▇ ▇▇▇▇▇ maintains its principal
place
of business in the State of New York; that this Agreement shall be
accepted and entered into by ▇▇▇▇▇▇▇ ▇▇▇▇▇ in the State of New York;
that
any Account established pursuant to this Agreement shall be located
in New
York; and that any loans, advances or other extensions of credit
made by
▇▇▇▇▇▇▇ ▇▇▇▇▇ in connection with any Account (including, without
limitation, margin credit extended by ▇▇▇▇▇▇▇ ▇▇▇▇▇) shall be funded
by
▇▇▇▇▇▇▇ ▇▇▇▇▇ in New York. Customer further agrees to pay to
▇▇▇▇▇▇▇ ▇▇▇▇▇ on demand principal, interest and other fees and charges
in
connection with such loans, advances or other extensions of credit
at the
rates, times and manner determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇ from time to
time, in
its discretion, in accordance with the laws of the State of New
York. Customer also acknowledges and agrees that ▇▇▇▇▇▇▇ ▇▇▇▇▇
may receive and retain as its own any interest, increment, profit,
gain or
benefit, directly or indirectly accruing from or relating to any
of the
cash or other funds ▇▇▇▇▇▇▇ ▇▇▇▇▇ receives from you in connection
with
your Account, unless you and ▇▇▇▇▇▇▇ ▇▇▇▇▇ otherwise agree.
|
|
24.
|
Governing
Law. This Agreement shall be governed by the laws of the
State of New York, without giving effect to its conflicts of law
principles. Subject to your right to initiate a CFTC
Reparations Proceeding, or unless you have specifically agreed to
arbitrate any dispute with ▇▇▇▇▇▇▇ ▇▇▇▇▇, you agree that ▇▇▇▇▇▇▇
▇▇▇▇▇
may, in its sole discretion, initiate proceedings in the court of
any
jurisdiction in which you are a resident or in which your assets
are
situated. In any legal action permitted by or against you, you
agree that the U.S. courts sitting in the State of New York shall
have
jurisdiction over you, and that the venue of any such action shall
be the
Southern District of New York. Customer agrees that service of
process may be made upon it by first class or certified mail to its
address as shown on ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇ records and Customer hereby waives any
objection to such service.
|
|
25.
|
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.
|
|
26.
|
Arbitration
Agreement (Optional for
Non-Eligible Contract Participants - Appendix E).
|
Any
controversy arising out of or relating to Customer’s Account, or to transactions
with ▇▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to this Agreement or the breach thereof, shall
be
settled by arbitration in accordance with the rules, then in effect, of the
NFA,
the contract market or board of trade upon which the transaction giving rise
to
the claim was executed or the New York Stock Exchange, Inc., as Customer may
elect. If Customer does not make such election by registered mail
addressed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ at its main office within 45 days after demand by
▇▇▇▇▇▇▇ ▇▇▇▇▇ that Customer make such election, then ▇▇▇▇▇▇▇ ▇▇▇▇▇ may make
such
election. ▇▇▇▇▇▇▇ ▇▇▇▇▇ agrees to pay any incremental fees which may
be assessed by the forum chosen by Customer for the provision of a “mixed panel”
of arbitrators, unless the arbitrators determine that Customer has acted in
bad
faith in initiating or conducting the proceedings. Judgment upon any
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. In addition, neither Customer nor ▇▇▇▇▇▇▇ ▇▇▇▇▇
hereby waives any right to assert any equitable remedies each may have as
against the other prior to the election or commencement of
arbitration.
THREE
FORUMS EXIST FOR THE RESOLUTION OF COMMODITY DISPUTES: CIVIL COURT LITIGATION,
REPARATIONS AT THE CFTC AND ARBITRATION CONDUCTED BY A SELF-REGULATORY OR OTHER
PRIVATE ORGANIZATION.
THE
CFTC RECOGNIZES THAT THE OPPORTUNITY TO SETTLE DISPUTES BY ARBITRATION MAY
IN
SOME CASES PROVIDE MANY BENEFITS TO CUSTOMERS, INCLUDING THE ABILITY TO OBTAIN
AN EXPEDITIOUS AND FINAL RESOLUTION OF DISPUTES WITHOUT INCURRING
SUBSTANTIAL
-7-
COSTS. THE
CFTC REQUIRES, HOWEVER, THAT EACH CUSTOMER INDIVIDUALLY EXAMINE THE RELATIVE
MERITS OF ARBITRATION AND THAT YOUR CONSENT TO THIS ARBITRATION AGREEMENT BE
VOLUNTARY.
BY
SIGNING THIS AGREEMENT, YOU: (1) MAY BE WAIVING YOUR RIGHT TO ▇▇▇ IN A COURT
OF
LAW; AND (2) ARE AGREEING TO BE BOUND BY ARBITRATION OF ANY CLAIMS OR
COUNTERCLAIMS WHICH YOU OR ▇▇▇▇▇▇▇ ▇▇▇▇▇ MAY SUBMIT TO ARBITRATION UNDER THIS
AGREEMENT. YOU ARE NOT, HOWEVER, WAIVING YOUR RIGHT TO ELECT INSTEAD TO PETITION
THE CFTC TO INSTITUTE REPARATIONS PROCEEDINGS UNDER SECTION 14 OF THE COMMODITY
EXCHANGE ACT WITH RESPECT TO ANY DISPUTE WHICH MAY BE ARBITRATED PURSUANT TO
THIS AGREEMENT. IN THE EVENT A DISPUTE ARISES, YOU SHALL BE NOTIFIED IF ▇▇▇▇▇▇▇
▇▇▇▇▇ INTENDS TO SUBMIT THE DISPUTE TO ARBITRATION. IF YOU BELIEVE A VIOLATION
OF THE COMMODITY EXCHANGE ACT IS INVOLVED AND IF YOU PREFER TO REQUEST A SECTION
14 “REPARATIONS” PROCEEDING BEFORE THE CFTC, YOU SHALL HAVE 45 DAYS FROM THE
DATE OF SUCH NOTICE IN WHICH TO MAKE THAT ELECTION.
NON-ELIGIBLE
CONTRACT PARTICIPANTS NEED NOT SIGN THIS ARBITRATION AGREEMENT (BY EXECUTING
APPENDIX E HERETO) TO OPEN AN ACCOUNT WITH ▇▇▇▇▇▇▇ ▇▇▇▇▇. SEE 17
C.F.R. 166.5.
Please
note that, if you are an eligible contract participant as defined in the Act,
this paragraph is binding upon you.
|
27.
|
Bankruptcy
Trustee (Optional - Appendix
E).
|
CFTC
Regulation 190.06 requires that, in the unlikely event of ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇
bankruptcy, Customer be given the opportunity to give instructions to the
bankruptcy trustee to liquidate or transfer to another futures commission
merchant all of Customer’s open futures positions. Customer
acknowledges that no assurance can be given that any open futures positions
will
be transferred even if Customer has given such instructions. Unless
Customer indicates a contrary preference in Appendix E hereto, the trustee
would be authorized to liquidate Customer’s open positions, without seeking
further instructions from Customer.
|
28.
|
Authorization
to Take
Other Side of Transaction (Optional
- Appendix E).
|
In
connection with the execution of buy or sell orders for Contracts placed by
Customer or Advisor on Customer’s behalf with ▇▇▇▇▇▇▇ ▇▇▇▇▇, Customer hereby
consents and agrees that ▇▇▇▇▇▇▇ ▇▇▇▇▇, its directors, officers, employees,
agents or any floor broker may take, without prior notice to Customer, the
other
side of Customer’s transaction by the purchase or sale for an account in which
▇▇▇▇▇▇▇ ▇▇▇▇▇ or any person affiliated with ▇▇▇▇▇▇▇ ▇▇▇▇▇ has a direct or
indirect interest, subject to the limitations and conditions, if any, contained
in the rules or regulations of any board of trade upon which such buy or sell
orders are executed, and subject to the limitations and conditions, if any,
contained in any applicable CFTC Regulations.
|
29.
|
Direct
Foreign Order
Transmittal. If Customer wishes to place orders for
execution in ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇ foreign futures and options customer omnibus
account directly with a foreign futures and options broker, Customer
represents that it is an “authorized customer” as such term is defined in
CFTC Regulation 30.12. For purposes of Regulation 30.12, an
“authorized customer” is a customer (i) which is an “eligible swap
participant” as defined in CFTC Regulation 35.1(b)(2), or (ii) whose
investment decisions with respect to foreign futures and option
transactions are made
|
-8-
|
|
by
a commodity trading advisor subject to regulation under the Act or
a
foreign person performing a similar role or function subject as such
to
foreign regulation, provided
that
such
commodity trading advisor has over $50,000,000 in total assets under
management and places the foreign futures or foreign options
order. ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇ Direct Order Transmittal Client
Disclosure Statement has been separately provided to you.
|
|
30.
|
Verification
of
Information. Customer agrees to provide financial
information reasonably requested by ▇▇▇▇▇▇▇ ▇▇▇▇▇. Customer
understands that an investigation may be conducted at banks, financial
institutions and credit agencies pertaining to Customer’s credit standing
and its business. Customer agrees to notify ▇▇▇▇▇▇▇ ▇▇▇▇▇ if
financial information provided to ▇▇▇▇▇▇▇ ▇▇▇▇▇ changes in any material
respect.
|
|
31.
|
Extraordinary
Events. ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall not be liable for any loss,
liability, expense, damages, fine or tax caused, directly or indirectly,
by any events beyond ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇ control, including, without
limitation, any (i) governmental, judicial, board of trade or other
self-regulatory organization restriction, action or order, (ii) suspension
or termination of trading, (iii) breakdown or failure of transmission
or
communication facilities, (iv) failure or delay by any board of trade
or
clearing house to enforce its rules or to pay or return any amounts
owed
to ▇▇▇▇▇▇▇ ▇▇▇▇▇ with respect to any Contracts executed and/or cleared
for
Customer’s Account, or (v) war, strike, act of terrorism, natural disaster
or other force majeure. In no event shall ▇▇▇▇▇▇▇ ▇▇▇▇▇ be
liable for consequential, incidental or special
damages. ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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.
|
|
32.
|
Third
Party
Actions. Customer understands that commodity interest
information, price quotations and trade reports are subject to error
as
well as delay, and acknowledges that it relies on such information
at its
own risk. Under no circumstances shall ▇▇▇▇▇▇▇ ▇▇▇▇▇ have any
responsibility, liability or obligation regarding any conduct, act,
omission or representation of any introducing firm, commodity trading
advisor or third party vendor selected by Customer to give Customer
research or advice, to electronically route orders to ▇▇▇▇▇▇▇ ▇▇▇▇▇
or to
provide similar services to Customer.
|
|
33.
|
Recording. You
acknowledge and agree that ▇▇▇▇▇▇▇ ▇▇▇▇▇ may tape-record any and
all
telephone calls from or to you concerning your Account and that such
tape-recording may be done in the regular course of business without
further notice to you.
|
|
34.
|
Notices
or
Communications. Reports, confirmations, statements,
notices and any other communications may be transmitted to Customer
at the
address designated in this Agreement, or to such address as Customer
may
designate in writing to ▇▇▇▇▇▇▇ ▇▇▇▇▇. Except as otherwise set
forth herein, all communications so sent, whether by mail, messenger,
telegraph or otherwise, shall be deemed transmitted when deposited
in the
U.S. mail, or when received by a transmitting agent, and shall be
deemed
to have been delivered to Customer personally, whether or not actually
received by Customer. All communications to ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated shall be to its office at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Manager
- Futures Client Services, or to such other address as ▇▇▇▇▇▇▇ ▇▇▇▇▇
shall
hereafter direct Customer, in writing, to use.
|
|
35.
|
Successors;
Binding
Effect. This Agreement shall be binding on and inure to
the benefit of ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇ successors, by merger, consolidation or
otherwise, and assigns, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ may transfer your Account
to any
such successors or assigns. This Agreement and the obligations
of Customer hereunder may not be assigned or delegated by Customer
without
the
|
-9-
|
|
prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, and any purported assignment or
delegation without such consent shall be void.
|
|
36.
|
Amendment,
Modification; Waiver. ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall have the right
to amend this Agreement by modifying or rescinding any of its existing
provisions or by adding any new provision at any time by sending
notice of
the amendment to Customer. Any such amendment shall be
effective as of a date to be established by ▇▇▇▇▇▇▇ ▇▇▇▇▇, subject
to
Applicable Law. Customer understands that there may be additional
documentation required by Applicable Law or the policies and procedures
of
▇▇▇▇▇▇▇ ▇▇▇▇▇ and Customer agrees to promptly comply with any requests
for
additional documents. Neither ▇▇▇▇▇▇▇ ▇▇▇▇▇’▇ failure to insist
at any time upon strict compliance with this Agreement or with any
of the
terms hereof nor any continued course of such conduct on its part
shall
constitute or be considered a waiver by ▇▇▇▇▇▇▇ ▇▇▇▇▇ of any of its
rights
hereunder.
|
|
37.
|
Severability. If
any provision of this Agreement is or at any time becomes inconsistent
with or invalid under any present or future Applicable Law, such
inconsistent or invalid provision shall be deemed to be suspended
or
modified to conform to such Applicable Law, but in all other respects
this
Agreement shall continue in full force and effect.
|
|
38.
|
Entire
Agreement. This Agreement constitutes the entire
agreement between Customer and MLPFS with respect to the subject
matter
hereof, and supersedes any prior agreements between the parties with
respect to such subject matter.
|
|
39.
|
Counterparts. This
Agreement may be executed in counterparts, each of which shall be
deemed
an original, but all of which shall constitute one and the same
instrument.
|
|
40.
|
Termination. This
Agreement shall continue until signed notice of termination is received
by
or from you, and in the case of such termination this Agreement shall
continue effective as to transactions entered into and outstanding
amounts
due ▇▇▇▇▇▇▇ ▇▇▇▇▇ prior to such termination by Customer. Any
modifications to this Agreement must be in writing and accepted by
▇▇▇▇▇▇▇
▇▇▇▇▇ in writing and no employee of ▇▇▇▇▇▇▇ ▇▇▇▇▇ is authorized to
make
any representations contrary to the terms of this
Agreement. Upon the actual receipt by ▇▇▇▇▇▇▇ ▇▇▇▇▇ of written
notice of termination, this Agreement shall terminate, provided that
Customer
shall remain fully responsible and liable with respect to transactions
entered into pursuant to this Agreement prior to such termination,
until
all such positions have been transferred or liquidated and any and
all
amounts due prior thereto have been paid in full to ▇▇▇▇▇▇▇
▇▇▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ may terminate this Agreement at any time
upon mailing or delivery of written notice of termination to Customer,
provided
that
any such
termination shall not affect any transactions entered into prior
to such
termination and shall not relieve either party of any obligations
in
connection with any debit or credit balance or other liability or
obligation incurred prior to termination.
|
[The
remainder of this page has intentionally been left blank.]
-10-
The
undersigned understands the terms and conditions of this Futures Customer
Agreement and agrees to be bound by them.
|
Signed
for and on behalf of:
Each
entity as identified on Exhibit 1 attached hereto
(which
may be amended from time to time)
|
|
|
|
By:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Alternative Investments LLC
|
|
Manager
|
|
|
|
By:
___________________________________
|
|
Name: ▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
|
|
Title: Vice
President, Chief Operating Officer and
Manager
|
|
Acknowledged
and agreed:
▇▇▇▇▇▇▇
LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
By:
_____________________________ ________________________________
Date:
________________________________ ________________________________
Print
Name
Title:
-11-
EXHIBIT
1
(as
of December 31, 2004)
▇▇
▇▇▇▇▇▇▇▇ FUTURESACCESS LLC
ML
ASPECT FUTURES ACCESS LLC
ML
CORNERSTONE FUTURESACCESS LLC
▇▇
▇▇▇▇▇▇ FUTURESACCESS LLC
-12-
▇▇▇▇▇▇▇
▇▇▇▇▇
Appendix
A
Acknowledgement
of Risk Disclosure Statement
for
Futures and Options
By
initialing in the space below, Customer acknowledges that it has received and
understands the separate consolidated Risk Disclosure Statement for Futures
and
Options provided to it by ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
in accordance with Rule 1.55(c) of the Regulations of the Commodity Futures
Trading Commission and all other disclosures provided to it by ▇▇▇▇▇▇▇ ▇▇▇▇▇
in
accordance with Applicable Law or otherwise.
|
__________________
|
|
|
Customer
Initial
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇
Appendix
B
Customer
New Account Information Form
______________________________________________________
Customer’s
Full Legal Name
I.
Contact Information
|
_______________________________
Operations
Contact
|
_______________________________
Telephone Number
|
|
|
_______________________________
E-Mail Address
|
Customer’s
Address for
Original
Confirmation
(must
not
be an Authorized Trader
| or Trader Assistant): | _______________________________ |
| _______________________________ |
| _______________________________ |
Advisor’s
Address for
Duplicate
Confirmation
| (if applicable): | _______________________________ |
| _______________________________ |
| _______________________________ |
| Additional Confirmation: | _______________________________ |
| _______________________________ |
| _______________________________ |
Customer’s
Wire Information
for
Cash:
| Bank | _______________________________ |
| ABA or SWIFT Number | _______________________________ |
Customer’s
Wire Information
for
Collateral:
| Bank | _______________________________ |
| ABA or SWIFT Number | _______________________________ |
Customer
is a member of the following
| exchanges: | _______________________________ |
| _______________________________ |
II.
Financial
Information
Please
forward a copy of Customer’s most recent financials. If the account
will be traded by an advisor, please provide a letter from the advisor
confirming the total amount of Customer’s assets under management with the
advisor.
Financials
enclosed:
_____________
Initial
Financials
to be forwarded
under
separate
cover: _____________
Initial
Total
amount of assets
under
management with
| advisor (if applicable): | _______________________________ |
-▇-
▇▇▇▇▇▇▇
▇▇▇▇▇
Appendix
D
Hedge
Agreement
(To
be
signed by hedge customers only.)
The
Customer and, if applicable, Advisor, each as to itself, represents and warrants
that the Account is a hedge account and every order given for the purchase
or
sale of Contracts for the Account, except with prior written notice to the
contrary to the Broker, shall be (i) a bona fide hedging transaction as that
term is defined in Regulation 1.3(z) of the Rules and Regulations of the
Commodity Futures Trading Commission or (ii) a risk management or other
non-speculative position for which relief had been granted under the rules
of a
designated contact market, a derivatives transaction execution facility or
a
foreign board of trade, exchange or market, to permit reduced margin levels
for
such transactions.
These
transactions are not for speculation. In the event that Customer
intends to enter into any transactions in this Account for speculative purposes,
Customer shall notify ▇▇▇▇▇▇▇ ▇▇▇▇▇ in writing prior to the entry of such
transactions.
____________N/A_________________________
Name
of Customer
(Corporation,
Partnership or Other Entity)
|
By:
______________________________________
Signature
|
_____________________________
Date
|
|
______________________________________
Print Name
|
_____________________________
Title
|
_____________________________________
Name
of Advisor (if applicable)
|
By:
______________________________________
Signature
|
_____________________________
Date
|
|
______________________________________
Print Name
|
_____________________________
Title
|
▇▇▇▇▇▇▇
▇▇▇▇▇
Appendix
E
Customer
Elections
Arbitration
Agreement
By
initialing the space below, Customer agrees to arbitrate controversies as
described in Paragraph 27 of the Futures Customer Agreement.
_____N/A_____________________
Customer
Initial
Bankruptcy
Trustee (CFTC Regulation 190.06)
By
initialing the space below, Customer advises that it would prefer to be
contacted by the bankruptcy trustee for instructions regarding the disposition
of Customer’s open futures positions as described in Paragraph 28 of the Futures
Customer Agreement.
________N/A__________________
Customer
Initial
Authorization
to Take Other Side of Transaction
By
initialing the space below, Customer authorizes ▇▇▇▇▇▇▇ ▇▇▇▇▇, without prior
notice to Customer, to take the other side of Customer’s transaction as
described in Paragraph 29 of the Futures Customer Agreement entered into by
Customer and ▇▇▇▇▇▇▇ ▇▇▇▇▇.
__________________________
Customer
Initial
▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
|
By:
___________________________________
Signature
|
|
|
___________________________________
Print
Name and Title
|
|
|
___________________________________
Date
|
▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ Acct#:
__________________
Futures
Customer Agreement (for
▇▇▇▇▇▇▇ ▇▇▇▇▇ office use
only)
Appendix
G
Consent
for Electronic Delivery of Confirmations and Statements
By
completing this Consent, Customers and/or Advisors may elect to receive daily
and monthly statements by electronic transmission in lieu of or in addition
to
hard copy statements.
The
Advisor may not consent on behalf
of the Customer and, likewise, the Customer may not consent on behalf of the
Advisor.
Customer/Advisor
hereby requests that hereafter ▇▇▇▇▇▇▇ ▇▇▇▇▇ deliver the following confirmations
and statements for Accounts held for Customer by electronic media rather than
by
means of – or in addition to – hard copy mailing. Customer/Advisor
requests that ▇▇▇▇▇▇▇ ▇▇▇▇▇ deliver the confirmations and statements to
Customer/Advisor by means of the electronic media set forth
below. Customer/Advisor recognizes that, as a result,
Customer/Advisor will not receive copies of the confirmations and statements
in
hard copy form unless it has indicated otherwise
below. Customer/Advisor understands that there will be no additional
cost to Customer/Advisor for delivering such communications in this
manner. Customer/Advisor further understands that the consent
provided herein is revocable by Customer/Advisor at any time upon written notice
to ▇▇▇▇▇▇▇ ▇▇▇▇▇.
Please
check below which confirmations and statements you would like to receive
electronically and provide the e-mail address OR fax number
to
which the statements should be delivered.
|
Deliver
by
Electronic
Transmission:
|
Continue
Hard Copy
Delivery
of:
|
||||
|
Daily
Statement
|
Monthly
Statement
|
E-mail
Address or Fax Number:
|
Daily
Statement
|
Monthly
Statement
|
|
|
Customer:
|
________
|
__________
|
_______________________________
|
________
|
________
|
|
Advisor:
|
________
|
__________
|
_______________________________
|
________
|
________
|
(If
you
wish to name additional recipients, please attach a list of e-mail addresses
or
fax numbers to this Appendix.)
______________________________________
Name
of Customer
(Corporation,
Partnership or Other
Entity)
|
By:
______________________________________
Signature
|
_____________________________
Date
|
|
______________________________________
Print Name
|
_____________________________
Title
|
______________________________________
Name
of Advisor (if applicable)
|
By:
______________________________________
Signature
|
_____________________________
Date
|
|
______________________________________
Print Name
|
_____________________________
Title
|