CUSTOMER AGREEMENT


                  THIS CUSTOMER AGREEMENT (this "Agreement"), made as of the 1st
day of December,  1997,  by and among DEAN WITTER  DIVERSIFIED  FUTURES FUND III
L.P., a Delaware  limited  partnership  (the  "Customer"),  CARR FUTURES INC., a
Delaware  corporation  ("CFI"),  and  DEAN  WITTER  REYNOLDS  INC.,  a  Delaware
corporation ("DWR");


                             W I T N E S S E T H :


                  WHEREAS,  the Customer was organized pursuant to a Certificate
of  Limited  Partnership  filed in the office of the  Secretary  of State of the
State of Delaware on May 14, 1990, and a Limited Partnership  Agreement dated as
of May 14, 1990,  and as amended,  between  Demeter  Management  Corporation,  a
Delaware corporation  ("Demeter"),  acting as general partner (in such capacity,
the "General Partner"), and the limited partners of the Customer, to trade, buy,
sell, spread, or otherwise acquire, hold, or dispose of commodities  (including,
but not limited to, foreign currencies, mortgage-backed securities, money market
instruments, financial instruments, and any other securities or items which are,
or may  become,  the subject of futures  contract  trading),  commodity  futures
contracts, commodity forward contracts, foreign exchange commitments, options on
physical  commodities  and on futures  contracts,  spot (cash)  commodities  and
currencies,   and  any  rights  pertaining  thereto  (hereinafter   referred  to
collectively  as "futures  interests"),  and  securities  (such as United States
Treasury  bills)  approved by the  Commodity  Futures  Trading  Commission  (the
"CFTC")  for  investment  of  customer  funds,  and to engage in all  activities
incident thereto;

                  WHEREAS,  the  Customer  (which is a  commodity  pool) and the
General  Partner  (which is a registered  commodity  pool operator) have entered
into a management agreement (the "Management  Agreement") with a certain trading
advisor (the "Trading  Advisor"),  which  provides that the Trading  Advisor has
authority and responsibility,  except in certain limited  situations,  to direct
the  investment  and  reinvestment  of the  assets of the  Customer  in  futures
interests under the terms set forth in the Management Agreement;

                  WHEREAS,  the  Customer and DWR have entered into that certain
Amended and Restated Customer Agreement,  dated as of December 1, 1997 (the "DWR
Customer Agreement"), whereby DWR agreed to perform certain non-clearing futures
interests brokerage and other services for the Customer; and

                  WHEREAS,  the  Customer,  DWR and CFI wish to enter  into this
Agreement  to set forth the terms and  conditions  upon  which CFI will  perform
futures interests execution and clearing services for the Customer;

                  NOW, THEREFORE, the parties hereto hereby agree as follows:

                  1. Duties of CFI.  CFI agrees to execute and clear all futures
interests  brokerage  transactions  on behalf of the Customer in accordance with
instructions  provided by DWR, Demeter or the Trading Advisor,  and the Customer
agrees to retain CFI as its clearing broker for the term of this Agreement.  CFI
agrees to maintain such number of subaccounts for the Customer as DWR reasonably
shall  request.  The execution and clearing  services of CFI provided  hereunder
shall be in accordance with applicable exchange rules.

                  CFI agrees to furnish to the  Customer as soon as  practicable
all of the information from time to time in its possession which Demeter, as the
general partner of the Customer,  is required to furnish to the Limited Partners
pursuant to the Limited Partnership Agreement as from time to time in effect and
as required by applicable law,  rules,  or regulations.  CFI shall disclose such
information  (including,  without limitation,  financial  statements)  regarding
itself and its  affiliates  as may be required by the Customer for SEC, CFTC and
state blue sky disclosure purposes.

                  CFI agrees to notify the  applicable  Trading  Advisor and DWR
immediately  upon  discovery of any error  committed by CFI or any of its agents
with respect to a trade executed or cleared by CFI on behalf of the Customer and
to notify DWR promptly of any order or trade for the  Customer's  account  which
CFI believes was not executed or cleared in accordance with proper  instructions
given by DWR,  Demeter or any Trading  Advisor or other agent for the Customer's
account.  Notwithstanding  any provision of this Agreement to the contrary,  CFI
shall assume financial  responsibility  for any errors committed or caused by it
in  executing or clearing  orders for the purchase or sale of futures  interests
for the  Customer's  account and shall  credit the  Customer's  account with any
profit resulting from an error of CFI. Errors made by floor brokers appointed or
selected by CFI shall constitute errors made by CFI.  However,  CFI shall not be
responsible for errors committed by the Trading Advisor.

                  CFI acknowledges that other  partnerships of which the General
Partner is the general partner are not affiliates of the Customer.

                  2.  Margins.  The futures and  futures  option  trades for the
Customer's account shall be margined at the applicable exchange or clearinghouse
minimum rates for speculative  accounts;  all subaccounts  shall be combined for
determining  such  margin  requirements.  All  margin  calls for the  Customer's
account  shall be made to DWR by CFI, and each such call for margin shall be met
by  Customer  within  three hours after DWR has  received  such call.  CFI shall
accept as margin for the  Customer's  account any instrument  deemed  acceptable
under exchange or clearinghouse  rules pertaining to such account.  Upon oral or
written request by DWR, CFI shall,  within three hours after receipt of any such
request,  wire  transfer  (by federal  bank wire  system) to DWR for  Customer's
account  any funds in the  Customer's  account  with CFI in excess of the margin
requirements for such account.

                  3.  Obligations  and  Expenses.  Except as otherwise set forth
herein,  the  Customer,  and not  CFI,  shall  be  responsible  for  all  taxes,
management and incentive fees to the Trading Advisor, the brokerage  commissions
to DWR pursuant to the DWR Customer  Agreement,  and all extraordinary  expenses
incurred by it.

                  4.  Agreement  Nonexclusive.  CFI  shall  be  free  to  render
services of the nature to be rendered to the Customer hereunder to other persons
or entities in addition to the Customer,  and the parties  acknowledge  that CFI
may  render  such  services  to  additional  entities  similar  in nature to the
Customer,  including other partnerships  organized with Demeter as their general
partner.  It  is  expressly   understood  and  agreed  that  this  Agreement  is
nonexclusive  and that the Customer has no  obligation  to execute any or all of
its trades for futures interests  through CFI. The parties  acknowledge that the
Customer may execute and clear trades for futures  interests  through such other
broker or brokers  as  Demeter  may  direct  from time to time.  The  Customer's
utilization  of an  additional  commodity  broker shall neither  terminate  this
Agreement nor modify in any regard the respective  rights and obligations of the
Customer and CFI hereunder.

                  5.  Compensation  of CFI. In  compensation  of CFI's  services
pursuant  to  this  Agreement,   the  Customer  shall  pay  CFI  all  NFA  fees,
clearinghouse  fees,  exchange fees or other  regulatory fees, taxes (other than
income taxes), floor brokerage fees, third-party clearing fees and give-up fees.
DWR shall pay to CFI such charges with respect to the execution and clearance of
trades for the Customer as DWR and CFI shall agree from time to time. Subject to
the brokerage  commission and  transaction  fees and costs caps set forth in the
DWR Customer  Agreement,  DWR shall have no obligation to reimburse the Customer
for any  payments  made by the  Customer  to CFI.  The  Customer  shall  have no
obligation to reimburse DWR for any payments made by DWR to CFI.

                  6. Investment Discretion. The parties recognize that CFI shall
have no authority to direct the futures interests investments to be made for the
Customer's  account,  but shall  execute  only such  orders  for the  Customer's
account as DWR,  Demeter or the  Trading  Advisor  may direct from time to time.
However, the parties agree that CFI, and not the Trading Advisor, shall have the
authority and  responsibility  with regard to the investment,  maintenance,  and
management  of the  Customer's  assets  that are held in  segregated  or secured
accounts, as provided in Section 7 hereof.

                  7. Interest on Customer Funds. The Customer's assets deposited
with CFI will be segregated or secured in accordance with the Commodity Exchange
Act and CFTC regulations. All of such funds will be available for margin for the
Customer's trading.  CFI shall pay to DWR such interest income on the Customer's
assets  held by CFI as CFI and DWR shall agree from time to time.  The  Customer
understands  that it will not receive any interest  income on its assets held by
CFI other than that paid by DWR  pursuant  to the DWR  Customer  Agreement.  The
Customer's  assets held by CFI may be used  solely as margin for the  Customer's
trading.

                  8.  Recording  Conversations.  CFI consents to the  electronic
recording,  at the discretion of the Customer,  Customer's agents or DWR, of any
or all telephone conversations with CFI (without automatic tone warning device),
the use of same as evidence by either party in any action or proceeding  arising
out of this  Agreement,  and in the  Customer's,  Customer's  agents'  or  DWR's
erasure, at its discretion,  of any recording as a part of its regular procedure
for handling of recordings.

                  9.       Delivery; Option Exercise.

                  (a) The Customer  acknowledges that the making or accepting of
delivery pursuant to a futures contract may involve a much higher degree of risk
than  liquidating  a position  by offset.  CFI has no control  over and makes no
warranty with respect to grade, quality or tolerances of any commodity delivered
in fulfillment of a contract.

                  (b)  The  Customer  agrees  to  give  CFI  timely  notice  and
immediately  on request to inform  CFI if the  Customer  intends to make or take
delivery  under a futures  contract  or to exercise  an option  contract.  If so
requested,  the Customer shall provide CFI with satisfactory assurances that the
Customer can fulfill the  Customer's  obligation to make or take delivery  under
any contract.  The Customer  shall furnish CFI with property  deliverable  by it
under any contract in accordance with CFI's instructions.

                  (c) CFI shall not have any  obligation  to  exercise  any long
option  contract  unless the Customer  has  furnished  CFI with timely  exercise
instructions  and  sufficient  initial  margin with  respect to each  underlying
futures contract.

                  10. Standard of Liability and Indemnity.  Subject to Section 1
hereof,  CFI and its  affiliates  (as defined  below) shall not be liable to the
Customer,  the  General  Partner  or  Limited  Partners,  or any of its or their
respective  successors or assigns,  for any act, omission,  conduct, or activity
undertaken by or on behalf of the Customer  pursuant to this Agreement which CFI
determines,  in good faith, to be in the best interests of the Customer,  unless
such act, omission,  conduct,  or activity by CFI or its affiliates  constituted
misconduct or negligence.

                  The Customer shall indemnify, defend and hold harmless CFI 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 CFI on behalf of the
Customer pursuant to this Agreement, including, without limitation, any demands,
claims  or  lawsuits  initiated  by a Limited  Partner  (or  assignee  thereof),
provided that (i) CFI 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 anything to the contrary
contained  in the  foregoing,  neither  CFI nor any of its  affiliates  shall be
indemnified  by the Customer for any losses,  liabilities,  or expenses  arising
from or out of an alleged  violation of federal or state  securities laws unless
(a)  there  has been a  successful  adjudication  on the  merits  of each  count
involving alleged securities law violations as to the particular indemnitee,  or
(b) such claims have been  dismissed  with prejudice on the merits by a court of
competent  jurisdiction  as to the  particular  indemnitee,  or (c) 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 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 the  Customer  to  which  CFI  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 10. The Customer shall make advances to CFI 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 the
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.

                  CFI shall indemnify, defend and hold harmless the 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 CFI has approved such settlement)  incurred as a result of the
activities of CFI 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.

                  The indemnities provided in this Section 10 by the Customer to
CFI 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 warranty, covenant, or agreement of CFI contained in this
Agreement  to the  extent  caused  by such  breach.  Likewise,  the  indemnities
provided in this Section 10 by CFI to the 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
warranty,  covenant, or agreement of the Customer contained in this Agreement to
the extent caused by such breach.

                  As used in this Section 10, the term  "affiliate" of CFI 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 CFI;  (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 CFI;  (iii)  any  natural  person,
partnership,  corporation,  association,  or  other  legal  entity  directly  or
indirectly  controlling,  controlled by, or under common  control with,  CFI; or
(iv) any officer or director of CFI. Notwithstanding the foregoing, "affiliates"
for  purposes of this  Section 10 shall  include  only those  persons  acting on
behalf of CFI within  the scope of the  authority  of CFI,  as set forth in this
Agreement.

                  11.  Term.  This  Agreement  shall  continue  in effect  until
terminated  by any party giving not less than 60 days' prior  written  notice of
termination to the other parties. The Customer shall have the right to terminate
this Agreement

                           (i)      at any  time,  effective  upon  thirty  (30)
days' prior written notice to CFI, in the event that:

                                    (A)     CFI announces  plans to  discontinue
                                            the   provision  of  execution   and
                                            clearing  services  with  respect to
                                            futures   contracts,    options   on
                                            futures  contracts  or  acting  as a
                                            dealer   counterparty   for  foreign
                                            exchange     cash    and     forward
                                            contracts; or

                                    (B)     CFI merges or  consolidates  with or
                                            into  or  acquires  or  is  acquired
                                            by,   another   entity  or  entities
                                            acting  in  concert  (excluding  any
                                            intergroup    reorganizations   with
                                            any   affiliates   of   CFI  or  any
                                            capital  contributions  by,  or sale
                                            of CFI  stock to any  affiliates  of
                                            CFI,  provided  that  the  guarantee
                                            agreement  between  DWR  and  Credit
                                            Agricole  Indosuez S.A.  dated as of
                                            July 31,  1997  remains  in place or
                                            a     comparable     guaranty     is
                                            substituted  by a  bank  with  a net
                                            worth  and  credit  rating  equal to
                                            Credit  Agricole  Indosuez  S.A.) in
                                            a    transaction    involving    the
                                            purchase   or  sale  of   stock   or
                                            substantially  all of the  assets of
                                            the   acquired   entity   or   which
                                            involves a capital  contribution  to
                                            or by such  entity or  entities  (in
                                            an   amount    representing    fifty
                                            percent  (50%)  or more of the  book
                                            value  of  CFI's  or  such  entity's
                                            (or  their  respective  affiliate's)
                                            net  worth),   or  the  purchase  or
                                            sale  of  stock  representing  fifty
                                            percent  (50%)  or more of  CFI's or
                                            such  entity's (or their  respective
                                            affiliate's)    outstanding   equity
                                            securities; and

                           (ii)     at  any  time  effective   immediately  upon
written notice to CFI in the event:

                                    (A)     CFI  ceases  to  be   registered  or
                                            conduct   business   as  a   futures
                                            commission        merchant        or
                                            discontinues   its   membership   or
                                            clearing  membership  on  any  major
                                            futures  interest  exchange  in  the
                                            United  States  (or  any  affiliated
                                            clearing   corporation)  or  in  the
                                            NFA; or

                                    (B)     a  receiver,  liquidator  or trustee
                                            of CFI is  appointed  by court order
                                            and such  order  remains  in  effect
                                            for more than thirty  (30) days;  or
                                            CFI  is   adjudicated   bankrupt  or
                                            insolvent;    or   any   of    CFI's
                                            property  is  sequestered  by  court
                                            order  and  such  order  remains  in
                                            effect  for more  than  thirty  (30)
                                            days;   or  a   petition   is  filed
                                            against  CFI under  any  bankruptcy,
                                            reorganization,         arrangement,
                                            insolvency,  readjustment  or  debt,
                                            dissolution  or  liquidation  law of
                                            any  jurisdiction,  whether  now  or
                                            hereafter  in  effect,  and  is  not
                                            dismissed  within  thirty  (30) days
                                            after  such  filing;  or CFI files a
                                            petition  in  voluntary   bankruptcy
                                            or   seeking    relief   under   any
                                            provision    of   any    bankruptcy,
                                            reorganization,         arrangement,
                                            insolvency,  readjustment  of  debt,
                                            dissolution  or  liquidation  law of
                                            any  jurisdiction,  whether  now  or
                                            hereafter  in  effect,  or  consents
                                            to  the   filing  of  any   petition
                                            against it under any such law; or

                                    (C)     CFI,  DWR or the Customer is ordered
                                            or  otherwise  directed to terminate
                                            this Agreement by any  governmental,
                                            regulatory,    or    self-regulatory
                                            authority.

Any such termination by any party shall be without penalty.

                  12. Complete Agreement.  This Agreement constitutes the entire
agreement among the parties with respect to the matters referred to herein,  and
no other agreement,  verbal or otherwise,  shall be binding as among the parties
unless in writing and signed by the party against whom enforcement is sought.

                  13.  Assignment.  This  Agreement  may not be  assigned by any
party without the express written consent of the other parties.

                  14. Amendment. This Agreement may not be amended except by the
written consent of the parties.

                  15. Notices.  All notices  required or desired to be delivered
under this  Agreement  shall be in writing and shall be effective when delivered
personally on the day delivered,  or when given by registered or certified mail,
postage prepaid, return receipt requested,  on the day of receipt,  addressed as
follows  (or to such  other  address  as the  party  entitled  to  notice  shall
hereafter designate in accordance with the terms hereof):

                  if to the Customer:

                           DEAN WITTER DIVERSIFIED FUTURES FUND III L.P.
                           c/o Demeter Management Corporation
                           Two World Trade Center, 62nd Floor
                           New York, New York 10048
                           Attn:    Mark J. Hawley
                                    President

                  if to DWR:

                           DEAN WITTER REYNOLDS INC.
                           Two World Trade Center, 62nd Floor
                           New York, New York 10048
                           Attn:    Mark J. Hawley
                                    Executive Vice President

                  if to CFI:

                           CARR FUTURES INC
                           10 South Wacker Drive, Suite 1125
                           Chicago, Illinois 60606
                           Attn:  Legal/Compliance Department

                  16.  Survival.  The provisions of this Agreement shall survive
the  termination of this Agreement with respect to any matter arising while this
Agreement was in effect.

                  17.      Headings.  Headings  of  Sections  herein are for the
convenience  of the  parties  only  and are not  intended  to be a part of or to
affect the meaning or interpretation of this Agreement.

                  18. Incorporation by Reference.  The Futures Account Agreement
annexed hereto is hereby incorporated by reference herein and made a part hereof
to the same extent as if such  document  were set forth in full  herein.  If any
provision  of this  Agreement is or at any time  becomes  inconsistent  with the
annexed document, the terms of this Agreement shall control.

                  19. Governing Law; Venue. This Agreement shall be governed by,
and  construed in  accordance  with,  the law of the State of New York  (without
regard to its choice of law  principles).  If any action or proceeding  shall be
brought by a party to this  Agreement  or to enforce  any right or remedy  under
this  Agreement,  each  party  hereto  hereby  consents  and will  submit to the
jurisdiction of the courts of the State of New York or any federal court sitting
in the County,  City and State of New York. Any action or proceeding  brought by
any party to this  Agreement to enforce any right,  assert any claim,  or obtain
any relief whatsoever in connection with this Agreement shall be brought by such
party  exclusively  in the courts of the State of New York or any federal  court
sitting in the County, City and State of New York.



<PAGE>





                  IN WITNESS  WHEREOF,  this Agreement has been executed for and
on behalf of the undersigned as of the day and year first above written.

                                             DEAN WITTER DIVERSIFIED FUTURES 
                                             FUND III L.P.

                                             By: Demeter Management Corporation,
                                                   General Partner



                                             By: /s/ Mark J. Hawley
                                                 -------------------------------
                                                 Mark J. Hawley
                                                 President

                                             DEAN WITTER REYNOLDS INC.



                                             By: /s/ Mark J. Hawley
                                                 -------------------------------
                                                 Mark J. Hawley
                                                 Executive Vice President



                                             CARR FUTURES INC.



                                             By: /s/ Bruce A. Beatus
                                                 -------------------------------
                                             Name:  Bruce A. Beatus
                                                  ------------------------------
                                             Title: General Counsel
                                                   -----------------------------
<PAGE>
                               CARR FUTURES INC.
                           FUTURES ACCOUNT AGREEMENT

In consideration of the acceptance by Carr Futures Inc.  ("Carr") of one or more
accounts  of the  undersigned  ("Customer")  (if more than one account is at any
time opened or reopened  with Carr,  all are covered by this  Agreement  and are
referred  to  individually  and  collectively  as  the  "Account"),  and  Carr's
agreement  to act as broker,  directly  or  indirectly,  or as  dealer,  for the
execution,  clearance  and/or carrying of transactions for the purchase and sale
of commodity  interests,  including  commodities,  forward contracts,  commodity
futures  contracts,  options on  commodity  futures  contracts  and  transaction
involving  the  exchange  of futures  for cash  commodities  or the  exchange of
futures in  connection  with cash  commodity  transactions,  Customer  agrees as
follows:

1.       APPLICABLE RULES AND REGULATIONS

         The Account and each transaction  therein shall be subject to the terms
         of this Agreement and to (a) all applicable  laws and the  regulations,
         rules and orders  (collectively  "regulations")  of all  regulatory and
         self-regulatory   organizations   having   jurisdiction   and  (b)  the
         constitution,   by-laws,  rules,  regulations,   orders,   resolutions,
         interpretations  and customs and usages  (collectively  "rules") of the
         market and any associated clearing organization (each an "exchange") on
         or subject to the rules of which such  transaction  is executed  and/or
         cleared.  The reference in the preceding  sentence to exchange rules is
         solely for Carr's  protection  and Carr's  failure to comply  therewith
         shall not constitute a breach of this Agreement or relieve  Customer of
         any obligation or responsibility  under this Agreement.  Carr shall not
         be liable to Customer as a result of any action by Carr,  its officers,
         directors, employees or agents to comply with any rule or regulation.

2.       PAYMENTS TO CARR

         Customer agrees to pay to Carr  immediately on request (a) commissions,
         give-up charges, fees and service charges as are in effect from time to
         time,  together  with all  applicable  regulatory  and  self-regulatory
         organization  and exchange fees,  charges and taxes;  (b) the amount of
         any  debit  balance  or  any  other  liability  that  may  result  from
         transactions  executed for the Account;  and (c) interest on such debit
         balance or liability at the prevailing rate charged by Carr at the time
         such debit balance or liability  arises and service charges on any such
         debit  balance or  liability  together  with any  reasonable  costs and
         attorneys'  fees  incurred  in  collecting  any such  debit  balance or
         liability.  Customer  acknowledges that Carr may charge  commissions at
         other rates to other customers.

3.       CUSTOMER'S DUTY TO MAINTAIN ADEQUATE MARGIN

         Customer  shall at all times,  and without  prior notice or demand from
         Carr,  maintain  adequate margin (also known as "performance  bond") in
         the Account so as to continually  to meet the original and  maintenance
         margin requirements  established by Carr for Customer.  Carr may change
         such requirements from time to time at Carr's  discretion.  Such margin
         requirements may exceed the margin  requirements set by any exchange or
         other  regulatory  authority and may vary from Carr's  requirements for
         other  customers.  Customer  agrees,  when so  requested,  orally or by
         written notice, immediately (in no less than one hour) to wire transfer
         (by federal bank wire system to the account of Carr) margin funds,  and
         to furnish Carr with names of bank officers for immediate  verification
         of such  transfers.  Customer  acknowledges  and  agrees  that Carr may
         receive and retain as its own any interest,  increment, profit, gain or
         benefit,  directly or  indirectly,  accruing from any of the funds Carr
         receives from Customer.

4.       DELIVERY; OPTION EXERCISE

         Liquidating  instructions  on  open  positions  maturing  in a  current
         delivery  month must be given to Carr at least five business days prior
         to the first  notice  day in the case of long  positions,  and at least
         five  business  days prior to the last trading day in the case of short
         positions.  Alternatively,  sufficient  funds to take  delivery  or the
         necessary  delivery documents must be delivered to Carr within the same
         period  described  above. If funds,  documents or instructions  are not
         received,   Carr  may,  without  notice,  either  liquidate  Customer's
         position or make or receive  delivery  on behalf of Customer  upon such
         terms and by such methods as Carr, in its sole discretion, determines.

         If,  at any  time,  Customer  fails to  deliver  to Carr  any  property
         previously  sold  by Carr  on  Customer's  behalf  in  compliance  with
         commodity interest contracts,  or Carr shall deem it necessary (whether
         by  reason  of the  requirements  of any  exchange,  clearing  house or
         otherwise) to replace any  securities,  commodity  interest  contracts,
         financial  instruments,  or other property previously delivered by Carr
         for the Account of Customer  with other  property of like or equivalent
         kind or amount,  Customer hereby authorizes Carr, in its sole judgment,
         to borrow or to buy any property necessary to make delivery thereof, or
         to replace any such property  previously  delivered,  or to deliver the
         same to such other party or to whom  delivery  is to be made.  Carr may
         subsequently  repay any  borrowing or purchase  thereof  with  property
         purchased  or otherwise  acquired for the amount of Customer.  Customer
         shall  pay Carr for any  cost,  loss and  damages  from the  foregoing,
         including,  but not limited to,  consequential  damages,  penalties and
         fines which Carr may incur or which Carr may sustain from its inability
         to borrow or buy any such property.

         Customer  understands  that some  exchanges  and  clearing  houses have
         established cut-off times for the tender of exercise instructions,  and
         that an option will become  worthless if instructions are not delivered
         before such expiration  time.  Customer also  understands  that certain
         exchanges  and  clearing  houses   automatically   will  exercise  some
         "in-the-money"   options   unless   instructed   otherwise.    Customer
         acknowledges full  responsibility  for taking action either to exercise
         or to prevent the exercise of an option  contract,  as the case may be,
         and Carr is not  required to take any action with  respect to an option
         contract,  including  without  limitations  any action to  exercise  an
         option  prior to its  expiration  date,  or to  prevent  the  automatic
         exercise of an option,  except upon  Customer's  express  instructions.
         Customer further  understands that Carr may establish  exercise cut-off
         times which may be different  from the times  established  by exchanges
         and clearing houses.

         Customer understands that (a) all short option positions are subject to
         assignment at any time, including positions established on the same day
         that exercises are assigned,  and (b) exercised  assignment notices are
         allocated  randomly  from  among  all  Carr  customer's  short  options
         positions which are subject to exercise. A more detailed description of
         Carr's allocation procedures is available upon request.

5.       FOREIGN CURRENCY

         If Carr enters into any transaction for Customer effected in a currency
         other than U.S.  dollars:  (a) any profit or loss  caused by changes in
         the rate of exchange for such currency shall be for Customer's  Account
         and risk and (b)  unless  another  currency  is  designated  in  Carr's
         confirmation of such  transaction,  all margin for such transaction and
         the profit or loss on the liquidation of such  transaction  shall be in
         U.S. dollars at a rate of exchange determined by Carr in its discretion
         on the  basis of then  prevailing  market  rates of  exchange  for such
         foreign currency.

6.       CARR MAY LIMIT POSITIONS HELD

         Customer agrees that Carr, at its  discretion,  may limit the number of
         open positions (net or gross) which Customer may execute,  clear and/or
         carry with or acquire  through it.  Customer agrees (a) not to make any
         trade which would have the effect or exceeding  such  limits,  (b) that
         Carr may require  Customer to reduce open  positions  carried with Carr
         and (c) that  Carr  may  refuse  to  accept  orders  to  establish  new
         positions.  Carr may impose  and  enforce  such  limits,  reduction  or
         refusal whether or not they are required by applicable law, regulations
         or rules. Customer shall comply with all position limits established by
         any  regulatory or  self-regulatory  organization  or any exchange.  In
         addition,  Customer  agrees to notify  Carr  promptly  if  Customer  is
         required   to  file   position   reports   with   any   regulatory   or
         self-regulatory organization or with any exchange.

7.       NO WARRANTY AS TO INFORMATION OR RECOMMENDATION

         Customer acknowledges that:

         (a)      Any   market   recommendations   and   information   Carr  may
                  communicate  to  Customer,  although  based  upon  information
                  obtained from sources believed by Carr to be reliable,  may be
                  incomplete and not subject to verification;

         (b)      Carr makes no representation, warranty or guarantee as to, and
                  shall not be responsible  for, the accuracy or completeness of
                  any  information  or  trading   recommendation   furnished  to
                  Customer;

         (c)      Recommendations  to Customer as to any particular  transaction
                  at any given time may differ  among  Carr's  personnel  due to
                  diversity in analysis of fundamental and technical factors and
                  may vary from any standard  recommendation made by Carr in its
                  research reports or otherwise; and

         (d)      Carr has no obligation or  responsibility to update any market
                  recommendations,  research or information it  communicates  to
                  Customer.

         Customer understands that Carr and its officers, directors, affiliates,
         stockholders,  representatives or associated persons may have positions
         in and may  intend  to buy or sell  commodity  interests  that  are the
         subject of market  recommendations  furnished to Customer, and that the
         market  positions  of Carr or any such  officer,  director,  affiliate,
         stockholder,  representative  or  associated  person  may or may not be
         consistent with the recommendations furnished to Customer by Carr.

8.       LIMITS ON CARR DUTIES; LIABILITY

         Customer agrees:

         (a)      That Carr has no duty to  apprise  Customer  of news or of the
                  value of any commodity  interests or collateral  pledged or in
                  any way to advise Customer with respect to the market;

         (b)      That the  commissions  which Carr  receives are  consideration
                  solely  for  the   execution,   reporting   and   carrying  of
                  Customer's trades;

         (c)      If  there  is  an  Account  Manager,   an  Account   Manager's
                  Agreement  for the Account  Manager  will be provided to Carr.
                  Customer   represents  it  has  received:   (1)  a  disclosure
                  document  concerning  such Account  Manager's  trading advice,
                  including,  in  the  event  the  Account  Manager  will  trade
                  options,  the  options  strategies  to be  utilized,  or (2) a
                  written  statement  explaining  why  Account  Manager  is  not
                  required  under  applicable  law to provide  such a disclosure
                  document to Customer; and

         (d)      Customer acknowledges,  understands and agrees that Carr is in
                  no way responsible for any loss to Customer  occasioned by the
                  actions  of  the   Account   Manager  and  Carr  does  not  by
                  implication  or  otherwise  endorse the  operating  methods or
                  trading strategies or programs of the Account Manager.

9.       EXTRAORDINARY EVENTS

         Customer agrees that Carr shall have no liability for damages,  claims,
         losses or expenses caused by any errors,  omissions or delays resulting
         from an act,  condition or cause beyond the reasonable control of Carr,
         including, but not limited to: war; insurrection;  riot; strike; act of
         God; fire; flood; extraordinary weather conditions; accident; action of
         government  authority;  action of exchange,  clearinghouse  or clearing
         organization;  communications  or power failure;  equipment or software
         malfunction;  error,  omission or delay in the report of  transactions;
         prices, exchange rates or other market or transaction  information;  or
         the  insolvency,   bankruptcy,   receivership,   liquidation  or  other
         financial  difficulty of any bank, clearing broker,  exchange,  market,
         clearinghouse or clearing organization.

10.      INDEMNIFICATION OF CARR, CONTRIBUTION AND REIMBURSEMENT

         (a)      To the extent  permitted by law,  Customer agrees to indemnify
                  and  hold  harmless  Carr  and  its  shareholders,  directors,
                  officers,   employees,   agents,  affiliates  and  controlling
                  persons against any liability for damages,  claims,  losses or
                  expenses   which   they  may  incur  as  the  result  of:  (x)
                  Customer's   violation   of   federal   or   state   laws   or
                  regulations,  or of rules of any  exchange or  self-regulatory
                  organization;  (y)  any  other  breach  of this  Agreement  by
                  Customer;  or (z) any  breach by Carr of federal or state laws
                  or  regulations,  or  of  the  charter  provisions,   by-laws,
                  rules,  margin  or other  requirements,  of the  exchanges  or
                  self-regulatory  organizations,  provided that such  violation
                  was  caused  by  Carr's  acting  in good  faith on  Customer's
                  behalf.  Such  damages,   claims,  losses  or  expenses  shall
                  include  legal fees and  expenses,  costs of settling  claims,
                  interest,  and fines or  penalties  imposed by the  exchanges,
                  self-regulatory organization or governmental authority.

         (b)      Customer  agrees  that  if  the  indemnification  provided  in
                  paragraph  (a) above is held to be  unavailable  to Carr,  the
                  parties  hereto shall share in and contribute to such damages,
                  claims,  losses or expenses in  proportion  to their  relative
                  benefits  from the  transactions  involved and their  relative
                  degree of fault in causing the liability.

         (c)      Customer  agrees  to  reimburse  Carr  and  its  shareholders,
                  directors,   officers,   employees,   agents,  affiliates  and
                  controlling  persons  on  demand  for any  costs  incurred  in
                  collecting any sums Customer owes under this Agreement and any
                  costs  of  successfully   defending  against  claims  asserted
                  against them by Customer.

11.      NOTICES; TRANSMITTALS

         Carr shall  transmit  all  communications  to  Customer  at  Customer's
         address, facsimile or telephone number set forth below or to such other
         address as Customer may  hereafter  direct in writing.  Customer  shall
         transmit all  communications  to Carr regarding this Agreement  (except
         routine  inquiries  concerning  the Account) to 10 South Wacker  Drive,
         Suite  1100,  Chicago,   Illinois  60606;   facsimile  (312)  441-4201,
         Attention:  Legal/Compliance Department. All payments and deliveries to
         Carr shall be made as instructed by Carr from time to time and shall be
         deemed received only when actually received by Carr.

12.      CONFIRMATION CONCLUSIVE

         Confirmation  of trades and any other notices sent to Customer shall be
         conclusive and binding on Customer unless customer or Customer's  agent
         notifies Carr to the contrary (a) in the case of an oral report, orally
         at the time received by Customer or its agent;  or (b) in the case of a
         written report or notice, in writing prior to opening of trading on the
         business day next  following  receipt of the report.  In  addition,  if
         Customer  has not  received  a written  confirmation  that a  commodity
         interest transaction has been executed within three business days after
         Customer has placed an order with Carr to effect such transaction,  and
         has been  informed or believes  that such order has been or should have
         been  executed,  then Customer  immediately  shall notify Carr thereof.
         Absent such notice,  Customer  conclusively shall be deemed estopped to
         object and to have waived any such  objection to the failure to execute
         or cause to be executed such  transaction.  Anything in this Section 12
         notwithstanding,  neither  Customer  nor  Carr  shall  be  bound by any
         transaction or price reported in error.

13.      SECURITY INTEREST

         Customer  hereby  grants  to  Carr a first  lien  upon  and a  security
         interest  in any and all  cash,  securities,  whether  certificated  or
         uncertificated,  security entitlements,  investment property, financial
         assets,  foreign  currencies,  commodity  interests and other  property
         (including  securities  and  options)  and the  proceeds  of all of the
         foregoing (together the "Collateral") belonging to Customer or in which
         Customer may have an interest,  now or in the future,  and held by Carr
         or in Carr's  control or carried in any of Customer's  Accounts,  or in
         Customer's  accounts  carried under other  agreements  with Carr or its
         affiliates.  Such  security  interest  is granted as  security  for the
         performance  by  Customer  of its  obligations  hereunder  and  for the
         payment of all loans and other liabilities which Customer has or may in
         the future  have to Carr,  whether  under this  Agreement  or any other
         agreement  between the parties hereto.  Customer agrees to execute such
         further  instruments,  documents,  filings  and  agreements  as  may be
         requested  at any  time  by Carr  in  order  to  perfect  and  maintain
         perfected  the  foregoing  lien and  security  interest.  Carr,  in its
         discretion,  may  liquidate  any  Collateral  to satisfy  any margin or
         Account  deficiencies  or to  transfer  the  Collateral  to the general
         ledger account of Carr.

         In the  event  that the  provisions  of  Section  13,  which  relate to
         Collateral  in any account  carried by Carr for Customer  other than an
         Account instituted  hereunder,  conflict with the agreement under which
         such other account was instituted,  such other  agreement  between Carr
         and Customer shall take  precedence over the provisions of this Section
         13.

14.      TRANSFER OF FUNDS

         At any time and from time to time and without prior notice to Customer,
         Carr may transfer from one Account to another Account in which Customer
         has any  interest,  such excess  funds,  equities,  securities or other
         property as in Carr's judgment may be required for margin, or to reduce
         any debit  balance or to reduce or satisfy  any  deficits in such other
         Accounts  except that no such  transfer  may be made from a  segregated
         Account  subject  to the  Commodity  Exchange  Act to  another  Account
         maintained  by Customer  unless  either  Customer has  authorized  such
         transfer  in  writing or Carr is  effecting  such  transfer  to enforce
         Carr's  security  interest  pursuant to Section 13. Carr promptly shall
         confirm  all  transfers  of funds made  pursuant  hereto to Customer in
         writing.

15.      CARR'S RIGHT TO LIQUIDATE CUSTOMER POSITIONS

         In addition to all other rights of Carr set forth in this Agreement:

         (a)      When directed or required by a regulatory  or  self-regulatory
                  organization  or  exchange  having  jurisdiction  over Carr or
                  the Account;

         (b)      Whenever  Carr  reasonably  considers  it  necessary  for  its
                  protection because of margin requirements or otherwise;

         (c)      If Customer or any affiliate of Customer repudiates, violates,
                  breaches  or fails to  perform  on a timely  basis  any  term,
                  covenant or condition  on its part to be performed  under this
                  Agreement or another agreement with Carr;

         (d)      If a  case  in  bankruptcy  is  commenced  or if a  proceeding
                  under  any  insolvency  or  other  law for the  protection  of
                  creditors or for the  appointment  of a receiver,  liquidator,
                  trustee,  conservator,  custodian or similar  officer is filed
                  by or against  Customer or any  affiliate of  Customer,  or if
                  Customer or any  affiliate  of  Customer  makes or proposes to
                  make any  arrangement  or  composition  for the benefit of its
                  creditors,  or if Customer (or any such  affiliate)  or any or
                  all of its  property  is  subject  to  any  agreement,  order,
                  judgment  or  decree  providing  for  Customer's  dissolution,
                  winding-up,      liquidation,      merger,      consolidation,
                  reorganization   or  for  the   appointment   of  a  receiver,
                  liquidator,   trustee,   conservator,   custodian  or  similar
                  officer of Customer, such affiliate or such property;

         (e)      Carr is informed of Customer's death or mental incapacity; or

         (f)      If an  attachment  or  similar  order is  levied  against  the
                  Account or any other  account  maintained by a Customer or any
                  affiliate of Customer with Carr;

         Carr shall have the right to (i) satisfy any  obligations  due Carr out
         of any Customer's property (also referred to as "Collateral") in Carr's
         custody or control,  (ii) liquidate any or all of Customer's  commodity
         interest  positions,   such  liquidation  shall  include   transactions
         involving the exchange of futures for cash  commodities or the exchange
         of futures in connection with cash commodity transactions, (iii) cancel
         any or all of Customer's  outstanding  orders, (iv) treat any or all of
         Customer's  obligations  due Carr as immediately  due and payable,  (v)
         sell any or all of Customer's  property in Carr's custody or control in
         such manner as Carr  determines to be commercially  reasonable,  and/or
         (vi) terminate any or all of Carr's  obligations for future performance
         to Customer,  all without any notice to or demand on Customer if deemed
         necessary by Carr. Any sale  hereunder may be made in any  commercially
         reasonable manner.  Customer agrees that a prior demand, call or notice
         shall not be considered a waiver of Carr's right to act without  demand
         or notice  as  herein  provided,  that  Customer  shall at all times be
         liable for the payment of any debit  balance owing in each Account upon
         demand  whether  occurring  upon a liquidation  as provided  under this
         Section 15 or  otherwise  under this  Agreement,  and that in all cases
         Customer shall be liable for any  deficiency  remaining in each Account
         in the event of  liquidation  thereof in whole or in part together with
         interest  thereon and all costs relating to liquidation  and collection
         (including   reasonable   attorneys'  fees).  In  the  event  that  the
         provisions  of Section 15,  which relate to  Collateral  in any account
         carried  by  Carr  for  Customer  other  than  an  Account   instituted
         hereunder,  conflict with the agreement  under which such other account
         was instituted,  such other  agreement  between Carr and Customer shall
         take precedence over the provisions of this Section 15.

16.      CUSTOMER REPRESENTATIONS, WARRANTIES AND AGREEMENTS

         Customer represents and warrants to and agrees with Carr that:

         (a)      Customer  has full  power  and  authority  to enter  into this
                  Agreement  and to engage in the  transactions  and perform its
                  obligations hereunder and contemplated hereby, and:

                  (1)      If Customer is a corporation or partnership, Customer
                           represents and warrants that (a) it is duly organized
                           and  in  good   standing   under   the  laws  of  the
                           jurisdiction  in which it is established and in every
                           state in which it does business;  (b) is empowered to
                           enter  into  and  perform  this   Agreement   and  to
                           effectuate   transactions  in  commodity   interests,
                           financial   instruments   and  foreign   currency  as
                           contemplated hereby; (c) that Customer has determined
                           that  trading in commodity  interests is  appropriate
                           for Customer, is prudent in all respects and does not
                           and will not violate any statute,  rule,  regulation,
                           judgment  or decree to which  Customer  is subject or
                           bound;  (d) that Customer has had at least one year's
                           prior  experience  in  effectuating  transactions  in
                           commodity  interests,   financial  instruments,   and
                           foreign currency as contemplated  hereby;  and (e) no
                           person or entity  has any  interest  in or control of
                           the Account to which this Agreement  pertains  except
                           as disclosed by Customer to Carr in writing.

                  (2)      If  Customer  is a  trust,  Customer  represents  and
                           warrants  that (a) it is a duly  formed and  existing
                           trust under the laws of the state of its formation or
                           such other laws as are applicable, including ERISA or
                           similar   state   law,   and  the  party  or  parties
                           designated as trustee or trustees by Customer to Carr
                           in writing submitted herewith  constitute the only or
                           all of the proper trustees  thereof;  (b) the trustee
                           or trustees  are  empowered to enter into and perform
                           this  Agreement  and to  effectuate  transactions  in
                           commodity  interests,   financial  instruments,   and
                           foreign  currency  as  contemplated  hereby;  (c) the
                           trustee  or  trustees  make the  representations  set
                           forth in  Section 1 hereof as if the term  trustee(s)
                           were substituted for the term Customer  therein;  and
                           (d) no  person  or  entity  has  any  interest  in or
                           control  of  the  Account  to  which  this  Agreement
                           pertains  except as  disclosed by Customer to Carr in
                           writing.

         (b)      Neither Customer nor any partner,  director,  officer, member,
                  manager  or  employee  of  Customer   nor  any   affiliate  of
                  Customer is a partner,  director,  officer, member, manager or
                  employee  of  a  futures  commission   merchant,   introducing
                  broker,  bank,  broker-dealer,   exchange  or  self-regulatory
                  organization  or an employee or  commissioner of the Commodity
                  Futures   Trading   Commission   (the   "CFTC"),   except   as
                  previously disclosed in writing to Carr;

         (c)      Any  financial  statements or other  information  furnished in
                  connection  therewith are true,  correct and complete.  Except
                  as  disclosed  in  writing,  (i)  Customer  is not a commodity
                  pool or is  exempt  from  registration  under the rules of the
                  CFTC,  and (ii)  Customer is acting solely as principal and no
                  one other than  Customer  has any  interest  in any Account of
                  Customer.  Customer  hereby  authorizes  Carr to contact  such
                  banks,  financial  institutions  and credit  agencies  as Carr
                  shall deem  appropriate  for  verification  of the information
                  contained herein;

         (d)      Customer has determined that trading in commodity interests is
                  appropriate for Customer,  is prudent in all respects and does
                  not and will not  violate  Customer's  charter or by-laws  (or
                  other  comparable   governing  document)  or  any  law,  rule,
                  regulation,  judgment,  decree,  order or  agreement  to which
                  Customer or its property is subject or bound;

         (e)      As  required  by  CFTC  regulations,  Customer  shall  create,
                  retain and produce  upon  request of the  applicable  contract
                  market,  the  CFTC or  other  regulatory  authority  documents
                  (such as contracts,  confirmations,  telex printouts, invoices
                  and  documents  of title)  with  respect to cash  transactions
                  underlying  exchanges  of  futures  for  cash  commodities  or
                  exchange  of  futures  in  connection   with  cash   commodity
                  transactions;

         (f)      Customer  consents  to the  electronic  recording,  at  Carr's
                  discretion,  of any or all telephone  conversations  with Carr
                  (without  automatic tone warning  device);  the use of same as
                  evidence by either party in any action or  proceeding  arising
                  out of the Agreement and in Carr's erasure, at its discretion,
                  of any recording as part of its regular procedure for handling
                  of recordings;

         (g)      Absent a separate written  agreement between Customer and Carr
                  with respect to give-ups,  Carr, in its  discretion,  may, but
                  shall  have  no  obligation  to,  accept  from  other  brokers
                  commodity interest transactions executed by such brokers on an
                  exchange for Customer  and proposed to be  "given-up"  to Carr
                  for clearance and/or carrying in the Account;

         (h)      Carr,  for  and on  behalf  of  Customer,  is  authorized  and
                  empowered   to   place   orders   for    commodity    interest
                  transactions  through  one or  more  electronic  or  automated
                  trading  systems  maintained  or  operated  by  or  under  the
                  auspices  of an  exchange,  that  Carr  shall not be liable or
                  obligated to Customer for any loss,  damage,  liability,  cost
                  or expense  (including  but not  limited  to loss of  profits,
                  loss of use,  incidental or  consequential  damages)  incurred
                  or  sustained  by  Customer  and  arising in whole or in part,
                  directly  or  indirectly,  from any  fault,  delay,  omission,
                  inaccuracy or termination  of a system or Carr's  inability to
                  enter,  cancel or modify an order on behalf of  Customer on or
                  through  a  system.  The  provisions  of  this  Section  16(h)
                  shall apply  regardless  of whether any customer  claim arises
                  in contract,  negligence,  tort, strict  liability,  breach or
                  fiduciary obligations or otherwise; and

         (i)      If Customer is subject to the  Financial  Institution  Reform,
                  Recovery  and   Enforcement   Act  of  1989,   the   certified
                  resolutions  set  forth  following  this  Agreement  have been
                  caused to be reflected in the minutes of  Customer's  Board of
                  Directors  (or  other  comparable  governing  body)  and  this
                  Agreement is and shall be,  continuously from the date hereof,
                  an official record of Customer.

         Customer  agrees  to  promptly  notify  Carr in  writing  if any of the
         warranties  and  representations  contained  in this  Section 16 become
         inaccurate or in any way cease to be true, complete and correct.

17.      SUCCESSORS AND ASSIGNS

         This Agreement shall inure to the benefit of the parties hereto,  their
         successors and assigns,  and shall be binding upon the parties  hereto,
         their successors and assigns, provided, however, that this Agreement is
         not  assignable by any party  without the prior written  consent of the
         other parties.

18.      MODIFICATION OF AGREEMENT BY CARR; NON-WAIVER PROVISION

         This  Agreement  may only be  altered,  modified  or  amended by mutual
         written consent of the parties.  The rights and remedies conferred upon
         Carr shall be  cumulative,  and its  forbearance  to take any  remedial
         action  available to it under this Agreement  shall not waive its right
         at any time or from time to time thereafter to take such action.

19.      SEVERABILITY

         If any term or  provision  hereof  or the  application  thereof  to any
         persons  or  circumstances  shall  to any  extent  be  contrary  to any
         exchange,  government or self-regulatory  regulation or contrary to any
         federal,  state or local law or otherwise be invalid or  unenforceable,
         the  remainder  of this  Agreement or the  application  of such term or
         provision to persons or  circumstances  other than those as to which it
         is contrary, invalid or unenforceable, shall not be affected thereby.

20.      CAPTIONS

         All captions used herein are for  convenience  only,  are not a part of
         this  Agreement,  and are not to be used in construing or  interpreting
         any aspect of this Agreement.

21.      TERMINATION

         This  Agreement  shall  continue  in  force  until  written  notice  of
         termination is given by Customer or Carr. Termination shall not relieve
         either party of any  liability  or  obligation  incurred  prior to such
         notice.  Upon giving or receiving notice of termination,  Customer will
         promptly  take all action  necessary to transfer all open  positions in
         each Account to another futures commission merchant.

22.      ENTIRE AGREEMENT

         This Agreement (as amended by the attached Customer Agreement dated the
         date hereof into which this  Agreement is  incorporated  by  reference)
         constitutes the entire agreement between Customer and Carr with respect
         to the  subject  matter  hereof  and  supersedes  any prior  agreements
         between the parties with respect to such subject matter.

23.      GOVERNING LAW; CONSENT TO JURISDICTION

         (a)      In case of a dispute  between  Customer  and Carr  arising out
                  of  or  relating  to  the  making  or   performance   of  this
                  Agreement or any  transaction  pursuant to this  Agreement (i)
                  this  Agreement and its  enforcement  shall be governed by the
                  laws of the State of  Illinois  without  regard to  principles
                  of conflicts of laws,  and (ii)  Customer will bring any legal
                  proceeding  against Carr in, and Customer  hereby  consents in
                  any  legal  proceeding  by Carr to the  jurisdiction  of,  any
                  state or federal court located within  Chicago,  Illinois,  in
                  connection  with  all  legal  proceedings   arising  directly,
                  indirectly or otherwise in connection  with,  out of,  related
                  to or from Customer's  Account,  transactions  contemplated by
                  this  Agreement  or  the  breach   thereof.   Customer  hereby
                  waives all  objections  Customer,  at any time, may have as to
                  the   propriety   of  the  court  in  which  any  such   legal
                  proceedings  may be  commenced.  Customer also agrees that any
                  service  of  process   mailed  to   Customer  at  any  address
                  specified  to  Carr  shall  be  deemed  a  proper  service  of
                  process  on the  undersigned.  Customer  agrees  that venue of
                  all proceedings shall be in Chicago, Illinois.

         (b)      Notwithstanding   the   provisions   of   Section   23(a)(ii),
                  Customer   may  elect  at  this  time  to  have  all  disputes
                  described in this  Section  resolved by  arbitration.  To make
                  such election,  Customer must sign the  Arbitration  Agreement
                  set forth in Section 24.  Notwithstanding  such election,  any
                  question  relating to whether  Customer or Carr has  commenced
                  an  arbitration  proceeding  in a  timely  manner,  whether  a
                  dispute is within the scope of the  Arbitration  Agreement  or
                  whether a party  (other than  Customer or Carr) has  consented
                  to  arbitration  and all  proceedings  to  compel  arbitration
                  shall  be  determined  by a  court  as  specified  in  Section
                  23(a)(ii).

24.      ARBITRATION AGREEMENT (OPTIONAL)

         Every dispute  between  Customer and Carr arising out of or relating to
         the making or performance of this Agreement or any transaction pursuant
         to this  Agreement,  shall be settled by arbitration in accordance with
         the rules,  then in effect,  of the National Futures  Association,  the
         contract market upon which the transacting giving rise to the claim was
         executed, or the National Association of Securities Dealers as Customer
         may elect.  If Customer does not make such election by registered  mail
         addressed  to Carr at 10  South  Wacker  Drive,  Suite  1100,  Chicago,
         Illinois 60606, Attention:  Legal/Compliance Department, within 45 days
         after demand by Carr that the Customer  make such  election,  then Carr
         may make such election.  Carr agrees to pay any incremental  fees which
         may be  assessed  by a  qualified  forum for making  available 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 aware rendered by the  arbitrators  may be entered in
         any court having jurisdiction thereof.

         THREE FORUMS EXIST FOR THE  RESOLUTION  OF  COMMODITY  DISPUTES:  CIVIL
         COURT   LITIGATION,   REPARATIONS  AT  THE  COMMODITY  FUTURES  TRADING
         COMMISSION  ("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  COSTS.  THE  CFTC  REQUIRES,
         HOWEVER, THAT EACH CUSTOMER INDIVIDUALLY EXAMINE THE RELATIVE MERITS OF
         ARBITRATION  AND THAT YOUR  CONSENT OF THIS  ARBITRATION  AGREEMENT  BE
         VOLUNTARY.

         BY SIGNING THIS AGREEMENT,  YOU (1) MAY BE WAIVING YOUR RIGHT TO SUE IN
         A COURT OF LAW AND (2) ARE AGREEING TO BE BOUND BY  ARBITRATION  OF ANY
         CLAIMS OR  COUNTERCLAIMS  WHICH YOU OR CARR 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 WILL BE  NOTIFIED  IF CARR  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"  PROCEEDINGS  BEFORE THE CFTC, YOU WILL HAVE 45 DAYS FROM
         THE DATE OF SUCH NOTICE IN WHICH TO MAKE THAT ELECTION.

         YOU NEED NOT AGREE TO THIS  ARBITRATION  AGREEMENT  TO OPEN AN  ACCOUNT
         WITH CARR.

         See 17 CFR 1890.1-180.5.

         Acceptance of this arbitration  agreement requires a separate signature
         on page 15.

25.      CONSENT TO TAKE THE OTHER SIDE OF ORDERS (OPTIONAL)

         Without its prior notice,  Customer agrees that when Carr executes sell
         or buy orders on Customer's  behalf,  Carr,  its  directors,  officers,
         employees,  agents, affiliates, and any floor broker may take the other
         side of  customer's  transaction  through  any  Account of such  person
         subject to its being executed at prevailing  prices in accordance  with
         and subject to the  limitations and  conditions,  if any,  contained in
         applicable rules and regulations.

26.      AUTHORIZATION TO TRANSFER FUNDS (OPTIONAL)

         Without  limiting  other  provisions  herein,  Carr  is  authorized  to
         transfer from any segregated  Account subject to the Commodity Exchange
         Act carried by Carr for the  Customer to any other  Account  carried by
         Carr for the Customer such amount of excess funds as in Carr's judgment
         may be  necessary  at any time to avoid a  margin  call or to  reduce a
         debit balance in said Account.  It is understood that Carr will confirm
         in  writing  each  such   transfer  of  funds  made  pursuant  to  this
         authorization within a reasonable time after such transfer.

27.      ELECTRONIC TRANSMISSION OF STATEMENTS (OPTIONAL)

         Customer  elects and consents to receive  transmission of statements of
         transactions  and  statements of account  solely by  electronic  means,
         including without limitation, by electronic mail or facsimile. Customer
         shall not incur any costs or fees in  connection  with the  receipt  of
         such statements by electronic transmission. Customer shall receive such
         statements by electronic transmission until such time as it revokes its
         consent in writing to Carr.

28.      SUBORDINATION AGREEMENT

         (Applies only to Accounts with funds held in foreign currencies)

         Funds of customers  trading on United  States  contract  markets may be
         held in accounts  denominated in a foreign  currency with  depositories
         located  outside or inside the United States or its  territories if the
         customer is domiciled in a foreign  country or if the funds are held in
         connection  with  contracts  priced and settled in a foreign  currency.
         Such  accounts  are subject to the risk that  events  could occur which
         hinder or prevent the  availability of these funds for  distribution to
         customers.  Such  accounts  also may be  subject  to  foreign  currency
         exchange rate risks.

         If authorized below, Customer authorizes the deposit of funds into such
         depositories.  For  customer  domiciled  in  the  United  States,  this
         authorization  permits the holding of funds in regulated  accounts only
         if such funds are used to margin,  guarantee,  or secure  positions  in
         such  contracts  or accrue as a result of such  positions.  In order to
         avoid the possible  dilution of other customer funds, a customer agrees
         by accepting this subordination agreement that his claims based on such
         funds will be  subordinated  as described  below in the unlikely  event
         both of the  following  conditions  are  met:  (1)  Carr is  placed  in
         receivership  or  bankruptcy,  and (2)  there  are  insufficient  funds
         available for  distribution  denominated in the foreign  currency as to
         which the  customer  has a claim to satisfy  all claims  against  those
         funds.

         By initialing the Subordination  Agreement below,  Customer agrees that
         if both of the conditions  listed above occur, its claim against Carr's
         assets  attributable  to funds held  overseas in a  particular  foreign
         currency  may be satisfied  out of  segregated  customer  funds held in
         accounts  denominated in dollars or other foreign currencies only after
         each customer  whose funds are held in dollars or in such other foreign
         currencies  receives its pro-rata  portion of such funds. It is further
         agreed that in no event may a customer  whose funds are so held receive
         more than its pro-rata share of the aggregate pool  consisting of funds
         held in dollars,  funds held in the particular  foreign  currency,  and
         non-segregated assets of Carr.


<PAGE>



OPTIONAL ELECTIONS/ACKNOWLEDGMENT

The following  provisions,  which are set forth in this  Agreement,  need not be
entered into to open the Account.  Customer  agrees that its optional  elections
are as follows:

SIGNATURE REQUIRED FOR EACH ELECTION


<TABLE>
<CAPTION>
<S>                                                          <C>
ARBITRATION AGREEMENT
(Agreement Paragraph 24)
                                                             -------------------------------------------
                                                                                                  (Date)
CONSENT TO TAKE THE OTHER SIDE OF
ORDERS (Agreement Paragraph 25)                              X /S/ MARK J. HAWLEY               12-01-97
                                                             -------------------------------------------
                                                                                                  (Date)

AUTHORIZATION TO TRANSFER
FUNDS (Agreement Paragraph 26)
                                                             -------------------------------------------
                                                                                                  (Date)

CONSENT TO RECEIVE STATEMENTS BY 
ELECTRONIC TRANSMISSION
(Agreement Paragraph 27)
                                                             -------------------------------------------
                                                                                                  (Date)

ACKNOWLEDGMENT OF SUBORDINATION AGREEMENT (Agreement
Paragraph 28) (Required for accounts holding non-U.S.        X /S/ MARK J. HAWLEY               12-01-97
currency                                                     -------------------------------------------
                                                                                                  (Date)
</TABLE>



HEDGE ELECTION

/ /      Customer  confirms that all  transactions in the Account will represent
         bona fide hedging  transactions,  as defined by the  Commodity  Futures
         Trading  Commission,  unless Carr is notified  otherwise not later than
         the time an order is placed for the Account:

Pursuant to CFTC  Regulation  190.06(d),  Customer  specifies  and agrees,  with
respect to hedging  transactions  in the Account,  that in the unlikely event of
Carr's  bankruptcy,  it prefers that the bankruptcy  trustee [check  appropriate
box]:

A) / /   Liquidate all open contracts without first seeking  instructions either
         from or on behalf of Customer.

B) / /   Attempt to obtain  instructions  with respect to the disposition of all
         open contracts.

(If neither box is checked, Customer shall be deemed to elect A).)


<PAGE>



ACKNOWLEDGMENT OF RECEIPT OF RISK DISCLOSURE STATEMENTS

The  undersigned  hereby  acknowledges  its separate  receipt from Carr, and its
understanding  of  each of the  following  documents  prior  to  opening  of the
Account:

o        Risk Disclosure Statement for Futures and Options
o        LME Risk Warning Notice
o        NYMEX ACCESS(SM) Risk Disclosure Statement
o        Globex(R)Customer Information and Risk Disclosure Statement
o        Project A(TM)Customer Information Statement
o        Questions & Answers on Flexible Options Trading at the CBOT
o        CME Average Pricing System Disclosure Statement
o        Special Notice to Foreign Brokers and Foreign Traders

REQUIRED SIGNATURES

CUSTOMER

The undersigned has received, read, understands and agrees to all the provisions
of this Agreement and the separate risk disclosure  statements  enumerated above
and agrees to  promptly  notify  Carr in writing  if any of the  warranties  and
representations  contained  herein  become  inaccurate or in any way cease to be
true, complete and correct.

Dean Witter Diversified Futures Fund III L.P.
--------------------------------------------------------------------------------
Customer name(s)

By:      DEMETER MANAGEMENT CORPORATION

By:  /s/ Mark J. Hawley                                December 1, 1997
   -----------------------------------------------------------------------------
Authorized signature(s)                                Date

Mark J. Hawley, President
--------------------------------------------------------------------------------
[If applicable, print name and title of signatory]

CARR FUTURES INC.

Accepted and Agreed:

Carr Futures Inc.

By: /s/ Bruce A. Beatus                     By:  /s/ Susan Schultz
   ------------------------------------        ---------------------------------
Title: Bruce A. Beatus, General Counsel     Title: Associate General Counse
      ---------------------------------           ------------------------------
Date: December 1, 1997                      Date: December 1, 1997
     ----------------------------------          -------------------------------