Document:

EXHIBIT
10.01

 

 

Global Futures and Options Department

Deutsche
Bank Securities Inc.

31
West 52nd Street

New
York, New York 10019

Telephone
(212) 469-2034

Telefax
(212) 469-2165

 

 

FUTURES AND OPTIONS AGREEMENT

FOR INSTITUTIONAL CUSTOMERS

 

 

In consideration of the
acceptance by Deutsche Bank Securities Inc. (which, together with its
affiliates (“Affiliates”) is referred to as “DBSI” unless otherwise specified
herein) of one or more accounts for the undersigned (“Customer”) (all accounts
of the Customer with DBSI being collectively referred to as the “Account”),
Customer agrees that this Agreement shall govern all dealings between Customer
and DBSI relating to transactions that DBSI may execute, clear and/or carry on
Customer’s behalf for the purchase or sale of futures contracts (“Futures
Contracts”) or options thereon (“Option Contracts”; Futures Contracts and
Option Contracts collectively being “Contracts”).

 

1.     Relevant Law.

 

The Account and every Contract executed and/or cleared
by DBSI on Customer’s behalf shall be subject to (a) this Agreement; (b) the
Commodity Exchange Act, as amended (“CEA”) and all rules, regulations and
interpretations of the Commodity Futures Trading Commission (the “Commission”);
(c) all rules, regulations and interpretations of the National Futures
Association (“NFA”); and (d) the constitution, by-laws, rules, interpretations
and customs of each applicable exchange and clearing organization (each
exchange and clearing house being collectively an “Exchange”) ((b) through (d)
collectively being “Relevant Law”).

 

2.     Margin.

 

(a)   Customer agrees that it will deposit and maintain cash, acceptable
securities or other assets (as defined in Section 2(d)), in order to satisfy
initial and variation margin requirements and make any premium payments in
connection with each Contract, in the amount, at the times and in the manner
required by DBSI or Relevant Law. DBSI has no obligation to set uniform margin
requirements, commissions or other charges and DBSI’s margin requirements may
exceed Exchange requirements. After providing Customer with reasonable prior
notice, DBSI, exercising reasonable discretion, may change the margin
requirements for any Account or Contract.

 

(b)   DBSI will comply with all
applicable provisions of the CEA and Commission regulations relating to the
segregation and handling of customer property with respect to property
deposited by Customer. Without limitation of the foregoing, DBSI will not
pledge, rephypothecate, loan or invest any such property except in connection
with the margining of Contracts entered into by Customer.  Any property deposited by Customer may be
transferred or pledged by DBSI to any Exchange or clearing broker to satisfy
obligations of customers of DBSI.

 

(c)   DBSI agrees that it will pay
Customer interest on cash margin deposited by Customer at rates mutually agreed
to from time to time.  Customer will
receive all interest or other distributions or income on securities Customer
has deposited with DBSI.

 

(d)   For purposes of this Section,
acceptable securities or other assets means securities or other assets
acceptable (i) under the rules of the relevant Exchange and (ii) to DBSI in its
reasonable discretion. The value of acceptable securities or other assets
deposited in Customer’s Accounts will be determined by DBSI in its reasonable
judgment.

 

(e)   Customer will be entitled to
or responsible for any profit, loss or risk, and any related costs, arising
from currency conversions or exposures incidental to Customer’s trading of
Contracts (including those related to the margining of Contracts denominated in
currencies other than those deposited by Customer).

 

 

Any
currency conversions will be made at DBSI’s then current rates of exchange.

 

3.     Other  Payments To DBSI.

 

Customer agrees to pay (i) commissions and brokerage charges for each
Contract and Account as mutually agreed by Customer and DBSI from time to time;
(ii) all fees, charges, taxes, fines and penalties incurred by DBSI or imposed
by any regulatory or self-regulatory organization (including any Exchange) with
respect to such Contracts or Accounts; (iii) any and all losses, debit balances
or deficiencies in any Account; and (iv) any interest on any deficiencies or
debit balance in such Account and on any funds advanced to or provided on
behalf of Customer at a rate to be agreed upon by Customer and DBSI. Such
interest rate shall be confirmed to Customer in writing.

 

4.     Option
Exercise; Delivery.

 

(a)   Customer is required to give
DBSI notice of any intention to make or take delivery under any Futures
Contract or to exercise any Option Contract, in accordance with DBSI’s
instructions, and to satisfy any payment or delivery requirements in connection
with its performance under such Futures or Option Contracts.

 

(b)   Customer understands that
certain Option Contracts are subject to exercise at any time. Upon the receipt
of an exercise notice for this type of Option Contract, DBSI will allocate the
notices in accordance with Relevant Law to customers who have open short
positions in the Option Contract (including Customer). The assignment of any
exercise notice to Customer by DBSI will be final and binding upon Customer.
DBSI will use reasonable efforts to notify Customer of any assignment of an
exercise notice to Customer.

 

(c)   If Customer does not furnish
DBSI with instructions regarding the disposition of a Contract within the time
specified by DBSI, DBSI will be entitled to take or refrain from taking any
action it deems appropriate and will have no liability to Customer.  These actions might include the exercise of,
or failure to exercise, an Option Contract or the liquidation of any Contract
on any Exchange (including those Exchanges whose rules provide for automatic
exercise).

 

5.     Position
Limits.

 

(a)   Customer agrees to comply
with the position limits established by Relevant Law, to notify DBSI promptly
if it is required to file any position report and, upon request, promptly to
provide copies of any such reports to DBSI.

 

(b)   Upon reasonable notice to
Customer, DBSI may limit the size and number of open Contracts (net or gross)
that Customer may execute, clear and/or carry with it. DBSI’s position limits
may be more restrictive than the limits imposed under Relevant Law. Customer
agrees that it will not place any order, which, if filled, would cause Customer
to exceed these limits. Further, DBSI may require Customer to liquidate any
open positions carried in Customer’s Account, and may refuse to accept any
order of Customer establishing a new position in order to comply with such
limits.

 

6.     Advice; No
Warranty as to Information, Etc.

 

(a)   Customer acknowledges and
agrees that: (i) Customer and any advisor of Customer have sole responsibility
for all decisions for the Account; (ii) DBSI is not an advisor or
fiduciary with respect to Customer, any Account or any action of Customer in
connection with an Account or Contract and DBSI assumes no responsi­bility for
compliance with any law or regulation governing the conduct of any such
fiduciary or advisor or for Customer’s compliance with any law or regulation
governing or affecting Customer; (iii) DBSI makes no represen­tation, warranty
or guarantee as to, and will not be liable or responsible for, the accuracy,
completeness or reliability of any advice or recommendation, or any market
information, furnished to Customer; (iv) recommendations to Customer as to any
particular transaction at any given time may differ among DBSI’s personnel and
may vary from any recommendations made to others; and (v) any advice provided
by DBSI with respect to a Contract or Account is incidental to DBSI’s business
as a futures commission merchant and will not serve as the primary basis for
any decision by or on behalf of Customer.

 

(b)   Customer agrees that DBSI,
its officers, directors, stockholders, representatives or associated persons
may have certain conflicts of interest in connection with the services
contemplated hereby, including but not limited to conflicts arising from
positions established for their proprietary accounts in Contracts that are the
subject of market recommendations furnished to Customer. Such positions or
other actions of such persons may not be consistent with any recommendations
furnished to Customer by DBSI.

 

7.     Customer
Representations, Warranties and Agreements.

 

Customer represents and warrants
to DBSI that as of the date of this Agreement and on the date each transaction
relating to a Contract or Account is entered into under this Agreement:

 

2

 

(a)   (i) Customer is duly
organized under the laws of the applicable jurisdiction and the execution,
delivery and performance of this Agreement by Customer have been authorized by
all necessary corporate or other action; (ii) Customer has full power and
authority to enter into this Agreement and to perform its obligations under
this Agreement; (iii) this Agreement is valid and binding on Customer, is
enforceable against it in accordance with its terms and neither this Agreement
nor the trading of Contracts violate Relevant Law or any other law or regulation
governing or affecting Customer’s activities under this Agreement or any order
or agreement applicable to Customer or Customer’s property; (iv) Customer has
and will maintain in full force and effect any and all necessary governmental
or other approvals or authorizations to execute and deliver this Agreement,
perform its obligations hereunder; (v) Customer, and any other person involved
in the management of Customer or its Account, are in compliance with all
Relevant Law and any other law or regulation governing or affecting Customer’s
activities under this Agreement, including but not limited to all applicable
registration requirements; and (vi) Customer is acting solely as principal and
no person other than Customer has any interest in or any control over any
Account of Customer.

 

(b)   Customer is not an employee,
partner, officer, director or owner of more than ten percent of the equity
interest of a futures commission merchant, an introducing broker, Exchange or
any self-regulatory organization nor is Customer an employee or commissioner of
the Commission, except as previously disclosed in writing to DBSI.

 

(c)   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.

 

(d)   If Customer is an insured
depository subject to the Federal Deposit Insurance Act, Customer has taken all
action and maintained such records required to be taken or maintained by it to
effect and maintain the enforceability of this Agreement pursuant to the
Federal Deposit Insurance Act, and the person executing this Agreement on
behalf of Customer is an authorized person with at least the rank of vice
president.

 

(e)   Customer agrees promptly to
notify DBSI in writing if any of the warranties or representations contained in
this Section 7 becomes inaccurate or incomplete in any respect and to provide
financial and other information to DBSI at any time upon its reasonable
request, and represents that any such information will be accurate and complete
in every material respect. Customer shall also notify DBSI promptly of any
material adverse change in the financial condition of Customer, regardless of
whether Customer has previously furnished financial information to DBSI.

 

8.     Indemnification; Limitation of Liability.

 

(a)   Customer shall indemnify DBSI
and its officers, employees and agents for any fine, penalty, tax, loss,
liability or cost, including reasonable attorneys’ fees, incurred by DBSI that
was caused, directly or indirectly, by Customer’s refusal or failure (i) to
comply with Relevant Law or any other law or regulation governing or affecting
Customer’s activities under this Agreement or any provision of this Agreement
or (ii) to perform any obligation required under this Agreement. In addition,
Customer agrees to pay any attorneys’ fees and expenses incurred by DBSI in
collecting any amount due by Customer under this Agreement or in defending
against any claim brought by Customer in any suit, arbitration or reparations
proceeding in which DBSI is the prevailing party.

 

(b)   Customer acknowledges that
DBSI does not guarantee the performance by any Exchange or other third party,
including any third party clearing or intermediate broker, with respect to any
Contract and, accordingly, Customer agrees that DBSI has no responsibility or
liability to Customer for any loss or cost sustained or incurred by Customer
due to Customer’s, an Exchange’s or any other third party’s actions or
omissions in connection with any Contract unless caused solely by DBSI’s gross
negligence or willful breach of this Agreement.

 

(c)   DBSI shall not be liable for
the non-performance of any obligation, or any fine, sanction, penalty, expense,
tax, loss, liability or cost, caused by any events outside the control of DBSI,
including but not limited to any (i) action or order of any government,
judicial institution, Exchange or other self regulatory organization, (ii)
temporary or permanent suspension or termination of trading for whatever
reason, (iii) failure or malfunction of transmission or communication
facilities, (iv) delay or failure by any Exchange to enforce its rules or
pay or return any amount owed with respect to any Contracts executed and/or
cleared for Customer’s Accounts or (v) actions or omissions of third party
brokers.

 

3

 

9.     Communication
Between the Parties; Confirmations Conclusive.

 

(a)   Customer must specify in a
written notice to DBSI the persons authorized to place orders or give DBSI
instructions on Customer’s behalf. Any additions or amendments to this notice
must be communicated to DBSI and any oral communication of such an addition or
amendment must be promptly confirmed by Customer in writing. DBSI will not be
bound by such amendments or additions until written confirmation is received.

 

(b)   DBSI may rely on any order
for the purchase or sale of Contracts, or any notice or other communications
that are given by Customer or that DBSI reasonably believes to have originated
from Customer or from Customer’s duly authorized agent and Customer shall be
bound by any such order, notice or communication and any action taken or not
taken by DBSI in reliance thereon.

 

(c)   Confirmations of trades and
any other similar notices, including but not limited to purchase and sale
statements, sent to Customer shall be conclusive and binding unless Customer or
Customer’s agent notifies DBSI to the contrary, (i) where a report is made
orally, orally at the time received by Customer or its agent, or (ii) where a
report or notice is in writing, in writing prior to the opening of trading on
the next day following receipt of the report on which the relevant Exchange is
open for business. Monthly statements of the Account shall be conclusive and
binding unless Customer or Customer’s agent notifies DBSI to the contrary
within five business days of Customer’s receipt thereof.

 

(d)   DBSI shall transmit all
communications to Customer at Customer’s address, telex, telefax or telephone
number or to such other address as Customer may hereafter direct in writing.
Customer shall transmit all communications to DBSI to the address, telex,
telefax or telephone number at the beginning of this Agreement, Attention:
Futures Administrator. All payments and deliveries to DBSI shall be wired,
mailed or otherwise transmitted to DBSI pursuant to DBSI’s instructions and
shall be deemed received only when actually received by DBSI.

 

10.  Security
Interest.

 

All money, credit balances, Contracts and other property in which
Customer has any ownership interest, now or at any future time held in
Customer’s Account or otherwise held by DBSI for Customer or any affiliate of
Customer and any amount due to DBSI for Customer’s Account from any Exchange or
clearing broker in connection with any Contracts, and all proceeds thereof,
shall be subject to a lien and security interest in DBSI’s favor to secure any
indebtedness of Customer to DBSI pursuant to this Agreement or any transactions
in Contracts hereunder.

 

11.  DBSI’s Right to Liquidate Customer Positions.

 

(a)   In addition to all other
rights of DBSI set forth in this Agreement, DBSI has the right, upon the
occurrence of any of the events specified in (i) through (viii) below, to take
any or all of the actions specified in subdivision (b) of this Section:

 

(i)       if DBSI is so directed or required by a regulatory or self-regulatory
organization or Exchange having jurisdiction over DBSI or the Account;

 

(ii)      if Customer repudiates, violates, breaches or fails to perform
on a timely basis any obligation, term, covenant or condition required to be performed
by Customer under this Agreement;

 

(iii)     if Customer fails to post the initial or variation margin
required by this Agreement, or fails to pay any required premium or make any
other payments required under this Agreement or in connection with any Contract;

 

(iv)     if Customer is in material breach of or in material default
under any contract or agreement to which it is a party or by which it or any of
its assets are bound;

 

(v)      if any representation made by Customer or by Customer’s
Advisor, if any, is not accurate or complete, or ceases to be accurate or
complete in any material respect;

 

(vi)     if a voluntary or involuntary case or other proceeding is
commenced by or against Customer seeking liquidation, reorganization or other
relief with respect to itself or any of its debts under any bankruptcy,
insolvency or similar law, or seeking the appoint­ment of a trustee, receiver,
liquidator, conservator, administrator, custodian or other similar official of
it or any substantial part of its assets, or if Customer enters into or
proposes to enter into any arrangement for the benefit of any of its creditors,
or if Customer or any or all of its property is or becomes subject to any
agreement, order, judgment or decree that provides for Customer’s merger, consolidation,
dissolution, winding-up, liquidation, reorganization or appointment of a
trustee, receiver, liquidator, conservator, custodian or similar officer for
Customer or for Customer’s property, or if Customer takes any corporate action
to authorize any of the foregoing;

 

(vii)    if the Account, or any other account maintained by Customer or an
affiliate of Customer

 

4

 

with DBSI becomes subject to any warrant, attachment or similar order;
or

 

(viii)   if, after allowing Customer an opportunity to provide assurances
acceptable to DBSI within a reasonable time period, DBSI reasonably determines
such action is necessary for its protection.

 

(b)   In each such instance, DBSI may (1) satisfy any obligations due DBSI out of
any of Customer’s property in DBSI’s custody or control, (2) liquidate any or
all of Customer’s Contracts, (3) decline to execute any or all of
Customer’s outstanding orders, (4) make Customer’s obligations to DBSI
immediately due and payable, (5) acting in a commercially reasonable manner,
sell any or all of Customer’s property in DBSI’s custody or control and set off
and apply any such property or the proceeds of the sale of such property to
satisfy any amounts owed by Customer to DBSI, (6) set off any obligations of
DBSI under this Agreement against the obligations of Customer to DBSI
hereunder, (7) set off any cash, Contracts or property held for Customer by
DBSI against amounts owed to DBSI by Customer hereunder, (8) purchase or borrow
any securities or other property required to settle any outstanding
transactions or positions for the Account, and (9) required to settle any
outstanding transactions or positions for the Account.

 

(c)   Before exercising any rights
under Section 11(b), DBSI will send a notice to customer of the action that it
intends to take provided that DBSI will be entitled to take any such action
regardless of whether such notice is received by Customer. Any prior demand or
notice by DBSI shall not be a waiver of any right of DBSI to take any action
authorized by this Agreement or Relevant Law.

 

(d)   At all times, Customer will
be liable for the payment of any debit balance or deficiency in the Account,
together with interest on such amounts and all costs relating to any
liquidation or collection, including reasonable attorneys’ fees.

 

12.  Payment Netting and Setoff.

 

Customer acknowledges and agrees that DBSI has the right to setoff and
apply any amounts, fees or charges due to it hereunder against amounts held in
any Accounts of Customer subject to this Agreement provided that any Account
subject to setoff under this Section is owned solely by the same Customer.

 

13.  Termination.

 

A party wishing to terminate this Agreement must provide the other party
with written notice of termination sent by certified mail specifying the
effective date of such termination. Any termination under this Section will not
affect any transactions entered into prior to the effective date of such
termination or any liability or obligation incurred prior to such date. Upon
termination under this Section, DBSI will either transfer all open positions in
Customer’s Account to another futures commis­sion merchant of Customer’s
choice, if so instructed by Customer, or liquidate all such positions. DBSI
will not transfer any of Customer’s property or Contracts held or controlled by
it until Customer satisfies all obligations to DBSI arising under this
Agreement, including the payment of any fees for the transfer of Contracts to
another futures commission merchant upon termination of this Agreement.

 

14.  Governing Law; Consent to Jurisdiction.

 

(a)   In case of a dispute between
Customer and DBSI arising out of or related to this Agreement or any
transaction hereunder, (i) the construction, validity, performance and enforcement
of this Agreement will be governed by the laws of the State of New York in all
respects (without giving effect to principles of conflict of laws), and (ii)
Customer and DBSI each agrees to bring any legal proceeding against the other
party in, and each such party consents in any legal proceeding brought by the
other party in connection with or related to this Agreement or breach thereof,
the Account or any transactions entered into hereunder to the jurisdiction of,
any state or federal court located within the City of New York.

 

(b)   Customer and DBSI each
expressly waives (i) all objections it may at any time have as to the
jurisdiction of the court in which any such legal proceedings may be commenced
and (ii) any defense of sovereign immunity or other immunity from suit or
enforcement, whether before or after judgment. Customer and DBSI each also
agrees that any service of process mailed to it at any address provided by the
receiving party shall be deemed a proper service.

 

5

 

15. 
Miscellaneous.

 

(a)   Available Funds. Customer agrees
that all payments of cash by it to DBSI shall be made in immediately available
funds in such currency and to such bank account as DBSI may from time to time
specify. If Customer is required by law to make any deduction or withholding,
Customer will pay such amount to DBSI as will result in DBSI’s receiving an
amount equal to the full amount which would have been received had no such
deduction or withholding been required.

 

(b)   Consent to Recording. Customer and
DBSI each consents to the electronic recording of any or all telephone
conversations with the other party (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 the recording party’s erasure, at its sole discretion, of
any recording as part of its regular procedure for handling of recordings.

 

(c)   Authority to Disclose Information.
Customer hereby authorizes DBSI to disclose any financial, credit or business
information it has obtained concerning Customer to any Affiliate of DBSI, and
authorizes any such Affiliate to disclose like information to DBSI, in either
case solely for the purpose of permitting DBSI to perform its obligations, or
enforce its rights, under this Agreement. Any such information will be kept
confidential according to the internal policies of DBSI and its Affiliates.

 

(d)   Modification. This Agreement may
only be modified or amended by mutual written consent of DBSI and Customer. Any
modifica­tion, amendment, alteration or waiver of this Agreement will not
affect any outstanding orders or transactions or any legal rights or
obligations that may have already arisen between DBSI and Customer.

 

(e)   Cumulative Rights; No Waiver. The
rights and remedies conferred upon DBSI will be cumulative, and its forbearance
to exercise any right or remedy under this Agreement will not waive its right
to take such action at any later time, nor shall such forbearance constitute a
modification of this Agreement.

 

(f)    Successors and Assigns. This
Agreement will inure to the benefit of DBSI, its permitted successors and
assigns, and will be binding upon Customer and Customer’s successors and
assigns, provided,
however, that this Agreement may not be assigned or delegated by either party
without the prior written consent of the other party hereto and any purported
assignment or delegation without such consent shall be void.

 

(g)   Severability. If any term or
provision of this Agreement or the application thereof to any persons or
circumstances is found to be inconsistent with any Relevant Law or otherwise to
be invalid or unenforceable, such inconsistent, invalid or unenforceable
provision will be deemed to be superseded or modified to conform to such
Relevant Law, but the remainder of this Agreement and/or the application of
such term or provision to persons or circumstances other than those as to which
it is contrary, invalid or unenforceable, will not be affected thereby.

 

(h)   Counterparts. This Agreement may
be executed in any number of counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.

 

(i)    Entire Agreement. This Agreement,
together with any Annexes hereto entered into between DBSI and Customer,
constitutes the entire agreement between Customer and DBSI with respect to the
subject matter hereof and supersedes any prior agreements between the parties
with respect to such subject matter.

 

(j)    Multiple Customers. If the
signatory of this Agreement has the authority to enter into the Agreement on
behalf of more than one Customer (each such Customer being identified on the
attached Schedule I), the execution of the Agreement by such signatory
shall be sufficient to bind each such Customer to the terms of the Agreement to
the same extent and with the same force and effect as if each Customer had
executed a separate Agreement.

 

6

 

[16.  Acknowledgment of Receipt of Disclosure
Statements; Hedging Election.

 

(a)   Customer acknowledges and
agrees that it has received from DBSI and has read and understood the following
document:

 

o  Risk
Disclosure Statement For Futures and Options pursuant to CFTC Regulations 1.55,
30.6, 33.7, 190.10 and disclosure pursuant to CFTC Rule 1.46(e)(1) (and the
related bankruptcy election).

 

(Please check box to so acknowledge)

 

(b)   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 DBSI’s bankruptcy, it prefers
that the bankruptcy trustee (check appropriate box):

 

o  Election
A - Liquidate all open contracts without first seeking instructions either from
or on behalf of Customer.

 

o  Election
B - Attempt to obtain instructions with respect to the disposition of all open
contracts.

 

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

 

The
undersigned has read, understands and agrees to all of the provisions of this
Agreement.]

 

	
   

  	
   

  	
   

  
	
  Dated

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Customer
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signature

  	
   

  	
   

  	
  Authorized
  Signature

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Print
  Name and Title

  	
   

  	
   

  	
  Print
  Name and Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  City,
  State

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Zip
  Code

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Telephone

  	
  Telefax

  	
   

  
													

 

7

 

Schedule I–Independent Customers Deemed to Have Entered Into Separate
Agreements Hereunder

 

 

8EXHIBIT
10.02

FOREIGN EXCHANGE
AND OPTIONS

 

MASTER AGREEMENT

(FEOMA)

 

MASTER AGREEMENT dated as of 
June 11, 2002, by and between Morgan Stanley
                ,
a Delaware Corporation and Millburn Global Macro Trust, a Delaware
Business Trust.

 

SECTION
1.           DEFINITIONS

 

Unless otherwise required by the context, the following terms shall
have the following meanings in the Agreement:

 

“Agreement” has the meaning given to it in Section 2.2.

 

“American Style Option” means an Option which may be exercised
on any Business Day up to and including the Expiration Time.

 

“Base Currency”, as to a Party, means the Currency agreed to as
such in relation to it in Part VII of the Schedule.

 

“Business Day” means for purposes of: (i) Section 3.2, a day
which is a Local Banking Day for the applicable Designated Office of the Buyer;
(ii) Section 5.1 and the definition of American Style Option, a day which is a
Local Banking Day for the applicable Designated Office of the Seller; (iii)
clauses (i), (viii) and (xii) of the definition of Event of Default, a day
which is a Local Banking Day for the Non-Defaulting Party; (iv) solely in
relation to delivery of a Currency, a day which is a Local Banking Day in
relation to that Currency; and (v) any other provision of the Agreement, a day
which is a Local Banking Day for the applicable Designated Offices of both
Parties; provided, however, that neither Saturday nor Sunday
shall be considered a Business Day for any purpose.

 

“Buyer” means the owner of an Option.

 

“Call” means an Option entitling, but not obligating (except
upon exercise), the Buyer to purchase from the Seller at the Strike Price a
specified quantity of the Call Currency.

 

“Call Currency” means the Currency agreed to as such at the time
an Option is entered into, as evidenced in a Confirmation.

 

“Close-Out Amount” has the meaning given to it in Section 8.1.

 

“Close-Out Date” means a day on which, pursuant to the
provisions of Section 8.1, the Non-Defaulting Party closes out Currency
Obligations and/or Options or such close-out occurs automatically.

 

“Closing Gain”, as to the Non-Defaulting Party, means the
difference described as such in relation to a particular Value Date under the
provisions of Section 8.1.

 

“Closing Loss”, as to the Non-Defaulting Party, means the
difference described as such in relation to a particular Value Date under the
provisions of Section 8.1.

 

“Confirmation” means a writing (including telex, facsimile or
other electronic means from which it is possible to produce a hard copy)
evidencing an FX Transaction or an Option, and specifying:

 

(A) in the case of an FX Transaction, the following information:

 

1

 

(i)            the Parties thereto and the
Designated Offices through which they are respectively acting,

(ii)           the amounts of the Currencies being
bought or sold and by which Party,

(iii)          the Value Date, and

(iv)          any other term generally included in
such a writing in accordance with the practice of the relevant foreign exchange
market; and

 

(B) in the case of an Option, the following information:

 

(i)            the Parties thereto and the
Designated Offices through which they are respectively acting,

(ii)           whether the Option is a Call or a
Put,

(iii)          the Call Currency and the Put Currency
that are the subject of the Option and their respective quantities,

(iv)          which Party is the Seller and which is
the Buyer,

(v)           the Strike Price,

(vi)          the Premium and the Premium Payment
Date,

(vii)         the Expiration Date,

(viii)        the Expiration Time,

(ix)           whether the Option is an American
Style Option or a European Style Option, and

(x)            such other matters, if any, as the
Parties may agree.

 

“Credit Support” has the meaning given to it in Section 8.2.

 

“Credit Support Document”, as to a Party (the “first Party”),
means a guaranty, hypothecation agreement, margin or security agreement or
document, or any other document containing an obligation of a third party
(“Credit Support Provider”) or of the first Party in favor of the other Party
supporting any obligations of the first Party under the Agreement.

 

“Credit Support Provider” has the meaning given to it in the
definition of Credit Support Document.

 

“Currency” means money denominated in the lawful currency of any
country or the Ecu.

 

“Currency Obligation” means any obligation of a Party to deliver
a Currency pursuant to an FX Transaction, the application of Section 6.3(a) or
(b), or an exercised Option (except, for the purposes of Section 8.1 only, one
that is to be settled at its In-the-Money Amount under Section 5.5).

 

“Currency Pair” means the two Currencies which potentially may
be exchanged in connection with an FX Transaction or upon the exercise of an
Option, one of which shall be the Put Currency and the other the Call Currency.

 

“Custodian” has the meaning given to it in the definition of Insolvency
Proceeding.

 

“Defaulting Party” has the meaning given to it in the definition
of Event of Default.

 

“Designated Office(s)”, as to a Party, means the office or
offices specified in Part II of the Schedule.

 

“Effective Date” means the date of this Master Agreement.

 

“European Style Option” means an Option for which Notice of
Exercise may be given only on the Option’s Expiration Date up to and including
the Expiration Time, unless otherwise agreed.

 

“Event of Default” means the occurrence of any of the following
with respect to a Party (the “Defaulting Party”, the other Party being the
“Non-Defaulting Party”):

 

(i) the Defaulting Party shall (A) default in any payment when due
under the Agreement (including, but not limited to, a Premium payment) to the
Non-Defaulting Party with respect to any Currency Obligation or Option and such
failure shall continue for two (2) Business Days after the Non-Defaulting Party
has given the Defaulting Party written

 

2

 

notice of non-payment, or (B) fail to perform or comply with any other
obligation assumed by it under the Agreement and such failure is continuing
thirty (30) days after the Non-Defaulting Party has given the Defaulting Party
written notice thereof;

 

(ii) the Defaulting Party shall commence a voluntary Insolvency
Proceeding or shall take any corporate action to authorize any such Insolvency
Proceeding;

 

(iii) a governmental authority or self-regulatory organization having
jurisdiction over either the Defaulting Party or its assets in the country of
its organization or principal office (A) shall commence an Insolvency
Proceeding with respect to the Defaulting Party or its assets or (B) shall take
any action under any bankruptcy, insolvency or other similar law or any
banking, insurance or similar law or regulation governing the operation of the
Defaulting Party which may prevent the Defaulting Party from performing its
obligations under the Agreement as and when due;

 

(iv) an involuntary Insolvency Proceeding shall be commenced with
respect to the Defaulting Party or its assets by a person other than a
governmental authority or self-regulatory organization having jurisdiction over
either the Defaulting Party or its assets in the country of its organization or
principal office and such Insolvency Proceeding (A) results in the appointment
of a Custodian or a judgment of insolvency or bankruptcy or the entry of an
order for winding-up, liquidation, reorganization or other similar relief, or
(B) is not dismissed within five (5) days of its institution or presentation;

 

(v) the Defaulting Party is bankrupt or insolvent, as defined under any
bankruptcy or insolvency law applicable to it;

 

(vi) the Defaulting Party fails, or shall otherwise be unable, to pay
its debts as they become due;

 

(vii) the Defaulting Party or any Custodian acting on behalf of the
Defaulting Party shall disaffirm, disclaim or repudiate any Currency Obligation
or Option;

 

(viii) any representation or warranty made or given or deemed made or
given by the Defaulting Party pursuant to the Agreement or any Credit Support
Document shall prove to have been false or misleading in any material respect
as at the time it was made or given or deemed made or given and one (1)
Business Day has elapsed after the Non-Defaulting Party has given the
Defaulting Party written notice thereof;

 

(ix) the Defaulting Party consolidates or amalgamates with or merges
into or transfers all or substantially all its assets to another entity and (A)
the creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of the Defaulting Party prior to such action, or
(B) at the time of such consolidation, amalgamation, merger or transfer the
resulting, surviving or transferee entity fails to assume all the obligations
of the Defaulting Party under the Agreement by operation of law or pursuant to
an agreement satisfactory to the Non-Defaulting Party;

 

(x) by reason of any default, or event of default or other similar
condition or event, any Specified Indebtedness (being Specified Indebtedness of
an amount which, when expressed in the Currency of the Threshold Amount, is in
aggregate equal to or in excess of the Threshold Amount) of the Defaulting
Party or any Credit Support Provider in relation to it: (A) is not paid on the
due date therefor and remains unpaid after any applicable grace period has
elapsed, or (B) becomes, or becomes capable at any time of being declared, due
and payable under agreements or instruments evidencing such Specified Indebtedness
before it would otherwise have been due and payable;

 

(xi) the Defaulting Party is in breach of or default under any
Specified Transaction and any applicable grace period has elapsed, and there
occurs any liquidation or early termination of, or acceleration of obligations
under, that Specified Transaction or the Defaulting Party (or any Custodian on
its behalf) disaffirms, disclaims or repudiates the whole or any part of a
Specified Transaction;

 

(xii) (A) any Credit Support Provider of the Defaulting Party or the
Defaulting Party itself fails to comply with or perform any agreement or
obligation to be complied with or performed by it in accordance with the
applicable Credit Support Document and such failure is continuing after any
applicable grace period has elapsed; (B) any Credit Support Document relating
to the Defaulting Party expires or ceases to be in full force and effect prior
to the satisfaction of all

 

3

 

obligations of the Defaulting Party under the Agreement, unless
otherwise agreed in writing by the Non-Defaulting Party; (C) the Defaulting
Party or any Credit Support Provider of the Defaulting Party (or, in either
case, any Custodian acting on its behalf) disaffirms, disclaims or repudiates,
in whole or in part, or challenges the validity of, any Credit Support
Document; (D) any representation or warranty made or given or deemed made or
given by any Credit Support Provider of the Defaulting Party pursuant to any
Credit Support Document shall prove to have been false or misleading in any
material respect as at the time it was made or given or deemed made or given
and one (1) Business Day has elapsed after the Non-Defaulting Party has given
the Defaulting Party written notice thereof; or (E) any event set out in (ii)
to (vii) or (ix) to (xi) above occurs in respect of any Credit Support Provider
of the Defaulting Party; or

 

(xiii) any other condition or event specified in Part IX of the
Schedule or in Section 11.14 if made applicable to the Agreement in Part XI of
the Schedule.

 

“Exercise Date”, in respect of any Option, means the day on
which a Notice of Exercise received by the applicable Designated Office of the
Seller becomes effective pursuant to Section 5.1.

 

“Expiration Date”, in respect of any Option, means the date
agreed to as such at the time the Option is entered into, as evidenced in a
Confirmation.

 

“Expiration Time”, in respect of any Option, means the latest
time on the Expiration Date on which the Seller must accept a Notice of
Exercise as agreed to at the time the Option is entered into, as evidenced in a
Confirmation.

 

“FX Transaction” means any transaction between the Parties for
the purchase by one Party of an agreed amount in one Currency against the sale
by it to the other of an agreed amount in another Currency, both such amounts
either being deliverable on the same Value Date or, if the Parties have so
agreed in Part VI of the Schedule, being cash-settled in a single Currency,
which is or shall become subject to the Agreement and in respect of which
transaction the Parties have agreed (whether orally, electronically or in
writing): the Currencies involved, the amounts of such Currencies to be
purchased and sold, which Party will purchase which Currency and the Value
Date.

 

“In-the-Money Amount” means (i) in the case of a Call, the
excess of the Spot Price over the Strike Price, multiplied by the aggregate
amount of the Call Currency to be purchased under the Call, where both prices
are quoted in terms of the amount of the Put Currency to be paid for one unit
of the Call Currency; and (ii) in the case of a Put, the excess of the Strike
Price over the Spot Price, multiplied by the aggregate amount of the Put
Currency to be sold under the Put, where both prices are quoted in terms of the
amount of the Call Currency to be paid for one unit of the Put Currency.

 

“Insolvency Proceeding” means a case or proceeding seeking a
judgment of or arrangement for insolvency, bankruptcy, composition,
rehabilitation, reorganization, administration, winding-up, liquidation or
other similar relief with respect to the Defaulting Party or its debts or
assets, or seeking the appointment of a trustee, receiver, liquidator,
conservator, administrator, custodian or other similar official (each, a
“Custodian”) of the Defaulting Party or any substantial part of its assets,
under any bankruptcy, insolvency or other similar law or any banking, insurance
or similar law governing the operation of the Defaulting Party.

 

“LIBOR”, with respect to any Currency and date, means the
average rate at which deposits in the Currency for the relevant amount and time
period are offered by major banks in the London interbank market as of 11:00
a.m. (London time) on such date, or, if major banks do not offer deposits in
such Currency in the London interbank market on such date, the average rate at
which deposits in the Currency for the relevant amount and time period are
offered by major banks in the relevant foreign exchange market at such time on
such date as may be determined by the Party making the determination.

 

“Local Banking Day” means (i) for any Currency, a day on which
commercial banks effect deliveries of that Currency in accordance with the
market practice of the relevant foreign exchange market, and (ii) for any
Party, a day in the location of the applicable Designated Office of such Party
on which commercial banks in that location are not authorized or required by
law to close.

 

4

 

“Master Agreement” means the terms and conditions set forth in
this Master Agreement, including the Schedule.

 

“Matched Pair Novation Netting Office(s)”, in respect of a
Party, means the Designated Office(s) specified in Part V of the Schedule.

 

“Non-Defaulting Party” has the meaning given to it in the
definition of Event of Default.

 

“Notice of Exercise” means telex, telephonic or other electronic
notification (excluding facsimile transmission) providing assurance of receipt,
given by the Buyer prior to or at the Expiration Time, of the exercise of an
Option, which notification shall be irrevocable.

 

“Novation Netting Office(s)”, in respect of a Party, means the
Designated Office(s) specified in Part V of the Schedule.

 

“Option” means a currency option which is or shall become
subject to the Agreement.

 

“Parties” means the parties to the Agreement, including their
successors and permitted assigns (but without prejudice to the application of
clause (ix) of the definition of Event of Default); and the term “Party” shall
mean whichever of the Parties is appropriate in the context in which such
expression may be used.

 

“Premium”, in respect of any Option, means the purchase price of
the Option as agreed upon by the Parties, and payable by the Buyer to the
Seller thereof.

 

“Premium Payment Date”, in respect of any Option, means the date
on which the Premium is due and payable, as agreed to at the time the Option is
entered into, as evidenced in a Confirmation.

 

“Proceedings” means any suit, action or other proceedings
relating to the Agreement, any FX Transaction or any Option.

 

“Put” means an Option entitling, but not obligating (except upon
exercise), the Buyer to sell to the Seller at the Strike Price a specified
quantity of the Put Currency.

 

“Put Currency” means the Currency agreed to as such at the time
an Option is entered into, as evidenced in a Confirmation.

 

“Schedule” means the Schedule attached to and part of this
Master Agreement, as it may be amended from time to time by agreement of the
Parties.

 

“Seller” means the Party granting an Option.

 

“Settlement Date” means, in respect of: (i) an American Style
Option, the Spot Date of the Currency Pair on the Exercise Date of such Option,
and (ii) a European Style Option, the Spot Date of the Currency Pair on the
Expiration Date of such Option; and, where market practice in the relevant
foreign exchange market in relation to the two Currencies involved provides for
delivery of one Currency on one date which is a Local Banking Day in relation
to that Currency but not to the other Currency and for delivery of the other
Currency on the next Local Banking Day in relation to that other Currency,
“Settlement Date” means such two (2) Local Banking Days.

 

“Settlement Netting Office(s)”, in respect of a Party, means the
Designated Office(s) specified in Part V of the Schedule.

 

“Specified Indebtedness” means any obligation (whether present
or future, contingent or otherwise, as principal or surety or otherwise) in
respect of borrowed money, other than in respect of deposits received.

 

5

 

“Specified Transaction” means any transaction (including an
agreement with respect thereto) between one Party to the Agreement (or any
Credit Support Provider of such Party) and the other Party to the Agreement (or
any Credit Support Provider of such Party) which is a rate swap transaction,
basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity linked swap, equity or equity index option, bond option, interest
rate option, foreign exchange transaction, cap transaction, floor transaction,
collar transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination of any of
the foregoing.

 

“Spot Date” means the spot delivery day for the relevant
Currency Pair as generally used by the relevant foreign exchange market.

 

“Spot Price” means the rate of exchange at the time at which
such price is to be determined for foreign exchange transactions in the
relevant Currency Pair for value on the Spot Date, as determined in good faith:
(i) by the Seller, for purposes of Section 5, and (ii) by the Non-Defaulting
Party, for purposes of Section 8.

 

“Strike Price”, in respect of any Option, means the price at
which the Currency Pair may be exchanged, as agreed to at the time the Option
is entered into, as evidenced in a Confirmation.

 

“Threshold Amount” means the amount specified as such for each
Party in Part VIII of the Schedule.

 

“Value Date” means, with respect to any FX Transaction, the
Business Day (or where market practice in the relevant foreign exchange market
in relation to the two Currencies involved provides for delivery of one
Currency on one date which is a Local Banking Day in relation to that Currency
but not to the other Currency and for delivery of the other Currency on the
next Local Banking Day in relation to that other Currency (“Split Settlement”)
the two (2) Local Banking Days in accordance with that market practice) agreed
by the Parties for delivery of the Currencies to be purchased and sold pursuant
to such FX Transaction, and, with respect to any Currency Obligation, the
Business Day (or, in the case of Split Settlement, Local Banking Day) upon
which the obligation to deliver Currency pursuant to such Currency Obligation
is to be performed.

 

SECTION
2.           FX TRANSACTIONS AND
OPTIONS

 

2.1           Scope of the
Agreement.  The Parties (through
their respective Designated Offices) may enter into (i) FX Transactions, for
such quantities of such Currencies, as may be agreed subject to the terms of
the Agreement, and (ii) Options, for such Premiums, with such Expiration Dates,
at such Strike Prices and for the purchase or sale of such quantities of such
Currencies, as may be agreed subject to the terms of the Agreement; provided
that neither Party shall be required to enter into any FX Transaction or Option
with the other Party (other than in connection with an exercised Option).  Unless otherwise agreed in writing by the
Parties, each FX Transaction and Option entered into between Designated Offices
of the Parties on or after the Effective Date shall be governed by the
Agreement.  Each FX Transaction and
Option between any two Designated Offices of the Parties outstanding on the
Effective Date which is identified in Part I of the Schedule shall also be
governed by the Agreement.

 

2.2           Single Agreement.  This Master Agreement, the terms agreed
between the Parties with respect to each FX Transaction and Option (and, to the
extent recorded in a Confirmation, each such Confirmation), and all amendments
to any of such items shall together form the agreement between the Parties (the
“Agreement”) and shall together constitute a single agreement between the
Parties. The Parties acknowledge that all FX Transactions and Options are
entered into in reliance upon such fact, it being understood that the Parties
would not otherwise enter into any FX Transaction or Option.

 

2.3           Confirmations.  FX Transactions and Options shall be
promptly confirmed by the Parties by Confirmations exchanged by mail, telex,
facsimile or other electronic means from which it is possible to produce a hard
copy.  The failure by a Party to issue a
Confirmation shall not prejudice or invalidate the terms of any FX Transaction
or Option.

 

6

 

2.4           Inconsistencies.  In the event of any inconsistency between
the provisions of the Schedule and the other provisions of the Agreement, the
Schedule will prevail.  In the event of
any inconsistency between the terms of a Confirmation and the other provisions
of the Agreement, (i) in the case of an FX Transaction, the other provisions of
the Agreement shall prevail, and the Confirmation shall not modify the other
terms of the Agreement and (ii) in the case of an Option, the terms of the
Confirmation shall prevail, and the other terms of the Agreement shall be
deemed modified with respect to such Option, except for the manner of
confirmation under Section 2.3 and, if applicable, discharge of Options under
Section 4.

 

SECTION
3.           OPTION PREMIUM

 

3.1           Payment of
Premium.  Unless otherwise agreed in
writing by the Parties, the Buyer shall be obligated to pay the Premium related
to an Option no later than its Premium Payment Date.

 

3.2           Late Payment or
Non-Payment of Premium.  If any
Premium is not received on or before the Premium Payment Date, the Seller may
elect: (i) to accept a late payment of such Premium; (ii) to give written
notice of such non-payment and, if such payment shall not be received within
two (2) Business Days of such notice, treat the related Option as void; or
(iii) to give written notice of such non-payment and, if such payment shall not
be received within two (2) Business Days of such notice, treat such non-payment
as an Event of Default under clause (i) of the definition of Event of
Default.  If the Seller elects to act
under either clause (i) or (ii) of the preceding sentence, the Buyer shall pay
all out-of-pocket costs and actual damages incurred in connection with such
unpaid or late Premium or void Option, including, without limitation, interest
on such Premium from and including the Premium Payment Date to but excluding
the late payment date in the same Currency as such Premium at overnight LIBOR
and any other losses, costs or expenses incurred by the Seller in connection
with such terminated Option, for the loss of its bargain, its cost of funding,
or the loss incurred as a result of terminating, liquidating, obtaining or
re-establishing a delta hedge or related trading position with respect to such
Option.

 

SECTION
4.           DISCHARGE AND TERMINATION
OF OPTIONS; NETTING OF OPTION PREMIUMS

 

4.1           Discharge and
Termination.  If agreed in Part V of
the Schedule, any Call or any Put written by a Party will automatically be
discharged and terminated, in whole or in part, as applicable, against a Call
or a Put, respectively, written by the other Party, such discharge and
termination to occur automatically upon the payment in full of the last Premium
payable in respect of such Options; provided that such discharge and
termination may only occur in respect of Options:

 

(i)            each being with
respect to the same Put Currency and the same Call Currency;

(ii)           each having the
same Expiration Date and Expiration Time;

(iii)          each being of the
same style, i.e. either both being American Style Options or both being
European Style Options;

(iv)          each having the same
Strike Price;

(v)           each being
transacted by the same pair of Designated Offices of Buyer and Seller; and

(vi)          neither of which
shall have been exercised by delivery of a Notice of Exercise;

 

and,
upon the occurrence of such discharge and termination, neither Party shall have
any further obligation to the other Party in respect of the relevant Options
or, as the case may be, parts thereof so discharged and terminated.  Such discharge and termination shall be
effective notwithstanding that either Party may fail to record such discharge
and termination in its books.  In the
case of a partial discharge and termination (i.e., where the relevant Options
are for different amounts of the Currency Pair), the remaining portion of the
Option which is partially discharged and terminated shall continue to be an
Option for all purposes of the Agreement, including this Section 4.1.

 

4.2           Netting of Option
Premiums.  If agreed in Part V of
the Schedule and if, on any date, Premiums would otherwise be payable under the
Agreement in the same Currency between the same respective Designated Offices
of the Parties, then, on such date, each Party’s obligation to make payment of
any such Premium will be automatically satisfied and discharged and, if the
aggregate Premium(s) that would otherwise have been payable by such Designated

 

7

 

Office
of one Party exceeds the aggregate Premium(s) that would otherwise have been
payable by such Designated Office of the other Party, replaced by an obligation
upon the Party by whom the larger aggregate Premium(s) would have been payable
to pay the other Party the excess of the larger aggregate Premium(s) over the
smaller aggregate Premium(s) and, if the aggregate Premiums are equal, no
payment shall be made.

 

SECTION
5.           EXERCISE AND SETTLEMENT OF
OPTIONS

 

5.1           Exercise of
Options.  The Buyer may exercise an
Option by delivery to the Seller of a Notice of Exercise.  Subject to Section 5.3, if a Notice of
Exercise with respect to an Option has not been received by the Seller prior to
or at the Expiration Time, the Option shall expire and become void and of no
effect.  Any Notice of Exercise shall
(unless otherwise agreed):

 

(i) in respect of an American Style Option, (A) if received at or prior
to 3:00 p.m. on a Business Day, be effective upon receipt thereof by the
Seller, and (B) if received after 3:00 p.m. on a Business Day, be effective
only as of the opening of business of the Seller on the first Business Day
subsequent to its receipt; and

 

(ii) in respect of a European Style Option, if received on or, if the
parties have so agreed, before the Expiration Date, prior to or at the
Expiration Time, be effective upon receipt thereof by the Seller.

 

5.2           No Partial
Exercise.  Unless otherwise agreed
by the Parties, an Option may be exercised only in whole.

 

5.3           Automatic
Exercise.  Unless otherwise agreed
in Part VI of the Schedule or unless the Seller is otherwise instructed by the
Buyer, if an Option has an In-the-Money Amount at its Expiration Time that
equals or exceeds the product of (x) 1% of the Strike Price (or such other
percentage or amount as may have been agreed by the Parties) and (y) the amount
of the Call Currency or Put Currency, as appropriate, then the Option shall be
deemed automatically exercised.  In such
case, the Seller may elect to settle such Option either in accordance with
Section 5.4 or by payment to the Buyer on the Settlement Date for such Option
of the In-the-Money Amount, as determined at the Expiration Time or as soon
thereafter as practicable.  In the
latter case, the sole obligations of the Parties with respect to settlement of
such Option shall be to deliver or receive the In-the-Money Amount of such
Option on the Settlement Date.  The
Seller shall notify the Buyer of its election of the method of settlement of an
automatically exercised Option as soon as practicable after the Expiration
Time.

 

5.4           Settlement of
Exercised Options.  An exercised
Option shall settle on its Settlement Date. 
Subject to Section 5.3 and 5.5, on the Settlement Date, the Buyer shall
pay the Put Currency to the Seller for value on the Settlement Date and the
Seller shall pay the Call Currency to the Buyer for value on the Settlement
Date.  An exercised Option shall be
treated as an FX Transaction and a Currency Obligation (except, for the
purposes of Section 8.1 only, if it is to be settled at its In-the-Money
Amount), and for this purpose the relevant Settlement Date shall be treated as
the Value Date of the FX Transaction.

 

5.5           Settlement at
In-the-Money Amount.  An Option
shall be settled at its In-the-Money Amount if so agreed by the Parties at the
time such Option is entered into.  In
such case, the In-the-Money Amount shall be determined based upon the Spot
Price at the time of exercise or as soon thereafter as practicable.  The sole obligations of the Parties with
respect to settlement of such Option shall be to deliver or receive the In-the-Money
Amount of such Option on the Settlement Date.

 

SECTION
6.           SETTLEMENT AND NETTING OF
FX TRANSACTIONS

 

6.1           Settlement of FX
Transactions.  Subject to Sections
6.2 and 6.3, each Party shall deliver to the other Party the amount of the
Currency to be delivered by it under each Currency Obligation on the Value Date
for such Currency Obligation.

 

8

 

6.2           Settlement
Netting.  If, on any date, more than
one delivery of a particular Currency under Currency Obligations is to be made
between a pair of Settlement Netting Offices, then each Party shall aggregate
the amounts of such Currency deliverable by it and only the difference between
these aggregate amounts shall be delivered by the Party owing the larger aggregate
amount to the other Party, and, if the aggregate amounts are equal, no delivery
of the Currency shall be made.

 

6.3           Novation Netting.  (a)  By
Currency.  If the Parties enter into
an FX Transaction through a pair of Novation Netting Offices giving rise to a
Currency Obligation for the same Value Date and in the same Currency as a then
existing Currency Obligation between the same pair of Novation Netting Offices,
then immediately upon entering into such FX Transaction, each such Currency
Obligation shall automatically and without further action be individually
canceled and simultaneously replaced by a new Currency Obligation for such
Value Date determined as follows:  the
amounts of such Currency that would otherwise have been deliverable by each
Party on such Value Date shall be aggregated and the Party with the larger
aggregate amount shall have a new Currency Obligation to deliver to the other
Party the amount of such Currency by which its aggregate amount exceeds the
other Party’s aggregate amount, provided that if the aggregate amounts
are equal, no new Currency Obligation shall arise. This Section 6.3 shall not
affect any other Currency Obligation of a Party to deliver any different
Currency on the same Value Date.

 

(b)           By Matched Pair.  If the Parties enter into an FX Transaction
between a pair of Matched Pair Novation Netting Offices then the provisions of
Section 6.3(a) shall apply only in respect of Currency Obligations arising by
virtue of FX Transactions entered into between such pair of Matched Pair
Novation Netting Offices and involving the same pair of Currencies and the same
Value Date.

 

6.4           General  (a)  Inapplicability
of Sections 6.2 and 6.3.  The
provisions of Sections 6.2 and 6.3 shall not apply if a Close-Out Date has
occurred or a voluntary or involuntary Insolvency Proceeding or action of the
kind described in clause (ii), (iii) or (iv) of the definition of Event of
Default has occurred without being dismissed in relation to either Party.

 

(b)           Failure to Record.  The provisions of Section 6.3  shall apply notwithstanding that either
Party may fail to record the new Currency Obligation in its books.

 

(c)           Cut-off Date and
Time.  The provisions of Section 6.3
are subject to any cut-off date and cut-off time agreed between the applicable
Novation Netting Offices and Matched Pair Novation Netting Offices of the
Parties.

 

SECTION
7.           REPRESENTATIONS,
WARRANTIES AND COVENANTS

 

7.1           Representations
and Warranties.  Each Party
represents and warrants to the other Party as of the Effective Date and as of
the date of each FX Transaction and each Option that:  (i) it has authority to enter into the Agreement (including such
FX Transaction or Option, as the case may be); (ii) the persons entering into
the Agreement (including such FX Transaction or Option, as the case may be) on
its behalf have been duly authorized to do so; (iii) the Agreement (including
such FX Transaction or Option, as the case may be) is binding upon it and
enforceable against it in accordance with its terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors’ rights generally and applicable principles of equity) and does not
and will not violate the terms of any agreements to which such Party is bound;
(iv) no Event of Default, or event which, with notice or lapse of time or both,
would constitute an Event of Default, has occurred and is continuing with
respect to it; (v) it acts as principal in entering into each FX Transaction
and Option and exercising each and every Option; and (vi) if the Parties have
so specified in Part XV of the Schedule, it makes the representations and
warranties set forth in such Part XV.

 

7.2           Covenants.  Each Party covenants to the other Party
that:  (i) it will at all times obtain
and comply with the terms of and do all that is necessary to maintain in full
force and effect all authorizations, approvals, licenses and consents required
to enable it lawfully to perform its obligations under the Agreement; (ii) it
will promptly notify the other Party of the occurrence of any Event of Default
with respect to itself or any Credit Support Provider in relation to it; and
(iii) if the Parties have set forth additional covenants in Part XVI of the
Schedule, it makes the covenants set forth in such Part XVI.

 

9

 

SECTION
8.           CLOSE-OUT AND LIQUIDATION

 

8.1           Manner of
Close-Out and Liquidation.  (a)  Close-Out.  If an Event of Default has occurred and is continuing, then the
Non-Defaulting Party shall have the right to close out all, but not less than
all, outstanding Currency Obligations (including any Currency Obligation which
has not been performed and in respect of which the Value Date is on or precedes
the Close-Out Date) and Options, except to the extent that in the good faith
opinion of the Non-Defaulting Party certain of such Currency Obligations or
Options may not be closed out under applicable law.  Such close-out shall be effective upon receipt by the Defaulting
Party of notice that the Non-Defaulting Party is terminating such Currency
Obligations and Options. 
Notwithstanding the foregoing, unless otherwise agreed by the Parties in
Part X of the Schedule, in the case of an Event of Default in clause (ii),
(iii) or (iv) of the definition thereof with respect to a Party and, if agreed
by the Parties in Part IX of the Schedule, in the case of any other Event of
Default specified and so agreed in Part IX with respect to a Party, close-out
shall be automatic as to all outstanding Currency Obligations and Options, as
of the time immediately preceding the institution of the relevant Insolvency
Proceeding or action. The Non-Defaulting Party shall have the right to
liquidate such closed-out Currency Obligations and Options as provided below.

 

(b)           Liquidation of
Currency Obligations.  Liquidation
of Currency Obligations terminated by close-out shall be effected as follows:

 

(i)            Calculating
Closing Gain or Loss.  The
Non-Defaulting Party shall calculate in good faith, with respect to each such
terminated Currency Obligation, except to the extent that in the good faith
opinion of the Non-Defaulting Party certain of such Currency Obligations may
not be liquidated as provided herein under applicable law, as of the Close-Out
Date or as soon thereafter as reasonably practicable, the Closing Gain, or, as
appropriate, the Closing Loss, as follows:

 

(A)          for each Currency
Obligation calculate a “Close-Out Amount” as follows:

 

(1)       in the case of a
Currency Obligation whose Value Date is the same as or is later than the
Close-Out Date, the amount of such Currency Obligation; or

 

(2)       in the case of a
Currency Obligation whose Value Date precedes the Close-Out Date, the amount of
such Currency Obligation increased, to the extent permitted by applicable law,
by adding interest thereto from and including the Value Date to but excluding
the Close-Out Date at overnight LIBOR; and

 

(3)       for each such amount in
a Currency other than the Non-Defaulting Party’s Base Currency, convert such
amount into the Non-Defaulting Party’s Base Currency at the rate of exchange at
which, at the time of the calculation, the Non-Defaulting Party can buy such
Base Currency with or against the Currency of the relevant Currency Obligation
for delivery (x) if the Value Date of such Currency Obligation is on or after the
Spot Date as of such time of calculation for the Base Currency, on the Value
Date of that Currency Obligation or (y) if such Value Date precedes such Spot
Date, for delivery on such Spot Date (or, in either case, if such rate of
exchange is not available, conversion shall be accomplished by the
Non-Defaulting Party using any commercially reasonable method); and

 

(B)           determine in
relation to each Value Date: (1) the sum of all Close-Out Amounts relating to
Currency Obligations under which the Non-Defaulting Party would otherwise have
been entitled to receive the relevant amount on that Value Date; and (2) the
sum of all Close-Out Amounts relating to Currency Obligations under which the
Non-Defaulting Party would otherwise have been obliged to deliver the relevant
amount to the Defaulting Party on that Value Date; and

 

(C)           if the sum
determined under (B)(1) is greater than the sum determined under (B)(2), the
difference shall be the Closing Gain for such Value Date; if the sum determined
under (B)(1) is less than the sum determined under (B)(2), the difference shall
be the Closing Loss for such Value Date.

 

10

 

(ii)           Determining
Present Value.  To the extent
permitted by applicable law, the Non-Defaulting Party shall adjust the Closing
Gain or Closing Loss for each Value Date falling after the Close-Out Date to
present value by discounting the Closing Gain or Closing Loss from and
including the Value Date to but excluding the Close-Out Date, at LIBOR with
respect to the Non-Defaulting Party’s Base Currency as at the Close-Out Date or
at such other rate as may be prescribed by applicable law.

 

(iii)          Netting.  The Non-Defaulting Party shall aggregate the
following amounts so that all such amounts are netted into a single liquidated
amount payable to or by the Non-Defaulting Party:  (x) the sum of the Closing Gains for all Value Dates (discounted
to present value, where appropriate, in accordance with the provisions of
Section 8.1(b)(ii)) (which for the purposes of the aggregation shall be a
positive figure); and (y) the sum of the Closing Losses for all Value Dates
(discounted to present value, where appropriate, in accordance with the
provisions of Section 8.1(b)(ii)) (which for the purposes of the aggregation
shall be a negative figure).

 

(c)           Liquidation of
Options.  To liquidate unexercised
Options and exercised Options to be settled at their In-the-Money Amounts that
have been terminated by close-out, the Non-Defaulting Party shall:

 

(i)            Calculating
Settlement Amount.  Calculate in
good faith with respect to each such terminated Option, except to the extent
that in the good faith opinion of the Non-Defaulting Party certain of such
Options may not be liquidated as provided herein under applicable law, as of
the Close-Out Date or as soon as reasonably practicable thereafter a settlement
amount for each Party equal to the aggregate of:

 

(A)          with respect to each
Option purchased by such Party, and which the other Party has not elected to
treat as void pursuant to Section 3.2(ii) for lack of payment of the Premium,
the current market premium for such Option;

 

(B)           with respect to each
Option sold by such Party and which such Party has not elected to treat as void
pursuant to Section 3.2(ii) for lack of payment of the Premium, any unpaid
Premium, provided that, if the Close-Out Date occurs before the Premium
Payment Date, such amount shall be discounted from and including the Premium
Payment Date to but excluding the Close-Out Date at a rate equal to LIBOR on
the Close-Out Date and, if the Close-Out Date occurs after the Premium Payment
Date, to the extent permitted by applicable law, the settlement amount shall
include interest on any unpaid Premium from and including the Premium Payment
Date to but excluding the Close-Out Date in the same Currency as such Premium
at overnight LIBOR;

 

(C)           with respect to any
exercised Option to be settled at its In-the-Money Amount (whether or not the
Close-Out Date occurs before the Settlement Date for such Option), any unpaid
amount due to such Party in settlement of such Option and, if the Close-Out
Date occurs after the Settlement Date for such Option, to the extent permitted
by applicable law, interest thereon from and including the applicable
Settlement Date to but excluding the Close-Out Date at overnight LIBOR; and

 

(D)          without duplication,
the amount that the Non-Defaulting Party reasonably determines in good faith,
as of the Close-Out Date or as of the earliest date thereafter that is
reasonably practicable, to be its additional losses, costs and expenses in
connection with such terminated Option, for the loss of its bargain, its cost
of funding, or the loss incurred as a result of terminating, liquidating,
obtaining or re-establishing a delta hedge or related trading position with respect
to such Option;

 

(ii)           Converting to
Base Currency.  Convert any
settlement amount calculated in accordance with clause (i) above in a Currency
other than the Non-Defaulting Party’s Base Currency into such Base Currency at
the Spot Price at which, at the time of the calculation, the Non-Defaulting
Party could enter into a contract in the foreign exchange market to buy the
Non-Defaulting Party’s Base Currency in exchange for such Currency (or, if such
Spot Price is not available, conversion shall be accomplished by the
Non-Defaulting Party using any commercially reasonable method); and

 

(iii)          Netting.  Net such settlement amounts with respect to
each Party so that all such amounts are netted to a single liquidated amount
payable by one Party to the other Party.

 

11

 

(d)           Final Netting.  The Non-Defaulting Party shall net (or, if
both are payable by one Party, add) the liquidated amounts payable under
Sections 8.1(b) and 8.1(c) with respect to each Party so that such amounts are
netted (or added) to a single liquidated amount payable by one Party to the
other Party as a settlement payment.

 

8.2           Set-Off Against
Credit Support.  Where close-out and
liquidation occurs in accordance with Section 8.1, the Non-Defaulting Party
shall also be entitled (i) to set off the net payment calculated in accordance
with Section 8.1(d) which the Non-Defaulting Party owes to the Defaulting
Party, if any, against any credit support or other collateral (“Credit
Support”) held by the Defaulting Party pursuant to a Credit Support Document or
otherwise (including the liquidated value of any non-cash Credit Support) in
respect of the Non-Defaulting Party’s obligations under the Agreement or (ii)
to set off the net payment calculated in accordance with Section 8.1(d) which
the Defaulting Party owes to the Non-Defaulting Party, if any, against any
Credit Support held by the Non-Defaulting Party (including the liquidated value
of any non-cash Credit Support) in respect of the Defaulting Party’s
obligations under the Agreement; provided that, for purposes of either
such set-off, any Credit Support denominated in a Currency other than the
Non-Defaulting Party’s Base Currency shall be converted into such Base Currency
at the rate specified in Section 8.1(c)(ii).

 

8.3           Other Foreign
Exchange Transactions and Currency Options.  Where close-out and liquidation occurs in accordance with Section
8.1, the Non-Defaulting Party shall also be entitled to close-out and
liquidate, to the extent permitted by applicable law, any other foreign
exchange transaction or currency option entered into between the Parties which
is then outstanding in accordance with the provisions of Section 8.1, with each
obligation of a Party to deliver a Currency under such a foreign exchange
transaction being treated as if it were a Currency Obligation (including
exercised options, provided that cash-settled options shall be treated
analogously to Options to be settled at their In-the-Money Amount) and each
unexercised option being treated as if it were an Option under the Agreement.

 

8.4           Payment and Late
Interest.  The net amount payable by
one Party to the other Party pursuant to the provisions of Sections 8.1 and 8.3
above shall be paid by the close of business on the Business Day following the
receipt by the Defaulting Party of notice of the Non-Defaulting Party’s
settlement calculation, with interest at overnight LIBOR from and including the
Close-Out Date to but excluding such Business Day (and converted as required by
applicable law into any other Currency, any costs of conversion to be borne by,
and deducted from any payment to, the Defaulting Party).  To the extent permitted by applicable law,
any amounts owed but not paid when due under this Section 8 shall bear interest
at overnight LIBOR (or, if conversion is required by applicable law into some
other Currency, either overnight LIBOR with respect to such other Currency or
such other rate as may be prescribed by such applicable law) for each day for
which such amount remains unpaid.  Any
addition of interest or discounting required under this Section 8 shall be
calculated on the basis of a year of such number of days as is customary for
transactions involving the relevant Currency in the relevant foreign exchange
market.

 

8.5           Suspension of
Obligations.  Without prejudice to
the foregoing, so long as a Party shall be in default in payment or performance
to the other Party under the Agreement and the other Party has not exercised
its rights under this Section 8, or, if “Adequate Assurances” is specified as
applying to the Agreement in Part XI of the Schedule, during the pendency of a
reasonable request to a Party for adequate assurances of its ability to perform
its obligations under the Agreement, the other Party may, at its election and
without penalty, suspend its obligation to perform under the Agreement.

 

8.6           Expenses.  The Defaulting Party shall reimburse the
Non-Defaulting Party in respect of all out-of-pocket expenses incurred by the
Non-Defaulting Party (including fees and disbursements of counsel, including
attorneys who may be employees of the Non-Defaulting Party) in connection with
any reasonable collection or other enforcement proceedings related to the
payments required under the Agreement.

 

8.7           Reasonable
Pre-Estimate.  The Parties agree
that the amounts recoverable under this Section 8 are a reasonable pre-estimate
of loss and not a penalty.  Such amounts
are payable for the loss of bargain and the loss of protection against future
risks and, except as otherwise provided in the Agreement, neither Party will be
entitled to recover any additional damages as a consequence of such losses.

 

8.8           No Limitation of
Other Rights; Set-Off.  The
Non-Defaulting Party’s rights under this Section 8 shall be in addition to, and
not in limitation or exclusion of, any other rights which the Non-Defaulting
Party may have (whether by agreement, operation of law or otherwise), and, to
the extent not prohibited by law, the Non-Defaulting

 

12

 

Party
shall have a general right of set-off with respect to all amounts owed by each
Party to the other Party, whether due and payable or not due and payable
(provided that any amount not due and payable at the time of such set-off
shall, if appropriate, be discounted to present value in a commercially
reasonable manner by the Non-Defaulting Party).  The Non-Defaulting Party’s rights under this Section 8.8 are
subject to Section 8.7.

 

SECTION
9.           FORCE MAJEURE, ACT OF
STATE, ILLEGALITY AND IMPOSSIBILITY

 

9.1           Force Majeure,
Act of State, Illegality and Impossibility.  If either Party is prevented from or hindered or delayed by
reason of force majeure or act of state in the delivery or receipt of any
Currency in respect of a Currency Obligation or Option or if it becomes or, in
the good faith judgment of one of the Parties, may become unlawful or
impossible for either Party to make or receive any payment in respect of a
Currency Obligation or Option, then the Party for whom such performance has
been prevented, hindered or delayed or has become illegal or impossible shall
promptly give notice thereof to the other Party and either Party may, by notice
to the other Party, require the close-out and liquidation of each affected
Currency Obligation and Option in accordance with the provisions of Section 8.1
and, for such purposes, the Party unaffected by such force majeure, act of
state, illegality or impossibility (or, if both Parties are so affected,
whichever Party gave the relevant notice) shall perform the calculation
required under Section 8.1 as if it were the Non-Defaulting Party.  Nothing in this Section 9.1 shall be taken
as indicating that the Party treated as the Defaulting Party for the purpose of
calculations required by Section 8.1 has committed any breach or default.

 

9.2           Transfer to Avoid
Force Majeure, Act of State, Illegality or Impossibility.  If Section 9.1 becomes applicable, unless
prohibited by law, the Party which has been prevented, hindered or delayed from
performing shall, as a condition to its right to designate a close-out and
liquidation of any affected Currency Obligation or Option, use all reasonable
efforts (which will not require such Party to incur a loss, excluding
immaterial, incidental expenses) to transfer as soon as practicable, and in any
event before the earlier to occur of the expiration date of the affected
Options or twenty (20) days after it gives notice under Section 9.1, all its
rights and obligations under the Agreement in respect of the affected Currency
Obligations and Options to another of its Designated Offices so that such force
majeure, act of state, illegality or impossibility ceases to exist.  Any such transfer will be subject to the
prior written consent of the other Party, which consent will not be withheld if
such other Party’s policies in effect at such time would permit it to enter
into transactions with the transferee Designated Office on the terms proposed,
unless such transfer would cause the other Party to incur a material tax or
other cost.

 

SECTION
10.         PARTIES TO RELY ON THEIR
OWN EXPERTISE

 

Each Party will be deemed to represent to the other Party on the date
on which it enters into an FX Transaction or Option that (absent a written
agreement between the Parties that expressly imposes affirmative obligations to
the contrary for that FX Transaction or Option): (i)(A) it is acting for its
own account, and it has made its own independent decisions to enter into that
FX Transaction or Option and as to whether that FX Transaction or Option is
appropriate or proper for it based upon its own judgment and upon advice from
such advisors as it has deemed necessary; (B) it is not relying on any
communication (written or oral) of the other Party as investment advice or as a
recommendation to enter into that FX Transaction or Option, it being understood
that information and explanations related to the terms and conditions of an FX
Transaction or Option shall not be considered investment advice or a
recommendation to enter into that FX Transaction or Option; and (C) it has not
received from the other Party any assurance or guarantee as to the expected
results of that FX Transaction or Option; (ii) it is capable of evaluating and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of that FX
Transaction or Option; and (iii) the other Party is not acting as a fiduciary
or an advisor for it in respect of that FX Transaction or Option.

 

SECTION
11.         MISCELLANEOUS

 

11.1         Currency Indemnity.  The receipt or recovery by either Party (the
“first Party”) of any amount in respect of an obligation of the other Party
(the “second Party”) in a Currency other than that in which such amount was
due, whether pursuant to a judgment of any court or pursuant to Section 8 or 9,
shall discharge such obligation only to

 

13

 

the extent that, on the first
day on which the first Party is open for business immediately following such
receipt or recovery, the first Party shall be able, in accordance with normal
banking practice, to purchase the Currency in which such amount was due with
the Currency received or recovered.  If
the amount so purchasable shall be less than the original amount of the
Currency in which such amount was due, the second Party shall, as a separate
obligation and notwithstanding any judgment of any court, indemnify the first
Party against any loss sustained by it. The second Party shall in any event
indemnify the first Party against any costs incurred by it in making any such
purchase of Currency.

 

11.2         Assignment.  Neither Party may assign, transfer or charge
or purport to assign, transfer or charge its rights or obligations under the
Agreement to a third party without the prior written consent of the other Party
and any purported assignment, transfer or charge in violation of this Section
11.2 shall be void.

 

11.3         Telephonic Recording.  The Parties agree that each may
electronically record all telephonic conversations between them and that any
such recordings may be submitted in evidence to any court or in any Proceedings
for the purpose of establishing any matters pertinent to the Agreement.

 

11.4         Notices.  Unless otherwise agreed, all notices,
instructions and other communications to be given to a Party under the
Agreement shall be given to the address, telex (if confirmed by the appropriate
answerback), facsimile (confirmed if requested) or telephone number and to the
individual or department specified by such Party in Part III of the Schedule.  Unless otherwise specified, any notice,
instruction or other communication given in accordance with this Section 11.4
shall be effective upon receipt.

 

11.5         Termination.  Each of the Parties may terminate the
Agreement at any time by seven (7) days’ prior written notice to the other
Party delivered as prescribed in Section 11.4, and termination shall be
effective at the end of such seventh day; provided, however, that any
such termination shall not affect any outstanding Currency Obligations or
Options, and the provisions of the Agreement shall continue to apply until all
the obligations of each Party to the other under the Agreement have been fully
performed.

 

11.6         Severability.  In the event any one or more of the
provisions contained in the Agreement should be held invalid, illegal or
unenforceable in any respect under the law of any jurisdiction, the validity,
legality and enforceability of the remaining provisions contained in the
Agreement under the law of such jurisdiction, and the validity, legality and enforceability
of such and any other provisions under the law of any other jurisdiction shall
not in any way be affected or impaired thereby.  The Parties shall endeavor in good faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

 

11.7         No Waiver.  No indulgence or concession granted by a
Party and no omission or delay on the part of a Party in exercising any right,
power or privilege under the Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.

 

11.8         Master Agreement.  Where one of the Parties to the Agreement is
domiciled in the United States, the Parties intend that the Agreement shall be
a master agreement, as referred to in 11 U.S.C. Section 101(53B)(C) and 12
U.S.C. Section 1821(e)(8)(D)(vii).

 

11.9         Time of Essence, Etc.  Time shall be of the essence in the
Agreement.  Unless otherwise agreed, the
times referred to in the Agreement with respect to Options shall in each case
refer to the local time of the relevant Designated Office of the Seller of the
relevant Option.

 

11.10       Headings.  Headings in the Agreement are for ease of
reference only.

 

11.11       Payments Generally.  All payments to be made under the Agreement
shall be made in same day (or immediately available) and freely transferable
funds and, unless otherwise specified, shall be delivered to such office of
such bank, and in favor of such account as shall be specified by the Party
entitled to receive such payment in Part IV of the Schedule or in a notice
given in accordance with Section 11.4.

 

14

 

11.12       Amendments.  No amendment, modification or waiver of the
Agreement will be effective unless in writing executed by each of the Parties; provided
that the Parties may agree in a Confirmation that complies with Section 2.3 to
amend the Agreement solely with respect to the Option that is the subject of
the Confirmation.

 

11.13       Credit Support.  A Credit Support Document between the
Parties may apply to obligations governed by the Agreement.  If the Parties have executed a Credit
Support Document, such Credit Support Document shall be subject to the terms of
the Agreement and is hereby incorporated by reference in the Agreement.  In the event of any conflict between a
Credit Support Document and the Agreement, the Agreement shall prevail, except
for any provision in such Credit Support Document in respect of governing law.

 

11.14       Adequate Assurances.  If the Parties have so agreed in Part XI of
the Schedule, the failure by a Party to give adequate assurances of its ability
to perform any of its obligations under the Agreement within two (2) Business
Days of a written request to do so when the other Party has reasonable grounds
for insecurity shall be an Event of Default under the Agreement.

 

11.15       Correction of Confirmations.  Unless either Party objects to the terms
contained in any Confirmation sent by the other Party or sends a corrected
Confirmation within three (3) Business Days of receipt of such Confirmation, or
such shorter time as may be appropriate given the Value Date of an FX
Transaction, the terms of such Confirmation shall be deemed correct and
accepted absent manifest error.  If the
Party receiving a Confirmation sends a corrected Confirmation within such three
(3) Business Days, or shorter period, as appropriate, then the Party receiving
such corrected Confirmation shall have three (3) Business Days, or shorter
period, as appropriate, after receipt thereof to object to the terms contained
in such corrected Confirmation.

 

SECTION
12.         LAW AND JURISDICTION

 

12.1         Governing Law.  The Agreement shall be governed by, and
construed in accordance with, the laws of the jurisdiction set forth in Part
XII of the Schedule without giving effect to conflict of laws principles.

 

12.2         Consent to Jurisdiction.  (a) 
With respect to any Proceedings, each Party irrevocably (i) submits to
the non-exclusive jurisdiction of the courts of the jurisdiction set forth in
Part XIII of the Schedule and (ii) waives any objection which it may have at any
time to the laying of venue of any Proceedings brought in any such court,
waives any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such Proceedings,
that such court does not have jurisdiction over such Party.  Nothing in the Agreement precludes either
Party from bringing Proceedings in any other jurisdiction nor will the bringing
of Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

 

(b)  Each Party irrevocably appoints the agent
for service of process (if any) specified with respect to it in Part XIV of the
Schedule.  If for any reason any Party’s
process agent is unable to act as such, such Party will promptly notify the
other Party and within thirty (30) days will appoint a substitute process agent
acceptable to the other Party.

 

12.3         Waiver of Jury Trial.  Each Party irrevocably waives any and all
right to trial by jury in any Proceedings.

 

15

 

12.4         Waiver of Immunities.  Each Party irrevocably waives, to the
fullest extent permitted by applicable law, with respect to itself and its
revenues and assets (irrespective of their use or intended use), all immunity
on the grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its assets
(whether before or after judgment) and (v) execution or enforcement of any
judgment to which it or its revenues or assets might otherwise be entitled in
any Proceedings in the courts of any jurisdiction and irrevocably agrees, to
the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.

 

 

	
   

  	
  MORGAN STANLEY & CO. INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MILLBURN GLOBAL MACRO TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Gregg
  Buckbinder

  
	
   

  	
  Title:

  	
  Chief
  Operating Officer

  
	
   

  	
   

  	
  Millburn
  Ridgefield Corporaton

  
	
   

  	
   

  	
  Managing
  Owner

  
					

 

16

 

SCHEDULE

 

Schedule to the
International Foreign Exchange and Options Master Agreement

dated as of June 11, 2002
(the “Agreement”)

between Morgan
Stanley & Co. Incorporated (“Party A”)

and  Millburn Global Macro Trust (“Party B”).

 

Part
I.                                                                 Scope of the Agreement

 

The Agreement
shall apply to all FX Transactions outstanding between any two Designated
Offices of the Parties on the Effective Date.

 

Part
II.                                                             Designated Offices

 

Each of the following shall be a Designated Office:

 

Party A:  New York

 

Party B: Greenwich Connecticut

 

Each Party (the
“first Party”) that enters into an FX Transaction through a Designated Office
other than its head or home office represents to the other Party (the “second
Party”) that, notwithstanding the place of booking office or jurisdiction of
incorporation or organization of the first Party, the obligations of the first
Party are the same as if it had entered into the FX Transaction through its
head or home office.  This
representation will be deemed to be repeated by the first Party on each date on
which it enters into an FX Transaction.

 

Part III.                                                         Notices

 

If sent to Party A:

 

Address:         Morgan Stanley
& Co. Incorporated

1585
Broadway, 4th floor

New York, New York 10036

 

Telephone Number:             (212)
761-2700

Telex Number:                                  6801048    (Answerback: FXMS)

Facsimile Number:                (212)
761-0296

SWIFT Number:                              MSNYUS33

Name of Individual or Department

to whom Notices are to be sent: 
Foreign Exchange Trading Department

 

If sent to Party B

 

Address:         Millburn
Ridgefield Corporation

411
West Putnam Avenue

Greenwich,
CT 06830

 

Telephone Number:  203-625-7554

Telex Number:

Facsimile Number:  203-625-8220

SWIFT Number:

Name of Individual or Department to whom Notices are to be sent: Attn,:
George E. Crapple

 

17

 

Part IV.                                                         Payment Instructions

 

ý    Name
of Bank and Office, Account Number and Reference with respect to relevant
Currencies:  As specified in the
relevant Confirmation or as otherwise advised.

 

 

ý    With
respect to each Party, as may be set forth in such Standard Settlement
Instructions as may be specified by such Party in a notice given in accordance
with Section 11.4.

 

Part V.                                                             Netting

 

A.                                                                                   Discharge of Options

 

Not Applicable

 

B.                                                                                     Netting of Premiums

 

Not Applicable

 

C.                                                                                     Settlement Netting Offices

 

Each of the following shall be a
Settlement Netting Office:

 

Party A:  Same as Part II.

 

Party B:  Same as Part II.

 

Party A and Party B agree that, notwithstanding Section 6.2 of the
Agreement, obligations to make payments pursuant to FX Transactions shall only
be netted, satisfied and discharged against obligations to make payments
arising out of the same or other FX Transactions between a pair of Settlement
Netting Offices.

 

D.                                                                                    Novation Netting Offices

 

Each of the following shall be a Novation Netting Office:

Not applicable.

 

E.                                                                                      Matched Pair Novation Netting Offices

 

Each of the following shall be a Matched Pair Novation Netting Office:

 

Not applicable.

 

Part VI.                                                         Automatic Exercise of Options; Cash Settlement of
FX Transactions

 

A.                                                                                   Automatic Exercise of Options

 

Not Applicable

 

18

 

B.                                                                                     Cash Settlement of FX Transactions

 

The following provision shall apply:

 

The definition of FX Transaction in Section 1 shall
include foreign exchange transactions for the purchase and sale of one Currency
against another but which shall be settled by the delivery of only one Currency
based on the difference between exchange rates as agreed by the Parties as
evidenced in a Confirmation.  Section
6.1 is modified so that only one Currency shall be delivered for any such FX
Transaction in accordance with the formula agreed by the Parties.  Section 8.1(b)(i)(A) is modified so that the
Close-Out Amount for any such FX Transaction for which the cash settlement
amount has been fixed on or before the Close-Out Date pursuant to the terms of
such FX Transaction shall be equal to the Currency Obligation arising therefrom
(increased by adding interest in the manner provided in clause (A)(2) if the
Value Date precedes the Close-Out Date) and for any such FX Transaction for
which the cash settlement amount has not yet been fixed on the Close-Out Date
pursuant to the terms of such FX Transaction, the Close-Out Amount shall be as
reasonably determined by Party A in accordance with market practice.

 

Part VII.                                                     Base Currency

 

Party A’s Base Currency is U.S. Dollars.

 

Party B’s Base Currency is U.S. Dollars.

 

Part VIII.                                                 Threshold Amount

 

For purposes of clause (x) of the definition of Event
of Default:

 

Party A’s Threshold Amount is U.S.D. $10,000,000.

 

Party B’s Threshold Amount is U.S.D. $10,000,000.

 

Part IX.                                                        Additional Events of Default

 

Clause (x) of the definition of Event of Default shall
be modified by deleting the words “, or becomes capable at any time of being
declared,” after the words “and remains unpaid after any applicable grace
period has elapsed, or (B) becomes”.

 

The following provisions which are checked shall
constitute Events of Default:

 

o  (a)     occurrence
of garnishment or provisional garnishment against a claim against the
Defaulting Party acquired by the Non-Defaulting Party.  The automatic termination provision of
Section 8.1 shall not apply to either Party that is a Defaulting Party in
respect of this Event of Default.

 

o  (b)     suspension
of payment by the Defaulting Party or any Credit Support Provider in accordance
with the Bankruptcy Law or the Corporate Reorganization Law in Japan.  The automatic termination provision of
Section 8.1 shall not apply to either Party that is a Defaulting Party in
respect of this Event of Default.

 

o  (c)     disqualification
of the Defaulting Party or any Credit Support Provider by any relevant bill
clearing house located in Japan.  The
automatic termination provision of Section 8.1 shall not apply to either Party
that is a Defaulting Party in respect of this Event of Default.

 

19

 

Part X.                                                            Automatic Termination

 

The automatic termination provision of Section 8.1
shall not apply to Party A as Defaulting Party in respect of clause (ii), (iii)
or (iv) of the definition of Event of Default.

 

The automatic termination provision of Section 8.1
shall [shall not] apply to Party B as Defaulting Party in respect of clause
(ii), (iii) or (iv) of the definition of Event of Default ; provided, however
where the Event of Default specified in clause (ii), (iii), or (iv) is governed
by a system of law which does not permit termination to take place upon or
after the occurrence of the relevant Event of Default in accordance with the
terms of the Agreement, then the automatic termination provisions of Section
8.1 will apply to Party B.

 

Part XI.                                                        Adequate Assurances

 

Adequate Assurances under Section 11.14 shall not
apply to the Agreement.

 

Part XII.                                                    Governing Law

 

In accordance with Section 12.1 of the Agreement, the
Agreement shall be governed by the laws of the State of New York.

 

Part XIII.                                                Consent to Jurisdiction

 

In accordance with Section 12.2 of the Agreement, each
Party irrevocably submits to the non-exclusive jurisdiction of the courts of
the State of New York and the United States District Court located in the
Borough of Manhattan in New York City.

 

Part XIV.                                                Agent for Service of Process

 

Party A appoints the following as its agent for
service of process in any Proceedings in the State of New York:  Not applicable.

 

Party B appoints the following as its agent for
service of process in any Proceedings in State of New York: Not applicable.

 

Part XV.                                                    Certain Regulatory Representations

 

A.                                                                                   The following FDICIA representation shall apply:

 

1.                           Party A
represents and warrants that it qualifies as a “financial institution” within
the meaning of the Federal Deposit Insurance Corporation Improvement Act of
1991 (“FDICIA”) by virtue of being a:

 

ý  broker or dealer within the meaning of
FDICIA;

 

o  depository institution within the meaning of
FDICIA;

 

ý  futures commission merchant within the
meaning of FDICIA;

 

o  “financial institution” within the meaning
of Regulation EE (see below).

 

20

 

2.                           Party B
hereby represents and warrants that it qualifies as a “financial institution”
by virtue of being a:

 

o  broker or dealer within the meaning of
FDICIA;

 

o  depository institution within the meaning of
FDICIA;

 

o  futures commission merchant within the
meaning of FDICIA;

 

o  “financial institution” within the meaning
of Regulation EE (see below).

 

3.                           A Party
representing that it is a “financial institution” as that term is defined in 12
C.F.R. Section 231.3 of Regulation EE issued by the Board of Governors of the
Federal Reserve System (“Regulation EE”) represents that:

 

(a)                       it
is willing to enter into “financial contracts” as a counterparty “on both sides
of one or more financial markets” as those terms are used in Section 231.3 of
Regulation EE; and

 

(b)                      during
the 15-month period immediately preceding the date it makes or is deemed to
make this representation, it has had on at least one (1) day during such
period, with counterparties that are not its affiliates (as defined in Section
231.2(b) of Regulation EE) either:

 

(i)                                     one or more financial contracts of a total gross
notional principal amount of $1 billion outstanding; or

 

(ii)                                  total gross mark-to-market positions (aggregated
across counterparties) of $100 million; and

 

(c)                       agrees
that it will notify the other Party if it no longer meets the requirements for
status as a financial institution under Regulation EE.

 

4.                           If both
Parties are financial institutions in accordance with the above, the Parties
agree that the Agreement shall be a netting contract, as defined in 12 U.S.C.
Section 4402(14), and each receipt or payment or delivery obligation under the
Agreement shall be a covered contractual payment entitlement or covered
contractual payment obligation, respectively, as defined in FDICIA.

 

B.                                                                                     The following ERISA representation shall apply:

 

Party B continuously represents that it is not (i) an
employee benefit plan (hereinafter an “ERISA Plan”), as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
subject to Tittle I of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended, (ii) a person acting on behalf of an ERISA Plan or (iii) a
person the assets of whom constitute assets of an ERISA Plan.  Party B will provide notice to Party A in
the event that Party B is aware that it is in breach of any aspect of this
representation or is aware that with the passing of time, giving of notice or
expiry of any applicable grace period Party B will breach this representation.

 

C.                                                                                     The following Commodity Exchange Act
representation shall apply:

 

It is an “eligible contract participant” under, and as
defined in, Section 1(a)(12) of the Commodity Exchange Act, and was not formed
solely for the purposes of constituting an “eligible contract participant.”

 

21

 

Part XVI.                                                Representations and Warranties:

 

In addition to the representations and warranties set
forth in Section 7.1  of this Schedule, each Party
hereby represents and warrants to the other Party on the date hereof and on the
date of each FX Transaction, as the case may be, that:  (a) it is a sophisticated investor able to
evaluate and assume the risks associated with transactions in currencies as
contemplated by the Agreement; (b) it is not relying upon any representations
(whether written or oral) of the other Party other than the representations
expressly set forth in the Agreement, this Schedule, any Credit Support
Document or in any Confirmation; (c) its execution and delivery of the
Agreement, and its performance of its obligations hereunder, do not and will
not conflict with any law or regulation of the jurisdiction of its organization
or other law or regulation applicable to it, and do not and will not violate,
constitute a default under, or result in the creation or imposition of any lien
or encumbrance on any of its property or assets under any agreement or
instrument to which it is a party or by which its assets are bound; (d) no
consent, authorization or approval (including exchange control approval) or
other action by, and no notice to or filing with, any person or entity,
including any governmental authority or regulatory body, other than any already
obtained, made or filed and remaining in full force and effect, and the
conditions of which have been duly complied with, is required in connection
with the performance of its obligations under the Agreement; and (e) there are
no actions, proceedings or claims pending or, to the best of its knowledge,
threatened, the adverse determination of which might have a materially adverse
effect on its ability to perform its obligations under, or affect the validity
or enforceability of, the Agreement.

 

Part XVII.                                            Agreement Superseding

 

A new Section 11.16 shall be added to the Agreement
which shall read as follows:  “The
Agreement shall supersede any other agreement between the Parties with respect
to the subject matter hereof.”

 

Part XVIII.             1998 FX
and Currency Option Definitions.

 

The 1998 FX and Currency Option Definitions as
published by ISDA, EMTA and The Foreign Exchange Committee (the “Definitions”)
shall be applicable to each FX Transaction under the Agreement, including any
FX Transaction outstanding on the date hereof, subject to the following:

 

A.                                                                                   Definitions

 

1.                                       The
term “Agreement” in Section 2.2 of the Agreement shall include the Agreement as
modified and supplemented by this Part.

 

2.                                       The
term “FX Transaction” in the Definitions or in a Confirmation shall in all
cases be considered references to an “FX Transaction” under the Agreement.

 

3.                                       All
terms in this Part shall have the meanings given them above or in the
Definitions, unless not defined above or in the Definitions, in which case the
term shall have the meaning given in the Agreement.

 

B.                                                                                     Scope

 

1.                                       Notwithstanding
the absence of any reference to the Definitions in a Confirmation, this Part
and the Definitions shall be applicable to any FX Transaction covered by the
Agreement; provided that the Parties may agree otherwise for any Transaction as
evidenced by a Confirmation that complies with Section 2.3 of the Agreement.

 

2.                                       In
the event of any inconsistency between the Definitions and a Confirmation, the
terms of the Confirmation shall govern for the purpose of the relevant
Transaction.  In the event of any inconsistency
between the Definitions and the Agreement, the Definitions shall prevail.

 

22

 

C.                                                                                     Confirmations

 

Notwithstanding Sections 2.4 and 11.12 of the
Agreement, in the event of any inconsistency between the terms of a
Confirmation for an FX Transaction and the Agreement, the terms of the
Confirmation shall prevail.

 

D.                                                                                    Disruption
Events

 

With respect to any Disruption Event that is
applicable to an FX Transaction pursuant to the Definitions or as otherwise agreed
by the Parties as evidenced by a Confirmation, Section 9 of the Agreement shall
not be applicable in respect of such FX Transaction, and the Parties shall be
subject to the Disruption Fallbacks (including but not limited to No Fault
Termination) specified as applicable pursuant to the Definitions or such
Confirmation.

 

E.                                                                                      Miscellaneous

 

The provisions of Part VI.B of this Schedule relating
to cash settlement of FX Transactions shall apply to Non-Deliverable FX
Transactions.

 

Part XIX.                                               Force
Majeure, Act of State, Illegality and Impossibility

 

Section 9 of the Agreement is hereby amended by
deleting it in its entirety and inserting in its place the following
replacement Section:

 

“9.1 Liquidation
Rights.  If a Force Majeure Event
occurs and is still in effect, then (but subject to Section 9.2) either Party
may, by notice to the other Party on any day or days after the Waiting Period
expires, require the close-out and liquidation of the Currency Obligations
under any or all of the Affected Transactions in accordance with the provisions
of Section 8.1 and, for such purposes, the Party unaffected by such Force
Majeure Event shall perform the calculation required under Section 8.1 as if it
were the Non-Defaulting Party (or, if both Parties are Affected Parties, but
Parties shall so calculate in respect of all Affected Transactions which either
Party determines to liquidate and the average of the amounts so determined
shall be the relevant amount in respect of each Affected Transaction, except
that if a Party fails to so determine an amount, the amount determined by the
other Party shall govern).  If a Party
elects to so liquidate less than all Affected Transactions, it may liquidate
additional Affected Transactions on a later day or days if the relevant Force Majeure
Event is still in effect.

 

9.2  Waiting Period.  If the Value Date of an FX Transaction which
is an Affected Transaction, under Section 9.1 falls during the Waiting Period
of the relevant Force Majeure Event, then such Value Date will be deferred to
the first Business Day (or the first day which, but for such event, would have
been a Business Day) after the end of that Waiting Period (or, in the case of
Split Settlement, the first Local Banking Day or the first day which, but for
such event, would have been a Local Banking Day, after the end of the Waiting
Period).  Compensation for this deferral
shall be at then current market rates as determined in a commercially
reasonable manner by the calculating Party or Parties under Section 9.

 

9.3  Notice by Affected Party.  If a Force Majeure Event has occurred, an
Affected Party shall promptly give notice thereof to the other Party.

 

9.4  Force Majeure Event and Event of Default.  Nothing in this Section 9 shall be taken as
indicating that the Party treated as the Defaulting Party for the purpose of
calculations required by Section 8.1 has committed any breach or default.  If an event occurs that would otherwise
constitute both a Force Majeure Event and an Event of Default, that event will
be treated as a Force Majeure Event and will not constitute an Event of
Default.”

 

In addition, the following definitions shall be added
to Section 1 of the Agreement:

 

23

 

““Force Majeure Event”,
on any day determined as if such day were a Value Date of an FX Transaction
(even if it is not), means (i) either Party, by reason of force majeure or act
of state, is prevented from or hindered or delayed in delivering or receiving,
or it is impossible to deliver or receive, any Currency in respect of a
Currency Obligation, and which event is beyond the control of such Party and
which such Party, with reasonable diligence, cannot overcome, or (ii) it is
unlawful for either Party to deliver or receive a payment of any Currency in
respect of a Currency Obligation.  A
Party whose delivery or receipt of Currency has been or would be so prevented,
hindered or delayed or made unlawful or impossible is an “Affected Party”, and
an FX Transaction under which performance has been or would be so prevented,
hindered or delayed or made unlawful or impossible is an “Affected
Transaction”, unless the Parties have expressly agreed in an Agreement, another
writing or in regard to a particular FX Transaction that other disruption
events or disruption fallbacks will apply to that FX Transaction; in such
event, that FX Transaction will be subject to such disruption events or
disruption fallbacks as the Parties have otherwise agreed.

 

“Waiting Period”,
in respect of a Force Majeure Event, means that first three days after such
event occurs which are Business Days or which, but for such event, would have
been Business Days.”“

 

Part XX.                                                   Margin and Security

 

A.                                                                                   Party
B shall at all times maintain with Party A cash and securities acceptable to
Party A (together, the “Margin”) in order to secure the obligations of Party B
under all open FX Transactions entered into under the Agreement.  The amount of Margin which Party B shall
maintain with Party A shall be determined by Party A in its reasonable judgment
(which determination shall be conclusive in the absence of manifest error), on
a risk adjusted basis, taking into account historical volatility, imputed
volatility and/or such other factors as Party A reasonably deems relevant to
this determination (the “Aggregate Margin Requirement”).  On or prior to the date of the Agreement,
Party B shall have established a pledge account with Party A (the “Account”)
for the purpose of holding custody of the Margin in accordance with the provisions
of the Agreement. Party B’s failure to deposit Margin or to establish the
Account as required herein shall be an Event of Default for all purposes under
the Agreement (it being understood that there shall be no grace period with
respect to obligations of Party B pursuant to this Part XX.  Party A shall settle all FX Transactions
with Party B on a secured basis only, such that Party A’s payment obligations
to Party B shall be made (a) prior to receipt of Party B’s counterpayment
thereunder, only to the extent that the amount by which Margin in the Account
exceeds the Aggregate Margin Requirement is greater than such counterpayment or
the U.S. Dollar equivalent thereof, or (b) after Party A has confirmed receipt
of Party B’s counterpayment thereunder.

 

B.                                                                                     Whenever
such Aggregate Margin Requirement shall exceed the market value of Margin on
deposit with Party A in the Account as determined by Party A at such time in
its reasonable judgment and which determination shall be conclusive in the
absence of manifest error (the “Margin Balance”, and the difference between
such Aggregate Margin Requirement and the Margin Balance being the
“Shortfall”), then Party B shall deposit immediately upon Party A’s request,
additional Margin in an amount at least equal to such Shortfall.

 

C.                                                                                     In
furtherance of the foregoing, as security for the prompt and complete payment
when due and the performance by Party B of all of its obligations to Party A
under the Agreement, Party B hereby grants to Party A a continuing first
priority security interest in and to all of Party B’s right, title and interest
in and to the Margin, the Account, all financial assets, investment property
and other property and assets which are deposited from time to time in, or
credited from time to time to, the Account, all security entitlements in
respect thereof, all income and profits thereon, all interest, dividends and
other payments and distributions with respect thereto, and all proceeds of any
of the foregoing (the “Margin Collateral”). 
In addition, Party B hereby grants to Party A and its affiliates a first
priority security interest in and to any property of Party B at any time held
by Party A or any affiliate of Party A for any purpose, including, without
limitation, any property of Party B held in any account with Party A or any affiliate
of Party A, any financial assets,

 

24

 

investment
property and other property and assets which are deposited from time to time
in, or credited from time to time to, any such account, all security entitlements
in respect thereof, all income and profits thereon, all interest, dividends and
other payments and distributions with respect thereto, and all proceeds of any
of the foregoing (the “Collateral”), to secure all obligations of Party B to
Party A.  If Collateral was delivered in
connection with a particular agreement between Party B and Party A or any of
its affiliates, then such Collateral shall secure first the obligations of
Party B with respect to such agreement and second all other obligations of Party
B to Party A or any of its affiliates (in such order as Party A shall determine
in its sole discretion).  Party A and
its affiliates and Party B hereby each acknowledge and agree that each of Party
A and its affiliates which holds Collateral holds such Collateral for itself
and also as agent and bailee for all other of Party A and its affiliates which
are secured parties hereunder or under any agreement between Party B and Party
A or any of its affiliates.  If an Event
of Default hereunder shall occur, then each of Party A and its affiliates shall
be entitled to retain or sell all Collateral as security for Party B’s
obligations, even if otherwise required pursuant to the terms of an agreement
or otherwise to deliver any Collateral to Party B or Party B’s order. The
parties agree that Party A and its affiliates shall have the rights and
remedies of a secured creditor under the New York Uniform Commercial Code (the
“UCC”) and under any other applicable law or agreement to exercise any right
with respect to the Margin Collateral and the Collateral subject to the
security interest granted under the Agreement. 
Each of Party A or any of its affiliates shall have free and
unrestricted use of any Margin Collateral and/or Collateral which it holds
hereunder, including, without limitation, the right, from time to time and
without notice to Party B, to sell, pledge, repledge, hypothecate,
rehypothecate, assign, invest, use, commingle or otherwise dispose of, or
otherwise use in its business any Margin Collateral and/or Collateral
separately or in common with other securities, commodities or other property,
for the sum due to any of Party A or any of its affiliates or for a greater sum
on terms which may otherwise impair the right of Party B to redeem such Margin
Collateral and/or Collateral, and free from any other right of claim of any
nature whatsoever of Party B, and without retaining possession and control for
delivery a like amount of similar securities, commodities, or other property.

 

D.                                                                                    Party
B represents and warrants that it owns the Margin Collateral and the Collateral
to be pledged and assigned to each of Party A and its affiliates hereunder and
under any other agreement between Party B and Party A or any of its affiliates,
free and clear of any liens, equities, claims (including, without limitation,
participation interests) and transfer restrictions.  Party B covenants and agrees that it will not sell, assign,
transfer, exchange or otherwise dispose of, or grant any option with respect
to, any of the Margin Collateral or the Collateral, nor will it create, incur
or permit to exist any lien on or with respect to any of the Margin Collateral
or the Collateral, any interest therein, or any proceeds thereof, except for
the security interests created under this Agreement or otherwise under any
agreement between Party B and Party A or any of its affiliates.  Any purported sale, assignment, transfer,
exchange, disposition, grant or lien of the Margin Collateral or the Collateral
by Party B that is not permitted under the foregoing sentence shall be null and
void and shall constitute an Event of Default hereunder and under any agreement
between Party B and Party A or any of its affiliates immediately prior to the
taking of any such action,  if Party A
so deems (it being understood that there shall be no grace period with respect
to obligations of Party B pursuant to this Part XX.

 

E.                                                                                      Party
B shall, in its sole expense and as Party A in its sole discretion may deem
necessary or advisable from time to time, (i) to create, preserve, protect and
perfect the security interests granted under the Agreement and (ii) to enable
Party A to exercise and enforce its rights with respect to such security
interests, do all acts and things and execute and deliver all documents and instruments
in such manner and form as Party A may require, including without limitation
UCC financing statements and continuation statements.  Party B hereby appoints Party A as its true and lawful
attorney-in-fact, including without limitation, to sign and file such documents
and instruments on Party B’s behalf and without Party B’s signature; such
appointment, being coupled with an interest, shall be irrevocable.  Without limitation on the foregoing, Party B
agrees to take such action as Party A in its sole discretion may deem necessary
or advisable in the event of any change in applicable law, including, without
limitation, Articles 8 and 9 of the UCC and the Regulations of the Department
of the Treasury and other governmental bodies governing transfers of interests
in U.S. marketable treasury securities in book-entry form.

 

25

 

F.                                                                                      The
parties hereto agree that each of the Account and any account in which any
Collateral is held or to which any Collateral is credited (a “Collateral
Account”) is a “securities account” within the meaning of Article 8 of the UCC
and that all property and assets (including, without limitation, cash) held in
or credited to (i) the Account or (ii) any Collateral Account shall be treated
as a “financial asset” for purposes of Article 8 of the UCC.

 

Part XXI.                                               Miscellaneous

 

Trading Authorization for
FX Transactions and Options

 

Party B hereby
makes the following additional representations and warranties, which shall
continue during the term of any FX Transaction and Option:

 

(i)                                     Party
B has duly authorized Millburn Global Macro Trust (the “Agent”) to enter
into FX Transactions and Options on its behalf and to take all requisite action
on behalf of Party B contemplated by and in connection with the Agreement.  Party B has designated the Agent as its
agent for performance of its obligations to Party A and for receipt of
performance by Party A of its obligations to Party B in connection with any FX
Transactions and Options under the Agreement (including, among other things, as
agent for Party B in connection with transfers of cash or other property and as
agent for giving and receiving of all notices under the Agreement).  Party B hereby agrees that it shall have in
connection with any FX Transaction and Option entered into by the Agent on its
behalf, the rights, responsibilities, privileges and obligations of a “Party”
directly entering into such FX Transactions with Party A under the Agreement.

 

(ii)                                  Party
B shall indemnify Party A against any damages incurred by Party A as a
consequence of the failure of the above representations made by Party B to be
true at any time made or deemed to be made, or for Agent’s failure to act as
contemplated by the Agreement.

 

(iii)                               This
authorization shall continue in full force and effect, and may be relied upon
by Party A, unless terminated by Party B by giving two (2) Business Day’s
written notice (by telex or facsimile) of such termination to Party A. Party B
will remain fully responsible for any transactions effected by Party A for
Party B prior to the valid termination of this authority.

 

 

	
  MORGAN
  STANLEY& CO. INCORPORATED, as Party A

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MILLBURN GLOBAL MACRO TRUST, as Party B

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Gregg Buckbinder

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  
	
   

  	
   

  	
  Millburn Ridgefield
  Corporation

  
	
   

  	
   

  	
  Managing Owner

  
							

 

26

 

SCHEDULE

 

Schedule to the
International Foreign Exchange and Options Master Agreement

dated as of June 11, 2002
(the “Agreement”)

between Morgan
Stanley Capital Group Inc. (“Party A”)

and  Millburn Global Macro Trust (“Party B”).

 

Part I.                                                                 Scope of the Agreement

 

The Agreement shall apply to all FX Transactions
outstanding between any two Designated Offices of the Parties on the Effective
Date.

 

The Agreement shall apply to all Options outstanding
between any two Designated Offices of the
Parties on the Effective Date.

 

Part
II.                                                             Designated Offices

 

Each of the following shall be a Designated Office:

 

Party A: New York

 

Party B:

 

Each Party (the “first Party”) that enters into an FX
Transaction or Option through a Designated Office other than its head or home
office represents to the other Party (the “second Party”) that, notwithstanding
the place of booking office or jurisdiction of incorporation or organization of
the first Party, the obligations of the first Party are the same as if it had
entered into the FX Transaction or Option through its head or home office.  This representation will be deemed to be
repeated by the first Party on each date on which it enters into an FX
Transaction or Option.

 

Part
III.                                                         Notices

 

If sent to Party A:

 

Address:                Morgan Stanley Capital Group
Inc.

1585 Broadway, 4th floor

New York, New York 10036

 

Telephone Number:             (212)
761-2700

Telex Number:                                       6801048    (Answerback:    FXMS)

Facsimile Number:                (212)
761-0296

SWIFT Number:                                   MSCGUS33,

Name of Individual or Department

to whom Notices are to be sent:  Foreign Exchange Trading Department

 

If sent to Party B:

 

Address:                Millburn Ridgefield Corporation

411 West Punam Avenue

Greenwich, CT 06830

 

Telephone Number:             203-625-7554

 

27

 

Telex Number:

Facsimile Number:                203-625-8220

SWIFT Number:

Name of Individual or Department to whom Notices are to be sent:

Attn: George E. Crapple

 

Part
IV.                                                         Payment Instructions

 

ý    Name
of Bank and Office, Account Number and Reference with respect to relevant
Currencies:  As specified in the
relevant Confirmation or as otherwise advised.

 

 

ý    With
respect to each Party, as may be set forth in such Standard Settlement
Instructions as may be specified by such Party in a notice given in accordance
with Section 11.4.

 

Part
V.                                                             Netting

 

A.                                                                                   Discharge of Options

 

Section 4.1 shall apply to Options other than Barrier Options.

 

B.                                                                                     Netting of Premiums

 

Section 4.2 shall
apply to Premium payments for Options other than Barrier Options.

 

C.                                                                                     Settlement Netting Offices

 

Each of the following shall be a Settlement Netting Office:

 

Party A:  Same as Part II.

 

Party B:  Same as Part II.

 

Party A and Party B agree that, notwithstanding Section 6.2 of the
Agreement, obligations to make payments pursuant to FX Transactions shall only
be netted, satisfied and discharged against obligations to make payments
arising out of the same or other FX Transactions between a pair of Settlement
Netting Offices and obligations to make payments pursuant to Options (including
exercised Options) shall only be netted, satisfied and discharged against
obligations to make payments arising out of the same or other Options
(including exercised Options) between a pair of Settlement Netting Offices.

 

D.                                                                                    Novation Netting Offices

 

Each of the following shall be a Novation Netting Office:

 

Not applicable.

 

E.                                                                                      Matched Pair Novation Netting Offices

 

Each of the following shall be a Matched Pair Novation Netting Office:

 

Not applicable.

 

28

 

Part
VI.                                                         Automatic Exercise of Options; Cash Settlement of
FX Transactions

 

A.                                                                                   Automatic Exercise of Options

 

Automatic Exercise of certain In-the-money Options
pursuant to Section 5.3 shall apply to Party A as Buyer.

 

Automatic Exercise of certain In-the-money Options
pursuant to Section 5.3 shall apply to Party B as Buyer.

 

B.                                                                                     Cash Settlement of FX Transactions

 

The following provision shall apply:

 

The definition of FX Transaction in Section 1 shall
include foreign exchange transactions for the purchase and sale of one Currency
against another but which shall be settled by the delivery of only one Currency
based on the difference between exchange rates as agreed by the Parties as
evidenced in a Confirmation.  Section
6.1 is modified so that only one Currency shall be delivered for any such FX
Transaction in accordance with the formula agreed by the Parties.  Section 8.1(b)(i)(A) is modified so that the
Close-Out Amount for any such FX Transaction for which the cash settlement
amount has been fixed on or before the Close-Out Date pursuant to the terms of
such FX Transaction shall be equal to the Currency Obligation arising therefrom
(increased by adding interest in the manner provided in clause (A)(2) if the
Value Date precedes the Close-Out Date) and for any such FX Transaction for
which the cash settlement amount has not yet been fixed on the Close-Out Date
pursuant to the terms of such FX Transaction, the Close-Out Amount shall be as
reasonably determined by Party A in accordance with market practice.

 

Part
VII.                                                     Base Currency

 

Party A’s Base Currency is U.S. Dollars.

 

Party B’s Base Currency is U.S. Dollars.

 

Part
VIII.                                                 Threshold Amount

 

For purposes of clause (x) of the definition of Event of Default:

 

Party A’s Threshold Amount is U.S.D. $10,000,000.

 

Party B’s Threshold Amount is U.S.D. $10,000,000.

 

Part
IX.                                                        Additional Events of Default

 

Clause (x) of the definition of Event of Default shall
be modified by deleting the words “, or becomes capable at any time of being
declared,” after the words “and remains unpaid after any applicable grace
period has elapsed, or (B) becomes”.

 

The following provisions which are checked shall constitute Events of
Default:

 

o  (a)     occurrence
of garnishment or provisional garnishment against a claim against the
Defaulting Party acquired by the Non-Defaulting Party.  The automatic termination provision of
Section 8.1 shall not apply to either Party that is a Defaulting Party in
respect of this Event of Default.

 

o  (b)     suspension
of payment by the Defaulting Party or any Credit Support Provider in accordance
with the Bankruptcy Law or the Corporate Reorganization Law in Japan.  The automatic termination provision of
Section 8.1 shall not apply to either Party that is a Defaulting Party in
respect of this Event of Default.

 

29

 

o  (c)     disqualification
of the Defaulting Party or any Credit Support Provider by any relevant bill
clearing house located in Japan.  The
automatic termination provision of Section 8.1 shall not apply to either Party
that is a Defaulting Party in respect of this Event of Default.

 

Part
X.                                                            Automatic Termination

 

The automatic termination provision of Section 8.1
shall not apply to Party A as Defaulting Party in respect of clause (ii), (iii)
or (iv) of the definition of Event of Default.

 

The automatic termination provision of Section 8.1
shall [shall not] apply to Party B as Defaulting Party in respect of clause
(ii), (iii) or (iv) of the definition of Event of Default ; provided, however
where the Event of Default specified in clause (ii), (iii), or (iv) is governed
by a system of law which does not permit termination to take place upon or after
the occurrence of the relevant Event of Default in accordance with the terms of
the Agreement, then the automatic termination provisions of Section 8.1 will
apply to Party B.

 

Part
XI.                                                        Adequate Assurances

 

Adequate Assurances under Section 11.14 shall not apply to the
Agreement.

 

Part
XII.                                                    Governing Law

 

In accordance with Section 12.1 of the Agreement, the Agreement shall
be governed by the laws of: the State of New York.

 

Part
XIII.                                                Consent to Jurisdiction

 

In accordance with
Section 12.2 of the Agreement, each Party irrevocably submits to the
non-exclusive jurisdiction of the courts of
the State of New York and the United States District Court located in the
Borough of Manhattan in New York City.

 

Part
XIV.                                                Agent for Service of Process

 

Party A appoints the following as its agent for
service of process in any Proceedings in the State of New York:  Not applicable.

 

Party B appoints the following as its agent for service of process in
any Proceedings in State of New York: Not applicable.

 

Part
XV.                                                    Certain Regulatory Representations

 

A.                                                                                   The following FDICIA representation shall apply:

 

1.                                       Party
A represents and warrants that it qualifies as a “financial institution” within
the meaning of the Federal Deposit Insurance Corporation Improvement Act of
1991 (“FDICIA”) by virtue of being a:

 

o  broker
or dealer within the meaning of FDICIA;

 

o 
depository institution within the meaning of FDICIA;

 

o  futures
commission merchant within the meaning of FDICIA;

 

ý 
“financial institution” within the meaning of Regulation EE (see below)

 

30

 

2.                                       Party
B hereby represents and warrants that it qualifies as a “financial institution”
by virtue of being a:

 

o  broker
or dealer within the meaning of FDICIA;

 

o 
depository institution within the meaning of FDICIA;

 

o  futures
commission merchant within the meaning of FDICIA;

 

o 
“financial institution” within the meaning of Regulation EE (see below).

 

3.                                       A
Party representing that it is a “financial institution” as that term is defined
in 12 C.F.R. Section 231.3 of Regulation EE issued by the Board of Governors of
the Federal Reserve System (“Regulation EE”) represents that:

 

(a)                                  it is willing to enter into “financial contracts”
as a counterparty “on both sides of one or more financial markets” as those
terms are used in Section 231.3 of Regulation EE; and

 

(b)                                 during the 15-month period immediately preceding
the date it makes or is deemed to make this representation, it has had on at
least one (1) day during such period, with counterparties that are not its
affiliates (as defined in Section 231.2(b) of Regulation EE) either:

 

(i)                                     one or more financial contracts of a total gross
notional principal amount of $1 billion outstanding; or

 

(ii)                                  total gross mark-to-market positions (aggregated
across counterparties) of $100 million; and

 

(c)                                  agrees that it will notify the other Party if it
no longer meets the requirements for status as a financial institution under
Regulation EE.

 

4.                                       If
both Parties are financial institutions in accordance with the above, the
Parties agree that the Agreement shall be a netting contract, as defined in 12
U.S.C. Section 4402(14), and each receipt or payment or delivery obligation
under the Agreement shall be a covered contractual payment entitlement or
covered contractual payment obligation, respectively, as defined in FDICIA.

 

D.                                                                                    The following ERISA representation shall apply:

 

Party B continuously represents that it is not (i) an
employee benefit plan (hereinafter an “ERISA Plan”), as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
subject to Tittle I of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended, (ii) a person acting on behalf of an ERISA Plan or (iii) a
person the assets of whom constitute assets of an ERISA Plan.  Party B will provide notice to Party A in
the event that Party B is aware that it is in breach of any aspect of this
representation or is aware that with the passing of time, giving of notice or
expiry of any applicable grace period Party B will breach this representation.

 

E.                                                                                      The following Commodity Exchange Act
representation shall apply:

 

It is an “eligible contract
participant” under, and as defined in, Section 1(a)(12) of the Commodity
Exchange Act, and was not formed solely for the purposes of constituting an
“eligible contract participant.”

 

Part XVI.                                                Representations
and Warranties:

 

In addition to the representations and warranties set
forth in Section 7.1  of this Schedule, each Party
hereby represents and warrants to the other Party on the date hereof and on the
date of each FX Transaction or

 

31

 

Option, as the case may be, that:  (a) it is a sophisticated investor able to
evaluate and assume the risks associated with transactions in currencies as
contemplated by the Agreement; (b) it is not relying upon any representations
(whether written or oral) of the other Party other than the representations
expressly set forth in the Agreement, this Schedule, any Credit Support
Document or in any Confirmation; (c) its execution and delivery of the
Agreement, and its performance of its obligations hereunder, do not and will
not conflict with any law or regulation of the jurisdiction of its organization
or other law or regulation applicable to it, and do not and will not violate,
constitute a default under, or result in the creation or imposition of any lien
or encumbrance on any of its property or assets under any agreement or
instrument to which it is a party or by which its assets are bound; (d) no
consent, authorization or approval (including exchange control approval) or
other action by, and no notice to or filing with, any person or entity,
including any governmental authority or regulatory body, other than any already
obtained, made or filed and remaining in full force and effect, and the
conditions of which have been duly complied with, is required in connection
with the performance of its obligations under the Agreement; and (e) there are
no actions, proceedings or claims pending or, to the best of its knowledge,
threatened, the adverse determination of which might have a materially adverse
effect on its ability to perform its obligations under, or affect the validity
or enforceability of, the Agreement.

 

Part XVII.                                            Agreement Superseding

 

A new Section 11.16 shall be added to the Agreement
which shall read as follows:  “The
Agreement shall supersede any other agreement between the Parties with respect
to the subject matter hereof.”

 

Part XVIII.                                        1998
FX and Currency Option Definitions.

 

The 1998 FX and Currency Option Definitions as
published by ISDA, EMTA and The Foreign Exchange Committee (the “Definitions”)
shall be applicable to each FX Transaction and Option under the Agreement,
including any FX Transaction or Option outstanding on the date hereof, subject
to the following:

 

A.                                                                                   Definitions

 

1.                                       The
term “Agreement” in Section 2.2 of the Agreement shall include the Agreement as
modified and supplemented by this Part.

 

2.                                       The
term “FX Transaction” and “Currency Option Transaction” in the Definitions or
in a Confirmation shall in all cases be considered references to an “FX
Transaction” and “Option” under the Agreement.

 

3.                                       All
terms in this Part shall have the meanings given them above or in the
Definitions, unless not defined above or in the Definitions, in which case the
term shall have the meaning given in the Agreement.

 

B.                                                                                     Scope

 

1.                                       Notwithstanding
the absence of any reference to the Definitions in a Confirmation, this Part
and the Definitions shall be applicable to any FX Transaction or Currency
Option Transaction covered by the Agreement; provided that the Parties may
agree otherwise for any Transaction as evidenced by a Confirmation that
complies with Section 2.3 of the Agreement.

 

2.                                       In
the event of any inconsistency between the Definitions and a Confirmation, the
terms of the Confirmation shall govern for the purpose of the relevant
Transaction.  In the event of any
inconsistency between the Definitions and the Agreement, the Definitions shall
prevail.

 

32

 

C.                                                                                     Confirmations

 

Notwithstanding Sections
2.4 and 11.12 of the Agreement, in the event of any inconsistency between the
terms of a Confirmation for an FX Transaction or Currency Option Transaction
and the Agreement, the terms of the Confirmation shall prevail.

 

D.                                                                                    Disruption
Events

 

With respect to any
Disruption Event that is applicable to an FX Transaction or Currency Option
Transaction pursuant to the Definitions or as otherwise agreed by the Parties
as evidenced by a Confirmation, Section 9 of the Agreement shall not be
applicable in respect of such FX Transaction or Currency Option Transaction,
and the Parties shall be subject to the Disruption Fallbacks (including but not
limited to No Fault Termination) specified as applicable pursuant to the
Definitions or such Confirmation.

 

E.                                                                                      Miscellaneous

 

The provisions of Part
VI.B of this Schedule relating to cash settlement of FX Transactions shall
apply to Non-Deliverable FX Transactions.

 

Part XIX.                                               Force
Majeure, Act of State, Illegality and Impossibility

 

Section 9 of the
Agreement is hereby amended by deleting it in its entirety and inserting in its
place the following replacement Section:

 

“9.1 Liquidation
Rights.  If a Force Majeure Event
occurs and is still in effect, then (but subject to Section 9.2) either Party
may, by notice to the other Party on any day or days after the Waiting Period
expires, require the close-out and liquidation of the Currency Obligations
under any or all of the Affected Transactions in accordance with the provisions
of Section 8.1 and, for such purposes, the Party unaffected by such Force
Majeure Event shall perform the calculation required under Section 8.1 as if it
were the Non-Defaulting Party (or, if both Parties are Affected Parties, but
Parties shall so calculate in respect of all Affected Transactions which either
Party determines to liquidate and the average of the amounts so determined
shall be the relevant amount in respect of each Affected Transaction, except
that if a Party fails to so determine an amount, the amount determined by the
other Party shall govern).  If a Party
elects to so liquidate less than all Affected Transactions, it may liquidate
additional Affected Transactions on a later day or days if the relevant Force
Majeure Event is still in effect.

 

9.2  Waiting Period.  If the Value Date of an FX Transaction, or
the Settlement Date of an Option, which is an Affected Transaction, under
Section 9.1 falls during the Waiting Period of the relevant Force Majeure
Event, then such Value Date or Settlement Date (as applicable) will be deferred
to the first Business Day (or the first day which, but for such event, would
have been a Business Day) after the end of that Waiting Period (or, in the case
of Split Settlement, the first Local Banking Day or the first day which, but
for such event, would have been a Local Banking Day, after the end of the
Waiting Period).  Compensation for this
deferral shall be at then current market rates as determined in a commercially
reasonable manner by the calculating Party or Parties under Section 9.

 

9.3  Notice by Affected Party.  If a Force Majeure Event has occurred, an
Affected Party shall promptly give notice thereof to the other Party.

 

9.4  Force Majeure Event and Event of Default.  Nothing in this Section 9 shall be taken as
indicating that the Party treated as the Defaulting Party for the purpose of
calculations required by Section 8.1 has committed any breach or default.  If an event occurs that would otherwise
constitute both a Force Majeure Event and an Event of Default, that event will
be treated as a Force Majeure Event and will not constitute an Event of
Default.”

 

In addition, the following definitions shall be added
to Section 1 of the Agreement:

 

33

 

““Force Majeure Event”,
on any day determined as if such day were a Value Date of an FX Transaction or
the Settlement Date of an Option (even if it is not), means (i) either Party,
by reason of force majeure or act of state, is prevented from or hindered or
delayed in delivering or receiving, or it is impossible to deliver or receive,
any Currency in respect of a Currency Obligation or Option, and which event is
beyond the control of such Party and which such Party, with reasonable
diligence, cannot overcome, or (ii) it is unlawful for either Party to deliver
or receive a payment of any Currency in respect of a Currency Obligation or
Option.  A Party whose delivery or
receipt of Currency has been or would be so prevented, hindered or delayed or
made unlawful or impossible is an “Affected Party”, and an FX Transaction or
Option under which performance has been or would be so prevented, hindered or
delayed or made unlawful or impossible is an “Affected Transaction”, unless the
Parties have expressly agreed in an Agreement, another writing or in regard to
a particular FX Transaction or Option that other disruption events or
disruption fallbacks will apply to that FX Transaction or Option; in such
event, that FX Transaction or Option will be subject to such disruption events
or disruption fallbacks as the Parties have otherwise agreed.

 

“Waiting Period”,
in respect of a Force Majeure Event, means that first three days after such
event occurs which are Business Days or which, but for such event, would have
been Business Days.”“

 

Part XX.                                                   Margin and Security

 

A.                                                                                   Party
B shall at all times maintain with Party A cash and securities acceptable to
Party A (together, the “Margin”) in order to secure the obligations of Party B
under all open FX Transactions and Options entered into under the
Agreement.  The amount of Margin which
Party B shall maintain with Party A shall be determined by Party A in its
reasonable judgment (which determination shall be conclusive in the absence of
manifest error), on a risk adjusted basis, taking into account historical
volatility, imputed volatility and/or such other factors as Party A reasonably
deems relevant to this determination (the “Aggregate Margin Requirement”).  On or prior to the date of the Agreement,
Party B shall have established a pledge account with Party A (the “Account”)
for the purpose of holding custody of the Margin in accordance with the
provisions of the Agreement.  Party B’s
failure to deposit Margin or to establish the Account as required herein shall
be an Event of Default for all purposes under the Agreement (it being
understood that there shall be no grace period with respect to obligations of
Party B pursuant to this Part XX.  Party
A shall settle all FX Transactions and Options with Party B on a secured basis
only, such that Party A’s payment obligations to Party B shall be made (a)
prior to receipt of Party B’s counterpayment thereunder, only to the extent
that the amount by which Margin in the Account exceeds the Aggregate Margin
Requirement is greater than such counterpayment or the U.S. Dollar equivalent
thereof, or (b) after Party A has confirmed receipt of Party B’s counterpayment
thereunder.

 

B.                                                                                     Whenever
such Aggregate Margin Requirement shall exceed the market value of Margin on
deposit with Party A in the Account as determined by Party A at such time in
its reasonable judgment and which determination shall be conclusive in the
absence of manifest error (the “Margin Balance”, and the difference between
such Aggregate Margin Requirement and the Margin Balance being the
“Shortfall”), then Party B shall deposit immediately upon Party A’s request,
additional Margin in an amount at least equal to such Shortfall.

 

C.                                                                                     In
furtherance of the foregoing, as security for the prompt and complete payment
when due and the performance by Party B of all of its obligations to Party A
under the Agreement, Party B hereby grants to Party A a continuing first
priority security interest in and to all of Party B’s right, title and interest
in and to the Margin, the Account, all financial assets, investment property
and other property and assets which are deposited from time to time in, or
credited from time to time to, the Account, all security entitlements in
respect thereof, all income and profits thereon, all interest, dividends and
other payments and distributions with respect thereto, and all proceeds of any
of the foregoing (the “Margin Collateral”). 
In addition, Party B hereby grants to Party A and its affiliates a first
priority security interest in and to any property of Party B at any time held
by Party A or any affiliate of Party A for any purpose, including, without
limitation, any property of Party B held in any account with Party A or any
affiliate of Party A, any financial assets, investment property and other
property and assets which are deposited from time to time in, or credited

 

34

 

from time to time to, any
such account, all security entitlements in respect thereof, all income and
profits thereon, all interest, dividends and other payments and distributions
with respect thereto, and all proceeds of any of the foregoing (the
“Collateral”), to secure all obligations of Party B to Party A.  If Collateral was delivered in connection
with a particular agreement between Party B and Party A or any of its
affiliates, then such Collateral shall secure first the obligations of Party B
with respect to such agreement and second all other obligations of Party B to
Party A or any of its affiliates (in such order as Party A shall determine in
its sole discretion).  Party A and its
affiliates and Party B hereby each acknowledge and agree that each of Party A
and its affiliates which holds Collateral holds such Collateral for itself and
also as agent and bailee for all other of Party A and its affiliates which are
secured parties hereunder or under any agreement between Party B and Party A or
any of its affiliates.  If an Event of
Default hereunder shall occur, then each of Party A and its affiliates shall be
entitled to retain or sell all Collateral as security for Party B’s
obligations, even if otherwise required pursuant to the terms of an agreement
or otherwise to deliver any Collateral to Party B or Party B’s order. The
parties agree that Party A and its affiliates shall have the rights and
remedies of a secured creditor under the New York Uniform Commercial Code (the
“UCC”) and under any other applicable law or agreement to exercise any right
with respect to the Margin Collateral and the Collateral subject to the
security interest granted under the Agreement. 
Each of Party A or any of its affiliates shall have free and
unrestricted use of any Margin Collateral and/or Collateral which it holds
hereunder, including, without limitation, the right, from time to time and
without notice to Party B, to sell, pledge, repledge, hypothecate,
rehypothecate, assign, invest, use, commingle or otherwise dispose of, or
otherwise use in its business any Margin Collateral and/or Collateral
separately or in common with other securities, commodities or other property,
for the sum due to any of Party A or any of its affiliates or for a greater sum
on terms which may otherwise impair the right of Party B to redeem such Margin
Collateral and/or Collateral, and free from any other right of claim of any
nature whatsoever of Party B, and without retaining possession and control for
delivery a like amount of similar securities, commodities, or other property.

 

D.                                                                                    Party
B represents and warrants that it owns the Margin Collateral and the Collateral
to be pledged and assigned to each of Party A and its affiliates hereunder and
under any other agreement between Party B and Party A or any of its affiliates,
free and clear of any liens, equities, claims (including, without limitation,
participation interests) and transfer restrictions.  Party B covenants and agrees that it will not sell, assign,
transfer, exchange or otherwise dispose of, or grant any option with respect
to, any of the Margin Collateral or the Collateral, nor will it create, incur
or permit to exist any lien on or with respect to any of the Margin Collateral
or the Collateral, any interest therein, or any proceeds thereof, except for
the security interests created under this Agreement or otherwise under any
agreement between Party B and Party A or any of its affiliates.  Any purported sale, assignment, transfer,
exchange, disposition, grant or lien of the Margin Collateral or the Collateral
by Party B that is not permitted under the foregoing sentence shall be null and
void and shall constitute an Event of Default hereunder and under any agreement
between Party B and Party A or any of its affiliates immediately prior to the
taking of any such action,  if Party A
so deems (it being understood that there shall be no grace period with respect
to obligations of Party B pursuant to this Part XX.

 

E.                                                                                      Party
B shall, in its sole expense and as Party A in its sole discretion may deem
necessary or advisable from time to time, (i) to create, preserve, protect and
perfect the security interests granted under the Agreement and (ii) to enable
Party A to exercise and enforce its rights with respect to such security
interests, do all acts and things and execute and deliver all documents and
instruments in such manner and form as Party A may require, including without
limitation UCC financing statements and continuation statements.  Party B hereby appoints Party A as its true
and lawful attorney-in-fact, including without limitation, to sign and file
such documents and instruments on Party B’s behalf and without Party B’s
signature; such appointment, being coupled with an interest, shall be
irrevocable.  Without limitation on the
foregoing, Party B agrees to take such action as Party A in its sole discretion
may deem necessary or advisable in the event of any change in applicable law,
including, without limitation, Articles 8 and 9 of the UCC and the Regulations
of the Department of the Treasury and other governmental bodies governing
transfers of interests in U.S. marketable treasury securities in book-entry
form.

 

35

 

F.                                                                                      The
parties hereto agree that each of the Account and any account in which any
Collateral is held or to which any Collateral is credited (a “Collateral
Account”) is a “securities account” within the meaning of Article 8 of the UCC
and that all property and assets (including, without limitation, cash) held in
or credited to (i) the Account or (ii) any Collateral Account shall be treated
as a “financial asset” for purposes of Article 8 of the UCC.

 

G.                                                                                     Morgan
Stanley & Co. Incorporated hereby agrees to act as securities intermediary
within the meaning of the UCC (the “Securities Intermediary”) with respect to
the Account and any Collateral Account and to comply with entitlement orders
and other instructions of Party A with respect to the Account, any Collateral
Account, any Margin Collateral and any Collateral without further consent by
Party B.  Party B hereby consents to
such an agreement. The parties hereto also agree that the Securities
Intermediary shall not (i) accept or comply with any entitlement order from
Party B withdrawing or making a free delivery of any Margin Collateral or
Collateral from the Account or any Collateral Account, (ii) deliver any Margin
Collateral or Collateral held in or credited to the Account or any Collateral
Account to Party B or (iii) pay any free credit balance or other amount owing
to Party B with respect to the Account or any Collateral Account without the
specific prior written consent of Party A.

 

H.                                                                                    The
Securities Intermediary hereby acknowledges the security interest granted
herein to Party A by Party B.

 

I.                                                                                         The
parties hereto agree that the securities intermediary’s jurisdiction, within
the meaning of Section 8-110(e) of the UCC, in respect of the Account, any
Collateral Account, the Margin Collateral and the Collateral is the State of
New York and further agree that none of them has entered into or will enter
into any agreement to the contrary.

 

Part XXI.                                               Miscellaneous

 

Trading Authorization for
FX Transactions and Options

 

Party B hereby
makes the following additional representations and warranties, which shall
continue during the term of any FX Transaction and Option:

 

(i)                                     Party
B has duly authorized Millburn Ridgefield Corporation (the “Agent”) to
enter into FX Transactions and Options on its behalf and to take all requisite
action on behalf of Party B contemplated by and in connection with the
Agreement.  Party B has designated the
Agent as its agent for performance of its obligations to Party A and for
receipt of performance by Party A of its obligations to Party B in connection
with any FX Transactions and Options under the Agreement (including, among
other things, as agent for Party B in connection with transfers of cash or
other property and as agent for giving and receiving of all notices under the
Agreement).  Party B hereby agrees that
it shall have in connection with any FX Transaction and Option entered into by
the Agent on its behalf, the rights, responsibilities, privileges and
obligations of a “Party” directly entering into such FX Transactions with Party
A under the Agreement.

 

(ii)                                  Party
B shall indemnify Party A against any damages incurred by Party A as a
consequence of the failure of the above representations made by Party B to be
true at any time made or deemed to be made, or for Agent’s failure to act as
contemplated by the Agreement.

 

36

 

(iii)                               This
authorization shall continue in full force and effect, and may be relied upon
by Party A, unless terminated by Party B by giving two (2) Business Day’s
written notice (by telex or facsimile) of such termination to Party A. Party B
will remain fully responsible for any transactions effected by Party A for
Party B prior to the valid termination of this authority.

 

 

	
  MORGAN
  STANLEY CAPITAL GROUP INC., as Party A

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MILLBURN GLOBAL MACRO TRUST, as Party B

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Gregg
  Buckbinder

  
	
   

  	
  Title:

  	
  Chief
  Operating Officer

  
	
   

  	
   

  	
  Millburn
  Ridgefield Corporation

  
	
   

  	
   

  	
  Managing
  Owner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MORGAN STANLEY & CO. INCORPORATED, as Securities Intermediary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
												

 

37

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}]]