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This Options Account Agreement contains a Predispute Arbitration Clause which is located in Paragraph 3 of the TERMS AND CONDITIONS displayed below.
1) Acknowledgements and Representations.
By opening a Private Fund Management Options Account at Private Fund Management ("Private Fund Management "), you acknowledge and represent that:
a) You have read and understand these TERMS AND CONDITIONS, and separate PRIVACY POLICY and that you agree to be bound by such TERMS AND CONDITIONS. Your clicking on "I Agree" to accept these conditions ("Agreement") is legally the same as manually signing this Agreement. Private Fund Management reserves the right to change or terminate this Agreement and you hereby agree to consent to consult the Private Fund Management Website periodically to review the most up to date Agreement. Your use of the Private Fund Management Service after a change to the Private Fund Management Service or after notice of change to this Agreement, or if you do not close your Private Fund Management Account within fifteen (15) calendar days of such change(s) or notice, means that you accept the changes, whether or not you actually know of them. Changes required by law, however, will be effective immediately.
b) This Agreement amends supplements and incorporates by reference the Account Agreement between you and Private Fund Management . In the event of a direct conflict between this Agreement and the Account Agreement, the terms of this Agreement shall control for matters or services related to this Agreement. For purposes of this Agreement, the term "Customer" or "you" shall also refer to your money investment advisor or sub-adviser, acting as your agent (if applicable). Capitalized terms used in this Agreement and not otherwise defined shall have the meanings ascribed to them in the Account Agreement.
c) As a self-directed investor you understand that: (i) you alone are responsible for determining the suitability of your choices in investing money and investment strategies in light of your particular circumstance; (ii) Private Fund Management assumes no responsibility for such choices or determinations; (iii) all orders are unsolicited, and that the market values of securities can and do fluctuate. Additionally, Private Fund Management cannot advise you, nor comment concerning the nature, risk or suitability of any security, transaction or investment strategy. Private Fund Management does not give legal or tax advice. You are of the age of majority as defined by the laws of the state of your home of record in order to enter into this Agreement and be bound thereby.
d) By opening a Private Fund Management Options Account, you will effect all transactions in your Private Fund Management Options Account via the Private Fund Management Web site and receive all communications from Private Fund Management via the World Wide Web or e-mail. Such communications will include but not necessarily be limited to exercise and assignment notifications, confirmations of transactions, account statements, tax documents, financial statements and reports of portfolio holdings, reorganization notices, proxy materials, notices of modifications to Private Fund Management's Privacy Policy and Terms and Conditions, as well as annual and semiannual audited and unaudited reports for Private Fund Management and other basic communications. You agree to advise Private Fund Management promptly of any errors or omissions in any transaction or in the handling of your account. Failure to provide prompt notice of any errors will be deemed to constitute acceptance of the accuracy of all information sent to you.
e) You agree to make appropriate changes to information for any changes in your financial situation, knowledge and investment objectives as you deem these changes material to any options transactions.
f) If you are opening a Private Fund Management Account in response to bank or credit union ("Depositary Institution") sponsored advertising or a web site provided by a Depositary Institution, you hereby specifically acknowledge your understanding that investments through Private Fund Management are not insured by the FDIC or NCUA; are not a deposit or other obligation of, or guaranteed by, the Depository Institution; and are subject to risks in investing money, including possible loss of the principal amount invested.
g) You have received, read and understand the information contained in the most recent "Characteristics and Risks of Standardized Options."
h) You understand that the purchasing or selling of options may involve a high degree of risk and speculation. You are also aware that on certain days, options trading may cease, which could result in financial loss to you. You are willing and able to undertake the financial risks and hazards of options trading and agree that you will in no way hold Private Fund Management responsible for any option trading decisions however arrived at by you.
You are aware that when purchasing options, there is the risk that the entire premium paid (purchase price) for the option can be lost if the option is not exercised or otherwise sold. When selling (writing) options, the risk of loss can exceed the amount of premium received. You are also aware that for certain strategies, Private Fund Management may restrict or limit your ability to enter orders, or your orders may be required to be entered in such a way or in a certain order, in an attempt to reduce customer exposure.
i) You are capable of evaluating and bearing the financial risks attendant to the writing, selling, or purchasing of options. Your capabilities are based on your income, net worth, experience and knowledge of securities investing, and your investment objectives.
j) You fully understand that an active program of purchasing and/or selling options may involve related purchases and sales of the underlying stocks to which the options relate, and that such a program may produce a high level trading activity and commission costs.
k) You understand and agree that, unless otherwise agreed in writing, Private Fund Management is not, and will not be, obligated under any circumstances to repurchase any option.
l) You have been advised of and agree that all transactions in your Private Fund Management Options Account shall be subject to the constitution, rules, regulations, customs and usages of the exchange or market, and its clearinghouse, if any, where the transactions are executed and to Private Fund Management’s policies. Transactions also shall be subject to the provisions of federal and state securities laws, as amended, and to the rules and regulations of the Securities and Exchange Commission and the Board of Governors of the Federal Reserve System. Private Fund Management shall not be liable for any loss caused directly or indirectly by Private Fund Management 's compliance with such rules or regulations, or by government restrictions, exchange or market rulings, suspensions of trading or other conditions beyond Private Fund Management’s control. You acknowledge and agree that Private Fund Management may, in Private Fund Management's sole discretion, determine that there is danger of financial loss to Private Fund Management or you, request additional margin deposit, purchase or sale of additional stock, or the closing out of an option position. You understand that if you exceed any applicable position or exercise limits, Private Fund Management is authorized in its sole discretion, and without notification, to take any and all steps Private Fund Management deems necessary to protect itself (for any reason), including the right to buy and/or sell (including short or short exempt) from your Private Fund Management Options Account, in order to bring your Private Fund Management Options Account into compliance with such position limits. Any and all expenses or losses incurred by Private Fund Management in this connection will be reimbursed by you
m) You understand that settlement (payment date) for option trades is the business day following the purchase or sale of the option. However, Private Fund Management may require deposits at the time of purchase or sale.
n) You will deliver underlying securities in good transferable form as is customary for that type of security and the underlying securities shall be made free and clear of any lien, encumbrance, claim, pledge, charge, restriction or impediment to transfer of any nature whatsoever. You warrant at the time of such delivery that you will have good, valid and marketable title or right to sell and transfer all such underlying securities on the terms of this Agreement. Private Fund Management will close out any positions and you shall be liable for all losses, including commissions, where underlying securities delivered are not in good transferable form or not free and clear of any lien, encumbrance, claim, pledge, charge, restriction or impediment to transfer of any nature whatsoever.
o) You understand that when transactions on your behalf are to be executed in options traded on more than one exchange, Private Fund Management or its correspondent may use discretion in selecting the market in which to enter your order.
p) It shall be your sole responsibility to exercise, in a proper and timely manner as set forth by the Options Clearing Corporation and Private Fund Management, any right or privilege or obligation of any put option, call option or other option which Private Fund Management may purchase, handle or carry for your Private Fund Management Options Account. Private Fund Management has no obligation or responsibility to exercise any option without specific instructions from you. You will provide Private Fund Management of a notice of exercise with respect to an option held by you via the Private Fund Management Website. You agree that Private Fund Management reserves the right, in its sole discretion, to rely upon any notice or instruction given to it orally or in writing under this Agreement which it reasonably believes is given to it by or on your behalf. You understand that the failure on your part to notify Private Fund Management of your desire to exercise any option may result in the option expiring worthless, even though it may have a monetary value on the expiration date.
In the event that you fail to instruct Private Fund Management to exercise an option about to expire that is "in-the-money" by .05 or more by 4:00 p.m. (Eastern time) on the business day immediately preceding the expiration date of the option, you understand that Private Fund Management may exercise such option, but is under no obligation to do so and you hereby agree to waive all claims for damage which you may have at the time or any time thereafter against Private Fund Management arising out of the fact that the option was or was not exercised. Private Fund Management reserves the right to require your account to have available funds to support the cost of any exercise prior to allowing you to exercise an option, or may reduce the number of options exercised based on the available funds in your account. Should Private Fund Management exercise such an option and liquidate the underlying securities for your account and at your sole risk you shall be charged two commissions: one for the exercise of the option, another for the purchase or sale of the securities underlying the option. You agree to pay the full aggregate price for the underlying securities covered by the options contract and understand that, generally, you will be charged at least one commission in connection with the exercising of any option.
q) In options transactions, acting alone or in concert with other, you agree not to exceed position or exercise limits imposed by an exchange or other market with respect to options trading. You also understand that Private Fund Management may be required to report your position to regulatory authorities in a class of options having the same underlying security.
r) You understand that exercise assignment notices for option contracts are allocated among client short positions, whether covered or uncovered, on a First-In-First-Out ("FIFO") basis from among all client short options positions established as of the day of assignment those contracts which are subject to exercise. The writer of an American-style option is subject to being assigned an exercise at any time after the writer has written the option until the option expires. By contrast, the writer of a European-style option is subject to exercise assignment only during the exercise period. A more detailed description of Private Fund Management's FIFO allocation procedures is available upon request.
s) Private Fund Management shall not be liable in connection with the execution, handling, selling, purchasing, exercising or endorsing of put or calls for your, except for gross negligence or willful misconduct on Private Fund Management's part.
2) Services and Fees
Private Fund Management will act as your broker for the purpose of buying and selling securities on your instructions. You are solely responsible for the trades entered, and will not hold Private Fund Management or any of its employees liable for those investment decisions. Private Fund Management reserves the right to refuse any account and to decline or change any order at its sole discretion. You agree to pay the applicable commissions, fees (including any extraordinary surcharges passed to Private Fund Management by certain exchanges), and taxes that may apply at the time services are rendered to your Private Fund Management Options Account. For a schedule of standard fees relating to your Private Fund Management Options Account, you should refer to the Fee Schedule link at the bottom of each page or the "Customer Care" area on the Private Fund Management .com web site. Private Fund Management reserves the right to pass on to you all fees imposed by an agent for any corporate action. Private Fund Management further reserves the right to change its fees anytime by posting a modified fee schedule on the Private Fund Management web site.
A request to cancel a Real-time Trade is only a request and, as such, cancellation of any given trade is not guaranteed. Private Fund Management processes requests to cancel orders on a best efforts basis and you agree not to hold Private Fund Management liable if it is unable to cancel an order. Your order will only be cancelled if your cancellation request is received in the marketplace and matched up with the existing order before the order is executed. Market orders are subject to immediate execution and, as a general rule, cannot be cancelled during market hours. If an order cannot be cancelled you agree to be bound to the results of the original order.
3) PREDISPUTE ARBITRATION CLAUSE DISCLOSURES:
- ALL PARTIES TO THIS AGREEMENT ARE GIVING UP THE RIGHT TO SUE EACH OTHER IN COURT, INCLUDING THE RIGHT TO A TRIAL BY JURY, EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN WHICH A CLAIM IS FILED.
- ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY'S ABILITY TO HAVE A COURT REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED.
- THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS AND OTHER DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN COURT PROCEEDINGS.
- THE ARBITRATORS DO NOT HAVE TO EXPLAIN THE REASON(S) FOR THEIR AWARD.
- THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
- THE RULES OF SOME ARBITRATION FORUMS MAY IMPOSE TIME LIMITS FOR BRINGING A CLAIM IN ARBITRATION. IN SOME CASES, A CLAIM THAT IS INELIGIBLE FOR ARBITRATION MAY BE BROUGHT IN COURT.
- THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS FILED, AND ANY AMENDMENTS THERETO, SHALL BE INCORPORATED INTO THIS AGREEMENT.
SUBJECT TO THE LIMITED EXCEPTIONS DESCRIBED BELOW, YOU AGREE TO SUBMIT TO ARBITRATION ANY DISPUTE BETWEEN YOU AND Private Fund Management AND/OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS RELATING TO YOUR BROKERAGE ACCOUNT(S). ANY ARBITRATION UNDER THIS AGREEMENT WILL BE CONDUCTED UNDER THE ARBITRATION RULES OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. ARBITRATION MAY BE INITIATED BY EITHER OF US SERVING WRITTEN NOTICE ON THE OTHER. THE ARBITRATORS' RULING WILL BE FINAL AND JUDGMENT ON IT MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION. SHOULD Private Fund Management PREVAIL IN ARBITRATION, YOU AGREE TO PAY ALL REASONABLE ATTORNEY, FILING AND OTHER COLLECTION COSTS INCURRED BY Private Fund Management INCLUDING MARKET INTEREST FROM THE DATE THE BALANCE BECAME DUE.
Private Fund Management RESERVES THE RIGHT TO PURSUE LEGAL ACTION AGAINST YOU THROUGH THE STATE AND FEDERAL COURTS OF WASHINGTON OR OTHER APPROPRIATE JURISDICTION IN THE EVENT Private Fund Management DETERMINES YOU HAVE COMMITTED FRAUD OR OTHER CRIMES AGAINST Private Fund Management AND/OR THIRD PARTIES INVOLVING THE FUNDING OF, TRANSACTIONS IN, OR WITHDRAWALS FROM YOUR ACCOUNT(S) WITH Private Fund Management . IN SUCH CASES, YOU SHALL BE DEEMED BY THIS AGREEMENT TO HAVE ACCEPTED AND CONSENTED TO THE PERSONAL JURISDICTION AND VENUE OF THE FEDERAL AND STATE COURTS IN KING COUNTY, WASHINGTON, FOR ANY COURT ACTION OR PROCEEDING.
NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO ARBITRATION, NOR SEEK TO ENFORCE ANY PREDISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION; OR WHO IS A MEMBER OF A PUTATIVE CLASS ACTION WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL: (I) THE CLASS CERTIFICATION IS DENIED; OR (II) THE CLASS IS DECERTIFIED, OR (III) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.
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