HOTSPOT FXR, L.L.C.
TRADING POLICIES

ANNEX B

1. YOUR RESPONSIBILITY. You must read and understand this document before effecting transactions through Hotspot FXr. These Hotspot FXr Trading Policies (the “Policies”) are an Annex to and an integral part of your Customer Account Agreement. IT IS YOUR RESPONSIBILITY AS A CUSTOMER OF HOTSPOT FXR TO CAREFULLY READ THESE HOTSPOT FXR TRADING POLICIES AND NOTIFY YOUR PERSONNEL AS APPLICABLE BEFORE ENTERING EACH AND EVERY ORDER. IN ENTERING YOUR ORDERS WITH HOTSPOT FXR, YOU AGREE, REPRESENT, WARRANT AND CERTIFY THAT YOU UNDERSTAND AND ACCEPT THESE TRADING POLICIES, AS THEY ARE SET FORTH HEREIN AND AS THEY MAY BE AMENDED FROM TIME TO TIME BY HOTSPOT FXR, IN ITS SOLE DISCRETION. Before executing your first Trade, you must sign date, and return this Annex B
2. DEFINED TERMS. Unless otherwise defined herein or in the Customer Account Agreement, these terms shall have the following meanings:
“Accounts” means all over-the-counter (“O.T.C.”) Foreign Exchange accounts that a Customer now has or at any time may have with, at, or through Hotspot FXr or its successors, including accounts from time to time closed and then re-opened (each an “Account”).

“Balance” means the actual amount of U.S. Dollars in a Customer Account, plus the theoretical Marked-to-Market value (as determined by Hotspot FXr and denominated in U.S. Dollars) of any Open Positions in the Account.

“ Business Day” means any day on which commercial banks in the State of New York are generally open for business (other than a Saturday or Sunday); provided that for transactions involving the currency of a nation other than the United States, Business Day shall mean Foreign Business Day (as defined below).

“Customer” means any Hotspot FXr customer; any person or entity registered to use the Hotspot FXr System.

“Customer Contact” means, with respect to a given Customer, a good faith effort by Hotspot FXr (or its designee or agent) to contact the Customer by, either of the following means (selected by Hotspot FXr, in its sole discretion): (i) electronic mail at the e-mail address provided to Hotspot FXr by Customer, or (ii) telephone at the telephone number designated in writing (including, without limitation, electronically) to Hotspot FXr by the Customer, which may, at the Customer’s option, be a pager or an automated answering or voice recording system. . The message so sent (verbally, electronically or otherwise) by Hotspot FXr shall indicate, to the extent reasonably possible, that a Margin Call is being issued or other action is being taken (as applicable) on the subject Account.

“Collateral” means all of a given Customer’s Contracts, cash and other assets and property in a given Customer’s Account(s) or otherwise held by Hotspot FXr for any purpose, including safekeeping. All Collateral may, at Hotspot FXr’s sole discretion, be used by the Customer for Margin.

“Contract” means an agreement between two Customers guaranteed by Hotspot FXr or between a Customer and Hotspot FXr for a specified amount of a specified currency in return for a specified amount of a different specified currency for settlement on a specified Value Date. The amounts of the two currencies will be related to a specified price or exchange rate.

“Cross Currency Pairs” means two Foreign Currencies, the relationship between which is the subject of a Foreign Exchange transaction in which one Foreign Currency is purchased from (or sold to) a counterparty against a second Foreign Currency. Examples of popular Cross Currency Pairs include EUR/JPY (Euro against Japanese Yen) and EUR/GBP (Euro against British Pound Sterling).

“Deposits” means Collateral.

“Dollar Value” means the amount of lawful currency of the United States which, at any moment in time, would be generated by the conversion of the relevant Foreign Currency into United States dollars at Hotspot FXr’s then prevailing exchange rates for buying or selling, as applicable, such Foreign Currency; provided that the “Dollar Value” of non-currency assets shall be the Market Value of such assets.

“Erroneous” means, with respect to a given Trade or Order, a Trade or Order for a given Currency Pair which Hotspot FXr determines in its sole discretion to have been placed or made in error by virtue of the fact that the Trade or Order was materially outside of the range (as determined by Hotspot FXr) of all non-Erroneous consummated Orders or Trades for that Currency Pair on the Hotspot FXr System at or around the time such Trade was consummated or such Order was placed; provided that, in the absence of Trades in that Currency Pair consummated through the Hotspot FXr System, then based on such range (as determined by Hotspot FXr) in the interbank market.

“Fill” means an Order executed and/or Trade Entry executed on behalf of a Customer pursuant to an Order and/or Trade Entry. Once Filled, an Order and/or Trade Entry cannot be canceled, amended, or waived by the Customer.

“Foreign Business Day” means any day on which commercial banks are authorized by law to open for business (other than a Saturday or Sunday) in the capital of the country in which a subject currency of a transaction is the lawful currency.

“Foreign Currency” means the legal tender issued by and acceptable for the payment of obligations under the laws of one or more countries, other than the United States.

“GTC Order” (“Good Till Canceled Order”) means an Order (other than a Market Order) that is effective unless and until Filled or canceled. All orders are worked on a Good Till Canceled basis. GTC orders are not automatically canceled at the end of the Business Day.

“Hotspot FXr Indemnified Person” means Hotspot FXr, its past and present officers, directors, employees, agents, contractors, subcontractors, and any successors or assigns of any of them, as well as any of the heirs and executors of any of the foregoing. In addition, the term shall also include any parties claiming by or through any of the parties listed in the preceding sentence.

“Hotspot FXr System” means Hotspot FXr’s electronic communications network(s) and/or web site(s) (or links thereto) through which users make Trades and make and accept offers to buy or sell currencies. This system includes the Accounts.

“Limit Entry Order” means an Order to establish an Open Position by selling or buying once a given currency achieves a specified Spot Rate. Although a Spot Rate is specified upon entry of a Limit Entry Order, Customers should note that market conditions may often prevent the execution of an individual Customer’s Limit Entry Order despite other dealing activity at specified Spot Rate level.

“Margin” means the Market Value of Collateral or Deposits in the Customer’s Account(s) needed to satisfy its then current Margin Requirement.

“Margin Call” means a demand made to the Customer to return to compliance with that Customer’s Margin Requirement by depositing into the Customer’s Account(s) additional U.S. dollars and/or by liquidating any one or more of the Customer’s Open Positions.

“Margin Close Out Threshold” has the meaning set forth in Section 4.4 of these Policies.

“Margin Requirement” or “Margin Utilization” or “Collateralization Percent” means a requirement that a Customer’s Account(s) contain Collateral (in form acceptable to the Company, in the Company’s discretion) with a Market Value equal to a fixed percentage of that Customer’s net Open Positions, after deductions of commissions, fees and any other liabilities of the Account(s) (such as amounts owed to Hotspot FXr). To illustrate, a 3% Margin Requirement means that the Customer must have in his Account Collateral with a Market Value equal to 3% of the Dollar Value of all of that Customer’s Open Positions.

“Market Order” means an order to sell or buy Foreign Currency “at market” – i.e., immediately and at the next Spot Rate available for Customer dealing. No Spot Rate is specified when entering a Market Order.

“Market Value” means the Dollar Value, determined by Hotspot FXr in its sole discretion, which Hotspot FXr would receive if it sold any Collateral for immediate delivery in the relevant market.

“Marking (Marked) to Market” means the process of recalculating the theoretical profit or loss of Open Positions in an Account assuming all Open Positions were liquidated at current Market Value. Hotspot FXr will Mark to Market the Collateral in Customer Accounts at a specified time and Spot Rate (as determined by Hotspot FXr, in its sole discretion) in order to estimate and report the Balance in U.S. Dollars.

“Material Customer Change” means, with respect to a specific Customer, the occurrence of any of the following (i) Customer fails at any time to satisfy the Margin Requirements (in amounts or of types required by Hotspot FXr) or a Margin Call, (ii) Hotspot FXr, in its sole discretion and for the protection of Hotspot FXr, other Customers trading through the Hotspot FXr System or the bank(s) at which the Account(s) is (or are) held, determines that a material adverse change has occurred with respect to that Customer, whether because of Margin Requirements, changes in that Customer’s creditworthiness, or otherwise, (iii) any attachment is levied against any of that Customer’s Accounts or, (iv) the death, judicial declaration of incompetence, dissolution or liquidation of that Customer, (v) the Market Value of any Collateral deposited in or to protect one or more of that Customer’s Accounts, is or becomes inadequate to meet the Margin Requirements or Collateral minimums for the Account, or to protect or secure one or more of that Customer’s Accounts, or (vi) that Customer’s failure to provide Hotspot FXr any information requested pursuant to the Customer Account Agreement.

“Notice of Withdrawal” has the meaning set forth in Section 3.4 below.

“OCO Order” means an Order known commonly as a ‘One Cancels Other Order’ to sell or buy a Currency Pair at a Spot Rate, where a stop loss and take profit order are attached, where if one order gets filled, the other order is canceled. Customer agrees to accept the rate which Hotspot FXr, in its discretion, may assign to the Customer’s Fill.

“Open Position” means any Contract that has not settled or expired and that is not completely offset by another Contract.

“Order, trade order” means generally, an instruction by a Customer (or a Customer’s agent) to Hotspot FXr or through the Hotspot FXr System to send to Hotspot FXr (either verbally or electronically) a take profit, stop loss or OCO order for that Customer’s Account.

“P/L” (“Profit / Loss”) means the actual gain or loss in U.S. Dollars resulting from trading activities on Closed Positions, plus the theoretical gain or loss on Open Positions that have been Marked to Market.

“Person” means any individual, corporation, association, partnership (general or limited), joint venture, trust, estate, limited liability company, or other legal entity or organization.

“Point” (“Pip”) means the smallest unit of price for any Foreign Currency (e.g. for USD/CHF one point (or pip) equals .0001 Swiss Francs and for USD/JPY one point (or pip) equals .01 Japanese Yen.)

“Roll or Rollover” means the process of extending the settlement value date on an open position forward to the next valid value date.

“Spot Rate” means the rate of exchange between two (2) Foreign Currencies for “Spot” value (normally settlement in two Business days), generally quoted either in “U.S. Terms” (price of one unit of Foreign Currency expressed in U.S. Dollars and Cents) or in “European Terms” (price of one U.S. Dollar expressed in units and decimals of the Foreign Currency). Spot Rates change rapidly. Customers should note that published rates represent rates for transactions between large commercial bank participants in the interbank market and may vary from Spot Rates available for dealing to Hotspot FXr Customers. Please see the Risk Disclosure Statement for more information.

“Stop Loss Order” means an Order to sell or buy a Currency Pair at a Spot Rate that is less favorable to the party placing that Order than the then-current Spot Rate. Although a Spot Rate is specified upon entry of Stop Loss Orders, market conditions may often require such Orders to be Filled at a substantially different Spot Rate, and Customer agrees to accept the rate which Hotspot FXr, in its discretion, may assign to the Customer’s Fill.

“Take-Profit Order” means an Order to sell or buy a Currency Pair at a Spot Rate that is more favorable to the party placing that Order than the then-current Spot Rate. Although a Spot Rate is specified upon entry of Take-Profit Orders, market conditions may often prevent the execution of an individual Customer’s Take-Profit Order despite other dealing activity at that price level.

“Trade” means the trading of any currency, including any option, by a Customer on the Hotspot FXr System.

“Trade Date” means with respect to any Trade, the date on which the Contract is consummated by the parties to that Trade (i.e., the date, according to New York time, on which the bid is hit).

“ Trade Entry” means generally, an instruction by a Customer (or a Customer’s agent) to Hotspot FXr or through the Hotspot FXr System to send to Hotspot FXr (either verbally or electronically) a bid, offer, sell or buy for that Customer’s Account.

“Value Date” means, with respect to any Contract, the applicable settlement date specified in the confirmation as it relates to the particular Contract. A Value Date must be a Foreign Business Day in each country in which a subject currency of a transaction is the lawful currency.
3. CUSTOMER ACCOUNTS
3.1 Currency. All initial deposits to Customer Accounts will be accepted only in U.S. Dollars and, unless settlement and delivery of a Foreign Currency have taken place, all Balances shall be computed and reported only in U.S. Dollars.
3.2 Minimum Initial Deposit. To open a Hotspot FXr trading Account, a minimum deposit of $ 7,500 by check or wire transfer is required. Wire instructions will be provided upon opening an Account.
3.3 Recognition of Deposits. No deposit shall be recognized until the wire or check has been fully cleared and collected by Hotspot FXr’s bank or depository institution.
3.4 Withdrawals. Customer withdrawals from a Customer’s Account requires a notice to be signed by all required parties (the “Notice of Withdrawal”, and require a minimum of four (4) Business Days from receipt of the Notice of Withdrawal for issuance of a check, electronic funds transfer, or wire transfer subject to the terms set forth in the Customer Account Agreement. Funds will be returned to the originating account. Certain charges may apply.
3.5 Fees. All banking fees (including, without limitation, those specified in Annex C to the Customer Account Agreement) shall be charged to the Customer’s Account at Hotspot FXr’s discretion, including without limitation a $100.00 Hotspot FXr fee, over and above any bank fees, for each returned check.
4. MARGIN REQUIREMENTS
4.1 Margin Requirement. The current Margin Requirements are as follows, and are subject to change, as set forth herein and in the Customer Account Agreement:
U.S. Dollar-Based Currency Pairs and Cross-Currency Pairs (except zloty) :
2% of Open Position for accounts up to $ 100,000
3% for accounts above $ 100,000
4% of Open Position for U.S./PLN (zloty) and the Cross Currency pair EUR/PLN (zloty). This 4% PLN margin requirement is maintained on all accounts.

Customer acknowledges that Hotspot FXr may reject Customer’s order for execution until the Margin Requirement is met and deposited in the Customer’s Account.

4.2 Right to Change Margin Requirement and/or Margin Close Out Threshold. Hotspot FXr shall have the right, in its sole discretion, to change the Margin Requirement and/or Margin Close Out Threshold at any time. Hotspot FXr may change the Margin Requirement or Margin Close Out Threshold due to, among other things, the volatility of a particular Foreign Currency that is the subject of an Open Position or the reduced liquidity associated with holding an Open Position during certain periods of the day.
4.3 Margin Calls. In the event that, in the opinion of Hotspot FXr and in accordance with Hotspot FXr’s reasonable estimate of the then prevailing and obtainable market spot dealing rates, a Customer’s Account Balance should fall below the Margin Requirement for an individual Open Position or for a group of Open Positions or for the Customer’s Account in the aggregate, Hotspot FXr shall, at its discretion, have the right, but not the obligation, to liquidate any or all Open Positions in the Customer’s Account, and the Customer shall remain liable for any resulting deficit balances; provided that (except as set forth in Section 4.4 below or in the Customer Account Agreement, such as in the event of a Material Customer Change) Hotspot FXr shall not exercise such right unless it has first attempted Customer Contact and waited three (3) hours (from the commencement of attempts at Customer Contact) for the Customer to remit, by wire transfer, sufficient money in U.S. Dollars to raise the Customer’s Balance to meet the applicable Margin Requirements. Once issued, the Customer must comply in full with the Margin Call regardless of subsequent price action and irrespective of any recovery in Market Value of the subject Open Positions. Customers are prohibited from increasing or establishing any new Open Positions while any Margin Call remains unsatisfied.
By way of clarifying the foregoing but without limitation to the rights and remedies of Hotspot FXr listed above, the following constitute Hotspot FXr’s Margin Requirement Procedures:

When a Customer’s Account falls to 75% of the Margin Requirement, and there are no Stop-Loss-Orders in place which aid in ensuring that the Customer’s Account position does not fall below 50% of the Margin Requirement, Hotspot FXr attempts, but is not obligated to, notify Customer’s, either electronically or verbally. When the Customer is contacted and spoken with, the Customer may be informed of the following:

1. that such Customer must input a Stop-Loss Order(s) to prevent its Margin Requirement from falling below 50%;

2. that such Customer may reduce its Open Position(s) to aid in ensuring that the Account does not fall below a Margin Requirement of 50%; and

3. that if the Customer fails to cut the Open Positions, reduce the Open Positions or input Orders to ensure that the Margin Requirement does not go below 50%, Hotspot FXr has the right and may input Order(s) or go into the market and close all such Customer’s Open Position(s) once the Account Margin Requirement falls below 50%. Additionally, if the Customer cannot be reached or markets move so quickly that the Customer’s Open Positions fall below the Margin Requirement by an amount in excess of 50%, then Hotspot FXr will go into the market and close all the Open Position(s).

After receiving the foregoing information, in the event the Customer is reached after the attempted contact,, the Customer can notify Hotspot FXr that such Customer is wiring sufficient funds to bring the Margin Requirement above 100%. Hotspot FXr. must receive the funds by 5 PM EST that same day. or the foregoing procedure set forth above will apply.

Margin cuts (and Open Position closings) are made when an account falls to 50% of Margin Requirement. Market conditions will determine the closed position rate as market movements, volatility and action may result in the Account Open Positions fall below 50% of the available Margin. Note: On the business day which occurs prior to a Holiday or Weekend, Clients Margin Utilization must be above 100%. In the event that the margin utilization falls below 100%, Hotspot FXr will attempt to contact Customer to place Stop Loss Orders against Customer’s Open Positions. Orders will be transmitted by Customer, or if Customer is not contacted, Hotspot FXr will input Orders on behalf of Customer to close out Customer Open Positions which breach the 50% Margin Requirement.

Please refer to the Customer Account Agreement and Risk Disclosure Statement (Annex A) for additional information.

4.4 Margin Close Out Threshold. In addition to any of Hotspot FXr’s rights under the Customer Account Agreement, in the event that, in the opinion of Hotspot FXr and in accordance with Hotspot FXr’s reasonable estimate of the then prevailing and obtainable market spot dealing rates, and regardless of whether or not prior Margin Calls have been issued or met, the Customer’s Account Balance should AT ANY TIME fall below fifty percent (50%) of the Margin Requirement for an individual Open Position or for a group of Open Positions or for any one or more of the Customer’s Accounts (individually or in the aggregate) (the “Margin Close Out Threshold”), Hotspot FXr shall have the right, but not the obligation, to liquidate immediately (and without having attempted Customer Contact) any or all Open Positions in the Customer’s Account, and the Customer shall remain liable for any resulting deficit balances, in accordance with the Customer Account Agreement. Hotspot FXr shall have no liability to the Customer whatsoever for any decision Hotspot FXr may make to liquidate, or not to liquidate, any Open Position, nor for any failure of Customer to receive Margin Calls or confirmations.
5. TRADING HOURS
5.1 General. All references to Hotspot FXr hours of trading are in U.S. eastern standard time (“E.S.T.”) using twenty-four (24) hour format. Hotspot FXr normally provides access to OTC Foreign Exchange quotes during Trading Hours (as defined below). It is the sole responsibility of the Customer to remain available for Margin Calls, Order and Fill confirmations, and other communications regarding the Customer’s Account at any time.
5.2 Trading Hours. Hotspot FXr will be open and Customer Trades can occur during Trading Hours. “Trading Hours” means all hours between Sunday at 18:00 E.S.T. through Friday 16:30 E.S.T. subject to closing on non-Business Days and/or non-Foreign Business Days and to modification by Hotspot FXr; provided that Hotspot FXr reserves the right to suspend or modify its Trading Hours at any time, with or without prior notice and the duration of any such suspensions or closures shall not be deemed to be part of “Trading Hours.”
6. Accounts.
6.1 Transfer of Funds. Hotspot FXr may, at any time, without prior notice to Customer, transfer from one account to another carried by Hotspot FXr for Customer such excess Collateral as in Hotspot FXr’s judgment may be required for margin, or to reduce any debit balance or reduce or satisfy any deficits in such other accounts. Hotspot FXr shall promptly confirm in writing (or by email) to Customer every transfer of Collateral made pursuant hereto.
6.2 Master Accounts. Except as provided in Section 6.3 of these Policies, all Collateral that Customer and other customers deposit with Hotspot FXr shall be held in one or more Master Accounts that Hotspot FXr shall establish, from time to time, with one or more banks. Each Master Account shall be in the name of the Company as custodian or “for the benefit of the customers” (or as otherwise agreed between the Company and the bank). Hotspot FXr may not commingle such Collateral with its own assets and, except as set forth in this paragraph, may not use such Collateral to guarantee or secure any of Hotspot FXr’s obligations. Notwithstanding the foregoing, Hotspot FXr may deposit in such Master Accounts such amounts of its own funds as may be necessary to satisfy any margin requirements established by banks in connection with any transactions that Hotspot FXr may enter into to hedge or manage the risk of its obligations to its customers.
CUSTOMER ACKNOWLEDGES THAT HOTSPOT FXr MAY PLEDGE ANY OR ALL AMOUNTS CONTAINED IN MASTER ACCOUNTS TO ONE OR MORE BANKS AS SECURITY FOR THE HOTSPOT FXr’S CREDIT OBLIGATIONS TO BANKS IN CONNECTION WITH FOREIGN CURRENCY CONTRACTS THAT HOTSPOT FXr MAY ENTER INTO FOR THE SOLE PURPOSE OF HEDGING OR MANAGING ITS OBLIGATIONS TO CUSTOMERS. IN THE UNLIKELY EVENT THAT HOTSPOT FXr IS UNABLE TO SATISFY IN WHOLE ITS OBLIGATIONS TO A BANK IN CONNECTION WITH SUCH FOREIGN CURRENCY CONTRACTS OUT OF HOTSPOT FXr’S OWN ASSETS, CUSTOMER FURTHER ACKNOWLEDGES THAT THE BANK MAY, IN ITS SOLE DISCRETION, REQUIRE HOTSPOT FXr TO CAUSE FUNDS CONTAINED IN A MASTER ACCOUNT TO BE DELIVERED TO THE BANK IN SATISFACTION OF HOTSPOT FXr’S OBLIGATIONS. IN THE EVENT THAT AMOUNTS ARE WITHDRAWN FROM A MASTER ACCOUNT AND DELIVERED TO A BANK AS PROVIDED HEREIN, CUSTOMER’S SOLE RECOURSE FOR AMOUNTS WITHDRAWN FROM THE MASTER ACCOUNT SHALL BE AGAINST THE COMPANY AND ITS ASSETS.
6.3 Separate Accounts; Transfers to Master Account. Hotspot FXr may, in its sole discretion, allow Customer (if Customer meets Hotspot FXr’s requirements to do so) to maintain a separate account in which Collateral not required to margin any open contracts shall be held (each, a “Separate Account”). Any such Separate Account shall be in the name of Hotspot FXr as custodian for such customer. The Collateral in a Separate Account shall not be pledged to any bank as security for Hotspot FXr’s obligations to such bank in connection with Hotspot FXr’s foreign currency risk management activities. Hotspot FXr shall transfer funds from a Separate Account into a Master Account as positions are placed (or in the same day that they are placed). The amount transferred shall not exceed the sum of the margin required for each of the customer’s open positions during that given day. Hotspot FXr shall transfer any funds required to margin positions back to the Separate Account no later than the beginning of the next business day following the date a customer closes such positions.
6.4 Interest. Hotspot FXr may credit interest to Customer’s account based upon the amount of cash Collateral in the account at a rate determined by the Company from time to time. Hotspot FXr shall credit interest to such account on a monthly basis.
6.5 Withdrawals. Upon written request from a Customer at least four (4) Business Days prior to the requested withdrawal date, Customer may withdraw from its account such excess Collateral that is not required to margin open positions or otherwise required to satisfy Customer’s obligations to Hotspot FXr. Customers must download, complete, sign and send back the Withdrawal Request Form, found on the Hotspot FXr website www.hotspotfx.com/main.jsp, tab-open account, withdrawal form, returning the form via fax or regular mail to Hotspot FXr. Such withdrawal shall be effected by issuance of a wire transfer, electronic funds transfer, or by issuance of a check, as Hotspot FXr in its sole discretion shall elect. Hotspot FXr shall return funds to the account where the funds originated. Charges may apply.
7. TRADE ORDERS
7.1 Order Entry /“Execution Only”. All Orders shall be placed through the Hotspot FXr System or by telephone through Hotspot FXr’s order desk (at the number referenced under the heading “trading/orders” on the Hotspot FXr web site.) In normal market conditions, the process of inputting a new order, or modifying or cancelling an existing order through the Hotspot FXr System, usually takes less than one minute. In volatile “fast” markets, the order input process may take several minutes. Clients should leave sufficient time to input new orders, or to modify or cancel existing orders. New orders and requests to modify or cancel existing orders are not active until accepted by Hotspot FXr. Upon acceptance, Hotspot FXr will notify the client. It is possible that volatile market conditions or other factors as set forth more specifically elsewhere in our account documentation, may prevent an order from being input, modified or cancelled. While Hotspot FXr may act as the principal counterparty to its Customers, it will work diligently to fill all of its Customers’ Orders quickly at rates as closely related to actual then-current interbank market rates as is reasonably practicable. All Orders are accepted on a strict “Execution Only” basis (i.e., the exchange rates will be based on actual bids and offers on the Hotspot FXr system, and where possible, the interbank market levels, rather than and regardless of Spot Rates quoted elsewhere, reported price action, or erroneous oral confirmations). No Order shall be deemed Filled, and Hotspot FXr shall have no liability whatsoever for any Order accepted, unless and until such Order is (1) actually executed, covered and offset with another Hotspot FXr Customer or one or more of Hotspot FXr’s clearing counterparties; or (2) accepted by and offset against positions of Hotspot FXr or any of its affiliated organizations or any of their associated principals, officers, directors, affiliates and associates, and confirmed in writing by Hotspot FXr.
7.2 Order Recording/Confirmation. Any and all conversations with Hotspot FXr principals, agents or associates, including the Hotspot FXr order and operations desks may, at the sole discretion of Hotspot FXr, be tape recorded to enhance the quality of service, ensure fairness to all parties, and resolve potential disputes. Orders entered with a Hotspot FXr associate or the Hotspot FXr order-desk may, at Hotspot FXr’s option, be confirmed via telephone by the Hotspot FXr operations desk. In the event that Hotspot FXr is unable, for any reason, to reach the Customer and confirm an Order, Hotspot FXr shall have the option to cancel such order without liability. UNLESS OTHERWISE SPECIFIED, ANY ORDER ENTERED WITH HOTSPOT FXr SHALL BE ACCEPTED ON A GTC ORDER BASIS – THIS MEANS THAT THE ORDER WILL STAY OPEN UNTIL IT IS EITHER HIT (AND A TRADE OCCURS) OR THE CUSTOMER CANCELS IT, WHICHEVER COMES FIRST. GTC ORDERS INVOLVE RISK AND THE CUSTOMER MUST MONITOR HIS GTC ORDERS IN LIGHT OF CHANGING CONDITIONS AND RATES IN THE MARKET AND OTHERWISE.
7.3 Terms of Acceptance for Orders. It is the Customer’s sole responsibility to clearly indicate the terms of an Order when entered, whether Market, Take Profit, Limit Entry, Stop Loss, OCO or GTC and including the Order’s Value Date and specified Spot Rate limits, where applicable. Although a Spot Rate is specified upon entry of Stop Loss, OCO, Take-Profit and Limit Entry Orders, market conditions may often prevent the execution of an individual Customer’s Stop Loss, Take-Profit or Limit Entry Order despite other dealing activity at that price level or may often require Stop-Loss to be Filled at a substantially different Spot Rate. The Customer agrees to accept the rate that Hotspot FXr, in its discretion, may assign to the Fill. THE CUSTOMER ACKNOWLEDGES THAT HOTSPOT FXr SHALL ACCEPT ALL ORDERS ONLY ON A BEST-EFFORTS BASIS. HOTSPOT FXr SHALL HAVE NO LIABILITY FOR FAILURE TO FILL ORDERS, AND MAKES NO REPRESENTATIONS, WARRANTIES, OR GUARANTEES OF AN ORDER’S PRIORITY OVER THE ORDERS OF HOTSPOT FXr, ITS OTHER CUSTOMERS AND ITS PRINCIPALS, OFFICERS, DIRECTORS, AFFILIATES, ASSOCIATES, EMPLOYEES, BANKS, BANK EMPLOYEES OR DEALERS. HOTSPOT FXr SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO REJECT ANY ORDER BEFORE OR AFTER CONFIRMATION, OR TO CANCEL AND RESCIND ANY FILL, WHERE THE CUSTOMER’S ACCOUNT CONTAINS INSUFFICIENT MARGIN AT THE TIME OF ORDER ENTRY, OR WHERE, IN THE OPINION AND SOLE DISCRETION OF HOTSPOT FXr, THE EXECUTION OF SUCH ORDER MAY PLACE THE CUSTOMER’S ACCOUNT IN AN INSUFFICIENT MARGIN CONDITION, OR WHERE THE EXECUTION OF SUCH ORDER OR FILL VIOLATES ANY APPLICABLE LAW, RULE OR REGULATION OR IS OTHERWISE ILLEGAL OR IMPROPER OR AS OTHERWISE SET FORTH IN THE CUSTOMER ACCOUNT AGREEMENT. THIS LIMITATION ON LIABILITY AND DISCLAIMER IS IN ADDITION TO AND NOT INSTEAD OF THOSE CONTAINED IN THE CUSTOMER ACCOUNT AGREEMENT AND THE RISK DISCLOSURE STATEMENT, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.
7.4 Confirmation of Fills. After a Customer Order is Filled, and as soon as reasonably possible given market conditions, Hotspot FXr shall attempt to notify the Customer of the Fill by one of the following means: electronically (on screen), electronically (on the platform), via e-mail, fax, by telephone or by other means at the sole discretion of Hotspot FXr. In the event of an attempt to contact the Customer by telephone, Hotspot FXr shall contact the Customer at the telephone number designated to Hotspot FXr by the Customer, which may, at the Customer’s option, be a pager or automated answering or voice recording system, for the purpose of attempting to confirm such Fill. Any failure of Hotspot FXr to confirm a Fill by telephone or any other means, or any failure of Customer, for any reason, to receive such confirmation, shall not invalidate the Fill, and shall under no circumstances give rise to liability on the part of Hotspot FXr and its own or its affiliated organizations’ principals, officers, directors, associates, or employees. Confirmation of Fills and statements of accounts for Customer shall be handled in accordance with Section 8.5 below.
8. HOTSPOT FXR CLEARLY ERRONEOUS TRADE POLICY
8.1 If a Customer places an Order or executes a Trade that was either placed or executed in error (in terms of price, quantity or symbol), the Customer may contact the Hotspot FXr help desk during Trading Hours (as defined in Section 5.2 above) and request that Hotspot FXr review the Order or Trade to determine if it is, in fact, erroneous. The Customer acknowledges that it is possible (and likely) for Orders or Trades to be executed on the Hotspot FXr System at a different rate than the interbank best bid/offer or any other foreign exchange bid/offer market. Any Order or Trade executed at a different rate than the interbank best bid/offer or any other foreign exchange bid/offer market shall not be deemed to be erroneous solely because it was executed at such different rate (except as provided below in the definition of Erroneous).
8.2 In the event that Hotspot FXr determines, in its sole discretion, that a material term of a Trade or Order is Erroneous, Hotspot FXr shall have the right, in its sole discretion, but not the obligation, to break, cancel, nullify, amend or modify such Trade or Order. The Customer(s) involved will have an affirmative duty to monitor their open bids/offers while still in the Hotspot FXr System and, in the case of a clearly Erroneous Order or Trade which is then canceled by Hotspot FXr, the Customer(s) will be deemed to not have placed that Order or Trade and therefore, must enter a new Order in the Hotspot FXr System if the Customer(s) desires to make a Trade. NOTE THAT IF A CUSTOMER PLACES AN ORDER OR CONSUMMATES A TRADE WHICH IS LATER CANCELED BECAUSE HOTSPOT FXr HAS DETERMINED IT TO HAVE BEEN ERRONEOUS, THE CUSTOMER WHO WOULD HAVE PROFITED FROM SUCH TRADE WILL NOT HAVE PROFITED AND MAY HAVE MISSED AN OPPORTUNITY TO HAVE PROFITED BY HAVING MISSED OTHER OPPORTUNITIES TO MAKE A NON-ERRONEOUS TRADE OR ORDER. ACCORDINGLY, HOTSPOT FXr ENCOURAGES CUSTOMERS TO MAKE ORDERS AND CONSUMMATE TRADES THAT THEY BELIEVE ARE NOT ERRONEOUS AND TO MONITOR THEIR OFFERS AND POSITIONS TO AVOID ACCEPTANCE ON TERMS THAT ARE ERRONEOUS.
8.3 After a Customer Order or Trade is canceled, and as soon as reasonably practicable given market conditions, Hotspot FXr shall in good faith attempt to notify the Customer of the cancellation by Customer Contact or by displaying a message on the screen in the Hotspot FXr System, or by other means at the sole discretion of Hotspot FXr. Any failure of Hotspot FXr to confirm an Order or Trade cancellation by telephone or any other means, or any failure of Customer, for any reason, to receive such confirmation, shall not invalidate the cancellation, and shall under no circumstances give rise to liability on the part of any Hotspot FXr Indemnified Person. Nor shall any Hotspot FXr Indemnified Person have any liability for a Customer’s failure to re-enter or adjust the original bid/offer Order or Trade.
8.4 Hotspot FXr requires that Customers who wish to contest a Trade or an Order as having been Erroneous must follow the procedure set forth in Section 8.5, provided that the Customer must contest such Trade or Order by phone within thirty (30) minutes from the time the disputed or questioned Order or Trade was executed. Hotspot FXr may consider requests received after such time period, depending on the facts and circumstances surrounding such request. Hotspot FXr will make a final determination within three (3) hours of its actual receipt of notice (provided that such hours are during a Business Day), except under exceptional circumstances. The complainant will receive a written (including electronic) determination from Hotspot FXr.
8.5 Statements and Confirmations; Instructions. (a) Hotspot FXr shall provide Customer with electronic confirmation of Customer’s trades. Confirmations of trades, statements of account, margin calls and any other notices sent to Customer shall be conclusively deemed accurate and complete if not objected to in writing within three (3) business days after transmittal to Customer. All such notifications to Hotspot FXr under this paragraph shall be to Hotspot FXR, LLC., c/o Knight Capital Group, 545 Washington Blvd., Jersey City, NJ, 07310, or such other address as Hotspot FXr may hereafter give the Customer in writing. In addition to the written objection required by this paragraph, Customer must notify Hotspot FXr within one (1) business day of receipt of any notice that Customer believes is not accurate or complete. Upon receipt of notice from Customer as to a disputed transaction, Hotspot FXr and Customer shall investigate the matter and cooperate in good faith to resolve the dispute. (b) Hotspot FXr is authorized to accept instructions from and to send transmittal confirmations to the undersigned as Customer’s agent or any person(s) designated by the undersigned in writing (collectively referred to as “Authorized Representatives”). Hotspot FXr may rely upon the undersigned’s written designation of any Authorized Representative pursuant to the foregoing sentence until it is revoked or changed in writing by the undersigned. Customer agrees that Hotspot FXr may assume Customer authorizes all orders given to it by such Authorized Representatives. Customer understands and agrees that Hotspot FXr has no responsibility to and will not monitor the trading activity of the Authorized Representatives for compliance with Customer’s internal trading policies or any law or regulation governing Customer’s conduct as a fiduciary or otherwise. Communications from Hotspot FXr shall be sent to Customer at the address or addresses indicated on the account information form or at such other address or addresses as Customer directs in writing.

9. LIMITATION OF LIABILITY. NO HOTSPOT FXr INDEMNIFIED PERSON SHALL HAVE ANY LIABILITY FOR DAMAGES ARISING DIRECTLY OR INDIRECTLY FROM (A) ANY DELAY, ERROR, INACCURACY, OMISSION, OR OTHER DEFECT IN THE HOTSPOT FXr SYSTEM, WHETHER RESULTING FROM SYSTEM OR EQUIPMENT FAILURE OR FROM ANY OTHER CAUSE WHATSOEVER, (B) THE FAILURE OF ANY PERSON (OTHER THAN A HOTSPOT FXr INDEMNIFIED PERSON) TO PERFORM ITS OBLIGATIONS UNDER ANY TRANSACTION, INCLUDING, WITHOUT LIMITATION, THE FAILURE OF CUSTOMER TO PROCESS OR CONFIRM ANY TRANSACTION INITIATED BY CUSTOMER. CUSTOMER HEREBY ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY WARRANTY, CONDITION, GUARANTY OR REPRESENTATION MADE BY HOTSPOT FXr, OR ANY OF ITS SUBSIDIARIES, OFFICERS, EMPLOYEES, AGENTS OR REPRESENTATIVES.

UNDER NO CIRCUMSTANCES SHALL ANY HOTSPOT FXr INDEMNIFIED PERSON BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE, LOSS OF COST OR OTHER SAVINGS, OR DAMAGE SUFFERED OR COSTS AND EXPENSES INCURRED BY CUSTOMER (REGARDLESS OF WHETHER ANY SUCH PERSON OR ENTITY HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH LOSSES, DAMAGES, COSTS OR EXPENSES) FROM ANY CAUSE WHATSOEVER, WHETHER DIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL, ARISING OUT OF OR RELATED TO THE CUSTOMER ACCOUNT AGREEMENT (AND ITS ANNEXES THERETO) AND THE HOTSPOT FXr SYSTEM.

THE LIMITATION ON LIABILITY AND DISCLAIMERS CONTAINED IN THIS SECTION 9.0 ARE IN ADDITION TO AND NOT INSTEAD OF THOSE CONTAINED IN THE CUSTOMER ACCOUNT AGREEMENT AND THE RISK DISCLOSURE STATEMENT, AS THEY MAY BE AMENDED FROM TIME TO TIME.

10. Hotspot FXr as Principal. (a) Customer acknowledges that all contracts executed under this Agreement shall be made and entered into with Hotspot FXr as principal. Customer further acknowledges Hotspot FXr’s right, in its discretion, to limit the number of open positions that Customer may hold or acquire through Hotspot FXr. (b) For the purpose of hedging or otherwise managing the risks associated with the foreign currency contracts Hotspot FXr enters into with Customer or other customers, Hotspot FXr may buy or sell foreign currency contracts for its own account. Such contracts may be executed at a different price from that quoted to Customer. Hotspot FXr is under no obligation to disclose such price to the Customer at any time.
11. References; Recordings; Customer Information Filings.
11.1 References. Hotspot FXr is authorized to contact such references, including without limitation Customer’s banks or any credit agency, as Hotspot FXr deems appropriate to verify the agreements and representations of Customer set forth in this Agreement and applicable ancillary documents.
11.2 Recordings. Customer consents to the recording of conversations between Customer and Hotspot FXr (or any of their respective agents), without any obligation by Hotspot FXr to make or retain such recordings. Customer agrees to the use of such recordings as evidence by either party in any disputes between Customer and Hotspot FXr, subject to proper authentication, or in any other proceeding to which Hotspot FXr is a party or in which Hotspot FXr’s records are subpoenaed.
11.3 Customer Information Filings. Customer agrees to fill out and mail to Hotspot FXr any and all changes to all information which client has provided via the account opening documents. Client will submit a new Customer Account Application every three years.
12. GENERAL DISCLOSURES. Hotspot FXr and/or its affiliated organizations may make markets in Foreign Currencies (during periods of reduced liquidity) and may act as the principal counterparty in Foreign Currency transactions for Hotspot FXr Customer Accounts. While such an arrangement may give Hotspot FXr many distinct advantages in servicing its Customers in O.T.C. Foreign Currencies, the Customer should remain aware that the O.T.C. Foreign Currency market is unregulated, and that Hotspot FXr may at times be working to fill several Customer Orders at similar Spot Rate levels simultaneously, along with its own proprietary Orders or those of its affiliated organizations or either of their associated principals, officers, directors, associates, or employees. Customer acknowledges that, from time to time, Hotspot FXr may execute Orders for itself or its affiliated organizations at the same or better prices ahead of a Customer Order. The Fill rate on Market Orders can and will vary from initial Spot Rate quotes. These risks are more fully described in the Risk Disclosure Statement, which You must read and execute prior to executing your first trade.