Exhibit 99.B(22)(g)(3)
[UBS INVESTMENT BANK LOGO]
FOR UBS SECURITIES LLC USE ONLY
Account Title:_____________________________________________
Account Number:____________________________________________
CLIENT ACCOUNT AGREEMENT
PRIME BROKERAGE SERVICES
SSgA Directional Core Equity Fund ("CLIENT") and UBS Securities LLC ("UBS
SECURITIES"), on behalf of itself and as agent for the UBS Entities (as defined
below), hereby enter into this Client Account Agreement (this "AGREEMENT"),
dated as of December __, 2004. This Agreement sets forth the terms and
conditions pursuant to which UBS Securities will open and maintain one or more
accounts for Client (the "ACCOUNTS") and otherwise transact business with
Client. In addition, Client may maintain brokerage accounts with a number of
other brokers ("EXECUTING BROKERS") and may, from time to time, place orders to
be executed by one or more of these Executing Brokers designating UBS Securities
as its "PRIME BROKER." As used herein, "UBS ENTITIES" means UBS Securities, UBS
AG (including any branch thereof) and any of the current and future
subsidiaries, parents, affiliates, divisions, officers, directors, agents and/or
employees of the foregoing entities, either collectively or individually, as the
context requires. Client, UBS Securities, State Street Bank and Trust Company
and the SSgA Funds have entered into a Special Custody Account Agreement dated
as of __________________, 2004, whereby ________ is acting as custodian to hold
Collateral (as defined below).
1. APPLICABLE RULES AND REGULATIONS.
All transactions for which UBS Securities acts as Prime Broker shall be
subject to the Securities and Exchange Commission ("SEC") No-Action letter,
dated January 25, 1994, (the "SEC LETTER"), relating to prime brokerage, as
amended, supplemented or modified from time to time. All transactions and
positions in the Accounts shall be subject to all applicable laws, rules,
regulations and customs, including, without limitation, those of all U.S.
and, if applicable, non-U.S. federal, state and local governmental
authorities, self-regulatory organizations, markets, exchanges and clearing
facilities including, but not limited to the Investment Company Act of
1940, as amended, along with the rules and SEC guidance issued thereunder
(the "1940 Act", the foregoing are collectively referred to as, the
"APPLICABLE LAW").
2. SECURITY INTEREST AND LIEN.
(a) "COLLATERAL" shall mean (i) each deposit, custody, securities,
commodity or other account maintained by Client with any of the UBS
Entities (including, but not limited to, any or all Accounts); (ii)
any cash, securities, commodities, general intangibles and other
property which may from time to time be deposited, credited, held or
carried in any such account, that is due to Client, or that is
delivered to or in the possession or control of any of the UBS
Entities or any of the UBS Entities' agents and all security
entitlements with respect to any of the foregoing; (iii) all of
Client's rights, title or interest in, to or under any Contract with
any of the UBS Entities, including obligations owed by any UBS Entity;
(iv) all of Client's security interests (or similar interests) in any
property of any UBS Entity securing any UBS Entity's obligations to
Client under any Contract; (v) any property of Client in which any of
the UBS Entities is granted a security interest under any Contract or
otherwise (howsoever held); (vi) all income and profits on any of the
foregoing, all dividends, interest and other payments and
distributions with respect to any of the foregoing, all other rights
and privileges appurtenant to any of the foregoing, including any
voting rights and any redemption rights, and any substitutions for any
of the foregoing; and (vii) all proceeds of any of the foregoing, in
each case whether now existing or owned by Client or hereafter arising
or acquired.
(b) Client hereby assigns and pledges to the UBS Entities all Collateral,
and Client hereby grants a first priority security interest therein, a
lien thereon and a right of set off against any Collateral, and all
such Collateral shall be subject to a general lien and a continuing
first security interest and fixed charge, in each case securing the
discharge of all Obligations, Contracts with UBS Entities and
liabilities of Client to the UBS Entities, whether now existing or
hereafter arising and irrespective of whether or not any of the UBS
Entities have made advances in connection with such Collateral, and
irrespective of the number of accounts Client may have with any of the
UBS Entities, or which UBS Entity holds such Collateral. "OBLIGATIONS"
means any and all obligations of Client to any UBS Entity arising at
any time and from time to time, whether or not mature or contingent,
related to the purchase, sale or loan of securities or other property,
or under or in connection with any and all Contracts, in each case
whether now existing or hereafter arising. "CONTRACT" means this
Agreement as well as any swap agreement, rate swap transaction, swap
option, basis swap, equity or equity index swap, currency swap
transaction, cross-currency rate swap transaction, option on a
security or commodity, commodity swap, equity or equity index option,
bond option, interest rate option, currency option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction,
credit protection transaction, credit swap, credit default swap,
credit default option, total return swap, credit spread transaction,
forward, weather index transaction, any repurchase or reverse
repurchase agreement or transaction, any buy-sell agreement or
transaction, any securities lending or borrowing agreement or
transaction, loan sale or purchase or loan participation, any
agreement for prime brokerage or the settlement of securities
transactions, any margin and securities loan agreement, or other
agreement relating to extensions of credits, any contract for the
purchase or sale of any security, commodity or other financial
instrument or interest (including any option with respect to any of
these
transactions), any guarantee or other credit support document related
to any of the foregoing and any other agreement, contract, instrument
or document of any kind or nature whatsoever, whether or not similar
to any of the foregoing or any combination of the foregoing, as to
which, in each case, Client is a party, has any obligations or holds
any rights, regardless of how documented and whether written or oral,
together with all such purchases and sales, agreements, instruments
and other documents, including, without limitation, payment and
delivery obligations, obligations relating to the extension of credit
or to pay damages (including costs of cover) and payment of legal and
other expenses incurred in connection with the enforcement of
Contracts. The parties agree that any Contract between the Client and
any UBS Entity is hereby amended to reflect the Client's pledge of
Collateral hereunder.
(c) The UBS Entities and Client each acknowledge and agree that each
account maintained by a UBS Entity for Client is a "securities
account" within the meaning of Article 8 of the Uniform Commercial
Code, as in effect in the State of New York (the "NYUCC"), and all
property and assets held in or credited from time to time to any such
account shall be treated as a "financial asset" for purposes of
Article 8 of the NYUCC. Each UBS Entity represents and warrants that
it is a "securities intermediary" within the meaning of Article 8 of
the NYUCC and is acting in such capacity with respect to each account
maintained by it for Client. In the event of a breach or default by
Client under this Agreement or any other Contract, the UBS Entities
shall have all rights and remedies available to a secured creditor
under any applicable law or under the NYUCC (whether or not the NYUCC
is otherwise applicable in the relevant jurisdiction) in addition to
the rights and remedies provided herein. All Collateral delivered to
any of the UBS Entities shall be free and clear of all prior liens,
claims and encumbrances (other than liens solely in favor of the UBS
Entities), and Client will not cause or allow any of the Collateral,
whether now owned or hereafter acquired, to be or become subject to
any liens, security interests, mortgages or encumbrances of any nature
other than security interests solely in the UBS Entities' favor;
further, Collateral consisting of securities shall be delivered in
good deliverable form (or the UBS Entities shall have the power to
place such securities in good deliverable form) in accordance with the
requirements of the primary market or markets for such securities.
Client shall execute such documents and take such other action as the
UBS Entities shall reasonably request in order to perfect the UBS
Entities' rights with respect to any such Collateral and, in the case
of an investment property, grant the UBS Entities control (within the
meaning of Sections 8-106 and 9-106 of the NYUCC) thereof. In
addition, Client appoints the UBS Entities as Client's
attorney-in-fact to act on Client's behalf to sign, seal, execute and
deliver all documents, and do all such acts as may be required, to
perfect (and, in the case of investment property, grant the UBS
Entities control thereof) the security interests created hereunder in,
or realize upon all rights in, the Collateral. Nothing in this
Agreement providing for a security interest in Collateral pledged in
connection with a particular Contract with any UBS Entity or
Obligation shall affect any calculation of margin or right of any UBS
Entity to require additional margin or other Collateral to secure any
other Contract with or Obligation to any UBS Entity.
(d) The UBS Entities and Client each acknowledge and agree that each UBS
Entity that holds Collateral holds such Collateral for itself and also
as agent and bailee for all other UBS Entities that are secured
parties under any Contract or with respect to any Obligation. All
Collateral pledged by Client in connection with a particular Contract
shall secure first the Obligations to the UBS Entities under that
Contract and second any other Obligations to the UBS Entities and
Contracts with the UBS Entities. Anything in this Agreement to the
contrary notwithstanding, each UBS Entity hereby agrees to comply with
entitlement orders and other instructions with respect to any
Collateral held in or credited to any account maintained by such UBS
Entity for Client, or otherwise held by such UBS Entity, which
entitlement order or instruction is originated by any UBS Entity that
is a secured party under any Contract or with respect to any
Obligation, in each case without further consent of Client; Client
hereby consents to such agreement. In addition, Client hereby consents
to any agreement pursuant to which a UBS Entity agrees to comply with
entitlement orders originated by any other UBS Entity that is a
secured party under any Contract or with respect to any Obligation
with respect to Collateral held in or credited to any account
maintained by such UBS Entity for Client, or otherwise held by such
UBS Entity, including the entering into control or similar agreements.
Each of the UBS Entities represents and warrants that it has not, and
agrees that it will not, agree to comply with entitlement orders
concerning the Collateral held by the UBS Entities that are originated
by any person other than (i) Client, any person acting on behalf of
Client (unless a UBS Entity shall have given a "notice of sole
control") or (ii) a UBS Entity.
(e) Under no circumstances shall any Collateral pledged principally to
secure Obligations to any of the UBS Entities under any Contract with
any UBS Entity be required to be applied or transferred to secure
Obligations to any of the UBS Entities under any other Contract or to
be released if such UBS Entity determines that such transfer would
render it undersecured with respect to the Obligations or Contracts
for which such Collateral was pledged or if an event of default has
occurred and is continuing under any Contract between Client and such
UBS Entity or any such application, transfer or release would be
contrary to Applicable Law.
(f) The UBS Entities' security interest in the Collateral shall (i) remain
in full force and effect until the payment and performance in full of
its Obligations and termination of this Agreement by the parties, (ii)
be binding upon Client, its successors and permitted assigns, and
(iii) inure to the benefit of, and be enforceable by, the UBS Entities
and their respective successors, transferees and assigns.
(g) Client will notify UBS Securities not less than 30 days prior to any
change in (i) if Client is an individual, Client's principal residence
or (ii) if Client is not an individual, Client's type of organization,
jurisdiction of organization, organizational identification number,
place of business (if it has, or after such change will have, only one
place of business) or chief executive office (if it has, or after such
change will have, more than one place of business).
3. RIGHTS UPON DEFAULT OF CLIENT.
(a) Each of the following shall constitute a "DEFAULT" by Client under
this Agreement:
(i) Client's death (if an individual), dissolution (if an
organization) or material breach of any provision of this
Agreement or any Contract (provided, however, that the failure
of Client to make any part of any payment or delivery when due
shall be deemed to be a material breach unless such failure was
not within the sole control of Client);
(ii) the failure by Client to give reasonable assurances of due
performance as set forth in this Agreement, which shall
constitute a material and additional breach, repudiation,
misrepresentation or default (howsoever characterized) under the
terms of all Contracts;
(iii) any material breach, repudiation, misrepresentation or the
occurrence of a default, termination event or similar condition
(howsoever characterized which, for the avoidance of doubt,
includes the occurrence of an Additional Termination Event under
any ISDA Master Agreement between Client and any UBS Entity by
Client under any Contract and there occurs a liquidation of, an
acceleration of all obligations under, or an early termination
of, that Contract;
(iv) any representation by Client in this Agreement which shall have
been untrue when made or deemed made;
(v) Client (A) is insolvent or is unable to pay its debts as they
become due or fails or admits in writing its inability to pay
its debts as they become due, (B) makes a general assignment,
arrangement or composition with or for the benefit of its
creditors, or (C) institutes or has instituted against it a case
or proceeding under any bankruptcy, insolvency, reorganization,
liquidation, moratorium, dissolution, delinquency or other
similar law affecting creditors' rights, or seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, trustee, receiver, custodian or similar
official for all or a substantial portion of its assets; or
(vi) the failure of Client to fulfill or discharge any Obligations,
including, but not limited to, the failure to make any payment
or delivery when due.
(b) At any time when a Default under this Agreement has occurred and/or is
continuing, the UBS Entities may, without notice or demand to Client,
and at such times and places as the UBS Entities may determine,
terminate, liquidate and accelerate any and all Contracts and exercise
any right under any security relating to any Contract and any right to
net or set off payments which may arise under any Contract or other
agreement or under applicable law, cancel any outstanding orders for
the purchase or sale or borrowing or lending of any securities or
other property, terminate, effective at a time specified by UBS
Securities, any obligation to accept or affirm additional transactions
presented by any Executing Broker for the account of UBS Securities as
Client's Prime Broker, or sell any or all of the Collateral (either
individually or jointly with others), or buy in any securities,
commodities or other property of which any account of Client with any
UBS Entity may be short. To the extent permitted by Applicable Law,
such sale, purchase or cancellation may be made on the exchange or
other market where such business is then usually transacted, or at
public auction or at private sale, without advertising the same and
without any notice of the time or place of sale to Client or to the
personal representatives of Client, and without prior tender, demand
or call of any kind upon Client or upon the personal representatives
of Client, all of which are expressly waived. To the extent permitted
by Applicable Law, the UBS Entities may purchase or sell the property
to or from itself or third parties in whole or in any part thereof
free from any right of redemption, and Client shall remain liable for
any deficiency. A prior tender, demand or call of any kind from the
UBS Entities, or prior notice from the UBS Entities, of the time and
place of such sale or purchase shall not be considered a waiver of the
UBS Entities' right to sell or buy any Collateral at any time as
provided herein. In addition, upon the occurrence of a Default, each
UBS Entity may exercise all the rights of a secured party under the
NYUCC (whether or not in effect in the jurisdiction in which such
rights are exercised) with respect to any Collateral. [XXXXXXX, I
THOUGH THAT WE AGREED THAT THE COMMERCIALLY REASONABLE LANGUAGE WOULD
STAY AND THAT ITS RIGHTS AS A SECURED CREDITOR WERE ONLY AGAINST THE
ACCOUNT - NOT ANY AND ALL UBS OBLIGATIONS? UNDER THE '40 ACT I DO NOT
THINK THAT WE CAN GIVE UBS A PRIORITY INTEREST IN ANY ASSETS ASIDE
FROM THE SHORT SALES IN THE SPECIAL CUSTODY ACCOUNT.]
(c) Client shall remain liable for any deficiency in its accounts
maintained by any of the UBS Entities or in respect of any Contract or
Obligation, including any loss or expense incurred in connection with
the commercially reasonable exercise of remedies under this Agreement
following the termination of this Agreement or the exercise of any
other remedies by the UBS Entities.
4. ADEQUATE ASSURANCES.
If at any time any of the UBS Entities has reasonable grounds for
insecurity with respect to Client's performance of any of the Contracts or
its Obligations, any of the UBS Entities may demand, and Client shall give,
adequate assurance of due performance by Client within 24 hours, or within
any reasonable shorter period of time the UBS Entities demand. The adequate
assurance of performance may include, but shall not be limited to, the
delivery by Client to the UBS Entities of additional property as
Collateral. Any failure by Client to give such adequate assurance of due
performance shall constitute an independent, material default under the
terms of this Agreement.
5. MARGIN AND COLLATERAL TERMS.
Client hereby agrees to at all times maintain in and furnish to the
Accounts such margin (the "MARGIN") as is required by Applicable Law and
such greater amounts as the UBS Entities or Client may in their sole
discretion require in light of Applicable Law or Client's outstanding
Contracts with any of the UBS Entities and Obligations of Client to any of
the UBS Entities [SEE ABOVE COMMENT]. Client agrees to pay forthwith on
demand any debit balance owing with respect to any of its margin account(s)
maintained with any of the UBS Entities. Upon Client's failure to make any
such payment or deposit, any of the UBS Entities shall be entitled, without
prior demand, call or notice, to exercise all rights and remedies provided
in this Agreement or any Contract [SEE ABOVE COMMENT]. Client understands
that the UBS Entities may
from time to time impose limitations on the types, size or number of
transactions hereunder or other transactions in any account t of Client
with any of the UBS Entities or decline to enter into transactions.
6. NETTING AND SET OFF RIGHTS.
Without limiting the rights and remedies of the UBS Entities in Section 3,
the UBS Entities shall have the right and Client expressly agrees that the
UBS Entities shall have the right, at any time and from time to time, to
set off and otherwise apply any and all obligations of any of the UBS
Entities to Client (whether mature or unmatured, fixed or contingent,
liquidated or unliquidated) against any and all Obligations of Client to
any of the UBS Entities then due (whether at maturity, upon acceleration or
termination or otherwise) and to foreclose on any Collateral for the
purpose of satisfying any and all Obligations. Client agrees that the
fulfillment of the obligations of any of the UBS Entities to Client under
any Contract is contingent upon there being no material breach,
repudiation, misrepresentation or default (however characterized) by Client
which has occurred and is continuing under any Contract.
7. CURRENCY CONVERSION.
The UBS Entities shall have the right to convert currencies in connection
with the effecting of transactions and the exercise of any of their rights
and remedies hereunder in such manner as any of them may determine to be
commercially reasonable.
8. MAINTENANCE OF CLIENT'S COLLATERAL.
(a) Client agrees and acknowledges that the UBS Entities, at any time at
any UBS Entity's discretion and without prior notice to Client, may
use, apply, or transfer any and all Collateral interchangeably between
UBS Entities in any accounts in which Client has an interest. With
respect to Collateral pledged principally to secure Obligations under
any Contract with any UBS Entity, the UBS Entities shall have the
right, but in no event the obligation, to apply all or any portion of
such Collateral to Client's Obligations to any of the UBS Entities
under any other Contract, to transfer all or any portion of such
Collateral to secure Client's Obligations to any of the UBS Entities
under any other Contract or to release any such Collateral.
(b) Payments or deliveries to a UBS Entity with respect to a transaction
or Obligation will not be "final" until the relevant UBS Entity shall
have received immediately available funds which under Applicable Law
are irreversible, which are not subject to any security interest
(other than that set forth herein or in any other Contract between
Client and a UBS Entity), levy or other encumbrance, and which are
specifically applicable, or deemed by the relevant UBS Entity to be
specifically applicable, to such transaction or Obligation. A debit by
a UBS Entity to any other account of Client maintained by the UBS
Entities or to an account of any third party to whom or for whose
account securities have been delivered shall not constitute final
payment to the extent that such debit creates an overdraft or does not
otherwise result in the receipt by the relevant UBS Entity of
immediately available, irreversible and unencumbered funds.
(c) All income and receipts, sale proceeds and other cash accruing on or
arising in respect of items in any Account and other cash sums
received by any UBS Entity for any of Client's accounts may be
automatically applied in immediate repayment (to the extent of the
amount received) of any debit balance owing with respect to any
account of Client [SEE ABOVE COMMENT].
9. SHORT AND LONG SALES.
Client agrees to comply with all of the Applicable Law relating to short
sales, including but not limited to the requirement that Client, when
placing with UBS Securities any short sale order, will designate it as
such, and when placing with UBS Securities any long sell order for
securities, will designate it as such to the extent Client "has a net long"
position in such securities and, if such securities are not then
deliverable by UBS Securities from any Accounts of Client, the placing of
such order shall constitute a representation by Client that it is
impracticable for Client then to deliver such securities to the relevant
UBS Entity but that Client will deliver them as soon as it is commercially
practicable to do so.
10. FAILURE OF DELIVERY.
In case of a sale of any security, commodity, or other property by any of
the UBS Entities at the direction of Client and the UBS Entities' inability
to deliver the same to the purchaser by reason of failure of Client to
supply the UBS Entities therewith, Client authorizes the UBS Entities to
borrow or purchase any such security, commodity or other property necessary
to make delivery thereof. Client hereby agrees to be responsible for any
loss or expense which the UBS Entities may sustain in connection with
Client's failure to deliver securities, commodities or other property, any
premiums which the UBS Entities may be required to pay thereon, and for any
loss or expense which the UBS Entities may sustain by reason of the UBS
Entities' inability to borrow or purchase the security, commodity, or other
property to fulfill the UBS Entities' delivery obligations.
11. GIVE-UPS; FREE DELIVERIES.
In the event: (i) Client's orders are not executed by UBS Securities and
Client gives up UBS Securities name for clearance and/or settlement with
respect to transactions which are not subject to the SEC Letter, or (ii)
Client requires UBS Securities to make a free delivery of cash or
securities in connection with the settlement of such orders ("CLEARING
TRANSACTIONS"), the following terms and conditions shall apply:
(a) Client will notify UBS Securities of the details of all Clearing
Transactions necessary to clear and settle each Clearing Transaction
(including all such information as may be specified by UBS Securities
from time to time with respect to transactions of that type) within
the time periods specified and in formats specified by UBS Securities
from time to time. Client will bear all risks related to each Clearing
Transaction, including the risk of non-performance by the third party,
broker or dealer. Client will provide to UBS Securities and be
responsible for the settlement payment (including the necessary
securities) to enable UBS Securities to process, clear and settle the
delivery of securities and cash relating to each Clearing Transaction,
and any cash or securities necessary to meet a demand for margin made
by the third party, broker or dealer relating to a Clearing
Transaction. If UBS Securities engages in Clearing Transactions for
Client in which UBS Securities becomes obligated to settle a trade
Client has placed through another broker or dealer, Client shall be
obligated to UBS Securities for the settlement payment (including the
necessary securities) to enable UBS Securities to process, clear and
settle such transaction. UBS Securities is only acting as agent in
connection with any Clearing Transaction and nothing contained herein
shall
be construed as imposing liability on any UBS Entity as a principal.
Client shall not under any circumstances represent to any third party
that any UBS Securities entity acts as guarantor in any Clearing
Transaction.
(b) Client will only execute bona fide orders, and if required for
settlement of a transaction, Client will request a free delivery of
cash or securities only when Client has reasonable grounds to believe
that the counterparty and the broker who executed Client's order has
the financial capability to complete the contemplated transaction;
(c) UBS Securities reserves the right at any time to place a limit (of
either dollars or number of securities) on the size of transactions
that UBS Securities will accept for clearance or to reject
transactions. If, after Client has received notice of such limitation,
Client executes an order in excess of the limit established by UBS
Securities, UBS Securities shall have the right, exercisable in its
sole discretion, to decline to accept any transaction for clearance
and settlement. In the event any claim is asserted against UBS
Securities by the broker who executed Client's order because of such
action by UBS Securities Client agrees to indemnify and hold harmless
UBS Securities from any loss, liability, damage, claim, cost or
expense (including, but not limited to, fees and expenses of legal
counsel) arising directly or indirectly therefrom; and
(d) UBS Securities will attempt to clear such transactions within a
reasonable period of time and utilize the same procedures it utilizes
when clearing transactions on behalf of other customers. UBS
Securities shall have the right but not the obligation to take action
at any time in its sole discretion to correct errors in such
transactions. Client hereby agrees to release, indemnify and hold
harmless UBS Securities from all loss, liability, damage, claim, cost
or expense (including, but not limited to, fees and expenses of legal
counsel) arising out of or incurred in connection with Client's
failure or the failure of the broker who executed Client's order to
settle the transaction, to return any free delivery upon demand, and
UBS Securities shall have no liability whatsoever to Client in any
such circumstance.
12. PRIME BROKERAGE SERVICES.
In connection with any transactions for which UBS Securities acts as
Client's Prime Broker pursuant to the SEC Letter:
(a) Client hereby appoints UBS Securities, in accordance with the terms of
this Agreement, to act as its Prime Broker. Client acknowledges that
it is familiar with and agrees to comply with the terms of the SEC
Letter and to inform UBS Securities promptly if it fails to do so. In
connection therewith, Client authorizes UBS Securities to execute an
agreement with all Executing Brokers (a "PRIME BROKERAGE AGREEMENT"),
to provide any relevant information relating to Client to the
Executing Brokers, and to perform any necessary or useful act as Prime
Broker in accordance with this Agreement or Applicable Law.
(b) Client or its authorized representative will advise UBS Securities
prior to 5:30 p.m. (New York time) on trade date of the details of all
transactions (the "TRADE DATA") effected by Executing Brokers on
Client's behalf as required by the SEC Letter. UBS Securities is
authorized to acknowledge, affirm, settle and clear all such
transactions. UBS Securities is further authorized to undertake to
resolve any unmatched trade report received by it from an Executing
Broker; however, Client shall remain responsible for the ultimate
resolution and UBS Securities shall have no responsibility with
respect to Trade Data not correctly transmitted to it on a timely
basis by any person or entity. As between Client and UBS Securities,
the Executing Broker will be acting as an agent of Client for the
purpose of carrying out Client's instructions with respect to the
purchase, sale and settlement of securities. Client understands that
no order may be legally accepted by UBS Securities as Prime Broker
from an Executing Broker with whom UBS Securities has not entered into
a Prime Brokerage Agreement. Client will use commercially reasonable
efforts to assure that its Executing Brokers comply with any Prime
Brokerage Agreement to which such Executing Broker is a party. Client
agrees that UBS Securities shall use commercially reasonable efforts,
but shall be under no obligation to effect or settle any trade on
behalf of Client.
(c) On the Business Day following each transaction, UBS Securities shall
send Client a notification of each trade placed with any Executing
Broker based upon information provided by Client. Each such
notification shall provide the information required by the SEC Letter.
If Client has instructed Executing Brokers to send trade confirmations
to Client in care of UBS Securities, Client understands that such
confirmations are available to Client without charge upon request. UBS
Securities shall also provide Client with periodic statements
concerning transactions effected for it and in respect of the
Collateral held by UBS Securities. Except as otherwise explicitly
provided herein, "BUSINESS DAY" as used in this Agreement means any
day other than a Saturday, Sunday and or other day on which the New
York Stock Exchange is closed. All references to time herein are to
time in New York City.
(d) Client and UBS understand and agree that Client must maintain in its
Account with UBS Securities, its custodian or a registered investment
adviser(s) a minimum net equity in cash and securities with a ready
market no less than is required by the 1940 Act and the SEC Letter
(the "MINIMUM NET EQUITY") or any greater amount as to which UBS
Securities may from time to time inform Client; and that settlement of
such transactions will be made by UBS Securities only if sufficient
funds or securities, as applicable, are maintained in an Account with
UBS Securities, Client's custodian or if Client makes other
arrangements for settlement which are satisfactory to UBS Securities;
provided, however, that in no event will UBS Securities accept any
transaction if Client maintains, or the settlement of such transaction
would cause it to maintain, a net equity less than the Minimum Net
Equity. If Client's Account with UBS Securities falls below the
Minimum Net Equity, and it does not bring its Account into compliance
in accordance with Applicable Law and UBS Securities' requirements,
Client authorizes UBS Securities to notify all Executing Brokers of
this event. In such event, Client further understands and agrees that
UBS Securities is required by the SEC Letter, without notice to
Client, to disaffirm or DK any transaction effected for it by an
Executing Broker. Should UBS Securities be required to disaffirm or DK
any transaction of Client's, all of Client's transactions of that day
and the immediately preceding Business Day will be disaffirmed or
DK'd. In that case, UBS Securities shall send a cancellation
notification to Client to offset the prior notification sent pursuant
to the previous paragraph and Client understands that it must settle
outstanding trades directly with the Executing Brokers and hereby
authorizes UBS Securities to provide the Executing
Brokers with any relevant information necessary in order for the
Executing Brokers to settle such trades.
(e) If Client's Account is managed on a discretionary basis by a third
party (the "ADVISOR"), Client hereby authorizes UBS Securities to
commingle its prime brokerage transactions with those of other
accounts managed by the Advisor ("SUB-ACCOUNTS") for settlement in
bulk in accordance with the Advisor's instructions. Client understands
that no part of any transaction may be allocated to sub-accounts
having net equity below the minimum levels established by the SEC
Letter and that, should such a net equity maintenance problem occur in
any such sub-account, UBS Securities may be required to disaffirm the
entire transaction. Client agrees that, in that event, prior to the
disaffirmance deadline established by the SEC Letter, the Advisor may
resubmit the bulk trade so as to exclude those securities which were
originally allocated to the sub-account failing to meet the minimum
net equity or, if permissible, re-allocate the entire prime brokerage
transaction to those sub-accounts meeting the net equity requirements
established by the SEC Letter.
13. FEES.
Client agrees to pay all brokerage commissions (including Executing Broker
fees), and markups or markdowns in connection with the execution of
transactions and other fees for other services rendered to Client. All such
fees shall be determined in good faith by UBS Securities. Client shall make
any necessary arrangements concerning the payment of any such fees. UBS
Securities is authorized to pay any such fees from the Account(s) of
Client.
14. CUSTODY.
State Street Bank and Trust Company or Client's successor custodian shall
at all times be the custodian of Client's assets pursuant to the Special
Custody Agreement by and among Client, State Street Bank and Trust Company
(as such agreement may be novated to, or replaced by a similar agreement
with, any successor custodian of Client) and UBS Securities LLC.
15. UBS ENTITIES ARE NOT PROVIDING ADVICE; NOT FIDUCIARIES.
Client represents and warrants that it is capable of assessing the merits
of and understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms and conditions set forth in
this Agreement and any transaction it may undertake with the UBS Entities.
It is also capable of undertaking the obligations set forth in this
Agreement. With respect to this Agreement or any transaction it may
undertake with the UBS Entities, Client acknowledges that none of the UBS
Entities or their respective agents or affiliates is acting as a fiduciary
for (other than in connection with their duties as an agent for Client in a
transaction executed by the UBS Entities as agent) or an adviser to Client;
Client understands that the UBS Entities are not acting as investment
advisers or soliciting orders, that the UBS Entities are not advising it,
performing any analysis, or making any judgment on any matters pertaining
to the suitability of any order, or offer any opinion, judgment or other
type of information pertaining to the nature, value, potential or
suitability of any particular investment.
16. PRIME ACCESS; DIRECT MARKET ACCESS.
(a) UBS Securities may provide to Client an electronic trading service
that enables electronic transmission of orders to securities exchanges
or markets, using the UBS infrastructure, with access to its Prime
Access system and other electronic systems (collectively, the
"SERVICES"). Client's use of the Services will be governed by the
terms and conditions of this Agreement, including this Section 16. All
title, ownership rights and intellectual property rights in or
relating to any software, hardware, application, interfaces and/or
network communication device (together "EQUIPMENT") provided in
relation to the Services and any information transmitted over the
Service shall remain the exclusive property of UBS Securities, except
for any Equipment which is proprietary to a third party. UBS grants
Client a non-exclusive and non-transferable license (the "LICENSE") to
access and use the Services and Equipment. In accepting this License,
Client agrees that: (i) the Equipment will be used only in connection
with the Services and Client will not, nor will Client permit a third
party to disassemble, decode, alter, copy, amend, develop or
commercially exploit the Services and/or the Equipment; (ii) Client
will keep the Services, Equipment and any manuals and instructional
materials provided in whatever form to Client confidential at all
times and will return such materials to UBS Securities upon request or
termination of access or use; (iii) Client will not, without the prior
written consent of UBS Securities, permit any person (other than
Client's properly authorized officers, employees and agents) to view
or use the Services or Equipment. Client will be responsible for
maintaining secure internal and, to the fullest extent possible,
external controls on access to and use of the Services and Equipment.
Client acknowledges that UBS Securities is under no duty of inquiry
regarding the capacity of any person submitting orders or entering
data through the Services and any such person will be viewed as having
the authority to bind Client. Nor is UBS Securities under any duty to
verify any information which is transmitted by means of the Equipment;
(iv) UBS Securities is not responsible for notifying Client of any
upgrades, fixes or enhancements to the Services or Equipment, however
UBS Securities will make reasonable efforts where possible to notify
Client of such upgrades, fixes or enhancements; (v) Client will follow
all guidelines for use of and access to the Service and/or Equipment
as may be notified to Client by UBS Securities from time to time; and
(vi) if Client uses any service or network of a third party vendor to
access the Services, then all installation, use and maintenance of any
delivery components are the sole responsibility of the vendor, and UBS
Securities has no responsibility for the hardware, the software or any
communication link required or related to such third party service and
third party services are not in any way warranted or supported by UBS.
When using the Services, Client will not conduct any activity which,
whether on its own or in combination with other activities, could
constitute market-making activity or require registration or licensing
as a broker or dealer. UBS Securities may impose limitations on
Client's use of the Services, including but not limited to aggregate
values of trades per day and limits or restrictions on markets and
instruments available for trading from time to time. UBS Securities
may accept or reject at its sole discretion any orders on the Services
and/or Equipment. Client covenants that all transactions conducted via
use of the Services and/or the Equipment will be in compliance with
Applicable Law.
(b) Client agrees that its use of the Services and Equipment is at its
sole risk. Client accepts responsibility for orders submitted,
notwithstanding that such orders may have been submitted erroneously
or by an unauthorized user or is inaccurate or incomplete when
submitted to the
Services or Client subsequently determines for whatever reason that
the order should not have been submitted; and Client will, if damages
occur to UBS Securities for such an order(s), reimburse UBS Securities
for any monetary loss due to such trade error.
(c) NO UBS ENTITY, NOR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, CONTRACTORS, AND AFFILIATES WARRANT THAT THE SERVICES AND
EQUIPMENT WILL BE UNINTERRUPTED OR ERROR FREE NOR DO ANY OF THEM MAKE
ANY WARRANTY AS TO THE RESULT THAT MAY BE OBTAINED FROM THE USE OF THE
SERVICE OR AS TO THE TIMELINESS, SEQUENCE, ACCURACY, COMPLETENESS,
RELIABILITY OR CONTENT OF ANY INFORMATION, SERVICE OR TRANSACTION
PROVIDED THROUGH THE SERVICE OR WITH RESPECT TO EQUIPMENT. THE
SERVICES AND EQUIPMENT ARE PROVIDED ON AN "AS IS", "AS AVAILABLE"
BASIS WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, THOSE OF INFORMATION ACCESS, ORDER
EXECUTION, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
17. TAXES.
Each payment by Client and all deliveries of Collateral under this
Agreement shall (except as required by law) be made, except as required by
law, and the value of any Collateral shall be calculated, without
withholding or deducting any Taxes. "TAXES" are any taxes, levies, imposts,
duties, charges, assessments or fees of any nature, including interest,
penalties and additions thereto that are imposed by any taxing authority.
If any Taxes are required to be withheld or deducted, Client shall pay such
additional amounts as necessary to ensure that the actual net amount
received by the UBS Entities is equal to the amount that the UBS Entities
would have received had no such withholding or deduction been required.
Client will provide the UBS Entities with any forms or documentation
reasonably requested by the UBS Entities in order to reduce or eliminate
withholding tax on payments made to Client with respect to this Agreement.
The UBS Entities are hereby authorized to withhold taxes from any payment
made hereunder and remit such taxes to the relevant taxing authorities to
the extent required by law.
18. INDEMNITY; LIMITATION OF LIABILITY.
(a) Client agrees to indemnify and hold the UBS Entities harmless from any
loss, claim or expense, including reasonable attorneys' fees and
expenses, when and as incurred by the UBS Entities in connection with
or related to this Agreement or any Contract or pursuant to authorized
instructions received by the UBS Entities from Client or its agents,
and to fully reimburse the UBS Entities for any reasonable legal or
other expenses (including the cost of any investigation and
preparation) when and as incurred by the UBS Entities in connection
with any claim, action, proceeding, or investigation arising out of or
in connection with this Agreement or any transactions hereunder or
Contracts or any activities of the UBS Entities in connection with
this Agreement.
(b) The UBS Entities shall not be held liable for any acts, omissions or
defaults of an Executing Broker, subcustodian (other than another UBS
Entity) or other third party, subject to U.S. bank regulatory
limitations applicable to U.S. bank offices of any of the UBS
Entities. All transactions effected with an Executing Broker or other
third party for Client shall be for the account of Client and the UBS
Entities shall have no responsibility to Client or such third party
with respect thereto. Client agrees that it is responsible, and liable
to the relevant UBS Entity, for all costs, losses and fees arising out
of the settlement of Client's orders with an Executing Broker selected
by Client (including, without limitation, the insolvency of any such
party or the failure of any such party to fulfill its settlement
obligations to UBS Securities).
(c) In no event should the UBS Entities be held liable for any loss of any
kind caused, directly or indirectly, by government restrictions,
exchange or market rulings, suspension of trading, war (whether
declared or undeclared), terrorist acts, insurrection, riots, fires,
flooding, strikes, failure of utility services, accidents, adverse
weather or other events of nature, including but not limited to
earthquakes, hurricanes and tornadoes, or other conditions beyond the
UBS Entities' control. In the event that any communications network,
data processing system, or computer system used by any of the UBS
Entities or Client is rendered wholly or partially inoperable, the UBS
Entities will not be liable to Client for any loss, liability, claim,
damage or expense resulting, either directly or indirectly, therefrom.
Notwithstanding the foregoing, the UBS Entities may be held liable for
any losses suffered by Client attributable to any circumstance capable
of mitigation pursuant to a prudent business continuity program.
(d) None of the UBS Entities, nor any of their respective officers,
directors, employees, agents or counsel, shall be liable, except for
their own gross negligence or willful misconduct, and no such party
shall be liable for any error of judgment made by it in good faith for
any action taken or omitted to be taken by any of them in good faith
hereunder or in connection herewith, including, but not limited to the
following: (i) the execution, clearing, custodying, subcustodying,
handling, purchasing or selling of cash, securities, commodities or
other property, including Collateral, or other similar action taken by
the UBS Entities; (ii) any arrangement pursuant to which certain of
Client's securities are held by subcustodians, agent banks, agent
financial institutions and depositories inside or outside the United
States provided that the subcustodians have been selected by the UBS
Entities with reasonable care in light of the relevant jurisdiction;
or (iii) any act or failure to act in any capacity under this
Agreement for Client when resulting from or arising out of or related
to material statements made or omitted by Client including in its
offering documents.
(e) Client further agrees that the UBS Entities may rely upon any
authorized instructions or any notice, request, waiver, consent,
receipt or other document which the UBS Entities reasonably believe to
be genuine and transmitted by authorized persons. The UBS Entities
shall be entitled to rely upon the identity and authority of the
authorized persons designated pursuant to this Agreement until it
receives an authorized instruction from Client to the contrary.
(f) In no event should the UBS Entities be held liable for indirect or
consequential damages for any reason.
19. REPRESENTATIONS AND WARRANTIES.
Client hereby represents and warrants as of the date hereof, which
representations and warranties will be deemed repeated on each date on
which a transaction is effected for Client's Account(s) or a Contract with
any of the UBS Entities is executed, that:
(a) Client (if not an individual) is duly organized and validly existing
under the laws of the jurisdiction of its organization;
(b) Client (if an individual) is of legal age and, unless Client has
otherwise informed UBS Securities in writing, Client is not an
employee of any exchange or of any exchange subsidiary, or of a
securities broker or dealer, bank, trust company, insurance company or
of any entity or individual engaged in the business of trading as
broker or as principal in financial instruments or assets;
(c) No person (other than Client or any UBS Entity) has an interest in the
Account or any other accounts of Client with any of the UBS Entities
or any Collateral or other assets or property held therein or credited
thereto (except for the residual interests attributable to the
Client's shareholders in the Client's assets or other property);
(d) Unless Client otherwise informs UBS Securities in writing, Client is
not an affiliate (as defined in Rule 144(a)(1) under the Securities
Act of 1933) of the issuer of any Collateral or the securities that
are the subject of any transaction;
(e) Client has full power and authority to execute and deliver this
Agreement and each Contract and to perform and observe the provisions
hereof and thereof and to enter into each transaction contemplated by
this Agreement, and this Agreement does and the Contracts do or will
constitute valid and binding agreements of Client, enforceable in
accordance with their terms, subject to applicable bankruptcy and
similar laws affecting creditors' rights and general principles of
equity;
(f) The execution, delivery and performance by Client of this Agreement,
the consummation of the Contracts, the fulfillment of the Obligations
and any transaction hereunder do not and will not result in a breach
or violation of any Applicable Law or order or award binding on Client
or its property, or Client's organizational documents, or any contract
or other instrument binding on or affecting Client or any of its
property;
(g) No consent of any person and no authorization or other action by, and
no notice to, or filing with, any governmental authority or any other
person is required that has not already been obtained (i) for the due
execution, delivery and performance by Client of this Agreement or for
the consummation of the Contracts and the fulfillment of the
Obligations; (ii) for the pledge by Client of the Collateral or the
perfection or maintenance of the first priority security interest
created hereby; or (iii) for the exercise by any of the UBS Entities
of the rights or remedies provided for in this Agreement, including
rights and remedies in respect of the Collateral;
(h) Client's financial statements or similar documents previously or
hereafter provided to the UBS Entities do or will fairly present the
financial condition of Client as of the date of such financial
statements and the results of its operations for the period for which
such financial statements are applicable, have been prepared in
accordance with U.S. generally accepted accounting principles and, if
audited, have been certified without reservation by a firm of
independent public accountants, and Client will promptly furnish to
the relevant UBS Entity appropriate financial statements or similar
documents upon the relevant UBS Entity's request and any other
information as the relevant UBS Entity may reasonably request, and if
at any time since the date of its most recent audited financial
statements, there occurs a material adverse change in Client's
business, financial condition or results of operations, Client agrees
that it will inform UBS Securities of such material adverse change
promptly in writing;
(i) No litigation, arbitration or administrative proceeding or claim is in
progress, pending or, to Client's knowledge, threatened which could by
itself or together with any other proceedings or claims affect the
legality, validity or enforceability of this Agreement or affect
Client's ability to perform the Obligations under this Agreement;
(j) Client is the lawful owner of all Collateral, free and clear of all
liens, claims, encumbrances and transfer restrictions, except such as
are created under this Agreement and other liens solely in favor of
one or more UBS Entities, and Client will not cause or allow any of
the Collateral, whether now owned or hereafter acquired, to be or
become subject to any liens, security interests, mortgages or
encumbrances of any nature other than those solely in favor of the UBS
Entities;
(k) The assets used to consummate the transactions provided hereunder
shall not constitute the assets of (i) an "employee benefit plan" that
is subject to the fiduciary responsibility provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), (ii) a
"plan" within the meaning of Section 4975 of the Internal Revenue Code
of 1986, as amended (the "CODE"), (iii) a person or entity the
underlying assets of which include plan assets by reason of Department
of Labor Regulation Section 2510.3-101 or otherwise, or (iv) a
governmental plan that is subject to any federal, state or local law
that is substantially similar to the provisions of Section 406 of
ERISA or Section 4975 of the Code; and
(l) (1) if Client is an individual, Client's principal residence is as set
forth on the signature page hereof or as shall have been notified to
UBS Securities pursuant to Section 30; or (2) if Client is not an
individual, Client's jurisdiction of organization, type of
organization, place of business (if it has only one place of business)
or chief executive office (if it has more than one place of business)
and organizational identification number are, in each case, as set
forth on the signature page hereof or as shall have been notified to
UBS Securities pursuant to Section 30. Unless Client otherwise informs
UBS Securities in writing, Client does not have any place of business
in the United Kingdom.
20. HONG KONG LOANS.
UBS wishes to inform you about the registration requirements that apply to
this Agreement with respect to Securities Loans of Hong Kong stock. As you
may know, where an entity borrows Hong Kong stock it must register the
agreement under which the stock borrowing and lending was transacted with
the Hong Kong Inland Revenue department ("IRD") within 30 days after the
first stock borrowing and lending transaction is effected if it is to
qualify for exemption from stamp duty. The stock borrower must also comply
with various other requirements of the Hong Kong Stamp Duty Ordinance that
include, among other things, periodic reporting and the submission of copy
documentation to the IRD. Failure to do so can result in the
non-application of the specific exemption from stamp duty and a fine being
levied for late stamping or late filing of a required return or both. Under
the IRD's rules, the obligation to register the agreement and to
periodically report transactions falls upon the borrower of the Hong Kong
stock. In that connection, you hereby authorize and appoint UBS, at UBS's
discretion and as appropriate, to register or file this Agreement and to
make any subsequent filings with or periodic reportings to the Hong Kong
revenue authorities in relation to any Securities Loan relating to Hong
Kong stock.
21. AGENTS.
The UBS Entities may execute any of their duties and exercise their rights
hereunder by or through agents (which may include affiliates) or employees.
In selecting and appointing agents, the UBS Entities shall use reasonable
care to ensure that it appoints only reportedly competent persons or
entities. None of the UBS Entities shall be liable for the acts or
omissions of any agent selected by it with reasonable care.
22. FURNISHING OF INFORMATION.
Client will promptly furnish to the relevant UBS Entity appropriate
financial statements or similar documents, and any other information, as
the relevant UBS Entity may reasonably request. Client authorizes UBS
Securities and, if applicable, Client's introducing broker, in its or their
discretion, at any time and from time to time, to make or obtain reports
concerning Client's credit standing and business conduct. Client may make a
written request for a description of the nature and scope of the reports
made or obtained by UBS Securities and the same will be provided to Client
within a reasonable period of time.
23. SEVERABILITY.
If any provision of this Agreement is or becomes inconsistent with any
applicable present or future law, rule or regulation, that provision will
be deemed modified or, if necessary, rescinded in order to comply with the
relevant law, rule or regulation. All other provisions of this Agreement
will continue and remain in full force and effect. To the extent that this
Agreement is not enforceable as to any Contract, this Agreement shall
remain in full force and effect and be enforceable in accordance with its
terms as to all other Contracts.
24. APPLICABLE LAW.
(a) This Agreement, its enforcement, and any dispute between the UBS
Entities and Client hereunder, whether arising out of or relating to
Client's Accounts or otherwise, (including, without limitation, the
establishment and maintenance of the Accounts and all interests,
duties and obligations related thereto) shall be governed by and
construed in accordance with the laws of the State of New York and
shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(b) The parties hereto agree that the securities intermediary's
jurisdiction, within the meaning of Section 8-110(e) of the NYUCC, in
respect of any Accounts or other accounts and in respect of any
Collateral consisting of security entitlements is the State of New
York and agree that none of them has or will enter into any agreement
to the contrary.
(c) The parties hereto further agree that, in respect of any Account, the
law applicable to all the issues specified in Article 2(1) of the
"Hague Convention on the Law Applicable to Certain Rights in Respect
of Securities Held with an Intermediary (Hague Securities Convention)"
is the law in force in the State of New York and agree that none of
them has or will enter into any agreement to the contrary.
25. CHOICE OF DISPUTE RESOLUTION.
ANY DISPUTE CLIENT MAY HAVE WITH ANY OF THE UBS ENTITIES ARISING OUT OF,
RELATING TO OR IN CONNECTION WITH THIS AGREEMENT SHALL BE DETERMINED BY
ARBITRATION OR LITIGATION IN COURT AT THE ELECTION OF CLIENT. REGARDLESS OF
WHETHER CLIENT CHOOSES TO PROCEED BY ARBITRATION OR LITIGATION, CLIENT AND
THE UBS ENTITIES AGREE TO FOLLOW THE PROCEDURES, AND ABIDE BY THE
REQUIREMENTS SET FORTH IN THIS AGREEMENT.
26. ARBITRATION.
ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING
THE RIGHT TO JURY TRIAL.
PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM
COURT PROCEEDINGS.
THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL
REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF
RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED.
THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS
WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
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 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; (ii) THE CLASS IS DECERTIFIED; OR (iii) CLIENT 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.
ANY ARBITRATION UNDER THIS AGREEMENT SHALL BE HELD AT THE FACILITIES AND
BEFORE AN ARBITRATION PANEL APPOINTED BY THE NEW YORK STOCK EXCHANGE, INC.,
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., OR ANY OTHER
SELF-REGULATORY ORGANIZATION OF WHICH THE RELEVANT UBS ENTITY IS A MEMBER.
CLIENT MAY ELECT ONE OF THE FOREGOING FORUMS FOR ARBITRATION, BUT IF CLIENT
FAILS TO MAKE SUCH ELECTION BY REGISTERED MAIL ADDRESSED, TO UBS SECURITIES
LLC, 000 XXXXXXXXXX XXXXXXXXX, XXXXXXXX, XX 00000 ATTENTION: LEGAL
DEPARTMENT (OR ANY OTHER ADDRESS OF WHICH CLIENT IS ADVISED IN WRITING),
BEFORE THE EXPIRATION OF 10 DAYS AFTER RECEIPT OF A WRITTEN REQUEST FROM
ANY OF THE UBS ENTITIES TO MAKE SUCH ELECTION, THEN THE RELEVANT UBS ENTITY
MAY MAKE SUCH ELECTION. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS
CONSENT BY ANY OF THE UBS ENTITIES TO AN AWARD OF PUNITIVE DAMAGES. THE
AWARD OF THE ARBITRATORS, OR OF A MAJORITY OF THEM, SHALL BE FINAL, AND
JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE OR
FEDERAL, HAVING JURISDICTION.
27. LITIGATION IN COURT; SOVEREIGN IMMUNITY; SERVICE.
ANY LITIGATION BETWEEN CLIENT AND THE UBS ENTITIES OR INVOLVING THEIR
RESPECTIVE PROPERTY MUST BE INSTITUTED IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR THE SUPREME
COURT OF THE STATE OF NEW YORK FOR THE COUNTY OF NEW YORK. EACH PARTY
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY OBJECTION, INCLUDING, ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH COURTS. EACH
PARTY HEREBY AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW.
ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, ACTION, PROCEEDING OR
COUNTERCLAIM OR OTHER LEGAL ACTION IS HEREBY WAIVED BY ALL PARTIES TO THIS
AGREEMENT.
EACH PARTY HERETO, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
IRREVOCABLY WAIVES WITH RESPECT TO ITSELF AND ITS REVENUES AND ASSETS
(IRRESPECTIVE OF THEIR USE OR INTENDED USE) ALL IMMUNITY ON THE GROUNDS OF
SOVEREIGNTY OR SIMILAR GROUNDS FROM (I) SUIT, (II) JURISDICTION OF ANY
COURT, (III) RELIEF BY WAY OF INJUNCTION, ORDER FOR SPECIFIC PERFORMANCE,
OR 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 ACTIONS OR
PROCEEDINGS IN SUCH COURTS, AND IRREVOCABLY AGREES THAT IT WILL NOT CLAIM
SUCH IMMUNITY IN ANY SUCH ACTIONS OR PROCEEDINGS.
CLIENT HEREBY CONSENTS TO PROCESS BEING SERVED BY ANY UBS ENTITY ON CLIENT
IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE SPECIFIED IN CLAUSE (A)
ABOVE BY THE MAILING OF A COPY THEREOF BY REGISTERED OR CERTIFIED AIRMAIL,
POSTAGE PRE-PAID, TO CLIENT AT THE ADDRESS SET FORTH AFTER CLIENT'S
SIGNATURE BELOW; SUCH SERVICE SHALL BE DEEMED COMPLETED AND EFFECTIVE AS
FROM 30 DAYS AFTER SUCH MAILING. NOTHING CONTAINED HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
28. ASSIGNMENT.
The UBS Entities may assign their rights hereunder or any interest herein
to any affiliate and otherwise on thirty days prior written notice to an
unaffiliated entity. Client may not assign its rights hereunder or any
interest herein or under any other Contract with any of the UBS Entities
without the prior written consent of the respective UBS Entity or UBS
Entities, which consent will not be unreasonably withheld or delayed. Any
attempted assignment by Client in violation of this Agreement shall be
null, void and without effect.
29. MODIFICATION; TERMINATION.
Client agrees that UBS Securities may modify the terms of this Agreement at
any time upon thirty days prior written notice. If the modifications are
unacceptable, Client agrees to notify UBS Securities in writing within ten
days of the transmittal of such written notice. UBS Securities shall then
negotiate in good faith to resolve Client's concerns or cooperate with
Client in transitioning Client's Accounts to another broker. after which
Client agrees to remain liable to the UBS Entities for all existing
liabilities or Obligations without giving effect to any such modifications.
Client further agrees that all transactions and Contracts entered into
after such notification shall be subject to the modifications. Under no
circumstances may a modification be made by Client without UBS Securities'
written consent. Either UBS Securities or Client may terminate this
Agreement upon delivery of written notice to the other party, provided that
Sections 18, 24 and 27 shall survive any such termination. In the event of
such termination UBS Securities continues to have its rights under the SEC
Letter to cease the clearance and settlement of any transactions for Client
executed but not settled prior to such notice of termination.
30. NOTICES.
All notices and other communications provided hereunder shall be in writing
and either posted onto the Internet in a form agreed to by the parties or
mailed, electronically mailed, telecopied, or delivered to the addresses of
the intended recipient specified below or to such other address as such
intended recipient may provide. All communications sent to Client, whether
through the Internet, or by mail, fax, messenger or otherwise, shall be
deemed given to Client as of the date sent, whether actually received or
not. Client shall review promptly all such communications and shall
promptly advise the relevant UBS Entity of any error, omission or
inaccuracy in the transactions or positions reported. Reports of the
execution of orders, prime broker transactions and other activities in the
Accounts of Client made available to Client by 10:00 a.m. New York time on
the business day following the trade date shall be conclusive and binding
if not objected to in writing by Client by 12:00 noon on that day, or
within two hours after such report is made available if such report is not
available by 10:00 a.m. Information contained in confirmations and account
statements and not included in daily reports, shall be conclusive if not
objected to in writing within three days in the case of confirmations and
ten days in the case of statements of account, after transmittal by UBS
Securities to Client by mail or otherwise. Any notice and other
communications provided under this Agreement to UBS Securities shall be
sent to UBS Securities LLC, 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000,
Attention: Prime Broker Services, telephone: (000) 000-0000, fax: (212)
000-0000.
31. MISCELLANEOUS.
(a) Client hereby authorizes the UBS Entities, at the latter's discretion
and without further notice, to monitor and/or record any and all
telephone conversations between it or any of its employees or agents
and Client or any of Client's employees or agents relating to
transactions contemplated by this Agreement.
(b) Client does not wish to have certain information pertaining to its
beneficial ownership disclosed to a "registrant" (as such term is
defined in Rule 14b-1 of the Securities Exchange Act of 1934) pursuant
to SEC Rule 14b-1. Client objects to disclosure for the purposes of
Rule 14b-1(b)(1)(ii).
(c) No demand, call or notice that any of the UBS Entities may have made
in the past in any one or more instance shall be considered a waiver
of such UBS Entity's or UBS Entities' right to act in the future
without demand, call or notice. No failure or delay in exercising any
right, or any partial exercise of a right will operate as a waiver of
the full exercise of that right. The rights provided in this Agreement
are cumulative and not exclusive of any rights provided by Applicable
Law.
(d) The parties hereto acknowledge that this Agreement and each Contract
entered into pursuant to this Agreement
are each a "securities contract" within the meaning of the United
States Bankruptcy Code (11 U.S.C. Section 741(7)).
(e) This Agreement is hereby incorporated into each Contract with any of
the UBS Entities that is a "swap agreement" under the Bankruptcy Code
and any transfer hereunder shall be a transfer "under" and "in
connection with" each such Contract.
(f) Client hereby acknowledges receipt of UBS Securities' Truth-in-Lending
disclosure statement. Interest will be charged on any debit balances
in the Account(s) in accordance with the methods described in such
statement or in any amendment or revision thereto which may be
provided to Client. Any debit balance which is not paid at the close
of an interest period will be added to the opening balance for the
next interest period.
(g) This Agreement supersedes all prior agreements as to matters within
its scope. To the extent this Agreement contains any provision which
is inconsistent with provisions in any other Contract or agreement
between Client and any of the UBS Entities, or of which Client is a
beneficiary, the provisions of this Agreement shall control.
(h) This Agreement may be executed by the parties hereto in any number of
counterparts, each of which when so executed and delivered will be an
original, but all of which counterparts will together constitute one
and the same instrument.
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CLIENT ACKNOWLEDGES BY SIGNING BELOW THAT:
THE SECURITIES IN ANY OF CLIENT'S ACCOUNTS MAINTAINED BY ANY OF THE UBS ENTITIES
MAY BE LOANED TO ANY OF THE UBS ENTITIES OR LOANED OUT TO OTHERS;
CLIENT HAS RECEIVED A COPY OF THIS AGREEMENT; AND
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION AGREEMENT.
CLIENT:
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NAME OF INSTITUTION/INDIVIDUAL
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JURISDICTION OF ORGANIZATION
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TYPE OF ORGANIZATION
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PLACE OF BUSINESS / CHIEF EXECUTIVE OFFICER
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ORGANIZATIONAL IDENTIFICATION NUMBER
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NAME OF AUTHORIZED OFFICER
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TITLE OF AUTHORIZED OFFICER
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SIGNATURE OF AUTHORIZED OFFICER / INDIVIDUAL
XXXXXX'S ADDRESS FOR NOTICES AND OTHER CONFIRMATIONS:
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NAME
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STREET ADDRESS
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CITY, STATE, ZIP CODE
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ATTENTION
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TELEPHONE
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FAX
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EMAIL
ACCEPTED AND AGREED TO:
UBS Securities LLC, on behalf of itself and as agent for the UBS Entities
By:
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By:
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