Document:

Exhibit 10.1

 

GLOBALSTAR, INC.

 

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

FOR MEMBERS OF THE BOARD OF DIRECTORS UNDER

 

AMENDED AND RESTATED 2006 GLOBALSTAR, INC.

EQUITY INCENTIVE PLAN

 

THIS
AWARD AGREEMENT (“Agreement”), is entered into as of November 14, 2008
(the “Grant Date”), by and between GLOBALSTAR, INC., a Delaware corporation (the “Company”), and                                   
(“Director”).

 

1.                                      GRANT.  In
accordance with Resolutions adopted by Unanimous Consent of its Board of
Directors (the “Board”) effective on the Grant
Date, the Company hereby awards Director, subject to and in accordance with the
terms and conditions of this Agreement and the Amended and Restated 2006
Globalstar, Inc. Equity Incentive Plan (as amended or restated from time
to time, the “Plan”), a total of Two Hundred Thousand (200,000) non-qualified stock options (“Options”), each Option to purchase one share of the Company’s
Common Stock, par value $0.0001 per share (a “Share”),
at the option price (“Option Price”)
of $0.38 per share, which is the NASDAQ closing bid price for a Share on the
Grant Date.

 

2.                                      CONSIDERATION.  The
award made by this Agreement is in consideration and full satisfaction of past
and future service by Director as a member of the Board (“Service”).

 

3.                                      VESTING; FORFEITURE.

 

(a)                                  The Options are fully vested on the Grant
Date; provided, however, that a specified
number of the Options, as set forth in the table appended hereto as Schedule 3(a) (“Forfeiture Table”), shall remain subject to the Condition of
Forfeiture as defined in Section 3(b). 
Upon the occurrence of the Condition of Forfeiture, after the date of
this Agreement but before the then next-to-expire date on the Forfeiture Table,
the applicable number of Options shown on the Forfeiture Table shall without
notice automatically and immediately be divested, forfeited, and become null
and void.  For example, if the Condition
of Forfeiture should occur on December 31, 2008, the number of Options not
subject to the Condition of Forfeiture would be 104,167 and the remaining
subject to the Condition of Forfeiture would be 95,833.  Likewise, if the Condition of Forfeiture
should occur on January 1, 2009, the number of options not subject to the
Conditions of Forfeiture would be 108,334 and the remaining subject to the
Condition of Forfeiture would be 91,666.

 

(b)                                 The “Condition of Forfeiture”
is that the Director’s Service shall terminate because:  (i) Director voluntarily resigns from
Service as a member of the Board; or (ii) Director, at the expiration of
the Director’s current term as a member of the Board has not been nominated for
an additional term as a member of the Board because the Director has
voluntarily informed (or, having 

 

 

been
nominated for an additional term, Director subsequently voluntarily informs)
the Board that the Director will not continue in Service after expiration of
the Director’s term, or (iii) at any time, regardless of whether Director
has been nominated for an additional term, Director either resigns for “Cause” (as defined in Section 4), or is requested, by
notice as specified below, by the Chairman of the Board or by a majority of
Board members to resign, from Service for Cause.  For purposes of determining when a Condition
of Forfeiture has occurred under (i) or (ii) if this Section 3(b),
the term “Board” includes informing the Chairman of the Board or of any
committee of the Board having authority to make or recommend nominations for
members of the Board.

 

(c)                                  For avoidance of doubt, the intention of this
Agreement is that any failure of Director to continue in Service that is
directly and solely attributable to reasons (i), (ii), or (iii) under Section 3(b) shall
automatically and immediately result in the Condition of Forfeiture lapsing and
all Options no longer being subject to forfeiture.  For example, and not by way of limitation:

 

(i)                                     failure of Director, having been so
nominated, to achieve re-election by the requisite vote of the Company’s
stockholders shall result in the Condition of Forfeiture lapsing unless the Director
shall have been notified in writing prior to the vote of the stockholders
becoming final, that the Director is being requested to resign for Cause;

 

(ii)                                  failure of Director to continue in Service
because of any reorganization or change in control (as such events are
generally and liberally understood) of the Company shall result in the
Condition of Forfeiture lapsing; and

 

(iii)                               the death of Director or Director’s permanent
and total disability to perform substantially the duties of Director’s Service
shall result in the Condition of Forfeiture lapsing unless the Director
affected shall, prior to the occurrence of death or onset of disability, have
been duly notified in writing that the Director is being requested to resign
for Cause.

 

4.                                      CAUSE.  For
purposes of this Agreement, “Cause” means (i) any
act of fraud, theft, or misappropriation of property relating to the Company; (ii) any
material neglect or misconduct by Director in discharging the ordinary and
necessary duties of Service; (iii) any conviction, or plea of guilty or no
contest, by Director for any felony or any other crime related to Director’s
Service and involving moral turpitude; or (iv) any action or failure to
act by Director which results in a penalty or sanction being levied against
Director or the Company by the Securities and Exchange Commission or the
Federal Communications Commission.  Prior
to the date that all Options cease to be subject to forfeiture, the Company
shall not, for Cause, either remove Director from Service, request Director’s
resignation, or fail to nominate Director for an additional term of Service
unless the Company first provides Director with written notice that includes a
statement of the acts and omissions giving rise to the “for Cause” decision,
and that provides Director with an opportunity to be heard by the Board on the
subject.  After such notice and
opportunity to be heard have been given, the decision of the Board on the
question of whether Cause exists shall be final and conclusive.

 

2

 

5.                                      COMPLIANCE WITH RULE 16B-3.  The
Options subject to this Agreement have been approved by the Board of Directors
in compliance with Rule 16b-3(d) promulgated under the Securities
Exchange Act of 1934.

 

6.                                      EXPIRATION OF OPTIONS. 
Subject to applicable law and the Company’s then-effective insider
trading policy, Options no longer subject to the Condition of Forfeiture may be
exercised at any time, and from time to time, in the manner provided in this
Agreement, until five o’clock p.m., Pacific Standard Time, on November 14,
2018 (the “Expiration Time”).

 

7.                                      EXERCISE.  Only
Options that are not subject to the Condition of Forfeiture may be
exercised.  In order to exercise any
Option, Director must deliver to the Company a written notice at any time until
the Expiration Time indicating the number of Options being exercised,
accompanied by full payment of the Option Price applicable to the
exercise.  Director may exercise Options
as often as a notice is given and payment is tendered in accordance with this
Agreement, except that each exercise must be in the minimum amount of at least
1,000 Options, plus additional amounts of at least 100 Options, unless the
total number of Options not then subject to the Condition of Forfeiture is less
than 1,000, in which case any exercise submitted by Director must be for not
less than all remaining Options. 
Director may pay the Option Price in cash, by transferring to the
Company Shares owned by Director for at least six months prior to the exercise
with a Fair Market Value on the date of exercise equal to or in excess of the
Option Price, by delivery of an irrevocable instruction to a broker approved by
the Company of properly executed instructions, providing for the assignment to
the Company of the proceeds of a sale with respect to some or all of the Shares
issued upon exercise of an Option, or by a combination of the foregoing.  Director shall have no rights as a
stockholder with respect to purchased Shares before the exercise of an Option
and delivery to Director of a certificate evidencing those Shares or a
statement evidencing the entry of the Shares in Director’s name in book entry
form.

 

8.                                      TAXES.  Upon
exercise of Options, Director will become liable for and must pay all
applicable U.S. federal, state, and local taxes resulting from exercise.  Director agrees that the preceding sentence
shall not relieve Director of the obligation to obtain tax advice from Director’s
independent taxation advisor(s).  The
foregoing notwith-standing, the Company may, but shall not be obligated to
Director to, withhold all applicable taxes become due from Director upon
exercise of the Options (by withholding of Shares from delivery or otherwise)
from the proceeds of any exercise or from any directors’ fees or other payments
then due or to become due to Director. 
Subject to compliance with applicable law, Director may satisfy the
Company’s tax withholding by the Company in accordance with procedures
established by the Company providing for delivery by Director to the Company or
a broker approved by the Company of properly executed instructions, in a form
approved by the Company, providing for the assignment to the Company of the
proceeds of a sale with respect to some or all of the Shares issued upon exercise
of Options.  It is the intention of the
parties that Options, and Shares issued upon exercise of Options, under this
Agreement shall comply with, and/or be exempt from, the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended, so that no adverse tax
consequences of such Section will be imposed upon Director at the time any
exercise of Options.  This Agreement is
not intended to be a qualified plan under the Federal Employee Retirement
Income Security Act.  Nothing in this
Agreement shall be construed to be at variance with these intentions.

 

3

 

9.                                      ADJUSTMENT.  If
any dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, merger or consolidation, split-up, spin-off, or other similar corporate
transaction or event occurs prior to exercise of an Option, then the Board or
the Compensation Committee of the Board (the “Committee”)
shall adjust the number and kind of shares subject to the Option and the
purchase price of such shares in such manner as the Committee may deem
equitable and appropriate within the limits of applicable law and NASDAQ or
other exchange rules.

 

10.                               TRANSFERABILITY. 
Director may not transfer the Options or Director’s rights under this
Agreement other than (i) by will, (ii) by the laws of descent and
distribution applicable to Director’s estate, or (iii) by grant to the
trustee of an irrevocable or living trust for the benefit of Director and/or
Director’s estate or beneficiaries as designated from time to time in
accordance with such trust (a “Permitted Trust”).  Options shall be exercisable during Director’s
lifetime only by Director or by Director’s guardian, legal representative, or
the trustee of a Permitted Trust, and after Director’s death only by the duly
appointed and qualified personal representative of Director’s estate or the
trustee of a Permitted Trust to which such property or rights have been duly
transferred.

 

11.                               LAWS AND REGULATIONS.  No
Shares shall be issued upon exercise of Options unless and until all legal
requirements applicable to the issuance of such shares have been complied with
to the satisfaction of the Board or the Committee.  The Board or the Committee shall have the
right to condition any issuance of Shares to Director hereunder on Director’s
undertaking in writing to comply with such restrictions on the subsequent
disposition of such Shares as the Committee shall deem necessary or advisable
as a result of any applicable law or regulation.

 

12.                               RESERVATION OF REGISTERED SHARES.  As
soon as practicable, the Company shall cause Shares that have been registered
under the Securities Act of 1933, as amended (the “Securities
Act”) corresponding in number to the Options awarded, without regard
to possible future forfeiture, to be reserved by the Company’s registrar and
transfer agent for issuance upon exercise of Options.  The Company shall thereafter use its best
efforts to maintain the effectiveness of such registration and qualification
until exercise or earlier expiration of the Options.

 

13.                               MARKET STANDOFF PERIOD. 
Director acknowledges and agrees that if so requested in connection with
any registration of the offering of any securities of the Company (or any
successor) under the Securities Act, Director will not sell or otherwise
transfer any Shares or other securities of the Company (or a successor) during
the 180-day period (or such other period as may be requested by any underwriter
or the Company in writing) (the “Market Standoff Period”) following the
effective date of a registration statement of the Company (or any successor),
any parent corporation (as defined in Section 424 of the Internal Revenue
Code) or any Subsidiary filed under the Securities Act.  To enforce this restriction, such entity may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such Market Standoff Period.

 

14.                               NOTICES.  Any
notices required or permitted hereunder shall be addressed to the Company at
its corporate headquarters, to the attention of either the Director of Human
Resources or the Corporate Secretary, or to Director at the address then on
record with the Company, as the case may be. Notices shall be effective when
delivered 

 

4

 

or,
if delivery is released, when delivery is attempted in the ordinary
course.  Either party may, by notice to
the other given in the manner aforesaid, change his or its address for future
notices.

 

15.                               HEADINGS.  The
headings of paragraphs herein are included solely for convenience of reference
and shall not affect the meaning or interpretation of any of the provisions of
this Agreement.

 

16.                               INTERPRETATION. 
Nothing in this Agreement shall be construed to:  (i) confer on Director any right to be
granted any option, right, or benefit other than as set forth herein or at the
sole discretion of the Board or Committee; (ii) confer on Director any
rights whatsoever with respect to Shares except as specifically provided in
this Agreement; (iii) limit in any way the right of the Company terminate
Director’s Service at any time (however such termination may give rise to
rights on behalf of Director as described in the final sentence of this Section [16];
or (iv) be evidence of any agreement or understanding, expressed or
implied, that the Company or its subsidiaries or affiliates will employ or
retain Director in any position, including without limitation as a member of
the Board of Directors, at any rate of compensation or for any period of
time.  In the event that Director’s
Service terminates before November 14, 2018, Director’s rights shall be
limited exclusively to the rights expressly provided for in this Agreement.

 

17.                               GOVERNING LAW: INTERPRETATION.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of California without regard, except as to matters pertaining to estate
planning, to California conflict of laws principles.  It is subject to and shall be interpreted to
be consistent with the Plan.

 

18.                               SUCCESSORS AND ASSIGNS.  This
Agreement shall bind and inure to the benefit of the Company, its successors
and assigns, and Director and Director’s personal representatives and permitted
assigns.

 

19.                               AMENDMENT; COUNTERPARTS.  This
Agreement may be amended or modified at any time by an instrument in writing
signed by both parties hereto.  This
Agreement and any amendments thereto may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

20.                               SURVIVAL OF AGREEMENT.  To
the extent necessary to carry out the intentions of the parties hereto, the
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement.

 

 

	
  GLOBALSTAR,
  INC.

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  James
  Monroe III

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chairman
  of the Board and

  	
  Member
  of the Board of Directors

  
	
   

  	
  Chief
  Executive Officer

  	
   

  
				

 

5

 

SCHEDULE 3(a)

 

FORFEITURE TABLE

 

	
  Number of Options

  Not Subject to

  Condition of Forfeiture

  	
   

  	
  Number of Options

  Remaining Subject to

  Condition of Forfeiture

  	
   

  	
  Until Effective Date of

  Non-Forfeiture

  Set Forth Below

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  100,000

  	
   

  	
   

  	
  100,000

  	
   

  	
   

  	
  November 14, 2008

  	
   

  
	
  104,167

  	
   

  	
   

  	
  95,833

  	
   

  	
   

  	
  December 1, 2008

  	
   

  
	
  108,334

  	
   

  	
   

  	
  91,666

  	
   

  	
   

  	
  January 1, 2009

  	
   

  
	
  112,500

  	
   

  	
   

  	
  87,500

  	
   

  	
   

  	
  February 1, 2009

  	
   

  
	
  116,667

  	
   

  	
   

  	
  83,333

  	
   

  	
   

  	
  March 1, 2009

  	
   

  
	
  120,834

  	
   

  	
   

  	
  79,166

  	
   

  	
   

  	
  April 1, 2009

  	
   

  
	
  125,000

  	
   

  	
   

  	
  75,000

  	
   

  	
   

  	
  May 1, 2009

  	
   

  
	
  129,167

  	
   

  	
   

  	
  70,833

  	
   

  	
   

  	
  June 1, 2009

  	
   

  
	
  133,334

  	
   

  	
   

  	
  66,666

  	
   

  	
   

  	
  July 1, 2009

  	
   

  
	
  137,500

  	
   

  	
   

  	
  62,500

  	
   

  	
   

  	
  August 1, 2009

  	
   

  
	
  141,667

  	
   

  	
   

  	
  58,333

  	
   

  	
   

  	
  September 1, 2009

  	
   

  
	
  145,834

  	
   

  	
   

  	
  54,166

  	
   

  	
   

  	
  October 1, 2009

  	
   

  
	
  150,000

  	
   

  	
   

  	
  50,000

  	
   

  	
   

  	
  November 1, 2009

  	
   

  
	
  154,167

  	
   

  	
   

  	
  45,833

  	
   

  	
   

  	
  December 1, 2009

  	
   

  
	
  158,334

  	
   

  	
   

  	
  41,666

  	
   

  	
   

  	
  January 1, 2010

  	
   

  
	
  162,500

  	
   

  	
   

  	
  37,500

  	
   

  	
   

  	
  February 1, 2010

  	
   

  
	
  166,667

  	
   

  	
   

  	
  33,333

  	
   

  	
   

  	
  March 1, 2010

  	
   

  
	
  170,834

  	
   

  	
   

  	
  29,166

  	
   

  	
   

  	
  April 1, 2010

  	
   

  
	
  175,000

  	
   

  	
   

  	
  25,000

  	
   

  	
   

  	
  May 1, 2010

  	
   

  
	
  179,167

  	
   

  	
   

  	
  20,833

  	
   

  	
   

  	
  June 1, 2010

  	
   

  
	
  183,334

  	
   

  	
   

  	
  16,666

  	
   

  	
   

  	
  July 1, 2010

  	
   

  
	
  187,500

  	
   

  	
   

  	
  12,500

  	
   

  	
   

  	
  August 1, 2010

  	
   

  
	
  191,667

  	
   

  	
   

  	
  8,333

  	
   

  	
   

  	
  September 1, 2010

  	
   

  
	
  195,834

  	
   

  	
   

  	
  4,166

  	
   

  	
   

  	
  October 1, 2010

  	
   

  
	
  200,000

  	
   

  	
   

  	
  - 0 -

  	
   

  	
   

  	
  November 1, 2010

  	
   

  

 

6Exhibit 10.1

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

Borrower
Agreement

BY SIGNING
BELOW, THE BORROWER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT:

 

	
  A.

  	
   

  	
  The Borrower has received
  and read a copy of this Borrower Agreement, the attached Credit Line Account
  Application and Agreement (including the Credit Line Agreement following this
  Borrower Agreement) and the Loan Disclosure Statement explaining the risk
  factors that the Borrower should consider before obtaining a loan secured by
  the Borrower’s securities account. The Borrower agrees to be bound by the
  terms and conditions contained in the Credit Line Account Application and
  Agreement (including the Credit Line Agreement following this Borrower
  Agreement) (which terms and conditions are incorporated by reference).
  Capitalized terms used in this Borrower Agreement have the meanings set forth
  in the Credit Line Agreement.

  
	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  THE
  BORROWER UNDERSTANDS AND AGREES THAT UBS CREDIT CORP. MAY DEMAND FULL OR
  PARTIAL PAYMENT OF THE CREDIT LINE OBLIGATIONS, AT ITS SOLE OPTION AND
  WITHOUT CAUSE, AT ANY TIME, AND THAT NEITHER FIXED RATE ADVANCES NOR VARIABLE
  RATE ADVANCES ARE EXTENDED FOR ANY SPECIFIC TERM OR DURATION. THE BORROWER
  UNDERSTANDS AND AGREES THAT ALL ADVANCES ARE SUBJECT TO COLLATERAL
  MAINTENANCE REQUIREMENTS. THE BORROWER UNDERSTANDS THAT UBS CREDIT CORP. MAY,
  AT ANY TIME, IN ITS DISCRETION, TERMINATE AND CANCEL THE CREDIT LINE REGARDLESS OF WHETHER OR NOT AN
  EVENT HAS OCCURRED.

  
	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  UNLESS
  DISCLOSED IN WRITING TO UBS CREDIT CORP. AT THE TIME OF THIS AGREEMENT, AND
  APPROVED BY UBS CREDIT CORP., THE BORROWER AGREES NOT TO USE THE PROCEEDS OF
  ANY ADVANCE EITHER TO PURCHASE, CARRY OR TRADE IN SECURITIES OR TO REPAY ANY
  DEBT (I) USED TO PURCHASE, CARRY OR TRADE IN SECURITIES OR (II) TO
  ANY AFFILIATE OF UBS CREDIT CORP.. THE BORROWER WILL BE DEEMED TO REPEAT
  THIS AGREEMENT EACH TIME THE BORROWER REQUESTS AN ADVANCE.

  
	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  THE BORROWER
  UNDERSTANDS THAT BORROWING USING SECURITIES AS COLLATERAL ENTAILS RISKS.
  SHOULD THE VALUE OF THE SECURITIES IN THE COLLATERAL ACCOUNT DECLINE BELOW
  THE REQUIRED COLLATERAL MAINTENANCE REQUIREMENTS, UBS CREDIT CORP.
  MAY REQUIRE THAT THE BORROWER POST ADDITIONAL COLLATERAL, REPAY
  PART OR ALL OF THE LOAN AND/OR SELL THE BORROWER’S SECURITIES, ANY REQUIRED
  LIQUIDATIONS MAY INTERRUPT THE BORROWER’S LONGTERM INVESTMENT STRATEGIES
  AND MAY RESULT IN ADVERSE TAX CONSEQUENCES.

  
	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Neither
  UBS Credit Corp. nor UBS Financial Services Inc. provides legal or tax advice
  and nothing herein shall be construed as providing legal or tax advice.

  
	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Upon execution of this
  Credit Line Account Application and Agreement, the Borrower declares that all
  of the information requested in the Application and supplied by the Borrower
  is true and accurate and further agrees to promptly notify UBS Credit Corp.
  in writing of any material changes to any or all of the information contained
  in the Application including information relating to the Borrower’s financial
  situation.

  
	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Subject to any applicable
  financial privacy laws and regulations, data regarding the Borrower and the
  Borrower’s securities account may be shared with UBS Credit Corp. affiliates.
  Subject to any applicable financial privacy laws and regulations, the
  Borrower requests that UBS Credit Corp. share such personal financial data
  with non-affiliates of UBS Credit Corp. as is necessary or advisable to
  effect, administer or enforce, or to service, process or maintain, all
  transactions and accounts contemplated by this Agreement.

  
	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  The Borrower authorizes UBS
  Credit Corp. and UBS Financial Services Inc. to obtain a credit report or
  other credit references concerning the Borrower (including making verbal or
  written inquiries concerning credit history) or to otherwise verify or update
  credit information given to UBS Credit Corp. at any time. The Borrower
  authorizes the release of this credit report or other credit information to
  UBS Credit Corp. affiliates as it deems necessary or advisable to effect,
  administer or enforce, or to service, process or maintain all transactions
  and accounts contemplated by this Agreement, and for the purpose of offering
  additional products, from time to time, to the Borrower. The Borrower
  authorizes UBS Credit Corp. to exchange Borrower information with any party
  it reasonably believes is conducting a legitimate credit inquiry in
  accordance with the Fair Credit Reporting Act. UBS Credit Corp. may also
  share credit or other transactional experience with the Borrower’s designated
  UBS Financial Services Inc. Financial Advisor or other parties designated by
  the Borrower.

  
	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  UBS Credit Corp. is subject
  to examination by various federal, state and self-regulatory organizations
  and the books and records maintained by UBS Credit Corp. are subject to
  inspection and subpoena by these regulators and by federal, state, and local
  law enforcement officials. The Borrower acknowledges that such regulators and
  officials may, pursuant to treaty or other arrangements, in turn disclose
  such information to the officials or regulators of other countries, and that
  U.S. courts may be required to compel UBS Credit Corp. to disclose such
  information to the officials or regulators of other countries. The Borrower
  agrees that UBS Credit Corp. may disclose to such regulators and officials
  information about the Borrower and transactions in the credit line account or
  other accounts at UBS Credit Corp. without notice to the Borrower. In
  addition, UBS Credit Corp. may in the context of a private dispute be
  required by subpoena or other judicial process to disclose information or
  produce documentation related to the Borrower, the credit line account or
  other accounts at UBS Credit Corp. The Borrower acknowledges and
  agrees that UBS Credit Corp. reserves the right, in its sole discretion, to
  respond to subpoenas and judicial process as it deems appropriate.

  
	
   

  	
   

  	
   

  
	
  J.

  	
   

  	
  To help the government
  fight the funding of terrorism and money laundering activities, Federal law
  requires all financial institutions to obtain, verify, and record information
  that identifies each person who opens an account. When the Borrower opens an
  account with UBS Credit Corp., UBS Credit Corp. will ask for the Borrower’s
  name, address, and other information that will allow UBS Credit Corp. to
  identify the Borrower. UBS Credit Corp. may also ask to see other identifying
  documents. UBS Financial Services Inc. and UBS Credit Corp. are firmly
  committed to compliance with all applicable laws, rules and regulations,
  including those related to combating money laundering. The Borrower
  understands and agrees that the Borrower must take all necessary steps to
  comply with the antimony laundering laws, rules and regulations of the
  Borrower’s country of origin, country of residence and the situs of the
  Borrower’s transaction.

  
	
   

  	
   

  	
   

  
	
  K.

  	
   

  	
  UBS Credit Corp. and its
  affiliates will act as creditors and, accordingly, their interests may be
  inconsistent with, and potentially adverse to, the Borrower’s interest. As a lender
  and consistent with normal lending practice, UBS Credit Corp. may take any
  steps necessary to perfect its interest in the Credit Line, issue a call for
  additional collateral or force the sale of the Borrower’s securities if the
  Borrower’s actions or inactions call the Borrower’s creditworthiness into
  question. Neither UBS Credit Corp. nor UBS Financial Services Inc. will act
  as Client’s investment advisor with respect to any liquidation. In fact, UBS
  Credit Corp. will act as a creditor and UBS Financial Services Inc. will act
  as a securities intermediary.

  
	
   

  	
   

  	
   

  
	
  L.

  	
   

  	
  The Borrower understands
  that, if the Collateral Account is a managed account with UBS Financial
  Services Inc., (i) in addition to any fees payable to UBS Financial
  Services Inc. in connection with the Borrower’s managed account, interest
  will be payable to UBSCC on an amount advanced to the Borrower in connection
  with the Credit Line Account, and (ii) the performance of the managed
  account might not exceed the managed account fees and the interest expense
  payable to UBSCC in which case the Borrower’s overall rate of return will be
  less than the costs associated with the managed account.

  
	
   

  	
   

  	
   

  
	
  M.

  	
   

  	
  UBS Credit Corp. may
  provide copies of all credit line account statements to UBS Financial Services
  Inc. and to any Guarantor. The Borrower acknowledges and agrees that UBS
  Credit Corp. may share any and all information regarding the Borrower and the
  Borrower’s accounts at UBS Credit Corp. with UBS Financial Services Inc. UBS
  Financial Services Inc. may provide copies of all statements and
  confirmations concerning each Collateral Account to UBS Credit Corp. at such
  times and in such manner as UBS Credit Corp. may request and may share with
  UBS Credit Corp. any and all information regarding the Borrower and the
  missing language

  

 

IN WITNESS WHEREOF, the undersigned (the
“Borrower) has signed this Agreement, or has caused this Agreement to be signed
in its name by its duly authorised representatives, as of the date indicated
below.

 

© 2007 UBS Credit Corp. All rights reserved.

Sign and date the application on page 5.

 

4

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

 

	
   

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name of
  Borrower

  	
  FIVE STAR QUALITY CARE, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Title:

  	
  Treasurer, CFO & Asst Secretary

  
	
   

  	
  (Signature of Authorized
  Signatory (IN HB ONLY) of Borrower)*

  	
   

  	
   

  	
    (Title of
  Authorized Signatory of Borrower)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Title:

  	
  VP, Gen’l Counsel and Secretary 

  
	
   

  	
  (Signature of Authorized
  Signatory (IN HB ONLY) of Borrower)*

  	
   

  	
   

  	
    (Title of
  Authorized Signatory of Borrower)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
						

 

The
authorized signatory of the Borrower must be one of the Authorized Persons
designated on the applicable UBS Credit Corp. supplemental form executed by the
Borrower (e.g., the Supplemental Corporate Resolution Form (HP Form)).

 

5

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
     V

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  
	
  Credit
  Line Agreement

  	
   

  	
   

  

 

Credit
Line Agreement—Demand Facility

 

THIS CREDIT LINE AGREEMENT (as
it may be amended, supplemented or otherwise modified from time to time, this
“Agreement”) is made by and between the party or parties signing as the
Borrower on the Application to which this Agreement is attached (together and
individually, the “Borrower”) and UBS Credit Corp. (“UBSCC”) and, together with
the Application, establishes the terms and conditions that will govern the
uncommitted demand loan facility made available to the Borrower by UBSCC (the
“Credit Line”). This Agreement becomes effective upon the earlier of (i) notice
from UBSCC (which notice may be oral or written) to the Borrower that the
Credit Line has been approved and (ii) UBSCC making an Advance to the
Borrower.

 

1.
Definitions

 

·                  “Advance” means any Fixed Rate Advance or
Variable Rate Advance made by UBSCC pursuant to this Agreement.

 

·                  “Advance Advice” means a written or electronic
notice by UBSCC, sent to the Borrower, the Borrower’s financial advisor at UBS
Financial Services Inc. or any other party designated by the Borrower to
receive the notice, confirming that a requested Advance will be a Fixed Rate
Advance and specifying the amount, fixed rate of interest and Interest Period
for the Fixed Rate Advance.

 

·                  “Application” means the Credit Line Account
Application and Agreement that the Borrower has completed and submitted to
UBSCC and into which this Agreement .

 

·                  “Approved Amount” means the maximum principal
amount of Advances that is permitted to be outstanding under the Credit Line at
any time, as specified in writing by UBSCC.

 

·                  “Breakage Costs” and “Breakage Fee” have the
meanings specified in Section 6(b).

 

·                  “Business Day” means a day on which both of
UBSCC and UBS Financial Services Inc. are open for business. For notices and
determinations of LIBOR, Business Day must also be a day for trading by and
between UBSCCs in U.S. dollar deposits in the London interUBSCC market.

 

·                  “Collateral” has the meaning specified in Section 8(a).

 

·                  “Collateral Account” means, individually and
collectively, each account of the Borrower or Pledgor at UBS Financial Services
Inc. or UBS International Inc., as applicable, that is either identified as a
Collateral Account on the Application to which this Agreement is attached or
subsequently identified as a Collateral Account by the Borrower or Pledgor in
writing, together with all successors to those identified accounts,
irrespective of whether the successor account bears a different name or account
number.

 

·                  “Credit Line” has the meaning specified in Section 2(a).

 

·                  “Credit Line Account” means each Fixed Rate
Account and each Variable Rate Account of the Borrower that is established by
UBSCC in connection with this Agreement and either identified on the Application
or subsequently identified as a Credit Line Account by UBSCC by notice to the
Borrower, together with all successors to those identified accounts,
irrespective of whether any successor account bears a different name or account
number.

 

·                  “Credit Line Obligations” means, at any time
of determination, the aggregate of the outstanding principal amounts of all
Advances, together with all accrued but unpaid interest on the outstanding
principal amounts, any and all fees or other charges payable in connection with
the Advances and any costs of collection (including reasonable attorneys’ fees)
and other amounts payable by the Borrower under this Agreement, and any and all
other present or future obligations of the Borrower and the other respective
Loan Parties under this Agreement and the related agreements, whether absolute
or contingent, whether or not due or mature.

 

·                  “Event” means any of the events listed in Section 10.

 

·                  “Fixed Rate Advance” means any advance made
under the Credit Line that accrues interest at a fixed rate.

 

·                  “Guarantor” means any party who guaranties the
payment and performance of the Credit Line Obligations.

 

·                  “Guaranty Agreement” means an agreement
pursuant to which a Guarantor agrees to guaranty payment of the Credit Line
Obligations.

 

·                  “Interest Period” means, for a Fixed Rate
Advance, the number of days, weeks or months requested by the Borrower and
confirmed in the Advance Advice relating to the Fixed Rate Advance, commencing
on the date of (i) the extension of the Fixed Rate Advance or (ii) any
renewal of the Fixed Rate Advance and, in each case, ending on the last day of
the period. If the last day is not a Business Day, then the Interest Period
will end on the immediately succeeding Business Day. If the last Business Day
would fall in the next calendar month, the Interest Period will end on the
immediately preceding Business Day. Each monthly or longer Interest Period that
commences on the last Business Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent
calendar month) will end on the last Business Day of the appropriate calendar
month.

 

·                  “Joint Borrower” has the meaning specified in Section 7(a).

 

·                  “Loan Party” means each Borrower, Guarantor
and Pledgor, each in their respective capacities under this Agreement or any
related agreement.

 

·                  “LIBOR” means, as of any date of
determination:

 

(i)             for Variable Rate Advances, the prevailing
London InterUBSCC Offered Rate for deposits in U.S. dollars having a maturity
of 30 days as published in The Wall Street Journal “Money Rates” Table on the
date of the Advance; and

 

(ii)                                  for Fixed Rate Advances, the prevailing London
Inter UBSCC Offered Rate for deposits in U.S. dollars having a maturity corresponding
to the length of the Interest Period applicable to the Advance as quoted by the
Bloomberg service at 4:00 a.m. Eastern Standard Time on the date of the
Advance.

 

(iii)                               If the rate ceases to be regularly published
by The Wall Street Journal or stated by the Bloomberg service, as applicable,
LIBOR will be determined by UBSCC in its sole and absolute discretion. For any
day that is not a Business Day, LIBOR will be the applicable LIBOR in effect
immediately prior to that day.

 

·                  “Person” means any natural person, company,
corporation, firm, partnership, joint venture, limited liability company or
limited liability partnership, association, organization or any other legal
entity.

 

·                  “Pledgor” means each Person who pledges to
UBSCC any Collateral to secure the Credit Line Obligations (or to secure the
obligations of any Guarantor with respect to the guaranty of the Credit Line
Obligations). Pledgors will include (i) each Borrower who pledges
Collateral to secure the Credit Line Obligations, (ii) each Guarantor who
has pledged collateral to secure the Credit Line Obligations or its obligations
under a Guaranty Agreement, (iii) any spouse of a Borrower who executes a
spouse’s pledge and consent agreement with respect to a jointly held collateral
account, (iv) any other joint account holder who executes a joint account
holder pledge and consent agreement with respect to a jointly held collateral
account, and (v) any other Person who executes a pledge agreement with
respect to the Credit Line.

 

·                  “Credit
Line” has the meaning set forth in the Preamble to this Agreement. means any
Credit Line with an Approved Amount equal to or greater than $250,000.

 

·                  “Prime Credit Line” means any Credit Line with
an Approved Amount less than $250,000.

 

·                  “Prime Rate” means the floating “Prime Rate”
as published in The Wall Street Journal “Money Rates” Table from time to time.
The Prime Rate will change as and when the Prime Rate as published in The Wall
Street Journal. In the event that The Wall Street Journal does not publish a
Prime

 

© 2007 UBS Credit Corp. All rights reserved.

Sign and date the application on page 5.

 

6

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

                        Rate,
the Prime Rate will be the rate as determined by UBSCC in its sole and absolute
discretion.

 

·                  “Securities Intermediary” has the meaning
specified in Section 9

 

·                  “UBS Financial Services Inc.” means
UBS Financial Services Inc. and its successors.

 

7

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

·                  “UBS-1” means UBS International Inc. and its
successors.

 

·                  “Variable Rate Advance” means any advance made
under the Credit Line that accrues interest at a variable rate.

 

2.         Establishment
of Credit Line; Termination

 

a)         Upon the effectiveness of this Agreement,
UBSCC establishes an UNCOMMITTED, demand
revolving line of credit (the “Credit Line”) in an amount up to the Approved
Amount. UBSCC may, from time to time upon request of the Borrower, without
obligation and in its sole and absolute discretion, authorize and make one or
more Advances to the Borrower. The Borrower acknowledges that UBSCC has no
obligation to make any Advances to the Borrower. UBSCC may carry each Variable
Rate Advance in a Variable Rate Account and may carry each Fixed Rate Advance in
a Fixed Rate Account, but all Advances will constitute extensions of credit
pursuant to a single Credit Line. The Approved Amount will be determined, and
may be adjusted from time to time, by UBSCC in its sole and absolute
discretion.

 

b)         THE BORROWER AND EACH OTHER
LOAN PARTY UNDERSTANDS AND AGREES THAT UBSCC MAY DEMAND FULL OR PARTIAL
PAYMENT OF THE CREDIT LINE OBLIGATIONS, AT ITS SOLE AND ABSOLUTE DISCRETION AND
WITHOUT CAUSE, AT ANY TIME, AND THAT NEITHER FIXED RATE ADVANCES NOR VARIABLE
RATE ADVANCES ARE EXTENDED FOR ANY SPECIFIC TERM OR DURATION.

 

c)         UNLESS DISCLOSED IN WRITING
TO UBSCC AT THE TIME OF THE APPLICATION, AND APPROVED BY UBSCC, THE BORROWER
AGREES NOT TO USE THE PROCEEDS OF ANY ADVANCE EITHER TO PURCHASE, CARRY OR TRADE IN SECURITIES OR TO
REPAY ANY DEBT (I) USED TO PURCHASE, CARRY OR TRADE IN SECURITIES OR (II) TO
ANY AFFILIATE OF UBSCC. THE BORROWER WILL BE DEEMED TO REPEAT THE AGREEMENT IN
THIS SECTION 2(C) EACH TIME IT REQUESTS AN ADVANCE.

 

d)             Prior to the first Advance under the Credit
Line, the Borrower must sign and deliver to UBSCC a Federal Reserve Form U-1
and all other documentation as UBSCC may require. The Borrower acknowledges
that neither UBSCC nor any of its affiliates has advised the Borrower in any
manner regarding the purposes for which the Credit Line will be used.

 

e)              e) The Borrower consents and agrees that, in
connection with establishing the Credit Line Account, approving any Advances to
the Borrower or for any other purpose associated with the Credit Line, UBSCC may
obtain a consumer or other credit report from a credit reporting agency
relating to the Borrower’s credit history. Upon request, UBSCC will inform the
Borrower: (i) whether or not a consumer or other credit report was
requested; and (ii) if so, the name and address of the consumer or other
credit reporting agency that furnished the report.

 

f)           The Borrower understands that UBSCC will,
directly or indirectly, pay a portion of the interest that it receives to the
Borrower’s financial advisor at UBS Financial Services Inc. or one of its
affiliates. To the extent permitted by applicable law, UBSCC may also charge
the Borrower fees for establishing and servicing the Credit Line Account.

 

f)                Following each month in which there is
activity in the Borrower’s Credit Line Account in amounts greater than $1, the
Borrower will receive an account statement showing the new balance, the amount
of any new Advances, year to date interest charges, payments and other charges
and credits that have been registered or posted to the Credit Line Account.

 

g)             h) Each of the Loan Parties understands and
agrees that UBSCC may, at any time, in its discretion, terminate and cancel the
Credit Line regardless of whether or not an Event has occurred. In the event
UBSCC terminates and cancels the Credit Line the Credit Line Obligations shall
be immediately due and payable in full. If the Credit Line Obligations are not
paid in full, UBSCC shall have the right, at its option, to exercise any or all
of its remedies described in Section 10 of this Agreement.

 

3.         Terms
of Advances

 

a)         Advances made under this Agreement will be
available to the Borrower in the form, and pursuant to procedures, as are
established from time to time by UBSCC in its sole and absolute discretion. The
Borrower and each Loan Party agree to provide all documents, financial or other
information regarding any Advance as UBSCC may request. Advances will be made
by wire transfer of funds to an account as specified in writing by the Borrower
or by any other method agreed upon by UBSCC and the Borrower. The Borrower
acknowledges and agrees that UBSCC will not make any Advance to the Borrower
unless the collateral maintenance requirements that are established by UBSCC in
its sole and absolute discretion have been satisfied.

 

b)        Each Advance made under a Credit Line will be
a Variable Rate Advance unless otherwise designated as a Fixed Rate Advance in
an Advance Advice sent by UBSCC to the Borrower. UBSCC will not designate any
Advance as a Fixed Rate Advance unless it has been requested to do so by the
Borrower (acting directly or indirectly through the Borrower’s UBS Financial
Services Inc. financial advisor or other agent designated by the Borrower and
acceptable to UBSCC). Each Advance Advice will be conclusive and binding upon the
Borrower, absent manifest error, unless the Borrower otherwise notifies UBSCC
in writing no later than the close of business, New York time, on the third
Business Day after the Advance Advice is received by the Borrower.

 

c)         Each Advance made under a Prime Credit Line
will be a Variable Advance.

 

d)        Unless otherwise agreed by UBSCC: (i) all
Fixed Rate Advances must be in an amount of at least $100,000; and (ii) all
Variable Rate Advances taken by wire transfer must be in an amount of at least
$2,500. If the Borrower is a natural person, the initial Variable Rate Advance
under the Credit Line must be in an amount equal to at least $25,001 (the
“Initial Advance Requirement”). If the initial Advance requested by the
Borrower is made in the form of a check drawn on the Credit Line that does not
satisfy the Initial Advance Requirement, then, in addition to and not in
limitation of UBSCC’s rights, remedies, powers or privileges under this
Agreement or applicable law, UBSCC may, in its sole and absolute discretion:

 

(i)             pay the check drawn by the Borrower if, prior
to paying that check, UBSCC makes another Advance to the Borrower, which
Advance shall be in an amount not less than $25,001; or

 

(ii)          pay the check drawn by the Borrower; or

 

(iii)       decline to pay (bounce) the check.

 

If UBSCC elects option (ii), no
interest shall accrue on the amount of the Advance made by paying the check,
and the amount of that Advance shall be due and payable to UBSCC immediately
(with or without demand by UBSCC).

 

© 2007 UBS Credit Corp. All rights reserved.

Sign and date the application on page 5.

 

8

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

4.         Interest

 

a)         Each Fixed Rate Advance will bear interest at
a fixed rate for the Interest Period specified in the related Advance Advice.
The rate of interest payable on each Fixed Rate Advance will be determined by
adding a percentage rate to LIBOR determined by UBSCC as of the date that the
fixed rate is determined.

 

b)        Each Variable Rate Advance under a Credit Line
will bear interest at a variable rate equal to LIBOR, adjusted daily, plus the
percentage rate that (unless otherwise specified by UBSCC in writing) is shown
on Schedule I below for the Approved Amount of the Credit Line. For Credit
Lines, the rate of interest payable on Variable Rate Advances is subject to
change without notice in accordance with fluctuations in LIBOR and in the
Approved Amount. On each day that LIBOR changes or the Approved Amount crosses
one of the thresholds that is indicated on Schedule I (or that is otherwise
specified by UBSCC in writing), the interest rate on all Variable Rated Advances
will change accordingly.

 

c)         Each Variable Rate Advance under a Prime
Credit Line will bear interest at a variable rate equal to the Prime Rate,
adjusted daily, plus the percentage rate that (unless otherwise specified by
UBSCC in writing) is shown on the attached Schedule II and that corresponds to
the aggregate principal amount outstanding under the Prime Credit Line on that
day. For Prime Credit Lines, the rate of interest payable on Variable Rate
Advances is subject to change without notice in accordance with fluctuations in
the Prime Rate and in the aggregate amount outstanding under the Prime Credit
Line. On each date that the Prime Rate changes or the aggregate principal
amount outstanding under the Prime Credit Line crosses one of the thresholds that
is indicated on Schedule II (or that is otherwise specified by UBSCC in
writing), the interest rate on all Variable Rate Advances will change
accordingly.

 

5.         Payments

 

a)         Each Fixed Rate Advance will
be due and payable in full ON DEMAND or, if not earlier demanded by UBSCC, on
the last day of the applicable Interest Period. Any Fixed Rate Advance as to which UBSCC has
not made a demand for payment and that is not paid in full or renewed, which
renewal is in the sole and absolute discretion of UBSCC, (pursuant to
procedures as may be established by UBSCC) as another Fixed Rate Advance on or
before the last day of its Interest Period will be automatically renewed on
that date as a U.S. dollar denominated, Variable Rate Advance in an amount
(based, in the case of any conversion of a non U.S. dollar denominated Fixed
Rate Advance, upon the applicable, spot currency exchange rate as of the
maturity date, as determined by UBSCC) equal to the unpaid principal balance of
the Fixed Rate Advance, plus any accrued but unpaid interest on the Fixed Rate
Advance, which Variable Rate Advance will then accrue additional interest at a
variable rate as provided in this Agreement.

 

b)        Each Variable Rate Advance
will be due and payable ON DEMAND.

 

c)         The Borrower promises to pay the outstanding
principal amount of each Advance, together with all accrued but unpaid interest
on each Advance, any and all fees or other charges payable in connection with
each Advance, on the date the principal amount becomes due (whether by reason of
demand, the occurrence of a stated maturity date, by reason of acceleration or
otherwise). The Borrower further promises to pay interest in respect of the
unpaid principal balance of each Advance from the date the Advance is made
until it is paid in full. All interest will be computed on the basis of the
number of days elapsed and a 360-day year. Interest on each Advance will be
payable in arrears as follows:

 

(i)        for Fixed Rate Advances — on the last day of
the Interest Period (or if the Interest Period is longer than three months, on
the last day of each three month period following the date of the Advance) and
on each date that all or any portion of the principal amount of the Fixed Rate
Advance becomes due or is paid; and

 

(ii)     for Variable Rate Advances — on the
twenty-second day of each month other than December, and on the thirty first
day of December, and on each date that all or any portion of the principal
amount of the Variable Rate Advance becomes due or is paid.

 

To the extent permitted by
law, and without limiting any of UBSCC’s other rights and remedies under the
Agreement, interest charges on any Advance that are not paid when due will be
treated as principal and will accrue interest at a variable rate from the date
the payment of interest was due until it is repaid in full.

 

d)        All payments of principal, interest or other
amounts payable under this Agreement will be made in immediately available
funds and in the same currency in which the Advance was made, which unless
otherwise agreed by UBSCC, will be U.S. dollars. UBS Financial Services Inc. or
UBS International Inc., as applicable, may act as collecting and servicing
agent for UBSCC for the Advances. All payments will be made by wire transfer of
funds to an account specified by UBSCC or by another method agreed upon by
UBSCC and the Borrower. Upon receipt of all payments, UBSCC will credit the
same to the Credit Line Account. UBSCC shall apply the proceeds of any payments
in the following order; first to any Breakage Costs, Breakage Fee, other fees,
costs of collection and expenses, second to accrued interest and third to the
outstanding principal amount of the related Advance.

 

	
  e)

  	
  All
  payments must be made to UBSCC free and clear of any and all present and
  future taxes (including withholding taxes), levies, imposts, duties,
  deductions, fees, liabilities and similar charges other than those imposed on
  the overall net income of UBSCC. If so requested by UBSCC, the Borrower will
  deliver to UBSCC the original or a certified copy of each receipt evidencing
  payment of any taxes or, if no taxes are payable in respect of any payment
  under this Agreement, a certificate from each appropriate taxing authority,
  or an opinion of counsel in form and substance and from counsel acceptable to
  UBSCC in its sole and absolute discretion, in either case stating that the
  payment is exempt from or not subject to taxes. If any taxes or other charges
  are required to be withheld or deducted from any amount payable by the
  Borrower under this Agreement, the amount payable will be increased to the
  amount which, after deduction from the increased amount of all taxes and
  other charges required to be withheld or deducted from the amount payable,
  will yield to UBSCC the amount stated to be payable under this Agreement. If
  any of the taxes or charges are paid by UBSCC, the Borrower will reimburse
  UBSCC on demand for the payments, together with all interest and penalties
  that may be imposed by any governmental agency. None of UBSCC, UBS Financial
  Services Inc., UBS-I or their respective employees has provided or will
  provide, legal advice to the Borrower or any Loan Party regarding compliance
  with (or the implications of the Credit Line and the related guaranties and
  pledges under) the laws (including tax laws) of the jurisdiction of the
  Borrower or any Loan Party or any other jurisdiction. The Borrower and each
  Loan Party is and shall be solely responsible for, and UBSCC shall have no
  responsibility for, the compliance by the Loan Parties with any and all
  reporting and other requirements arising under any applicable laws.

  

 

f)           In no event will the total interest and fees,
if any, charged under this Agreement exceed the maximum interest rate or total
fees permitted by law. In the event any excess interest or fees are collected,
the same will be refunded or credited to the Borrower. If the amount of
interest payable by the Borrower for any period is reduced pursuant to this Section 5(f),
the amount of interest payable for each succeeding period will be increased to
the maximum rate permitted by law until the amount of the reduction has been
received by UBSCC.

 

6.         Prepayments; Breakage
Charges

 

a)         The Borrower may repay any Variable Rate
Advance at any time, in whole or in part, without penalty.

 

b)        The Borrower may repay any Fixed Rate Advance,
in whole or in part. The Borrower agrees to reimburse UBSCC, immediately upon
demand, for any loss or cost (“Breakage Costs”) that UBSCC notifies the
Borrower has been incurred by UBSCC as a result of (i) any payment of the
principal of a Fixed Rate Advance before the expiration of the Interest Period
for the Fixed Rate Advance (whether voluntarily, as a result of acceleration,
demand or otherwise, ), or (ii) the Customer’s failure to take any Fixed
Rate Advance on the date agreed upon, including any loss or cost (including
loss of profit

 

© 2007 UBS Credit Corp. All rights reserved.

Sign and date the application on page 5.

 

9

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

or margin)
connected with UBSCC’s re-employment of the amount so prepaid or of those funds
acquired by UBSCC to fund the Advance not taken on the agreed upon date.
Breakage Costs will be

 

10

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

calculated by determining the
differential between the stated rate of interest for the Fixed Rate Advance and
prevailing LIBOR and multiplying the differential by the sum of the outstanding
principal amount of the Fixed Rate Advance (or the principal amount of Fixed
Rate Advance not taken by the Borrower) multiplied by the actual number of days
remaining in the Interest Period for the Fixed Rate Advance (based upon a
360-day year). The Borrower also agrees to promptly pay to UBSCC an
administrative fee (“Breakage Fee”) in connection with any permitted or
required prepayment. The Breakage Fee will be calculated by multiplying the
outstanding principal amount of the Fixed Rate Advance (or the principal amount
of Fixed Rate Advance not taken by the Borrower) by two basis points (0.02%).
Any written notice from UBSCC as to the amount of the loss or cost will be
conclusive absent manifest error.

 

7. Joint
Credit Line Account Agreement; Suspension and Cancellation

 

a)         If more than one Person is signing this
Agreement as the “Borrower”, each party (a “Joint Borrower”) will be jointly
and severally liable for the Credit Line Obligations, regardless of any change
in business relations, divorce, legal separation, or other legal proceedings or
in any agreement that may affect liabilities between the parties. Except as
provided below for the reinstatement of a suspended or cancelled Credit Line,
and unless otherwise agreed by UBSCC in writing, UBSCC may rely on, and each
Joint Borrower will be responsible for, requests for Advances, directions,
instructions and other information provided to UBSCC by any Joint Borrower.

 

b)        Any Joint Borrower may request UBSCC to
suspend or cancel the Credit Line by sending UBSCC a written notice of the
request addressed to UBSCC at the address shown on the Borrower’s periodic
Credit Line Account statements. Any notice will become effective three Business
Days after the date that UBSCC receives it, and each Joint Borrower will
continue to be responsible for paying: (i) the Credit Line Obligations as
of the effective date of the notice, and (ii) all Advances that any Joint
Borrower has requested but that have not yet become part of the Credit Line
Obligations as of the effective date of the notice. No notice will release or
in any other way affect UBSCC’s interest in the Collateral. All subsequent
requests to reinstate credit privileges must be signed by all Joint Borrowers
comprising the Borrower, including the Joint Borrower requesting the suspension
of credit privileges. Any reinstatement will be granted or denied in the sole
and absolute discretion of UBSCC.

 

c)         All Credit Line Obligations will become
immediately due and payable in full as of the effective date of any suspension
or cancellation of the Credit Line. The Borrower will be responsible for the
payment of all charges incurred on the Advances after any the effective date.
UBSCC will not release any Loan Party from any of the obligations under this
Agreement or any related agreement until the Credit Line Obligations have been
paid in full and this Agreement has been terminated.

 

8. Collateral; Grant of Security Interest; Set-off

 

a)         To secure payment or performance of the Credit
Line Obligations, the Borrower assigns, transfers and pledges to UBSCC, and
grants to UBSCC a first priority lien and security interest in the following
assets and rights of the Borrower, wherever located and whether owned now or
acquired or arising in the future: (i) each Collateral Account; (ii) any
and all money, credit balances, certificated and uncertificated securities,
security entitlements, commodity contracts, certificates of deposit,
instruments, documents, partnership interests, general intangibles, financial
assets and other investment property now or in the future credited to or
carried, held or maintained in any Collateral Account; (iii) any and all
over-the-counter options, futures, foreign exchange, swap or similar contracts
between the Borrower and either UBS Financial Services Inc. or any of its
affiliates; (iv) any and all accounts of the Borrower at UBSCC or any of
its affiliates; (v) any and all supporting obligations and other rights
ancillary or attributable to, or arising in any way in connection with, any of
the foregoing; and (vi) any and all interest, dividends, distributions and
other proceeds of any of the foregoing, including proceeds of proceeds
(collectively, the “ Collateral ” ).

 

b)        The Borrower and if applicable, any Pledgor on
the Collateral Account, will take all actions reasonably requested by UBSCC to
evidence, maintain and perfect UBSCC’s first priority security interest in, and
to enable UBSCC to obtain control over, the Collateral and any additional
collateral pledged by the Pledgors, including but not limited to making,
executing, recording and delivering to UBSCC (and authorizes UBSCC to file,
without the signature of the Borrower and any Pledgor where permitted by
applicable law)financing statements and amendments thereto, control agreements,
notices, assignments, listings, powers, consents and other documents regarding
the Collateral and UBSCC’s security interest in the Collateral in such.
jurisdiction and in a form as UBSCC reasonably may require. Each Loan Party
irrevocably authorizes and appoints each of UBSCC and UBS Financial Services
Inc., as collateral agent, to act as their agent and attorney-in-fact to file
any documents or to execute any documents in their name, with or without
designation of authority. Each Loan Party acknowledges that it will be
obligated in respect of the documentation as if it had executed the documentation
itself

 

c)         The Borrower (and, if applicable, any other
Pledgor on the Collateral Account) agrees to maintain in a Collateral Account,
at all times, Collateral having an aggregate lending value as specified by
UBSCC from time to time.

 

d)        UBSCC’s sole duty for the custody, safe
keeping and physical preservation of any Collateral in its possession will be
to deal with the Collateral in the same manner as UBSCC deals with similar
property for its own account. The Borrower (and, if applicable, any other
Pledgor on the Collateral Account) agrees that UBSCC will have no
responsibility to act on any notice of corporate actions or events provided to
holders of securities or other investment property included in the Collateral.
The Borrower (and, if applicable, any other Pledgor on the Collateral Account)
agrees to (i) notify UBSCC promptly upon receipt of any communication to
holders of the investment property disclosing or proposing any stock split,
stock dividend, extraordinary cash dividend, spin-off or other corporate action
or event as a result of which the Borrower or Pledgor would receive securities,
cash (other than ordinary cash dividends) or other assets in respect of the
investment property, and (ii) immediately upon receipt by the Borrower or
Pledgor of any of these assets, cause them to be credited to a Collateral
Account or deliver them to or as directed by UBSCC as additional Collateral.

 

e)         The Borrower (and, if applicable, any other
Pledgor on the Collateral Account) agrees that all principal, interest,
dividends, distributions, premiums or other income and other payments
received by UBSCC or credited to the Collateral Account in respect of any
Collateral may be held by UBSCC as additional Collateral or applied by UBSCC to
the Credit Line Obligations. UBSCC may create a security interest in any of the
Collateral and may, at any time and at its option, transfer any securities or
other investment property constituting Collateral to a securities account
maintained in its name or cause any Collateral Account to be redesignated or
renamed in the name of UBSCC.

 

f)           The Borrower (and, if applicable, any other
Pledgor on the Collateral Account) that if a Collateral Account has margin
features, the margin features will be removed by UBS Financial Services Inc. or
UBS International Inc., as applicable, so long as there is no outstanding
margin debit in the Collateral Account.

 

g)        If the Collateral Account permits cash
withdrawals in the form of check writing, access card charges, bill payment
and/or electronic funds transfer services (for example, Resource Management
Account®, Business Services Account BSA®, certain Basic Investment Accounts and
certain accounts enrolled in UBS Financial Services Inc. Investment Consulting
Services programs), the Borrower (and, if applicable, any other Pledgor on the
Collateral Account) that the “Withdrawal Limit” for the Collateral Account, as
described in the documentation governing the account will be reduced on an
ongoing basis so that the aggregate lending value of the Collateral remaining
in the Collateral Account following the withdrawal may not be less than the
amount required pursuant to Section 8(c).

 

h)        In addition to UBSCC’s security interest, the
Borrower (and, if applicable, any other Pledgor on the Collateral Account) that
UBSCC will at all times have a right to set off any or all of the Credit Line
Obligations at or after the time at which they become due, whether upon demand,
at a stated

 

© 2007 UBS Credit Corp. All rights reserved.

Sign and date the application on page 5.

 

11

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

maturity date,
by acceleration or otherwise, against all securities, cash, deposits or other
property in the possession of or at any time in any account maintained with UBSCC or any of its
affiliates by or for the benefit of the Borrower, whether carried individually
or jointly with others. This right is in addition to, and not in limitation of,
any right UBSCC may have at law or otherwise.

 

12

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

i)            UBSCC reserves the right to disapprove any
Collateral and to require the Borrower at any time to deposit into the
Borrower’s Collateral Account additional Collateral in the amount as UBSCC
requests or to substitute new or additional Collateral for any Collateral that
has previously been deposited in the Collateral Account.

 

9.         Control

 

For the purpose of giving UBSCC control over
each Collateral Account and in order to perfect UBSCC’s security interests in
the Collateral, the Borrower and each Pledgor on the applicable Collateral
Account consents to compliance by UBS Financial Services Inc., UBS-I or any
other securities intermediary (in any case, the “Securities Intermediary”)
maintaining a Collateral Account with entitlement orders and instructions from
UBSCC (or from any assignee or successor of UBSCC) regarding the Collateral
Account without the further consent of the Borrower or any other Pledgor on the
applicable Collateral Account. Without limiting the foregoing, the Borrower and
each Pledgor on the Collateral Account acknowledges, consents and agrees that,
pursuant to a control agreement entered into between UBSCC and the Securities
Intermediary:

 

a)         The Securities Intermediary will comply with
entitlement orders originated by UBSCC regarding any Collateral Account without
further consent from the Borrower or any Pledgor. The Securities Intermediary
will treat all assets credited to a Collateral Account, including money and
credit balances, as financial assets for purposes of Article 8 of the
Uniform Commercial Code.

 

b)        In order to enable the Borrower and any
Pledgor on the applicable Collateral Account to trade financial assets that are
from time to time credited to a Collateral Account, the Securities Intermediary
may comply with entitlement orders originated by the Borrower or any Pledgor on
the applicable Collateral Account (or if so agreed by UBSCC, by an investment
adviser designated by the Borrower or any Pledgor on the applicable Collateral
Account and acceptable to UBSCC and the Securities Intermediary) regarding the
Collateral Account, but only until the time that UBSCC notifies the Securities
Intermediary, that UBSCC is asserting exclusive control over the Collateral
Account. After the Securities Intermediary has received a notice of exclusive
control and has had a reasonable opportunity to comply, it will no longer
comply with entitlement orders originated by the Borrower or any Pledgor (or by
any investment adviser designated by the Borrower or any Pledgor) concerning
the Collateral Account. Notwithstanding the foregoing, however, and
irrespective of whether it has received any notice of exclusive control, the
Securities Intermediary will not comply with any entitlement order originated
by the Borrower or any Pledgor (or by any investment adviser designated by the
Borrower or any Pledgor) to withdraw any financial assets from a Collateral
Account or to pay any money, free credit balance or other amount owing on a
Collateral Account (other than cash withdrawals and payments not exceeding the
“Withdrawal Limit” as contemplated in Section 8 (g)) without the prior
consent of UBSCC.

 

10.  Remedies

 

a)         If any of the following events (each, an
“Event”) occurs:

 

	
  (i)

  	
   

  	
  the Borrower fails to pay
  any amount due under this Agreement;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  the Borrower and/or any
  other relevant Loan Party fails to maintain sufficient Collateral in a
  Collateral Account as required by UBSCC or any Guarantor fails to maintain
  collateral as required by UBSCC under its Guaranty Agreement;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  the Borrower or any other
  Loan Party breaches or fails to per form any other covenant, agreement, term
  or condition that is applicable to it under this Agreement or any related
  agreement, or any representation or other statement of the Borrower (or any
  Loan Party) in this Agreement or in any related
  agreement is incorrect in any material respect when made or deemed made;.

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  the Borrower or any other
  Loan Party dies or is declared (by appropriate authority) incompetent or of
  unsound mind or is indicted or convicted of any crime or, if not an
  individual, ceases to exist;

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  any voluntary or
  involuntary proceeding for UBSCCruptcy, reorganization, dissolution or
  liquidation or similar action is commenced by or against the Borrower or any
  other Loan Party, or a trustee in UBSCCruptcy, receiver, conservator or
  rehabilitator is appointed, or an assignment for the benefit of creditors is
  made, with respect to the Borrower or any other Loan Party or its property;

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  the Borrower or any Loan
  Party is insolvent, unable to pay its debts as they fall due, stops, suspends
  or threatens to stop or suspend payment of all or a material part of its
  debts, begins negotiations or takes any proceeding or other step with a view
  to readjustment, rescheduling or deferral of all or any part of its
  indebtedness, which it would or might otherwise be unable to pay when due, or
  proposes or makes a general assignment or an arrangement or composition with
  or for the benefit of its creditors;

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  a Collateral Account (or
  any account in which collateral provided by a Loan Party is maintained) or
  any portion thereof is terminated, attached or subjected to a levy;

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  the Borrower or any Loan
  Party fails to provide promptly all financial and other information as UBSCC
  may request from time to time;

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  any indebtedness of the
  Borrower or any other Loan Party in respect of borrowed money (including
  indebtedness guarantied by the Borrower or any other Loan Party) or in
  respect of any swap, forward, cap, floor, collar, option or other derivative
  transaction, repurchase or similar transaction or any combination of these
  transactions is not paid when due, or any event or condition causes the indebtedness
  to become, or permits the holder to declare the indebtedness to be, due and
  payable prior to its stated maturity;

  
	
   

  	
   

  	
   

  
	
  (x)

  	
   

  	
  final judgment for the
  payment of money is rendered against Client (or any Loan Party) and within
  thirty days from the entry of judgment has not been discharged or stayed
  pending appeal or has not been discharged within thirty days from the entry
  of a final order of affirmance on appeal;

  
	
   

  	
   

  	
   

  
	
  (xi)

  	
   

  	
  any legal proceeding is
  instituted or any other event occurs or condition exists that in UBSCC’s
  judgment calls into question (A) the validity or binding effect of this
  Agreement or any related agreement or any of the Borrower’s (or any other
  Loan Party’s) obligations under this Agreement or under any related agreement
  or (B) the ability of the Borrower (or any Loan Party) to perform its
  obligations under this Agreement, or under any related agreement; or

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

  	
  UBSCC otherwise deems
  itself or its security interest in the Collateral insecure or UBSCC believes
  in good faith that the prospect of payment or other performance by any Loan
  Party is impaired.

  

 

then, the Credit Line
Obligations will become immediately due and payable (without demand) and UBSCC
may, in its sole and absolute discretion, liquidate, withdraw or sell all or
any part of the Collateral and apply the same, as well as the proceeds of any
liquidation or sale, to any amounts owed to UBSCC, including any applicable
Breakage Costs and Breakage Fee. UBSCC will not be liable to any Loan Party in any way for any
adverse consequences (for tax effect or otherwise) resulting from the
liquidation of appreciated Collateral. Without limiting the generality of the
foregoing, the sale may be made in UBSCC’s sole and absolute discretion by
public sale on any exchange or market where business is then usually transacted
or by private sale, and UBSCC may purchase at any public or private sale. Any
Collateral that may decline speedily in value or that customarily is sold on a
recognized exchange or market may be sold without providing any Loan Party with
prior notice of the sale. Each Loan Party agrees that, for all other
Collateral, two calendar days notice to the Loan Party, sent to its last
address shown in UBSCC’s account records, will be deemed reasonable notice of
the time and place of any public sale or time after which any private sale or
other disposition of the Collateral may occur. Any amounts due and not paid on
any Advance following a Event will bear interest from the day following the
Event until fully paid at a rate per annum equal to the interest rate
applicable to the Advance immediately prior to the Event plus 2.00%. In
addition to UBSCC’s rights under this Agreement, UBSCC will have the right to
exercise any one or more of the rights and remedies of a secured creditor under
the Utah Uniform Commercial Code, as then in effect, or under any other
applicable law.

 

© 2007 UBS Credit Corp. All rights reserved.

Sign and date the application on page 5.

 

13

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

b)        Nothing contained in this Section 10 will
limit the right of UBSCC to demand full or partial payment of the Credit Line
Obligations, in its sole and absolute discretion and without cause, at any
time.

 

c)         All rights and remedies of UBSCC under this
Agreement are cumulative and are in addition to all other rights and remedies
that UBSCC may have at law or equity or under any other contract or other
writing for the enforcement of the security interest herein or the collection
of any amount due under this Agreement.

 

d)        Any non-exercise of rights, remedies and
powers by UBSCC under this Agreement and the other documents delivered in
connection with this Agreement shall not be construed as a waiver of any
rights, remedies and powers. UBSCC fully reserves its rights to invoke any of
its rights, remedies and powers at any time it may deem appropriate.

 

11.
Representations, Warranties and Covenants by the Loan Parties.

 

Each Borrower and each other Loan Party (if
applicable) makes the following representations, warranties and covenants (and
each Borrower will be deemed to have repeated each representation and warranty
each time a Borrower requests an Advance) to UBSCC.

 

a)         Except for UBSCC’s rights under this Agreement
and the rights of the Securities Intermediary under any account agreement, the
Borrower and each relevant Pledgor owns the Collateral, free of any interest,
lien or security interest in favor of any third party and free of any
impediment to transfer;

 

b)        Each Loan Party: (i) if a natural Person,
is of the age of majority; (ii) is authorized to execute and deliver this
Agreement and to perform its obligations under this Agreement and any related
agreement; (iii) is not an employee benefit plan, as that term is defined
by the Employee Retirement Income Security Act of 1974, or an Individual
Retirement Credit Line Account (and none of the Collateral is an asset of a
plan or account); and (iv) unless the Loan Party advises UBSCC to the
contrary, in writing, and provides UBSCC with a letter of approval, where
required, from its employer, is not an employee or member of any exchange or of
any corporation or firm engaged in the business of dealing, either as a broker
or as principal, in securities, bills of exchange, acceptances or other forms
of commercial paper;

 

c)         Neither the Borrower nor any Pledgor on the
Collateral Account will pledge the Collateral or grant a security interest in
the Collateral to any party other than UBSCC or the Securities Intermediary, or
permit the Collateral to become subject to any liens or encumbrances (other
than those of UBSCC and the Securities Intermediary), during the term of this Agreement;

 

d)        Each Loan Party is not in default under any
material contract, judgment, decree or order to which it is a party or by which
it or its properties may be bound; and

 

e)         Each Loan Party has duly filed all tax and
information returns required to be filed and has paid all taxes, fees,
assessments and other governmental charges or levies that have become due and
payable, except to the extent such taxes or other charges are being contested
in good faith and are adequately reserved against in accordance with GAAP.

 

The
provisions of this section will survive the termination of this Agreement or
any related agreement and the repayment of the Credit Line Obligations.

 

12. Indemnification; Limitation on Liability of UBSCC and the
Securities Intermediary.

 

Borrower
agrees to indemnify and hold harmless UBSCC and the Securities Intermediary,
their affiliates and their respective directors, officers, agents and employees
against any and all claims, causes of action, liabilities, lawsuits, demands
and damages, for example, any and all court costs and reasonable attorneys
fees, in any way relating to or arising out of or in connection with this
Agreement, except to the extent caused by UBSCC’s or Securities Intermediary’s
breach of its obligations under this Agreement. Neither UBSCC nor the
Securities Intermediary will be liable to any party for any consequential
damages arising out of any act or omission by either of them with respect to
this Agreement or any Advance or Collateral Account. The provisions of this section
will survive the termination of this Agreement or any related agreement and the
repayment of the Credit Line Obligations.

 

13.  Acceptance
of Application and Agreement; Applicable Law

 

THIS
APPLICATION AND AGREEMENT WILL BE RECEIVED AND ACCEPTED BY UBSCC IN THE STATE
OF UTAH, OR IF THIS APPLICATION AND AGREEMENT IS DELIVERED TO UBSCC’S AGENT,
UBS FINANCIAL SERVICES INC., IT WILL BE RECEIVED AND ACCEPTED WHEN RECEIVED BY
UBS FINANCIAL SERVICES INC.’S UNDERWRITING DEPARTMENT. DELIVERY OF THE APPLICATION
AND AGREEMENT TO THE BORROWER’S FINANCIAL ADVISOR AT UBS FINANCIAL SERVICES
INC. WILL NOT NOT BE CONSIDERED RECEIPT OR ACCEPTANCE BY UBSCC. ALL DECISIONS
MADE BY UBSCC REGARDING THE CREDIT LINE WILL BE MADE IN UTAH. THIS AGREEMENT
WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
UTAH APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF
UTAH AND, IN CONNECTION WITH THE CHOICE OF LAW GOVERNING INTEREST, THE FEDERAL
LAWS OF THE UNITED STATES, EXCEPT THAT WITH RESPECT TO THE COLLATERAL ACCOUNT
AND UBSCC’S SECURITY INTEREST THEREIN, THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, THE NEW YORK UNIFORM COMMERCIAL CODE, AND FOR PURPOSES
OF THIS AGREEMENT, THE COLLATERAL ACCOUNT AND UBSCC’S SECURITY INTEREST
THEREIN, THE JURISDICTION OF UBS FINANCIAL SERVICES INC. AND UBS-I SHALL BE
DEEMED TO BE THE STATE OF NEW YORK.

 

14.  Assignment

 

This Agreement may not be
assigned by the Borrower without the prior written consent of UBSCC. This
Agreement will be binding upon and inure to the benefit of the heirs,
successors and permitted assigns of the Borrower. UBSCC may assign this
Agreement, and this Agreement will inure to the benefit of UBSCC’s successors
and assigns.

 

15.  Amendment

 

This Agreement may be amended
only by UBSCC, including, but not limited to, (i) the addition or deletion
of any provision of this of this Agreement (including any appendices, exhibits
or addenda hereto) and (ii) the amendment of the “Spread Over LIBOR in
Schedule I to this Agreement, at any time by sending written notice, signed by
an authorized officer of UBSCC, of an amendment to the Borrower. The amendment shall be effective
as of the date established by UBSCC. This Agreement may not be amended orally.
The Borrower or UBSCC may waive compliance with any provision of this
Agreement, but any waiver must be in writing and will not be deemed to be a
waiver of any other provision of this Agreement. The provisions of this
Agreement constitute the entire agreement between UBSCC and the Borrower with
respect to the subject matter hereof and supersede all prior or contemporaneous
agreements, proposals, understandings and representations, written or oral,
between the parties with respect to the subject matter hereof.

 

16.  Severability

 

If any provision of this
Agreement is held to be invalid, illegal, void or unenforceable, by reason of
any law, rule, administrative order or judicial or arbitral decision, the determination
will not affect the validity of the remaining provisions of this Agreement.

 

17.  Choice
of Forum; Waiver of Jury Trial

 

a)         ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY JUDGMENT ENTERED BY
ANY COURT

 

© 2007 UBS Credit Corp. All rights reserved.

Sign and date the application on page 5.

 

14

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

REGARDING THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT WILL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE THIRD JUDICIAL
DISTRICT COURT FOR THE STATE OF UTAH OR IN THE UNITED STATES DISTRICT COURT FOR
THE STATE OF UTAH. EACH OF THE LOAN PARTIES IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE THIRD JUDICIAL DISTRICT COURT FOR THE STATE
OF UTAH AND OF THE UNITED STATES DISTRICT COURT FOR THE STATE OF UTAH FOR THE
PURPOSE OF ANY SUCH ACTION OR PROCEEDING AS SET FORTH ABOVE AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
ACTION OR PROCEEDING. EACH OF THE LOAN PARTIES IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE NOW OR IN THE FUTURE
TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH ACTION OR PROCEEDING HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

b)         EACH OF THE LOAN PARTIES
(FOR ITSELF, ANYONE CLAIMING THROUGH IT OR IN ITS NAME, AND ON BEHALF OF ITS
EQUITY HOLDERS) IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A

 

15

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

TRIAL BY
JURY REGARDING ANY CLAIM BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

c)         Any arbitration proceeding between the
Borrower (or any other Loan Party) and the Securities Intermediary, regardless
of whether or not based on circumstances related to any court proceedings
between UBSCC and the Borrower (or the other Loan Party), will not provide a
basis for any stay of the court proceedings.

 

d)        Nothing in this Section 17 will be deemed
to alter any agreement to arbitrate any controversies which may arise between
the Borrower (or any other Loan Party) and UBS Financial Services Inc. or its
predecessors, and any claims between the Borrower or the Loan Party, as
applicable, and UBS Financial Services Inc. or its employees (whether or not
they have acted as agents of the UBSCC) will be arbitrated as provided in any
agreement between the Borrower or the Loan Party, as applicable, and UBS
Financial Services Inc.

 

18.  State
Specific Provisions and Disclosures

 

a)   For residents of Ohio:

 

The Ohio laws against
discrimination require that all creditors make credit equally available to all
creditworthy customers, and that credit reporting agencies maintain separate
credit histories on each individual upon request. The Ohio civil rights
commission administers compliance with this law.

 

b)   For residents of Oregon:

 

NOTICE TO BORROWER: DO NOT
SIGN THIS AGREEMENT BEFORE YOU READ IT. THIS AGREEMENT PROVIDES FOR THE PAYMENT
OF A PENALTY IF YOU WISH TO REPAY A FIXED RATE ADVANCE PRIOR TO THE DATE
PROVIDED FOR REPAYMENT IN THE AGREEMENT.

 

c)   For residents of Vermont:

 

NOTICE TO BORROWER: THE
ADVANCES MADE UNDER THIS AGREEMENT ARE DEMAND LOANS AND SO MAY BE
COLLECTED BY THE LENDER AT ANY TIME. A NEW LOAN MUTUALLY AGREED UPON AND
SUBSEQUENTLY ISSUED MAY CARRY A HIGHER OR LOWER RATE OF INTEREST. NOTICE
TO JOINT BORROWER: YOUR SIGNATURE ON THE AGREEMENT MEANS THAT YOU ARE EQUALLY
LIABLE FOR REPAYMENT OF THIS LOAN. IF THE BORROWER DOES NOT PAY, THE LENDER HAS
A LEGAL RIGHT TO COLLECT FROM YOU.

 

d)   For residents of California:

 

(i)                      Any person, whether married, unmarried, or separated, may apply for separate credit.

 

(ii)                   As required by law, you are notified that a
negative credit report reflecting on your credit record may be submitted to a
credit reporting agency if you fail to fulfill the terms of your credit
obligations.

 

(iii)                The Borrower will notify UBSCC, within a
reasonable time, of any change in the Borrower’s name, address, or employment.

 

(iv)               The Borrower will not attempt to obtain any
Advance if the Borrower knows that the Borrower’s credit privileges under the
Credit Line have been terminated or suspended.

 

(v)                  The Borrower will notify UBSCC by telephone,
telegraph, letter, or any other reasonable means that an unauthorized use of
the Credit Line has occurred or may occur as the result of the loss or theft of
a credit card or other instrument identi-fying the Credit Line, within a
reasonable time after the Borrower’s discovery of the loss or theft, and will
reasonably assist UBSCC in determining the facts and circumstances relating to
any unauthorized use of the Credit Line.

 

19.  Account Agreement

 

Each Loan Party acknowledges
and agrees that this Agreement supplements their account agreement(s) with
the Securities Intermediary relating to the Collateral Account and, if
applicable, any related account management agreement(s) between the Loan
Party and the Securities Intermediary. In the event of a conflict between the
terms of this Agreement and any other agreement between the Loan Party and the
Securities Intermediary, the terms of this Agreement will prevail.

 

20.  Notices

 

Unless otherwise required by
law, all notices to a Loan Party may be oral or in writing, in UBSCC’s
discretion, and if in writing, delivered or mailed by the United States mail,
or by overnight carrier or by telecopy to the address of the Loan Party shown
on the records of UBSCC. Each Loan Party agrees to send notices to UBSCC, in
writing, at such address as provided by UBSCC from time to time.

 

© 2007 UBS Credit Corp. All rights reserved.

Sign and date the application on page 5.

 

16

 

	
  

  	
  UBS
  Credit Corp.

  
	
  Variable
  Credit Line Account Number: (if applicable)

  G Q

  
	
   

  	
   

  
	
   

  	
  Fixed Credit
  Line Account Number: (if applicable)

  
	
   

  	
   

  
	
   

  	
  SS#/TIN

  	
   

  
	
   

  	
   

  	
  Internal
  Use Only

  

 

Schedule I
to UBS Credit Corp. Credit Line Agreement

 

Schedule of Percentage Spreads
Over LIBOR

 

	
  Aggregate Approved Amount

  	
   

  	
  Spread Over LIBOR

  	
   

  
	
  $250,000 to $499,999

  	
   

  	
  2.750

  	
  %

  
	
  $500,000 to $999,999

  	
   

  	
  1.750

  	
  %

  
	
  $1,000,000 to $4,999,999

  	
   

  	
  1.500

  	
  %

  
	
  $5,000,000 and over

  	
   

  	
  1.250

  	
  %

  

 

Schedule
II to UBS Credit Corp. Credit Line Agreement 

 

Schedule of Percentage Spreads
Over Prime

 

	
  Outstanding Amount under Credit Line

  	
   

  	
  Spread Over Prime

  	
   

  
	
  $0 to $24,999

  	
   

  	
  3.125

  	
  %

  
	
  $25,000 to $49,999

  	
   

  	
  2.625

  	
  %

  
	
  $50,000 to $74,999

  	
   

  	
  2.125

  	
  %

  
	
  $75,000 to $99,999

  	
   

  	
  1.625

  	
  %

  
	
  $100,000 to $249,999

  	
   

  	
  1.375

  	
  %

  

 

NOTICE TO
CO-SIGNER (Traduccion en Ingles Se Requiere Por La Ley)

 

You are being asked to guarantee this debt.
Think carefully before you do. If the borrower doesn’t pay the debt, you will
have to. Be sure you can afford to pay if you have to, and that you want to
accept this responsibility.

 

You may have to pay to the full amount of the
debt if the borrower does not pay. You may also have to pay late fees or
collection costs, which increase this amount.

 

The creditor can collect this debt from you
without first trying to collect from the borrower. The creditor can use the
same collection methods against you that can be used against the borrower, such
as suing you, garnishing your wages, etc. If this debt is ever in default, that
fact may become a part of your credit record.

 

This notice is not the contract that makes you
liable for the debt.

 

AVISO PARA
EL FIADOR (Spanish Translation Required By Law)

 

Se le
esta pidiendo que garantice esta deuda. Pienselo con cuidado antes de ponerse
de acuerdo. Si la persona que ha pedido este prestamo no paga la deuda, usted
tendra que pagarla. Este seguro de que usted podra pagar si sea obligado a
pagarla y de que usted desea aceptar la responsabilidad.

 

Si la
persona que ha pedido el prestamo no paga la deuda, es posible que usted tenga
que pagar la suma total de la deuda, mas los cargos por tardarse en el pago o
el costo de cobranza, lo cual aumenta el total de esta suma.

 

El
acreedor (financiero) puede cobrarle a usted sin, primeramente, tratar de
cobrarle al deudor. Los mismos metodos de cobranza que pueden usarse contra el
deudor, podran usarse contra usted, tales como presentar una demanda en corte,
quitar parte de su sueldo, etc. Si alguna vez no se cumpla con la obligacion de
pagar esta deuda, se puede incluir esa informacion en la historia de credito de
usted. Este aviso no es el contrato mismo en que se le echa a usted la
responsabilidad de la deuda.

 

© 2007 UBS Credit Corp. All rights reserved.

Sign and date the application on page 5.

 

17

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