Document:

exv10w2

Exhibit 10.2 

	1.0	 	PURPOSE
	 
	 	 	Provide eligible executive officers of the Company continuing financial security in the
event the Company terminates their employment without “cause.” This policy sets forth the
terms and conditions regarding the payment of severance benefits for eligible executive
officers.
	 
	2.0	 	APPLICABILITY
	 
	 	 	This policy applies to (i) Ingram Micro’s chief executive officer, (ii) executive officers
of the Company elected by the Company’s Board of Directors who report to either the chief
executive officer or the chief operating officer of the Company, and (iii) such other
executive officers elected by the Company’s Board of Directors as the Human Resources
Committee of the Board of Directors may determine from time to time in their discretion.
	 
	3.0	 	POLICY

	 	3.1.	 	Eligibility — Eligible executive officers are entitled to the severance benefits
described in this policy if their employment is terminated by the Company without
“cause”. Eligible executive officers shall not be entitled to receive severance
benefits if their employment with the Company is terminated (i) by the Company for
“cause”, (ii) due to their resignation for any reason; (iii) due to their
disability; (iv) due to their retirement; or (v) as a result of their death.
	 
	 	3.2.	 	 Benefits — The following severance benefits will be provided to eligible executive
officers meeting the eligibility criteria for severance set forth above:

	 	3.2.1	 	The greater of:

	 	3.2.1.1	 	The sum of: (i) the eligible executive officer’s annualized Base
Salary in effect on the effective date of the termination of employment
with the Company (“Effective Date”); and (ii) the executive officer’s
Target Annual Bonus in effect on the Effective Date; OR
	 
	 	3.2.1.2	 	The product of 1/12th times the sum of (i) the executive
officer’s Base Salary in effect on the Effective Date and (ii) the
executive officer’s Target Annual Bonus in effect on the Effective
Date, multiplied by the number of full years’ of employment with the
Company; provided, however, that no more than twenty-four (24) full
years of the executive officer’s employment with the Company shall
apply for the purposes of this Section 3.2.1.2, with respect to the
Chief Executive Officer of the Company; provided, further, 

 

 

	 	 	 	that no more
than eighteen (18) full years of the executive officer’s employment
with the Company shall apply for the purposes of this Section 3.2.1.2,
with respect to any executive officer other than the Chief Executive
Officer of the Company.

	 	3.2.1.3	 	Subject to Section 3.11 below, such amounts shall be payable in a
lump-sum cash payment within 60 days after the Effective Date. Payment
will be subject to applicable tax and related payroll withholding
requirements.

	 	3.2.2	 	An amount equal to the executive officer’s unpaid annual bonus
established for the bonus plan year in which the Effective Date occurs,
multiplied by a fraction, the numerator of which is the number of days
completed in the then existing fiscal year through the Effective Date, and the
denominator of which is three hundred sixty-five (365). This amount will be
calculated and paid after the close of the applicable fiscal year at such time
and in the same manner as annual bonus payments are made to actively employed
executive officers. This amount will be calculated based on actual performance
achieved during the fiscal year relative to the performance objectives set
forth in the applicable annual bonus plan.
	 
	 	3.2.3	 	The Company will provide the continuation of, and pay 100% of
the premiums for, the Company-sponsored health and welfare benefits of medical
insurance, dental insurance and vision insurance for the eligible executive
officer and enrolled dependents during the period commencing on the Effective
Date and ending on the earliest to occur of (a) the date which is twelve (12)
months following the Effective Date or such greater number of months following
the Effective Date equal to the number of full years of the executive officer’s
employment with the Company, (b) the
date which is eighteen (18) months following the Effective Date, or (c) such
date as the executive officer becomes eligible for coverage under the group
health plan of another employer, provided, however, that if any plan
pursuant to which such benefits are provided is not, or ceases prior to the
expiration period of the period of continuation coverage to be, exempt from
the application of Code Section 409A under Treasury Regulation Section
1.409A-1(a)(5), then an amount equal to each remaining premium subsidy shall
thereafter be paid to the executive officer as currently taxable
compensation in substantially equal monthly installments over the
continuation coverage period (or remaining portion thereof). Following the
expiration of such continuation period, any further continuation of 

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	 	 	 	such
coverage under applicable law (if any) shall be at the executive officer’s
sole expense.
	 
	 	3.2.4	 	Participation in a Company paid outplacement program for up to
one year following the Effective Date, up to a maximum cost to the Company of
$20,000. The selection of the outplacement assistance firm shall be at the
discretion of the Company. The executive officer may not select a cash payment
in lieu of this benefit.

	 	3.3.	 	Executive Physical Examination Program — Participation in the Company’s Executive
Physical Examination Program will cease on the Effective Date.
	 
	 	3.4.	 	Retirement Plans — Participation in the Company’s retirement plan(s) and deferred
compensation plan(s) will cease on the Effective Date. Payment of accrued benefits
and account balances in these plans will be made in accordance with the plans’
provisions and the executive officer’s distribution election forms on file as of the
Effective Date.
	 
	 	3.5.	 	Stock Awards — Stock options, restricted stock awards, or other stock-based
incentive compensation awards shall be governed by the terms of the plan(s) and
award agreement(s) for each such award.
	 
	 	3.6.	 	Long-Term Executive Cash Incentive Award Program and Executive Long-Term Performance
Share Program —
The executive officer’s participation in the Company’s Long-Term Executive Cash
Incentive Award Program and Executive Long-Term Performance Share Program and the
payment(s) of earned awards shall be made in accordance with the terms of the
plan(s) and award agreement(s) for each such award.
	 
	 	3.7.	 	Mitigation of Benefits — The executive officer will not be obligated to seek other
employment in mitigation of the amounts payable or arrangements made under this
policy. Obtaining any other employment will in no event affect any of the Company’s
obligations to make payments and arrangements referenced within this policy.
	 
	 	3.8.	 	Release and Covenant — The entitlement of the executive officer to the severance
benefits provided in this policy is contingent upon the executive officer’s
execution of a release and covenant agreement satisfactory to the Company which may
include, but is not limited to, confidentiality, non-competition, non-solicitation,
and no-raid provisions for a period equal to the Health Benefits Continuation
Period.

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	 	3.9.	 	Effect of Other Arrangements — This policy applies to certain terminations of an
executive officer’s employment with the Company, provided that such termination does
not constitute a “Qualifying Termination” under the Company’s Change in Control
Policy for any executive officer who is a “Participant” under the Company’s Change
in Control Policy. If an executive officer has an employment agreement with the
Company in force on the Effective Date, he or she may elect to receive the severance
benefits and limitations provided for in such agreement or those provided by the
terms of this policy, but not both. Any such election shall be in writing delivered
to the Executive Vice President, Human Resources of the Company. In the absence of
any such election, the terms of the executive officer’s employment agreement shall
control. No termination of an executive officer’s employment shall be covered under
both this policy and the Company’s Change in Control Policy. In no event shall the
provisions of this policy result in the duplication of payments or benefits payable
or provided to an executive officer.
	 
	 	3.10.	 	Authority — The provisions of this policy have been established by the Human
Resources Committee of the Board of Directors of Ingram Micro Inc. The Committee
maintains the right to modify or terminate this policy at any time, with or without
prior notification.
	 
	 	3.11.	 	Section 409A — Notwithstanding anything to the contrary in this policy, no
compensation or benefits, including without limitation any severance payments or
benefits payable under Section 3.2 hereof, shall be paid to the executive officer
during the 6-month period following the executive officer’s “separation from
service” (within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue
Code of 1986, as amended (the “Code”)) if the Company determines that paying such
amounts at the time or times indicated in this policy would be a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code. If the payment of any such
amounts is delayed as a result of the previous sentence, then on the first business
day following the end of such 6-month period (or such earlier date upon which such
amount can be paid under Section 409A of the Code without resulting in a prohibited
distribution, including as a result of the executive officer’s death), the Company
shall pay the executive officer a lump-sum amount equal to the cumulative amount
that would have otherwise been payable to the executive officer during such period.
	 
	 	 	 	The payments and benefits under this policy are not intended to constitute
“nonqualified deferred compensation” within the meaning of Section 409A of the Code.
Notwithstanding any provision of this policy to the contrary, in the event 

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	 	 	 	that the
Company determines that any payments or benefits payable hereunder may be subject to
Section 409A of the Code, the Company may adopt such amendments to this policy or
take any other actions that the Company determines are necessary or appropriate to
(i) exempt such payments and benefits from Section 409A of the Code and/or preserve
the intended tax treatment of such payments or benefits, or (ii) comply with the
requirements of Section 409A of the Code and related Department of Treasury guidance
and thereby avoid the application of penalty taxes under Section 409A of the Code.
	 
	 	3.12.	 	Return of Payment — Notwithstanding anything to the contrary in this policy, if the
executive officer receives any severance payments or other benefits under Section
3.2 hereof and the Company subsequently determines that the executive officer had
engaged in conduct which constituted “cause” for the termination of his employment
by the Company prior to the Effective Date, the executive officer shall reimburse
the Company for all payments and the value of all benefits received by the executive
officer which would not have been made if the executive officer’s employment
had been terminated by the Company for “cause” with interest at the US Prime Rate as
published by Bloomberg Finance L.P., compounded annually, from the date such
payments or benefits were made until the date of repayment.
	 
	 	3.13.	 	Arbitration — With respect to any executive officer, any controversy or claim
arising out of or relating to this policy shall be submitted to binding arbitration.
By agreeing to arbitrate, the executive officer agrees to waive the executive officer’s
right to a jury trial. The arbitration will be conducted in accordance with this
Policy, the Federal Arbitration Act and the Employment Arbitration Rules of the
American Arbitration Association, as in effect at the time of any arbitration pursuant
to this Policy (the “AAA Rules”). In the event of a conflict, the provisions of the
AAA Rules will control, except where those AAA Rules conflict with this Policy, in
which case this Policy will control. The arbitration shall be conducted before a
single neutral arbitrator, regardless of the size of the dispute, to be selected as
provided in the AAA Rules. The arbitration shall be commenced and held in Orange
County, California. Any issue concerning the location of the arbitration, the extent
to which any dispute is subject to arbitration, the applicability, interpretation, or
enforceability of these procedures, including any contention that all or part of these
procedures are invalid or unenforceable, and any discovery disputes, shall be resolved
by the arbitrator. No potential arbitrator may serve on the panel unless he or she has
agreed in writing to be bound by these procedures. To the extent state law is
applicable, the arbitrator shall apply the law of California. Each party will, upon
the written request of the other 

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	 	 	 	party, promptly provide the other with copies of all
documents on which the producing party may rely in support of or in opposition to any
claim or defense and a report of any expert whom the producing party may call as a
witness in the arbitration hearing. Additional discovery shall be conducted as
permitted by the AAA Rules or as may be ordered by the arbitrator upon a showing of
good cause. All aspects of the arbitration shall be treated as confidential and
neither the parties nor the arbitrator may disclose the existence, content or results
of the arbitration, except as necessary to comply with legal or regulatory
requirements, or to enforce any ruling or award. Before making any such disclosure, a
party shall give written notice to all other parties and shall afford such parties a
reasonable opportunity to protect their interests. The parties shall share all fees
and costs payable to the arbitrator or AAA equally, except that the Company will pay
all fees and costs that are unique to arbitration and/or in excess of the costs that
would be incurred if the action were filed in a court of competent jurisdiction. All
attorneys’ fees, witness fees and other costs shall be paid by the party that incurs
those costs and expenses, except to the extent that a party is entitled to recover
those costs or expenses under applicable law. The result of the arbitration shall be
rendered in writing and shall be binding on the parties and judgment on the
arbitrators’ award may be entered in any court having jurisdiction.

	4.0	 	RESPONSIBILITIES
	 
	5.0	 	PROCEDURES
	 
	6.0	 	RELATED DOCUMENTS
	 
	7.0	 	DEFINITIONS
	 
	 	 	For purposes of this policy, the following terms will have the meanings set forth below:

	 	7.1.	 	Company — Company means Ingram Micro Inc., a Delaware corporation, and its wholly
owned subsidiaries and affiliates. Company also means Ingram Micro Inc.’s
predecessor companies and their wholly-owned subsidiaries and affiliates.
	 
	 	7.2.	 	Base Salary — The fixed annual cash compensation that is generally paid in
substantially equal periodic payments over the course of the 12-month period
approximating the calendar year.
	 
	 	7.3.	 	Target Annual Bonus — The executive officer’s annual base salary in effect on the
Effective Date multiplied by the incentive award percentage applicable to such
executive officer’s salary grade or position as specified in the Company’s 

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	 	 	 	annual
Executive Incentive Award Plan in effect for the fiscal year in which the Effective
Date occurs.
	 
	 	7.4.	 	Termination for Cause — Refers to the occurrence of any one or more of the
following:

	 	(i)	 	Participant fails to observe and fully obey Ingram’s rules and
regulations of conduct;
	 
	 	(ii)	 	Participant is convicted by any federal, state or local
authority for an act of dishonesty, or an act constituting a felony;
	 
	 	(iii)	 	Participant’s commission of fraud, embezzlement or
misappropriation, whether or not a criminal or civil charge is filed in
connection therewith; or
	 
	 	(iv)	 	any other conduct on the part of Participant that would make
Participant’s retention by Ingram prejudicial to Ingram’s best interests.

	8.0	 	REVISION HISTORY

	 	8.1.	 	Adopted August 23, 2003

Revised November 28, 2006

Revised September 10, 2008

Revised September 7, 2010

7exv10wxay

Exhibit 10(a)

COMBINED TERMS AND CONDITIONS

 

 

CONTENTS

NOTE — This document contains various account agreements related to deposit, custody, and
brokerage services offered at J.P. Morgan. Only those agreements specific to the service requested
shall apply.

	 	 	 	 	 

	General Terms for Accounts and Services
	 	 	1	 
	 
	 	 	 	 
	Deposit Accounts and Services Offered By JPMorgan Chase Bank, N.A.
	 	 	5	 
	Money Market Deposit Account (“MMDA”) Agreement
	 	 	5	 
	Checking Account Agreement
	 	 	6	 
	Certificate of Deposit Agreement
	 	 	6	 
	 
	 	 	 	 
	Accounts and Services Relating to Assets Held by JPMorgan Chase Bank, N.A. and Affiliated Banks
	 	 	7	 
	Asset Allocation Advisory Services
	 	 	7	 
	Asset Account Agreement
	 	 	7	 
	 
	 	 	 	 
	Agreements for Accounts and Services Offered Through J.P. Morgan Securities Inc.
	 	 	 	 
	and J.P. Morgan Entities
	 	 	12	 
	Brokerage Account Agreement
	 	 	12	 
	Margin Disclosure Statement
	 	 	15	 
	Margin Account Agreement
	 	 	15	 
	Disclosure to Clients in Compliance With FINRA Rule 4370 Regarding Continuity
	 	 	 	 
	and Contingency Plans and Emergency Contact Information for J.P. Morgan
	 	 	17	 
	Risks Of Certain Investments
	 	 	17	 
	 
	 	 	 	 
	Appendix: Asset Account and Deposit Account — Funds Availability Policy Statement
	 	 	22	 
	 
	 	 	 	 
	Appendix: Other Banking Services Relating to Accounts
	 	 	23	 
	 
	 	 	 	 
	Appendix: General Rules and Regulations for Deposit Accounts
	 	 	24	 
	 
	 	 	 	 
	Appendix: Electronic Fund Transfers
	 	 	28	 

 

 

GENERAL TERMS FOR ACCOUNTS AND SERVICES

“Account” refers to the account or accounts
subject to these General Terms and an additional
account agreement. “Accountholder” means the
person or entity (also called “I” or “me”) who
owns the Account. “You” means JPMCB or, in the
case of a product or service furnished by, or
Account with, or Obligations owed to another
Morgan Affiliate, that Morgan Affiliate. Other
definitions of capitalized terms used in these
General Terms are found in the Definitions
Section.

1. Types of Accounts

The titles under which accounts are opened, the
selection of the type of account or opening an
account for a minor under various states’ Uniform
Transfers or Gifts to Minors Acts (UTMA/UGMA) have
important consequences for taxes, control of
assets, and wealth and estate planning. Clients
should discuss how to structure financial accounts
with their own legal or tax adviser. Material
provided by J.P. Morgan is not intended to provide,
and should not be relied on for, accounting, legal,
estate planning or tax advice nor does it provide
investment advice unless specifically contracted
for.

Individual Accounts

Where only one individual appears on the
Application or a signature card as the owner of
such account, the Account will be treated as a
solely owned account. In the event of the
Accountholder’s death or adjudication of
incompetence, you have the right to honor checks or
other items drawn against the Account until ten
days after you receive actual written notice of
death or incompetence, and upon such notice, you
may restrict access to the Account until my
executor, administrator or other representative of
my estate provides the appropriate documentation to
you, including a death certificate. To the extent
and under the circumstances permitted by the laws
of the state governing my Account, upon receipt of
actual written notice and proof of my death, the
balance in my Account will be paid to the person or
entity I designate to “pay on death” (“POD”) or
whom I designate as a POD payee or beneficiary on
my Account’s signature card, Application, or other
form provided by you.

Joint Accounts

Unless the signature card or Application provides
otherwise, where two or more individuals are
designated or appear on a signature card or
Application as owners of such Account, then as
between them, they will be treated as joint tenants
with rights of survivorship. For any joint account
where a joint owner has died, you need not release
funds in the Account until all legal documents are
delivered to you. I will notify you of the death of
any joint owner and reimburse you for any tax you
may be required to pay by reason of your payment or
release of funds in the Account. Certain states
also permit married residents to own property as
community property or as tenants by the entirety.
These forms of ownership have different attributes
than ownership as joint tenants with right of
survivorship. I must consult my own legal advisor
about which type of account is best for me.

Any joint owner may close the Account. You may, at
your sole discretion, act upon the instructions of
any joint owner, including an instruction to
withdraw funds or add a signatory to the Account,
without the consent of the other joint owner.
However, you are under no obligation to follow such
instruction, and may refuse to do so without
liability. You also may pay all or any part of the
funds in the Account to any of the joint
owners upon request of that joint owner or to a
court or governmental agency upon receipt of a
garnishment order, tax levy or similar legal
process identifying any one of the joint owners.

Any Accountholder may grant a security interest
in a joint account without the consent of the
other owners. All joint owners will be jointly
and severally liable for all Obligations,
whether or not that particular owner incurred
the Obligation or received benefit from a
transaction which resulted, directly or
indirectly, in such Obligation.

Each joint owner appoints each of the others as
such joint owner’s agent and attorney in fact
with power to endorse and deposit Items payable
to such joint owner in the joint account. If a
joint account is established without the
signature of the other joint owner, we will hold
you harmless for your reliance upon the
designation of the other as a joint owner.

If I hold an investment through my Account which
is entered into under a separate agreement, for
example, an investment in a hedge fund, the
agreements governing such investment may impose
terms and conditions on investors that are at
variance with the characteristics of the type of
joint account I have selected. I agree that the
terms and conditions in such investment’s
governing documents supersede and prevail over
this Agreement. However, this Agreement governs
any proceeds distributed to the Account as a
result of such investment, including, without
limitation, liquidation proceeds.

Accounts for Minors

The custodian of an Account opened for a minor
under the Uniform Transfers or Gifts to Minors
Act controls the Account, but the designated
minor is the owner of the funds in the Account.
When the minor reaches the age mandated by law,
full control of the Account must be turned over
to the minor by the custodian. The Social
Security number of the minor is to be used for
income tax reporting. The gift to the minor is
irrevocable.

Deposit Account (“Totten”) Trusts

If a deposit account is established as “in trust
for” (“ITF”) or as trustee for a third person
without formal trust documents, the Account will
be treated as a Totten Trust account or as
otherwise required by the laws of the state where
the deposit is located.

Transfer on Death Accounts

Securities in an Account designated as “Transfer
on Death” (“TOD”) will be held for the benefit of
the beneficiaries I designate on the Application.
Upon the death of the last surviving
Accountholder, ownership of the Securities passes
to those beneficiaries, not the deceased
Accountholder’s estate. If there are two or more
beneficiaries, they will hold as tenants in
common. If no beneficiary survives the death of
all Account owners, the Securities will be part
of the last surviving owner’s estate. TOD
Accounts may not be available in all States and
are available only for Accounts eligible to hold
Securities.

2. My Representations and Warranties

All information provided in the Application or
otherwise given to you from time to time is
accurate, true and complete.

For individual and joint accounts, the identified
Accountholders are the beneficial owners. For
entity accounts, beneficial ownership is as I
have told you. I will notify you immediately if
the beneficial ownership of any Account changes.

If I am a natural person, I represent and
warrant that I am of the age of majority
according to the law of my place of residence
and of the place of my Accounts.

If I establish the Account when acting in a
fiduciary capacity, (i) all beneficial interests
in the estate, trust or Account for which I am a
fiduciary are owned by individuals or by
non-profit organizations; and (ii) I am legally
empowered to enter into and perform this
Agreement in such capacity.

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If the Account is to be maintained in the name of
a sole proprietorship, (i) I am the sole owner of
the sole proprietorship; (ii) the sole
proprietorship is doing business under the name
and style of, and at the location, given in the
Application; (iii) I will be personally
responsible for any debts, deficiencies or
overdrafts in the sole proprietorship Account; and
(iv) checks drawn on the sole proprietorship’s
Account may be debited against any Account I hold,
in my individual name or jointly, with you.

For Accounts opened other than by a natural person,
the Accountholder (i) has the power to enter into
and perform under the Agreement, all necessary
actions have been taken and approvals received in
accordance with its organizational documents and
applicable law and regulation, and it is duly
organized and in good standing in the jurisdiction
in which it is organized. The persons signing the
Application have the authority to bind the
Accountholder to the Agreement.

You may rely on these representations and
warranties, which are made as of the date of the
Agreement and which will continue until the
Agreement is terminated.

3. Authorized Instructions

Authorized Persons on my Account are those
indicated on my Application, any resolution, or
other separate written authorization related to
the Account that I deliver to you. I agree to be
bound by all instructions that you believe are
authorized and to have been given by an Authorized
Person, regardless of how those instructions have
been transmitted, and no Morgan Affiliate will be
liable for any loss, cost, or expense for acting
on such instructions. Until I or another
Authorized Person has revoked the authority of an
Authorized Person in writing, Authorized Persons
shall continue to be Authorized Persons. I
authorize you to accept instructions by telephone,
facsimile transmission, in writing or any other
method that we may agree to use but understand
that you are not required to accept instructions
by any such media.

I agree to be bound by any facsimile or other
electronically transmitted signature that you in
good faith believe to have been transmitted by me
and that such signature will evidence my agreement
or consent and will be legally binding,
enforceable and the legal equivalent of my
handwritten signature.

4. Monitoring Conversations; Electronic Communications

I agree that so long as my Account is open, you
may monitor or record conversations and telephone
calls (should you elect, in your discretion, to
do so) that I have with your employees or agents
for the purpose of verifying transactions,
quality control, or for other business reasons. I
waive any notice other than this provision that
our communications shall or may be recorded at
any time.

Confidentiality and integrity of messages via
email, facsimile, or other electronic media cannot
be assured, and electronic media may not always
transmit correctly, so I will not assume you have
received a message via such media if you do not
respond within a reasonable time. I understand that
messages left on a voice-mail system may not be
collected immediately for various reasons and,
again, I will not assume you have received a
message if you do not respond within a reasonable
time. I understand that you do not accept
securities, money transfer, or other instructions
sent by electronic media, and will not be
responsible for them. If you agree to accept
instructions I send by such media, I accept that I
do so at my risk, in accordance with this paragraph
and Section 3 above. You may record and monitor
communications via electronic media similarly to
telephone conversations, as explained above.

5. Statements and Confirmations; Balancing and Holding Information

You will provide me with periodic statements
detailing the activity that occurs in my Accounts.
JPMSI will confirm Brokerage
Account transactions when required by applicable
law and regulation. I will not receive
confirmations relating to my Investment
Management Account activity or accounts opened
for me with Third Party Managers. All statements
and advices will be sent to me by mail at the
address last recorded by you unless we make other
arrangements. This address must be one where I or
someone I have authorized to receive
communications on my behalf actually receives
communications. I will notify you in writing of
any address change. For deposit accounts, if
there have been no deposits or withdrawals made
to my account within a 30-month period (12 months
in Texas), annual statements will be sent unless
specifically indicated in the personal or
business account disclosures. I may be unable to
access my Account other than by an in-person
withdrawal if my account has no deposits or
withdrawals within a 24-month period (10 months
in Texas).

I agree that I must review statements and
confirmations promptly and notify you
immediately of any errors, omissions, improper
payments, or transfers. Unless otherwise
provided by applicable law or regulation or
specifically provided elsewhere in the General
Terms or any Account Agreement, I agree that I
cannot make a claim against you based on any
error, omission, improper payment or transfer
disclosed by a confirmation or statement if I
fail to notify you of it within three (3)
Business Days after its delivery in the case of
a confirmation, and within thirty (30) Business
Days after its delivery in the case of a
statement. My responsibilities with respect to
periodic statements covering Deposit Accounts
are identified in “Appendix: General Rules and
Regulations for Deposit Accounts,” Section A.14.

Asset values on periodic statements come from
your proprietary pricing models or external
pricing services that you select and may rest on
estimates and assumptions you make about relevant
future market conditions and other matters, all
of which are subject to change without notice.
Such changes may have a material impact on
valuations, and valuations based on other models
or different assumptions may yield materially
different results. Statement valuations may not
represent the actual or indicative terms for new
transactions or for liquidation of existing
transactions, and may vary from valuations used
by you for other purposes. Accordingly, I will
not use my statements as the sole basis for
valuing my assets, and I will seek advice from my
accountant or attorney about using statements to
prepare tax returns, financial statements,
regulatory reports, or for other purposes. I
agree that you and Morgan Affiliates shall not be
liable for losses, costs, expenses or damages
(incidental, special, consequential,
compensatory, punitive, or otherwise) arising out
of any use or reliance on any valuation of any
asset set forth in a periodic statement or other
document.

Balances and Account holdings change on a
frequent basis. Information about the amount of
my balance or holdings will be as of a given
time, and there is no assurance that the same
balance or holdings will be in my Account at the
time the checks that I write are presented for
payment. I hereby waive any claims against you
based on balance and holdings information
provided to me orally, electronically or in
writing or to a third party on my behalf.

6. Security Interest; Right to Debit and Setoff

In order to secure payment when due of any and
all Obligations under this Agreement to you or
any Morgan Affiliate I pledge and grant to you
and each of them a continuing security interest
in the Collateral. This security
interest shall apply to any Collateral (and
proceeds thereof) now or at any time in the
future held in or credited to any Account or
other accounts maintained for me. I acknowledge
and agree that where you or any other Morgan
Affiliate holds Collateral or is a securities
intermediary in respect of any

2

 

Collateral, you each hold the Collateral for
yourself and also as agent for all other Morgan
Affiliates who are secured parties hereunder
pursuant to the Intercompany J.P. Morgan Securities
Account Control Agreement among various Morgan
Affiliates as amended or restated from time to
time. At any time that I have not met any
Obligation under this Agreement you may liquidate,
sell or transfer all or any portion of the
Collateral to satisfy that Obligation in whatever
priority you choose in your sole discretion;
exercise all rights and remedies you have under
applicable law with respect to the Collateral; or,
exercise any other rights or remedies you have
under other agreements or applicable law.

If I have a line of credit connected to an Asset
Account, this security interest is in addition to
any security interest that I have granted in
connection with that line of credit.

In addition, you may, without prior notice or
demand, apply or setoff the funds in my Account at
any time to pay off any Obligation, whether direct
or indirect, I have to a Morgan Affiliate that
provides products or services under this Agreement.
If the Account is a joint account, the funds in the
joint account may be used to pay the Obligations of
a single Accountholder. A hold against the Account
(to the extent of your right of offset) may be
imposed rather than an immediate debit of the
funds. Any of my assets or my Obligations may be
transferred within and among Morgan Affiliates in
order to effect the rights in this Section 6. I
acknowledge that my Account is a general account
and not a special purpose account.

7. Fees

I agree to pay all fees, charges and commissions
associated with this Agreement and the Accounts and
services you provide to me. You are authorized to
charge my Accounts directly for payment for all
applicable fees contained in the fee schedules in
effect from time to time, which are available upon
request.

8. Error Corrections

You have the right to correct all errors that
arise in my Accounts without prior notice to me,
including debiting my Accounts for any sums or
positions incorrectly existing therein and
correcting errors with respect to Account holdings
or balances. You may also reverse any provisional
credits or recredits. You may take these actions
even if they result in a debit balance or
overdraft.

9. Credit Reports

You may request credit reports on me in connection
with my Application for an Account or in the future
in connection with an update, renewal or extension
of an Account. Upon my request, you will inform me
whether you have obtained any such reports and, if
you have, you will inform me of the name and
address of the reporting agency that furnished the
reports to you. Any credit reports that you receive
will be deemed to have been obtained by each Morgan
Affiliate for its own benefit.

10. Limitations on Responsibilities and Liabilities; Indemnification

You shall be responsible for the performance of only those duties that are set forth in this Agreement.

Except as otherwise provided by law, your sole
liability and that of Morgan Affiliates to me, my
heirs, legal representatives, assigns or any other
party for any wrongful act or failure to act in
connection with any of the products or services
provided to me shall be any direct damages I incur
because of your gross negligence or willful
misconduct. Direct damages will be limited to the
amount of any funds or the fair market value of any
property lost because of such gross negligence or
willful misconduct, together with compensatory
interest and a credit for your fees with respect to
any relevant transaction. Under no circumstance
shall you be liable to me or any other person for
any services provided by third parties (e.g.,
clearing agencies, central depositories,
communications carriers) or for any indirect,
incidental, special, or consequential damages,
regardless of the form of action and even if you
have been advised of the possibility of such
damages. You disclaim any and all warranties,
whether express or implied, including but not
limited to all warranties of merchantability
or fitness for a particular purpose.

You will not be responsible for losses caused
directly or indirectly by events or conditions
beyond your control, such as war, acts of
terrorism, natural disasters, government
restrictions, strikes, a failure of public
utility, communication, computer, equipment or
other systems, a failure or delay in receiving
electronic data or any law, legal or regulatory
requirements, exchange or market rulings, or
suspension of trading.

I will indemnify and hold all Morgan Affiliates
providing products or services under the
Agreement harmless from any claim, loss,
liability, or expense, including, without
limitation, collection costs, reproduction and
search costs and the reasonable fees and
disbursements of counsel and other advisers
incurred by them (i) in rendering services
hereunder; (ii) if I breach the Agreement; (iii)
if a third party brings a claim, suit or
proceeding against a Morgan Affiliate because it
provided products and services to me, or (iv)
resulting from a subpoena, administrative order,
court order, levy, garnishment, attachment or
other legal process affecting the Account. I will
not be required to indemnify any Morgan Affiliate
if the claim, loss, or liability results from its
gross negligence or willful misconduct.

11. Taxes

I will be responsible for the payment of all
taxes relating to my Accounts. I will reimburse
you and all Morgan Affiliates on demand for any
transfer taxes, documentary taxes, assessments
or charges that are imposed at any time on or in
connection with this Agreement and shall
indemnify you and them against liability for any
such tax (including any interest and penalties).
You are authorized to deduct from any cash
receivable credited to my Accounts any taxes or
levies required to be deducted by any revenue or
governmental authority for whatever reason with
respect to my Accounts.

12. Abandoned or Inactive Accounts

Unless I make a transaction in my Account from
time to time or notify you in writing that I know
my Account still exists, state law may require
you to send the Property in the Account to the
applicable state as abandoned property. The
applicable state is generally the state of my
last known address as shown on your books and
records, or the state of the JPMCB address where
my Account is maintained if my address is outside
the United States. After the turnover, the funds
must be reclaimed from the applicable state. My
Account may be charged for certain expenses
incurred in remitting funds to any state. These
charges are not refundable.

13. Retention of Assets; Disputes over Account Assets

You may refuse to pay out any money or transfer
or distribute Securities or other Property from
my Accounts (i) in the event of my death or the
death of any co-Accountholder, until you are
fully satisfied, in your sole judgment, that you
will have no resulting liability or potential
liability for any estate tax, gift tax or other
tax, or (ii) upon receipt of oral or written
notice of a claim regarding the Account, until
you have a court order or the written consent of
all required parties. You also may place a hold
on the Account or you may file an action in
interpleader. I agree to reimburse you for any
expenses, including reasonable attorneys’ fees
that you incur because of any dispute, including
any incurred
without litigation. You are not required to
determine whether a dispute has merit in order to
take one of the actions permitted by this
section.

14. Termination

Either of us may terminate this Agreement or
some or all of the products, features and
services provided at any time upon notice to the
other. However, any security interest in

3

 

Collateral, or any other setoff rights against my
Accounts or Property will not terminate until I
have satisfied indefeasibly and in full all my
Obligations, whether arising before or after
termination. Termination of one or more of the
services and features of an Account may result in
the cancellation of some or all of the features or
privileges described in this Agreement. I
understand that I remain responsible for all
charges, debit Items, or other transactions
initiated or authorized by me or Authorized
Persons, whether arising before or after
termination.

15. Compliance with Laws

I certify that I have observed and will continue
to observe all laws and regulations that apply to
my activities and relationship with you or any
Morgan Affiliate.

16. Rules and Regulations

My transactions will be effected in accordance with
your internal rules and policies, the applicable
rules, regulations, customs, and usages of any
exchange, market, clearinghouse, or self-regulatory
organization, and all applicable federal and state
laws, rules, regulations, and treaties.

17. Governing Law; Jurisdiction

Except as otherwise provided, or insofar as
preempted by federal law, this Agreement shall be
governed by the law of the State of New York
without giving effect to its choice of law or
conflict of laws provisions (other than section 5-
1401 of the New York General Obligations Law).

Deposit accounts shall be governed by the law of
the place where each deposit account is located.

Under federal law, deposits that I maintain in any
JPMCB branch located outside of the U.S. are not
insured by the Federal Deposit Insurance
Corporation (“FDIC”); are subject to cross-border
risks; and enjoy a lesser preference, as compared
to deposits held in the U.S., in the event JPMCB
should be liquidated, become insolvent or be placed
into receivership or be subject to other
proceedings for the benefit of creditors.

This Agreement varies applicable law or regulation
to the maximum extent permitted under any such law
or regulation. Any provision of applicable law or
regulation that cannot be varied by agreement or
notice shall supersede any conflicting term of this
Agreement. If any provision of this Agreement is
held to be illegal or unenforceable, the validity
of the remaining portions of this Agreement shall
not be affected.

I submit to the exclusive jurisdiction of any
federal or state court located in the county where
the office holding my Account is situated for all
legal proceedings arising out of this Agreement. I
irrevocably waive any objection of inconvenient
forum that I may now or later have.

18. Waiver of Jury Trial

To the extent permitted by law, you and I
knowingly, voluntarily and irrevocably waive all
right to trial by jury in any action, proceeding or
counterclaim, of whatever type or nature, including
but not limited to actions in contract or tort,
arising out of this Agreement or the relationship
established by this Agreement.

I acknowledge that this jury waiver is a material
inducement to you to enter into this agreement
and acknowledge that no representative of yours
has represented (expressly or otherwise) that you
might not enforce this jury waiver in the event
of litigation.

19. Use and Exchange of Nonpublic Personal Information

The J.P. Morgan Privacy Policy governs the use
and exchange of nonpublic personal information
about me, including by Morgan Affiliates.

20. Successors and Assigns; Subcontracting

This Agreement shall be binding upon and inure to
the benefit of each of us and our successors,
assigns, heirs, and
representatives. I will not assign any of my
rights or obligations under this Agreement
without your prior written consent. Except where
prohibited by applicable law or regulation, each
Morgan Affiliate providing accounts and services
under this Agreement may assign its rights and
obligations under this Agreement, or grant
participations in its rights, such as its rights
as a creditor, to any other party without notice
to me or my consent. I agree that each Morgan
Affiliate may arrange for another Morgan
Affiliate or other entity to perform on its
behalf any act required to be performed by such
Morgan Affiliate under this Agreement.

21. Entire Agreement, Amendment, Waiver, and Construction

This Agreement contains the entire agreement
between me, you and all Morgan Affiliates for the
Accounts and services described and supersedes
any prior oral or written agreements relating to
the Accounts opened and services contracted for.
No prior conduct, past practice, or oral
statement by your officers or employees will
modify my or your obligations under the
Agreement. If there are any conflicts between the
General Terms and any product Agreement contained
in this document, the product Agreement shall
prevail. This Agreement and your fees and charges
may be amended, and you may modify any aspect of
an Account, at any time following notice sent to
me by ordinary mail. You do not waive any right
under this Agreement or under applicable law
because you delay in exercising that right. If
you exercise any single or partial right, you may
exercise or further exercise that right or any
other right or remedy at a later time. Your
rights are cumulative under this Agreement and do
not exclude any rights or remedies provided by
law. No ambiguity in any provision of this
Agreement shall be construed against you by
reason of the fact that you or your legal counsel
drafted such provision.

22. Definitions

“AC Fund” means a mutual fund which American
Century Investment Management Inc. (“ACI”)
advises or to which it provides other services
for which it is separately compensated. JPMorgan
Chase & Co. has an equity interest in ACI.

“Agreement” means these General Terms, the
applicable Agreements for Accounts and Services
for the products and services I select, all
relevant appendices, the Application, any
supplemental forms I am asked to complete, and
rate and fee schedules, all as the same may be
amended or supplemented from time to time.

“Application” means the application I have signed
with respect to the Accounts and this Agreement,
any supplemental or additional applications
(including those amending or replacing a prior
application) for products and services offered by
J.P. Morgan. My Application includes any
agreements or applications I signed or submitted
to a predecessor of a Morgan Affiliate, and
further means any information I have given in
writing to you or a predecessor of a Morgan
Affiliate related to these products and services.

“Authorized Persons” means me and those persons
who have been authorized by me to act on my
behalf in connection with an Account.

“Business Day” unless otherwise specified in the
Agreement means a day on which a relevant Morgan
Affiliate is generally open for the conduct of
substantially all of its business functions. For
any Morgan Affiliate that is an insured
depository institution, a Business Day is any
day other than Saturday, Sunday, or a legal
holiday where the Morgan Affiliate is located.

4

 

“Collateral” means all of my rights, title, and
interest in and to any Deposit Accounts, or in
and to any Property maintained in any other
Account identified as Collateral on any
Application or otherwise, and any proceeds
thereof and substitutions and additions thereto.

“Item” means any check, substitute check, draft,
note or other instrument for the payment of
money.

“JPMCB” means JPMorgan Chase Bank, N.A.

“J.P. Morgan” means the marketing name used for
the private banking business conducted by
JPMorgan Chase & Co. and its subsidiaries
worldwide.

“JPMSI” means J.P. Morgan Securities Inc.

“JPM Fund” means a mutual fund or other collective
investment fund which a Morgan Affiliate advises
or to which it provides other services for which
it is separately compensated.

“Line of Credit” means the line of credit you may
provide to me as part of the Asset Account.

“Morgan” or “Morgan Affiliate” means JPMorgan Chase
& Co. or any entity controlled by, controlling, or
under common control with JPMorgan Chase & Co. For
the purpose of this definition, “control” means
ownership of more than 50% of the voting securities
of an entity or the ability to elect a majority of
the board of directors or other governing body of
such entity.

“Obligations” means all obligations of payment or
performance, whether joint or several, contingent
or otherwise, that I have to a Morgan Affiliate
arising under the Agreement or any other agreement
relating to products or services offered by or
through J.P. Morgan, including but not limited to
agreements for borrowed money, guarantees, letters
of credit, floors, collars, swaps, options, foreign
exchange transactions (or any similar transaction
or combination of these types of transactions),
overdrafts and shortfalls of any kind, no matter
how arising, as well as obligations to pay fees, to
provide information, to make accurate
representations and to provide security.

“Property” means, but is not limited to,
Securities and securities entitlements of all
kinds, money, deposits, bankers’ acceptances,
commercial paper, contract rights of all kinds,
accounts, goods, documents, general intangibles,
chattel paper, commodities and commodity interests
and the distributions, proceeds, products and
accessions of and to the above.

“Security” or “Securities” means any share
(including a mutual fund share or unit of a unit
investment trust), stock, bond, debenture, note,
certificate of indebtedness, warrant, option,
interest, or other security (whether represented
by a certificate or by a book entry on the records
of the issuer or other entity responsible for
recording such book entries), and any security
entitlement in respect of any of the foregoing.

DEPOSIT ACCOUNTS AND SERVICES OFFERED BY JPMORGAN CHASE BANK, N.A.1

The Money Market Deposit Account Agreement,
the Checking Account Agreement, and the
Certificate of Deposit Agreement, with amendments
from time to time, will apply to any such future
account opened or product or service obtained
from J.P. Morgan if you and I have agreed,
orally, electronically or otherwise, upon such
account, product or service. Each Agreement is subject to the General Terms
for Accounts and Services, Appendix: Other
Banking Services Relating to the Accounts,
Appendix: General Rules and Regulations for
Deposit Accounts, and Appendix: Electronic Fund
Transfers contained herein (collectively, the
“General Terms”). Capitalized terms not defined
in each Agreement have the meanings given to
them in the General Terms.

MONEY MARKET DEPOSIT ACCOUNT (“MMDA”) AGREEMENT

A Money Market Deposit Account is a deposit
account at JPMorgan Chase Bank, N.A., which is
an insured depository institution. I understand
and agree that upon notice to me, you may
transfer my MMDA to another branch office
without my consent. The MMDA holds only U.S.
dollar deposits.

1. Interest Rate and Annual Percentage Yield

My interest rate is the rate of interest paid
without regard to compounding, shown as an annual
figure. If you have not disclosed an interest
rate, but instead have disclosed an annual
percentage yield, the interest rate is the rate
that will produce the disclosed annual percentage
yield. The annual percentage yield means a
percentage rate my money will earn if it remains
on deposit for a full year with compounding and
no change in the interest rate and all interest
is left in the account. Interest rates are
determined at your discretion and you may change
them at any time without notifying me. The annual
percentage yield in effect when I open my Account
is effective only until the next interest rate
change.

Depending on the type of account, interest may
be compounded daily or monthly, computed on a
360- or 365- day basis according to the daily
balance method. This method applies a daily
periodic rate to the principal and accrued (but
not yet credited) interest in the Account each
day.

The interest rate and annual percentage yield
applicable to my Account on the date my Account
is opened will be set forth on a separate “rate
sheet” or other interest rate disclosure provided
to me when my Account is opened. That interest
rate disclosure is considered part of this
Agreement.

Deposits begin to earn interest when you receive
credit for the deposit, which depends on where
the Item originated and/or how the deposit was
made. Cash, wire and electronic transfer deposits
and Items drawn on you will earn interest as of
the day of deposit. Other Items generally will
begin to earn interest one to two days from the
day of deposit. Interest will be paid by
crediting my Account at the end of each monthly
statement cycle. If I close my account before
interest is credited, I will receive the accrued
interest.

Generally, deposits made on a Business Day
before 2:00 p.m. at a branch or before 12 noon
at an ATM will have that day as the day of
deposit. Local ATMs will provide the exact
cut-off time. For deposits made after that time
or on a day that is not a Business Day, the day
of deposit will be the next Business Day.

From time to time, you may establish, change or
eliminate different balance levels and apply
different rates of interest to different balance
levels or establish a balance above or below
which interest shall not be paid. If a claim is
made against my Account restricting or
prohibiting the withdrawal of funds, you may
convert the Account to a non-interest bearing
account.

2. Limitations on Withdrawls and Transfers

Certain types of transfers from MMDA accounts are
limited by federal regulation to no more than six
(6) per statement period (approximately one
month). Examples of restricted transfers or
withdrawals include checks, telephone or online
withdrawals or transfers, pre-authorized third
party payments, pre-authorized transfers to
another account, and Purchase Transactions, as
defined in Section A.3 of the Appendix:

 

			
	1	 	Deposit products and services
offered by JPMorgan Chase Bank, N.A. Member
FDIC.

5

 

Electronic Fund Transfers. Once I reach my limit,
you may refuse to process any additional restricted
transfer or withdrawal. You also may treat as
restricted transactions debits for the purchase of
your official checks. If these limits are exceeded
three times in a six month period, you will be
obliged to restrict or close my MMDA or convert it
to a checking account that offers unlimited check
writing and transfers, and I may pay a fee for each
transfer you process in excess of either of the
limits described above in accordance with the
current fee schedule. There is no limit on the
number of withdrawals or transfers I may make in
person, by mail, at an ATM, or by messenger.

Federal regulations require you to reserve the
right to require seven days’ advance written
notice before permitting a withdrawal from my
MMDA, although you do not presently exercise
this right.

CHECKING ACCOUNT AGREEMENT

I understand and agree that upon notice to me, you
may transfer my Checking Account to another branch
office without my consent.

1. Minimum Balance Required to Avoid Additional
Fees; Earnings Credit on Business Accounts

The Checking Account holds only U.S. dollar
deposits. If my account is a personal account, you
can impose a minimum average daily balance that I
must maintain during each month to avoid the
imposition of a monthly account maintenance fee.

Business accounts are accounts held by or on behalf
of an entity (a person other than a natural person)
or held by an individual in a professional or
business capacity. Each month the non-interest
bearing funds in a business Account will earn a
credit that is based on the rate paid on
three-month U.S. Treasury bills from time to time.
Each month’s credit is calculated by taking the
average daily non-interest bearing balance of my
Account during the month and multiplying the result
by 90% of the applicable Treasury bill rate and by
the number of days in the current month divided by
365. The average daily non-interest bearing balance
is the sum of each day’s ending balance from the
last day of the prior month through the
second-to-last day of the current month divided by
the number of days in the month. The average daily
balance is calculated the same way but using only
balances in the Account that are above zero and
available for withdrawal.

Each month’s credit will be used to offset
maintenance and certain transaction fees incurred
in that month for account maintenance and services.
The credit may be applied only against current fees
and will never be credited to my Account. Fees in
excess of a credit will be charged to my Account,
or to the Account designated as my primary business
checking account if I have more than one. No credit
is earned on funds in personal non-interest bearing
accounts unless they are linked to a business
relationship.

2. Interest on My Account

If my Account pays interest, the interest rate is
the rate of interest paid without regard to
compounding, shown as an annual figure. If you have
not disclosed an interest rate, but instead have
disclosed an annual percentage yield, the interest
rate is the rate that will produce the disclosed
annual percentage yield. The annual percentage
yield means a percentage rate my money will earn if
it remains on deposit for a full year with
compounding and no change in the interest rate and
all interest is left in the account. Interest rates
are determined at your discretion and you may
change them at any time without notifying me. The
annual percentage yield in effect when I open my
Account is effective only until the next interest
rate change.

Interest is compounded daily and computed on a
365-day basis according to the daily balance
method. This method applies a daily periodic rate
to the principal and accrued (but not yet
credited) interest in the Account each day.

Deposits begin to earn interest when you receive
credit for the deposit, which depends on where
the Item originated and/or how the deposit is
made. Cash, wire and electronic transfer deposits
and Items drawn on you will earn interest as of
the day of deposit. Other Items generally will
begin to earn interest one to two days from the
day of deposit. Interest will be paid by
crediting my Account at the end of each monthly
statement cycle. If I close my Account before
interest is credited, I will receive the accrued
interest.

Generally, deposits made on a Business Day
before 2:00 p.m. at a branch or before 12 noon
at an ATM will have that day as the day of
deposit. Local ATMs will provide the exact
cut-off time. For deposits made after that time,
or on a day that is not a Business Day, the day
of deposit will be the next Business Day.

From time to time, you may establish, change or
eliminate different balance levels and apply
different rates of interest to different balance
levels or establish a balance above or below
which interest shall not be paid. In the event
that a claim restricting or prohibiting
withdrawals from my Account is asserted against
the funds on deposit, you may, in your
discretion, place such funds in a non-interest
bearing account.

3. Limitations on Withdrawls and Transfers

If my Checking Account is interest bearing,
federal regulations require you to reserve the
right to require seven days’ advance written
notice before permitting a withdrawal from my
Account, although you do not presently exercise
this right.

4. Checking Account Sub-Accounts

In order to accommodate your internal accounting
and regulatory reporting, a money market
sub-account is established and is a part of my
Checking Account. This does not affect my account
number, balance requirements, monthly statement
or my use of the Account. The sub-account does
not affect the way I earn interest or my
transactional (check writing or otherwise)
capabilities.

There will be two portions or “sub-accounts”
within my Checking Account. One is a checking
sub-account to match my primary account with no
transaction limitations, and the other is a
money market sub-account. (The sub-account for a
non-interest bearing Checking Account is a
non-interest bearing money market account.) At
the beginning of each statement period, you will
automatically allocate a portion of my Checking
Account to each sub-account. All checks,
withdrawals and other charges will be made
against the checking or checking with interest
sub-account. As funds are needed, you will,
without charge, automatically transfer funds
from the money market sub-account to the
checking or checking with interest sub-account.
This can occur up to six times per statement
period. Upon the sixth transfer, the entire
balance in the money market sub-account will be
transferred to the checking or checking with
interest subaccount. This process will repeat at
the beginning of each statement period. You will
be responsible for monitoring these
transactions. My monthly statement will reflect
one combined balance and, for an interest
bearing Checking Account, one annual percentage
yield earned and one amount of interest paid for
the entire Checking Account. The statement will
not reflect the previously described internal
transfers between the two sub-accounts.

CERTIFICATE OF DEPOSIT AGREEMENT

I understand and agree that upon notice to
me, you may transfer my Certificate of
Deposit to another branch office without my
consent. To the extent there are any
conflicts between the General Terms and this
Agreement, this Agreement shall prevail.

6

 

CD Features

The duration, rate of interest, annual percentage
yield, and time and method for payment of interest
on a Certificate of Deposit (“CD”) will be
established when the Account is opened.

Renewal

CDs will be renewed automatically for the same (or
similar) term at the interest rate in effect on
the maturity date. You have the right not to renew
any CD or to renew it on different terms.

Grace Period

During the CD grace period, I can elect not to
renew the CD and withdraw funds from the CD without
penalty. I can also make one additional deposit to
the CD during the grace period. A grace period of
ten (10) calendar days applies to a CD with a term
of 14 days or greater. A grace period of five (5)
calendar days applies to a CD with a term of 7
through 13 days.

Interest After Maturity

If I do not renew a CD, no interest will be earned
on or after the maturity date.

Early Withdrawal Penalty

I have contracted to keep the deposit amount on
deposit for the entire term. You are not required
to permit me to withdraw any part of my deposit
early, but you may do so. If you do permit me to
withdraw my deposit early, you will assess an early
withdrawal penalty in the following amounts,
regardless of the length of time the funds
withdrawn have remained on deposit. For CDs with a
term of less than 12 months, the penalty is one
percent (1%) of the amount withdrawn plus $25. For
CDs with a term of 12 months or longer, the penalty
is three percent (3%) of the amount withdrawn plus
$25.

If there is insufficient accrued interest to pay
a required penalty, forfeiture of some principal
will be necessary. There will be no penalty for
early withdrawal if I die or am determined to be
legally incapacitated by a court of competent
jurisdiction.

ACCOUNTS AND SERVICES RELATING TO ASSETS HELD BY JPMORGAN CHASE BANK, N.A. AND AFFILIATED BANKS

ASSET ALLOCATION ADVISORY SERVICES

Upon my request, JPMCB or an affiliated bank (a
“Bank”) will advise me about the allocation and
management of my investments and cash under
management or held by JPMCB or Morgan Affiliates.
The Bank also may, in consultation with me,
present to me investment ideas and strategies for
assets held or managed by other financial
institutions to the extent I disclose such assets
in writing to the Bank.

The Bank may advise and assist me in the
preparation of an investment plan based upon
information provided by me. Such investment plan
documents the Bank’s understanding of, among other
things, my current wealth picture, investment
goals, risk profile and strategic asset allocation
with J.P. Morgan, including discretionary assets
managed or held by the Bank in an Investment
Management Account and self-directed assets traded
through JPMSI in a Brokerage Account. The Bank
will exercise discretion and execute investment
ideas in my Investment Management Account based
upon written guidelines the Bank and I agree to if
consistent with applicable fiduciary standards.
JPMSI will execute trades in Brokerage Accounts
and will sell me alternative investments (hedge
funds, private equity funds, funds of such funds,
structured products, and the like) based upon my
prior express direction and if applicable
suitability standards, documentation requirements,
and other relevant considerations have been fully
satisfied.

I will review my investment plan from time to
time and notify the Bank if I believe any
information contained therein is incorrect or
does not reflect my investment goals, risk
profile, desired asset allocation and/or other
considerations addressed therein. Rebalancing
decisions and directing the movement of assets
between my Accounts are my sole responsibility
and neither the Bank nor JPMSI will do so except
pursuant to my express direction.

From time to time the Bank may recommend
changes in my investment plan. No changes in
such plan shall be effective unless agreed to
in writing by me. Until notified in writing by
me, the Bank is entitled to rely upon the most
recent investment plan that I have adopted.

Asset allocation services are subject to the
General Terms for Accounts and Services and
Appendices contained herein (the “General
Terms”). Capitalized terms not otherwise defined
in this Agreement have the meanings given to
them in the General Terms. To the extent there
are any conflicts between the General Terms and
this Agreement, this Agreement shall prevail.

ASSET ACCOUNT AGREEMENT

The Asset Account is a group of accounts and financial services that can be linked together.
Account activity and holdings will be reported on an integrated and comprehensive statement.

The following accounts and services may be linked:

	•	 	An automatic sweep of deposits and uninvested cash balances into a deposit account at a Morgan Affiliate that is an insured depositary
institution or a JPM Fund that is a money market mutual fund;
	 
	•	 	A Custody Account which will hold my Securities and other Property;
	 
	•	 	Direct purchase of JPM Funds and AC Funds;
	 
	•	 	Banking services:

	 	1.	 	check writing capability
	 
	 	2.	 	an ATM or debit card (“Banking Card”) issued by a
Morgan Affiliate which I may use to withdraw funds from my Account or to make purchases at
participating merchants
	 
	 	3.	 	electronic banking and funds transfers services, including information
about the Asset Account

	•	 	A discretionary line of credit; and
	 
	•	 	An optional brokerage account with JPMSI

Each of these is described in more detail below.

1. Automatic Sweep of Deposits and Uninvested
Cash Deposit Sweep

Uninvested cash balances and new cash deposits
will be transferred automatically to a deposit
sweep (a “Deposit Sweep”) on a daily basis.
Deposits will be held on my behalf by my
custodian with Chase Bank USA, N.A. or JPMorgan
Chase Bank, N.A., wholly owned subsidiaries of
JPMorgan Chase & Co. The Deposit Sweep rate is
established on the basis of various market
factors including short term rates, federal funds
rates, LIBOR and competitors’ rates. At any time
and at your discretion, how the rate is
determined on the Deposit Sweep may change. This
rate may be tiered based on the balances in my
Accounts.

Interest will be compounded, calculated monthly
using the average daily balance method, and
credited to my Account on the first day of the
month. The average-daily-balance method applies
the average daily periodic rate to the average
daily balance in the account for the period. The
average daily balance is calculated by adding
the principal in the account for each day of the
period and dividing that figure by the number of
days in the period. Interest will begin to
accrue on the first business day that funds are
swept into the Account.

7

 

The interest rate and annual percentage yield
(APY) applicable to my Deposit Sweep on the date
my Asset Account is opened will be set forth on a
“rate sheet” or other interest rate disclosure
provided to me when my Asset Account is opened.
The interest rate disclosure is considered part of
this agreement.

The Deposit Sweep is insured by the Federal Deposit
Insurance Corporation (“FDIC”). From October 3,
2008 through December 31, 2013, the $250,000 limit
on FDIC insurance generally represents the
aggregate coverage available to an individual for
all deposit accounts held in a custodial capacity
on the individual’s behalf at any particular
insured financial institution. If the combined
balances of my Deposit Sweep and any other single
ownership categories that I have with the same bank
exceeds $250,000, my total FDIC coverage for all
single ownership categories with the same bank will
be limited to $250,000, but if I have funds in a
different insured depository Morgan Affiliate,
those funds will be covered separately. Funds in a
Deposit Sweep in excess of $250,000 will be
uninsured. After December 31, 2013, the deposit
insurance coverage limit will revert back to the
$100,000 per depositor, per insured financial
institution.

I understand that you may receive certain
benefits from having client cash balances sweep
into deposit accounts. For example, Chase Bank
USA, N.A. and JPMorgan Chase Bank, N.A. will
obtain additional liquidity from clients’
deposits.

Money Market Sweep Fund

Instead of the Deposit Sweep, uninvested cash
balances and new cash deposits can be swept to a
dividend-paying money market mutual fund (the
“Money Market Sweep Fund”) offered by a Morgan
Affiliate so long as the selected Money Market
Sweep Fund is available to accept funds for
investment. Funds will be swept in accordance with
the investment deadlines set by the selected Money
Market Sweep Fund and will be insured by the FDIC,
subject to the limitations on FDIC insurance
described above, until swept.

You have no duty to supervise any Money Market
Sweep Fund and have not provided me with any
investment advice or recommendation nor are you
responsible for any act or omission, or the
solvency of, any Money Market Sweep Fund. The
transfer agent or distributor of the Money Market
Sweep Fund has the sole responsibility to provide
information to me about it. In certain states,
money market mutual funds are marketed through J.P.
Morgan Securities Inc.

Money Market Sweep Funds are mutual funds. Mutual
funds are securities. Securities are not bank
deposits and are not FDIC insured nor are they
obligations of or guaranteed by JPMorgan Chase
Bank, N.A. or its affiliates or any federal or
state government or government agency or government
sponsored agency. Securities involve investment
risks, including the possible loss of the principal
amount invested.

Although the Money Market Sweep Fund seeks to
maintain a stable net asset value of $1.00 per
share, there can be no assurance that it will
continue to do so. The prospectus for a Money
Market Sweep Fund should be reviewed before a
decision is made to invest.

I appoint you, or your designated Morgan Affiliate,
as my attorney-in-fact with full power and
authority to purchase or redeem shares of the Money
Market Sweep Fund or otherwise to effect
transactions with my Money Market Sweep Fund as
instructed by me, or to discharge any Obligation I
owe to you or a Morgan Affiliate, or as required by
the prospectus of the applicable Money Market Sweep
Fund, or otherwise in accordance with this
Agreement.

You are not obligated to continue to provide
money market sweep services during any time that
the Sweep Fund I select is not available to
accept collected balances for investment.

Withdrawals from My Sweep Account

You may refuse withdrawals from my Deposit Sweep
or my Money Market Sweep Fund if funds are not
available, or if the Account is pledged as
collateral in respect of an outstanding
Obligation or otherwise, or if you suspect legal
violations, fraud, impropriety, or other
irregularity, or if you are served with legal
process affecting my Account.

If there are insufficient funds in my
Deposit Sweep or my Money Market Sweep Fund
you may, at your discretion, transfer funds
to cover any debit from proceeds of a loan
drawn on my Line of Credit, if I have a Line
of Credit.

On any day, and subject to the limitations
described in this Agreement, I can withdraw the
total balance of (i) the available balance in my
Deposit Sweep or Money Market Sweep Fund, and
(ii) if there is no available balance, at your
discretion, the unused portion of my Line of
Credit. In the event that the total balance is
zero or less or in any other circumstance when
funds cannot be transferred to cover debits or
withdrawals that would result in an overdraft,
you will have no obligation to honor any
withdrawal, debit, or instruction to transfer
funds, including payments for purchases of
Securities or other Property. In the event that
my action creates an overdraft and you agree to
pay it, I will pay the entire amount of such
overdraft balance immediately. Interest will be
charged on such overdraft at a rate computed in
accordance with your current rates schedule.

2. The Custody Account

Custody Accounts are maintained at the Morgan
Affiliate determined to be most convenient when
an Account is opened. The Morgan Affiliate with
which my Custody Account is held is identified on
my monthly statement.

Terms of Custody

You will record, on your books, my interest in
Property that you hold directly or indirectly for
my account as my custodial agent. Property may be
held through one or more sub-custodians or
securities depositories you select and may be
registered in the name of your nominee, or in the
name of the nominee of any depository or
sub-custodian that you use. My Securities may be
treated as fungible with all other securities of
the same issue pursuant to the provisions of
applicable law.

You will make purchases, sales, and deliveries
only in accordance with instructions given by me
or an Authorized Person, but you are not
obligated to make payments for purchases unless
the total balance of my Deposit Sweep or Money
Market Sweep Fund (collectively, a “Sweep”)
and/or Line of Credit (if you permit me to use my
Line of Credit to purchase Securities) can cover
the payment. If, however, you do make a payment
on my instruction which exceeds the total
balance, I will reimburse you immediately for the
amount of the excess. You are not obligated to
exchange or transfer Securities unless sufficient
Securities actually are in the Custody Account
and available for delivery.

You may, in your discretion, hold non-US dollar
currencies in my Account to effect transactions
denominated in non-U.S. dollar currencies. You
may convert one currency into another at any time
and without prior notice at the current market
rate for spot foreign exchange transactions or
for forward foreign exchange transactions as
reasonably determined by you or any Morgan
Affiliate in your or its sole discretion.
Deposits may be held, and transactions effected
through, an account with an affiliate or another
bank in the country where such currency is the
lawful currency or in other countries where such
currency may be lawfully held on deposit.

You will receive distributions of dividends,
interest, stock, rights, and other similar
payments and distributions with
respect to Securities, present for payment
maturing Securities and those called for
redemption, sell any fractional interests in

8

 

Securities resulting from a dividend of Securities,
in all cases net of any applicable taxes or other
charges withheld by the maker of such payment or
distribution, and deposit funds received in my
Asset Account.

You will exchange temporary certificates for
definitive ones, or obtain new certificates if the
par value of any shares is changed.

You will notify me of the following: (i) any rights
offering by an issuer of Securities, and if you are
not instructed how to exercise rights under an
offering by the applicable deadline, then
consistent with local market practice and
applicable law, the rights will be sold in the
principal market and the proceeds of sale deposited
in my Asset Account; and (ii) the partial
redemption of any Securities, and if my Securities
are part of a fungible mass, you or the
sub-custodian or securities depository may select
the securities to participate in partial
redemptions, partial payments, or other actions
affecting less than all securities of the relevant
class in any nondiscriminatory manner that you or
it customarily uses to make such selection.

Promptly after receipt you will forward to me
communications relating to any Securities held in
my Custody Account that call for voting or other
specific action (including materials relating to
legal proceedings intended to be transmitted to
holders of the Securities). With respect to any
corporate events not listed above, you may (in the
absence of an instruction from an Authorized Person
within any prescribed deadline) take any action
that you consider appropriate under the
circumstances, provided that you will not be
obligated to take any action with respect to any
corporate event or any legal proceedings involving
holders of Securities.

Unless I have instructed you otherwise in writing,
or such release is mandatory, you are authorized
to release to issuing companies my name, address,
and share positions, in compliance with applicable
laws.

I will be solely responsible for compliance with
any notification or other requirement of any
jurisdiction affecting my beneficial ownership of
Property, and you will not be liable for my
noncompliance with those requirements.

In some securities markets and cash clearing
systems, deliveries of Securities and cash may be
reversed under certain circumstances. Accordingly,
credits of Securities and/or cash to the Custody
Account are provisional and subject to reversal if,
in accordance with relevant local law and practice,
the delivery of the Securities or cash is reversed.

Appointment as Agent: Authorization

I appoint you, or your designated Morgan Affiliate,
as my agent and authorize you to represent me in
every respect, in my name and place, with regard to
your acting as my agent pursuant to this Agreement.
By way of example, but not by way of limitation,
you or the appropriate sub-custodian are authorized
to execute endorsements, assignments, or other
instruments of conveyance or transfers of
Securities or other Property in the Account and to
execute any other documents deemed necessary or
desirable and proper in connection with your
provision of services under this Agreement. Your
signature or that of the appropriate sub-custodian,
as well as any and all declarations or other
documents, will be fully binding on me, and I will
be fully liable for any and all dispositions made
by you. This power is coupled with an interest and
will survive my disability or incompetence. Your
appointment as agent pursuant to this paragraph
will not be understood to impose upon you any
additional duties not expressly undertaken in this
Agreement.

You, in your sole discretion, are also expressly
authorized to employ agents and sub-agents in
connection with your provision of services under
this Agreement and pay reasonable compensation to
such agents and sub-agents directly from the
Account.

Standing Broker Transactions

You are authorized to accept and act on all
instructions received from JPMSI to either
receive or deliver Property against payment into
or from my Custody Account and to take funds from
my Deposit Sweep or Money Market Sweep Account to
pay for any transaction, service, or other fee on
behalf of JPMSI. I agree to assume all risks that
may result from any action you take in reliance
in good faith on instructions from JPMSI. I will
not send you separate settlement instructions for
my Securities transactions.

You are authorized to receive from or deliver to
any broker Securities as specified by the broker
through the Depository Trust Company (“DTC”)
Interactive Institutional Delivery System. You
will accept instructions through DTC from any
broker and will automatically affirm and settle
for my Custody Account each Securities
transaction when my broker provides information
to you through DTC’s Interactive Institutional
Delivery System or any other electronic
execution, affirmation, confirmation, or
delivery system for Securities in common use in
the relevant market or markets for any
particular instrument that you determine to be
appropriate under the circumstances in your sole
discretion. In carrying out these transactions,
my broker will furnish me with confirmations
directly and my broker will be responsible for
the accuracy of the trade and any other
transaction details.

3. Direct Purchase of JPM Funds or AC Funds

Subject to applicable law, I may purchase shares
directly in one or more JPM Funds or AC Funds. In
certain states, however, JPM Funds and AC Funds
are available only through JPMSI.

My positions in JPM Funds and AC Funds will
appear on my Asset Account statement, and I will
not receive a separate statement from any Fund.
All cash proceeds of redemptions of JPM Funds or
AC Funds will be credited to my Asset Account
and transferred to my Sweep. Dividends and
capital gains distributions from JPM Funds or AC
Funds will be reinvested unless I otherwise
notify you at the time of purchase.

4. Banking Services

If you have selected banking services for your
Account, uninvested cash held in the Account can
be accessed through use of banking services,
including checks, a banking card, electronic
banking and funds transfer services. The use of
banking services is governed by the Appendix:
Other Banking Services Relating to Accounts;
Appendix: General Rules and Regulations for
Deposit Accounts; and Appendix: Electronic Fund
Transfers. I understand that I must also refer
to the Banking Card Agreement I will receive
when the Card is delivered to me.

Use of the Banking Card by an Authorized Person,
presentment of a check signed by an Authorized
Person, and requests for funds transfers will be
an instruction to you to redeem shares of my
Sweep Fund. You are also authorized to redeem
the shares in my Sweep Fund to discharge any
Obligation I owe to you or any Morgan Affiliate,
or as required by the prospectus of the
applicable Sweep Fund. This authorization
extends to my Sweep Fund only, not to other
assets held in the Account.

I may elect to transfer funds into or out of my
Sweep Fund or cash on deposit by funds
transfers, “Payment Orders” (fund transfers NOT
governed by the Electronic Fund Transfer Act)
or automated clearing house (“ACH”)
transactions. If I request you to arrange for
domestic and/or international fund transfers
and related services, I authorize you to accept
such funds transfer instructions from me by
telephone, tested telex, facsimile
transmission, or in writing
or other methods upon which we agree, and to
receive funds sent to my Account.

9

 

5. Line of Credit

By checking the applicable box for banking
services or for a line of credit in the
Application, I am requesting you to extend credit
to me from time to time as provided for in this
Agreement (the “Line of Credit”). I understand
that I will have only one Line of Credit, even if
I have more than one Custody Account or Brokerage
Account. In your sole discretion you will
determine my credit limit under my Line of Credit
from time to time, which in no event will be
greater than the lending value of the Accounts
held by you and Morgan Affiliates (“Collateral”).
You have the right to modify the eligibility and
lending value of any Collateral in your sole
discretion.

JPMCB or another Morgan Affiliate will provide the
Line of Credit. The Line of Credit will be extended
to, and be an Obligation of, each of the
Accountholders (if more than one), and each
Accountholder will be jointly and severally liable
for the Obligations under this Line of Credit.

The Asset Account statement will show the amounts
drawn under my Line of Credit (each, a “Loan”).
Subject to the terms of this Agreement, a Loan may
be made whenever the cash on deposit and/or Sweep
total balance is insufficient to pay an Item,
Banking Card transaction (as described under the
Banking Card Services Available in the Electronic
Fund Transfers Appendix [to the General Terms] or
any other debit. I hereby irrevovably authorize
you, or your designated Morgan Affiliate, as my
attorney-in-fact with full power and authority to
effect such borrowing. You may at any time withdraw
or modify the Line of Credit and demand repayment
of any Loans, without prior notice, even though
this may cause Items to be returned unpaid,
authorizations for Banking Card transactions to be
denied, or other debits to be rejected. Each Loan
is secured by the Collateral in which I have
granted you a security interest as described below.

I agree to repay you ON DEMAND the principal
amount of any Loan under my Line of Credit and
any related finance charges and other fees and
charges in U.S. Dollars in same-day funds.

I represent and warrant that I have not requested a
Morgan Affiliate to arrange for you to finance my
purchase of any Security underwritten or placed by
a Morgan Affiliate during the period of
underwriting or placement, or for 30 days
thereafter, or to provide financing against such a
Security as Collateral. I will not use any Loan to
purchase shares of a JPM Fund or AC Fund or to
purchase or fund capital calls owed in connection
with investments in private equity, hedge, or
similar funds established, sponsored, advised,
managed by, or sold through, a Morgan Affiliate.

Security Interest; Events of Default

In order to secure the payment when due of any and all
Obligations under my Line of Credit, I pledge and
grant to you a continuing security interest in the
Collateral. This security interest will apply to
any Collateral (and proceeds thereof) now or at
any time in the future held in or credited to any
Account or other accounts maintained for me.

I acknowledge and agree that where you or any other
Morgan Affiliate holds Collateral or are a
securities intermediary in respect of any
Collateral, you each hold the Collateral for
yourself and also as agent for all other Morgan
Affiliates who are secured parties hereunder
pursuant to the Intercompany J.P. Morgan Securities
Account Control Agreement among various Morgan
Affiliates as amended or restated from time to
time. You and other Morgan Affiliates have the
right to take any further action necessary to
perfect your respective security interests in the
Collateral. I agree to execute any documents and
take other action as you or any other Morgan
Affiliate may reasonably request in order to allow
you or any other Morgan Affiliate to perfect rights
with respect to the Collateral. I appoint you and
any other Morgan Affiliate as my attorney-in-fact
to act on my behalf to sign and deliver all
documents, and to do all acts as may
be required to realize upon all rights in the
Collateral. Such power is coupled with an
interest and will survive my death or
disability.

I agree that you will have full control of the
Collateral and that any transfer affecting the
Collateral is subject to your approval. Any
contrary instruction I give will be of no effect
regardless of any action you take. I may
substitute collateral as long as it is
substantially similar to the Collateral
originally held by you, provided, however, you
may elect not to accept such substitution. If you
do not enforce your rights, you will not be
deemed to have waived your rights in the
Collateral.

“Event of Default” means my failure to pay
(whether on demand or otherwise) or meet any
Obligation under the Line of Credit; my failure
to observe or perform any provision of this
Agreement relating to the Line of Credit; my
making any materially incorrect representation,
warranty, certification or statement to you or a
Morgan Affiliate in connection with the Line of
Credit; my failure to provide financial
information to you if you request it; my death,
incapacity or incompetency; any entity that has
Obligations under the Line of Credit is
dissolved or ceases activity; a material
judgment is entered against me; a bankruptcy,
foreclosure or insolvency action or proceeding
is brought by or against me; a writ or order of
attachment or garnishment is made or issued
against any of my Property; or a receiver is
appointed for a portion of my Property.

At any time that an Event of Default has occurred
you may: liquidate, sell or transfer all or any
portion of the Collateral to satisfy my
Obligations under the Line of Credit in whatever
priority you, in your sole discretion, may
lawfully choose; exercise all rights and remedies
available to you under applicable law with
respect to the Collateral you or any other Morgan
Affiliate hold; or, exercise any other rights or
remedies available to you pursuant to other
agreements or applicable law.

Except for such notice as may be required under
applicable law, you may make such sale or
transfer without notice to me and sell any
Collateral in any public, private, or restricted
sale. You or any other Morgan Affiliate may be a
purchaser at any sale of Collateral under this
section. Each purchaser of any Collateral will
receive the Collateral free of any right and
claim I may have of whatsoever kind, including
any equity of redemption, without your prior
written consent which I waive.

In the event that you determine that additional
Collateral is required to meet any margin
maintenance, collateral or similar requirement
with respect to any Obligations secured under
this Agreement, you are authorized (but are not
obliged) on my behalf to instruct any Morgan
Affiliate holding Collateral to transfer
Collateral, selected by you in your sole
discretion, to my Account, in sufficient amount
to meet any such requirements. Similarly, if any
Morgan Affiliate instructs you to transfer
Collateral from my Account to an Account held
with it, you are authorized to do so.

In the event that my Loan Balance on any day
exceeds my Line of Credit for any reason, I
authorize you to (i) liquidate sufficient
Collateral and/or (ii) debit my Deposit Sweep,
redeem the necessary number of shares of my Money
Market Sweep Account, or redeem the necessary
number of shares in other JPM Funds or AC Funds,
as you choose in your sole discretion, and to
apply the proceeds to bring my Loan Balance
within my Line of Credit.

No provision of this Agreement concerning liens
or security interests will apply to my Account
or the cash, Securities, or Property therein, to
the extent that such application would result in
an adverse tax consequence to my Account under
any provision of the Internal Revenue Code
relating to early

10

 

distribution or withdrawal of assets held in
qualified retirement accounts.

I have the power to grant a security interest in
the Collateral and I am the sole owner of or have
the right to transfer the Collateral to you, free
and clear of all other liens or other restrictions.
Upon the transfer of Collateral to you, you will
have a valid and perfected first priority security
interest in the Collateral and the Collateral will
be fully marketable by you without any restriction
on transferability, voting or dividends or
limitations or restrictions relating to holding
period, volume, filing or manner of sale, unless
you have previously consented in writing to any
restriction.

Interest Charges

I agree to pay interest charges determined as
described below, on all Loans or related fees or
other charges (collectively, the “Loan Balance”)
outstanding under my Line of Credit. Interest
charges begin to accrue on the day a Loan is made,
or a fee or other charge is due, and continue to
accrue until the Loan Balance is paid in full.

You will determine the applicable interest charge
by applying the Daily Periodic Rate to the Daily
Balance of my Line of Credit.

The “Daily Balance” is the beginning balance of my
Line of Credit each day plus the amount of any
Loans or other debits made during the day minus the
amount of any payments or other credits made during
the day.

The Daily Periodic Rate and corresponding Annual
Percentage Rate are variable rates and therefore
may increase or decrease during the billing cycle.
The “Daily Periodic Rate” will be equal to the
applicable interest rate divided by 360. The
applicable interest rate is the rate of interest
announced by you from time to time as your Line of
Credit Borrowing Rate (the “Borrowing Rate”) in the
list of current rates that you have separately
provided to me. The corresponding “Annual
Percentage Rate” is the Daily Periodic Rate
multiplied by 365.

The Daily Periodic Rate and corresponding Annual
Percentage Rate increase when the Borrowing Rate
increases and decrease when the Borrowing Rate
decreases. An increase in the Daily Periodic Rate
and corresponding Annual Percentage Rate means I
pay a larger interest charge. A decrease in the
Daily Periodic Rate and corresponding Annual
Percentage Rate means I pay a smaller interest
charge. There is no limit on the amount by which
the Daily Periodic Rate and corresponding Annual
Percentage Rate may change at any one time or over
the life of my Line of Credit. If the Borrowing
Rate changes, the Daily Periodic Rate and
corresponding Annual Percentage Rate will be
increased or decreased on the effective date of
such change in the Borrowing Rate. The new Daily
Periodic Rate will be applied to the Daily Balance
beginning on that day. The current Borrowing Rate
schedule will be provided to me upon request.

If I fail to pay any Obligation when demanded or
due or there is an Event of Default under the
Line of Credit, I agree to pay an interest charge
at two percentage points (2%) above the
applicable rate that would otherwise be in
effect.

Without prejudice to my obligation to make payment
on demand, I agree to pay all of my interest
charges on the first Business Day of each month.
Such amount will automatically be paid from my
Deposit Sweep or Money Market Sweep Account to the
extent there are sufficient available funds. In
the event the total balance is insufficient, I
agree to pay such interest charges from other
sources upon your demand.

My Billing Rights: Keep This Document For Future
Use The following sections tell me about my
rights and your responsibilities under the Fair
Credit Billing Act.

What To Do If I Find A Mistake On My Statement

If I think there is an error on my Asset
Account statement relating to my Line of
Credit, I will send you a letter to:

JPMorgan Chase Bank, N.A.

500 Stanton Christiana Road, 1/OPS 

Newark, DE 19713-2107

In my letter, I will give you the following information:

	•	 	Account information: My name and Asset Account number.
	 
	•	 	Dollar amount: The dollar amount of
the suspected error.
	 
	•	 	Description of problem: If I think there is an error on my bill, describe
what I believe is wrong and why I believe it is a mistake.

I must contact you:

	•	 	Within 60 days after the error appeared on my statement.
	 
	•	 	At least 3 business days before an
automated payment is scheduled, if I want to stop payment on the amount I think is wrong.

I must notify you of any potential errors in
writing (or electronically). I may telephone
you, but if I do you are not required to
investigate any potential errors and I may have
to pay the amount in question.

What Will Happen After You Receive My Letter

When you receive my letter, you must do two things:

	•	 	Within 30 days of receiving my letter, you
must tell me that you received my letter. You
must also tell me if you have already corrected
the error.

	•	 	Within 90 days of receiving my letter,
you must either correct the error or explain
to me why you believe the statement was
correct.

While you investigate whether or not there has been an error:

	•	 	You cannot try to collect the
amount in question, or report me as delinquent on that amount.

	•	 	The charge in question may remain on my statement, and you may continue to charge me interest
on that amount.
	 
	•	 	While I do not have to pay the amount in question, I am responsible for the
remainder of my balance.
	 
	•	 	You can apply any unpaid amount against my credit limit.

After you finish your investigation, one of two things will happen:

	•	 	If you made a mistake: I
will not have to pay the amount in question or any interest or other fees related to that amount.
	 
	•	 	If you do not believe there was a mistake:
I will have to pay the amount in question, along
with applicable interest and fees. You will send
me a statement of the amount I owe and the date
payment is due. You may then report me as
delinquent if I do not pay the amount you think
I owe.

If I receive your explanation but still believe
my Asset Account statement is wrong, I must write
to you within 10 days telling you that I still
refuse to pay. If I do so, you cannot report me
as delinquent without also reporting that I am
questioning my statement. You must tell me the
name of anyone to whom you reported me as
delinquent, and you must let those organizations
know when the matter has been settled between us.

If you do not follow all of the rules above, I do
not have to pay the first $50 of the amount I
question even if my Asset Account statement is
correct.

11

 

AGREEMENTS FOR ACCOUNTS AND
SERVICES OFFERED THROUGH J.P. MORGAN
SECURITIES INC. AND J.P. MORGAN ENTITIES

The parties to the agreements set forth below
shall consist of the client and J.P. Morgan
Securities Inc., its successor firms, present and
future direct or indirect subsidiaries, affiliates
and assigns with which the client transacts
securities brokerage business. (Each affiliate is
referred to as a “J.P. Morgan entity” and all J.P.
Morgan entities together with J.P. Morgan
Securities Inc. are referred to collectively as
“J.P.Morgan”.)

JPMSI obligations and the Securities sold,
offered, or recommended by JPMSI are not deposits
and are not insured by the Federal Deposit
Insurance Corporation (“FDIC”). JPMSI is not a
bank and is a separate legal entity from JPMorgan
Chase Bank, N.A. (“JPMCB”) and all other Morgan
Affiliates. The obligations of JPMSI are not
obligations of JPMCB or any other Morgan Affiliate
(unless explicitly stated otherwise), and neither
JPMCB nor any other Morgan Affiliate is
responsible for Securities sold, offered, or
recommended by JPMSI. JPMCB and other Morgan
Affiliates may be lenders to issuers of Securities
that JPMSI underwrites, in which case proceeds of
offerings underwritten by JPMSI may be used for
the repayment of such loans. The disclosure
documents relating to particular Securities will
discuss any such lending relationships.

Brokerage Accounts will be subject to the Brokerage
Account Agreement below. Margin Accounts will be
subject to the Margin Account Agreement (which
incorporates the terms of the Brokerage Account
Agreement).

BROKERAGE
ACCOUNT AGREEMENT 

1.  Nature of Services

(a) A J.P. Morgan entity will execute transactions
accepted by it and/or will provide such other
clearance, settlement and custody services in
connection with the maintenance of the client’s
Account(s) at J.P. Morgan.

(b) All investments executed through a J.P. Morgan
Brokerage Account are made upon the client’s sole
discretion, risk and responsibility. J.P. Morgan
may choose to contact clients about investment
opportunities J.P. Morgan believes may be of
interest to a client, but J.P. Morgan is not
obliged to provide the client with any financial,
market or investment information, nor advice or
oversight with respect to asset allocation. J.P.
Morgan personnel do not take discretion over any
client Accounts, although the client may obtain
such advice and services from JPMCB under separate
agreements.

(c) Any J.P. Morgan entity that is a party to this
Agreement is acting as a broker-dealer and/or
custodian, and not as (1) an investment adviser
under the Investment Advisers Act of 1940, or (2) a
“fiduciary” as defined in Section 3(21) of the
Employee Retirement Income Security Act of 1974, as
amended (“ERISA”) or Section 4975 of the Internal
Revenue Code of 1986, as amended (“Code”), with
respect to the client’s Account(s) under this
Agreement. Brokerage activities are regulated under
different laws and rules than advisory activities
and generally do not give rise to the fiduciary
duties that an investment adviser has to its
clients. When acting in a brokerage capacity, J.P.
Morgan has a duty to deal fairly with brokerage
clients but may face certain conflicts of interest
and as such, J.P. Morgan’s interests may differ
from those of its clients. Neither J.P. Morgan nor
its employees are authorized to provide, and shall
not provide, legal, estate planning, tax or
accounting advice or services and the client will
not solicit or rely upon any such advice from them
whether in connection with transactions in any of
the client’s Accounts or otherwise. The client has
consulted or will consult with the client’s own
technical, legal, regulatory, tax, business,
investment, financial and accounting advisors to
the extent the client deems necessary in
determining the investment and trading strategy
appropriate for the client and the
appropriateness of each transaction. J.P. Morgan
assumes no responsibility for the accuracy and
completeness of or the performance or outcome or
tax consequences of any investment made by the
client as a result of receiving information from
J.P. Morgan, and J.P. Morgan has no obligation
to update the information or recommendation
provided. J.P. Morgan’s recommendation does not
imply any endorsement or guarantee.

(d) J.P. Morgan shall not be obligated to take
any action or render any advice with respect to
the voting of proxies related to issues of
securities held in a client’s Account(s).
Further, there may be instances when the client
may not be able to exercise voting or other
rights of ownership. The J.P. Morgan entity that
acts as custodian for the Account will forward
all proxies received by it, including proxy
solicitation material and other related material,
including interim reports, annual reports and
other issuer mailings to the client and the
client is responsible for providing such J.P.
Morgan entity with any applicable instructions or
directions contemplated by such communications.

(e) In addition to retaining the sole
responsibility for investment decisions and
shareholder actions, the client is responsible
for knowing the rights and terms of all
securities in the client’s Brokerage Account,
specifically including valuable rights that may
expire unless the client take action. This
includes, but is not limited to, warrants, stock
rights, convertible securities, bonds, and
securities subject to a tender or exchange offer.
J.P. Morgan has no obligation to notify the
client of any upcoming expiration or redemption
dates, or, except as required by applicable law
or regulation, to take any action on the client’s
behalf without specific instructions from the
client.

(f) Unless I have instructed you otherwise in
writing, or such release is mandatory, you are
authorized to release to issuing companies my
name, address, and share positions, in
compliance with applicable laws.

2. Satisfaction of Liabilities; Security
Interest and Lien

(a) The client agrees to satisfy each and every
obligation or liability owed to J.P. Morgan (such
obligations or liabilities, whether fixed,
matured, unmatured, liquidated, unliquidated or
contingent, “Obligations”) when due, including
without limitation, to pay any debit balance in
any Account and any costs described in this
Agreement and in the event of a sell or
redemption order by the client, to deliver the
applicable security in good deliverable form no
later than the deadline set by J.P. Morgan if the
applicable security is not credited to an Account
at the time such order is placed or settled.

(b) To secure the payment and performance of
Obligations to each J.P. Morgan entity providing
products or services to the client pursuant to
this Agreement, the client hereby grants each
such J.P. Morgan entity a lien on and a valid and
first priority, perfected, continuing security
interest in the following: (i) all property,
including all investment property, held, carried
or controlled by or through any J.P. Morgan
entity in which J.P. Morgan presently has or in
which the client acquires an interest in the
future, including all property in each Account in
the client’s name, (ii) any and all rights,
claims or causes of action the client may now or
hereafter have against any J.P. Morgan entity and
(iii) all proceeds of or distributions on the
foregoing (collectively (i) through (iii) are
referred to in this Agreement as “Collateral”).
Each item of property, including Investment
Property, a Security, a general intangible,
contract rights, an Instrument and cash, held in
or credited to any Securities Account at a
Securities Intermediary shall be treated as a
Financial Asset. All
undefined terms in the preceding sentence shall
have the meanings ascribed to them in the New
York Uniform Commercial Code (“NYUCC”), as in
effect from time to time.

12

 

(c) Any Collateral held by a J.P. Morgan entity is
held by such J.P. Morgan entity as agent and bailee
for itself and all other J.P. Morgan entities. Each
J.P. Morgan entity holding Collateral shall,
without the client’s further consent, comply with
(i) entitlement orders or instructions from a J.P.
Morgan entity with respect to the Collateral and
(ii) if such J.P. Morgan entity holding Collateral
is a commodity intermediary, any instructions to
such J.P. Morgan entity from another J.P. Morgan
entity to apply any value distributed on account of
a commodity contract. Additionally, each J.P.
Morgan entity holding Collateral has the right, in
its sole discretion, (i) to decline to enter into
control agreements with third parties and (ii) to
decline to comply with (a) any entitlement order or
instruction from the client or a third party with
respect to the Collateral and (b) any instruction
from the client to apply any value on account of
any commodity contract, if a J.P. Morgan entity
requests that such order or instruction not be
complied with in order to maintain security for the
payment and performance of the client’s Obligations
to it. Further, each J.P. Morgan entity is
authorized, at any time and without notice to the
client, to transfer Collateral from any Account to
any account of an obligor for which J.P. Morgan has
provided a guarantee within such J.P. Morgan entity
and/or at any other J.P. Morgan entity to
collateralize or satisfy any Obligations of such
obligor. The client agrees that the actions of a
J.P. Morgan entity in declining to comply with
orders or instructions as allowed in this Section
2(c) satisfies any duties J.P. Morgan may have
under the NYUCC.

(d) The client agrees that the client’s execution
of this Agreement shall constitute notice to each
J.P. Morgan entity of the security interest the
client has granted to each other J.P. Morgan entity
herein, and each J.P. Morgan entity holding
Collateral is on notice of the security interest
granted to each other J.P. Morgan entity.

(e) The reasonable costs and expenses of collection
of any such indebtedness or debit balance,
including but not limited to attorneys’ fees and
expenses, shall be payable by the client to J.P.
Morgan.

(f) In order to secure the payment and performance
of any of the client’s outstanding Obligations to
any J.P. Morgan entity, J.P. Morgan may, to the
fullest extent permitted by law, without prior
notice to the client use, apply or transfer
Collateral as it determines. Unless otherwise
agreed in writing, J.P. Morgan may register and
hold Collateral in its name or the name of its
designee.

(g) The client appoints J.P. Morgan with full power
as the client’s true and lawful attorney-in-fact,
to the fullest extent permitted by law, for the
purpose of perfecting the security interest granted
in this Agreement and taking any action and
executing any instrument that J.P. Morgan deems
necessary or advisable to accomplish the purposes
of this Agreement.

3. Restrictions on Trading

In its sole discretion, J.P. Morgan may prohibit or
restrict trading in a Brokerage Account. The client
shall nevertheless remain liable for all of the
client’s Obligations to J.P. Morgan under this
Agreement or otherwise.

4. Representations and Warranties

The client hereby represents and warrants to J.P.
Morgan that: (i) no other party has an interest or
shall have an interest in the Property or
Collateral unless J.P. Morgan has consented in
writing to the other party’s interest; (ii) the
client has the right to pledge and assign
Collateral to J.P. Morgan; (iii) except as the
client may have informed or may from time to time
inform J.P. Morgan in writing, the client is not an
affiliate (as defined in Rule 144(a)(1) under the
Securities Act of 1933) of the issuer of any
Security held in a Margin Account; (iv) since the
date of the client’s most recent audited or
unaudited financial statements (if any) there has
been no material adverse change in the client’s
business, financial condition, results of
operations or prospects; (v) the client has not
taken or failed to take, and shall not take any
action or fail to
take, any action with respect to an Account(s)
that would result in a non-exempt prohibited
transaction under ERISA, the Code or any
applicable state, local or non-US law that is
similar to the provisions of Section 406 of ERISA
or Section 4975 of the Code; and (vi) all of the
client’s other representations made in the
Account application and under the General Terms
and Brokerage Account Agreement continue to be
true.

5. Confirmation Reports and Account Statements

Confirmation reports of transactions shall be
conclusive if not objected to in writing by the
client within the shorter of (i) the applicable
settlement cycle of the subject transactions or
(ii) three (3) business days after such
documents have been transmitted to the client by
mail or otherwise. Statements of Account(s)
shall be conclusive if not objected to in
writing by the client within thirty (30)
Business Days after transmission. In all cases,
J.P. Morgan reserves the right to challenge a
client’s objections.

6. Service Fees; Taxes

(a) J.P. Morgan may charge Brokerage Accounts
for brokerage commissions, mark-ups, inactivity
fees (if applicable) and other fees for the
maintenance of Account(s), the execution of
transactions, fails, buy-ins, and currency
conversions, and for furnishing other services
to the client (collectively, “Service Fees”).
Service Fees may be implemented or increased
from time to time.

(b) The client will be responsible for and pay
any applicable value added tax and such other
taxes, duties and fees applicable to activities
in the client’s Account(s). Amounts owed to J.P.
Morgan shall not be affected by any taxes, duties
or other amounts J.P. Morgan may owe to any third
party. If the client is required by law to make
any deduction or withholding from any payment due
to J.P. Morgan, the client shall pay to J.P.
Morgan simultaneously with making such payment an
additional amount as may be necessary in order
for the total amount received by J.P. Morgan
after all deductions and withholdings to be equal
to the amount which J.P. Morgan would have
received had no deduction or withholding been
made. Any and all taxes, including any interest
and penalties with respect thereto, which may be
levied or assessed under present or future laws
upon or in respect to the client’s Account(s),
activities or upon or in respect of income
thereof shall be paid by the client. All Service
Fees, charges, expenses, disbursements and taxes
as described above may be deducted by J.P. Morgan
from the client’s Account(s).

7. Payments to J.P. Morgan

J.P. Morgan may receive payments or other
remuneration from the advisers, distributors or
other affiliates of certain of the mutual funds
available through J.P. Morgan. Such payments or
remuneration are for administrative,
technological or other services provided in
connection with fund Accounts and generally are
calculated based on the amount of assets held in
the Accounts. Such payments or other remuneration
are in addition to shareholder servicing and
distribution fees that J.P. Morgan may receive.
Funds whose affiliates do not make payments to
J.P. Morgan, including funds that may provide a
higher or lower return, may be available to
clients. Further, in certain instances, J.P.
Morgan may be paid both by clients and certain
other third parties who compensate J.P. Morgan
based upon what clients purchase and J.P.
Morgan’s profits and compensation may vary by
product and over time.

8. Control or Restricted Securities

The client hereby agrees, prior to placing an
order with J.P. Morgan, to inform J.P. Morgan if
the securities are restricted or control
securities and subject to: Rule 144, 144A, 145 or
701 of the Securities Act of 1933 (“Securities
Act”); an effective registration statement;
and/or any contractual limitation. The client
understands and agrees that J.P. Morgan may not
execute any orders regarding restricted or
control securities

13

 

until J.P. Morgan has conducted its due diligence
surrounding the transaction and may in its sole
discretion decline to execute the order until the
securities have cleared legal transfer. The client
further agrees to provide, without cost to J.P.
Morgan, all documentation required by J.P, Morgan
to complete the order, including, but not limited
to, any required forms, representation letters,
opinions of seller’s counsel and transfer
documentation and authorizes J.P. Morgan to
communicate with the issuer of the restricted or
control securities, its attorneys and its transfer
agent in connection with the client’s transaction.
Furthermore, the client acknowledges and agrees
that there may be time delays in connection with
the due diligence process, the execution of the
order and the processing of the transaction and
further acknowledges and agrees that the proceeds
of the transactions may not be paid until the
securities have been transferred into street name
and delivered, free of restrictive legend and stop
transfer instruction. J.P. Morgan shall not be
liable for any losses, direct or indirect, that may
have been caused by such delays.

9. Short and Long Sales

Short sales must be executed in a Margin Account.
In placing any sell order for a long Account, the
client will designate the order as such and hereby
authorizes J.P. Morgan to mark the order as being
“long.” The designation by the client of a sell
order as being for a long Account shall constitute
a representation by the client that the client owns
the security with respect to which the sell order
has been placed, that such security may be sold
without restriction in the open market and that, if
J.P. Morgan does not have the security in its
possession at the time the client places the sell
order, the client shall deliver the security by
settlement date in good deliverable form and if the
client fails to deliver as such, J.P. Morgan is
authorized (but is not required to) to borrow,
purchase, or otherwise acquire the security in
order to make delivery. The client shall be liable
to J.P. Morgan for any losses and expenses it may
incur or sustain as a result of the client’s
failure to make delivery on a timely basis and for
any loss, expense, premium and other costs incurred
in connection with borrowing, purchase or
acquisition of the required securities.

10. Obligations Upon Termination

Upon termination of this Agreement or the closing
of the client’s Account(s), the client will be
responsible for issuing instructions in writing
with regard to the assets held in the Account(s).
Unless and until J.P. Morgan receives such
instructions, it will be under no obligation to
take any action with regard to the Securities and
Property in the Accounts. The client agrees to be
responsible for any transaction costs associated
with the client’s instructions, including
commissions and related costs.

THE FOLLOWING SECTION REGARDING ARBITRATION
APPLIES ONLY TO BROKERAGE AND MARGIN ACCOUNTS
WITH A J.P. MORGAN ENTITY

11. Arbitration; Consent to Jurisdiction;
Service of Process

(a) THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. BY SIGNING AN ARBITRATION AGREEMENT
THE PARTIES AGREE AS FOLLOWS:

	•	 	ALL PARTIES TO THIS AGREEMENT ARE GIVING UP THE RIGHT TO SUE EACH
OTHER IN COURT, INCLUDING THE RIGHT TO A
TRIAL BY JURY, EXCEPT AS PROVIDED BY THE RULES
OF THE ARBITRATION FORUM IN WHICH A CLAIM IS
FILED.
	 
	•	 	ARBITRATION AWARDS ARE GENERALLY FINAL AND
BINDING; A PARTY’S ABILITY TO HAVE A COURT REVERSE
OR MODIFY
AN ARBITRATION AWARD IS VERY LIMITED.
	 
	•	 	THE ABILITY OF THE PARTIES TO OBTAIN
DOCUMENTS, WITNESS STATEMENTS AND OTHER
DISCOVERY IS
GENERALLY MORE LIMITED IN ARBITRATION THAN IN
COURT PROCEEDINGS.
	 
	•	 	THE ARBITRATORS DO NOT HAVE TO EXPLAIN THE
REASON(S) FOR THEIR AWARD.

	•	 	THE PANEL OF ARBITRATORS WILL TYPICALLY
INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR
ARE
AFFILIATED WITH THE SECURITIES INDUSTRY.
	 
	•	 	THE RULES OF SOME ARBITRATION FORUMS MAY
IMPOSE TIME LIMITS FOR BRINGING A CLAIM IN
ARBITRATION. IN
SOME CASES, A CLAIM THAT IS
INELIGIBLE FOR ARBITRATION MAY BE
BROUGHT IN COURT.
	 
	•	 	THE RULES OF THE ARBITRATION FORUM IN WHICH
THE CLAIM IS FILED, AND ANY AMENDMENTS THERETO,
SHALL
BE INCORPORATED INTO THIS AGREEMENT.
	 
	•	 	NO PERSON SHALL BRING A PUTATIVE OR
CERTIFIED CLASS ACTION TO ARBITRATION, NOR SEEK
TO ENFORCE ANY
PRE-DISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS
ACTION OR WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO
ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL:

	 	i)	 	THE CLASS CERTIFICATION IS DENIED;
	 
	 	ii)	 	THE CLASS IS DECERTIFIED; OR
	 
	 	iii)	 	THE CLIENT IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH
FORBEARANCE TO ENFORCE AN
AGREEMENT TO ARBITRATE SHALL NOT
CONSTITUTE A WAIVER OF ANY RIGHTS UNDER
THIS AGREEMENT EXCEPT TO THE EXTENT
STATED HEREIN.

	•	 	BY ENTERING INTO THIS AGREEMENT THE CLIENT
AND J.P. MORGAN AGREE THAT CONTROVERSIES ARISING
UNDER
OR RELATING TO THIS AGREEMENT OR ANY
ACTIVITY BETWEEN THE CLIENT AND J.P.
MORGAN, ITS
PREDECESSORS, AND ANY OF THEIR RESPECTIVE
SUCCESSORS, ASSIGNS, AND ANY OF THEIR,
DIRECTORS, EMPLOYEES, AND ANY OTHER CONTROL
PERSONS AND ANY OF THEIR AGENTS, WHETHER
ARISING PRIOR TO, ON OR SUBSEQUENT TO THE
DATE HEREOF, SHALL BE DETERMINED BY
ARBITRATION AND IN ACCORDANCE WITH THE RULES
OF THE FINANCIAL INDUSTRY
REGULATORY AUTHORITY, INC. (“FINRA”)
BEFORE AN ARBITRATION PANEL APPOINTED BY
FINRA IN
ACCORDANCE WITH ITS RULES, AND SUCH HEARING OR
HEARINGS SHALL BE CONDUCTED IN A LOCALE
SELECTED BY FINRA. THE AWARD OF THE
ARBITRATORS, OR OF THE MAJORITY OF THEM, SHALL
BE FINAL, AND JUDGMENT UPON THE AWARD RENDERED
MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL,
HAVING JURISDICTION.

(b) Notwithstanding the provisions of
subparagraph (a) above, either party may, at any
time prior to the initial arbitration hearing
pertaining to such dispute or controversy, seek
by application to the U.S. District Court for the
Southern District of New York or the Supreme
Court of the State of New York for the County of
New York any such temporary or provisional relief
or remedy (“Provisional Remedy”) provided for by
the laws of the U.S. or the laws of the State of
New York as would be available in an action based
upon such dispute or controversy in the absence
of an agreement to arbitrate. The parties
acknowledge and agree that it is their intention
to have any such application for a Provisional
Remedy decided by the Court to which it is made
and that such application shall not be referred
to or settled by arbitration. No such application
to either said Court for a
Provisional Remedy, nor any act or conduct by
either party in furtherance of or in opposition
to such application, shall constitute a
relinquishment or waiver of any right to have the
underlying dispute or controversy with respect to
which such application is made settled by
arbitration in accordance with subparagraph (a)
above.

(c) With respect to any application for a
Provisional Remedy and any application for
judgment on an arbitration award, each party
irrevocably (i) submits to the jurisdiction of
the U.S. District Court for the Southern
District of New York or the Supreme Court of the
State of New York for the County of New York,
(ii) waives any objection which it may have at
any time to the laying of venue of any
proceedings brought in any

14

 

such court, waives any claim that such proceedings have been brought in an inconvenient forum
and further waives the right to object, with respect to such proceedings, that such court does not
have any jurisdiction over such party, and (iii) consents to service of process by certified mail,
return receipt requested, to the address provided for herein.

(d) The client hereby agrees to receive service of process in connection with any legal matters or
actions or proceedings based upon, arising out of or relating in any way to this Agreement by
confirmed, return-receipt requested mail and that delivery shall be presumed if such service is
mailed to the address maintained by J.P. Morgan in its records.

(e) The client agrees that in any arbitration proceeding with J.P. Morgan, the arbitrators shall be
bound by, and obligated to follow, the substantive law of the State of New York and of the United
States regardless of where the agreement was executed, except to the extent that such laws would
permit the arbitrators to disregard the substantive laws of the State of New York and the United
States.

(f) The client agrees that the terms of any settlement or any award determined by arbitration shall
be confidential and shall not be disclosed by the client, the client’s attorneys or the client’s
representatives under any circumstances unless required by applicable law, judicial proceeding, or
self-regulatory organization rule or order.

(g) This arbitration provision may be waived only with the written agreement of J.P. Morgan.

12. Severability

If and to the extent any term or provision herein is or should become invalid or unenforceable,
then (i) the remaining terms and provisions hereof shall be unimpaired and remain in full force and
effect and (ii) the invalid or unenforceable provision or term shall be replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the intention of such
invalid or unenforceable term or provision.

13. Affiliations

If the client is a natural person, the client represents that unless the client has notified J.P.
Morgan to the contrary, neither the client nor any member of the client’s immediate family is: (i)
an employee or member of any exchange, (ii) an employee or member of FINRA, (iii) an employee of
any corporation or firm engaged in the business of dealing, as broker or principal, in securities,
options or futures or (iv) an employee of any bank, trust company or insurance company. Persons
signing on behalf of others should indicate the titles or capacities in which they are signing. If
any of the foregoing information changes, the client agrees to notify J.P. Morgan promptly. If the
client is required to obtain his or her employer’s consent before opening a securities account, the
client has obtained such consent.

14. Custody

Unless the client specifies otherwise, JPMCB will act as custodian of the Property in all brokerage
Accounts in accordance with the provisions relating to the Custody Account in the Asset Account
Agreement.

MARGIN DISCLOSURE STATEMENT

This Margin Agreement provides some basic facts about purchasing Securities on margin and will
alert the client to certain risks involved with trading Securities in a Margin Account. Before
trading Securities in a Margin Account, the client will fully review all terms and conditions of
this Margin Agreement and the client will consult J.P. Morgan regarding any questions or concerns
the client has about the Margin Account.

When the client purchases Securities, the client may pay for Securities in full unless the client
borrows part of the purchase price from J.P. Morgan through a Margin Account. The Securities
purchased are J.P. Morgan’s Collateral for the loan extended to the client. If the Securities in
the Account decline in value, so does the value of the Collateral supporting the loan and, as a
result, J.P. Morgan can take action, including issuing a margin call and/or selling Securities or
other assets in any of the client’s Accounts, in order to maintain the required ratio of debt to
equity in the Account.

The client fully understands the risks of trading Securities on margin, which are heightened over
purchasing them in full with the client’s own existing funds. These risks include, but are not
limited to, the following:

	•	 	The client can lose more funds than the client deposits in the Margin Account. A decline in the
value of Securities that are purchased on margin may require that the client provide additional
funds to avoid the forced sale of those Securities or other Securities or assets in the client’s
Accounts.
	 
	•	 	J.P. Morgan can force the sale of Securities or other assets in the client’s Accounts. If the
equity in an Account falls below the margin requirements or J.P. Morgan’s higher “house”
requirements, J.P. Morgan can sell the Securities or other assets in the Accounts to cover the
margin deficiency. The client will also be responsible for any shortfall in the Account after such a sale.

	•	 	J.P. Morgan is not required to contact the client for a margin call to be valid, and J.P. Morgan
may liquidate Securities or other assets in Accounts to meet the margin call without contacting the
client first or obtaining the client’s permission. J.P. Morgan may take all necessary steps to
protect its financial interests, including immediately liquidating Securities or other assets
without prior notice to the client and without the client’s consent.
	 
	•	 	Because the Securities are collateral for the margin loan, the client is not entitled to choose
which Securities or other assets in the Accounts will be liquidated or sold to meet a margin call.
J.P. Morgan has the sole right to decide which Securities and assets to sell in order to protect
its interests.
	 
	•	 	J.P. Morgan can increase its “house” maintenance margin requirements at any time and is not
required to provide to the client advance notice, in writing or otherwise. These changes in J.P.
Morgan’s policy often take effect immediately and may result in the issuance of a maintenance
margin call. The client’s failure to satisfy the call may result in the liquidation or sale of
Securities in the client’s Accounts.
	 
	•	 	The client is not entitled to an extension of time on a margin call. While an extension of time
to meet margin requirements may be available to clients under certain circumstances and at J.P.
Morgan’s sole discretion, a client does not have the right to an extension.

MARGIN ACCOUNT AGREEMENT

1. Margin and Other Collateral Requirements

The client agrees (i) to deposit and maintain such margin in the client’s margin Account(s) as J.P.
Morgan may in its sole discretion require; (ii) to pay on demand any debit balance owing with
respect to any of the client’s margin Account(s); (iii) that margin calls may be communicated
orally, without subsequent written confirmation; (iv) to deposit promptly and maintain such other
Collateral with J.P. Morgan as is required by applicable law or regulation or by J.P. Morgan under
this Agreement or any other agreement; and (v) that no demands, calls, tenders or notices that J.P.
Morgan may have made or given in the past shall obligate J.P. Morgan to make or give the same in
the future.

2. Breach, Bankruptcy or Default; Remedies

(a) Each J.P. Morgan entity may elect to consider the client in default of any or all agreements
the client may then have with it if: (i) the client does not pay any liability or perform any
Obligation to any J.P. Morgan entity by the time the client is

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obligated to do so; (ii) the client otherwise breaches, repudiates or defaults under this Agreement
or any other agreement the client may have with any J.P. Morgan entity; (iii) the client commences
a proceeding in bankruptcy or insolvency or one is commenced against the client; (iv) any
guarantor, co-signer or other party (a “Responsible Party”) liable for or providing security for
the client’s Obligations to any J.P. Morgan entity defaults in its obligation to J.P. Morgan or
commences a proceeding in bankruptcy or insolvency or one is commenced against it; (v) an
attachment is made against the client or a Responsible Party’s Account(s) with any J.P. Morgan
entity; (vi) a receiver is appointed with respect to the client, any of assets of the client or the
assets of a Responsible Party; (vii) if the client is a natural person, the client dies or becomes
incompetent, and if the client is an entity, the client merges, liquidates or dissolves; or (viii)
an event, circumstance or condition occurs that, in J.P. Morgan’s judgment, materially impairs the
client’s creditworthiness, ability to timely perform Obligations to J.P. Morgan or otherwise causes
J.P. Morgan to view itself as insecure. The occurrence of any of the foregoing is referred to as an
“Event of Default. ”

(b) Upon the election by J.P. Morgan to consider the client in default, each J.P. Morgan entity
shall have all of the rights and remedies of a secured party upon default under the NYUCC and other
applicable laws and may, without notice to the client among other things, (i) in whole or in part,
accelerate, cancel, terminate, liquidate or otherwise close out this Agreement in accordance with
the terms of this Agreement and (ii) foreclose, collect, sell or otherwise liquidate any Collateral
a J.P. Morgan entity selects in its sole discretion, in any order and at any time, and apply, in a
manner determined by J.P. Morgan in its sole discretion, the proceeds to satisfy any of the
client’s Obligations to any J.P. Morgan entity and (iii) buy any property that may have been sold
short and (iv) retain any Collateral and (v) set-off, net, and/or recoup a J.P. Morgan entity’s
obligation to the client against any of the client’s Obligations to any J.P. Morgan entity, and the
client’s Obligations to a J.P. Morgan entity shall be deemed performed and discharged to the extent
any J.P. Morgan entity has effected a valid and unavoidable set-off, netting or recoupment, and the
client expressly waives any requirement of mutuality to allow one J.P. Morgan entity to set-off,
net or recoup any Obligation owed by the client to a J.P. Morgan entity against any obligation of a
different J.P. Morgan entity to the client and (vi) calculate any obligation due to the client by
first deducting any Obligation that the client owes to any J.P. Morgan entity before determining
the final amount of any such obligation and (vii) in each J.P. Morgan entity’s discretion, convert
at the client’s expense any Obligation from one currency into another currency at such rates as
J.P. Morgan shall determine and (viii) take any other action permitted by law or in equity to
protect, preserve or enforce J.P. Morgan’s rights or to reduce any risk to J.P. Morgan of loss or
delay, including entering into hedging transactions for the client’s Account(s) and risk.

(c) At any sale of Collateral or other sale or purchase permitted hereunder or otherwise, J.P.
Morgan may sell or purchase to or from itself or third parties, and the client hereby acknowledges
and agrees that the securities subject to such sale or purchase are instruments traded in a
recognized market. The client will pay each J.P. Morgan entity for any losses and costs incurred by
J.P. Morgan as a result of any default by the client. The client waives marshalling of assets and
any similar doctrine dealing with the application of Collateral. J.P. Morgan’s rights and remedies
hereunder are cumulative and are in addition to any other rights and remedies available at law or
in equity.

3. Short Sales

The client will designate any short sales as such and hereby authorizes J.P. Morgan to mark the
order as being “short” or “short exempt.” Short sales are margin transactions and must be conducted
in a Margin Account. Short sale transactions are subject to certain regulatory rules and cannot be
executed under certain market conditions. J.P. Morgan does not guarantee that it will be able to
locate Securities to facilitate a short sale. J.P. Morgan may, in its discretion and without notice
to the client, “buy in” Securities to cover any short security position in the client’s Margin
Account. If the client is unable to cover a short security position (either through delivery of the
Security or through J.P. Morgan “buying in” the Security) in enough time for J.P. Morgan to deliver
the Security to its lender (to whom J.P. Morgan is obligated), the client agrees to reimburse J.P.
Morgan for the losses J.P. Morgan sustains as a result of the client’s failure to cover.

4. Special Charges for Short Sales In Hard-To-Borrow Securities

With respect to any short sale transactions in securities that are or become hard-to-borrow, the
client’s Account(s) also may be charged an amount equal to the sum of (i) the costs and expenses
incurred by J.P. Morgan and (ii) a Service Fee in connection with the establishment and/or
maintenance of the client’s short positions in that security (together, “Short Sale Charges”). A
security is or becomes hard-to-borrow when increased short selling in that security in the market
causes an increase in demand to borrow the security, which in turn causes an increase in the cost
and expense to J.P. Morgan in establishing and/or maintaining a short position in such security for
the client’s Account(s). Short Sale Charges may be disclosed to the client at the time a short
position is established or may be imposed or increased from time to time in light of changing
market conditions and the client agrees to pay such Short Sale Charges at J.P. Morgan’s
then-prevailing rates.

THE FOLLOWING SECTIONS REGARDING THE LOAN, PLEDGE OR USE OF SECURITIES AND FREE CREDIT BALANCES
APPLY ONLY TO MARGIN ACCOUNTS WITH A J.P. MORGAN ENTITY AND NOT TO ANY OTHER ACCOUNT

5. Consent to Loan, Pledge or Use Securities in Margin Accounts

(a) To the greatest extent permitted under Applicable Laws, the client hereby authorizes J.P.
Morgan to lend either to itself or to others and to otherwise use, sell or pledge any securities
held by J.P. Morgan in any of the client’s Margin Account(s), to convey therewith all attendant
rights of ownership (including voting rights) and to use all such property as Collateral for J.P.
Morgan’s general loans and/or other obligations or with respect to repurchase transactions. Any
such property, together with all attendant rights of ownership, may be pledged, repledged, sold,
hypothecated, rehypothecated, become subject to a repurchase transaction either separately or in
common with other property for any amounts due to J.P. Morgan thereon, and for a greater sum than,
and for periods longer than, any Obligation that the client owes to J.P. Morgan, and J.P. Morgan shall have no obligation to retain a like amount of similar property in its
possession and control. The client hereby acknowledges that, as a result of such activities, (i)
J.P. Morgan may receive and retain certain benefits to which the client will not be entitled and
(ii) the securities in a margin Account(s) may be used as Collateral by J.P. Morgan for loans made
to it in excess of the client’s indebtedness to J.P. Morgan.

(b) In certain circumstances, such loans or other use may limit, in whole or in part, the client’s
ability to receive dividends directly from the issuing company and/or the client’s right to
exercise voting and other attendant rights of ownership with respect to the loaned, sold or pledged
securities. Such circumstances include, but are not limited to, loans of securities that the client
owns in margin Account(s) that continue over record dates for voting purposes and ex-dividend dates
for dividend distributions. Record dates and ex-dividend dates are declared by the issuing company.
If J.P. Morgan does not receive dividends directly from the company, the client may receive
payments-in-lieu of dividends which may

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cause the client to lose the benefit of the preferential tax treatment accorded to dividends.

6. Free Credit Balances

The client hereby authorizes J.P. Morgan to use any free credit balance in any of the client’s
Margin Account(s) in accordance with all applicable laws and to pay interest thereon at such rate
or rates and under such conditions as are established from time to time by J.P. Morgan for such
Margin Account(s) and for the amounts of cash so used. In accordance with applicable regulations,
free credit balances are carried in clients’ Margin Accounts pending, and with a view towards,
reinvestment. J.P. Morgan may determine not to pay interest on free credit balances (i)
representing either uncollected funds (i.e., any deposited non-cash items (e.g., checks) for which
J.P. Morgan has not yet received credit) or funds that is deposited and subsequently withdrawn
prior to the expiration of the minimum time period required by J.P. Morgan, or (ii) where
prohibited by applicable law.

7. Custody

A J.P. Morgan entity will act as custodian of all Collateral and/or Property held pursuant to this
Margin Account Agreement.

8. General Terms; Definitions

This Agreement is subject to the General Terms for Accounts and Services (the “General Terms”) and
to the terms and conditions, including, without limitation, those pertaining to arbitration,
contained in the Brokerage Account Agreement (other than terms pertaining to custody). References
to the Brokerage Account shall be deemed to be references to the Margin Account and references to
the Brokerage Account Agreement shall be deemed to be references to this Agreement.

Capitalized terms not defined in this Agreement have the meanings given to them in the General
Terms and the Brokerage Account Agreement. To the extent there are any conflicts between the
General Terms and the terms of this Agreement or between the Brokerage Account Agreement and this
Agreement, this Agreement will prevail.

DISCLOSURE TO CLIENTS IN COMPLIANCE WITH FINRA RULE 4370 REGARDING CONTINUITY AND CONTINGENCY PLANS
AND EMERGENCY CONTACT INFORMATION FOR J.P. MORGAN

J.P. Morgan adheres to a Resiliency Risk Management (“RRM”) Program which is an integral part of
JPMorgan Chase & Co. normal business operations, and as such, is part of business planning and a
critical responsibility of management. The RRM Program establishes and assesses the criticality of
business processes, in addition to documenting strategies, gathering recovery information,
identifying resources, and developing and maintaining a plan for action to recover business
processes in a timely manner following a disruption, and to meet local and country regulatory
requirements. The Resiliency Plans (contingency plans) are designed to respond to a worst-case
scenario. This means the loss of a single location or an entire zone. Also, pursuant to the
Resiliency Risk Management Policy, J.P. Morgan establishes minimum requirements for supporting and
sustaining business resiliency services at levels commensurate with the associated business impact.

The following business continuity control practices are in place: A recovery plan designed to
restore the J.P. Morgan environment, which includes alternative work spaces and back-up computer
systems. The recovery plan is subject to periodic review, examination and/or testing by internal
and independent auditors. The recovery test utilizes, in part, off-site copies of data,
applications, and system software and synchronous or asynchronous systems. A regular review of
resource needs is performed to update processing and storage requirements.

J.P. Morgan’s risk mitigation strategies are commensurate with our obligations to our clients,
markets and regulators. J.P. Morgan will endeavor to sustain business on behalf of its clients on
that same business day or, where applicable, on a best efforts basis, during any and all
contingency events, recognizing that service may be impacted for longer periods depending upon the
seriousness of the event. In addition, in that J.P. Morgan is dependent upon various
infrastructures (e.g. transportation, telecommunications, exchanges, industry utilities, etc.) J.P.
Morgan’s ability to implement its plans may be impacted by issues with these infrastructures.

The recovery and business continuity plans of J.P. Morgan are subject to modification without
notice. Updates will be posted to the Morgan OnLine website and customers may request this
information by contacting their J.P. Morgan representative.

RISKS OF CERTAIN INVESTMENTS

The types of investments below involve special risks that should be evaluated carefully before a
decision is made to invest directly in a self-directed brokerage account at J.P. Morgan Securities
Inc. or to include type of investment in guidelines for an investment management account at JPMCB
or one of its banking affiliates. Not all of the risks and other significant aspects of these
investments are discussed here. Clients are advised to consult with their own legal, tax, financial
and accounting advisors to the extent deemed necessary and are expected to rely upon their own
evaluation of information they receive when making investment decisions.

1. Over-The-Counter Derivatives

Most Over-the-Counter (“OTC”) Derivatives are contracts that take one of four basic forms, although
the forms can be overlapping and one transaction can involve elements of all four forms. These
basic forms are (1) swaps, (2) options, (3) forwards and (4) hybrid instruments (which are debt
obligations or other securities with embedded swaps, options or forwards). OTC Derivatives may be
structured to be settled in a variety of ways, including in cash or by physical delivery of
property against cash. No matter what form is involved, a common feature of OTC Derivatives is that
the obligations of one or both of the parties are based on the value or market price of one or more
underlying financial or commodity markets, to which the transaction is linked. A Client should not
enter into an OTC Derivative unless the Client understands, at a minimum:

	•	 	The fundamentals of the market underlying such OTC Derivative;
	 
	•	 	The legal terms and conditions of the documentation for such OTC Derivative;
	 
	•	 	The extent of the economic risk to which the Client is exposed as a result of such OTC
Derivative;
	 
	•	 	The tax treatment of such OTC Derivative; and
	 
	•	 	The regulatory treatment of such OTC Derivative. The Client must determine that such
investment and its risk are suitable in the light of the Client’s financial circumstances and
objectives.

The following points should be considered in deciding whether to enter into a particular OTC
Derivative:

	•	 	Market risk. To the extent the obligations or rights in respect of an OTC Derivative are
linked to prices or values in a particular market, the Client will be exposed to a risk of
loss as a result of price or value movements in that market.
	 
	•	 	Credit Risk. JPMorgan Chase Bank, N.A. or one of its affiliates (a “Morgan Affiliate,” and
together with JPMorgan Chase Bank, N.A., “JPMCB”) will generally be the counterparty in an OTC
Derivative arranged by any Morgan Affiliate, including J.P. Morgan Securities Inc. (“JPMSI”).
The Client therefore will be dependent upon the financial capacity of JPMCB to meet its
obligations under each OTC Derivative contract prior to settlement, and may be unsecured with respect to those obligations of
JPMCB (as opposed to being a creditor of a central clearing corporation as may generally be the
case with exchange traded futures

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	•	 	Non-Transferability and Non-Marketability. OTC Derivatives will not be registered under the
Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any
state or other country unless otherwise specified in writing. OTC Derivatives will ordinarily be
sold and offered in a transaction that is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) of the Securities Act and/or Regulation D thereunder.
There will be no public market for OTC Derivatives. In this regard, the Client will be required to
represent that OTC Derivatives, or any securities underlying the OTC Derivatives, are being
acquired for investment purposes only and not with a view to resale or distribution. OTC
Derivatives generally cannot be assigned or transferred by a party without the prior written
consent of the other party. JPMCB may, but is not obligated to, consent to the early termination of
an OTC Derivative prior to its scheduled maturity at a negotiated price.It therefore may be
impossible for the Client to liquidate a position in an OTC Derivative prior to maturity. Because
OTC Derivatives are not standardized, engaging in another OTC Derivative transaction to offset an
OTC derivative the Client has entered into with JPMCB will not automatically close out those
positions (as may be true in the case of exchange-traded futures and options) and will not
necessarily function as an effective hedge. The Client will continue to be obligated with respect
to an OTC Derivative until it matures or is otherwise terminated.
	 
	•	 	Price Transparency. Because the prices and characteristics of OTC Derivatives are individually
negotiated and there is no central source for obtaining prices, dealers in OTC Derivatives may
quote different prices for similar transactions. JPMCB does not warrant that its prices will always
be the best prices available.
	 
	•	 	Option Risk. Option transactions can be very risky. The risk of selling (writing) options is
considerably greater than the risk involved in buying options. If the Client buys an option, the
Client cannot lose more than the premium. If the Client sells (writes) an option, the risk can be
unlimited. Fluctuations in currency exchange rates may affect the value of any OTC Option on
securities trading in or denominated in a foreign currency, as well as the value of any payment or
delivery of securities in connection with such OTC Option. Fluctuations in currency exchange rates
may affect the value of any payment or delivery of securities in connection with such OTC Option.
	 
	•	 	Leverage Risk. Certain derivatives can be structured to allow for significant leverage. The use
of leverage may have the effect of magnifying an investor’s losses or gains and causing an investor
to be highly exposed to risk with very little capital or cash investment. As a result, a relatively
small, unexpected change in the notional amount of an investor’s position could have a much larger
adverse impact on the principal amount invested.
	 
	•	 	Collateral. Collateral may be required to support the Client’s obligations under OTC Derivatives.
Additional collateral may be required after the Client has entered into an OTC Derivative. JPMCB and JPMSI will not provide the collateral for any OTC Derivative transaction.

Clients should not rely upon J.P. Morgan for an understanding of the risks, terms and conditions of
OTC Derivatives, and the Client must review carefully the documentation for any OTC Derivative with
a personal attorney or other adviser. J.P. Morgan will assume that when the Client enters into OTC
Derivatives, the Client understands the characteristics and risk associated with such transactions.

2. Uncovered Options (Permitted Only in Self-Directed Accounts at JPMSI)

An uncovered (or “naked”) option transaction occurs when an investor buys or sells (writes) an
option without having a position in the underlying asset. There are special risks associated with
uncovered option writing which expose the investor to potentially significant loss. Therefore, this
type of strategy may not be suitable for all clients, including those generally approved for
options transactions.

The potential loss of uncovered call writing is unlimited. The writer of an uncovered call is in an
extremely risky position, and may incur large losses if the value of the underlying instrument
increases above the exercise price.

As with writing uncovered calls, the risk of writing uncovered put options is substantial. The
writer of an uncovered put option bears a risk of loss if the value of the underlying instrument
declines below the exercise price. Such loss could be substantial if there is a significant decline
in the value of the underlying instrument.

Uncovered option writing thus is suitable only for the knowledgeable investor who understands the
risks, has the financial capacity and willingness to incur potentially unlimited losses, and has
sufficient liquid assets to meet applicable margin requirements. In this regard, if the value of
the underlying instrument moves against an uncovered writer’s options position, JPMSI may liquidate
stock or options positions in the Client’s account, with little or no prior notice in accordance
with the Client’s Margin Agreement.

For combination writing, where the investor writes both a put and a call on the same underlying
instrument, the potential risk also is unlimited.

If a secondary market in options were to become unavailable, investors could not engage in closing
transactions, and an option writer would remain obligated until expiration or assignment.

The writer of an American-style option is subject to being assigned an exercise at any time after
he has written the option until the option expires. By contrast, the writer of a European-style
option is subject to exercise assignment only during a specified exercise period.

Note: This brief discussion is not intended to enumerate all of the risks entailed in writing
uncovered options. It is expected that the Client also will read the booklet entitled
Characteristics and Risks of Standardized Options available from JPMSI. In particular, the Client’s
attention is directed to the chapter entitled Risks of Buying and Writing Options. If the Client
enters into an option contract, the Client thereby will confirm that the Client has received and
read the aforementioned booklet.

3. Emerging Markets

Emerging markets securities and transactions involving emerging markets securities are subject to
substantial risk arising from a number of factors including, but not limited to: (1) economic and
political instability in the regions where emerging markets issuers conduct business, (2)
significant volatility in the markets for emerging markets securities and the currencies in which
they may be denominated and (3) the potential for loss of the Client’s entire investment as a
result of insolvency, market or government action, or other similar factors which could render the
securities valueless.

Generally less information is publicly available with respect to emerging markets issuers and
obligors than is available with respect to United States companies. Many emerging markets companies
are not subject to the uniform accounting and

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financial reporting requirements applicable to issuers and obligors in the United States;
additionally, accounting, auditing, financial and other reporting standards in emerging markets
jurisdictions are often not equivalent to the standards established in the United States and
therefore disclosure of certain material information may not be made.

There may exist only small markets for certain emerging markets securities, resulting in low or
non-existent volumes of trading in such assets, and therefore a lack of liquidity and price
volatility of such assets. Settlement periods for transactions of emerging markets securities may
also be longer than settlement times for assets of United States issuers, and settlement systems
may be unreliable.

This may also affect the liquidity and price volatility of emerging markets securities.

The risks are significantly more pronounced in derivative instruments (options, swaps, futures,
etc.) on emerging markets securities.

4. Non-Traditional Investment Strategies

Non-traditional, or alternative, investment strategies include investments in hedge funds, private
equity funds, real estate funds, and funds comprised of such funds. Such funds are sometimes
referred to as private investments because they are typically organized pursuant to exemptions from
registration under federal securities laws and therefore are not offered to the general public.
They are appropriate for certain qualified investors only. Such funds: (1) often engage in
leveraging and other speculative investment practices that may increase the risk of the complete
loss of the investment; (2) can be highly illiquid because of the absence of any trading market and
restrictions on resale as a result of regulatory or contractual provisions; (3) are not required to
provide periodic pricing or valuation information to investors; (4) may involve complex tax
structures and delays in distributing important tax information; (5) are not subject to the same
regulatory requirements as mutual funds; (6) often charge high fees; (7) may be exposed
significantly to foreign currency and investment risk; and (8) may experience high return
volatility. In addition, any number of conflicts of interest may exist in connection with the sale,
distribution, management or operation of such funds.

Although interests in private investment funds sometimes may be resold in privately negotiated
transactions, the prices realized on these sales could be less than the original investment. It is
a condition of many fund investments offered through J.P. Morgan that the Client maintain an
investment management, trust, or custody/asset account at JPMCB or one of its affiliates for so
long as the Client owns the investment.

Private funds are offered only by confidential private placement memorandum or similar document
(the “PPM”).The PPM provides important detailed information regarding fees, merits, risks,
investment objectives, and other matters of interest, and must be read carefully before a decision
is made on whether to invest. However, generally no PPM will be delivered to the Client for whom
JPMCB exercises investment discretion. JPMCB will provide a copy of the PPM to a discretionary
Client upon request.

Morgan Affiliates may be the issuer of interests in these funds or may provide advisory,
management, administrative or other services to issuers, including issuers who also are Morgan
Affiliates, and may be compensated separately for such functions. JPMSI or another Morgan Affiliate
may act as placement agent for such interests and may be compensated by the issuer for providing
placement services. Such compensation is in addition to fees and commissions the Client pays in
connection with purchasing an interest or in connection with the Client’s investment management,
brokerage or custody account. Investments in private funds entail the execution and delivery of a
subscription agreement. If JPMCB is investing on behalf of a discretionary Client, JPMCB will
complete and execute the subscription agreement on the Client’s behalf. The subscription agreement
will require JPMCB to make certain representations and warranties relating to the Client. Such
representations and warranties relate to, but are not limited to, the Client’s status as an
“accredited investor,” a “qualified purchaser,” a “qualified eligible person,” or “U.S. person”
within the meaning of applicable securities laws; whether the Client or the Client’s account is
subject to the Employee Retirement Income Security Act of 1974 (“ERISA”); organizational data if
the Client is an entity; whether the Client is a regulated institution that is subject to legal or
regulatory restrictions or limitations on the nature of its investments (such as a bank or an
insurance company); whether the Client is restricted by rules of the National Association of
Securities Dealers from participating in initial public offerings by reason of the Client’s
association with any broker, dealer, bank or other securities business; and whether the Client
falls into a category of person whose ability to do business with a financial institution is
limited by laws intended to prevent money laundering and terrorist financing. JPMCB will rely on
information provided to it by the Client in making all representations and warranties contained in
a subscription agreement and may be liable to a fund if any such representation or warranty is
untrue. In the event of such liability, the Client will be required to indemnify JPMCB and its
affiliates for all loss and damage, including attorneys’ fees. Clients who invest in private funds
through their self-directed brokerage accounts at JPMSI will sign subscription agreements
containing the same representations and warranties.

5. Complementary/Structured Strategies

Structured strategies are securities in which swaps, options, futures, forwards or other
combinations or types of derivatives are embedded. Their returns typically are linked to the
performance of one or more underlying U.S. or international securities, indices, rates, currencies,
or commodities (please see Section 11 below for a discussion of the special risks of investing in
commodities and Section 12 below for a discussion of the special risks of investing in currencies),
and may incorporate leverage.

Investments in structured strategies may not be suitable for all investors. These types of
investments entail varying degrees of risk, and while some structured strategies offer full or
partial principal protection, others can subject the Client to the loss of the full amount
invested. Structured strategies offered by J.P. Morgan (referred to herein as “Structures”) may be
structured using unsecured and unsubordinated debt obligations of JPMorgan Chase & Co. or its
affiliates (“JPM”) or various non-Morgan affiliate issuers, and may also take the form of deposits
(which may or may not be insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government authority), equity or partnership interests, certificates, warrants or interests
in special purpose vehicles. The Client therefore will be dependent upon the issuer’s financial
capacity to meet its obligations under a Structure. Structures may or may not be registered under
the Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any
state or other country and if not registered, will be sold and offered in a transaction that is
intended to be exempt from registration under the Securities Act. Structures may or may not be
publicly listed or traded on an exchange and therefore may be illiquid investments. Prior to
maturity Structures issued by JPM may be repurchased by JPM only and only upon terms and conditions
acceptable to it, and in most cases the Structures are not-transferable and are nonnegotiable.

In the event that JPM consents to early liquidation, the Client will likely not fully participate
in any benefits of the Structure, such as principal protection, buffers, or enhanced returns.

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Structures will be offered by prospectus, term sheet or offering memorandum (collectively, an
“offering document”), and the offering document will provide more detailed information regarding
the Structures. The applicable offering document must be read carefully before a decision is made
to invest. However, generally no offering document will be delivered to a Client for whom J.P.
Morgan exercises investment discretion.

The issue price of a Structure will include the cost of hedging the issuer’s obligations under such
Structure, which includes an estimated profit component. It also will include compensation paid to
JPM for structuring, underwriting and marketing work involved in packaging a Structure as one
instrument. Compensation paid to JPM will vary with each Structure but is not expected to exceed, on an annual
basis, two percent. If, however, a Structure has an early redemption feature and is redeemed prior
to maturity, the compensation will not be prorated and limited to the period during which the
Structure was outstanding, and in such event, the compensation paid will be higher. A Structure may
also include an annual fee embedded in an index or calculation, payable to the issuer or index
sponsor (which may be JPM or a non-Morgan affiliate issuer) for structuring or calculating a
proprietary index or formula.

JPM also generally acts as calculation agent for Structures and determines the amount, if any, that
will be paid to the Client at maturity. In performing its duties as calculation agent, JPM may have
interests adverse to the interest of the holders of the Structures, which may affect the Client’s
return on a Structure, particularly where JPM, as the calculation agent, is entitled to exercise
discretion.

If JPMCB invests in a Structure on behalf of a Client for whom it exercises investment discretion,
JPMCB may be required to make certain representations and warranties relating to the Client. Such
representations and warranties relate to, but are not limited to, the Client’s status as an
“accredited investor” as defined by the Securities Act. JPMCB will rely on information provided to
it by the Client in making all required representations and warranties and may be liable to the
issuer or the issuer’s placement agent if any such representation or warranty is untrue. In the
event of such liability, the Client will be required to indemnify JPMCB and its affiliates for all
loss and damage, including attorneys’ fees.

6. Mutual Funds

Mutual funds are sold only by prospectus, and the prospectus contains important information
regarding the fund’s investment objectives, merits, risks, charges, expenses and other matters of
interest. Mutual funds may not be suitable for all investors and the Client agrees to request the
prospectus and read it carefully before deciding to invest. However, no prospectus will be
delivered to the Client prior to an investment if JPMCB is investing on behalf of a Client for whom
it exercises investment discretion. JPMCB will provide a copy of the prospectus to a discretionary
Client upon request.

Although most mutual funds available through J.P. Morgan will follow a traditional long-only
investment strategy, some mutual funds may utilize investment strategies similar to those employed
by private funds. Such funds may or may not have the liquidity of traditional mutual funds, provide
periodic pricing or valuation information to investors, and are subject to the same regulatory
requirements as traditional mutual funds, but they engage in leveraging and other speculative
investment practices commonly used by hedge funds that may increase the risk of the complete loss
of the investment. Such funds generally also charge higher fees than traditional mutual funds and
have higher expenses. The use of leverage increases risk to a fund, and the more a fund invests in
leveraged instruments, the more it could magnify gains or losses to those investments.

JPMCB, JPMSI or their affiliates may provide administrative, custodial, sales, distribution or
shareholder services to funds established, sponsored, advised, or managed by their affiliates as
well as by third parties, and JPMCB, JPMSI or their affiliates may be compensated for such
services.

7. Municipal Bonds

Municipal bonds are offered by an official statement and may not be suitable for all investors. A
Client should consult with an independent tax advisor regarding whether municipal bonds are
appropriate for the Client’s particular situation.

JPMSI or Morgan Affiliates may hold a position or act as market maker in the financial instruments
of any issue the Client may invest in, or act as underwriter, placement agent, advisor, or lender
to an issuer. If municipal bonds are sold prior to maturity, prices may be higher or lower than the
original purchase price and actual yields may be higher or lower than the yields indicated at the
time of my investment. Yield quotations and market values will thus fluctuate over time and in
certain instances interest from some municipal bonds will be subject to the Alternative Minimum Tax
(AMT).

8. Real Estate

Real estate investments are likely to be risky, illiquid and long-term. Real estate ownership and
the real estate industry in general are subject to many risks, including the burdens of ownership
of real property; local, national and international economic conditions; supply and demand for
properties; the financial condition of tenants, buyers and sellers; changes in interest rates and
the availability of mortgage funds; changes in environmental laws and regulations, planning laws
and other governmental rules and fiscal and monetary policies; claims arising out of undisclosed or
unknown environmental problems or as to which inadequate reserves have been established; changes in
real property tax rates; changes in energy prices; force majeure events; terrorist events; and
under-insured or uninsurable losses. Real estate assets are subject to long term cycles that gives
rise to significant volatility in values.

Illiquidity may result from the absence of an established market for the property. The possibility
of partial or total loss of capital will exist and investors should not invest in real estate
unless they can readily bear the consequences of such loss. Even if real estate investments are
successful, they are unlikely to produce a realized return to the investors for a period of years.

Securities issued by real estate fund companies, including real estate investment trusts (“REITs”)
are subject to the risks associated with the direct ownership of real estate as well as the risks
associated with the fund company or REIT itself.

Such companies carry the risks of possibly limited operating history, unspecified portfolios,
uncertainties in calculating net asset value due to reliance upon appraisals, and restrictions on
redemption arising out of the illiquidity of the underlying portfolio. REITs also carry the risk of
the possible failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended,
which will have adverse tax consequences for investors.

9. Exchange Traded Funds

Exchange traded funds (ETFs) are index funds or trusts that are listed on an exchange. Investors
can buy or sell shares in the collective performance of an entire stock or bond portfolio as a
single security. Unlike index mutual funds, which have their net asset values calculated at the end
of each trading day, ETF prices change within the trading day, fluctuating with supply and demand,
so that the price of an ETF may be different than its net asset value.

Leveraged or inverse ETFs are highly complex financial instruments and, due to the effects of
compounding, their performance over longer periods of time can differ significantly from their
stated daily objective. Leveraged and inverse ETFs typically are designed to achieve their stated
performance

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objectives on a daily basis. Some investors might invest in these ETFs with the expectation
that the ETFs may meet their stated daily performance objectives over the long term as well.
Investors should be aware that performance of these ETFs over a period longer than one day can
differ significantly from their stated daily performance objectives. Leveraged and inverse ETFs may
pursue a range of investment strategies through the use of swaps, futures contracts and other
derivative instruments, and are inherently more volatile then their underlying benchmark or index. Additionally, leveraged ETFs positions will be subject to applicable maintenance margin
requirements which may be greater or differ from margin requirements on their non-leveraged
counterparts.

Exchange traded funds are sold by prospectus. The prospectus contains important information
regarding the investment objectives of the ETF, its merits, risks, charges, expenses and other
matters of interest, and must be read carefully before a decision is made to invest. However, no
prospectus will be delivered to the Client prior to an investment if JPMCB makes the investment on
the Client’s behalf pursuant to a discretionary portfolio mandate. JPMCB will provide a copy of the
prospectus to a discretionary Client upon request.

ETFs are subject to risks similar to those of stocks. Investment returns will fluctuate and are
subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth
more or less than their original cost. In addition, there is no guarantee that an ETF will track
the exact performance of its index.

ETFs, including leveraged or inverse ETFs, may not be suitable for all investors.

10. High Yield Fixed Income Securities

High yield fixed income securities come in many forms. Common ones are high yield bonds,
asset-backed securities, mortgage-backed securities, mezzanine securities, and collateralized bond
obligations (“CBOs”).

High yield bonds (sometimes known as “junk” bonds) are non-investment grade bonds of varying
maturities. They generally will be in the lower rating categories of the major rating agencies or
may be unrated. High yield bonds typically pay more interest than other bonds because they involve
a greater risk that the issuer will default in the timely payment of interest and principal.
Issuers of high yield bonds may have a lot of debt. During an economic downturn, a period of rising
interest rates or a recession, high yield issuers with a lot of debt may experience financial
problems leading to a default, and high yield bonds tend to fall in price during such periods. They
also may have other creditors with the right to be paid before the high yield bond holder. High
yield bonds fluctuate more widely in price and yield than investment grade bonds and are not as
liquid.

Asset-backed securities are bonds backed by a pool of assets, usually loans such as installment
sale contracts or credit card receivables. The loans underlying asset-backed securities may be
unsecured, with no collateral to seize if the underlying borrower defaults. Asset-backed securities
may be prepaid at any time, which will reduce their yield and market value. When interest rates
fall, prepayment rates rise as borrowers pay off existing debt and refinance at new lower rates. As
a result, reinvestment of the prepayment proceeds generally will be at a lower rate of return than
the return on the assets that were prepaid.

Mortgage-backed securities are subject to the same risks as asset-backed securities except that the
underlying loans generally will be secured by real property.

Mezzanine investments are subordinated debt securities which receive payments of interest and
principal after more senior secured creditors are paid. They generally are issued in private
placements in connection with an investment in an equity security. They carry the risk that the
issuer will default on payment of interest and principal and that the equity securities purchased
with the proceeds of mezzanine investments will lose value.

CBOs are securities backed by a diversified pool of high yield securities and are subject to the
same risks as the high yield securities in the pool.

11. Commodities

(a) In General Commodities include hard assets, such as agricultural products, metals, or petroleum
as well as securities futures based on common stock, certain exchange-traded funds and American
Depositary Receipts, and securities indices.

Commodity futures contracts can be used for speculation, hedging, and risk management. Commodity
futures contracts are not appropriate investments for all investors. When they are used for
speculation, it is possible to realize substantial profits in a short period of time, but it is
also possible to incur substantial losses in a short period of time. Such losses may be larger than
the initial commitment of capital because futures trading is highly leveraged.

Because of the leverage involved and the nature of futures contract transactions, losses may be
felt immediately because gains and losses are credited or debited to the investor’s account, at a
minimum, on a daily basis. The purchase or sale of a futures contract requires the investor to make
an initial deposit of money, known as margin. Margin, in the context of futures trading, is
different than the margin involved in the purchase of stocks. The purchase of stocks on margin
involves a cash down payment and credit extended by the broker for the purchase. The margin
required to buy or sell a futures contract is a deposit of money that can be drawn on by the broker
to cover any daily losses. If movements in the markets for futures contracts or the underlying
commodity decrease the value of the investor’s positions in futures contracts, the investor may be
required to deposit additional funds in his or her account as margin. If an account is under the
minimum margin requirements set by the exchange or the investor’s broker, the position may be
liquidated at a loss, and the investor will be liable for any deficit in the account. Minimum
margin requirements for a particular futures contract at a particular time are set by the exchange
on which the contract is traded and are subject to modification based on market conditions. An
increase in market volatility and the range of daily price movements is frequently a reason for
raising margins.

Futures contracts cannot be sold like stocks or bonds. They generally must be liquidated by the
investor entering into an equivalent but opposite position in another contract month, on another
market, or in the underlying commodity. If a position in a futures contract cannot be liquidated,
the investor may not be able to realize a gain in the value of the position or prevent losses from
mounting. An inability to liquidate could occur, for example, if trading is halted due to unusual
trading activity in either the futures contract or the underlying commodity; if trading is halted
due to recent news events involving the issuer of the underlying commodity; if systems failures
occur on an exchange or at the investor’s broker; or if the position is on an illiquid market. An
exchange may set a maximum daily limit on market price increases and decreases, and will halt
trading when the limit is reached. In the event prices have risen or fallen by the maximum daily
limit, and there is no trading in the contract permitted (known as a “lock limit” market), it may
not be possible to execute an order at any price. Markets may be lock limit for more than one day,
resulting in substantial losses to futures investors who may find it impossible to liquidate losing
futures positions.

Even if the investor can liquidate the position, it may be at a price that involves a large loss.
For the same reasons, it may also be difficult or impossible to manage risk from open futures
positions by entering into offsetting positions.

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An alternative method of participating in futures trading is through a commodity pool, which is a
pooled investment vehicle that invests in commodities (and, typically, securities as well). A
commodity pool participant will not have an individual trading account. Instead, the funds of all
pool participants are combined and traded as a single account. Each investor shares in the profits
or losses of the pool in proportion to his or her investment in the pool. Although commodity pools
can offer benefits such as greater diversification among commodities than an investor might obtain
in an individual trading account, the absence of margin calls, and a limitation on losses to the
amount invested, the risks a pool incurs in any given futures transaction are no different than the
risks incurred by an individual trader. The pool still trades in futures contracts which are highly
leveraged and in markets that can be highly volatile. And like an individual trader, the pool can
suffer substantial losses as well as realize substantial profits.

(b) Securities Futures

Trading in security futures contracts requires knowledge of both the securities and the futures
markets. Under certain market conditions, the prices of security futures contracts may not maintain
their customary or anticipated relationships to the prices of the underlying security or index.
These pricing disparities could occur, for example, when the market for the security futures
contract is illiquid, when the primary market for the underlying security is closed, or when the
reporting of transactions in the underlying security has been delayed. For index products, it could
also occur when trading is delayed or halted in some or all of the securities that make up the
index. The investor may be required to settle certain security futures contracts with physical
delivery of the underlying security. If a position in a physically settled security futures
contract is held until the end of the last trading day prior to expiration, the investor will be
obligated to make or take delivery of the underlying securities, which could involve additional
costs. The actual settlement terms may vary from contract to contract and exchange to exchange.

Although security futures contracts share some characteristics with options on securities (options
contracts), these products are also different in a number of ways.

The purchaser of an options contract has the right, but not the obligation, to buy or sell a
security prior to the expiration date. The seller of an options contract has the obligation to buy
or sell a security prior to the expiration date. By contrast, if an investor has a position in a
security futures contract (either long or short), the investor has both the right and the
obligation to buy or sell a security at a future date. The only way to avoid the obligation
incurred by the security futures contract is to liquidate the position with an offsetting contract.

A person purchasing an options contract runs the risk of losing the purchase price (premium) for
the option contract. Because it is a wasting asset, the purchaser of an options contract who
neither liquidates the options contract in the secondary market nor exercises it at or prior to
expiration will necessarily lose his or her entire investment in the options contract. However, a
purchaser of an options contract cannot lose more than the amount of the premium. Conversely, the
seller of an options contract receives the premium and assumes the risk that he or she will be
required to buy or sell the underlying security on or prior to the expiration date, in which event
his or her losses may exceed the amount of the premium received. Although the seller of an options
contract is required to deposit margin to reflect the risk of its obligation, he or she may lose
many times his or her initial margin deposit. By contrast, the purchaser and seller of a security
futures contract each enter into an agreement to buy or sell a specific quantity of shares in the
underlying security. Based upon the movement in prices of the underlying security, a person who
holds a position in a security futures contract can gain or lose many times his or her initial
margin deposit. In this respect, the benefits of a security futures contract are similar to the
benefits of purchasing an option, while the risks of entering into a security futures contract are
similar to the risks of selling an option.

12. Currencies and Foreign Exchange

Foreign currencies or baskets of currencies may be very volatile and may experience significant
drops in value over a short period of time. The value of a foreign currency will depend, among
other economic indicators, on movements in exchange rates. Risks and special considerations with
respect to foreign currencies include, but are not limited to, economic uncertainties, currency
devaluations, political and social uncertainties, exchange control regulations, high rates of
interest, a history of government and private sector defaults, significant government influence on
the economy, less rigorous regulatory and accounting standards than in the United States,
relatively less developed financial and other systems and limited liquidity and higher price
volatility of the related securities markets.

APPENDIX: ASSET ACCOUNT AND DEPOSIT ACCOUNT — FUNDS AVAILABILITY POLICY STATEMENT

General Policy: Wire transfers, electronic direct deposits, and cash deposits made with a
banker or at an ATM that does not require a deposit envelope will be available on the day we
receive your deposit. Except as described later in this policy, when you make other deposits, the
funds are available on the first business day after the day we receive your deposit. Available
funds may be withdrawn in cash or used to pay checks and other items.

When Your Deposit Is Received: If you make a deposit on a business day before our cutoff times at a
Chase branch or ATM, we will consider that day to be the day of your deposit. However, if you make
a deposit after the cutoff time, or on a day that is not a business day, we will consider the
deposit to have been made on the next business day.

	•	 	For determining the availability of your deposits, every day is a business day, except Saturdays,
Sundays, and federal holidays.
	 
	•	 	Cutoff times for branch deposits vary by location. For most branches, the cutoff time will be the
end of the business day. If it is different, the branch will post signs indicating the earlier
cutoff time. The cutoff time will be no earlier than 2 p.m. local time.

For example: You make your deposit on Friday at 5:45 p.m. and the cutoff time for that branch is
5:00 p.m. We consider the deposit to be received on the next business day, which is Monday. But if
Monday is a holiday, we consider the deposit to be received on Tuesday.

	•	 	For deposits at most ATMs, the cutoff time is 11 p.m. Eastern time. For ATMs with an earlier
cutoff, the ATM screen will notify you of the cutoff time. For all ATM transfers between accounts,
the cutoff time will be determined by where your account is located, regardless of the location of
the ATM, as follows:

	 	 	 
	State Where Account is Located	 	Cutoff Time (all p.m.)
	CT, FL, GA, IN, KY,

	 	9:00 ET
	MI, OH, NJ, NY, WV
	 	 
	IL, LA, OK, TX, WI

	 	9:00 CT
	AZ

	 	9:00 MST (when Daylight Savings Time is in effect, 8:00 MST)
	CO, ID, UT

	 	9:00 MT
	CA, NV, OR, WA

	 	8:00 PT

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	•	 	Deposits placed in a night depository are considered received when we remove them from the night
depository. We will remove deposits not later than the next business day.
	 
	•	 	Branches in some locations may be closed on business days in observance of a state holiday
or because of an emergency, and deposits made when those branches are closed (either at a night
depository or at an ATM that requires an envelope for deposits) will be considered received on the
next business day when the branch is open.
	 
	•	 	All deposits made by mail and addressed to Chase without using a specific branch name and street
address will be considered received by the Chase-By-Mail facility in Louisville, Kentucky as of the
date such deposit is received by this facility.

Longer Delays May Apply: In some cases, we may not make all of the funds that you deposited by
check available by the first business day after the day of your deposit. Funds may not be available
until the second business day after the day of your deposit. However, at least the first $100 of
these deposits will be available on the first business day after the day of your deposit.

If we are not going to make all of the funds from your deposit available on the first business day,
we will notify you at the time you make your deposit. We will also tell you when the funds will be
available. If your deposit is not made directly to our employee, or if we decide to take this
action after you complete your deposit, we will mail you the notice by the day after we receive
your deposit. If you will need the funds from a deposit right away, you should ask us when the
funds will be available.

Funds you deposited by check may be delayed for longer than two business days under the following
circumstances:

	•	 	We believe a check you deposited will not be paid;
	 
	•	 	You deposited checks totaling more than $5,000 in any one day;
	 
	•	 	You re-deposited a check that has been returned unpaid;
	 
	•	 	You have overdrawn your account repeatedly in the last six months; or
	 
	•	 	There is an emergency, such as failure of communications or computer equipment.

We will notify you if we delay your ability to withdraw funds for any of these reasons, and we will
tell you when the funds will be available. They will generally be available no later than the
seventh business day after the day of your deposit.

Special Rules for New Accounts: If you are a new account customer, the following special rules may
apply during the first 30 days your account is open:

	•	 	Funds from deposits of the first $5,000 of a day’s total deposits of cashier’s, certified,
teller’s, traveler’s, and federal, state, and local government checks will be available on the
first business day after the day of your deposit if the deposit meets certain conditions. For
example, the checks must be payable to you. The excess over $5,000 will be available on the
ninth business day after the day of your deposit. If your deposit of these checks (other than
U.S. Treasury checks) is not made in person to one of our employees, the first $5,000 will not
be available until the second business day after the day of your deposit; and
	 
	•	 	Funds from all other check deposits will be available no later than the fifteenth business day
after the day of your deposit.

Holds on Other Funds: If we cash a check for you that is drawn on another bank, we may withhold the
availability of a corresponding amount of funds that are already in your Account. Those funds will
be available at the time funds from the check we cashed would have been available if you had
deposited it.

APPENDIX: OTHER BANKING SERVICES RELATING TO ACCOUNTS

A. FUNDS/WIRE TRANSFERS

1. Definitions

A “funds transfer” means a series of transactions, beginning when an originator issues a payment
order for the purpose of paying the beneficiary of such order (the “beneficiary”), but does not
include payments made by check or credit card, a debit transfer made through the Automated Clearing
House System (“ACH”) or transfers governed by the federal Electronic Fund Transfer Act. The term
“payment order” means an instruction to a receiving bank transmitted orally, electronically, or in
writing to pay a fixed or determinable amount to a beneficiary.

2. Payment Orders

I may issue payment orders orally, electronically or in writing, as arranged, against my Accounts,
subject to your acceptance. You will receive and process payment orders only on your Business Days,
and within your established cutoff hours. You may debit any of my Accounts for the amount of each
payment order you accept and all associated fees. No restrictions upon your acceptance of payment
orders or upon the Accounts which you may debit shall be binding unless agreed to by you in
writing. Unless otherwise agreed, communications requesting cancellation or amendment of payment
orders must be received no later than 4:00 p.m. on the Business Day preceding the day you are to
execute my payment order.

Notwithstanding any instructions by me to the contrary, you reserve the right to utilize any funds
transfer system and any intermediary bank you choose in the execution of any payment order you
accept and may otherwise use any means of executing the payment order which you deem reasonable
under the circumstances.

3. Security Procedure

All payment orders, and communications requesting cancellation or amendment of payment orders,
issued in my name are subject to verification by you pursuant to a mutually agreed upon security
procedure. Unless otherwise agreed, you may furnish confidential security procedure material to any
person authorized on my Account or to any other person you reasonably believe to be authorized to
receive such information. I must safeguard any such security procedure materials and make them
available only to persons who are authorized to give instructions using such procedures.

Unless you and I have agreed in writing to an alternate security procedure, the authenticity of
oral or written (including writings transmitted by facsimile) wire transfer payment orders may, at
your discretion, be verified by telephonic call-back confirmation with an individual purporting to
be a person reflected on your records as having authority to initiate wire transfers. I agree that
this security procedure is a commercially reasonable security procedure for those wire transfer
payment orders.

4. Foreign Currency Transfers

If I issue, and you accept, a payment order for payment outside the U.S. in a currency other than
the U.S. dollar, you shall debit my Account for the U.S. dollar equivalent of the amount of the
foreign currency transferred at your then prevailing rate of exchange or as otherwise agreed. In
processing my funds transfers, other banks may deduct their fees from the payment orders issued to
them. If the beneficiary’s bank is instructed to pay in a currency other than its local currency,
payment may be made by the beneficiary’s bank at its rate of exchange on the date of its payment.
In connection with each funds transfer, I shall be responsible for complying with all local
currency restrictions and any other local law governing the transaction.

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5 . Identification Numbers

In accepting a payment order issued in my name, you may rely upon the identifying number (such as a
Fedwire routing number or account number) of the beneficiary, the beneficiary’s bank or any
intermediary bank and use only such numbers in executing the order. Also, the beneficiary’s bank in
the payment order may make payment on the basis of the identifying number even though it identifies
a person different from the named beneficiary. Accordingly, I shall be responsible for the
consequences of any inconsistency between the name and identifying number, as instructed, of any
party in a payment order.

6. Funds Transfer Notices

In any funds transfer where I am the recipient or beneficiary of the transfer, you shall not be
obligated to notify me of any such payment to my Account, other than to record such payment in my
next regular statement of account. In the event that you send me an additional notice of the
receipt of such a funds transfer for my account, I may not withdraw such funds until you have
received payment from the sender of such transfer.

7. Other Procedures

You may from time to time provide me with operational procedures or instructions regarding your
funds transfer service.

8. Direct Deposit

I may designate you as the bank to receive deposits made directly by any payor to any of my
Accounts. These direct deposits may include, for example, my salary, Social Security benefits, and
pension or annuity payments.

If you receive a demand for reimbursement from any payor claiming that I was not entitled to
certain payment(s), you are authorized to charge my Accounts for the amount of the claim. Any
action by you for reimbursement from me may also be made against my estate, heirs and legal
representatives, who shall be liable for any claims made against and/or expenses incurred by you.
You may terminate any direct deposit service at any time without notice and/or make this service
subject to other conditions, at your discretion.

9. Limitations On Liability

Your liability for payment orders that are not authorized and not effective as my order or that are
not enforceable against me shall be limited to a refund of the amount paid pursuant to such payment
order, and if applicable law requires, interest on the refundable amount. Under no circumstances
will you or any Morgan Affiliate be liable for any indirect, incidental, special or consequential
damages, regardless of the form of action and even if you or such Morgan Affiliate has been advised
of the possibility of such damages, nor shall you or any Morgan Affiliate be liable for any
attorneys’ fees I incur.

B. RECEIPT OF AUTOMATED CLEARING HOUSE ENTRIES

All Automated Clearing House (“ACH”) credits and debits received for my account will be received by
you subject to the rules of the National Automated Clearing House Association and any other
applicable ACH rules. I agree to be bound by the ACH rules. Any credit given by you to me for an
ACH credit shall be provisional until you receive final payment. If you do not get paid, you may
revoke the provisional credit and charge the amount to my Account or obtain a refund from me, in
which case the originator of the credit entry shall not be deemed to have paid me the amount of
such entry. Unless you otherwise agree in writing, you shall not notify me of your receipt of ACH
transactions other than as recorded in my next regular Account statement.

APPENDIX: GENERAL RULES AND REGULATIONS FOR DEPOSIT ACCOUNTS

A. DEPOSITS IN AND CHARGES AGAINST MY ACCOUNT

1. Final Payment of Checks, Drafts and Other Instruments

Any Item I deposit is received for collection only, even if you cash the Item (in whole or in part
by a deposit less cash) or give me credit for it. All Items are credited or cashed subject to final
payment.

You choose the method of obtaining final payment of an Item for me and may use other banks in the
process. You are not responsible for actions taken by other banks, nor for the loss or destruction
of any Item in the possession of other banks or in transit. I agree that you have used due care in
selecting any collecting agent that is (i) a bank or savings institution insured by the Federal
Deposit Insurance Corporation or other governmental entity, (ii) a Federal Reserve Bank, or (iii)
any clearinghouse association. Any bank may refuse to honor a deposited Item or may honor one
refused by another bank. You are not responsible for any act or failure to act that is reasonable
under the circumstances or that is taken or omitted under the laws, rules, regulations, or
practices referenced herein.

2. Returned Items and Notices of Claims

If any Items are returned by the payor bank for any reason, or if any instrument you or a
subsequent collecting agent receives in payment for collection Items is not paid, or if any Item
drawn on you is not paid, you may charge the Item back to my Account. If the payor bank on any Item
returns the Item to you or makes a claim against you based on an asserted unauthorized signature or
endorsement or an asserted alteration, you may accept that return or pay that claim and charge my
Account for all or any part of the amount of the Item, even if the claim is made after the payor
bank’s return deadline. If I deposit or cash an Item drawn on you and the Item or any endorsement
is asserted to be altered, forged or unauthorized, you may charge back all or any part of the
amount of the Item, even if the charge back is made after your midnight deadline. If you determine
to charge my Account(s), you shall notify me in a timely manner. You may exchange information with
others concerning any such claim made against you. If you receive notice that an Item deposited in
my Account or that I cashed has not been paid, you may either immediately charge back my Account or
place a hold on my Account and charge my Account for the Item when the Item is returned to you. If
a returned Item is one that you cashed for me, you may charge back or hold funds in any of my
Accounts with you, including joint accounts. Any Item lost in the mail or transit or chargeable
back to me for any other cause may be charged back whether or not the original Item itself can be
returned.

3. Account Debiting

(a) General

My Account may be debited on the day an Item is presented to you or at such earlier time as
notification is received by you by electronic or other means that an Item drawn on my Account has
been deposited for collection in another financial institution. A determination of my Account
balance for purposes of making a decision to dishonor an Item for insufficiency of available funds
may be made at any time between the receipt of such presentment or notice and the time of return of
the Item, and no more than one such determination need be made.

(b) Facsimile Signature and Signatures with a Symbol You may in your discretion agree to open an
account with facsimile signatures or signatures with a symbol. A “facsimile signature” is any
signature made other than by the signer’s

24

 

manual writing, and includes any signature made
by any device (including a manual stamp) or machine
(including a computer-generated copy or photocopy
of a manual signature). A “signature with a symbol”
is any signature made by an “X” or any other set of
marks, or any signature containing a symbol, in
each case other than the name of the person
signing. If you open an account with authorized
facsimile signatures, I authorize you to pay any
Item bearing a facsimile that resembles the
signature on file. If you open an account allowing
a signature with a symbol, I authorize you to pay
any Item bearing the same or any similar symbol in
the signature line. I agree that there is no
commercially reasonable way for you to determine
whether facsimile signatures or signatures with a
symbol are authentic or authorized. If I request an
account to bear facsimile signatures or a symbol as
a signature, I assume all risk of forged or
unauthorized Items bearing a facsimile signature or
a signature with a symbol.

(c) Electronic Instructions

You may honor any instruction received by
telecopier, computer or other electronic
transmissions so long as this complies with your
internal policies and procedures if you reasonably
believe such instruction to be genuine or if such
instructions are received in accordance with any
security procedures agreed upon by you and me or
in accordance with any other agreements you may
have with me regarding the acceptance of such
instructions.

(d) Preauthorized Drafts

From time to time, you may receive Items generated
by third parties for payment against my Account
that do not bear my signature. Typically, such
Items (known as “preauthorized drafts”) are used to
pay for merchandise or other debts owed by me to
the third party. I authorize you to pay such Items
if presented for payment against my Account. In
addition, your charging of this type of Item to my
Account, without timely objection by me pursuant to
this Agreement, shall constitute authorization by
me to charge against my Account any subsequent Item
generated by the same third party, whether or not I
state to you after payment that such subsequent
Item was not authorized by me, unless I have
notified you in writing a reasonable time before
any such subsequent Items are presented to you for
payment that you should no longer charge to my
Account Items generated by that third party.

(e) Insufficient Funds and Returned Item Fees

You may charge a fee for any item presented when my
account is overdrawn, whether or not you pay the
item. If you pay the item, you will charge an
Insufficient Funds fee. If you return the item, you
will charge a Returned Item fee. You will not
charge an Insufficient Funds Fee for a
non-repeating (“everyday”) debit card transaction
in two cases: if I have notified you not to pay
debit card overdrafts or, for personal accounts, if
I have not notified you to do so by August 15,
2010.

You may limit the number of Returned Item and
Insufficient Funds fees you charge for a business
day. You will not charge Insufficient Funds fees if
my ending account balance is overdrawn by $5.00 or
less.

I will refer to my fee schedule for information
about what fees apply and how fees are
calculated for my account.

4. Overdrafts

You may, but are not required to, refuse to pay any
item unless my available account balance at the
time is equal to or more than the amount of the
item, plus all other items received. Even if you
have paid overdraft items previously, you will not
be required to do so at any future time. You
generally will not authorize a non-repeating
(“everyday”) debit card transaction if my available
account balance is insufficient to pay the
transaction in two cases: if I have notified you
not to pay debit card overdrafts or, for personal
accounts, if I have not notified you to do so by
August 15, 2010. My “available account balance” is
the balance after deducting (1) deposits that are
not yet available for
withdrawal under my funds availability policy,
(2) debit card or other transactions that you
are legally obligated to pay, or have already
paid out in cash, (3) other pending transactions
like ACH transactions, and (4) any holds on my
account to comply with court orders or other
legal requirements.

An “overdraft,” or “overdrawing” my account,
means that my account balance, minus deposits
that are not yet available and minus holds on my
account to comply with court orders or other
legal requirements, is negative or is less than
the total of all items presented on a business
day.

You look at my account balance only once from
the time you receive an item until you return
it to decide whether the item causes an
overdraft. You may charge my account for a
debit card transaction based on the
authorization request.

Generally, for each business day, you will (i)
add deposits to my account, (ii) subtract wire
transfers, debit card transactions, online
banking transactions, ATM withdrawals, teller
cash withdrawals, cashed checks and deposited
checks drawn on you, in the order in which they
were authorized, withdrawn, or deposited, and
(iii) subtract all other items in highest to
lowest dollar amount. You reserve the right to
use a different order in certain states.

It is my responsibility to avoid overdrawing my
account. I can talk with a banker to learn about
Overdraft Protection services. You also offer
Personalized Alerts to keep me informed about the
balance and transactions in my account.

I must immediately pay the amount of any
overdraft together with any applicable fees or
charges. If I fail to do so, I may be charged
additional fees or interest. Until I pay such
balance in full, I will pay interest on the
amount of the overdraft at the rate indicated on
the applicable rate schedule. You also may
report me to credit reporting agencies, close my
account, or both. These actions could affect my
ability to open accounts in the future.

I authorize you to apply any subsequent deposit
against the amount of any overdraft and resulting
fees or charges. Subsequent deposits include any
federal or state benefit payments that I choose
to deposit in any account (including direct
deposit of Social Security). I understand and
agree that if I do not want my benefits applied
in this way, I may change my direct deposit
instructions to the benefits payor at any time.

I agree to pay all costs and expenses, including
attorney’s fees, you incur in collecting any
overdraft. In addition, if you close my account
with an outstanding overdraft and charge off the
amount of the overdraft, you may charge a
Collection fee. You may still pursue collection
of my account (including suing me) after it is
charged off.

Cash Sweep Service

I must separately sign up for the Cash Sweep
Service as it does not automatically apply to
new accounts.

(a) Definitions: As used in this Cash Sweep
Service Agreement, the following terms shall
have the following meanings: “You” or “Your”
means the person(s) or entity who has requested
the Cash Sweep Service (“Request”). “Cash Sweep
Service” means the automated funds transfer
established pursuant to the Request and
Agreement. “Funding Account” means the account
from which the Cash Sweep transfers are made.
“Checking Account” means the personal checking
account for which the Cash Sweep Service is
requested or the business checking account for
which the Cash Sweep is requested. “Checking
Account Minimum Balance” means the balance that
will trigger the transfer from the Funding
Account. “Target Balance” is the balance that
will be maintained in the checking account after
the transfer from the funding account.

25

 

(b) Cash Sweep Service Request: The Request must
specify the Checking Account and the Funding
Account. For personal accounts, the Funding Account
must be a personal savings account at the Bank. For
business accounts, the Funding Account must be a
business savings account at the Bank. The Cash
Sweep will be effective after the Bank has received
your Request and had a reasonable time to act upon
it.

(c) Activation: Whenever the Checking Account is
below the established minimum balance, such event
will constitute a transfer under this Agreement
and J.P. Morgan will initiate a transfer (Sweep)
from the Funding Account sufficient to increase
the Checking Account balance to the prescribed
Target Balance. We have no obligation to inform
the checking account owner if the status of the
Funding Account or actions of the Account owner
results in the Cash Sweep Service being
unavailable.

(d) Maximum Cash Sweep Transfer Amount: The
maximum amount of the Cash Sweep Transfer will be
the available balance in the Funding Account. If
the amount of the Transfer calculated in paragraph
c above exceeds the Maximum Cash Sweep Transfer,
then notwithstanding the provisions of paragraph c
above the transfer will be the total available
balance in the Funding Account.

(e) Limits on Savings Account Transfers: Transfers
from savings accounts are considered
“preauthorized transfers”. The number of such
Transfers that may be made during each month or
statement cycle is limited in accordance with
federal regulations and our Account Agreement for
deposit accounts.

(f) Termination of Cash Sweep Service by the Bank:
We may terminate the Cash Sweep Service at any
time by sending written notice to the last address
for the Checking Account shown on our records. If
the Funding Account is closed or blocked for
usage, the Cash Sweep Service will not be
available. If the Checking Account is closed or
blocked for usage, the Cash Sweep Service for that
Checking Account will not be available.

(g) Termination of Cash Sweep Service by Clients:
The owner of the Checking Account or the Funding
Account may cancel the Cash Sweep Service for that
Checking Account by requesting the cancellation in
person at a branch or by delivering to us written
notice of cancellation. Any cancellation under
this paragraph seven will be effective after we
have received notice of such cancellation and had
a reasonable time to act upon it.

(h) Amendment: We may at any time change the
terms of this Agreement, by giving at least 30
days’ prior written notice of such change to the
owner of the Checking Account.

(i) General Provisions: This agreement is binding
on the owner of the Checking Account and the
Funding Account.

5. Acceptable Form of Items

I will use checks in a form authorized by you. You
may refuse to pay checks drawn in any other form.
You will not be responsible for loss, damage,
inability to process, or failure to pay
nonconforming Items or checks purchased through
vendors unassociated with you.

6. Conditional Checks

I will not put any condition, restriction, or
legend, such as (without limitation) “void after
60 days” or “full and final settlement,” on any
Item. You will not be required to comply with any
such condition, restriction or legend, whether
pre-printed or otherwise. If any such Item is
presented to you for payment, you may, in your
discretion, pay the Item or return it unpaid,
whether or not the condition, restriction, or
legend has been satisfied.

7. Postdated, Stale Dated, or Nonnegotiable Items

You will not be liable for any damages caused by
premature payment or certification of a
post-dated Item. You will not be required to pay
any Item presented more than six months after its
date or a non-negotiable Item, but you may pay
such an Item and charge my Account for it. If you
pay or certify a postdated Item, an Item
presented more than six months after its date, or
a non-negotiable Item, you will have the rights
of a holder in due course of that Item.

8. Cashing of Items

You may, in your discretion, refuse to cash any
Item payable to me or indorsed to me. If you cash
any such Item and it is returned unpaid, you are
authorized to deduct the amount of such Item from
any Account maintained by me, whether
individually or jointly. In addition, you may, at
your discretion, cash Items drawn by me on my
Account when presented by the holder. If a payee
who is not one of your deposit account clients
presents an Item drawn on my Account for cash,
you may refuse to cash the Item or may charge the
payee an Item cashing fee.

9. Withdrawal Limitations

You may refuse to allow a withdrawal from any
Account in certain cases, for example: there is
a dispute about my Account (unless a court has
ordered you to allow the withdrawal); a legal
garnishment or attachment is served; my Account
is being used as Collateral to secure an
Obligation; any required documentation has not
been presented; or I fail to repay an
Obligation to a Morgan Affiliate on demand or
when due. I will be advised of the reasons for
refusal if such action is taken.

In addition, withdrawals from an ATM or by
other Card transfers are limited as indicated
in the current Banking Card Agreement.

10. Stop Payments

You will accept from me a stop payment order on
an Item drawn on my Account provided you have a
reasonable opportunity to act on the order. I
agree that one Business Day to act upon a stop
payment order is a reasonable amount of time,
provided, however, that a stop payment order will
not be effective on an Item previously certified,
issued or paid by you. You will not be able to
stop payment on an Item unless I specify the
account number, the exact amount of the Item, the
Item number, the payee, and its date. Where
permitted by law, you may stop a certified Item,
or an official check, at your discretion, if the
certified Item or official check has been lost,
stolen or destroyed and upon my providing an
affidavit of fact, a surety bond or other form of
security acceptable to you. A stop payment order
is effective for 180 days, unless I renew the
order in writing within that period.

You shall not be liable for failure to
effectuate a stop payment order if: 1) I do not
provide you with all the information as
enumerated above and with a reasonable
opportunity to effectuate the stop payment
order; 2) you determine, as permitted by law,
not to stop payment on a certified Item or
official check; or 3) the Item in question is a
postdated Item.

If I wish to stop payment on a preauthorized
electronic transfer from or any other electronic
charge against my Account, I must write or call
you so that you receive my request three (3)
Business Days or more before the payment is
scheduled. If I call, you may also require me to
present my request in writing within 14 days
after I call.

11. Service Charges

My Account, whether active or inactive, is
subject to various service charges more
specifically described in the applicable fee
schedule. For example, you may impose service
charges for certifying or stopping payment on a
check or if balances are below the stated minimum
requirements. You will deduct

26

 

service charges from my Account and you may change
the amount of charges or the services for which
charges will be required from time to time. The
fee schedule in effect from time to time is
available upon request and is made a part of this
Agreement.

12. Endorsements

As a paying bank and as a bank of first deposit,
you are required to place your endorsement stamp in
prescribed positions on the back of a check. I
assume all responsibility and liability for any
loss that you may suffer as a result of (i) my
endorsement being placed on the back of the check
in a place or manner which obscures other
endorsements which then causes a delay in the
forward processing and/or return processing of the
check, or (ii) issuance of a check on my Account in
such a manner that information, marks, or bands on
the back of the check obscure endorsements. I must
place an endorsement on the back of a check only in
the area within 1.5 inches from the “trailing edge”
of the check. The trailing edge of the check is the
left side of the check looking at it from the
front. You retain the right to refuse to accept a
check for deposit when the back of the check is
unreasonably obscured.

13. My Duty to Protect Checks

I agree to protect my blank checks and other
instruments from theft or loss, and to notify you
promptly if any blank checks or other instruments
are lost or stolen. I further agree to register a
complaint of any theft of blank checks or other
instruments, or any unauthorized use of the
Account, with a local law enforcement agency, and
to provide you with a copy of the law enforcement
agency’s official report.

14. My Duty to Inspect Statements and Advices

You will send my monthly or periodic Deposit
Account statement(s) (“Statement(s)”) (which may
include a record of transactions and cancelled
Items) or advices to the address in your records
for me, and I am considered to have received the
Statements upon mailing, whether or not I actually
receive them. If I have asked that you hold my
Statement, I am considered to have received the
Statement when you make it available for me to pick
up.

I shall exercise reasonable care and promptness in
examining the Statement or advice. I shall notify
you in writing within 60 calendar days of the
mailing of the Statement or advice, or from the
time the Statement or advice is made available to
me, of any errors, discrepancies or irregularities,
including, but not limited to, unauthorized or
missing drawer’s signature or alteration,
unauthorized transfers or withdrawals of funds by
wire or otherwise, or of the nonreceipt of an
expected Statement or advice. However, I shall
notify you, in writing, within six months of the
mailing of the Statement or advice, or from the
time the Statement or advice is made available to
me, that any endorsement was unauthorized,
improper, or missing on any Item drawn on my
Account, that any Item payable to me was improperly
negotiated by you, or that any deposit was not
properly credited to my Account. You will not be
responsible for any loss suffered by me if I do not
notify you in writing within these stated time
periods.

I shall not institute any legal proceeding or
action against you for any claim which I may have
regarding any such errors, discrepancies or
irregularities, including, but not limited to
those listed above unless a) I have given the
written notice described above, and b) such legal
proceeding or action has been commenced: (i)
within one year after the date when such Statement
or advice was mailed or made available to me in
the case of an unauthorized or missing drawer’s
signature, an unauthorized transfer or withdrawal
of funds by wire or otherwise, or an alteration on
the face or back of an Item; (ii) within one and a
half years in the case of an unauthorized,
improper, or missing endorsement, an Item payable
to me that was improperly negotiated by you, or a
deposit not properly
credited to my account; or (iii) if my account
is maintained in Texas, within two years in all
cases.

15. Liability

I AGREE THAT YOU SHALL NOT BE LIABLE FOR
INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES
REGARDLESS OF THE FORM OF ACTION AND EVEN IF YOU
HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.

Notwithstanding the provisions of the General
Terms, except as otherwise provided by law, your
liability, if any, in the event of your (i)
failure to stop payment on an Item; or (ii)
payment of an Item bearing an unauthorized
signature, forged drawer’s signature, forged
endorsement or alteration, shall be limited to
the face amount of the Item.

16. Assignments/Power of Attorney

No Deposit Account may be assigned, except as
collateral. No collateral assignment will be
effective unless you consent to the assignment
in writing. You may refuse to consent in your
sole discretion. Any assignment contrary to this
paragraph is void.

You may, in your discretion, recognize the
authority of someone to whom I have given power
of attorney with regard to any of my Deposit
Accounts subject to documentation approved by
you or as authorized by applicable law.

B. SUBSTITUTE CHECKS AND YOUR RIGHTS

NOTE: FOR PURPOSES OF THIS SECTION B ONLY,
“YOU” MEANS THE ACCOUNTHOLDER AND “WE” MEANS
JPMCB.

What is a substitute check?

To make check processing faster, federal law
permits banks to replace original checks with
“substitute checks.” These checks are similar in
size to original checks with a slightly reduced
image of the front and back of the original
check. The front of a substitute check states:
“This is a legal copy of your check. You can use
it the same way you would use the original
check.” You may use a substitute check as proof
of payment just like the original check.

Some or all of the checks that you receive back
from us may be substitute checks. This notice
describes rights you have when you receive
substitute checks from us. The rights in this
notice do not apply to original checks or to
electronic debits to your account. However, you
have rights under other law with respect to
those transactions.

What are my rights as a consumer regarding substitute checks?

In certain cases, federal law provides a special
procedure that allows you to request a refund for
losses you suffer if a substitute check is posted
to your account (for example, if you think that
we withdrew the wrong amount from your account or
that we withdrew money from your account more
than once for the same check). The losses you may
attempt to recover under this procedure may
include the amount that was withdrawn from your
account and fees that were charged as a result of
the withdrawal (for example, bounced check fees).

The amount of your refund under this procedure is
limited to the amount of your loss or the amount
of the substitute check, whichever is less. You
also are entitled to interest on the amount of
your refund if your account is an
interest-bearing account. If your loss exceeds
the amount of the substitute check, you may be
able to recover additional amounts under other
law.

If you use this procedure, personal accounts may
receive up to $2,500 of the refund (plus
interest if your account earns interest) within
10 business days after we received your claim
and the remainder of your refund (plus interest
if your account

27

 

earns interest) not later than 45 calendar days
after we received your claim. We may reverse the
refund (including any interest on the refund) if we
later are able to demonstrate that the substitute
check was correctly posted to your account.

How do I make a claim for a refund?

If you believe that you have suffered a loss
relating to a substitute check that you received
and that was posted to your account, you must give
an oral or written claim to your J.P. Morgan
representative at the telephone number or address
listed on your statement.

You must contact us within 40 calendar days of the
date that we mailed (or otherwise delivered by a
means to which you agreed) the substitute check in
question or the account statement showing that the
substitute check was posted to your account,
whichever is later. We will extend this time period
if you were not able to make a timely claim because
of extraordinary circumstances.

Your claim must include:

	•	 	A description of why you have suffered a loss (for example, you think the amount withdrawn was
incorrect);
	 
	•	 	An estimate of the amount of your loss;
	 
	•	 	An explanation of why the substitute
check you received is insufficient to confirm that you suffered a loss; and
	 
	•	 	A copy of the
substitute check (and/or) the following information to help us identify the substitute check (the
precise amount of the check, the check number, the name of the person or payee to whom you wrote
the check, the amount of the check).

APPENDIX: ELECTRONIC FUND TRANSFERS

If I am an individual who uses electronic funds
transfer (EFT) services, I have certain rights and
responsibilities. These rights and responsibilities
are defined by the Electronic Fund Transfer Act (15
U.S.C. 1693, et seq.) and Regulation E of the
Federal Reserve Board. One requirement of this Act
and the Regulation is that all financial
institutions must make certain disclosures to all
EFT users. If the EFT transactions that I make are
not from an Account established primarily for
personal, family or household purposes, or if the
type of transaction is not governed by the federal
Electronic Fund Transfer Act, the rights described
in this Appendix are not applicable to me, except
that your liability shall be governed by the
section designated “Alternate Liability
Provisions.” If I use any of the EFT services
referred to below, I will read the appropriate
sections carefully. Even if I use only one of your
EFT services, I will be sure to read the section
entitled General Information.

A. BANKING CARD

1. Services Available at Chase Machines

If I have a Banking Card (a “Card”; the Banking
Card which bears a MasterCard or Visa logo is
sometimes referred to herein as the “Debit Card”;
and the Banking Card which does not bear the
MasterCard or Visa logo is sometimes referred to
herein as the “ATM Card”), I may use my Cards with
my Personal Identification Number (“PIN”) in any of
your automated teller machines2 with
those Accounts I have told you that I want to use
for such purposes to:

	•	 	Withdraw cash from the
Accounts.
	 
	•	 	Make deposits to the
Accounts3.
	 
	•	 	Learn the balance in the
Accounts.
	 
	•	 	Transfer money among Accounts.
	 
	•	 	Make payments to any credit card
account by transferring money among Accounts or
enclosing payments.

(Some of the above-mentioned services, and
access to all of the Accounts, may not be
available at all Machines). I may also use my
Debit Card to make purchases from merchants
which accept Master Card and Visa. Those
purchases will be deducted from my Account as if
they were a point of sale purchase.

I may receive more than one Account Card in
connection with an Account, as in the case of a
joint account, but for the purposes of this
section, all Cards issued in connection with an
Account will be referred to collectively as an
Account Card.

Each Card issued in connection with an Account
is referred to in this Section as an “Account
Card.”

I may use the Banking Card for cash withdrawals
at ATMs or merchants for up to $2,000 each day or
the available balance of my Account, whichever is
lower. Total purchases made with my Banking Card
may not exceed $25,000 each day (unless I am
otherwise notified in writing) and may be lower
in some cases. The day for withdrawal limits
starts at 12:00 a.m. each day and ends at 11:59
p.m. the same day.

Generally, deposits made at a Machine on a
Business Day before 12 noon will have that day
as the day of deposit. Local ATMs will provide
the exact cut-off time. For deposits made after
that time, or on a day that is not a Business
Day, the day of deposit will be the next
Business Day.

2. Services Available at Other Institutions’ Machines

Included among the services which you offer is
the right to use my Cards not only at your
Machines, but at Machines owned or operated by
other financial institutions which are
participating in various networks of which you
are a member (collectively, the “Networks”). When
I use my Cards in any Machine in any of the
Networks (each, a “Network Machine”), I may not
have access to all of my linked Accounts. At some
Network Machines, I may not be able to transfer
funds between Accounts. Transactions at Network
Machines may be subject to a fee assessed by the
Machine’s owner.

The services available at Network Machines are
more limited than the services available to me
at your Machines. Any of the Networks or
financial institutions participating in any of
the Networks may, from time to time, eliminate
or restrict the services described above.

3. Purchase Transactions

I may use my Banking Card to purchase goods and
services from certain vendors using
PIN-authorized electronic transfers (each, a
“PIN Purchase Transaction”). When a PIN Purchase
Transaction is made, there will be an immediate
electronic withdrawal from the Account I have
linked to my Card. I may also use my Debit Card
to make purchases at any merchant which accepts
Master Card and Visa (a “Debit Card Purchase
Transaction”, and collectively with PIN Purchase
Transactions, “Purchase Transactions”).

Any PIN Purchase Transaction will be subject to
the aggregate daily limitation set out in
paragraph A.1 above for cash withdrawals from
the Accounts. Debit Card Purchase Transactions
are subject to a daily spending limit specified
in the current Banking Card Agreement.

If I use my Card to access an Account and the
daily authorization limit attached to my Card is
exceeded, you may, at your sole discretion,
authorize the transaction.

For merchant purchases, you have the right to
place a temporary hold on my Account, which
may affect available

 

			
	2	 	Automated teller machines are
also referred to, from time to time, as “ATMs” or
“Machines.” The terms “ATM” and “Machine” also
apply to devices which provide some, but not all,
of the functions described herein.
	 
	3	 	Not all JPMCB ATMs accept deposits.

28

 

balances for purposes of authorizing other
transactions or honoring other items posting to my
Account, in an amount equal to the authorization
amount received through the payment authorization
system. Occasionally, merchants do not provide
sufficient information with the transaction to
allow you to match the final amount to the
authorized amount. In these cases the temporary
hold will remain on my Account for three business
days. If the underlying transaction posts after a
temporary hold drops off, you will still have the
right to post the transaction against my Account.

4. Transactions Occurring In A Currency Other
Than U.S. Dollars

The exchange rate applied by Visa or MasterCard to
Card transactions that occurred initially in a
different currency will be (i) a rate selected by
Visa or MasterCard from the range of rates
available in wholesale currency markets for the
applicable central processing date, which rate may
vary from the rate Visa or MasterCard itself
receives, or (ii) the government mandated rate in
effect for the applicable central processing date.
The rate in effect on the applicable processing
date may differ from the rate on the date I used my
Card. For purchases, ATM and non-ATM cash
transactions, I acknowledge that you will add three
percent to the amount provided to you by Visa and
MasterCard.

5. Transfers Which Do Not Require the Use of a Card

I may also authorize transfers of funds among
Accounts without using my Card (for example, by
calling you and requesting a transfer) and I may in
certain circumstances also authorize transfers, for
example, to make a payment to my credit card
account. Those services will be more fully
described in those documents provided in connection
with the Account that permits such transfers.
Transfers made without the use of my Card will be
reported on my statement for the Account involved
in the same fashion that pre-authorized transfers
involving such Accounts are reported.

The transfers described above are in addition to
the preauthorized transfers to and from my Account
described in Part B below.

6. Unauthorized Transfers

If I believe that any of my Cards has been lost or
stolen or someone has transferred or may transfer
money from any of my Accounts without my
permission, I will refer to Part A.8 and Part D
below for instructions as to what to do.

7. Fees

I may be charged a fee for withdrawals of cash
under certain circumstances, whether they take
place at your Machines or a Network Machine as
well as for Purchase Transactions and transfers
made without the use of a Card. The circumstances
under which such charges may be imposed and the
amount of such charges are covered by the fee
schedule for the Account from which the funds are
withdrawn or transferred. If I use a Network
Machine, the ATM operator may charge me a fee for
any withdrawal and may also charge a fee for a
balance inquiry even if I do not complete a
withdrawal.

For purchases, ATM and non-ATM cash
transactions that occurred initially in a
currency other than U.S. dollars, I
acknowledge that you will add three percent to
the amount provided to you by Visa and
MasterCard.

You reserve the right to impose additional fees
and to change fees upon notice to me.

8. My Liability

I shall tell you AT ONCE if I believe any of my
Cards and/or PIN have been lost or stolen or that
an unauthorized transaction has occurred in my
Accounts Telephoning you at the telephone numbers
listed in paragraph D.6 or visiting my branch to
supply the appropriate information are the best
ways of controlling my possible losses (see Part D
for further information). If I do not do
so, I could lose all the money in my Account,
including the amount of any credit or overdraft
protection line which can be drawn against by
using the lost or stolen Card.

If I believe any of my Cards or PIN have been
lost or stolen or that an unauthorized
transaction has occurred in any of the Accounts,
and I tell you within two (2) Business Days after
I discover the loss or theft, I can lose no more
than $50 if someone uses that Card without my
permission or otherwise does a transaction
without my authorization .If I do not tell you
within two (2) Business Days after I discover the
loss or theft of any of my Cards or PIN or that
an unauthorized transaction has occurred in any
of the Accounts, and you can prove that you could
have stopped someone from using that Card or from
otherwise doing a transaction without my
authorization if I had told you, I could lose as
much as $500. Furthermore, if any Account
statement shows transactions that I did not do, I
shall tell you AT ONCE. If I do not tell you
within 60 days after a statement showing such a
transaction was transmitted to me, I may not get
back any money I lost after the 60 days if you
can prove that you could have stopped someone
from taking the money if I had told you in time.

If a good reason, such as a long trip or
hospital stay, kept me from telling you, you
will extend the time periods.

If an unauthorized individual uses my Card for
Purchase Transactions, I will not be liable as
long as (1) my Account is in good standing; (2)
no more than two incidents of unauthorized use
involving my Account have been reported in the
last 12 months; and (3) I used reasonable care
in safeguarding the Card.

In the case of Debit Card Purchase Transactions
where the preceding paragraph does not apply,
my liability for transactions involving my
Card, where my Card has been lost or stolen, is
limited to the amount of liability applicable
to credit card losses under the Federal
Truth-in-Lending Act, which presently does not
exceed $50.

9. Records of Transfers

I will receive or have the option to receive the
documentation referred to in paragraph D.3 for
any transaction that I do, whether it involves a
Card or not, or if it is done at one of your
Machines or a Network Machine.

B. AUTOMATIC PAYMENTS

If I have arranged for certain automatic
payments from one of my Accounts, such as
insurance premiums, or if I have arranged for
preauthorized transfers into an Account, such as
Social Security or salary direct deposit, the
following provisions apply.

1. I Have the Right to Stop Payment

If I have arranged in advance to make regular
payments from my Account, I can stop any of
these payments. Here’s how:

I can call or write my J.P. Morgan Team at the
telephone number and address on my monthly
statement so that you receive my request in
three (3) Business Days or more before the
payment is scheduled. If I call, you may also
require me to present my request in writing
within 14 days after my call. The charge for
each stop payment order will be the then current
charge for such service as set out in the
schedule of fees for the Account from which such
payment was to be made.

If I stop any pre-authorized payment to another
party, you may not make further payments to that
party until I have provided a new authorization
or have requested you in writing to resume making
those payments.

2. Notice of Varying Amounts

If these regular payments vary in amount, the
person or company I am going to pay will tell
me 10 days before each

29

 

payment when it will be made and how much it will
be. Instead, I may arrange with the person or
company to receive this notice only when the
payment would differ by more than a certain amount
from the previous payment, or, alternatively, when
the amount would fall outside certain limits that I
set.

3. Liability for Failure to Stop Payment of a Transfer I Previously Authorized

If I order you to stop one of these payments three
(3) Business Days or more before the transfer is
scheduled, and you do not do so, you will be liable
to me for those losses or damages provided by law.

4. Charges

For each automatic payment from an Account, I may
be charged the fee described in the fee schedule
for the Account from which such transfer was made.

5. How to Find Out About Transfers to an Account

If I have arranged to have direct deposits made
into any Account(s) at least once every 60 days
from the same person or company, I can call my J.P.
Morgan Team at the number shown on my statement to
find out whether the deposit has been made. In
addition, I may check my balance in the Account by
using the Machines.

6. Limitations on Transfers from Certain Accounts

Automatic payments from a savings or money market
account, such as the Money Market Deposit Account,
are subject to restrictions under Federal law. If I
exceed Federal transfer restrictions, you may
return the transfer unpaid, charge me a fee,
convert my Account to a non-interest bearing
checking account, or do more than one of the above,
as set forth in Section 2 of the Money Market
Deposit Account Agreement.

C. OTHER EFT SERVICES

You may offer me, or Authorized Persons, other
computer or online banking and bill payment
services which can be accessed from our home,
office or other remote location and if you do so
those services will be governed by the agreements
and disclosures you provide when I sign up for the
services.

Text Message Transfers

If you send me a text message with a transfer
option, including an Account balance alert, I may
respond to request a transfer between eligible
accounts. To use the service, I can follow the
transfer options shown via the text message from
you. Not all accounts are eligible for transfer
via text message request. You must receive a text
message transfer before 11 p.m. Eastern time on a
business day for the transfer to be effective the
same day. Otherwise, the transfer will be
effective the next business day.

D. GENERAL INFORMATION

1. Account Information Disclosure

The J.P. Morgan Privacy Policy governs the
disclosure of information about my Accounts
by J.P. Morgan.

2. Your Liability for Failure to Complete Transactions

If you do not complete a transaction on time or in the correct amount according to your agreement
with me, you will be liable for those damages that the law imposes in such cases. However, there
are some exceptions. You will not be liable, for instance:

	•	 	If, through no fault of yours, I do
not have enough money in the Account for the transaction.
	 
	•	 	If the transaction would cause me to exceed
the credit limit on any overdraft line I may have.
	 
	•	 	If the Machine where I am making a withdrawal
does not have enough cash.
	 
	•	 	If the terminal was not working properly and
I knew about the breakdown when I started my
transaction.
	 
	•	 	If circumstances beyond your control (such
as fire or flood) prevent the transaction,
despite reasonable precautions that you have
taken.
	 
	•	 	If other agreements between us such as my
Asset Account, Checking Account, or Money Market
Deposit Account Agreements, provide other
exceptions.
	 
	•	 	My Account is not in an active status.

The list of examples set out in this paragraph 2
is meant to illustrate circumstances under which
you would not be liable for failing to complete
a transaction and is not intended to list all of
the circumstances where you would not be liable.

3. Documentation

(a) Periodic statements

I will receive a monthly account statement for
each Account to which funds have been credited
or in which transactions have been done showing
all electronic transfers to or from that
Account. In some instances, more than one
Account may appear on a statement. I may
request, and you may agree to, an adjustment to
the frequency of account statements rendered.

(b) Transactions Made at Machines

A transaction record will be offered to me at
the time I make any transaction using one of
your Machines. It will be the responsibility of
the owner or operator of any Network Machine to
offer a record to me when the transaction takes
place at a Network Machine.

4. Your Business Days

A Business Day is Monday through Friday,
excluding state and federal holidays.

5. In Case of Errors or Questions About
My Electronic Transfers

I will call or write to you at the address
indicated on my Account statement as soon as I
can if I think my statement or transaction
record is incorrect, or if I need more
information. You must hear from me no later
than 60 days after you send me the FIRST
statement on which the problem or error
appeared.

	•	 	I will tell you my name and the account
number(s) of the Account(s) involved.
	 
	•	 	I will describe the error or the
transaction I am uncertain about, and explain
as clearly as I can why I believe it is an
error or why I need more information.
	 
	•	 	I will tell you the dollar amount of the suspected error.

If I tell you in person or by telephone, you
may require that I send you my complaint or
question in writing within 10 Business Days.

You will give me the results of your
investigation within 10 Business Days after you
hear from me and will correct any error promptly.
If you need more time, however, you may take up
to 45 days to investigate my complaint or
question. If the transaction that I believe to be
in error occurred (i) outside of the United
States or the Commonwealth of Puerto Rico, (ii)
in connection with the use of a Card (other than
a Credit Card) at a point-of-sale terminal, or
(iii) in a new Account, then you may take up to
90 days to investigate my claim. If you decide to
take more than 10 Business Days to investigate,
you will recredit the Account in question within
10 Business Days (20 Business Days for a new
Account) for the amount I think is in error, so
that I will have the use of the money during the
time it takes you to complete your investigation.
Such recrediting is referred to as a provisional
recredit. If you ask me to put my complaint or
question in writing and you do not receive it
within 10 Business Days, you will not be required
to provisionally recredit the Account(s) that was
the subject of my complaint. If the transaction
complained of involves an Account which is
subject to margin requirements or is otherwise
covered by Regulation T of the Federal Reserve
Board, you will not provisionally recredit the
Account involved.

30

 

If you find there was no error, you will send me a
written explanation within 3 Business Days after
you finish your investigation. I may ask for
copies of the documents that you used in your
investigation. If you provisionally recredited my
Account you may take back the amount of any credit
if you find that an error did not occur.

My liability in connection with any errors or
losses that may occur at a Network Machine is the
same as it would be had I used one of your
Machines. I shall contact you in the same manner in
the case of errors or questions about my electronic
transfers made at a Network Machine as I would with
regard to a transfer made at one of your own
Machines.

6. How to Contact You About Lost or Stolen Card(s),
a PIN or an Unauthorized Transfer

If I believe my Card(s) and/or PIN have been lost
or stolen, or that someone has or may transfer
money from any of my Accounts without my
permission, I must contact you as follows:

Banking Cards:

Call The Banking Service Line, 24 hour service at
1-800-243-6727 or from overseas at 

212-825-0230

Home Banking:

Call you at 1-877-242-7327 or contact my J.P.
Morgan Team at the number listed on my Account
statement

7. Alternate Liability Provisions

This section, and not the liability provisions of
the General Terms, applies to both my and your
liability when the Card or other electronic funds
transfer service is used with an Account not
intended primarily for personal, family or
household purposes or the transaction is of a type
not covered by the Electronic Fund Transfer Act.

You shall have no liability to me for any errors or
losses I sustain in using my Card or other
electronic funds transfer service except where you
fail to exercise ordinary care in processing any
transaction. Your liability in any case shall be
limited to the amount of any funds improperly
transferred from my Account less any amount which,
even with the exercise of ordinary care, would have
been lost. In no event will you be liable for any
indirect, punitive, or consequential damages
howsoever caused or arising.

A failure to report to you any unauthorized
transfer from my Account within fourteen (14) days
of your providing me with a statement showing such
unauthorized transfer shall relieve you of any
liability for any losses sustained after the
expiration of such fourteen-day period.

Any errors reported to you will be investigated
by you and you will advise me of the results of
your investigation.

E. ATM SAFETY AND CARD PROTECTION GUIDELINES NOTE:
FOR PURPOSES OF THIS SECTION E ONLY, “YOU” MEANS
THE ACCOUNTHOLDER

The following tips can help you use your Card in
confidence and safety.

1. Memorize your PIN and keep it confidential. NO
CHASE EMPLOYEE WILL EVER ASK YOU TO DISCLOSE YOUR
PIN. Remember:

	•	 	 Never give the PIN to anyone
	 
	•	 	 Don’t write the PIN on your Card 
	 
	•	 	 Avoid carrying
the PIN with you.

	 

If you forget your PIN, stop in at any Chase
branch and select a new one. There is no charge,
and you do not need to change your Account.

2. Be aware that notwithstanding security
measures, access to the ATM facility is
sometimes obtained by persons who are not
authorized cardholders. Close the entry door
completely upon entering and exiting an ATM
facility. Do not permit entrance to the facility
by any unknown person at any time after regular
banking hours.

3. The activity within Chase facilities in New
York and New Jersey is recorded by surveillance
cameras.

4. Remember to remove your Card from the ATM
and place withdrawn cash securely upon your
person before exiting an ATM facility. Don’t
carry money in open view or in night deposit
bags that are obvious targets.

5. If you need emergency assistance due to
criminal activity or medical emergency, call 911
at the nearest public telephone.

Complaints concerning security in Chase ATM
facilities should be directed to the JPMorgan
Chase Security Department at 800-900-0001 or, in
New York, to the New York State Banking
Department at 888-697-2861, or, in New York
City, to the NYC Department of Consumer Affairs
at 212-487-4444 or, in New Jersey, to the New
Jersey Department of Banking at 609-292-7272.

© JPMorgan Chase & Co. (06/2010)

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