Document:

EMPLOYMENT AGREEMENT

This Employment Agreement (hereinafter referred to as “Agreement”) dated as of April 15, 2008 but effective as of January 1, 2008 (the “Effective Date”), by and between Vicor Technologies, Inc. (hereinafter referred to as the “Company”) and Daniel N. Weiss, M.D., F.A.C.C. whose mailing address is 6454 Brava Way, Boca Raton, FL 33433 (hereinafter referred to as “Executive”).

WHEREAS, the Company desires to secure the services of the Executive upon the terms and conditions hereinafter set forth: and

WHEREAS, the Executive desires to render services to the Company upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, the parties mutually agree as follows:

1. Employment. The Company hereby employs Executive and the Executive hereby accepts such employment as Chief Medical Officer, subject to the terms and conditions set forth in this Agreement.

2. Duties. The Executive shall serve as the Chief Medical Officer of the Company as set forth in Section 1 above. During the term of this Agreement, Executive shall devote all of his business time to the performance of his duties hereunder unless otherwise authorized by a majority of the Company’s Board of Directors. The Executive shall report directly to the Chief Executive Officer.

3. Term of Employment.

(a) The term of the Executive’s employment shall be for a period of thirty-six (36) months commencing on the date hereof, subject to earlier termination by the Company pursuant to Section 6 hereof (the “Term”)

4. Compensation of Executive.

a. Base Salary. The Company shall pay to Executive a base salary (the “Base Salary”) of $180,000 Dollars per annum, less such deductions as shall be required to be withheld by applicable law and regulations. As part of this agreement, $150,000 of the salary shall be at such regular weekly, biweekly or semi-monthly time or times as the Company makes payment of its regular payroll in the regular course of business. The remainder ($30,000) shall be paid in shares of the Company’s common stock, determined on a monthly basis based on the average fair market value (as quoted on the OTC:BB) and paid as convenient by the Company during the year. Employee’s Base will be adjusted upward on each anniversary of the Effective Date (or more frequently, at the Company’s discretion) by a
percentage equal to not less than the higher of the increase in the consumer price index for the preceding year or the increase in the core rate of inflation for the preceding year, each as reported by the United Sates government, to reflect cost of living increases. 

 

 

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b. Other Benefits. Employee will be entitled to participate in such incentive plans, bonus plans and other benefits as are offered from time to time by the Company to its executive level employees, including medical coverage or reimbursement therefore for the Employee and his family and an extended disability insurance plan, each at the Company’s cost, including any right to receive any stock options. Employee will also be entitled to participate in any other benefits that the Company may maintain from time to time for all employees, provided that Employee meets the respective eligibility requirements. 

c. Expense Reimbursement. The Company agrees to reimburse Employee for all reasonable expenses incurred by him in the discharge of his duties hereunder. The Employee agrees to maintain records of such expenses in such form as the Company may request and make such records available to the Company as and when requested.

d. Taxes. All sums payable to the Employee hereunder shall be subject to all federal, state and municipal laws or governmental regulations now or hereafter in existence requiring the withholding, deduction, or payment therefrom of sums for income or other taxes payable by or for or assessable against the Employee.

e. Vacation. The Employee may take a maximum of four (4) weeks vacation during each twelve (12) month period during the Term at times to be reasonably determined by mutual agreement between the Company and Employee. Employee shall be entitled to carryover up to one (1) week per year of unused vacation to future periods.

5. Inability to Perform Job Duties. If Employee becomes unable to substantially perform his employment duties pursuant to this Agreement due to mental or physical incapacity (a “Disability”), the Company shall continue his compensation under this Agreement at one-half of his regular rate during the first three months of such Disability. Thereafter no compensation shall be payable until such time as Employee becomes able to resume his job duties for the Company, except to the extent any amounts are payable pursuant to any Company-maintained disability insurance. In the event that Employee is Disabled for a cumulative period of greater than six (6) months within any span of twelve (12) months, this Agreement and Employee’s employment may be terminated by
the Company. For purposes of this Agreement, Disability shall be determined by a medical doctor who is mutually agreeable to the Company and the Employee; in the event that Company and Employee cannot agree on a medical doctor, then each of Company and Employee shall select a medical doctor, and the selected medical doctors shall select a third medical doctor who shall individually determine whether Disability exists pursuant to this Section. Following a termination of this Agreement by Company pursuant to this Section 5, Company shall pay to Employee all accrued compensation and benefits and all normal post-termination benefits available under any of Company’s retirement plan, insurance programs or other benefit plans.

6. Termination By Company For Cause. The Company may terminate this Agreement, and Employee’s employment “for cause” at any time. As used herein, “for cause” shall mean any one of the following:

a. The death of the Employee; or

 

 

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b. The Employee has a guardian of his person or estate appointed by a court of competent jurisdiction; or

c. The Employee is Disabled for a cumulative period of greater than six (6) months in any twelve (12) month period; or

d. The conviction of the Employee of a felony or of any crime involving moral turpitude (but excluding any offenses involving operation of a motor vehicle); or

e. The misuse, misappropriation or embezzlement of Company funds or property by Employee, as determined by a court of competent jurisdiction; or 

f. Any willful gross neglect or willful gross misconduct of Employee resulting in material economic harm to the Company; provided that the Company shall give Employee thirty (30) days’ written notice thereof during which thirty (30) day period Employee may cure same; or 

g. The habitual and sustained use of alcohol or drugs by Employee which interferes with the performance of Employee’s duties for the Company.

In the event the Company terminates Employee’s employment for cause, Employee’s right to continued payment of salary and other compensation shall automatically terminate and be forfeited, and the Company shall pay to Employee all compensation and benefits accrued through the date of termination. In addition, Employee shall be entitled to any post-termination benefits to which Employee would otherwise be entitled under any retirement plans, insurance programs or other benefit plans.

7. Termination By Employee Without Cause. Employee may terminate this Agreement and his employment with the Company without cause upon thirty (30) days prior written notice to the Company. Employee may be required to perform his job duties and will be paid his regular compensation up to the date of the termination. At the option of the Company, the Company may require Employee to immediately terminate employment upon receiving said thirty (30) days’ notice from Employee of the termination of this Agreement. In such event, the Company will pay to Employee an amount equal to thirty (30) calendar days of his Base. 

8. Termination by the Company Without Cause or by the Employee for Good Reason. 

a. The Employee may resign (and thereby terminate his employment under this Agreement) at any time for Good Reason (as defined below), upon not less than thirty (30) days’ prior written notice to the Company specifying in reasonable detail the reason therefor, provided, however, that if the reason for resignation for Good Reason is susceptible of a cure, the Company shall have a period of thirty (30) days after such written notice to effect a cure. For purposes of this Agreement, “Good Reason” shall mean (a) any material failure by the Company to comply with any material obligation imposed by this Agreement (including the failure of a successor to the Company to assume this Agreement or any purported termination hereof which is not in compliance with any applicable notice provisions hereof); (b) a reduction of Employee’s Base or a material reduction in the
Employee’s title, position, duties or responsibilities; (c) the Employee’s assignment to an office of the Company located more than fifty (50) miles from the 

 

 

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Company’s current Boca Raton, Florida office; or (d) the Company’s creation of working conditions that a reasonable person in the Employee’s position would consider unreasonable or intolerable, as determined by the Compensation Committee. The Company may terminate the employment of Employee without cause and the Employee may terminate the Agreement with Good Reason, in each case, at any time upon 30 days’ prior written notice, provided that in either such event the Company shall be obligated to pay Employee, in a lump sum within fifteen (15) days of the date of termination of employment, an amount equal to 100% of the sum of (a) Employee’s then current Base, and (b) any bonuses paid to Employee during the 12 month period preceding the date of such termination. In addition, the Company shall maintain the Employee’s health insurance, life insurance and disability
insurance at its expense on the same terms and conditions as existed during the Employee’s employment for the unexpired Term of this Agreement; provided, that such benefits will not be continued in the event that Employee obtains similar benefits in connection with any future employment. Moreover, in such event, Employee shall be entitled to receive all other customary post-termination benefits under the Company’s retirement plans, insurance programs, and other benefit plans, and Employee shall be entitled to acceleration of any vesting under any long-term incentive plans, including the vesting of any unvested stock options or stock warrants.

9. Agreement Not to Use or Disclose Confidential or Proprietary Information. During the term of this Agreement and a period of two (2) years thereafter, Employee promises and agrees that he will not disclose or utilize any confidential or proprietary information acquired during the course of service with the Company and/or its related business entities, Employee shall not divulge, communicate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any confidential or proprietary information pertaining to the business of the Company. Any confidential or proprietary information or data now or hereafter acquired by Employee with respect to the business of the Company (which shall include, but not be limited to,
information concerning the Company’s financial condition, prospects, technology, customers, suppliers, methods of doing business and promotion of the Company’s products and services) shall be deemed a valuable, special and unique asset of the Company that is received by Employee in confidence and as a fiduciary. For purposes of this Agreement “confidential or proprietary information” means information disclosed to Employee as a consequence of or through his/her employment by the Company (including information conceived, originated, discovered or developed by Employee) prior to or after the date hereof and not generally known or in the public domain, about the Company or its business. This Section 12 is effective regardless of the reason for the termination of the Agreement and regardless of whether the Agreement is terminated by the Employee, the Company or by its own terms. This restrictive covenant may be assigned to and enforced by any of the Company’s
assignees or successors.

10. Covenant Not to Compete. 

(a) Executive recognizes that the services to be performed by him hereunder are special, unique and extraordinary. The parties confirm that it is reasonably necessary for the protection of Company that Executive agree, and accordingly, Executive does hereby agree, that he shall not, directly or indirectly, at any time during the term of the Agreement and the “Restricted Period” (as defined in Section 10(e) below):

 

 

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(i) except as provided in Subsection (d) below, be engaged in the research, development/creation, marketing, sale or distribution of pharmaceutical and/or medical products that compete directly or indirectly with the Company’s products or proposed products, or provide technical assistance, advice or counseling regarding such competing products in any state in the United States, either on his own behalf or as an officer, director, stockholder, partner, consultant, associate, employee, owner, agent, creditor, independent contractor, or co-venturer of any third party; or

(ii) employ or engage, or cause or authorize, directly or indirectly, to be employed or engaged, for or on behalf of himself or any third party, any employee or agent of Company or any affiliate thereof in a manner which directly or indirectly competes with the Company.

(b) Executive hereby agrees that he will not, directly or indirectly, for or on behalf of himself or any third party, at any time during the term of the Agreement and during the Restricted Period solicit any customers of the Company or any affiliate thereof in a manner which directly or indirectly competes with the Company.

(c) If any of the restrictions contained in this Section 10 shall be deemed to be unenforceable by reason of the extent, duration or geographical scope thereof, or otherwise, then the court making such determination shall have the right to reduce such extent, duration, geographical scope, or other provisions hereof, and in its reduced form this Section shall then be enforceable in the manner contemplated hereby.

(d) This Section 10 shall not be construed to prevent Executive from owning, directly or indirectly, in the aggregate, an amount less than or equal to one percent (I%) of the issued and outstanding voting securities of any class of any company that directly or indirectly competes with the Company whose voting capital stock is traded on a national securities exchange or on the over-the-counter market other than securities of the Company. Furthermore, this Section 9 shall not be construed to prevent Executive from owning, directly or indirectly, any number of issued and outstanding voting securities of any company that does not directly or indirectly compete with the Company.

(e) The term “Restricted Period,” as used in this Section 10, shall mean the period of Executive’s actual employment hereunder plus a period of twelve  (12) months thereafter.

(f) The provisions of this Section 10 shall survive the end of the Term as provided in Section 10(e) hereof.

11. Executive Conceptions and Developments. The Company shall own all Intellectual Property Rights (as defined below) in and to, and, for the duration of such Intellectual Property Rights have the exclusive rights to the commercial exploitation with respect to, all Conceptions and Developments (as defined below) made individually or jointly by Executive during the period while employed at Employer (the “Covered Period”). Any Intellectual Property Rights as to which Executive was an inventor, author or assignee, whether patentable or not, shall be presumed to have been originally made during the Covered Period and subject to Employer’s 

 

 

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ownership. For purposes hereof, the term “Conceptions and Developments” means all creative, expressive, branding or technological conceptions, discoveries and developments related to the business of the Company and the development of the Company’s products of any nature, including, without limitation, conceptions for products and process, inventions, designs, writings, graphics, animations and other works of authorship, specifications, drawings, methods, formulas and branding proposals, and any implementations, improvements, derivative works or modifications thereof and without regard to whether are patentable or copyrightable, and the term “Intellectual Property Rights” means all U.S. and foreign patents, copyrights, trademarks, service marks, tradenames, corporate names, trade secrets, rights of publicity and similar rights (including without limitation and all common
law rights), domain names and all rights of priority under international conventions to make application with respect thereto. All Conceptions and Developments arising during the Covered Period are referred to as the “Covered Conceptions and Developments”. In addition to any previous assignments, Executive assigns to the Company all Intellectual Rights included the Covered Conceptions and Developments without regard to their being patentable or copyrightable. All works of authorship included in the Covered Conceptions and Developments that are eligible for protection under the Copyright Act shall be deemed “works made for hire” to the extent they may qualify as such under17 U.S.C. Section 101, and otherwise the copyright therein shall be assigned by Executive to the Company at the time such works were made. All Covered Conceptions and Developments, whether or not patentable, shall be promptly disclosed to the Company in writing and shall be held in confidence by
the Executive and treated as “Confidential Information”, until such time as the Company, in its sole determination, shall elect to make the subject matter thereof publicly known. Executive agrees that, at the expense of the Company, he will, without additional compensation, take any such further action, including the rendering of all lawful testimony and assistance; and the execution and delivery to such instruments as the Company may require from time to time, to perfect, effectuate, register, record or enforce the Company’s rights or interests in any of the Covered Conceptions and Developments. Executive hereby irrevocably appoints the Company to be Executive attorney-in-fact to act in Executive’s name, place and stead to do and execute any such act or instrument for the purpose of this Section. The Company shall be under no liability to account to Executive for any revenue or profit derived or resulting from the use, exploitation or licensing of any of the
covered Conceptions or Developments subject in this Section.

12. Agreement Not to Use or Disclose Trade Secrets. During the term of this Agreement and a period of five (5) years thereafter, Employee promises and agrees that he will not disclose or utilize any trade secrets acquired during the course of service with the Company and/or its related business entities. As used herein, “trade secret” refers to the whole or any portion or phase of any formula, pattern, device, combination of devices, or compilation of information which is for use, or is used, in the operation of the Company’s business and which provides the Company an advantage, or an opportunity to obtain an advantage, over those who do not know or use it. “Trade secret” also includes any scientific, technical, or commercial information,
including any design, list of suppliers, list of customers, as well as pricing information or methodology, contractual arrangements with vendors or suppliers, business development plans or activities, or Company financial information. This Section 11 is effective regardless of the reason for the termination of the Agreement and regardless of whether the Agreement is terminated by the Employee, the Company or by its own terms. This restrictive covenant may be assigned to and enforced by any of the Company’s assignees or successors.

 

 

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13. Agreement Not To Hire Company Employees. If Employee leaves the employ of the Company or terminates this Agreement, Employee promises and agrees that, during the two (2) years following his departure from the Company, Employee will not, without the express written permission of the Company, directly or indirectly employ as a consultant or employee any person who is employed as a consultant or employee of the Company at the time of Employee’s termination, or any person who was an employee or consultant of the Company during the six months preceding Employee’s termination; provided, however this Section 13 shall not apply in the event that Employee is terminated without cause by the Company or the Employee terminates this Agreement with Good Reason. This
restrictive covenant may be assigned to and enforced by any of the Company’s assignees or successors.

14. Injunctive Relief. In recognition of the unique services to be performed by Employee and the possibility that any violation by Employee of Section 10, Section 11, Section 12 or Section 13 of this Agreement may cause irreparable or indeterminate damage or injury to Company, Employee expressly stipulates and agrees that the Company shall be entitled, upon ten (10) days written notice to Employee, to obtain an injunction from any court of competent jurisdiction restraining any violation or threatened violation of this Agreement. Such right to an injunction shall be in addition to, and not in limitation of, any other rights or remedies the Company may have for damages.

15. Judicial Modification of Agreement. The Company and Employee specifically agree that a court of competent jurisdiction (or an arbitrator, as appropriate) may modify or amend Section 10, Section 11, Section 12 or Section 13 of this Agreement if absolutely necessary to conform with relevant law or binding judicial decisions in effect at the time the Company seeks to enforce any or all of said provisions.

16. Resolution of Disputes by Arbitration. Any claim or controversy that arises out of or relates to Employee’s employment, this Agreement, or the breach of this Agreement, will be resolved by arbitration in Palm Beach County in accordance with the rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in any court possessing jurisdiction over arbitration awards. This Section shall not limit or restrict the Company’s right to obtain injunctive relief for violations of Section 10, Section 11, Section 12 or Section 13 of this Agreement directly from a court under Section 14 of this Agreement.

 

 

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17. Miscellaneous.

a. Costs and Expenses. Each party hereto agrees to pay its own costs and expenses incurred in negotiating this Agreement and consummating the transactions described herein. In the event either party is required to seek legal counsel to enforce the terms and provisions of this Agreement, the prevailing party in any action (including arbitration) shall be entitled to recover attorneys fees and costs (including on appeal).

b. Choice of Law. This Agreement will be interpreted, construed and enforced in accordance with the laws of the State of Florida and the proper jurisdiction and venue shall be the Circuit Court in Palm Beach County, Florida.

c. Construction. The parties hereto and their respective legal counsel participated in the preparation of this Agreement; therefore, this Agreement shall be construed neither against nor in favor of any of the parties hereto, but rather in accordance with the fair meaning thereof.

d. Effect of Waiver. The failure of any party at any time or times to require performance of any provision of this Agreement will in no manner affect the right to enforce the same. The waiver by any party of any breach of any provision of this Agreement will not be construed to be a waiver by any such party of any succeeding breach of that provision or a waiver by such party of any breach of any other provision.

e. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.

f. Entire Agreement. This Agreement sets forth the entire agreement between the parties, and supersedes any prior agreements or understanding between the Company and Employee. This Agreement may be amended only in writing, signed by both parties.

g. Severability. If any provision of this Agreement is held invalid for any reason, such invalidity shall not affect the enforceability of the remainder of this Agreement.

h. Notices. Any notices required or permitted or given pursuant to this Agreement to the Company or Employee shall be in writing and shall be deemed given upon delivery in person or three (3) days after deposit of same in the U.S. certified mail or registered mail, return receipt requested, first class postage and registration fees prepaid, to the addresses listed below. The parties hereto shall notify each other whenever their addresses shall change during the Term.

[SIGNATURES ON NEXT PAGE]

 

 

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IN WITNESS WHEREOF, the parties have executed this Employment Agreement on the date set forth below.

 

	
                        Company
 	
                         
 	
                        Employee
 
	
                        By: 
 	
                        
 /s/ David H. Fater
 	
                         
 	
                         
 /s/ Daniel N. Weiss
 
	
                        Name: 
 	
                        David H. Fater
 	
                         
 	
                        Daniel N. Weiss, M.D., F.A.C.C.
 
	
                        Title:
 	
                        Chief Executive Officer
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Date: 4/15/2008
 	
                         
 	
                        Date: 4/15/2008
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        2300 NW Corporate Blvd; Suite 123
 	
                         
 	
                        6454 Brava Way
 
	
                        Boca Raton, FL 33431
 	
                         
 	
                        Boca Raton, FL 33433
 
	
                        (Address for Notices)
 	
                         
 	
                        (Address for Notices)
 
	
                         
 	
                         
 	
                         
 
	
                        /s/ Eileen W. Galui
 	
                         
 	
                        /s/ Eileen W. Galui
 
	
                        Witness
 	
                         
 	
                        Witnessexv10w1

 

Exhibit 10.1

Introduction

	1.	 	This Agreement contains the terms governing an account(s) in my name for the purchase or sale
of property. In the Agreement, “I,” “me or “my” means each person who signs below. “You,”
“you” or UBS Financial Services” means UBS Financial Services Inc. its successor firms,
subsidiaries, correspondents or affiliates, or employees. “Property” means all securities,
including but not limited to monies, stocks, options, bonds, notes, futures, contracts,
commodities, certificates of deposit and other obligations, contracts or securities.

Applicable Rules and Regulations

	2.	 	All transactions for me shall be subject to the constitution, rules, regulations, bylaws,
interpretations, customs and usages of the exchange or market and its clearing house, if any,
where the transactions are executed. Such transactions are also subject, where applicable, to
the provisions, rules and regulations of the Securities and Exchange Commission, the Commodity
Futures Trading Commission, the Board of Governors of the Federal Reserve System in existence
at this time and as later amended and supplemented.

Amendment or Waiver

	3.	 	I agree that you may change the terms of this agreement at any time upon prior written notice
to me. By continuing to accept the services offered by you, I indicate to you my acceptance
of these changes. If I do not accept the changes, I must notify you in writing of my refusal
and my account will be cancelled. However, I will remain liable for any outstanding Debits
and/or Charges on my account.

Transactions and Settlements

	4.	 	All orders for the purchase and sale of any property will be given by me and executed with
the distinct understanding that an actual purchase or sale is intended and that it is my
intention and obligation in every case to deliver property to cover any and all sales and in
the case of purchases to receive and pay for property that I will do so upon your demand, in
case you make a short sale of any property at my direction or in case I fail to deliver to you
any property which you have sold at my direction, you are authorized to borrow the property
necessary to enable you to make delivery to the purchaser and I agree to be responsible for
the cost or loss you may incur, or the cost of obtaining the property if you are unable to
borrow it. No settlement of my account(s) may occur without your first receiving all property
for which the account is short and all property in which the account(s) are long being paid
for in full and the property then delivered. You and your correspondents are my constituted
agents to complete all such transactions and are authorized to make advances and expend monies
as are required.

Marking Sell Orders Long or Short

	5.	 	When placing with you any sell order for a short account, I will designate it as such and
hereby authorize you to mark the order as being “short.” When placing with you any order for
a long account I will designate it as such and hereby authorize you to mark the order as being
“long.” Any sell order which I shall designate as being for a long account, is for property
which is owned by me and, if you are unable to deliver this property from any account(s), the
placing of the order will constitute my representation that the property will be delivered as
required and that I will reimburse you for any expense incurred.

Binding Order

	6.	 	Any order which I give shall be binding upon me, and (my/our) personal representative until
you receive notice oil my death. Such death and notice will not affect your right to take any
action which you could have taken if I had not died.

Lien Provisions

	7.	 	All property held or purchased shall be subject to a lien in your favor for the discharge or
all my indebtedness and any other obligations that I may owe to you, however and whenever
arising, and may be held by you as security for the payment of any such obligations or
indebtedness to you in any account you maintain for me including any accounts in which I may
have an interest. You are authorized without notice to me whenever you deem it advisable from
time to time (a) to transfer interchangeably between any accounts I have with you any or all
of the Property so held, without regard to whether you have in your possession or subject to
your control other Property of the same kind and amount, (b) in the usual course of business
pledge, repledge, hypothecate (either for the amount I owe you or for a greater or lesser sum)
and lend the same to you as broker or to others from time to time, separately or commingled
with Property earned for other clients and you shall not be required to deliver to me the same
Property but only Property of the same kind and amount.

Payment of Indebtedness Upon Demand

	8.	 	I shall at all limes be liable for the payment of any amounts advanced, any debit balance or
other obligations owing in any of my account(s) with you and I shall be liable to you for any
deficiency remaining in any such account(s) in the event of the liquidation thereof in whole
or in part, by you or by me. I shall make payment of any such debit balance, obligation,
deficiency, indebtedness, including interest and commissions, upon demand and any costs of
collection, including attorney’s fees, if incurred by you.

Interest Provision

	9.	 	All amounts advanced and other balances due shall be charged interest in accordance with your
usual custom, which may include the compounding of interest, including any increases in rates
which reflect adjustments in the UBS Financial Services Base Loan Rate, and such other charges
as you may make to cover your facilities and extra services. Payment of all amounts advanced
and other balances due, together with the interest thereon, shall be made by me to you at any
of your offices which will act as my agent for the transmittal of such amounts and other
balances due to you at New York, New York.

I HAVE READ AND UNDERSTAND THE STATEMENT OF CREDIT PRACTICES DESCRIBING INTEREST CHARGES PRINTED ON THE REVERSE SIDE.

Sub-Agents

	10.	 	You may employ sub-brokers and shall be responsible only for reasonable care in their
selection. You may deal with market makers or members of any exchange known as specialists or
known as odd lot dealers and in the execution of my orders they may act as sub-brokers for me
and may also buy or sell the property for themselves as dealers for their own account.

Margin Requirements

	11.	 	I agree to maintain in account(s) with you such positions and margin as required by all
applicable statutes, rules, regulations, procedures, and customs, or as you deem necessary or
advisable, and where applicable, to satisfy any and all margin calls issued in connection with
such business.

Liquidations and Covering Positions

	12.	 	You shall have the right in accordance with your general policies regarding your margin
maintenance requirements in existence at the time or if in your discretion you consider it
necessary for your protection to require additional collateral or the liquidation of any
account of mine, or in the event a petition in bankruptcy, or for appointment of a receiver is
filed by or against me, or; an attachment is levied against the account(s) of mine, or in the
event of my death; to sell any or all property in the account(s) of mine with you, whether
carried individually or jointly with others, to buy any or all property which may be short in
such account(s), to cancel any open orders and to close any or all outstanding contracts, all
without demand for margin or additional margin, other notice or sale or purchase, or other
notice of advertisement. My such sales or purchases may be made at your discretion on any
exchange or other market where such business is usually transacted, or at public auction or
private safe, and you may be the purchasers for your own account it is understood a prior
demand, or call, or prior notice of the time and place of such sale or purchase shall not be
considered a waiver of your right to sell or buy without demand or notice as herein provided.
You shall not be liable to me in any way for any adverse tax consequences resulting from the
liquidation of any appreciated Property in any account.

Binding Notice of Agreement

	13.	 	I expressly agree you will not be bound by any representation or agreement made by any of
your employees or agents which purports to effect or diminish your rights under this
agreement.

Effect of Law or Rule Change

	14.	 	In the event any one or more of the provisions contained in this agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect, such finding or
holding shall only affect the provision(s) involved and the remainder of this agreement and
the application of all other provisions shall not be affected.

Address

	15.	 	My address below is and will continue to be a correct address until UBS Financial Services
receives written notice of any change. Notices and communications sent to me at such address
will constitute personal delivery to me, whether actually received or not.

ORIGINAL – PAGE 1 OF 4

 

Client Representation

	16.	 	I represent to have reached the age of majority according to the laws of the state of my
residence. I agree to abide by the rules of the regulatory agencies and your firm’s policy if
I am employed by any exchange or any corporation of which any exchange owns a majority of the
capital stock; member or firm registered on any exchange, bank, trust company, insurance
company; or any company or individual dealing either as broker or principal, in stocks, bonds,
or any other securities, commodities, or commercial paper. If during this agreement I become
such an employee, you will be notified. No one other than me has or will have an interest in
any account(s) of mine unless you are notified in writing by me.

Jurisdiction

	17.	 	All transactions made for my account(s) shall be governed by the terms of this agreement.
This agreement and its enforcement shall be construed and governed by the laws of the State of
New York, and shall be binding upon my heirs, executors, administrators, successors, and
assigns.

Credit Review

	18.	 	An investigation of my personal end business credit may be made and, I may make written
request, within a reasonable time, for disclosure of the nature of the investigation.

ARBITRATION

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

• ARBITRATION IS FINAL AND BINDING ON THE PARTIES. 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.

• THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY
TRIAL. ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY’S ABILITY TO HAVE A COURT
REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED.

• PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM COURT
PROCEEDINGS. THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS AND OTHER
DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN COURT PROCEEDINGS.

• THE ARBITRATOR’S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND
ANY PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY
LIMITED. THE 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.

• CLIENT AGREES, AND BY CARRYING AN ACCOUNT FOR YOU UBS FINANCIAL SERVICES INC. AGREES, THAT
ANY AND ALL CONTROVERSIES WHICH MAY ARISE BETWEEN YOU AND UBS FINANCIAL SERVICES INC. CONCERNING
ANY ACCOUNT(S), TRANSACTION, DISPUTE OR THE CONSTRUCTION, PERFORMANCE, OR BREACH OF THIS OR ANY
OTHER AGREEMENT, WHETHER ENTERED INTO PRIOR, ON OR SUBSEQUENT TO THE DATE HEREOF, SHALL BE
DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER THIS AGREEMENT SHALL BE HELD UNDER AND PURSUANT
TO AND BE GOVERNED BY THE FEDERAL ARBITRATION ACT, AND SHALL BE CONDUCTED BEFORE AN ARBITRATION
PANEL CONVENED BY THE NEW YORK STOCK EXCHANGE, INC. OR THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC. CLIENT MAY ALSO SELECT ANY OTHER NATIONAL SECURITY EXCHANGE’S ARBITRATION FORUM UPON
WHICH UBS FINANCIAL SERVICES INC. IS LEGALLY REQUIRED TO ARBITRATE THE CONTROVERSY WITH CLIENT,
INCLUDING, WHERE APPLICABLE, THE MUNICIPAL SECURITIES RULEMAKING BOARD. SUCH ARBITRATION SHALL BE
GOVERNED BY THE RULES OF THE ORGANIZATION CONVENING THE PANEL. CLIENT MAY ELECT IN THE FIRST
INSTANCE THE ARBITRATION FORUM, BUT IF CLIENT FAILS TO MAKE SUCH ELECTION, BY REGISTERED LETTER OR
TELEGRAM ADDRESSED TO UBS FINANCIAL SERVICES INC. AT 1200 HARBOR BOULEVARD, 10TH FLOOR, WEEHAWKEN,
NJ 07088, ATTN: LEGAL DEPARTMENT, BEFORE THE EXPIRATION OF FIVE DAYS (5) AFTER RECEIPT OF A
WRITTEN REQUEST FROM UBS FINANCIAL SERVICES INC. TO MAKE SUCH ELECTION, THEN UBS FINANCIAL SERVICES
INC. MAY MAKE SUCH ELECTION. 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 OF COMPETENT JURISDICTION.

• 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; WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS 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 CUSTOMER IS
EXCLUDED FROM THE CLASS BY THE COURT.

• SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY
RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.

• CLIENT EXPRESSLY AGREES THAT SERVICE OF PROCESS IN ANY ACTION SHALL BE SUFFICIENT IF SERVED
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT YOUR LAST ADDRESS KNOWN TO UBS FINANCIAL SERVICES INC.

• CLIENT EXPRESSLY WAIVES ANY DEFENSE TO SERVICE OF PROCESS AS SET FORTH ABOVE.

Assignment

	20.	 	This agreement may be assigned by you and will inure to the benefit of your successors and
assigns and you may transfer or assign the account(s) of mine to them, which shall be binding
on me and my personal representatives.

Accuracy of Reports

	21.	 	ALL REPORTS OF EXECUTION OF ORDERS AND ACCOUNT STATEMENTS SHALL BE CONCLUSIVE IF NOT OBJECTED
TO BY ME IN WRITING IMMEDIATELY BY NOTICE SENT TO YOU BY REGISTERED MAIL.

Joint and Several Liability and Joint Accounts

	22.	 	If more than one person signs this agreement, our obligations under this agreement shall be
joint and several. If more than one person signs this agreement, you may accept any orders
and instructions from each, and upon receipt of inconsistent instructions or a court order,
may suspend or terminate my account.

Liability for Costs of Collection

	23.	 	I agree to pay you the reasonable costs and expenses of collection, including attorneys fees,
for any unpaid Debits, Charges, and other amounts owing you.

Ineligible Accounts

	24.	 	Your account cannot have margin if it is a UGMA/UTMA, ERISA Plan, Retirement, 529 Plan or
Estate account. Most managed programs cannot have margin.

Suitability

	25.	 	Margin is not suitable for all clients. Please review UBS Financial Service’s Loan
Disclosure Statement carefully for information on the risks involved with using margin.

Loan Consent

	26.	 	BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE THAT YOU AND YOUR SUCCESSORS AND ASSIGNS ARE
AUTHORIZED IN THE USUAL COURSE OF BUSINESS TO LEND, RELEND, HYPOTHECATE, REHYPOTHECATE, PLEDGE
OR REPLEDGE SEPARATELY OR TOGETHER WITH THE PROPERTY OF OTHERS EITHER TO YOURSELVES OR TO
OTHERS ANY PROPERTY WHICH YOU MAY BE CARRYING FOR ME ON MARGIN. THIS AUTHORIZATION SHALL
APPLY TO ALL ACCOUNTS CARRIED BY YOU FOR ME AND SHALL REMAIN IN FULL FORCE UNTIL WRITTEN
NOTICE OF REVOCATION IS RECEIVED BY YOU.

IN RETURN FOR YOUR EXTENSION OR MAINTENANCE OF CREDIT IN CONNECTION WITH MY ACCOUNT, I ACKNOWLEDGE
THAT THE SECURITIES IN MY MARGIN ACCOUNT, TOGETHER WITH ALL ATTENDANT RIGHTS OF OWNERSHIP, MAY BE
LENT TO YOU OR LENT OUT TO OTHERS. IN CONNECTION WITH SUCH LOANS, YOU MAY RECEIVE AND RETAIN
CERTAIN BENEFITS TO WHICH I WILL NOT BE ENTITLED. IN CERTAIN CIRCUMSTANCES, SUCH LOANS MAY LIMIT,
IN WHOLE OR IN PART, MY ABILITY TO EXERCISE VOTING RIGHTS OF THE SECURITIES LENT.

BY SIGNING THIS AGREEMENT THE CUSTOMER ACKNOWLEDGES THAT:

	1.	 	THE SECURITIES IN THE CUSTOMER’S MARGIN ACCOUNT MAY BE LOANED TO THE BROKER OR LOANED OUT TO
OTHERS AND;
	 
	2.	 	THAT THE CUSTOMER HAS RECEIVED A COPY OF THIS AGREEMENT.

THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT PAGE 2 AT PARAGRAPH 19.

Do you intend to engage in “pattern day trading” as defined by NYSE Rule 431*                     o Yes            o No

	*	 	“Day Trading” means purchasing and selling or selling and purchasing the same security in the
same day in a margin account. “Pattern day trading” means executing four or more day trades
within five business days if the number of day trades exceeds six percent of the total trade
during that period.

[CLIENT: BE SURE TO RETAIN YOUR COPY]

	 	 	 
	/S/ Timothy Cope
	 	4/4/08
	 
	Signature of Principal (Name and title if a corporation)
	 	Date
	 
	 	 
	 
	(Signature of Second Party, if a Joint Account)

	 	Date

	 	 	 	 	 	 	 
	 
	No. of Street Address
	 	City or Town	 	State	 	Postal Code

ORIGINAL – PAGE 2 OF 4

 

Introduction

	1.	 	This Agreement contains the terms governing an account(s) in my name for the purchase or sale
of property. In the Agreement, “I,” “me or “my” means each person who signs below. “You,”
“you” or UBS Financial Services” means UBS Financial Services Inc. its successor firms,
subsidiaries, correspondents or affiliates, or employees. “Property” means all securities,
including but not limited to monies, stocks, options, bonds, notes, futures, contracts,
commodities, certificates of deposit and other obligations, contracts or securities.

Applicable Rules and Regulations

	2.	 	All transactions for me shall be subject to the constitution, rules, regulations, bylaws,
interpretations, customs and usages of the exchange or market and its clearing house, if any,
where the transactions are executed. Such transactions are also subject, where applicable, to
the provisions, rules and regulations of the Securities and Exchange Commission, the Commodity
Futures Trading Commission, the Board of Governors of the Federal Reserve System in existence
at this time and as later amended and supplemented.

Amendment or Waiver

	3.	 	I agree that you may change the terms of this agreement at any time upon prior written notice
to me. By continuing to accept the services offered by you, I indicate to you my acceptance
of these changes. If I do not accept the changes, I must notify you in writing of my refusal
and my account will be cancelled. However, I will remain liable for any outstanding Debits
and/or Charges on my account.

Transactions and Settlements

	4.	 	All orders for the purchase and sale of any property will be given by me and executed with
the distinct understanding that an actual purchase or sale is intended and that it is my
intention and obligation in every case to deliver property to cover any and all sales and in
the case of purchases to receive and pay for property that I will do so upon your demand, in
case you make a short sale of any property at my direction or in case I fail to deliver to you
any property which you have sold at my direction, you are authorized to borrow the property
necessary to enable you to make delivery to the purchaser and I agree to be responsible for
the cost or loss you may incur, or the cost of obtaining the property if you are unable to
borrow it. No settlement of my account(s) may occur without your first receiving all property
for which the account is short and all property in which the account(s) are long being paid
for in full and the property then delivered. You and your correspondents are my constituted
agents to complete all such transactions and are authorized to make advances and expend monies
as are required.

Marking Sell Orders Long or Short

	5.	 	When placing with you any sell order for a short account, I will designate it as such and
hereby authorize you to mark the order as being “short.” When placing with you any order for
a long account I will designate it as such and hereby authorize you to mark the order as being
“long.” Any sell order which I shall designate as being for a long account, is for property
which is owned by me and, if you are unable to deliver this property from any account(s), the
placing of the order will constitute my representation that the property will be delivered as
required and that I will reimburse you for any expense incurred.

Binding Order

	6.	 	Any order which I give shall be binding upon me, and (my/our) personal representative until
you receive notice oil my death. Such death and notice will not affect your right to take any
action which you could have taken if I had not died.

Lien Provisions

	7.	 	All property held or purchased shall be subject to a lien in your favor for the discharge or
all my indebtedness and any other obligations that I may owe to you, however and whenever
arising, and may be held by you as security for the payment of any such obligations or
indebtedness to you in any account you maintain for me including any accounts in which I may
have an interest. You are authorized without notice to me whenever you deem it advisable from
time to time (a) to transfer interchangeably between any accounts I have with you any or all
of the Property so held, without regard to whether you have in your possession or subject to
your control other Property of the same kind and amount, (b) in the usual course of business
pledge, repledge, hypothecate (either for the amount I owe you or for a greater or lesser sum)
and lend the same to you as broker or to others from time to time, separately or commingled
with Property earned for other clients and you shall not be required to deliver to me the same
Property but only Property of the same kind and amount.

Payment of Indebtedness Upon Demand

	8.	 	I shall at all limes be liable for the payment of any amounts advanced, any debit balance or
other obligations owing in any of my account(s) with you and I shall be liable to you for any
deficiency remaining in any such account(s) in the event of the liquidation thereof in whole
or in part, by you or by me. I shall make payment of any such debit balance, obligation,
deficiency, indebtedness, including interest and commissions, upon demand and any costs of
collection, including attorney’s fees, if incurred by you.

Interest Provision

	9.	 	All amounts advanced and other balances due shall be charged interest in accordance with your
usual custom, which may include the compounding of interest, including any increases in rates
which reflect adjustments in the UBS Financial Services Base Loan Rate, and such other charges
as you may make to cover your facilities and extra services. Payment of all amounts advanced
and other balances due, together with the interest thereon, shall be made by me to you at any
of your offices which will act as my agent for the transmittal of such amounts and other
balances due to you at New York, New York.

I HAVE READ AND UNDERSTAND THE STATEMENT OF CREDIT PRACTICES DESCRIBING INTEREST CHARGES PRINTED ON THE REVERSE SIDE.

Sub-Agents

	10.	 	You may employ sub-brokers and shall be responsible only for reasonable care in their
selection. You may deal with market makers or members of any exchange known as specialists or
known as odd lot dealers and in the execution of my orders they may act as sub-brokers for me
and may also buy or sell the property for themselves as dealers for their own account.

Margin Requirements

	11.	 	I agree to maintain in account(s) with you such positions and margin as required by all
applicable statutes, rules, regulations, procedures, and customs, or as you deem necessary or
advisable, and where applicable, to satisfy any and all margin calls issued in connection with
such business.

Liquidations and Covering Positions

	12.	 	You shall have the right in accordance with your general policies regarding your margin
maintenance requirements in existence at the time or if in your discretion you consider it
necessary for your protection to require additional collateral or the liquidation of any
account of mine, or in the event a petition in bankruptcy, or for appointment of a receiver is
filed by or against me, or; an attachment is levied against the account(s) of mine, or in the
event of my death; to sell any or all property in the account(s) of mine with you, whether
carried individually or jointly with others, to buy any or all property which may be short in
such account(s), to cancel any open orders and to close any or all outstanding contracts, all
without demand for margin or additional margin, other notice or sale or purchase, or other
notice of advertisement. My such sales or purchases may be made at your discretion on any
exchange or other market where such business is usually transacted, or at public auction or
private safe, and you may be the purchasers for your own account it is understood a prior
demand, or call, or prior notice of the time and place of such sale or purchase shall not be
considered a waiver of your right to sell or buy without demand or notice as herein provided.
You shall not be liable to me in any way for any adverse tax consequences resulting from the
liquidation of any appreciated Property in any account.

Binding Notice of Agreement

	13.	 	I expressly agree you will not be bound by any representation or agreement made by any of
your employees or agents which purports to effect or diminish your rights under this
agreement.

Effect of Law or Rule Change

	14.	 	In the event any one or more of the provisions contained in this agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect, such finding or
holding shall only affect the provision(s) involved and the remainder of this agreement and
the application of all other provisions shall not be affected.

Address

	15.	 	My address below is and will continue to be a correct address until UBS Financial Services
receives written notice of any change. Notices and communications sent to me at such address
will constitute personal delivery to me, whether actually received or not.

ORIGINAL – PAGE 3 OF 4

 

Client Representation

	16.	 	I represent to have reached the age of majority according to the laws of the stale of my
residence. I agree to abide by the rules of the regulatory agencies and your firm’s policy if
I am employed by any exchange or any corporation of which any exchange owns a majority of the
capital stock; member or firm registered on any exchange, bank, trust company, insurance
company; or any company or individual dealing either as broker or principal, in stocks, bonds,
or any other securities, commodities, or commercial paper. If during this agreement I become
such an employee, you will be notified. No one other than me has or will have an interest in
any account(s) of mine unless you are notified in writing by me.

Jurisdiction

	17.	 	All transactions made for my account(s) shall be governed by the terms of this agreement.
This agreement and its enforcement shall be construed and governed by the laws of the State of
New York, and shall be binding upon my heirs, executors, administrators, successors, and
assigns.

Credit Review

	18.	 	An investigation of my personal end business credit may be made and, I may make written
request, within a reasonable time, for disclosure of the nature of the investigation.

ARBITRATION

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

• ARBITRATION IS FINAL AND BINDING ON THE PARTIES. 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.

• THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY
TRIAL. ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY’S ABILITY TO HAVE A COURT
REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED.

• PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM COURT
PROCEEDINGS. THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS AND OTHER
DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN COURT PROCEEDINGS.

• THE ARBITRATOR’S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND
ANY PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY
LIMITED. THE 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.

• CLIENT AGREES, AND BY CARRYING AN ACCOUNT FOR YOU UBS FINANCIAL SERVICES INC. AGREES, THAT
ANY AND ALL CONTROVERSIES WHICH MAY ARISE BETWEEN YOU AND UBS FINANCIAL SERVICES INC. CONCERNING
ANY ACCOUNT(S), TRANSACTION, DISPUTE OR THE CONSTRUCTION, PERFORMANCE, OR BREACH OF THIS OR ANY
OTHER AGREEMENT, WHETHER ENTERED INTO PRIOR, ON OR SUBSEQUENT TO THE DATE HEREOF, SHALL BE
DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER THIS AGREEMENT SHALL BE HELD UNDER AND PURSUANT
TO AND BE GOVERNED BY THE FEDERAL ARBITRATION ACT, AND SHALL BE CONDUCTED BEFORE AN ARBITRATION
PANEL CONVENED BY THE NEW YORK STOCK EXCHANGE, INC. OR THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC. CLIENT MAY ALSO SELECT ANY OTHER NATIONAL SECURITY EXCHANGE’S ARBITRATION FORUM UPON
WHICH UBS FINANCIAL SERVICES INC. IS LEGALLY REQUIRED TO ARBITRATE THE CONTROVERSY WITH CLIENT,
INCLUDING, WHERE APPLICABLE, THE MUNICIPAL SECURITIES RULEMAKING BOARD. SUCH ARBITRATION SHALL BE
GOVERNED BY THE RULES OF THE ORGANIZATION CONVENING THE PANEL. CLIENT MAY ELECT IN THE FIRST
INSTANCE THE ARBITRATION FORUM, BUT IF CLIENT FAILS TO MAKE SUCH ELECTION, BY REGISTERED LETTER OR
TELEGRAM ADDRESSED TO UBS FINANCIAL SERVICES INC. AT 1200 HARBOR BOULEVARD, 10TH FLOOR, WEEHAWKEN,
NJ 07088, ATTN: LEGAL DEPARTMENT, BEFORE THE EXPIRATION OF FIVE DAYS (5) AFTER RECEIPT OF A
WRITTEN REQUEST FROM UBS FINANCIAL SERVICES INC. TO MAKE SUCH ELECTION, THEN UBS FINANCIAL SERVICES
INC. MAY MAKE SUCH ELECTION. 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 OF COMPETENT JURISDICTION.

• 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, WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS 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 CUSTOMER IS
EXCLUDED FROM THE CLASS BY THE COURT.

• SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY
RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.

• CLIENT EXPRESSLY AGREES THAT SERVICE OF PROCESS IN ANY ACTION SHALL BE SUFFICIENT IF SERVED
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT YOUR LAST ADDRESS KNOWN TO UBS FINANCIAL SERVICES INC.

• CLIENT EXPRESSLY WAIVES ANY DEFENSE TO SERVICE OF PROCESS AS SET FORTH ABOVE.

Assignment

	20.	 	This agreement may be assigned by you and will inure to the benefit of your successors and
assigns and you may transfer or assign the account(s) of mine to them, which shall be binding
on me and my personal representatives.

Accuracy of Reports

	21.	 	ALL REPORTS OF EXECUTION OF ORDERS AND ACCOUNT STATEMENTS SHALL BE CONCLUSIVE IF NOT OBJECTED
TO BY ME IN WRITING IMMEDIATELY BY NOTICE SENT TO YOU BY REGISTERED MAIL.

Joint and Several Liability and Joint Accounts

	22.	 	If more than one person signs this agreement, our obligations under this agreement shall be
joint and several. If more than one person signs this agreement, you may accept any orders
and instructions from each, and upon receipt of inconsistent instructions or a court order,
may suspend or terminate my account.

Liability for Costs of Collection

	23.	 	I agree to pay you the reasonable costs and expenses of collection, including attorneys fees,
for any unpaid Debits, Charges, and other amounts owing you.

Ineligible Accounts

	24.	 	Your account cannot have margin if it is a UGMA/UTMA, ERISA Plan, Retirement, 529 Plan or
Estate account. Most managed programs cannot have margin.

Suitability

	25.	 	Margin is not suitable for all clients. Please review UBS Financial Service’s Loan
Disclosure Statement carefully for information on the risks involved with using margin.

Loan Consent

	26.	 	BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE THAT YOU AND YOUR SUCCESSORS AND ASSIGNS ARE
AUTHORIZED IN THE USUAL COURSE OF BUSINESS TO LEND, RELEND, HYPOTHECATE, REHYPOTHECATE, PLEDGE
OR REPLEDGE SEPARATELY OR TOGETHER WITH THE PROPERTY OF OTHERS EITHER TO YOURSELVES OR TO
OTHERS ANY PROPERTY WHICH YOU MAY BE CARRYING FOR ME ON MARGIN. THIS AUTHORIZATION SHALL
APPLY TO ALL ACCOUNTS CARRIED BY YOU FOR ME AND SHALL REMAIN IN FULL FORCE UNTIL WRITTEN
NOTICE OF REVOCATION IS RECEIVED BY YOU.

IN RETURN FOR YOUR EXTENSION OR MAINTENANCE OF CREDIT IN CONNECTION WITH MY ACCOUNT, I ACKNOWLEDGE
THAT THE SECURITIES IN MY MARGIN ACCOUNT, TOGETHER WITH ALL ATTENDANT RIGHTS OF OWNERSHIP, MAY BE
LENT TO YOU OR LENT OUT TO OTHERS. IN CONNECTION WITH SUCH LOANS, YOU MAY RECEIVE AND RETAIN
CERTAIN BENEFITS TO WHICH I WILL NOT BE ENTITLED. IN CERTAIN CIRCUMSTANCES, SUCH LOANS MAY LIMIT,
IN WHOLE OR IN PART, MY ABILITY TO EXERCISE VOTING RIGHTS OF THE SECURITIES LENT.

BY SIGNING THIS AGREEMENT THE CUSTOMER ACKNOWLEDGES THAT:

	1.	 	THE SECURITIES IN THE CUSTOMER’S MARGIN ACCOUNT MAY BE LOANED TO THE BROKER OR LOANED OUT TO
OTHERS AND;
	 
	2.	 	THAT THE CUSTOMER HAS RECEIVED A COPY OF THIS AGREEMENT.

THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT PAGE 2 AT PARAGRAPH 19.

Do you intend to engage in “pattern day trading” as defined by NYSE Rule 431*                     o Yes            o No

	*	 	“Day Trading” means purchasing and selling or selling and purchasing the same security in the
same day in a margin account. “Pattern day trading” means executing four or more day trades
within five business days if the number of day trades exceeds six percent of the total trade
during that period.

[CLIENT: BE SURE TO RETAIN YOUR COPY]

	 	 	 
	/S/ Timothy Cope

	 	4/4/08
	 
	Signature of Principal (Name and title if a corporation)

	 	Date
	 
	 	 
	 
	(Signature of Second Party, if a Joint Account)

	 	Date

	 	 	 	 	 	 	 
	 
	No. of Street Address

	 	City or Town
	 	State
	 	Postal Code

ORIGINAL – PAGE 4 OF 4

 

Re: Account Number CP (the “Account”)

ADDENDUM TO CLIENT’S AGREEMENT

The attached “Client’s Agreement” sets forth certain terms related to the extension of credit with
respect to certain assets held through the above-referenced discretionary corporate cash management
Account with UBS Financial Services Inc. (the “Firm”). The party signing this Addendum as Client
where indicated below (the “Client”) understands and agrees that, notwithstanding anything to the
contrary contained in either the Client’s Agreement or the existing Corporate Cash Management
Account Agreement applicable to the Account (the “Account Agreement”), the terms of the Client’s
Agreement supplement, but do not replace, the existing Account Agreement as follows: (i) the terms
of the Client’s Agreement (as amended from time to time in accordance with its terms) shall govern
with respect to any matters, issues or disputes related directly to, or arising directly from, the
extension of credit and/or the status of Client as borrower and the Firm as lender pursuant to the
Client’s Agreement (e.g., matters relating to the terms of any borrowing or extension of credit
under the Client’s Agreement, the indemnification of the Firm as a lender, and/or applicable margin
requirements); and (ii) the terms of the Account Agreement (as amended from time to time in
accordance with its terms) shall govern with respect to all other matters (e.g., matters relating
to the Firm’s trading authority and activities and/or the indemnification of the Firm for the
services it provides under the Account Agreement).

Without limiting the generality of the foregoing, Client further understands and agrees that:

	(A)	 	The Account remains a discretionary account, as described in Section 5 of the Account
Agreement, and the Firm will continue to exercise investment discretion over the assets in the
Account as provided in the Account Agreement.
	 
	(B)	 	If applicable, Client may continue to receive Financial Advisor Reports with respect to the
Account, as described in Section 9 of the Account Agreement, and Client’s receipt of such
reports remains subject to the provisions of Section 9 of the Account Agreement.
	 
	(C)	 	Solely with respect to disputes arising out of the extension of credit and/or the status of
Client as borrower and the Firm as lender pursuant to the Client’s Agreement, the choice of
law provisions of Paragraph 17 of the Client’s Agreement and the arbitration provisions of
Paragraph 19 of the Client’s Agreement shall govern. With respect to any other disputes
relating to the Account, the choice of law provisions of Section 26 of the Account Agreement
and the dispute resolution provisions of Section 27 of the Account Agreement shall continue to
govern.

[Remainder of page intentionally left blank]

[Signature page follows]

 

 

Acknowledged and agreed this    4      day of      April     , 2008

	 	 	 
	Client’s Name:
	 	Lakes Entertainment, Inc.
	 
	 	 
	By:

	 	/S/ Timothy Cope
	 

	 	 
	 
	 	 
	Name:

	 	Timothy Cope
	 

	 	 
	 
	 	 
	Title:

	 	President/CFO
	 

	 	 

 

 

Re: Account Number CP (the “Account”)

SECOND ADDENDUM TO CLIENT’S AGREEMENT

     This Second Addendum (this “Second Addendum’) is attached to, incorporated by reference into
and is fully a part of the Client’s Agreement (as amended, supplemented or otherwise modified from
time to time, the “Client’s Agreement”) between UBS Financial Services Inc. (“UBS Financial
Services”) and the party signing this Second Addendum as Client where indicated below (the
“Client”) with respect to the Account. Any conflict between the terms of the Client’s Agreement
and this Second Addendum shall be resolved in accordance with the terms of this Second Addendum.
Defined terms used herein shall have the respective meanings set forth in the Client’s Agreement
unless otherwise defined in this Second Addendum.

     UBS Financial Services and the Client acknowledge and agree that:

	 	1.	 	The Client’s Agreement is amended by adding the following at the end of Section 12:

     “I expressly agree that your right to liquidate any account of mine if in your discretion you
consider it necessary for your protection to do so shall include, without limitation, the right to
liquidate any such account in the event of a breach by me of any provision of this or any other
agreement with you or your affiliates or as a result of my insolvency. I further agree that in the
event you determine to liquidate any property credited to any of my accounts, you shall, to the
fullest extent permitted by applicable law, have the right to do so in any manner, including,
without limitation, the sale of my property individually or in a block, for cash or for credit, in
a public or private sale, with or without public notice, through the use of sealed bids or
otherwise, with the aid of any advisor or agent who may be your affiliate or in any other manner as
you in your sole discretion shall choose. I acknowledge that the price you obtain for my property
in your chosen method of sale may be lower than might be otherwise obtained in another method of
sale, and I hereby agree that any such sale shall not be considered to be not commercially
reasonable solely because of such lower price. I understand that there may not be a liquid market
for the property in my accounts and that, as a result, the price received for my property upon your
liquidation may be substantially less than I paid for such property or than the last market value
available for it, if any. I further agree that any sale by you shall not be considered to be not
commercially reasonable solely because there are few (including only one) or no third parties who
submit bids or otherwise offer to buy my property. I understand that your sale of any of the
property in my accounts may be subject to various state and federal property and/or securities laws
and regulations, and that compliance with such laws and regulations may result in delays and/or a
lower price being obtained for my property. I agree that you shall have the right to restrict any
prospective purchasers to those who, in your sole discretion, you deem to be qualified. I
acknowledge that you shall have sole authority to determine, without limitation, the time, place,
method of advertisement and manner of sale and that you may delay or adjourn any such sale in your
sole discretion. I expressly authorize you to take any action with respect to my property as you
deem necessary or advisable to facilitate any liquidation, and I agree that you shall not be held
liable for taking or failing to take any such action, regardless if a greater price may have been
obtained for my property if such action was or was not taken, as applicable. I hereby waive, to
the fullest extent permitted by law, any legal right of appraisal, notice, valuation, stay,
extension, moratorium or redemption that I would otherwise have with respect to a sale of my
property.

 

 

	 	2.	 	The Client’s Agreement is amended by adding the following at the end of Section 7:

     “I also hereby grant you a lien on my right to receive proceeds under any loan or financing
agreement entered into subsequent to the date hereof or under any issuance of shares by me
subsequent to the date hereof under any primary or secondary offering, or other financing
arrangement that I may undertake. I agree to promptly notify you about the occurrence of or my
intention to conduct any transaction contemplated by the prior sentence.’

	 	3.	 	The Client’s Agreement is amended by adding the following as Section 27:

     “I understand, acknowledge and agree that you shall have no obligation to extend any further
credit to me.”

               Acknowledged and agreed this ___4___day of April, 2008.

	 	 	 	 	 
	 	Client’s Name: Lakes Entertainment, Inc.

 	 
	 	By:  	/S/ Timothy Cope 	 
	 	Name:  	Timothy Cope 	 
	 	Title:  	President/CFO

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