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exv10w41

 

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Exhibit 10.41

	 	 	 
	 
	 	 
	 

	 	UBS Bank USA
	 

	 	C/O UBS Financial Services Inc.
	 

	 	100D Harbor Blvd./7th Floor
	 

	 	[ILLEGIBLE]

March 5, 2008

	 	 	 	 	 	 	 
	SUCAMPO PHARMACEUTICALS INC.

	 	 	 	Account Number:
	 	5V56045
	4520 EAST WEST HIGHWAY

	 	 	 	Approved Facility Amount:
	 	$30,000,000.00
	THIRD FLOOR
	 	 	 	 	 	 
	BETHESDAMD 20814-3319
	 	 	 	 	 	 

We are pleased to inform you that your application for a UBS Premier Variable Credit Line
has been approved.

Here are some important terms that apply to your
Credit Line

	 	 	 
	Interest Rate:
	 	Prevailing 1-month LIBOR (Reset Daily)                          +1%
	Loan Term:
	 	Payable on demand
	Frequency of Interest Payments:
	 	Monthly*
	Minimum Initial Draw Amount:
	 	$25,001
	Access Available Credit Via:
	 	Credit Line checks or electronic disbursement***

If you did not request checks for your Credit Line during the application process, or
if you want to
arrange an electronic disbursement, please contact your Financial Advisor. Your
Financial Advisor can
also assist you with any questions about your Credit Line.

Thank you for your business.

Sincerely,

Steven M. Stewart

Senior Vice President

UBS Bank USA

Note: Loans made through a Credit Line are extended solely at the discretion of UBS Bank
USA under the terms of the Credit Line Agreement (“Agreement”). This is not a committed
loan facility and UBS Bank USA is [ILLEGIBLE] obligated to you or any third party to satisfy your
borrowing requests. Credit Line loan funds cannot be used to
purchase, trade or carry securities; to repay an outstanding loan that was used to purchase, trade or carry securities; or to pay off
a loan that you may have with an affiliate of UBS Bank USA.

 

*        Loans extended by UBS Bank USA under your Credit Line are governed by the terms and conditions
set forth in your Credit Line Agreement.

**     Unless other payment arrangements are made,
your monthly interest payment will be added to
the outstanding principal of your Credit Line provided the Bank
determines there is sufficient collateral, the loan,
balance does not exceed your approved facility amount and all other requirements under the Agreement are met.

***  Changes in the value of the collateral supporting a Credit Line, as well as other factors
described in the Credit Line Agreement may limit your ability to access funds from your Credit Line.

 

 

			
	
	 	

Borrower Agreement

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

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

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

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

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

	E.	 	Neither UBS Bank USA nor UBS Financial Services Inc. provides legal or tax advice.

	F.	 	Upon execution of this Credit Line Account Application and Agreement, the Borrower will have
supplied all of the information requested in the Application and the Borrower declares it as
true and accurate and further agrees to promptly notify UBS Bank USA in writing of any
material changes to any or all of the information contained in the Application including
information relating to the Borrower’s financial situation.

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

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

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

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

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

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

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

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

DATE:                                         

	 	 	 	 	 	 	 	 	 
	Name of Borrower	 	SUCAMPO PHARMACEUTICALS, INC.	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BY:	 	/s/ Mariam Morris	 	Title:	 	CFO OF SUCAMPO PHARMACEUTICALS, INC.
	 	 	 	 	 	 	 
	 	 	(Signature of Authorised Signatory of Borrower) MARIAM MORRIS	 	 	 	(Title of Authorized Signatory of Borrower)
	 
	 	 	 	 	 	 	 	 
	BY:	 	/s/ Ryuji Ueno	 	Title:	 	CEO OF SUCAMPO PHARMACEUTICALS, INC.
	 	 	 	 	 	 	 
	 	 	(Signature of Authorised Signatory of Borrower) Ryuji Ueno	 	 	 	(Title of Authorized Signatory of Borrower)

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

©2006 UBS Bank USA. All rights reserved.

UBS Bank USA is a service mark of UBS AG.

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Credit Line Agreement

Credit Line Agreement — Demand Facility

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

1. Definitions

	•	 	“Advance” means any Fixed Rate Advance or Variable Rate Advance made by the Bank pursuant to
this Agreement.

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

	•	 	“Application” means the Credit Line Account Application and Agreement that the Borrower has
completed and submitted to the Bank.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	(i)	 	for Variable Rate Advances, the prevailing London Interbank Offered Rate for
deposits in U.S. dollars having a maturity of 30 days as published in The Wall Street
Journal “Money Rates” Table on the date of the Advance; and
	 
	 	(ii)	 	for Fixed Rate Advances, the prevailing London Interbank Offered Rate for deposits
in U.S. dollars having a maturity corresponding to the length of the Interest Period
applicable to the Advance as quoted by the Bloomberg service at 4:00 a.m. Eastern
Standard Time on the date of the Advance.

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

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

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

	•	 	“Pledgor” means each Person who pledges to the Bank any Collateral to secure the Credit
Line Obligations (or to secure the obligations of any Guarantor with respect to the guaranty
of the Credit Line Obligations). Pledgor will include (i) each Borrower who pledges

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	 	 	Collateral to secure the Credit Line Obligations, (ii) each Guarantor who has pledged
collateral to secure the Credit Line Obligations or its obligations under a Guaranty Agreement,
(iii) any spouse of a Borrower who executes a spouse’s pledge and consent agreement with respect
to a jointly held collateral account, (iv) any other joint account holder who executes a joint
account holder pledge and consent agreement with respect to a jointly held collateral account,
and (v) any other Person who executes a pledge agreement with respect to the Credit Line.
	 
	•	 	“Premier Credit Line” means any Credit Line with an Approved Amount equal to or greater than
$250,000.

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

	•	 	“Prime Rate” means the floating “Prime Rate” as published in The Wall Street Journal “Money
Rates” Table from time to time. The Prime Rate will change as and when the Prime Rate as
published in The Wall Street Journal. In the event that The Wall Street Journal does not
publish a Prime Rate, the Prime Rate will be the rate as determined by the Bank in its sole
and absolute discretion.

	•	 	“Securities Intermediary” has the meaning specified in Section 9.

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

	•	 	“UBS-I” means UBS International Inc. and its successors.

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

2. Establishment of Credit Line; Termination

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

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

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

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

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

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

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

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

3. Terms of Advances

	a)	 	Advances made under this Agreement will be available to the Borrower in the form, and
pursuant to procedures, as are established from time to time by the Bank in its sole and
absolute discretion. The Borrower and each Loan Party agree to provide all documents,
financial or other information regarding any Advance as the Bank may request. Advances will be
made by wire transfer of funds to an account as specified in writing by the Borrower or by any
other method agreed upon by the Bank and the Borrower. The Borrower acknowledges and agrees
that the Bank will riot make any Advance to the Borrower unless the collateral maintenance
requirements that are established by the Bank in its sole and absolute discretion have been
satisfied.

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

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

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

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

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

4. Interest

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

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

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

5. Payments

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

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

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

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

To the extent permitted by law, interest charges on any Advance that are not paid when due will
be treated as principal and will accrue interest at a variable rate from the date the payment
of interest was due until it is repaid in full.

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

	e)	 	All payments must be made to the Bank free and clear of any and all present and future taxes
(including withholding taxes), levies, imposts, duties, deductions, fees, liabilities and
similar charges other than those imposed on the overall net income of the Bank. If so
requested by the Bank, the Borrower will deliver to the Bank the original or a certified copy
of each receipt evidencing payment of any taxes or, if no taxes are payable in respect of any
payment under this Agreement, a certificate from each appropriate taxing authority, or an
opinion of counsel in form and substance and from counsel acceptable to the Bank in its sole
and absolute discretion, in either case stating that the payment is exempt from or not subject
to taxes. If any taxes or other charges are required to be withheld or deducted from any
amount payable by the Borrower under this Agreement,

7

 

			
	
	 	

	 	 	the amount payable will be increased to the amount which, after deduction from the increased
amount of all taxes and other charges required to be withheld or deducted from the amount
payable, will yield to the Bank the amount stated to be payable under this Agreement If any of
the taxes or charges are paid by the Bank, the Borrower will reimburse the Bank on demand for
the payments, together with ail interest and penalties that may be imposed by any governmental
agency. None of the Bank, UBS Financial Services Inc., UBS-I or their respective employees has
provided or will provide legal advice to the Borrower or any Loan Party regarding compliance
with (for the implications of the Credit Line and the related guaranties and pledges under) the
laws (including tax laws) of the jurisdiction of the Borrower or any Loan Party or any other
jurisdiction. The Borrower and each Loan Party are and shall be solely responsible for, and the
Bank shall have no responsibility for, the compliance by the Loan Parties with any and all
reporting and other requirements arising under any applicable laws.
	 
	f)	 	In no event will the total interest and fees, if any, charged under this Agreement exceed
the maximum interest rate or total fees permitted by law. In the event any excess interest or
fees are collected, the same will be refunded or credited to the Borrower. If the amount of
interest payable by the Borrower for any period is reduced pursuant to this Section 5(f), the
amount of interest payable for each succeeding period will be increased to the maximum rate
permitted by law until the amount of the reduction has been received by the Bank.

6. Prepayments; Breakage Charges

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

	b)	 	The Borrower may repay any Fixed Rate Advance, in whole or in part. The Borrower agrees to
reimburse the Bank, immediately upon demand, for any loss or cost (“Breakage Costs”) that the
Bank notifies the Borrower has been incurred by the Bank as a result of (i) any payment of the
principal of a Fixed Rate Advance before the expiration of the Interest Period for the Fixed
Rate Advance (whether voluntarily, as a result of acceleration, demand or otherwise), or (ii)
the Customer’s failure to take any Fixed Rate Advance on the date agreed upon, including any
loss or cost (including loss of profit or margin) connected with the Bank’s re-employment of
the amount so prepaid or of those funds acquired by the Bank to fund the Advance not taken on
the agreed upon date.
	 
	 	 	Breakage Costs will be calculated by determining the differential between the stated rate of
interest for the Fixed Rate Advance and prevailing LIBOR and multiplying the differential by
the sum of the outstanding principal amount of the Fixed Rate Advance (or the principal amount
of Fixed Rate Advance not taken by the Borrower) multiplied by the actual number of days
remaining in the Interest Period for the Fixed Rate Advance (based upon a 360-day year). The
Borrower also agrees to promptly pay to the Bank an administrative fee (“Breakage Fee”) in
connection with any permitted or required prepayment. The Breakage Fee will be calculated by
multiplying the outstanding principal amount of the Fixed Rate Advance (or the principal amount
of Fixed Rate Advance not taken by the Borrower) by two basis points (0 02%). Any written
notice from the Bank as to the amount of the loss or cost will be conclusive absent manifest
error.

7. Joint Credit Line Account Agreement; Suspension and Cancellation

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

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

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

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

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

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

8

 

			
	
	 	

	c)	 	The Borrower ,and, if applicable, any other Pledgor on the Collateral Account)
agrees to maintain in a Collateral Account, at all times, Collateral having an aggregate lending
value as specified by the Bank from time to time.
	 
	d)	 	The Bank’s sole duty for the custody, safe keeping and physical preservation of any
Collateral in its possession will be to deal with the Collateral in the same manner as the Bank
deals with similar property for its own account. The Borrower (and, if applicable, any other
Pledgor on the Collateral Account) agrees that the Bank will have no responsibility to act on any
notice of corporate actions or events provided to holders of securities or other investment
property included in the Collateral. The Borrower (and, if applicable, any other Pledgor on the
Collateral Account) agrees to (i) notify the Bank promptly upon receipt of any communication to
holders of the investment property disclosing or proposing any stock split, stock dividend,
extraordinary cash dividend, spin-off or other corporate action or event as a result of which the
Borrower or Pledgor would receive securities, cash (other than ordinary cash dividends) or other
assets in respect of the investment property, and (ii) immediately upon receipt by the Borrower or
Pledgor of any of these assets, cause them to be credited to a Collateral Account or deliver them
to or as directed by the Bank as additional Collateral.
	 
	e)	 	The Borrower (and, if applicable, any other Pledgor on the Collateral Account) agrees that
all principal, interest, dividends, distributions, premiums or other income and other payments
received by the Bank or credited to the Collateral Account in respect of any Collateral may be held
by the Bank as additional Collateral or applied by the Bank to the Credit Line Obligations. The
Bank may create a security interest in any of the Collateral and may, at any time and at its
option, transfer any securities or other investment property constituting Collateral to a
securities account maintained in its name or cause any Collateral Account to be redesignated or
renamed in the name of the Bank.
	 
	f)	 	
 If a Collateral Account has margin features, the margin features will be removed by UBS
Financial Services Inc. or UBS International Inc., as applicable, so long as there is no
outstanding margin debit in the Collateral Account.
	 
	g)	 	If the Collateral Account permits cash withdrawals in the form of check writing, access card
charges, bill payment and/or electronic funds transfer services (for example, Resource
Management Account®, Business Services Account BSA®, certain Basic Investment Accounts and certain
accounts enrolled in UBS Financial Services Inc. Investment solutions programs), the “Withdrawal
Limit” for the Collateral Account, as described in the documentation governing the account will be
reduced on an ongoing basis so that the aggregate lending value of the Collateral remaining in the
Collateral Account following the withdrawal may not be less than the amount required pursuant to
Section 8(c).
	 
	h)	 	In addition to the Bank’s security interest, the Bank will at all times have a right to set off
any or all of the Credit Line Obligations at or after the time at which they become due, whether
upon demand, at a stated maturity date, by acceleration or otherwise, against all securities, cash,
deposits or other property in the possesion of or at any time in any account maintained with the
Bank or any of its affiliates by or for the benefit of the Borrower, whether carried individually
or jointly with others. This right is in addition to, and not in limitation of, any right the Bank
may have at law or otherwise.
	 
	i)	 	The Bank reserves the right to disapprove any Collateral and to require the Borrower at any time
to deposit into the Borrower’s Collateral Account additional Collateral in the amount as the Bank
requests or to substitute new or additional Collateral for any Collateral that has previously been
deposited in the Collateral Account.

9. Control

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

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

10. Remedies

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

	 	(i)	 	the Borrower fails to pay any amount due under this Agreement;
	 
	 	(ii)	 	the Borrower and/or any other relevant Loan Party fails to maintain sufficient Collateral in a
Collateral Account or any Guarantor fails to maintain collateral as required under its Guaranty
Agreement;
	 
	 	(iii)	 	the Borrower or any other Loan Party breaches or fails to perform any other covenant,
agreement, term or condition that is applicable to it under this Agreement or any related
agreement, or any representation or other statement of the Borrower (or any Loan Party) in this
Agreement or in any related agreement is incorrect in any material respect when made or deemed
made;

9

 

			
	
	 	

	 	(iv)	 	the Borrower or any other Loan Party dies or is declared (by appropriate authority)
incompetent or of unsound mind or is indicted or convicted of any crime or, if not an individual,
ceases to exist;
	 
	 	(v)	 	any voluntary or involuntary proceeding for bankruptcy, reorganization, dissolution or
liquidation or similar action is commenced by or against the Borrower
or any other Loan Party, or a
trustee in bankruptcy, receiver, conservator or rehabilitator is appointed, or an assignment for
the benefit of creditors is made, with respect to the Borrower or any other Loan Party or its
property;
	 
	 	(vi)	 	the Borrower or any Loan Party is insolvent, unable to pay its debts as they fall due,
stops, suspends or threatens to stop or suspend payment of all or a material part of its debts,
begins negotiations or takes any proceeding or other step with a view to readjustment, rescheduling
or deferral of all or any part of its indebtedness, which it would or might otherwise be unable to
pay when due, or proposes or makes a general assignment or an arrangement or composition with or
for the benefit of its creditors;
	 
	 	(vii)	 	a Collateral Account (or any account in which collateral provided by a Loan Party is
maintained) or any portion thereof is terminated, attached or subjected to a levy;
	 
	 	(viii)	 	the Borrower or any Loan Party fails to provide promptly all financial and other
information as the Bank may request from time to time;
	 
	 	(ix)	 	any indebtedness of the Borrower or any other Loan Party in respect of borrowed money
(including indebtedness guar antied by the Borrower or any other Loan Party) or in respect of any
swap, forward, cap, floor, collar, option or other derivative transaction, repurchase or similar
transaction or any combination of these transactions is not paid when due, or any event or
condition causes the indebtedness to become, or permits the holder to declare the indebtedness to
be, due and payable prior to its stated maturity;
	 
	 	(x)	 	final judgment for the payment of money is rendered against Client (or any Loan Party) and
within thirty days from the entry of judgment has not been discharged or stayed pending appeal or
has not been discharged within thirty days from the entry of a final order of affirmance on appeal;
	 
	 	(xi)	 	any legal proceeding is instituted or any other event occurrs or condition exists that in the
Bank’s judgment calls into question (A) the validity or binding effect of this Agreement or any
related agreement or any of the Borrower’s (or any other Loan Party’s) obligations under this
Agreement or under any related agreement or (B) the ability of the Borrower (or any Loan Party) to
perform its obligations under this Agreement, or under any related agreement; or
	 
	 	(xii)	 	the Bank otherwise deems itself or its security interest in the Collateral insecure or the
Bank believes in good faith that the prospect of payment or other performance by any Loan Party is
impaired.

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

	b)	 	Nothing contained in this Section 10 will limit the right of the Bank to demand full or
partial payment of the Credit Line Obligations, in its sole and absolute discretion and without
cause, at any time.
	 
	c)	 	All rights and remedies of the Bank under this Agreement are cumulative and are in addition
to all other rights and remedies that the Bank may have at law or equity or under any other
contract or other writing for the enforcement of the security interest herein or the collection of
any amount due under this Agreement.
	 
	d)	 	Any non-exercise of rights, remedies and powers by the Bank under this Agreement and the other
documents delivered in connection with this Agreement shall not be construed as a waiver of any
rights, remedies and powers. The Bank fully reserves its rights to invoke any of its rights,
remedies and powers at any time it may deem appropriate.

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

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

	a)	 	Except for the Bank’s rights under this Agreement and the rights of the Securities
Intermediary under any account agreement, the Borrower and each relevant Pledgor owns the
Collateral, free of any interest or lien in favor of any third party and free of any impediment to
transfer;
	 
	b)	 	Each Loan Party: (i) if a natural Person, is of the age of majority; (ii) is authorized to
execute and deliver this Agreement and to perform its obligations under this Agreement and any
related agreement; (iii) is not an employee benefit plan, as that term is defined by the Employee
Retirement income Security Act of 1974, or an Individual Retirement Credit Line Account (and none
of the Collateral is an asset of a plan or account); and (iv) unless the Loan Party advises the
Bank to the contrary, in writing, and provides the Bank with a letter of approval, where required,
from its employer, is not an employee or member of any exchange or of any corporation or firm
engaged in the business of dealing, either as a broker or as principal, in securities, bills of
exchange, acceptances or other forms of commercial paper;
	 
	c)	 	Neither the Borrower nor any Pledgor on the Collateral Account will pledge the Collateral or
grant a security interest in the Collateral to

10

 

			
	
	 	

	 	 	any party ether than the Bank or the Securities Intermediary, or permit the Collateral to become
subject to any liens or encumbrances (other than those of the Bank and the Securities
Intermediary), during the term of this Agreement;
	 
	d)	 	Each Loan Party is not in default under any material contract, judgment, decree or order to
which it is a party or by which it or its properties may be bound; and
	 
	e)	 	Each Loan Party has duly filed all tax and information returns required to be filed and has
paid all taxes, fees, assessments and other governmental charges or levies that have become due and
payable, except to the extent such taxes or other charges are being contested in good faith and are
adequately reserved against in accordance with GAAP.

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

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

13. Acceptance of Application and Agreement; Applicable Law

THIS APPLICATION AND AGREEMENT WILL BE RECEIVED AND ACCEPTED BY BANK IN THE STATE OF UTAH, OR IF
THIS APPLICATION AND AGREEMENT IS DELIVERED TO BANK’S AGENT, UBS FINANCIAL SERVICES INC., IT WILL
BE RECEIVED AND ACCEPTED WHEN RECEIVED BY UBS FINANCIAL SERVICES INC.’S UNDERWRITING DEPARTMENT.
DELIVERY OF THE APPLICATION AND AGREEMENT TO THE BORROWER’S FINANCIAL ADVISOR AT UBS FINANCIAL
SERVICES INC. WILL NOT BE CONSIDERED RECEIPT OR ACCEPTANCE BY BANK. ALL DECISIONS MADE BY BANK
REGARDING THE CREDIT LINE WILL BE MADE IN UTAH.

THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF UTAH
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF UTAH AND, IN CONNECTION
WITH THE CHOICE OF LAW GOVERNING INTEREST, THE FEDERAL LAWS OF THE UNITED STATES.

14. Assignment

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

15. Amendment

This Agreement may be amended only by the Bank at any time by sending written notice, signed by an
authorized officer of the Bank, of an amendment to the Borrower. The amendment shall be effective
as of the date established by the Bank. This Agreement may not be amended orally. The Borrower or
the Bank may waive compliance with any provision of this Agreement, but any waiver must be in
writing and will not be deemed to be a waiver of any other provision of this Agreement.

16. Severability

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

17. Choice of Forum; Waiver of Jury Trial

	a)	 	ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY JUDGMENT ENTERED BY ANY COURT
REGARDING THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WILL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE THIRD JUDICIAL DISTRICT COURT FOR THE STATE OF UTAH OR IN THE UNITED
STATES DISTRICT COURT FOR THE STATE OF UTAH. EACH OF THE LOAN PARTIES IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE THIRD JUDICIAL DISTRICT COURT FOR THE STATE OF UTAH AND OF THE
UNITED STATES DISTRICT COURT FOR THE STATE OF UTAH FOR THE PURPOSE OF ANY SUCH ACTION OR PROCEEDING
AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH ACTION OR PROCEEDING. EACH OF THE LOAN PARTIES IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE NOW OR IN THE
FUTURE TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
	 
	b)	 	EACH OF THE LOAN PARTIES (FOR ITSELF, ANYONE CLAIMING THROUGH IT OR IN ITS NAME, AND ON BEHALF
OF ITS EQUITY HOLDERS) IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY REGARDING ANY
CLAIM BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.
	 
	c)	 	Any arbitration proceeding between the Borrower (or any other Loan Party) and the Securities
Intermediary, regardless of whether or not based on circumstances related to any court proceedings
between the Bank and the Borrower (or the other Loan Party), will not provide a basis for any stay
of the court proceedings.
	 
	d)	 	Nothing in this Section 17 will be deemed to alter any agreement to arbitrate any
controversies which may arise between the Borrower (or any other Loan Party) and UBS Financial
Services Inc. or its predecessors, and any claims between the Borrower or the Loan Party, as
applicable, and UBS Financial Services Inc. or its employees (whether or not they have acted as
agents of the the Bank) will be arbitrated as provided in any agreement between the Borrower or the
Loan Party, as applicable, and UBS Financial Services Inc.

11

 

			
	
	 	

	18.	 	State Specific Provisions and Disclosures
	 
	a)	 	For residents of Ohio:

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

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

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

	 	(i)	 	Any person, whether married, unmarried, or separated, may apply for separate credit.
	 
	 	(ii)	 	As required by law, you are notified that a negative credit report reflecting on your
credit record may be submitted to a credit reporting agency if you fail to fulfill the
terms of your credit obligations.
	 
	 	(iii)	 	The Borrower will notify the Bank, within a reasonable time, of any change in the
Borrower’s name, address, or employment.
	 
	 	(iv)	 	The Borrower will not attempt to obtain any Advance if the Borrower knows that the
Borrower’s credit privileges under the Credit Line have been terminated or suspended.
	 
	 	(v)	 	The Borrower will notify the Bank by telephone, telegraph, letter, or any other
reasonable means that an unauthorized use of the Credit Line has occurred or may occur as
the result of the loss or theft of a credit card or other instrument identifying the Credit
Line, within a reasonable time after the Borrower’s discovery of the loss or theft, and
will reasonably assist the Bank in determining the facts and circumstances relating to any
unauthorized use of the Credit Line.

	19.	 	Account Agreement
	 
	Each Loan Party acknowledges and agrees that this Agreement supplements their account agreement(s)
with the Securities Intermediary relating to the Collateral Account and, if applicable, any
related account management agreement(s) between the Loan Party and the Securities Intermediary. In
the event of a conflict between the terms of this Agreement and any other agreement between the
Loan Party and the Securities Intermediary, the terms of this Agreement will prevail.
	 
	20.	 	Notices
	 
	Unless otherwise required by law, all notices to a Loan Party may be oral or in writing, in the
Bank’s discretion, and if in writing, delivered or mailed by the United States mail, or by
overnight carrier or by telecopy to the address of the Loan Party shown on the records of the
Bank. Each Loan Party agrees to send notices to the Bank, in writing, at such address as provided
by the Bank from time to time.

12

 

			
	
	 	

Schedule I to UBS Bank USA Credit Line Agreement

Schedule of Percentage Spreads Over LIBOR

	 	 	 	 	 
	Aggregate Approved Amount	 	Spread Over LIBOR
	 
	$250,000 to $499,999
	 	 	2.750	%
	$500,000 to $999,999
	 	 	1.750	%
	$1,000,000 to $4,999,999
	 	 	1.500	%
	$5,000,000 and over
	 	 	1.250	%

Schedule II to UBS Bank USA Credit Line Agreement

Schedule of Percentage Spreads Over Prime

	 	 	 	 	 
	Outstanding Amount under Credit Line	 	Spread Over Prime
	 
	$0 to $24,999
	 	 	3.125	%
	$25,000 to $49,999
	 	 	2.625	%
	$50,000 to $74,999
	 	 	2.125	%
	$75,000 to $99,999
	 	 	1.625	%
	$100,000 to $249,999
	 	 	1.375	%

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

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

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

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

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

AVISO PARA EL FIADOR (Spanish Translation
Required By Law)

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

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

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

Este aviso no es el contrato mismo en que se le echa a usted la responsabilidad de la deuda.

13

 

UBS Bank USA

			
	 	 	 
	
	 	HP

CREDIT LINE SUPPLEMENTAL CORPORATE RESOLUTIONS (LENDING)

			
	 	 	 
	Variable Credit Line Account Title (if applicable)

SUCAMPO PHARMACEUTICALS, INC.

Fixed Credit Line Account Title (if applicable)
	 	

 

The undersigned certifies that I am the Secretary or an Assistant Secretary of the Corporation
indicated under the signature line below (the “Corporation”) and that the Corporation is a duly
organized and validly existing corporation in good standing in the jurisdiction of its
incorporation. The following resolutions were duly adopted by the Board of Directors at a duly
called meeting or by unanimous written consent of the Board of Directors.

WHEREAS, the Corporation seeks to benefit (directly or indirectly) from the opening and
maintaining of one or more loan accounts at UBS Bank USA, and/or its successor firms,
subsidiaries, affiliates, and any third party service providers (collectively, “UBS Bank USA”), on
its own behalf or a related person or entity.

NOW, THEREFORE, BE IT RESOLVED THAT:

	1)	 	The Corporation is authorized to:

	 	(a)	 	enter into a Credit Line Agreement with UBS Bank USA under which UBS Bank USA
will establish one or more loan accounts for the benefit of the Corporation (the
“Credit Line Agreement”);
	 
	 	(b)	 	enter into a Credit Line Guaranty Agreement for the benefit of UBS Bank USA
under which the Corporation will become liable to UBS Bank USA for the obligations of
the third party named below, arising under or in connection with the third party’s
Credit Line Agreement with UBS Bank USA; and
	 
	 	(c)	 	enter into any other agreements or documents in connection with the Credit Line
Agreement and/or the Credit Line Guaranty Agreement.

	2)	 	The Corporation is authorized to:

	 	(a)	 	use any loan accounts established under the Credit Line Agreement to borrow
and/or obtain credit from time to time from UBS Bank USA;
	 
	 	(b)	 	guaranty the obligations of others to UBS Bank USA, in United States dollars or any
foreign currency; and
	 
	 	(c)	 	pledge, mortgage, assign or subject to a security interest or lien any property
of any sort of the Corporation as security for any liability of the Corporation.

	3)	 	Each of the corporate officers named in the signature area below (each, together with
persons designated under resolution number 4 below an “Authorized Person”) is authorized
individually, without counter signature or co-signature, to act on behalf of the
Corporation to:

	 	(a)	 	enter into the Credit Line Agreement, establish loan accounts and pledge the
Corporation’s assets as collateral under the Credit Line Agreement or any related
agreement as applicable;
	 
	 	(b)	 	enter into the Credit Line Guaranty Agreement, assume all liabilities and
pledge the Corporation’s assets as collateral under the Credit Line Agreement or
Guaranty Agreement or any other related agreement, as applicable;
	 
	 	(c)	 	execute and deliver on behalf of the Corporation any and all relevant
documents, and to deal with UBS Bank USA in connection with the Credit Line Agreement,
loan and collateral accounts, Credit Line Guaranty Agreement and any related agreement,
with no limits as to amount;
	 
	 	(d)	 	obtain all services that UBS Bank USA offers, including the services set forth in these
resolutions;
	 
	 	(e)	 	bind the Corporation in respect of any agreements entered into with UBS Bank USA; and
	 
	 	(f)	 	take any other actions on behalf of the Corporation necessary or appropriate to carry
out the intent of these resolutions.

	4)	 	Each of the Authorized Persons acting as specified in these resolutions is authorized to
appoint one or more attorneys-in-fact or agents to act on behalf of the Corporation in the
same capacity as set forth in these resolutions, and is authorized to execute and deliver to
UBS Bank USA any powers of attorney or other documents to effect or evidence the appointment.
	 
	5)	 	UBS Bank USA is authorized, but not obligated, to deal with each Authorized Person
individually, as follows, subject to the Corporation having completed documentation relating
to the relevant products and services, and subject to UBS Bank USA policy and practice as in
effect from time to time:

	 	(a)	 	to accept all instructions of any nature in connection with any loan account
or collateral account given verbally, in writing, or by electronic communication by
him or her on behalf of the Corporation, as the action of the Corporation without
limit or further inquiry as to his or her authority or the validity or legality of the
actions under any and all laws, rules and regulations applicable to the Corporation
and the conduct of its business and affairs;

					
	 	 	 	 	 
	 
	 	1 of 2
	 	 

 

 

			
	 	 	 
	 
	 	

	 	(b)	 	to extend loans in connection with the loan accounts or-other credit facility for the
Corporation; and
	 
	 	(c)	 	to act, in effecting any of the transactions, upon instructions contained in
any message received by it, transmitted by any form or agency or communication, which
UBS Bank USA believes in good faith to have been originated by an Authorized Person
acting as specified in these resolutions.

	6)	 	Any borrowing made from time to time on behalf of the Corporation with UBS Bank USA is ratified,
confirmed and approved.
	 
	7)	 	UBS Bank USA is authorized to rely upon the authority conferred by these resolutions until
UBS Bank USA receives a certified copy of resolutions of the Corporation’s Board of Directors
revoking or modifying these resolutions. In the event that UBS Bank USA, for any reason, is
uncertain as to the continuing effectiveness of the authority conferred by these
resolutions or any other resolutions of the Corporation, UBS Bank USA will be indemnified
against and held harmless from any claims, demands, expenses, loss or damage, including legal
fees and costs, resulting from or arising out of its refraining from taking any action.
	 
	8)	 	In consideration of UBS Bank USA acting in reliance upon these resolutions, it shall be
fully protected in acting and the Corporation agrees to indemnify and save harmless UBS Bank
USA from and against any and all loss, damage, liability, claims and expenses arising by
reason of its acting in reliance upon these resolutions.
	 
	9)	 	The Secretary or an Assistant Secretary of the Corporation is authorized and directed to certify
to UBS Bank USA:

	 	(a)	 	that these resolutions have been duly adopted, are in full force and effect and
are in accordance with the provisions of applicable law and regulation and the charter
and by-laws of the Corporation;
	 
	 	(b)	 	the identities of the Authorized Persons and, from time to time in the future
any changes that may occur in the identities of the Authorized Persons as the changes
are made, and
	 
	 	(c)	 	that UBS Bank USA will be fully protected in relying on the certifications of
the Secretary or an Assistant Secretary and will be indemnified and saved harmless
from any and all loss, damage, liability, claims and expenses resulting from honoring
the signature of any Authorized Person certified or refusing to honor any signature not
certified.

	10)	 	I certify that there is no provision in the charter or by-laws of the Corporation limiting
the power of the Board of Directors to adopt these resolutions and that these resolutions are
in the conformity with the provisions of the charter and by-laws, neither of which requires or
provides for any vote or consent of other than the Board of Directors to authorize the
adoption of these resolutions.
	 
	11)	 	I further certify that the persons listed below are duly elected or appointed qualified
officers of the Corporation, hold in the Corporation the respective positions indicated above
and that set forth opposite each respective name is the true and correct signature of the
person.
	 
	12)	 	This Supplemental Corporate Resolutions Form shall inure to the benefit of UBS Bank USA and
the benefit of any successor corporations or firms, and of the assigns of UBS Bank USA and/or
any successor corporations or firms.

	 	 	 
	 

	 	/s/ KEI TOLLIVER
	 

	 	 
	 

	 	     (Signature of Secretary or Assistant Secretary)      DATE
	 
	 	 
	 

	 	KEI TOLLIVER, SECRETARY
	 

	 	 
	 

	 	(Print Name of Secretary or Assistant Secretary, as applicable)

PLEASE COMPLETE THE FOLLOWING INFORMATION:

Name of Corporation: SUCAMPO PHARMACEUTICALS, INC.

Jurisdiction where Corporation is organized: DELAWARE

Name of third-party whose Credit Line Agreement is being guaranteed (if applicable):

                                        

Corporate Officers Designated as “Authorized Persons” to act on behalf of the Corporation
(AT LEAST TWO SHOULD BE DESIGNATED) please sign below:

	 	 	 	 	 
	MARIAM MORRIS, CFO OF SUCAMPO PHARMACEUTICALS, INC

	 	/s/ MARIAM MORRIS	 	 
	 

	 	 	 	 
	(Print Name and Title of Officer)

	 	(Signature of Officer)
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	(Print Name and Title of Officer)

	 	(Signature of Officer)	 	 
	 
	 	 	 	 
	RYUJI UENO, CEO OF SUCAMPO PHARMACEUTICALS, INC

	 	/s/ RYUJI UENO	 	 
	 

	 	 	 	 
	(Print Name and Title of Officer)

	 	(Signature of Officer)	 	 

					
	 	 	 	 	 
	 
	 	2 of 2
	 	 

 

 

UBS Bank USA Know Your Customer:

Appropriateness and Client Verification

	 	 	 	 	 	 	 
	List all Borrower names below:	 	List all Guarantor names below:
	1)

	 	SUCAMPO PHARMACEUTICALS, INC
	 	1)
	 	SUCAMPO PHARMACEUTICALS, INC

	 
	2)

	 	 	 	 2)	 	 
	 

	 	 
	 	 	 	 
	 
	3)

	 	 	 	 3)	 	 
	 

	 	 
	 	 	 	 

In connection with the loan (the “Loan”) to be offered by UBS Bank USA (the “Bank”) to the
Borrower(s) described above (together with the Guarantor(s), the “Clients”) and the guaranty (the
“Guaranty”) to be executed by the Guarantor(s) in favor of the Bank, we hereby represent and
warrant as follows:

	1.	 	Client Disclosure. The terms and conditions of, as applicable,
the Loan and/or the Guaranty have been explained to the Clients including the
following:

	 	•	 	The Bank can “demand” repayment of the Loan at any time.
	 
	 	•	 	All “advances” under the Loan are subject to the Loan meeting the Bank’s
collateral value and other requirements.
	 
	 	•	 	If the Loan is a Fixed-Rate Loan, the Borrower(s) will be assessed a prepayment
fee in the event all or a portion of the Loan is paid prior to maturity (whether as a
result of voluntary prepayment, demand or otherwise).
	 
	 	•	 	If the Loan is a non-purpose Loan, the proceeds of the Loan may not be used
(directly or indirectly) to purchase or carry securities, including margin stock.
	 
	 	•	 	If the value of the pledged collateral falls below the Bank’s maintenance
requirements, the Bank may require the Client to deposit additional collateral and/or
sell the pledged collateral to repay the Loan.

	2.	 	Review. The request for an extension of credit has been reviewed for appropriateness
by a Series 8 registered manager of UBS Financial Services.
	 
	3.	 	Accurate Information. To the best of our knowledge, the information regarding the
Client contained in the Loan and/or Guaranty
agreement and furnished to the Bank in connection with the Loan and/or Guaranty is true and
complete in all material respects.
	 
	4.	 	Original Documentation. To the extent we had possession of and forwarded the
documents executed in connection with the Loan and/or Guaranty to the Bank, we confirm that
all such documents contain original and authentic signatures of the Client. All original,
signed Loan documents we received have been forwarded to the Bank or its agents, and we have
not retained any such original documents.
	 
	5.	 	Client Residence. We further confirm that the Client resides at the address reflected
in UBS Financial Services Inc.’s records,
	 
	6.	 	Non-Purpose Loans. To the extent that the Loan is a non-purpose Loan and the proceeds
are deposited into an account with us, we will monitor the use of such proceeds to ensure they
are not used by the Client to purchase or carry margin stock (including, without limitation,
payment of debit balances, if any, in the Client’s account(s) with us).
	 
	7.	 	Security Interest. We understand that the Bank has been granted a first-priority
security interest in, and has control over, the “Securities Account(s)” to be referenced in
the Guarantee agreement(s) entered into in connection with the Loan, and we have received a
copy of such Guaranty agreement(s).

	 	 	 	 	 	 	 	 	 
	Name:

	 	/s/ HOWARD L. McMILLAN
	 	Signature:
	 	/s/ HOWARD L. McMILLAN
	 	Date: 2-26-08
	 

	 	 
	 	 	 	 	 	 
	 

	 	Financial Advisor	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	RICHARD N LEISHMAN
	 	Signature:
	 	/s/ RICHARD N LEISHMAN
	 	Date: 2/26/08
	 

	 	 
	 	 	 	 	 	 
	 

	 	ASSOCIATE DIRECTOR

ADMINISTRATIVE MANAGER

Series 8 Registered Manager	 	 	 	 	 	 

			
	 	 	 
	
	 	 

 

 

	 	 	 
	

	 	FR U-1

OMB No. 7100-0115

Approval expires March 31, 2008

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Statement of Purpose for an Extension of Credit Secured by Margin Stock

(Federal Reserve Form U-1)

UBS BANK USA

Name of Bank

This
report is required by law (15 U.S.C. §§78g and 78w; 12 CFR 221).

The Federal Reserve may not conduct or sponsor, and an organization (or a person) is not required
to respond to, a collection of information unless it displays a currently valid OMB control number.

Public reporting burden for this collection of information is estimated to average 10 minutes per
response, including the time to gather and maintain data in the required form and to review
instructions and complete the information collection. Send comments regarding this
burden estimated or any other aspect of this collection of information, including suggestions for
reducing this burden to: Secretary, Board of Governors of the Federal Reserve System, 20th and C
Streets, N.W., Washington, DC 20551; and to the Office of Management and Budget, Paperwork
Reduction Project (7100-0011), Washington, DC 20503.

Instructions

1. This form must be completed when a bank extends credit in excess of $100,000 secured directly or
indirectly, in whole or in part, by any margin stock.

2. The term “margin stock” is defined in Regulation U (12 CFR 221) and includes, principally: (1)
stocks that are registered on a national securities exchange; (2) debt securities (bonds) that are
convertible into margin stocks; (3) any over-the-counter security designated as qualified for
trading in the National Market System under a designation plan approved by the Securities and
Exchange Commission (NMS security); and (4) shares of most mutual funds, unless 95 per cent of the
assets of the fund are continuously invested in U.S. government, agency, state, or municipal
obligations.

3. Please
print or type (if space is inadequate, attach separate sheet).

Part I To be completed by borrower(s)

	 	 	 
	1. What is the amount of the credit being extended?

	 	Maximum available credit as determined by UBS Bank USA from time to time based, in
part, on the value of the securities pledged
as collateral for the credit facility.
	 

	 	 

2. Will any part of this credit be used to purchase or carry margin stock?      o Yes      þ No

If the answer is “no,” describe the specific purpose of the credit. The UBS Credit Line proceeds
will only be used for legally permissible purposes, including personal, household, family or
business purposes; but no portion of the UBS Credit Line proceeds will be used to purchase, trade
or carry securities, or to repay debt incurred to purchase, trade or carry securities.

I (We) have read this form and certify that to the best of my (our) knowledge and belief
the information given is true, accurate, and complete, and that the margin stock and any
other securities collateralizing this credit are authentic, genuine, unaltered, and not
stolen, forged, or counterfeit.

	 	 	 	 	 	 	 
	Signed:

	 	 	 	Signed:	 	 
	 
	/s/ MARIAM MORRIS

	 	2/19/08	 	/s/ RYUJI UENO	 	2/19/08
	 

	 	 	 	 	 	 
	Borrower’s signature

	 	Date
	 	Borrower’s signature
	 	Date
	 
	 	 	 	 	 	 
	MARIAM MORRIS, CFO
	 	 	 	RYUJI UENO, CEO	 	 
	 	 	 
	Print or type name

	 	 	 	Print or type name	 	 

This form should not be signed if blank.

A borrower who falsely certifies the purpose of a credit on this form or otherwise
willfully or intentionally evades the provisions of Regulation U will also violate
Federal Reserve Regulation X, “Borrowers of Securities Credit.”exv10w12

 

Exhibit 10.12

MERRILL LYNCH LIFE INSURANCE COMPANY

NONAFFILIATED BROKER-DEALER

WHOLESALING AGREEMENT

This WHOLESALING AGREEMENT (“Agreement”) is made this 28th day of December, 2007. The parties to
this Agreement are Merrill Lynch Life Insurance Company, an Arkansas Company corporation
(“Company”), issuer of annuity policies (“Contracts”), Merrill Lynch, Pierce, Fenner & Smith
Incorporated, a Delaware corporation (“Distributor”), and Transamerica Capital, a California
corporation (“Wholesaler”).

RECITALS

WHEREAS, Company issues the Contracts that are described in the attached Wholesaling Allowance
Compensation Schedules, as may be amended from time to time, which are registered as securities
with the United States Securities and Exchange Commission (“SEC”) under the Securities Act of 1933
(“1933 Act”); and

WHEREAS, Distributor is duly registered as a broker-dealer with the SEC, is a member of the
Financial Industry Regulatory Authority (“FINRA,” formerly known in part as the National
Association of Securities Dealers, Inc.), and has been appointed by Company as the principal
underwriter of the Contracts, as applicable; and

WHEREAS, Wholesaler is duly registered as a broker-dealer with the SEC and is a member of FINRA;
and

WHEREAS, Company and Distributor desire to authorize Wholesaler to perform wholesaling services as
set forth in Exhibit A (“Wholesale Services”) in regard to the Contracts.

NOW, THEREFORE, in consideration of the premises and mutual promises contained herein, the parties
agree as follows:

	1.	 	APPOINTMENT

Company and Distributor hereby authorizes Wholesaler, on an exclusive basis, to enter into
arrangements with broker-dealers for the purpose of promoting the Contracts to such broker-dealers
and performing Wholesale Services to such broker-dealers’ registered representatives. Wholesaler
shall provide Wholesaling services only to broker-dealers that have been pre-approved by Company or
Distributor to receive such services. Company and Distributor agree that Wholesaling Services shall
not include determining the suitability of any Contract for any prospective purchaser, recommending
any Contract to any prospective purchaser, either directly or indirectly through broker-dealers,
supervising the sales activities of broker-dealers and their registered representatives or ensuring
their compliance with any applicable insurance and securities laws, regulations and rules. However,
if Wholesaler undertakes to provide any of the aforementioned services to any broker-dealer or
registered representative, Wholesaler agrees to perform such service in accordance with the
requirements set forth in FINRA’s conduct rules regarding determinations of suitability, sales
supervision and compliance supervision.

1

 

For purposes of this Agreement, Wholesaler shall only promote the Contracts to Merrill Lynch,
Pierce, Fenner and Smith Incorporated and its registered representatives for the term of this
Agreement.

	2.	 	REPRESENTATIONS

Company, Distributor and Wholesaler represent to each other that each of them, and each of their
undersigned officers, has full power and authority to enter into this Agreement.

	 	a.	 	Company represents to Distributor and Wholesaler that the Contracts and the
related
Separate Accounts have been duly registered with the SEC in accordance with the
requirements of the 1933 Act and the Investment Company Act of 1940 (“1940 Act”),
respectively, and the SEC rules promulgated thereunder, and comply with these and
all other applicable federal securities laws and regulations.
	 
	 	b.	 	Company represents to Distributor and Wholesaler that the Contracts have been
duly
filed with and approved for sale by the insurance departments of each state and other jurisdiction in which the Contracts are offered for sale.
	 
	 	c.	 	Company represents to Distributor and Wholesaler that the Contracts’
prospectuses
included in the Company’s registration statements and post-effective amendments
thereto, as have been filed or will be filed with the SEC, contain or will contain, as
of
their respective effective dates, all statements and information required to be stated
therein by the 1933 Act, and in all other respects conform or will conform with the
requirements of the 1933 Act.
	 
	 	d.	 	Distributor represents to Company and Wholesaler that it is duly registered
with the SEC as a broker-dealer under the provisions of the Securities Exchange Act of 1934
(“1934 Act”) and is a member of FINRA.
	 
	 	e.	 	Wholesaler represents to Company and Distributor that it is duly registered
with the
SEC as a broker-dealer under the provisions of the 1934 Act and is a member of
FINRA. Wholesaler also represents to Company and Distributor that it is, or will be,
a licensed broker-dealer in any state or other jurisdiction in which it will perform
Wholesaling Services if that state or jurisdiction regulates the Contracts as securities
and requires Wholesaler to be a licensed broker-dealer to perform Wholesaling
Services and/or to sell the Contracts.
	 
	 	f.	 	Wholesaler represents to Company and Distributor that it is duly licensed
as an
insurance agent in each state and other jurisdiction in which it will perform
Wholesaling Services.
	 
	 	g.	 	Wholesaler represents to Company and Distributor that each individual that
Wholesaler designates and authorizes to perform Wholesaling Services
(“Wholesaling Agents”) will be registered representatives of Wholesaler, will be duly
contracted or appointed by Company as an insurance producer, will be pre-approved

2

 

	 	 	 	by Distributor to perform Wholesaling Services, will be registered with FINRA in the
category of registration that is required to sell the Contracts, and will have all other
necessary securities and insurance licenses that are required to perform Wholesaling
Services and sell the Contracts in the states and other jurisdictions in which
Wholesaling Agents perform Wholesaling Services.

	 	h.	 	Company, Distributor and Wholesaler each represents and warrants that, to the
extent applicable to their operations, they have adopted and will enforce policies and
procedures that are reasonably designed to comply with (i) all anti-money laundering
requirements of the USA Patriot Act (“Act”) and the regulations promulgated thereunder,
and (ii) all suspicious activity reporting and other reporting requirements of the Act
and the rules of FINRA and any other applicable administrative agency (“Rules”).
Company, Distributor and Wholesaler agree that their separate obligations to comply
with the applicable requirements of the Act and Rules, including the filing of any
reports, will not be diminished by any other party complying with its applicable
requirements under the Act and Rules.
	 
	 	j.	 	Company represents and warrants that all materials, including but not
limited to prospectus and any supplements for Contracts, training materials,
illustration software, brochures, marketing materials and policy forms (collectively
“Wholesaling Materials”), provided to Wholesaler in order for Wholesaler to perform
Wholesaling Services, comply with applicable insurance and state and federal securities
laws, and filing requirements if any, and will be true and accurate in all material
respects and will not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Company acknowledges and
agrees that Wholesaler will be using and relying on Wholesaling Materials without
independent investigation or verification thereof.

	3.	 	COMPLIANCE AND SUPERVISION

	 	a.	 	Wholesaler agrees that in providing Wholesaling Services, Wholesaler and its
Wholesaling Agents will fully comply with all applicable rules and regulations of the
SEC and FINRA, including without limitation FINRA’s Conduct Rules, and will
comply with all applicable rules and regulations of the states and other jurisdictions
in
which Wholesaling Services are performed. Wholesaler further agrees that it and its
Wholesaling Agents will conform to all applicable policies and procedures of
Company, as such policies and procedures may be amended from time to time, to the
extent that they do not conflict with the terms of this Agreement.
	 
	 	b.	 	Wholesaler agrees that it will establish and maintain compliance and
supervisory
rules and procedures for the supervision of Wholesaling Agents, and that it will
diligently supervise its Wholesaling Agents in regard to their performance of
Wholesaling Services. Wholesaler’s supervisory responsibilities shall include, but
shall not be limited to, ensuring that (1) all Wholesaling Agents are registered
representatives of Wholesaler, (2) all Wholesaling Agents have all necessary

3

 

	 	 	 	securities and insurance licenses to perform the Wholesaling Services, (3) all Wholesaling
Agents are trained and qualified to perform the Wholesaling Services, (4) all Wholesaling
Agents use only advertising materials and sales literature that have been approved by Company,
as applicable under the circumstances, (5) all Wholesaling Agents use only current prospectuses
in performing Wholesaling Services, (6) Wholesaling Services are provided to only those
broker-dealers (and their registered representatives) that have been pre-approved by Company or
Distributor to receive such services, and (7) Wholesaling Services are conducted only in states
and other jurisdictions in which Company has authorized the solicitation of the Contracts.

	 	c.	 	If Wholesaler discovers that any Wholesaling Agent has failed to comply with
Company’s and/or Distributor’s standards or rules with regard to Wholesaling
Services, or if Wholesaler shall discover that any Wholesaling Agent has failed to
comply with the terms of this Agreement that relate to Wholesaling Services, and if
such failure constitutes a material breach of the aforementioned standards or rules or
of this Agreement, Wholesaler shall immediately notify Company and Distributor.
Also, Wholesaler shall immediately terminate the Wholesaling Agent’s authority to
perform Wholesaling Services.
	 
	 	d.	 	Upon the request of Company or Distributor, Wholesaler shall furnish to Company or
Distributor certification that Wholesaler has policies and procedures reasonably designed to achieve compliance with applicable securities laws and FINRA rules.
	 
	 	e.	 	Company will be solely responsible for conducting all due diligence reviews of all
broker-dealers and their registered representatives that are recommended by
Wholesaler under Section 4 of this Agreement.
	 
	 	f.	 	Wholesaler agrees that it will not divulge any of Company’s or Distributor’s
Confidential Information to any third party and will train and supervise the
Wholesaling Agents to ensure that they maintain the confidentiality of such
information. Notwithstanding the foregoing, Wholesaler shall not be restricted from
disclosing any of Company’s or Distributor’s Confidential Information if it is
required to do so by any applicable state or federal laws, or by order of any court or
government agency that has jurisdiction over the parties upon prior written notice.
Furthermore, this restriction shall not apply to Confidential Information which,
without any breach by Wholesaler of any obligation of confidentiality: (1) is
independently developed by Wholesaler; (2) is or becomes publicly known; (3) is
already known by Wholesaler, evidenced by the written records of Wholesaler; or (4)
is obtained from an independent source. “Confidential Information” shall be defined
as all information communicated to Wholesaler by Company or Distributor relating to
the Company, Distributor, or their affiliates, during the term of this Agreement,
including but not limited to: 1) financial, business or technical information of the
Company, Distributor, or their affiliates, and 2) information regarding consumers,
customers or policy holders.

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	 	 	 	Wholesaler also agrees to comply with the provisions of the Gramm-Leach-Bliley Act
(“GLBA”), the rules and regulations promulgated thereunder, SEC Regulation S-P and all
relevant state laws and regulations that may apply to Wholesaler’s and the Wholesaling
Agents’ receipt of any non-public personal information (as defined in GLBA, the
regulations thereunder, SEC Regulation S-P or relevant state laws and regulations) of
Company’s customers, including without limitation purchasers and prospective purchasers
of the Contracts.

	4.	 	LICENSING AND/OR APPOINTMENT OF RETAIL BROKER-DEALERS AND THEIR REGISTERED REPRESENTATIVES

Wholesaler shall recommend to broker-dealers and to their registered representatives who are not
contracted or appointed with Company, but desire to sell the Contracts, that they become contracted
with or appointed by Company. Furthermore, Wholesaler shall recommend to such broker-dealers that
they sign selling agreements with Company and Distributor to become authorized to sell the
Contracts. Company and/or Distributor reserve the right to reject any such recommendation.

	5.	 	ADVERTISING, SALES LITERATURE AND OTHER SALES PROMOTION MATERIALS

Wholesaler and its Wholesaling Agents shall use only advertising, sales literature and other sales
promotion materials that have been pre-approved in writing by Company when performing Wholesaling
Services.

	6.	 	COMPENSATION

	 	a.	 	All commissions and other compensation payable for Wholesaling Services shall
be
payable to Wholesaler in accordance with the Wholesaling Allowance Compensation
Schedules attached to this Agreement, as such Schedules may be amended from time
to time. Commissions and other compensation for Wholesaling Services related to
any particular Contract shall be determined in accordance with the Wholesaling
Allowance Compensation Schedule for that Contract that is in effect at the time that
premium payments for the Contract are received by Company. Company reserves the
right to amend any Wholesaling Allowance Compensation Schedule at any time upon
prior written notice to Wholesaler. The amendment of any Wholesaling Allowance
Compensation Schedule shall be effective as of the effective date set forth in the
written notice, and shall apply to all premiums for Contracts that are received by
Company on and after that date. The compensation to the Wholesaling Agent will be
governed by the agreement between Wholesaler and the Wholesaling Agent.
	 
	 	b.	 	If Company is required to refund premiums or return Contract values and waive
surrender charges on any Contract for any reason, then no commission or other
compensation for Wholesaling Services will be payable with respect to such premiums
and any commissions or other compensation for Wholesaling Services previously paid on
account of such premiums must be refunded to Company.

5

 

	 	c.	 	For purposes of this section, Company is solely responsible for any Compensation
payable hereunder.

	7.	 	HOLD HARMLESS AND INDEMNIFICATION PROVISIONS

If any director, officer, employee, associated person or other agent of any party to this Agreement
(“Employer Party”) materially breaches any of the provisions of this Agreement, or otherwise fails
to materially comply with any of its provisions, the Employer Party agrees to indemnify and hold
harmless each of the other parties hereto for any and all liability, loss, damage or expense,
including without limitation reasonable attorney’s fees and costs, that any of the other parties
may incur or suffer as a result of such material breach or failure to materially comply. For
purposes hereof, the term “associated person” shall have the same definition as in Article I of
FINRA By-Laws. No party to this Agreement shall be responsible to perform any act or other
obligation of any other party.

	8.	 	NON-ASSIGNABILITY OF AGREEMENT

No party may assign any of its rights or obligations under this Agreement without the express prior
written consent of each of the other parties hereto.

	9.	 	NON-WAIVER OF BREACH

The failure of any party to terminate this Agreement for any act or omission by any other party
that constitutes a breach of this Agreement shall not constitute a waiver by such party of the
right to terminate this Agreement at a later time for another such breach.

	10.	 	AMENDMENTS

No amendment to this Agreement will be effective unless it is in writing and signed by all of the
parties hereto.

	11.	 	INDEPENDENT CONTRACTOR

Wholesaler is an independent contractor of Company and Distributor.

	12.	 	NOTIFICATION OF DISCIPLINARY PROCEEDINGS AND AGREEMENT TO COOPERATE IN INVESTIGATIONS

	 	a.	 	Wholesaler agrees to promptly notify Company and Distributor if Wholesaler
receives notice that any of the following actions have been taken, or are threatened to
be taken, against Wholesaler or any of its Wholesaling Agents in connection with the
Wholesaling Services: (1) any disciplinary proceeding by the SEC, FINRA, any securities
or insurance regulatory authority of any state or other jurisdiction, or any other
governmental agency or self-regulatory organization; (2) any civil lawsuit or criminal
indictment; or (3) any arbitration proceeding. In the event that any of the
aforementioned actions are taken or threatened, Wholesaler agrees to fully cooperate
with Company and Distributor in connection with any investigation that they may

6

 

	 	 	 	make of the claims against Wholesaler or its Wholesaling Agents in such regulatory
proceeding, civil lawsuit, criminal indictment or arbitration proceeding.

	 	b.	 	Company, Distributor and Wholesaler jointly agree to fully cooperate with
each other, subject to the advice of their respective counsel, with regard to any
securities, insurance or other regulatory investigation or proceeding that may arise in
connection with or as a result of any Wholesaling Services.

	13.	 	BOOKS AND RECORDS

	 	a.	 	Company, Distributor and Wholesaler agree to maintain such books, accounts,
records and other documentation pertaining to Wholesaling Services and related sales
of Contracts (“Books and Records”) that are required to be maintained by applicable
laws and regulations, and shall preserve all such Books and Records for the periods
prescribed by such laws and regulations. Each party hereto shall maintain its Books
and Records so as to clearly and accurately disclose the nature and details of the
transactions covered thereby, including such accounting records that may be
necessary to correctly determine the compensation to be paid for Wholesaling
Services.
	 
	 	b.	 	If any party hereto shall request from any other party any report or other
information
pertaining to Wholesaling Services and related sales of Contracts for the purpose of
enabling the requesting party to comply with its record keeping and reporting
requirements under applicable laws and regulations, the party upon whom the request
is made shall, to the best of its ability, promptly furnish a copy of such report and/or
provide such information to the requesting party.

	14.	 	LIMITATIONS

Company and Distributor shall have the sole and exclusive authority to make, alter or discharge any
selling agreement between Company and Distributor. Company shall have the sole and exclusive
authority to make, alter or discharge any of its Contracts, waive any forfeiture, grant or permit
an extension of time for making any premium payment, alter any form used in connection with any of
its Contracts, or enter into any proceeding in a court of law or before any regulatory agency in
the name of or on behalf of Company.

	15.	 	TERMINATION

This Agreement shall continue until April 30, 2008, subject to termination by any party hereto with
or without cause upon sixty (60) days prior written notice to the other parties; except however,
that in the event Distributor or Wholesaler ceases to be a registered broker-dealer with the SEC or
a member of F1NRA, this Agreement shall terminate immediately. Upon termination of this Agreement,
the authorizations, rights and obligations of the parties shall cease, except for the survival of
(1) the provisions contained in Sections 7, 12 and 13 hereof.

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	16.	 	NOTICES

All notices to Company, Distributor and Wholesaler relating to this Agreement, or to any other
matter that may otherwise arise in connection with Wholesaling Services, shall be sent to:

Company:

Merrill Lynch Life Insurance Company

4333 Edgewood Road NE

Cedar Rapids, IA 52499

Attn: President and Division General Counsel

Distributor:

Merrill Lynch, Pierce, Fenner & Smith Incorporated

1700 Merrill Lynch Drive, 3rd Floor

Pennington, New Jersey 08534

Attn: Barry Skolnick, First Vice President & Assistant General Counsel

Wholesaler:

Transamerica Capital, Inc.

4600 South Syracuse Street, Suite 1100

Denver, CO 80237

Attn: President and Legal Department

All notices shall be in writing, shall be addressed as indicated above, and shall be sent by United
States mail, telegram, facsimile or personal delivery. Notices sent by United States mail shall be
deemed delivered by the third business day after such notice is deposited in the mail properly
addressed and with correct first class postage pre-paid. Notices sent by telegram or facsimile
shall be deemed delivered when sent if properly addressed. Notices sent by personal delivery shall
be deemed delivered when received by the person to whom the notice is addressed, or by that
person’s duly authorized representative.

	17.	 	BINDING EFFECT AND SEVERABILITY

This Agreement shall be binding on and shall inure to the benefit of the parties hereto and to
their respective successors in interest. If any provision of this Agreement would require any party
to take any action that is, at that time, prohibited by applicable federal law or regulation, by
FINRA rule, or by the applicable laws or regulations of any state or other jurisdiction, or if any
provision of this Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, then such provision shall be enforced only to the extent permitted by such law,
regulation, rule or court decision, and all of the other provisions of this Agreement shall remain
in full force and effect to the greatest extent possible.

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	18.	 	ENTIRE AGREEMENT

This Agreement and the attached Exhibits and Wholesaling Allowance Compensation Schedules
constitute the entire agreement between Company, Distributor and Wholesaler with respect to the
subject matter hereof, and supersedes any and all prior oral or written understandings, agreements
or negotiations between the parties with respect to the subject matter. No prior writings by or
between the parties hereto with respect to the subject matter hereof shall be used by any party to
interpret any provision of this Agreement.

	19.	 	GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the internal laws of the State
of New York without giving any effect to any principles of conflict of laws.

	20.	 	DISPUTE RESOLUTION

Any dispute, claim, or controversy arising out of or relating to this Agreement, or any breach
thereof, will be submitted to binding arbitration under FINRA Code of Arbitration Procedure and
settled in accordance with the then existing rules thereof. Any such arbitration shall be conducted
in New York, New York, and each arbitrator shall be from the securities industry. Any award
rendered by the arbitrators shall be binding and judgment thereon may be entered in any court
having jurisdiction thereof.

	21.	 	EXECUTION IN COUNTERPARTS

This Agreement may be executed in two or more counterparts, each of which when taken together
shall constitute one and the same instrument.

	22.	 	CAPTIONS

The captions of this Agreement are for convenience and reference only, and the words contained
therein shall not be held to explain, modify, amplify or aid in the interpretation, construction or
meaning of any provision of this Agreement.

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	23.	 	TIME IS OF THE ESSENCE

Time is of the essence in the performance of the provisions of this Agreement.

	24.	 	EFFECTIVE DATE

This Agreement shall be effective as of the date first shown on page 1 hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as indicated by the signatures set
forth below.

	 	 	 	 	 
	Merrill Lynch Life Insurance Company

 	 	 
	By:  	/s/ Brain C. Scott
 	 	 
	 	Title:  	Brain C. Scott	 	 
	 
	Merrill Lynch, Pierce, Fenner & Smith Incorporated

 	 	 
	By:  	/s/ Barry G. Skolnick
 	 	 
	 	Barry G. Skolnick  	 	 	 
	 	Title:  	First Vice President 	 	 
	 
	Transamerica Capital, Inc.

 	 	 
	By:  	/s/ Rob Frederick
 	 	 
	 	Title: President 	 	 
	 	 	 	 

10

 

	 	 	 	 	 

WHOLESALING ALLOWANCE COMPENSATION SCHEDULE

Annuity Contracts

Merrill Lynch Investor Choice

Merrill Lynch Consults Annuity

Merrill Lynch Asset I Annuity

RateMax Annuity

11

 

EXHIBIT A

WHOLESALE SERVICES

Wholesaler, through its Wholesaling Agents, may provide Wholesaling Services listed below, or other
activities related to this Agreement as agreed to in advance in writing among Wholesaler, Company,
Distributor and/or broker-dealers (“BD”):

	 	•	 	At the request of BD, Company or Distributor, provide training on Contract features to
BD and its registered representatives (“RRs”) utilizing materials created and approved by
Wholesaler, Company, Distributor and BD.
	 
	 	•	 	Answer questions from BD and RRs regarding Contract features as represented in
Wholesale Materials.
	 
	 	•	 	Complete insurance illustrations at the request of RRs for RRs to deliver to
prospective Contract purchasers utilizing software provided by Company based on customer
information provided by RRs.
	 
	 	•	 	Assist BD with the review of Contract applications for completeness prior to forwarding
Contract applications to Company.
	 
	 	•	 	Assist BD with processing commissions received by BD under selling group agreements
executed among BD, Company and Distributor.

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