EFTA01355818.pdf

The rights of OBSland Pershing shall include the right toibuy all Securities and Other Property which may be short in such account, to cancel any open orders and to close any or all outstanding contracts, all without demand for margin or additional margin, notice of sale or purchase or other notice or advertisement, each of which is expressly waived. Upon a detain, Client will also boar the cost of preserving the value af collateral, including hedging transactions that may be executed at DBSI or Pershing's d' iscretion. Any sales or purchases hereunder may be made at on any exchange or other market where such business is usually transacted, or at public auction or private sale, and DBSI or Pershing may be the puroheser for its own aceouot. Client understands That any prior:demand, er call at prior notice of the time and place of such sale or purchase shall not be considered a waiver of the right to sell or buy without demand or notice as provided herein. Client further understands end agrees that if DEISI or Pershing permits Client a perod of time in which to satisfy a call, the granting of this period of time shall not la any way waive or diminish the right of ()BSI or Pershing to shorten the time period in which Client must satisfy the call, including an outstanding call, or to demand that a calf be satisfied immediately. Client further understands that Nquidations may involve sales of positions in Client's Accoun(s) that ate as great as the full indebtedness owed by Client. 8. Reg T Extensions. Client autherites DBSI, at its discretion, to request end obtain extension(s) of Client's time to make payment fix securities Client purchases, as provided for by Federal Reserve Bank Regulation T. 9. Short Sales of Securities. Client understands that before executing a Short Sale. OBS, or Pershing is generally required to make an affiirriative determination as to whether ['BSI or Patching •will receive delivery of tho securities from the Client or that the securities can be borrowed by the settlement date. This process is commonly referred to as 'obtaining a locate.' If a sufficient quantity of securities Is not available from inventory, DBSI or Pershing may, among other things, contact third-party lancers, to ascertain whether they ham) securities available for lending. If a sufficient quantity of securities appears bonowabte, DBSI or Pershing may proceed to execute the short sale on Client's behalf. A locate is simply an Indication that, as of the time the locate is obtained, it appears that securities will be available for borrowing on the settlement date. A.lodate is not a guarantee that securities will actually be available for lending and delivery on the settlement dotter that the lender will not thereafter require the return of the borrowed Securities. If the securities are not available fon borrowing for any reason by the ebrdemem date, Client (as the seller) will "fail to deliver" to the purchaser. In that circumstance, a buy-in of the securities that were not timely delivered will occur cn the morning of the third bUsiness day after normal settlement dale and Client will be responsible for all losses and costs of the buy-in. See 'Mandatory Close-Out of Short Sales' below. Client is ultimately responsible for the delivery of securities on the settlement date and for the consequences of a failure to deliver and the timely return of securities borrowed on Client's behalf including any tosses incurreo by.DBSI or Pershing relating to such short sales. Short positions will be "marked to the market' weekly. If the aggregate value of all securities sold by Client appreciates, an amount equal to such appreciation will be transferred from Client's Margin Account to Client's short Account resulting in a debit entry in the Margin Account. If the aggregate value of all the securities sold short depreciates, an amount equal to such decline will be transferred from the cash account to the Margin Account resulting in a credit entry in the Margin Account. The closing. price from the previous business day is rased to determine any appreciation or depreciation Ic the market value of any security sold short. Please note, from time to time, DBSI or Pershing may be prohibited from effecting a short sale in accordance with Applicable Law whether or not a 'locate" is obtained. 10. Mandatory Close-Out of Short Sales. Applicable Law generally requires that short sales of equity securities be closed by no lamr than the beginning of regular trading hours on the brst business day following the settlement dater if delivery of the securities has not occurred. The close-out is effected by ()BSI or Pershing purchasing the securities for cash or guaranteed delivery of like kind and quantity. the requirement generally applies to undelivered equity securities that, on the date of the short sale. appeared Si the "restricted list' of PINRA of a national aeon-hies exchange of which 0851or Pershing is a member (i.e. those securities that have a clearing short position of 10,000 shares or more and that are equal to at least 1/2 of 1% of the issue's total shares outstanding) ("Threshold Securities"). DBSI or Pershing will be required to effect a close•out mandated by Applicable Law whether or not a 'locate" was obtained and whether or not a buy-in notice was issued by a purchaser or securities lender. 11. Tax Treatment of Earnings on Pledged Municipal Securities. Client will consult with a tax adviser prior to depositing municipal securities to satisfy margin reduicimentS as there may be tax consequences of doing so. 12. Rehypothecation and Tax Treihment of Payments in Lien of Dividends. The internal Revenue Code generally provides that, subject to certain requirements, dividendi paid toe U.S. individual shareholder from domestic corporations and certain foreign corporations are subject to tax at the reduced rates applicable to long-term capital gains. Payments in Iii30 of dividends are not eligible for the reduced rate of tax for dividends and ate taxed at ordinary income tax rates. DBSI and Pershing have the fight to rehypothecate margined shares in Client's Margin Account. Accordingly. Client hereby agrees that Client a Account may receive payments in lieu of dividends, which unlike actual dividends are taxed at nrdinary inoorne tsi rates. Client further agrees that neither DBSI nor Pershing shall be responsible to Client for any additional taxes oriother costs Client incurs for receipt of such payments in lieu of dividends. Client also agrees to consult with Client's tax adviser if Client has any questions relating to payments in lieu of dividemrts. 13. Additional Risks. The use of margin may enable Client to increase the size of the trades and/or volume of trading in the account which may result in an increase le the amount of uernmissions being paid to DBSI or Pershing by Client. 14. Restricted Securities. Client will not post Restricted Seburltiesas collateral for macgm transactions without the prior approval of DB51. 15. Collection Remedies. DBSI reserves the right to assert any other remedies available under Applicable Law to collect any and ail amount(s) due to DBSI or Pershing. 16. Receipt of Margin Disclosure. Client hereby acknowledges receipt of the Margin Disclosure and Client acknowledges Client's understanding of and agreement to the contents thereof. 13-AWM-0tea :13 012148.032813 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0041100 CONFIDENTIAL SDNY_GM_00187284 EFTA01355818