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Exhibit 10.16
MORGAN STANLEY 1585 BROADWAY
NEW YORK, NY 10036-8293
November 27, 2007
CUSTOMER FX PRIME BROKERAGE AGREEMENT
Ladies and Gentlemen:
In consideration of Morgan Stanley Capital Group Inc. ("Morgan
Stanley")
agreeing to act as prime broker of each entity specified in
Annex B attached
hereto (severally, and not jointly, each a "Customer") with
respect to Currency
Option Transactions executed by Customer with one or more
Executing Dealers and
given up to Morgan Stanley in accordance with the terms of this
Agreement,
Customer hereby agrees as follows:
1. DEFINITIONS
o "Advisor" means any third-party commodity trading advisor
listed on Annex B.
If Customer directs Morgan Stanley to accept trading
instructions from an
Advisor, unless otherwise agreed in writing, Customer hereby
appoints such
Advisor as Customer's agent for the purpose of receiving all
communications,
notices and requests for instructions related to this Agreement
and the
transactions effectuated pursuant to this Agreement, including,
without
limitation, margin calls and any trading information or advice
(subject to
Section 6(b) hereof). Advisor is authorized to access and use
electronic
services, facilities and information provided electronically,
including but not
limited to electronic trading systems, and on behalf of
Customer, to agree to
the terms and conditions regarding such use and to enter into
electronic trading
agreements. Customer hereby agrees to indemnify and hold Morgan
Stanley harmless
from and to pay Morgan Stanley promptly on demand any and all
losses arising
from Customer's appointment of Advisor; Morgan Stanley shall be
protected in
continuing to act in reliance on the appointment of the Advisor
until Morgan
Stanley receives written notice thereof; and termination of the
appointment of
the Advisor shall not affect any liability in any way resulting
from
transactions initiated prior to such termination. This indemnity
is in addition
to (and in no way limits or restricts) any rights which Morgan
Stanley may have
under this Agreement.
o "Agreement" means this document along with all executed
annexes to this
document.
o "Collateral" means any and all collateral, margin or other
credit support
provided by Customer in accordance with and pursuant to the
terms of the Master
Agreement between Customer and Morgan Stanley as security for
Customer's
obligations under outstanding Customer Currency Option
Transactions and other
Currency Option Transactions governed under such Master
Agreement, including any
applicable master cross-entity margining and netting
agreement.
o "Currency Option Transaction" shall have the meaning set out
in the 1998 FX
and Currency Option Definitions as published by the
International Swaps and
Derivatives Association, Inc., the Emerging Markets Traders
Association and The
Foreign Exchange Committee.
o "Customer Currency Option Transaction" means a Currency Option
Transaction
entered into between Customer and Morgan Stanley to offset a
Give-Up
Transaction.
o "Dollar Value" means with respect to an amount of currency at
any time (i) if
such currency is U.S. Dollars, such amount and (ii) in all other
cases, the
amount of U.S. Dollars which could be purchased at the market
rate prevailing at
such time against delivery of such amount of currency on a
specified settlement
date. Such rate shall be determined by Morgan Stanley (in good
faith and in a
commercially reasonable manner) to be the market rate available
to Morgan
Stanley at such time in the New York foreign exchange market
(or, at the
reasonable election of Morgan Stanley, in the foreign exchange
market of any
other financial center in which the currency is traded and which
is then open
for business) for the purchase or, as the case may be, sale of
one currency
against another currency for delivery on a specified date using
the spot or
forward rate as designated in the Notice. If Morgan Stanley is
unable to obtain
a market rate pursuant to the preceding sentence, Morgan Stanley
will determine
the rate in good faith and in a commercially reasonable
manner.
o "Executing Dealers" means dealers in the foreign exchange
market, other than
Morgan Stanley, with which Advisor on behalf of Customer
executes Give-Up
Transactions, subject to the terms and conditions of this
Agreement.
o "Give-Up Agreement" means the Master FX Give-Up Agreement
between Morgan
Stanley and each Executing Dealer regarding the execution of
Give-Up
Transactions.
o "Give-Up Notice" means a notice in the form attached as an
exhibit to the
Give-Up Agreement between Morgan Stanley and an Executing Dealer
setting forth
specific limitations and parameters for the execution of Give-Up
Transactions by
a particular Advisor on behalf of Customer with such Executing
Dealer.
o "Give-Up Transaction" means any Currency Option Transactions
that are executed
between Advisor on behalf of Customer and an Executing Dealer
and given up to
Morgan Stanley, as prime broker, in accordance with and subject
to the terms and
conditions of this Agreement.
o "Master Agreement" means any form of agreement or general
terms and conditions
governing Currency Option Transactions between the parties to
such Master
Agreement and Collateral, including, without limitation, any
master NDO
agreement related to terms and conditions for non-deliverable
Currency Option
Transactions in specified currencies and any applicable master
cross-entity
margining and netting agreement.
o "Net Daily Settlement Amount" means, with respect to Give-Up
Transactions
executed by Advisor on behalf of Customer with an Executing
Dealer for any
settlement date, the aggregate amount owed by such Executing
Dealer to Morgan
Stanley (excluding Netted Currency Option Transactions)
calculated by Morgan
Stanley as follows: (a) for each such Give -Up Transaction
(excluding any option
premia that may be owed to Morgan Stanley and assuming the
exercise of any
Give-Up Transaction on its expiration date), determine the
Dollar Value for each
currency (including USD) owed by such Executing Dealer to Morgan
Stanley or owed
by Morgan Stanley to such Executing Dealer under such Give-Up
Transaction; (b)
for each currency (including USD), determine the net Dollar
Value amount owed by
such Executing Dealer to Morgan Stanley or owed by Morgan
Stanley to such
Executing Dealer by summing the Dollar Value of all long and
short positions in
such currency as determined pursuant to clause (a) above; and
(c) aggregate the
Dollar Value(s) for all currencies determined pursuant to clause
(b) in respect
of which such Executing Dealer owes a net aggregate amount to
Morgan Stanley.
o "Net Open Position" means, with respect to Give-Up
Transactions executed by
Advisor on behalf of Customer with an Executing Dealer, the
aggregate amount
owed by such Executing Dealer to Morgan Stanley (excluding
Netted Currency
Option Transactions) calculated by Morgan Stanley as follows:
(i) determine the
delta equivalent of each leg of the currency pair in respect of
each Give-Up
Transaction; (ii) for each currency, aggregate and net the delta
equivalents of
amounts in such currency (assuming exercise of each Give-Up
Transaction on its
expiration date) deliverable to Morgan Stanley and payable by
such Executing
Dealer ; and (iii) aggregate the amounts determined pursuant to
clause (ii)
above for each currency with respect to which such Executing
Dealer owes a net
aggregate amount to Morgan Stanley.
o "Netted Currency Option Transaction" means a Give-Up
Transaction that is a
Currency Option Transaction sold by Morgan Stanley and owned by
an Executing
Dealer that may be discharged and terminated together with a
Give-Up Transaction
that is a Currency Option Transaction sold by such Executing
Dealer and owned by
Morgan Stanley upon satisfying the following criteria:
(i) each Currency Option Transaction being with respect to the
same put
currency and call currency;
(ii) each having the same expiration date and expiration
time;
(iii) each being of the same style (i.e., either both being
American style
of both being European style);
(iv) each having the same strike price;
(v) each being transacting by the same pair of offices of such
Executing
Dealer and Morgan Stanley; and
(vi) neither of which shall have been exercised by delivery of a
notice
of exercise.
Where the relevant Currency Option Transactions are for
different amounts of the
currency pair, only the portion of such Currency Option
Transactions that is
partially discharged and terminated shall be considered a Netted
Currency Option
Transaction for purposes of calculating Net Daily Settlement
Amount and Net Open
Position.
2. MORGAN STANLEY AS PRIME BROKER. In connection with any
Currency Option
Transactions where Morgan Stanley acts as prime broker for the
Customer:
(a) Advisor on behalf of Customer may execute Give-Up
Transactions only with
Executing Dealers that have been approved by Morgan Stanley, at
its discretion,
for the execution of Give-Up Transactions with Customer and that
have entered
into a Give-Up Agreement, a Give-Up Notice with respect to
Customer, and a
Master Agreement with Morgan Stanley, and provided that Customer
has posted a
sufficient minimum amount of Collateral pursuant to the terms of
the Master
Agreement between Morgan Stanley and Customer prior to the
execution of any
Give-Up Transaction with any Executing Dealer. Advisor on behalf
of Customer
shall not be permitted to execute Give-Up Transactions with more
than fifteen
Executing Dealers at any given time. Morgan Stanley may
terminate its approval
of any Executing Dealer at any time and in its sole discretion,
provided that
Morgan Stanley promptly notifies Customer and Advisor of any
such determination
to terminate approval. Such termination shall be effective with
respect to any
Currency Option Transactions executed by Customer with such
Executing Dealer
after the giving of such notice.
(b) Customer understands that Morgan Stanley will only accept
Give-Up
Transactions executed by Advisor on behalf of Customer with an
Executing Dealer
that are within the limitations and parameters set forth in the
corresponding
Give-Up Notice (a copy of which shall be provided to Customer
and Advisor by
Morgan Stanley) to the Give-Up Agreement for such Customer with
such Executing
Dealer and provided that Customer has posted with Morgan Stanley
a sufficient
amount of Collateral, to be determined in Morgan Stanley's
reasonable discretion
based on market indicia, to cover the initial exposure for
Customer Currency
Option Transactions related to such Give-Up Transactions. If
Advisor on behalf
of Customer executes a Give-Up Transaction with an Executing
Dealer that exceeds
the limitations set forth in the applicable Give-Up Notice,
Morgan Stanley shall
have the right to reject such transaction; provided, however,
that Morgan
Stanley reserves the right, in its sole discretion, to accept
any Give-Up
Transactions that exceed the prescribed limitations, to accept
and assign such
Give-Up Transaction to a third party, to close-out and liquidate
outstanding
Customer Currency Option Transactions and other Currency Option
Transactions
entered into with Customer, and/or to request that Customer
provide additional
Collateral to Morgan Stanley in connection with such Give-Up
Transaction. If
Morgan Stanley rejects a Give-Up Transaction executed by Advisor
on behalf of
Customer with an Executing Dealer, Customer acknowledges and
agrees that Morgan
Stanley shall have no liability, whether in contract, tort or
otherwise, to
Customer or Advisor or the Executing Dealer with respect to such
Give-Up
Transaction, and that such rejected transaction shall be for the
sole account
and risk of Customer and subject to the terms and conditions of
the Master
Agreement (if any) between Customer and such Executing
Dealer.
(c) Subject to the terms and conditions set forth herein, Morgan
Stanley agrees
to enter into a Customer Currency Option Transaction with
Advisor on behalf of
Customer to offset each applicable Give-Up Transaction executed
by Advisor on
behalf of Customer with an Executing Dealer, provided that
Morgan Stanley does
not reject such Give-Up Transaction and Customer has posted any
upfront
Collateral as may be requested by Morgan Stanley in its sole
discretion with
respect to such Customer Currency Option Transaction. The terms
of ea
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