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CUSTOMER FX PRIME BROKERAGE AGREEMENT

Broker Dealer Agreement

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Title: CUSTOMER FX PRIME BROKERAGE AGREEMENT
Governing Law: New York     Date: 12/5/2007

CUSTOMER FX PRIME BROKERAGE AGREEMENT, Parties: morgan stanley capital group inc
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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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