FOR EXISTING INVESTOR USE ONLY

FOR EXISTING INVESTOR USE ONLY MEMORANDUM NO: CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM Relating to CLASS B INTERESTS of ALPHAKEYS MILLENNIUM FUND, L.L.C. THIS CONFIDENTIAL MEMORANDUM CONTAINS INFORMATION SPECIFIC TO CLASS B INTERESTS OF ALPHAKEYS MILLENNIUM FUND, L.L.C. PURSUANT TO AN EXEMPTION FROM THE CFTC IN CONNECTION WITH POOLS WHOSE PARTICIPANTS ARE LIMITED TO QUALIFIED ELIGIBLE PERSONS, AN OFFERING MEMORANDUM FOR THIS POOL IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE CFTC DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A POOL OR UPON THE ADEQUACY OR ACCURACY OF AN OFFERING MEMORANDUM. CONSEQUENTLY, THE CFTC HAS NOT REVIEWED OR APPROVED THIS OFFERING OR ANY OFFERING MEMORANDUM FOR THIS POOL. CONFIDENTIAL UBSTERRAMAR00003856 EFTA00239188 FOR EXISTING INVESTOR USE ONLY This Confidential Private Placement Memorandum (as amended, restated or otherwise modified from time to time (for the avoidance of doubt, excluding any appendices attached hereto), the "Memorandum") is furnished on a confidential basis to a limited number of prospective investors (each, when admitted as a member, an "Investor") in AlphaKeys Millennium Fund, L.L.C. (f/k/a UBS Millennium Fund, L.L.C.) (the "AlphaKeys Fund") who are both qualified purchasers and accredited investors (unless otherwise permitted by law) for the purpose of providing certain information about a potential investment in Class B limited liability company interests (the "Class B Interests") in the AlphaKeys Fund. The Class B Interests have not been recommended, approved or disapproved by the U.S. Securities and Exchange Commission (the "SEC") or by the securities regulatory authority of any state or of any other jurisdiction, nor has the SEC or any such securities regulatory authority passed upon the accuracy or adequacy of this Memorandum. My representation to the contrary is a criminal offense. The Class B Interests have not been registered under the U.S. Securities Act of 1933, as amended (the "1933 Act"), the securities laws of any other state or the securities laws of any other jurisdiction, nor is such registration contemplated. The Class B Interests will be offered and sold in the United States under the exemption provided by Section 4(aX2) of the 1933 Act and Regulation D promulgated thereunder and other exemptions of similar import in the laws of the states and jurisdictions where the offering will be made. The AlphaKeys Fund will not be registered as an investment company under the U.S. Investment Company Act of 1940, as amended (the "1940 Act"). There is no public market for the Class B Interests and no such market is expected to develop in the future. The Class B Interests are subject to restrictions on transferability and resale and may not be sold or transferred except as permitted under the limited liability company agreement of the AlphaKeys Fund (as amended, restated or otherwise modified from time to time, the "AlphaKeys Fund Agreement", annexed hereto as Appendix B) and unless they are registered under the 1933 Act, or pursuant to an exemption from such registration thereunder and under any other applicable securities law registration requirements that may be available at such time. Required 1933 Act Disclosure. Pursuant to Rule 506 of Regulation D under the 1933 Act (the "Rule"), the AlphaKeys Fund is required, among other things, to disclose certain disciplinary events, in respect of various entities and/or individuals, that occurred prior to the Rule's effective date of September 23, 2013, and such disclosure is annexed hereto as Appendix C. Potential Investors should pay particular attention to the information under the "CERTAIN RISK FACTORS" and "POTENTIAL CONFLICTS OF INTEREST' sections of this Memorandum. Investment in the AlphaKeys Fund is suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in an investment in the AlphaKeys Fund. Investors in the AlphaKeys Fund must be prepared to bear such risks for an extended period of time. No assurance can be given that the AlphaKeys Fund's or the Underlying Fund's (defined below) investment objective will be achieved or that Investors will receive a return of their capital. My losses by the AlphaKeys Fund will be borne solely by the Investors and not by the Administrator or its affiliates; therefore, the Administrator's and its affiliates' or subsidiaries' losses in the AlphaKeys Fund will be limited to losses attributable to the Class B Interests in the AlphaKeys Fund held by the Administrator and its affiliates or subsidiaries in their capacity as investors in the AlphaKeys Fund. CONFIDENTIAL UBSTERRAMAR00003857 EFTA00239189 FOR EXISTING INVESTOR USE ONLY In making an investment decision, prospective Investors must rely on their own examination of the AlphaKeys Fund and the terms of the offering of Class B Interests, including the merits and risks involved. Any representation to the contrary is a criminal offense. The U.S. Commodity Futures Trading Commission (the "CFTC") has not reviewed or approved this offering or this Memorandum. Prospective Investors should not construe the contents of this Memorandum as legal, tax, investment or accounting advice and each prospective Investor is urged to consult with its own advisers with respect to legal, tax, regulatory, financial and accounting consequences of its investment in the AlphaKeys Fund. Each prospective Investor shall agree that it has not relied on the AlphaKeys Fund, UBS Fund Advisor, L.L.C. (the "Administrator") in its capacity as the Administrator and the manager of the AlphaKeys Fund, or any of the Administrator's affiliates or employees for tax advice in connection with its investment. As used in this Memorandum, the following capitalized terms have the following meanings. "Underlying Fund" refers to Millennium USA LP and any intermediate investment vehicles controlled by the Underlying Fund Manager or its affiliates and into which the Underlying Fund directly or indirectly invests all or a portion of its assets (e.g., through a master-feeder structure). "Underlying Fund Manager' refers, individually or collectively, as the context may require, to Millennium Management LLC, a Delaware limited liability company, the general partner of the Underlying Fund. "Underlying Fund Memorandum" refers collectively to the Confidential Memorandum of Millennium USA LP and the Confidential Memorandum of Millennium Partners, L.P., and any supplements thereto, attached hereto as Appendix A. "Underlying Fund Documents" refers to the offering and organizational documents of Millennium USA LP, and certain other documents referred to herein related to the Underlying Fund. This Memorandum contains information concerning the AlphaKeys Fund Agreement and the Underlying Fund Documents. However, the information set forth in this Memorandum does not purport to be complete and is subject to and qualified in its entirety by reference to the AlphaKeys Fund Agreement and the Underlying Fund Documents, copies of which are attached as appendices to this Memorandum and/or will be provided to any prospective Investor upon request, as applicable, and which should be reviewed for complete information, including information concerning the rights, privileges and obligations of Investors in the AlphaKeys Fund. In the event that the descriptions or terms in this Memorandum are inconsistent with or contrary to the descriptions in or terms of the AlphaKeys Fund Agreement and the Underlying Fund Documents, the AlphaKeys Fund Agreement (or with respect to any terms applicable to the Underlying Fund, the Underlying Fund Documents) shall control. The Underlying Fund Documents were not prepared by or independently verified by the AlphaKeys Fund, the Administrator or any of their respective affiliates, and none of the foregoing makes any representation or warranty with respect to, or shall be responsible for, the accuracy or completeness of such information. The Underlying Fund, the Underlying Fund Manager and their respective partners, officers, directors, employees, members and affiliates take no responsibility for the contents of this Memorandum, make no representations as to the accuracy or completeness hereof and expressly disclaim any liability whatsoever for any loss arising from or in reliance upon any part of this Memorandum or from any actions of the AlphaKeys Fund, the Administrator or any Investors. CONFIDENTIAL UBSTERRAMAR00003858 EFTA00239190 FOR EXISTING INVESTOR USE ONLY The Underlying Fund, the Underlying Fund Manager and their respective partners, officers, directors, employees, members and affiliates have not endorsed and make no recommendation with respect to the securities offered hereby. The Underlying Fund and the Underlying Fund Manager have no responsibility to update any of the information provided in this Memorandum. The AlphaKeys Fund will be an investor of the Underlying Fund entitled to the rights of an investor under applicable law and the applicable Underlying Fund Documents. Investors in the AlphaKeys Fund, however, do not thereby become, and will not be, investors of the Underlying Fund and will not have rights as investors of the Underlying Fund. Rather, Investors in the AlphaKeys Fund will have rights as members in the AlphaKeys Fund. As such, the Investors in the AlphaKeys Fund will have no standing or recourse against any of the Underlying Fund, the Underlying Fund Manager, their respective affiliates or any of their respective general partners, investment advisers, officers, directors, employees, partners or members. Statements contained in this Memorandum and the Underlying Fund Memorandum (including those relating to current and future market conditions and trends in respect thereof) that are not historical facts are based on current expectations, estimates, projections, opinions and/or beliefs of the Administrator or the Underlying Fund Manager. Certain information contained in this Memorandum and the Underlying Fund Memorandum may constitute "forward-looking statements," which can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "project," "estimate," "intend," "continue," "target," or "believe" or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, including those set forth in CERTAIN RISK FACTORS and in the Underlying Fund Memorandum, the amount subscribed for by the AlphaKeys Fund and the AlphaKeys Fund's fees and expenses, actual events or results or the actual performance of the AlphaKeys Fund may differ materially from those reflected or contemplated in such forward- looking statements. No representation or warranty is being made herein as to the past or future investment performance of the AlphaKeys Fund or the Underlying Fund. Only those particular representations and warranties that may be made by the AlphaKeys Fund in a definitive investor application ("Investor Application") relating to the purchase of Class B Interests, when and if one is executed, and subject to such limitations and restrictions as may be specified in such Investor Application, shall have any legal effect. The Administrator is registered as a "commodity pool operator" with the CFTC and is a member of the National Futures Association ("NFA") in such capacity under the U.S. Commodity Exchange Act, as amended. With respect to the AlphaKeys Fund, the Administrator has claimed an exemption pursuant to CFTC Rule 4.7 for relief from certain requirements applicable to a registered commodity pool operator. See REGULATORY CONSIDERATIONS: "U.S. Commodity Exchange Act." Except where otherwise indicated, the information contained in this Memorandum has been compiled as of the date set forth below, and the information regarding the Underlying Fund is as of the date set forth in the Underlying Fund Memorandum. Neither the AlphaKeys Fund nor any of its affiliates has any obligation to update this Memorandum. Under no circumstances should the delivery of this Memorandum, irrespective of when it is made, create any implication that CONFIDENTIAL UBSTERRAMAR00003859 EFTA00239191 FOR EXISTING INVESTOR USE ONLY there has been no change in the affairs of the AlphaKeys Fund or of the Underlying Fund since such date. This Memorandum and the information contained herein are being furnished on a confidential basis exclusively for use by prospective Investors in evaluating the offering of the Class B Interests of the AlphaKeys Fund described herein. Each person who has received a copy of the Memorandum and the Underlying Fund Memorandum (whether from the Administrator, such person's financial advisor or otherwise) is deemed to have agreed (whether or not such person purchases any Class B Interests) (i) not to reproduce, disclose, distribute or make available this Memorandum, or any information contained herein, in whole or in part, to any other person (other than to such person's financial, legal, tax, accounting and other advisers assisting in such person's evaluation of the Class B Interests and the AlphaKeys Fund, provided that such advisers are first advised of and instructed to comply with the confidentiality and use restriction on the information contained in this Memorandum) without the Administrator's prior express written consent, which consent may be withheld in the Administrator's sole discretion, (ii) to use the information in this Memorandum exclusively for such person's evaluation of the Class B Interests and the AlphaKeys Fund and in connection with the monitoring and management of an investment in the AlphaKeys Fund, if made, and (iii) to return this Memorandum to the Administrator promptly upon request. Each prospective Investor is invited to meet with representatives of the AlphaKeys Fund and to discuss with, ask questions of and receive answers from such representatives concerning the terms and conditions of the offering of Class B Interests, and to obtain any additional information, to the extent that such representatives possess such information or can acquire it without unreasonable effort or expense, necessary to verify the information contained herein. No person has been authorized in connection herewith to give any information or make any representations other than as contained in this Memorandum and any representation or information not contained herein must not be relied upon as having been authorized by the AlphaKeys Fund and the Administrator or any of their respective directors, officers, employees, partners, shareholders, members, managers, agents or affiliates. Statements in this Memorandum are made as of the date of the initial distribution of this Memorandum unless otherwise expressly stated herein. The delivery of this Memorandum does not imply that any information contained herein is correct as of any time subsequent to the date of this Memorandum. The distribution of this Memorandum and the offer and sale of the Class B Interests in certain jurisdictions may be restricted by law. This Memorandum does not constitute an offer to sell or the solicitation of an offer to buy in any state or other jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such state or jurisdiction. The AlphaKeys Fund reserves the right to modify any of the terms of the offering and the Class B Interests described herein, subject only to any applicable restrictions described in the AlphaKeys Fund Agreement. The Memorandum is intended for U.S. investors; in the event Class B Interests are offered to a non-U.S. Investor, the AlphaKeys Fund may provide such Investor additional information. Prospective non-U.S. Investors should inform themselves as to the legal requirements and tax consequences within the countries of their citizenship, residence, domicile and place of business with respect to the acquisition, holding or disposal of Class B Interests, and any foreign exchange restrictions that may be relevant thereto. -iv- CONFIDENTIAL UBSTERRAMAR00003860 EFTA00239192 FOR EXISTING INVESTOR USE ONLY Notwithstanding anything to the contrary provided in any offering document relating to the AlphaKeys Fund (including this Memorandum, the Investor Application and the AlphaKeys Fund Agreement), each Investor or prospective Investor (and each employee, representative, or other agent of the Investor or prospective Investor) may disclose to any and all persons, without limitation of any kind, the tax treatment, tax strategy and tax structure of (i) the AlphaKeys Fund and the offering of its Class B Interests and (ii) any of its transactions, and all materials of any kind (including opinions or other tax analyses) that are provided to the Investor or prospective Investor relating to such tax treatment, tax strategy and tax structure all within the meaning of Treasury Regulations § 1.6011-4(bX3). For the avoidance of doubt, this authorization is not intended to permit disclosure of the names of, or other identifying information regarding, the participants in this offering, or of any information or the portion of any materials not relevant to the tax treatment, tax strategy or tax structure of the offering. INTERESTS ARE NOT DEPOSITS IN, OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, THE ADMINISTRATOR OR ANY OF ITS AFFILIATES, OR ANY U.S. OR NON-U.S. DEPOSITORY INSTITUTION. INTERESTS ARE NOT INSURED BY THE FDIC, AND ARE NOT DEPOSITS, OBLIGATIONS OF, OR ENDORSED OR GUARANTEED IN ANY WAY BY, ANY BANKING ENTITY. INTERESTS ARE SUBJECT TO INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE ENTIRE AMOUNT INVESTED. November 2018 CONFIDENTIAL UBSTERRAMAR00003861 EFTA00239193 FOR EXISTING INVESTOR USE ONLY TABLE OF CONTENTS PAGE I. SUMMARY OF TERMS 1 II. CERTAIN RISK FACTORS 25 Ill. POTENTIAL CONFLICTS OF INTEREST 36 N. BROKERAGE 40 V. APPLICATION FOR INTERESTS 41 VI. TAX ASPECTS 43 VII. CERTAIN ERISA AND OTHER CONSIDERATIONS 55 VIII. REGULATORY CONSIDERATIONS 58 IX. ANTI-MONEY LAUNDERING REGULATIONS 60 X. ADDITIONAL INFORMATION 61 APPENDIX A - CONFIDENTIAL MEMORANDUM OF MILLENNIUM USA LP, AS AMENDED FROM TIME TO TIME AND CONFIDENTIAL MEMORANDUM OF MILLENNIUM PARTNERS, L.P., AS AMENDED FROM TIME TO TIME A-1 APPENDIX B - AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ALPHAKEYS MILLENNIUM FUND, L.L.0 B-1 APPENDIX C - REQUIRED 1933 ACT DISCLOSURE OF ALPHAKEYS MILLENNIUM FUND, L.L.0 C-I CONFIDENTIAL UBSTERRAMAR00003862 EFTA00239194 FOR EXISTING INVESTOR USE ONLY L SUNIMARY OF TERMS The following summary is qualified entirely by the detailed information appearing elsewhere in this Memorandum and by the terms and conditions of the limited liability company agreement of the AlphaKeys Fund (as amended, restated or otherwise modified from time to time, the "AlphaKeys Fund Agreement) attached hereto as Appendix B and the Investor Application, each of which should be read carefully and retained for future reference. Certain information contained in this Memorandum relating to the Underlying Fund Manager and the Underlying Fund has been derived by UBS Financial Services Inc. from materials finished by the Underlying Fund Manager. For a more detailed description of the Underlying Fund Manager and the Underlying Fund, see the Underlying Fund Memorandum. As used in this Memorandum, the following capitalized terms have the following meanings. "AlphaKeys Fund" refers to AlphaKeys Millennium Fund, L.L.C. (f/lc/a UBS Millennium Fund, L.L.C.), a Delaware limited liability company "Underlying Fund" refers to Millennium USA LP, a Delaware limited partnership, and any intermediate investment vehicles controlled by the Underlying Fund Manager or its affiliates and into which the Underlying Fund directly or indirectly invests all or a portion of its assets (e.g., through a master feeder structure). "Underlying Fund Manager" refers, individually or collectively, as the context may require, to Millennium Management LLC, a Delaware limited liability company, the general partner of the Underlying Fund. "Underlying Fund Memorandum" refers collectively to the Confidential Memorandum of Millennium USA LP and the Confidential Memorandum of Millennium Partners, L.P., and any supplements thereto, attached hereto as Appendix A. "Underlying Fund Documents" refers to the offering and organizational documents of Millennium USA LP, and certain other documents referred to herein related to the Underlying Fund. THE ALPHAKEYS FUND The AlphaKeys Fund is currently offering two classes of interests: Class A Interests and Class B Interests (together with additional classes, sub-classes, series or tranches of interests the AlphaKeys Fund may offer from time to time "Interests"). This Memorandum relates solely to an offering of Class B Interests. In respect of Class B Interests, the AlphaKeys Fund is offering two sub-classes of Interests: Advisory Sub-Class Interests and Brokerage Sub-Class Interests. Advisory Sub-Class Interests will be offered only to Investors who are clients of UBS Financial Services Inc. ("UBSFS") who invested through the UBS Institutional Consulting program or another UBSFS investment advisory program as permitted by the Administrator in its sole discretion (an "Advisors, Program"), pursuant to which UBSFS or its affiliates will receive a fee directly from such Investor (an "Advisory Sub-Class Investor") for the Advisory Sub-Class Interests. Brokerage Sub-Class Interests will be offered to all other clients of UBSFS unless otherwise determined by the Administrator (each, a "Brokerage Sub-Class Investor" and, together with each Advisory Sub-Class Investor, each an "Investor"). -1- CONFIDENTIAL UBSTERRAMAR00003863 EFTA00239195 FOR EXISTING INVESTOR USE ONLY INVESTMENT PROGRAM The AlphaKeys Fund has been organized to invest substantially all of its capital in Millennium USA LP, a Delaware limited partnership (the "Underlying Fund"), which may invest all or a portion of its assets through other investment vehicles (e.g. through a master-feeder structure) as further described in the Underlying Fund Memorandum. The objective of the AlphaKeys Fund is to invest in the Underlying Fund. The Underlying Fund's principal trading objective (through its investment in Millennium Partners, L.P. (the "Underlying Muter Fund")) is to achieve above-average appreciation by opportunistically trading and investing in a wide variety of securities, instruments, and other investment opportunities and engaging in a broad array of trading and investment strategies. There are no substantive limits on the investment strategies that may be pursued by the Underlying Fund. For a detailed description of the Underlying Fund's investment program, see "Millennium USA's Investment Program and Strategy" in Part One of the Underlying Fund Memorandum and the entirety of Part Two of the Underlying Fund Memorandum. The Underlying Fund is a limited partner of, and invests primarily in, the Underlying Muter Fund, a Cayman Islands exempted limited partnership. For ease of reference, the investment strategies, operations and performance of the Underlying Fund and Underlying Muter Fund are together referred to as those of the Underlying Fund. The AlphaKeys Fund from time to time may hold some of its assets in cash (not earning interest), or invested in money market securities, cash equivalents, short-to-medium term federal tax- exempt debt obligations and similar securities of governmental and private issuers, including funds that normally invest primarily in such securities ("Temporary Investments") (i) pending investment in the Underlying Fund or as the Administrator determines is necessary or prudent, in its discretion and/or (ii) pursuant to the retention of appropriate reserves (as determined in the sole discretion of the Administrator) in order to satisfy the AlphaKeys Fund's expenses. Subject to the foregoing, substantially all of the AlphaKeys Fund's assets are expected to be invested in the Underlying Fund. INTERESTS OFFERED The Underlying Fund offers and/or has issued multiple classes, sub-classes or series of interests ("Underlying Fund Interests"). The AlphaKeys Fund offers and/or has issued multiple classes, sub-classes, series or tranches of Interests. This Memorandum relates solely to an offering of Class B Interests, with respect to which the AlphaKeys Fund anticipates investing only in Class HH interests of the Underlying Fund, as described in the Underlying -2- CONFIDENTIAL UBSTERRAMAR00003864 EFTA00239196 FOR EXISTING INVESTOR USE ONLY Fund Memorandum. Class HH interests do not participate in gains and losses from "new issues" (as such term is defined by the Financial Industry Regulatory Authority, Inc. ("FINRA")) and activities that the Underlying Fund Manager determines are related thereto. The AlphaKeys Fund may invest in any other class, sub- class or series of the Underlying Fund if it is permitted to do so in the future by the Underlying Fund, in the Administrator's discretion without prior notice or consent. The Underlying Fund Memorandum should be read carefully by all prospective Investors. Investors in the AlphaKeys Fund will not be investors of the Underlying Fund and will have no direct interest in or rights with respect to or standing or recourse against the Underlying Fund, the Underlying Fund Manager or any affiliate, officer, director, member or partner or other affiliate of any of them. None of the AlphaKeys Fund, UBS Americas, Inc. or any of its affiliates has the right to participate in the control, management or operations of the Underlying Fund, nor has any discretion over the investments of the Underlying Fund. As a result of fees and expenses of the AlphaKeys Fund (including the Administrative Fee, as defined below) and the need to reserve amounts to pay AlphaKeys Fund obligations, the amount of each Investor's indirect investment in the Underlying Fund will be less than what it would have been had such Investor invested directly in the Underlying Fund. There can be no guarantee that the Underlying Fund will successfully employ its investment program or that either of the AlphaKeys Fund or the Underlying Fund achieves its investment objective. Any losses by the AlphaKeys Fund will be borne solely by the Investors and not by the Administrator or its affiliates. APPLICATION FOR INTERESTS Both initial and additional applications for Class B Interests by eligible Investors may be accepted at such times as the AlphaKeys Fund may determine, subject to the receipt of cleared funds on or before the acceptance date set by the AlphaKeys Fund. Capital contributions made prior to any closing, including the initial closing, the timing of which will be determined in the sole discretion of the Administrator (as defined below), may be held in an escrow or similar account pending such closing at the discretion of the Administrator. It is possible such account will not earn interest. After the initial closing, initial applications and additional capital contributions generally will be accepted monthly. The AlphaKeys Fund, in its sole and absolute discretion, reserves the -3- CONFIDENTIAL UBSTERRAMAR00003865 EFTA00239197 FOR EXISTING INVESTOR USE ONLY right to reject, in whole or in part, any application for Class B Interests in the AlphaKeys Fund at any time and to suspend acceptance of subscriptions, which suspension may later be terminated by the Administrator. Generally, the minimum initial investment in the AlphaKeys Fund is $250,000. Investors may make additional capital contributions in amounts not less than $50,000 unless otherwise determined by the Administrator, in its sole discretion. The AlphaKeys Fund, in its sole discretion, may vary the investment minimums from time to time. Contributions to the capital of the AlphaKeys Fund will be payable in cash. Investors must be "accredited investors" as defined in Regulation D promulgated under the 1933 Act (each, an "Accredited Investor") and "qualified purchasers" as defined in Section 2(aX51XA) of the Investment Company Act of 1940, as amended (the "1940 Act") (each, a "Qualified Purchaser") unless otherwise permitted by law. See APPLICATION FOR INTERESTS: "Eligible Investors." LEVERAGE: The AlphaKeys Fund may borrow money for any purpose, but currently contemplates borrowing only for limited purposes such as (i) for temporary or emergency purposes or in connection with withdrawals by an Investor, (ii) to invest in the Underlying Fund pending the receipt of capital contributions from Investors and (iii) to cover any shortfall in the AlphaKeys Fund's ability to perform any payment obligations when due. If the AlphaKeys Fund borrows money, its Net Asset Value (as defined below) may be subject to greater fluctuation until the borrowing is repaid. The Underlying Fund may use leverage in its trading of securities (subject to any restrictions described in the Underlying Fund Memorandum) and may sell securities short. The use of leverage and short sales has attendant risks and can, in certain circumstances, increase the adverse impact to which the Underlying Fund's portfolio (and in turn, that of the AlphaKeys Fund) may be subject. See "The Master Partnership's Investment Program and Description: Leverage and Loans" in the Underlying Fund Memorandum. THE ADMINISTRATOR UBS Fund Advisor, L.L.C. has been appointed by the Investors to provide certain administrative or support services to the AlphaKeys Fund (in such capacity, the "Administrator") pursuant to an administrative services agreement with the AlphaKeys Fund (the "Administrative Services Agreement"). One or more affiliates of the Administrator and the Placement Agent (as defined below) and third parties will be engaged to provide certain services to the AlphaKeys Fund at the expense of the AlphaKeys Fund. The Administrator and/or its affiliates provide certain administrative -4- CONFIDENTIAL UBSTERRAMAR00003866 EFTA00239198 FOR EXISTING INVESTOR USE ONLY and investment advisory services to registered and unregistered investment funds and individual accounts. The Administrator will serve as the "Manage?' of the AlphaKeys Fund (in such capacity, the "Manager") as such term is defined within the meaning of the Delaware Limited Liability Company Act, Title 6 of the Delaware Code, Section 18-101 et seq., as amended from time to time (the "LLC Act"). The Administrator and/or an affiliate may hold a nominal Interest in, and may therefore be an investor of, the AlphaKeys Fund. The Administrator currently serves (and may in the future serve) as administrator to one or more parallel funds investing in the Underlying Fund or similar funds managed by Millennium or an affiliate thereof (such funds "Other AlphaKeys Millennium Funds"). The Administrator is an indirect, wholly owned subsidiary of UBS Americas, Inc. (the "UBS Americas") which, in turn, is a wholly owned subsidiary of UBS AG (together with its affiliates, "UBS"), a Swiss bank. UBSFS, a wholly owned subsidiary of UBS Americas, is registered as a broker-dealer under the U.S. Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member of the New York Stock Exchange, Inc. and other principal securities exchanges. The offices of the Administrator are located at 1285 Avenue of the Americas, New York, New York 10019, and its telephone number is (800) 486-2608. The Administrator may, directly or indirectly, assign all or any part of its rights and duties under the Administrative Services Agreement to any individual or entity, with the prior approval of the AlphaKeys Fund. In the event of an assignment of the Administrative Services Agreement, the Manager of the AlphaKeys Fund is authorized to grant consent on behalf of the AlphaKeys Fund. The Manager will provide written notice to the Investors in the event that it grants consent to an assignment. Because the Manager and the Administrator are currently the same entity, it is unlikely that the Manager will withhold consent to an assignment proposed by the Administrator. In addition, notwithstanding anything to the contrary, the Manager may resign as Manager of the AlphaKeys Fund and cause the AlphaKeys Fund to admit a different individual or entity as manager in addition to or as a replacement and successor for the current Manager of the AlphaKeys Fund with (i) the prior consent of the AlphaKeys Fund, or (ii) prior notice to the AlphaKeys Fund and, to the extent consistent with applicable law, without the prior consent of the AlphaKeys Fund. The Manager expects (but is not required) to admit an entity not affiliated with the Manager as a successor manager. -5- CONFIDENTIAL UBSTERRAMAR00003867 EFTA00239199 FOR EXISTING INVESTOR USE ONLY The Administrator may be removed as the Manager of the AlphaKeys Fund and/or the Administrative Services Agreement may be terminated upon the vote of at least a majority-in-interest of Investors who are not affiliates of the Administrator ("Unaffiliated Investors") at a meeting of the Investors called for such purpose as further described in the AlphaKeys Fund Agreement. A substitute manager may be appointed upon the vote of at least a majority-in- interest of the Unaffiliated Investors. In certain circumstances, the AlphaKeys Fund Agreement permits the Administrator to reduce an Investor's voting or approval rights. ADMINISTRATIVE FEE In consideration for the services provided by the Administrator, the AlphaKeys Fund will pay the Administrator a fee (the "Administrative Fee") on behalf of each Brokerage Sub-Class Investor equal to (a) 1.0% per annum of the capital account balance of each Brokerage Sub-Class Investor with a Fee Base (as defined below) of less than $3 million and (b) 0.75% per annum of the capital account balance of each Brokerage Sub-Class Investor with a Fee Base of $3 million or more. The Administrative Fee is determined as of the appropriate date and payable monthly in arrears. The "Fee Base" with respect to any Brokerage Sub-Class Investor is the amount equal to the aggregate capital contributions made by such Brokerage Sub-Class Investor (including capital contributions made at the beginning of such fiscal period) less aggregate withdrawals made by, and distributions to, such Brokerage Sub-Class Investor, in each case with respect to the AlphaKeys Fund. The Administrative Fee is not paid to the Administrator in respect of Advisory Sub-Class Investors. If an Investor holding an Advisory Sub-Class Interest terminates its participation in an Advisory Program and, therefore, UBSFS or its affiliates are no longer receiving a fee from such Investor pursuant thereto, then the AlphaKeys Fund may convert such Investor's Advisory Sub-Class Interest into a Brokerage Sub-Class Interest and cause such Investor to bear the Administrative Fee due to the Administrator with respect to the Brokerage Sub-Class Interest accordingly, subject to waiver in the Administrator's discretion. The AlphaKeys Fund does not expect to permit mid-month investments or withdrawals. If the AlphaKeys Fund or the Administrator permits an Investor to make a capital contribution on any day other than the first day of any month, the AlphaKeys Fund may, in the Administrator's sole discretion, be required to pay, in lieu of a full Administrative Fee for such month, a prorated Administrative Fee with respect to such Investor for such month. -6- CONFIDENTIAL UBSTERRAMAR00003868 EFTA00239200 FOR EXISTING INVESTOR USE ONLY If the AlphaKeys Fund or the Administrator permits an Investor to make a withdrawal other than as of the last business day of a month, the Administrative Fee for such month may, in the Administrator's sole discretion, be prorated and paid accordingly, as appropriate. The Administrative Fee will be paid to the Administrator out of the AlphaKeys Fund's assets, and debited against each Investor's capital account by the amount of the Administrative Fee charged to the AlphaKeys Fund with respect to such Investor. The Administrative Fee will be in addition to the Underlying Fund Performance Allocation and other charges or expenses of the Underlying Fund (as described below). The Administrator may, in its sole discretion, waive or reduce the Administrative Fee with respect to any Investor and may otherwise vary the terms of the Administrative Fee as to an Investor. The Administrator may also vary the terms of the Administrative Fee with respect to a particular class, tranche or series (or sub-class, sub-tranche or sub-series) of Interests, in the Administrator's sole discretion. PLACEMENT FEE Brokerage Sub-Class Investors will be charged by UBSFS (in such capacity, the "Placement Agent") a placement fee (a "Placement Fee") of 2% of the Investor's capital contribution (including any additional capital contributions made by an Investor) to the AlphaKeys Fund (subject to waiver by the Placement Agent in limited circumstances). The Placement Fee is in addition to an Investor's capital contribution to the AlphaKeys Fund and will not be included in an Investor's capital account therein. Advisory Sub-Class Investors will not be charged a Placement Fee. Separately, the Administrator and the Placement Agent intend to compensate the Placement Agent's financial advisors, as well as others, for their ongoing servicing of clients with whom they have placed Interests. Such compensation will be payable out of the Administrative Fee. UNDERLYING FUND A performance allocation of 20% of any net profit (determined net PERFORMANCE of the Underlying Fund Management Fee as described herein) (the ALLOCATION "Underlying Fund Performance Allocation") will be charged annually, as further described in and subject to additional terms set forth in the Underlying Fund Memorandum. See "Fees and Expenses Relating to Millennium USA" and "Allocation of Gains and Losses" in Part One of the Underlying Fund Memorandum for further discussion of the Underlying Fund Performance Allocation. UNDERLYING FUND Neither the Underlying Fund nor the Underlying Master Fund pays -7- CONFIDENTIAL UBSTERRAMAR00003869 EFTA00239201 FOR EXISTING INVESTOR USE ONLY EXPENSES OTHER EXPENSES a management fee. As set forth in the Underlying Fund Memorandum, the Underlying Fund and the Underlying Master Fund each bear a range of fees and expenses including, but not limited to, expenses incurred with respect to, or in connection with, the Underlying Master Fund and its affiliates or incurred directly by the Underlying Master Fund (which cover, among other things, the expenses, salaries, fringe benefits, bonuses, fees and performance-based compensation paid or reimbursed to portfolio managers, other employees, consultants, subcontractors, agents and investment advisers engaged directly by the Underlying Master Fund and its affiliates, fees paid to persons or entities who assist in identifying and recruiting portfolio managers, and expenses related to computers, equipment and technology (including, without limitation, information technology hardware and software and third-party software licensing, implementation, data management and recovery services and custom developing costs) and expenses related to maintaining offices, including leases, fixtures and leasehold improvements). See "Fees and Expenses Relating to Millennium USA" in Part One of the Underlying Fund Memorandum and "The Master Partnership's Fees and Expenses" in Part Two of the Underlying Fund Memorandum for further discussion of the Underlying Fund's and Underlying Master Fund's expenses. BNY Mellon Alternative Investment Services (the "Sub- Administrator") performs certain administration, accounting and investor services for the AlphaKeys Fund and other investment funds sponsored or advised by UBSFS or its affiliates. In consideration for these services, the AlphaKeys Fund and certain of these other investment funds will pay the Sub-Administrator an annual fee calculated based upon the aggregate average net assets of the AlphaKeys Fund and certain of these other investment funds, subject to a minimum monthly fee, and will reimburse certain of the Sub-Administrator's expenses. In addition, the Administrator intends to retain a third party technology service provider (and the Administrator, UBSFS or an affiliate may own a non-controlling interest in such service provider) to provide an online portal through which the AlphaKeys Fund investors will receive certain of the reporting and monitoring services. The AlphaKeys Fund will bear all costs, fees and expenses incurred in the operation of the AlphaKeys Fund, other than those specifically required to be borne by the Administrator and other service providers pursuant to their agreements with the AlphaKeys Fund. Expenses ("Expenses") to be borne by the AlphaKeys Fund include, but are not limited to, the following: (i) all costs and expenses related to investment transactions and positions for the -8- CONFIDENTIAL UBSTERRAMAR00003870 EFTA00239202 FOR EXISTING INVESTOR USE ONLY AlphaKeys Fund's account, including, but not limited to, custodial fees, fees and expenses incurred in connection with the AlphaKeys Fund's investment in the Underlying Fund, including due diligence, "road show" and other marketing-related expenses and travel-related expenses, and fees and expenses related to any Temporary Investments made by the AlphaKeys Fund; (ii) all costs and expenses associated with borrowing; (iii) fees payable to the Conflicts Review Committee (as defined herein) and the costs and expenses of holding any meetings of the Conflicts Review Committee or of Investors that are permitted or required to be held under the terms of the AlphaKeys Fund Agreement or applicable law; (iv) all costs and expenses associated with the organization and operation of the AlphaKeys Fund, including offering costs and the costs of compliance with any applicable federal, state and other laws; tax preparation and reporting fees; taxes, including but not limited to, tax payments made on behalf of Investors; (v) fees and disbursements of any attorneys, accountants, auditors and other consultants and professionals engaged on behalf of the AlphaKeys Fund, including in connection with an audit; (vi) the costs of any liability or other insurance obtained on behalf of the AlphaKeys Fund or the Administrator; (vii) all costs and expenses of preparing, setting in type, printing and distributing reports and other communications to Investors; (viii) all expenses of valuing the AlphaKeys Fund's Net Asset Value, including any equipment or services obtained for the purpose of valuing the AlphaKeys Fund's investment portfolio, including appraisal and valuation services provided by third-party service providers; (ix) reporting and monitoring costs of an online portal; (x) all charges for equipment or services used for communications between the AlphaKeys Fund and any custodian or other agent engaged by the AlphaKeys Fund; (xi) the Administrative Fee and the fees and expenses of any custodians, third-party service providers (including service providers in which the Administrator, UBSFS, or an affiliate may own a non-controlling interest) and other persons providing administrative or sub-administrative services to the AlphaKeys Fund; (xii) fees and expenses incurred in connection with the preparation for or defense or disposition of any investigation, action, suit, arbitration or other proceeding, and any indemnification expenses related thereto; and (xiii) such other types of expenses as may be approved from time to time by the Administrator. The AlphaKeys Fund may pay costs and expenses, including any amounts paid or accrued by the AlphaKeys Fund vis-a-vis its investment in the Underlying Fund, such as withdrawal charges, if any. In addition, such expenses may be assessed against the individual Investor's capital account, in the Administrator's -9- CONFIDENTIAL UBSTERRAMAR00003871 EFTA00239203 FOR EXISTING INVESTOR USE ONLY discretion, as discussed further under "Withdrawals" below. Expenses (other than the Administrative Fee, which will be charged as described above) will be allocated pro rata among the Investors, unless otherwise determined by the Administrator. The AlphaKeys Fund will reimburse the Administrator for any of the above expenses that it may pay on behalf of the AlphaKeys Fund. The AlphaKeys Fund will bear its organizational and offering expenses, which may be amortized over a five year period. Such amortization over a five year period may be a divergence from U.S. Generally Accepted Accounting Principles ("GAAP"). Although amortization over a five year period is not deemed in accordance with GAAP, the Net Asset Value attributable to each Investor's capital account (as reported in the Investor's capital account statements) may still be calculated by amortizing organizational and offering costs over such five year period and may therefore differ from the Net Asset Value in the financial statements determined in accordance with GAAP. The Administrator may determine to bear, waive or delay certain expenses (including organizational expenses of the AlphaKeys Fund) in its sole discretion, under such terms and in such manner as the Administrator chooses. In addition to the foregoing costs and expenses, Investors will bear the cost of the AlphaKeys Fund's pro rata share of the Underlying Fund Performance Allocation and the Underlying Fund's and Underlying Master Fund's fees and expenses allocable to the AlphaKeys Fund in the Underlying Fund, each as described above. Among other things, under the Underlying Fund Documents, the Underlying Fund (and indirectly the AlphaKeys Fund, like all other investors in the Underlying Fund) has agreed to indemnify the Underlying Fund Manager and its affiliates (and each of its respective interest holders, directors, officers, employees, agents and each person who controls any of the foregoing and their executors, heirs, assigns, successors and other legal representatives). Any costs or liabilities associated with such indemnification will be borne in part by the Underlying Fund. See "Fees and Expenses Relating to Millennium USA" in Part One of The Underlying Fund Memorandum and "The Master Partnership's Fees and Expenses" in Part Two of the Underlying Fund Memorandum for further discussion of the Underlying Fund's and Underlying Master Fund's expenses. Appropriate reserves may be created, accrued and charged against net assets for contingent liabilities known to the Administrator. Reserves will be in such amounts, subject to increase or reduction, -10- CONFIDENTIAL UBSTERRAMAR00003872 EFTA00239204 FOR EXISTING INVESTOR USE ONLY and as of such date as the Administrator may deem necessary or appropriate. TERMS OF UNDERLYING FUND TERM WITHDRAWALS The terms of the Underlying Fund, including the terms described herein, are subject to change. In the event of any such change to the terms of the Underlying Fund, as an investor in the Underlying Fund, the AlphaKeys Fund will be subject to such changed terms. The AlphaKeys Fund's term is perpetual unless it is otherwise wound up under the terms of the AlphaKeys Fund Agreement. The AlphaKeys Fund will be voluntarily dissolved: (i) at the election of the Administrator, or (ii) as required by operation of law. Upon the occurrence of any event of dissolution, the Administrator, acting directly, or a liquidator under appointment by the Administrator, is charged with winding up the affairs of the AlphaKeys Fund and liquidating its assets. Net profits or net loss during the fiscal period including the period of liquidation will be allocated as described in the section titled SUMMARY OF TERMS: "Allocation of Profit and Loss." Upon the dissolution of the AlphaKeys Fund, its assets are to be distributed (1) first to satisfy the debts, liabilities and obligations of the AlphaKeys Fund, other than debts to Investors, including actual or anticipated liquidation expenses, (2) next to satisfy debts owing to the Investors and (3) finally to the Investors proportionately in accordance with the balances in their respective capital accounts. Assets may be distributed in kind if the Administrator or liquidator determines that such a distribution would be in the interests of the Investors in facilitating an orderly liquidation. An Investor shall be permitted to make a withdrawal of Class B Interests as of the close of business on March 31, June 30, September 30 and December 31 of each year (each such day, a "Withdrawal Date"). In the event that withdrawal requests are received for any Withdrawal Date aggregating to more than five percent (5%) of the aggregate Net Asset Value of the AlphaKeys Fund as of such Withdrawal Date, the Administrator may, in its sole discretion, (i) satisfy all such withdrawal requests or (ii) reduce all such withdrawal requests, pro rata based on the requested withdrawal amount of each Investor, so that only 5% (or a higher percentage, in the sole discretion of the Administrator) of the aggregate Net Asset Value of the AlphaKeys Fund as of such Withdrawal Date is withdrawn as of such date (the "Class B Gate"). To the extent a request for withdrawal of Class B Interests is not fully satisfied due to the Class B Gate, the applicable Investor will be deemed CONFIDENTIAL LiBSTERRAMAR00003873 EFTA00239205 FOR EXISTING INVESTOR USE ONLY automatically to have resubmitted a withdrawal request for the remaining portion of such unsatisfied request as of the next Withdrawal Date and, if the Class B Gate applies as of such next Withdrawal Date, such withdrawal request may be subject to reduction in the same manner as new withdrawal requests pursuant to the Class B Gate. For the avoidance of doubt, both new withdrawal requests for a Withdrawal Date and withdrawal requests deemed resubmitted for such Withdrawal Date will be reduced pro rata by the Class B Gate, if applicable, as of such date. Subject to the terms of withdrawal payments by the Underlying Fund, a withdrawing Investor subject to the Class B Gate(s) will generally receive payment as of each subsequent Withdrawal Date until the Investor's entire withdrawal request is satisfied. Capital not withdrawn from the AlphaKeys Fund by virtue of the foregoing restrictions shall remain at risk of (and will be subject to the profits and losses resulting from) the AlphaKeys Fund's business until the effective date of the withdrawal. In addition, to the extent the AlphaKeys Fund is restricted from making withdrawals from the Underlying Fund due to a gating or other restriction imposed by the Underlying Fund, the Administrator may, in its sole and absolute discretion, reduce the withdrawals requested by Investors pro rata according to the method described above. An Investor wishing to withdraw capital or withdraw from the AlphaKeys Fund must provide written notice to the Administrator at least one hundred and five (105) days prior to a Withdrawal Date, (unless the Administrator agrees to accept shorter notice), or upon such other notice period, which may be longer, as may be notified to the Investors, in the Manager's sole discretion. In the case of withdrawals of 95% or more of the balance of an Investor's capital account, an amount equal to 95% of the estimated withdrawal proceeds is generally expected to be payable to such Investor within sixty (60) days after the applicable Withdrawal Date, and the balance will be paid, subject to audit adjustment and with interest, within 30 days after the AlphaKeys Fund issues its audited financial statements for the year in which such Withdrawal Date occurred. In the case of withdrawals of less than 95% of the balance of an Investor's capital account, an amount equal to 100% of the estimated withdrawal proceeds is generally expected to be payable to such Investor within sixty (60) days after the applicable Withdrawal Date. -12- CONFIDENTIAL UBSTERRAMAR00003874 EFTA00239206 FOR EXISTING INVESTOR USE ONLY Notwithstanding the foregoing, amounts held back may be larger and/or paid out later than described above, as the ability of the AlphaKeys Fund to honor withdrawal requests may be dependent upon the AlphaKeys Fund's receipt of funds from the Underlying Fund and its ability to make withdrawals from the Underlying Fund, which is subject to the withdrawal terms of the Underlying Fund and may be delayed or suspended altogether. See "Millennium USA's Organization, Management, Structure, and Operations" in Part One of the Underlying Fund Memorandum. The Administrator may determine to satisfy a withdrawal request in full, without a holdback, in its discretion. Each withdrawal will be subject to a minimum withdrawal amount of U.S. $50,000 and no partial withdrawals will be permitted if the balance of the Investor's capital account with respect to its remaining Interests would be less than U.S. $250,000, provided that such requirements may be waived with respect to any Investor by the Administrator in its sole discretion. The amount due to any Investor whose Class B Interest or portion thereof is withdrawn will be equal to the value of the Investor's capital account or portion thereof based on the estimated Net Asset Value of the AlphaKeys Fund's assets as of the applicable Withdrawal Date, after giving effect to all allocations and charges to be made to the Investor's capital account (including the Administrative Fee) as of such date. The Administrator may establish reserves and holdbacks for estimated, projected or accrued expenses (including the Administrative Fee), liabilities and contingencies (even if such reserves or holdbacks are not otherwise required by generally accepted accounting principles) which could reduce the amount of a distribution upon withdrawal. In addition, in the sole discretion of the Administrator, any withdrawal by an Investor may be subject to a charge, as the Administrator may reasonably require, in order to defray the costs and expenses of the AlphaKeys Fund in connection with such withdrawal, including but not limited to any amounts paid or accrued by the AlphaKeys Fund vis-à-vis its investment in the Underlying Fund, withdrawal or similar charges imposed by the Underlying Fund. The AlphaKeys Fund may, at times, receive withdrawal proceeds in amounts that exceed the eligible withdrawal requests with respect to the AlphaKeys Fund. The Administrator will generally reinvest any such excess in the Underlying Fund as of the next available capital contribution date. However, as a result of such over-withdrawal, the AlphaKeys Fund may bear a greater amount of Underlying Fund Incentive Allocation and/or other fees and expenses than it would bear in the absence of such overwithdrawal. -13- CONFIDENTIAL UBSTERRAMAR00003875 EFTA00239207 FOR EXISTING INVESTOR USE ONLY To the extent permitted by applicable law, the Administrator may require any Investor to withdraw its Class B Interests (in whole or in part) for any or no reason. For example, the AlphaKeys Fund may terminate the Class B Interest of any Investor who is a UBS employee if the continued participation of such Investor is determined by the Administrator to subject any of the AlphaKeys Fund, the Administrator, or their respective affiliates to any adverse consequence under any laws, rules or regulations applicable to any of the AlphaKeys Fund, the Administrator, or their respective affiliates. Distributions in respect of any such required withdrawals may be made in the manner and in amounts described above for voluntary withdrawals by Investors. Please see "Withdrawal Rights" in the Underlying Fund Memorandum for a more detailed description of the withdrawal terms, including additional restrictions, applicable to the AlphaKeys Fund's investment in the Underlying Fund. LIMITATIONS ON WITHDRAWALS Notwithstanding anything herein to the contrary, and in accordance with the AlphaKeys Fund Agreement, the Administrator may suspend or delay the right of any Investor to withdraw all or a portion of its capital account or to receive a distribution from the AlphaKeys Fund if (i) the Administrator reasonably believes it necessary, prudent or appropriate in connection with the operation of the AlphaKeys Fund or (ii) the AlphaKeys Fund has not received sufficient funds from the Underlying Fund or if the AlphaKeys Fund's ability to make withdrawals from the Underlying Fund is suspended, delayed, modified or denied. See "Certain Risk Factors Relating to Millennium USA — Limit on Withdrawals" in Part One of the Underlying Fund Memorandum for a discussion of when the AlphaKeys Fund's ability to make withdrawals from the Underlying Fund may be suspended, delayed, modified or denied. Furthermore, unlike other interests in the Underlying Fund (including the interests in which Class A Interests are invested), the Underlying Fund's interests in which the Class B Interests are invested have no special withdrawal rights in the event of the death, disability, adjudication of incompetency, bankruptcy, insolvency or withdrawal from the general partner of the Underlying Master Fund of Israel A. Englander (a "Trigger Event"). The Administrator specifically reserves the right to prohibit an Investor from withdrawing all or a portion of its capital account or from receiving a distribution from the AlphaKeys Fund if such withdrawal or distribution would cause the assets of the AlphaKeys Fund to be considered "plan assets" under -14- CONFIDENTIAL UBSTERRAMAR00003876 EFTA00239208 FOR EXISTING INVESTOR USE ONLY Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and any rules and regulations thereunder, and the plan assets regulation set forth by the U.S. Department of Labor in the U.S. Code of Federal Regulations at 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA (collectively, the "Plan Assets Rules"). Further, Investors should be aware that the withdrawal process could involve substantial complications and delays, as the ability of the AlphaKeys Fund to honor withdrawal requests may be dependent upon the AlphaKeys Fund's ability to make withdrawals from the Underlying Fund, which may be delayed or suspended altogether. Accordingly, the Administrator may determine that withdrawals should be delayed or suspended. The Administrator may so delay or suspend redemptions from the AlphaKeys Fund at a time when no such delay or suspension is in effect with respect to one or more Other AlphaKeys Millennium Funds. Notwithstanding anything to the contrary contained herein, once the AlphaKeys Fund has commenced liquidation, all withdrawal rights and requests may be canceled or altered in the Administrator's sole discretion. Withdrawals may be funded with cash or securities. Although the Administrator generally expects distributions in connection with withdrawals to be made in cash, any such distributions may be in cash, in-kind, or partly in cash and partly in-kind, in the Administrator's sole discretion. Please see "Limitation on Withdrawals" in the Underlying Fund Memorandum for a more detailed description of the withdrawal terms, including additional restrictions, applicable to the AlphaKeys Fund's investment in the Underlying Fund. OTHER INTERESTS Interests of classes of the AlphaKeys Fund, including Class A Interests, and interests of classes of Other AlphaKeys Millennium Funds (collectively, "Other Interests") generally are significantly more liquid than the Class B Interests. Such Other Interests with more favorable liquidity terms may be offered to clients of UBSFS from time to time, simultaneously with or at different times than the Class B Interests, to the extent such Other Interests become available. Generally, the availability of the Other Interests is limited and may depend upon withdrawals of such Other Interests from the AlphaKeys Fund or from the Other AlphaKeys Millennium Funds. As a result, there is no guarantee that any Other Interests would be available to any Investor, and the Investor is likely to only have access to the Class B Interests, which provide liquidity terms that are significantly less favorable than those applicable to the Other Interests. See CERTAIN RISK FACTORS -15- CONFIDENTIAL UBSTERRAMAR00003877 EFTA00239209 FOR EXISTING INVESTOR USE ONLY — Other Interest; Limited Liquidity below. CAPITAL ACCOUNTS The AlphaKeys Fund will maintain a separate capital account for each Investor, which will have an opening balance equal to such Investor's initial contribution to the capital of the AlphaKeys Fund. Each Investor's capital account will be increased by the sum of the amount of cash constituting additional contributions by such Investor to the capital of the AlphaKeys Fund, plus any amounts credited to such Investor's capital account as described below. Similarly, each Investor's capital account will be reduced by the sum of the amount of any withdrawal from the AlphaKeys Fund of the Class B Interest or portion of the Class B Interest of such Investor, plus the amount of any distributions to such Investor, plus any amounts debited against such Investor's capital account as described below. Capital accounts of Investors are adjusted as of the close of business on the last day of each fiscal period. The AlphaKeys Fund may, in the Administrator's sole discretion, establish a separate capital account with respect to an additional contribution by an Investor and Investors may hold multiple Interests. ALLOCATION OF PROFIT Net profits or net losses of the AlphaKeys Fund for each fiscal AND Loss period will be allocated among and credited to or debited against the capital accounts of all Investors as of the last day of each fiscal period in accordance with the balance of each such capital account for such fiscal period (provided that allocations may be adjusted to give effect to additional classes, sub-classes, series or tranches of interests created by the AlphaKeys Fund). Net profits or net losses will be measured as the net change in the Net Asset Value of the AlphaKeys Fund, including any net change in unrealized appreciation or depreciation of investments and realized income and gains or losses and expenses during a fiscal period, before giving effect to the Administrative Fee (and certain other items) and any withdrawals by Investors. In the event the Administrator determines that, based upon tax or regulatory reasons, or any other reasons, an Investor should not participate, in whole or in part, in allocations of net profit and net loss to one or more of its capital accounts attributable to trading or investing in any security, type of security or any other transaction, the Administrator may allocate such profit and/or loss to the capital accounts of such Investor or other Investors not subject to such limitations. The Administrator may also choose, based upon the reasons above, to allocate interest earned on any security, type of security or any other transaction to a memorandum account separate from such Investor's capital account(s). -16- CONFIDENTIAL UBSTERRAMAR00003878 EFTA00239210 FOR EXISTING INVESTOR USE ONLY To the greatest extent possible, allocations for federal income tax purposes generally will be made among the Investors so as to reflect equitably amounts credited or debited to each Investor's capital account. The AlphaKeys Fund may specially allocate items of taxable income and gain or loss and deduction to a withdrawing Investor. This special allocation to or from a withdrawing Investor could result in Investors (including the withdrawing Investor) receiving more or less items of income, gain, deduction or loss (and/or income, gains, deductions or losses of a different character) than they would receive in the absence of such allocations. VALUATION The AlphaKeys Fund and/or each class, sub-class, tranche or series of Interests issued by the AlphaKeys Fund will have a Net Asset Value determined at such times as the Administrator may determine. The Net Asset Value will be equal to the sum of the value of all the gross assets of the AlphaKeys Fund and/or each class, sub-class, tranche or series minus all gross liabilities of the AlphaKeys Fund and/or such class, sub-class, tranche or series, including (after accrual thereof) any expenses. The term "Net Asset Value" in respect of the AlphaKeys Fund or the Underlying Fund (or any class, tranche or series (or sub-class or sub-series) thereof) shall mean the then-current Net Asset Value of such AlphaKeys Fund or Underlying Fund (or such class, tranche or series (or sub- class or sub-series) thereof). The assets of the AlphaKeys Fund will be valued in accordance with GAAP or another methodology determined appropriate by the Administrator in its sole discretion. Based on current GAAP requirements, the Administrator expects to rely on valuation information provided by the Underlying Fund (which will be unaudited, except for information as of the date of the Underlying Fund's annual audit), which if inaccurate or incomplete could adversely affect the Administrator's ability to determine the Net Asset Value and, accordingly, value the Class B Interests accurately. In certain circumstances, the Administrator may be required by GAAP to make adjustments to the valuation information provided by the Underlying Fund. Absent bad faith or manifest error, valuation determinations made by the Administrator will be conclusive and binding. Except as otherwise determined by the Administrator, the AlphaKeys Fund's net profits and net losses will be determined in accordance with GAAP applied consistently and will include net realized and unrealized profits or losses on the AlphaKeys Fund's investments. LIABILITY OF InivEsToRs Investors in the AlphaKeys Fund will be members of a limited -17- CONFIDENTIAL UBSTERRAMAR00003879 EFTA00239211 FOR EXISTING INVESTOR USE ONLY liability company as provided under Delaware law. Under Delaware law and the AlphaKeys Fund Agreement, an Investor will not be liable for the debts, obligations or liabilities of the AlphaKeys Fund solely by reason of being an Investor, except that the Investor may be obligated to (i) make capital contributions to the AlphaKeys Fund pursuant to the AlphaKeys Fund Agreement and applicable law, including to repay any funds wrongfully distributed to the Investor, (ii) repay amounts paid to such Investor in connection with a withdrawal as a result of a determination by the Administrator that the amount paid to such Investor was materially incorrect, (iii) repay withholding or other taxes applicable with respect to such Investor paid by the AlphaKeys Fund, or (iv) repay liabilities of the AlphaKeys Fund incurred during a prior period in which such Investor was an Investor in the AlphaKeys Fund (including any such liabilities of the AlphaKeys Fund to the Underlying Fund). The Administrator will not be personally liable to any Investor for the repayment of any balance in such Investor's capital account or for capital contributions by such Investor to the capital of the AlphaKeys Fund or by reason of any change in the federal or state income tax laws applicable to the AlphaKeys Fund or its Investors. EXCULPATION AND INDEMNIFICATION The AlphaKeys Fund Agreement provides that the Manager will not be liable to the AlphaKeys Fund for any acts or omissions by the Manager, and any member, director, officer or employee of the Manager, or any of its affiliates, for any error of judgment, mistake of law or any act or omission in connection with the performance of its duties under the AlphaKeys Fund Agreement, unless it shall be determined by final judicial decision on the merits, from which there is no further right to appeal, that such error, mistake or act or omission constitutes willful misfeasance, bad faith or gross negligence in connection with the conduct of the Manager's duties under the AlphaKeys Fund Agreement; provided, that under no circumstance will the Manager be liable for any indirect or consequential damages. The AlphaKeys Fund (and not any Indemnified Person), will (i) be responsible for any losses resulting from "trading" errors and similar human errors, absent willful misfeasance, bad faith or gross negligence in the performance of the obligations and duties of any Indemnified Person, or (ii) receive the gain from such errors, as the case may be. The AlphaKeys Fund will indemnify the Manager, and any member, director, officer or employee of the Manager, and any of their affiliates (each, an "Indemnified Person") for, and hold each Indemnified Person harmless against, any loss, liability or expense, including, without limit, reasonable counsel fees, incurred on the -18- CONFIDENTIAL UBSTERRAMAR00003880 EFTA00239212 FOR EXISTING INVESTOR USE ONLY part of an Indemnified Person arising out of or in connection with the Manager's acceptance of, or the performance of its duties and obligations under, the AlphaKeys Fund Agreement, as well as the costs and expenses of defending against any claim or liability arising out of or relating to the AlphaKeys Fund Agreement, absent willful misfeasance, bad faith or gross negligence of its obligations to the AlphaKeys Fund; provided, however, that nothing contained in the AlphaKeys Fund Agreement shall constitute a waiver or limitation of any rights which the AlphaKeys Fund may have under applicable securities or other laws. Expenses incurred by an Indemnified Person in defense or settlement of any claim that may be subject to a right of indemnification hereunder will be advanced by the AlphaKeys Fund to such Indemnified Person prior to the final disposition thereof upon receipt of an undertaking by or on behalf of such Indemnified Person to repay such amount if a court of competent jurisdiction determines in a non-appealable judgment that the Indemnified Person was not entitled to be indemnified hereunder. Any and all judgments against the AlphaKeys Fund or the Manager in respect of which the Manager is entitled to indemnification shall be satisfied from the AlphaKeys Fund assets, including capital contributions. If the Manager determines that it is appropriate or necessary to do so, the Manager may cause the AlphaKeys Fund to establish reasonable reserves, escrow accounts or similar accounts to fund its obligations. The Administrative Services Agreement and the Investor Application provide that the Administrator and its affiliates will receive certain exculpation and indemnification rights that are substantially similar to those afforded to the Manager pursuant to the terms of the AlphaKeys Fund Agreement. In addition, the AlphaKeys Fund indemnifies (i) the Placement Agent under certain circumstances, as set forth in the placement agreement between the AlphaKeys Fund and the Placement Agent (the "Placement Agreement"); and (ii) the Sub-Administrator under certain circumstances, as set forth in the administration agreement between the AlphaKeys Fund and the Sub-Administrator. AMENDMENT OF THE The AlphaKeys Fund Agreement may be amended with the ALPHAKEYS FuND approval of (i) the Administrator in its capacity as Manager and AGREEMENT (ii) a majority-in-interest of the Investors. An Investor will be deemed to consent to a proposed amendment if the Investor has received notice of such amendment and did not object thereto within a reasonable, and specifically disclosed, time period that is consistent with applicable law. Amendments increasing the -19- CONFIDENTIAL UBSTERRAMAR00003881 EFTA00239213 FOR EXISTING INVESTOR USE ONLY obligation of any Investor to make capital contributions to the AlphaKeys Fund or reducing any Investor's capital account (in each case other than as permitted in the AlphaKeys Fund Agreement) may not be made without the consent of any Investors adversely affected thereby or unless any such Investor has received notice of such amendment and, in the case of an Investor objecting to such amendment, a reasonable opportunity to withdraw its Class B Interests. Amendments that (i) increase Investor rights, including with respect to voting, or (ii) otherwise would not adversely affect Investors, will not require Investor consent. The terms of the Underlying Fund, including the terms described herein, are subject to change. In the event of any change to the terms of the Underlying Fund, as an investor in the Underlying Fund, the AlphaKeys Fund will be subject to such changed terms and will change its terms accordingly. TRANSFER REgrfficrioNs No person may become a substitute Investor without the written consent of the Administrator, which consent may be withheld for any reason in its sole and absolute discretion and is expected to be granted, if at all, only under extenuating circumstances, in connection with a transfer to an entity that does not result in a change of beneficial ownership. The Administrator may require such documentation as it shall determine in its sole discretion. SUMMARY OF TAXATION The AlphaKeys Fund intends to be treated as a partnership for federal income tax purposes and not as an association or a publicly traded partnership taxable as a corporation. Subject to certain exceptions discussed in "TAX ASPECTS" below, as a partnership, the AlphaKeys Fund generally should not be subject to federal income tax, and each Investor will be required to report on its own annual tax return its distributive share of the AlphaKeys Fund's taxable income or loss (which, assuming the Underlying Fund and the Underlying Master Fund are each properly treated as a partnership for federal income tax purposes and not as an association or a publicly traded partnership taxable as a corporation, will consist almost entirely of the AlphaKeys Fund's share of the taxable income or loss of the Underlying Fund, which, in turn, will consist primarily of the Underlying Fund's share of the taxable income or loss of the Underlying Master Fund). Each Investor must report its share of the AlphaKeys Fund's taxable income or loss, regardless of the extent to which, or whether, the AlphaKeys Fund or such Investor receives corresponding distributions for such taxable year, and such Investor, thus, may incur income tax liabilities in excess of any distributions to or from the AlphaKeys Fund. -20- CONFIDENTIAL UBSTERRAMAR00003882 EFTA00239214 FOR EXISTING INVESTOR USE ONLY An investment in the AlphaKeys Fund may have the effect of requiring the Investor to file income or other tax returns in jurisdictions in which the AlphaKeys Fund, the Underlying Fund or the Underlying Master Fund conducts investment activities. In order for the AlphaKeys Fund to complete its tax reporting requirements, the AlphaKeys Fund must, among other things, receive timely information from the Underlying Fund. If the AlphaKeys Fund incurs a withholding tax or other tax obligation with respect to the share of AlphaKeys Fund income allocable to any Investor in the Administrator's sole discretion, the amount of such obligation shall be debited against the Capital Account of such Investor, and any amounts then or thereafter distributable to such Investor may be reduced by the amount of such taxes. If the amount of such taxes is greater than any such distributable amounts, then such Investor shall be required to pay to the AlphaKeys Fund, upon demand, the amount of such excess. Investors should note that the AlphaKeys Fund is not generally obligated, and does not intend, to make distributions. Further, the AlphaKeys Fund is not required, and does not intend, to make distributions to an Investor to cover U.S. federal and state income taxes or other tax liabilities of such Investor with respect to its allocable share of AlphaKeys Fund income and gain. Accordingly, a non-withdrawing Investor will be required to use cash from other sources in order to pay tax on its taxable income that is attributable to its Class B Interests in the AlphaKeys Fund. See "TAX ASPECTS." TAX-EXEMPT ENTITIES The AlphaKeys Fund may borrow for any purpose and it is expected that the Underlying Fund or Underlying Master Fund will use leverage in connection with its trading activities. However, the AlphaKeys Fund only intends to borrow in limited circumstances, if any. The Underlying Fund Memorandum provides that a portion of the Underlying Fund's income may be treated as "unrelated business taxable income" ("UBTI"), and therefore the AlphaKeys Fund may generate UBTI as well (which will be significant if the Underlying Fund generates significant UBTI, as it has in previous years). Therefore, a tax-exempt Investor may incur income tax liability with respect to its share of the net profits from such leveraged transactions and other transactions to the extent they are treated as giving rise to UBTI. Tax-exempt investors (including individual retirement accounts ("IRAs"), to the extent investments through IRAs are accepted) may be required to make payments, including estimated payments, and file an income tax return for any taxable year in which they have UBTI. To file an income tax return, it may be necessary for the IRA or other tax-exempt -21- CONFIDENTIAL UBSTERRAMAR00003883 EFTA00239215 FOR EXISTING INVESTOR USE ONLY investor to obtain an Employer Identification Number. The AlphaKeys Fund will not accept subscriptions from charitable remainder trusts. See TAX ASPECTS. Investment in the AlphaKeys Fund by tax-exempt entities requires special consideration. Trustees or administrators of such entities are urged to review carefully the matters discussed in this Memorandum. ERISA CONSIDERATIONS The Administrator will use reasonable efforts to prevent the assets of the AlphaKeys Fund from being considered "plan assets" within the meaning of the Plan Assets Rules by limiting investment in each class of Interests of the AlphaKeys Fund by "Benefit Plan Investors" (as defined in the Plan Assets Rules and described in CERTAIN ERISA AND OTHER CONSIDERATIONS below) to a level that would not be considered "significant" (as defined in the Plan Assets Rules). Investors and persons making the decision to invest in the AlphaKeys Fund on their behalf will be required to identify an Investor's Benefit Plan status. See CERTAIN ERISA AND OTHER CONSIDERATIONS below. If at any time the Administrator determines that equity participation in any class of equity interests in the AlphaKeys Fund by Benefit Plan Investors would be considered "significant" (as defined in the Plan Assets Rules), the Administrator will be permitted to cause one or more Benefit Plan Investors to withdraw or reduce their Interests in the AlphaKeys Fund (including on a non-pro rata basis) to the extent necessary so that equity participation in such class of the AlphaKeys Fund by Benefit Plan Investors would not be considered "significant" (as defined in the Plan Assets Rules). See "CERTAIN ERISA AND OTHER CONSIDERATIONS below. Each prospective Investor subject to ERISA and/or Section 4975 of the United States Internal Revenue Code of 1986, as amended (the "Code") (or any other similar laws) is urged to consult its own legal and financial advisers as to the provisions of ERISA and Section 4975 of the Code (or such similar laws) applicable to an investment in the AlphaKeys Fund. REPORTS TO INVESTORS The AlphaKeys Fund will furnish to Investors as soon as practicable after the end of each taxable year such information as is necessary for Investors to complete federal and state income tax or information returns, along with any other tax information required by law. For the AlphaKeys Fund to complete its tax reporting requirements, it must receive information on a timely basis from the Underlying Fund. -22- CONFIDENTIAL UBSTERRAMAR00003884 EFTA00239216 FOR EXISTING INVESTOR USE ONLY It is expected that the AlphaKeys Fund's Schedule K-1s will most likely not be available prior to April 15 (and may be available significantly later than April 15) and, accordingly, Investors would need to obtain extensions for the filing of their individual tax returns at the federal, state and local level. The AlphaKeys Fund also intends to deliver to the Investors audited annual financial reports of the AlphaKeys Fund as soon as practicable after the conclusion of the AlphaKeys Fund's fiscal year; however, the AlphaKeys Fund may deliver unaudited annual financial reports in its sole discretion. If the AlphaKeys Fund does deliver audited reports, such annual audit can be completed only once the AlphaKeys Fund receives audited financial statements for the same fiscal year from the Underlying Fund. Consequently, it is possible that audited annual financial reports of the AlphaKeys Fund may be completed later than would otherwise be the case (up to 180 days after the fiscal year end or any other period permitted by law). Furthermore, if the Underlying Fund is unable to complete its audit (or if the Underlying Fund issues a qualified audit report), the AlphaKeys Fund will be unable to complete its own audit (or the AlphaKeys Fund will have to issue a qualified audit report). In addition, Investors may receive quarterly and other unaudited periodic reports regarding the AlphaKeys Fund's operations. To the extent that such reports reflect valuations of investments made by the Underlying Fund, such valuations will be based on information provided by the Underlying Fund, in its sole discretion. Such valuations are subjective in nature and may not conform to any particular valuation standard. Audited financial reports, as well as other financial reports of the AlphaKeys Fund, will be prepared in accordance with GAAP or another methodology determined appropriate by the Administrator, in its sole discretion. It is possible that the reporting method used to prepare annual reports may differ from the method used with respect to preparation of quarterly reports. The AlphaKeys Fund will adopt the accrual method for tax accounting purposes or any other accounting method permitted by the Code which the Administrator determines in its sole discretion is in the best interests of the AlphaKeys Fund. -23- CONFIDENTIAL UBSTERRAMAR00003885 EFTA00239217 FOR EXISTING INVESTOR USE ONLY RISK FACTORS AND CONFLICTS OF INTEREST An investment in the AlphaKeys Fund (and its investment in the Underlying Fund) is speculative and involves significant risks and potential conflicts of interest, certain of which are described in more detail in CERTAIN RISK FACTORS below and "Certain Risk Factors Relating to Millennium USA" and "Certain Risk Factors Relating to an Investment in the Master Partnership" in the Underlying Fund Memorandum. An investment in the AlphaKeys Fund entails special tax risks. See SUMMARY OF TERMS: "Summary of Taxation." The Underlying Fund is not registered as an investment company under the 1940 Act and, therefore, the AlphaKeys Fund is not able to avail itself of the protections of the 1940 Act with respect to the Underlying Fund. The investment activities of the Administrator, the Underlying Fund Manager and the portfolio managers it retains, and their respective affiliates, for their own accounts and the other accounts they manage, may give rise to conflicts of interest that may disadvantage the AlphaKeys Fund. The AlphaKeys Fund's operations may give rise to other conflicts of interest. See POTENTIAL CONFLICTS OF INTEREST and "Related-Party Transactions and Other Accounts; Conflicts" in Part Two of the Underlying Fund Memorandum. UBSFS acts as the principal placement agent for the AlphaKeys Fund (in such capacity, the Placement Agent) and will bear its own costs associated with its activities as Placement Agent. The Administrator and the Placement Agent intend to compensate the Placement Agent's or its affiliates' financial advisors, as well as third-party securities dealers and other industry professionals, for their ongoing servicing of clients with whom they have placed Interests in the AlphaKeys Fund and such compensation will be based upon a formula that takes into account the amount of client assets being serviced as well as the investment results attributable to the clients' assets in the AlphaKeys Fund. -24- CONFIDENTIAL UBSTERRAMAR00003886 EFTA00239218 FOR EXISTING INVESTOR USE ONLY II. CERTAIN RISK FACTORS Prospective Investors should carefully consider the risks involved in an investment in the AlphaKeys Fund and in the Underlying Fund, including, but not limited to, those discussed below. Prospective Investors should consult their own legal, tax and financial advisors as to all of these risks and an investment in the AlphaKeys Fund generally. Prospective Investors should refer to "Certain Risk Factors Relating to Millennium USA" and "Certain Risk Factors Relating to an Investment in the Master Partnership" in the Underlying Fund Memorandum for more detailed risks related to the AlphaKeys Fund's investment in the Underlying Fund. Risks Associated With the Structure of the AlphaKeys Fund Risk of a Single Investment. The investment performance of the AlphaKeys Fund will depend almost entirely on the performance of the Underlying Fund, over which neither the AlphaKeys Fund nor the Administrator will have any control. The AlphaKeys Fund will not hedge the risks of any of the Underlying Fund's investments and the Administrator does not intend to take any defensive actions in the event of declining performance or asset losses at the Underlying Fund. As a result, the AlphaKeys Fund's investment performance could be materially worse than would be the case if the AlphaKeys Fund could diversify investments among asset classes or hedge investment risks, or if the Underlying Fund itself were diversified among asset classes. Layering of Fees and Expenses. Pursuant to the Administrative Services Agreement, each Investor shall pay to the Administrator a monthly Administrative Fee as set forth above in SUMMARY OF TERMS: "Fees and Expenses." The Administrative Fee is in addition to and separate from the Underlying Fund Performance Allocation, other fees and expenses of the Underlying Fund borne by the AlphaKeys Fund due to its status as a limited partner of the Underlying Fund, and the retention of appropriate reserves therefor as determined in the sole discretion of the Administrator, and in addition to the fees and expenses paid to other third parties engaged on behalf of the AlphaKeys Fund. Therefore, Investors of the AlphaKeys Fund bear two levels of fees, and investments by Investors in the AlphaKeys Fund are not investments in the Underlying Fund on a dollar-for-dollar basis. The returns for an investor in the Underlying Fund will depend on the timing and actual amount invested in the Underlying Fund and the performance thereof, as well as the timing and amount of capital contributed to the Underlying Fund and held in Temporary Investments and the performance thereof. Investors meeting minimum investment criteria set forth in the Underlying Fund Memorandum may invest directly in the Underlying Fund without incurring fees and expenses of the AlphaKeys Fund; however, direct interests in the Underlying Fund are not offered pursuant to this Memorandum or by UBS. Different Classes of Interests may Yield Higher Levels of Compensation. The Administrator and/or its affiliates may receive higher levels of compensation in connection with investments by Investors in the Advisory Sub-Class Interests, on the one hand, and Investors in the Brokerage Sub-Class Interests, on the other hand. For example, the Administrator and/or its affiliates may receive greater compensation from the Underlying Fund in connection with Investors' indirect investments in the Underlying Fund, and/or directly from the Investor, depending upon whether an Investor is purchasing Advisory Sub-Class Interests or Brokerage Sub-Class Interests. Accordingly, UBSFS and/or its affiliates may have a greater incentive to recommend an -25- CONFIDENTIAL UBSTERRAMAR00003887 EFTA00239219 FOR EXISTING INVESTOR USE ONLY investment in the AlphaKeys Fund to an Investor who will invest in a class of Interests that will yield a relatively higher level of compensation. In addition, as clients of UBSFS, Investors who invest in the Advisory Sub-Class Interests have an arrangement with UBSFS to directly compensate UBSFS for UBSFS's advisory services (and may also pay account servicing fees to UBSFS). Depending upon each such Investor's assets under management, among other factors, certain of these Investors may compensate UBSFS at higher levels than other such Investors. Accordingly, the Administrator and/or its affiliates may receive higher levels of compensation in connection with investments by some Investors in the Advisory Sub-Class Interests than they receive in connection with investments by other Investors in the Advisory Sub-Class Interests. Moreover, in certain cases, if the Investor is purchasing Advisory Sub-Class Interests (and investing through a UBS advisory program), the Investor may be subject to higher fees overall with respect to its AlphaKeys Fund investment than an investor purchasing Brokerage Sub-Class Interests (and investing through a brokerage account), due to the additional compensation paid by such Investor to the Administrator and/or its affiliates in connection with the advisory program. Potential Adverse Effects of Being Treated as a Single Investor in the Underlying Fund. The AlphaKeys Fund will hold a single interest in the Underlying Fund, and each Investor's indirect investment in the Underlying Fund will not be represented by a separate interest in the Underlying Fund. Therefore, the Underlying Fund Performance Allocation made in respect of the AlphaKeys Fund's investment in the Underlying Fund is based on the performance of the AlphaKeys Fund's investment as a whole and not upon the performance of a particular Investor's indirect investment in the Underlying Fund. Similarly, withdrawal charges, if any, charged by the Underlying Fund and other withdrawal-related provisions may be based on the withdrawal by the AlphaKeys Fund as a whole and not upon the withdrawal by a particular Investor. An Investor may not be able to make a withdrawal from the AlphaKeys Fund at times and in the amounts that a direct investor in the Underlying Fund would have been able to withdraw. As a result, an Investor's partial or complete withdrawal from the AlphaKeys Fund may be significantly delayed compared to the partial or complete withdrawal of a direct investor in the Underlying Fund. Additional investments in the AlphaKeys Fund, by new or existing Investors, and withdrawals from the AlphaKeys Fund, which will generally require additional capital contributions or withdrawals, as the case may be, to or from the Underlying Fund, may in certain circumstances create distortions in the economic benefits and detriments of an investment in the AlphaKeys Fund for different Investors. An existing Investor's indirect share of a loss carryforward established with respect to a contribution by the AlphaKeys Fund into the Underlying Fund may effectively be diluted by new capital contributions to the AlphaKeys Fund made by other Investors or by a withdrawal from the Underlying Fund in connection with withdrawals from the AlphaKeys Fund by other Investors. Thus, an existing Investor's indirect share of such loss carryforward will effectively be diluted by any new capital contributions in the AlphaKeys Fund. See "Allocation of Gains and Losses" in Part One of the Underlying Fund Memorandum. In addition, the Underlying Fund may issue additional classes, sub-classes or series of Underlying Fund Interests to investors in the Underlying Fund in order to track participation in "new issues" as defined under the rules of FINRA. Investors should be aware that even if one or more Investors are eligible to invest in "new issues," the AlphaKeys Fund expects to invest in a class, sub-class or series of Underlying Fund Interests which does not participate in "new issues." -26- CONFIDENTIAL UBSTERRAMAR00003888 EFTA00239220 FOR EXISTING INVESTOR USE ONLY In the sole discretion of the Administrator, any withdrawal by an Investor may be subject to a charge, as the Administrator may reasonably require, in order to defray the costs and expenses of the AlphaKeys Fund in connection with such withdrawal, including but not limited to any amounts paid or accrued by the AlphaKeys Fund vis-a-vis its investment in the Underlying Fund. No Recourse Against the Underlying Fund. Investors of the AlphaKeys Fund will not be investors in the Underlying Fund, will have no direct interest in the Underlying Fund and will have no standing or recourse against the Underlying Fund or its affiliates, including the Underlying Fund Manager. No Rights to Vote or Participate. Except as otherwise described below, in the event that there is an issue to be voted upon by the investors of the Underlying Fund, the Administrator, in its discretion, and not the Investors, will determine how the AlphaKeys Fund's interest in the Underlying Fund will be voted. The Administrator will determine whether the AlphaKeys Fund should vote "yes", "no" or abstain from voting, in its sole discretion. In addition, Investors will have no opportunity to participate directly in the day-to-day operations of the AlphaKeys Fund. The AlphaKeys Fund expects to vote in accordance with the Administrator's recommendations on such matters unless at least a majority of the Investors duly object. In addition, the AlphaKeys Fund expects to refrain from voting on the selection, approval or disposition of any investment in any depository institution or other financial company to the extent it deems advisable to do so under the Bank Holding Company Act of 1956, as amended (the "BHC Act"). (See "REGULATORY CONSIDERATIONS-U.S. Bank Holding Company Act" below.). Side Letters and Other Agreements with Clients. The Administrator may enter into side letters or other similar agreements with a particular Investor without the approval of other Investors of the AlphaKeys Fund. Any such side letter would have the effect of establishing rights under, altering or supplementing the terms of the AlphaKeys Fund Agreement or the Investor Application with respect to such Investor in a manner different from, and possibly more favorable to, such Investor than those applicable to other Investors. Such rights or terms in any such side letter or similar agreement may include, without limitation, (i) different notice periods or minimum initial and continuing investment amounts, (ii) the agreement of the Administrator to extend certain information rights or additional diligence, valuation or reporting rights to such Investor, including, without limitation, to accommodate special regulatory or other circumstances of such Investor, (iii) waiver or modification of certain confidentiality obligations of such Investor, (iv) waiver or modification of certain fee obligations of such Investor, (v) consent of the Administrator to certain transfers by such Investor or other exercises by the Administrator of its discretionary authority under the AlphaKeys Fund Agreement in certain respects for the benefit of such Investor, (vi) restrictions on, or special rights of such Investor with respect to the activities of the Administrator and its affiliates, (vii) special rights of such Investor with respect to withdrawals, (viii) additional obligations and restrictions on the Administrator and the AlphaKeys Fund with respect to the structuring of investments in light of the legal, tax and regulatory considerations of such Investor or (ix) other rights or terms necessary in light of particular legal, regulatory, public policy or other characteristics of such Investor. The terms of any such side letter or similar agreement will not be disclosed to other Investors unless the Administrator, in its sole discretion, otherwise determines. Any rights or terms so established in a side letter with an Investor will govern solely with respect to such Investor. To the extent determined appropriate by the -27- CONFIDENTIAL UBSTERRAMAR00003889 EFTA00239221 FOR EXISTING INVESTOR USE ONLY AlphaKeys Fund, an Investor that enters into a side letter or other agreement may be issued a new class, sub-class, tranche or series (or sub-series) of Interests in the AlphaKeys Fund. Unregistered Status. None of the AlphaKeys Fund, the Underlying Master Fund nor the Underlying Fund is registered as an investment company under the Investment Company Act. The Investment Company Act provides certain protections to Investors and imposes certain restrictions on registered investment companies, none of which will be applicable to the AlphaKeys Fund. Termination of the AlphaKeys Fund's Interest in the Underlying Fund. The Underlying Fund may, among other things, force the withdrawal of the AlphaKeys Fund's interest in the Underlying Fund at any time. In addition, the Administrator may determine at any time, subject to the restrictions on withdrawals from the Underlying Fund, to terminate the AlphaKeys Fund's investment in the Underlying Fund. Repayment of Capital and Distributions. The investors and former investors of the Underlying Fund, including the AlphaKeys Fund, shall be liable for the repayment and discharge of all debts and obligations of the Underlying Fund attributable to any fiscal year (or relevant portion thereof) during which they are or were investors of the Underlying Fund to the extent of their respective interests in the Underlying Fund in the fiscal year (or relevant portion thereof) to which any such debts and obligations are attributable. In meeting this obligation, the AlphaKeys Fund may be required to return to the Underlying Fund any amounts actually received by it from the Underlying Fund during or after the fiscal year to which any debt or obligation is attributable. In addition, the AlphaKeys Fund may be required to pay to the Underlying Fund amounts that are required to be withheld by the Underlying Fund for tax purposes. The AlphaKeys Fund may require Investors to return to the AlphaKeys Fund all or part of any distribution by the AlphaKeys Fund to the Investors in order to satisfy all or any portion of the AlphaKeys Fund's indemnification obligations. Similarly, Investors may be required in certain circumstances to r