EFTA00239188.pdf

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 UnderlyingFundManager. For a more detailed description ofthe UnderlyingFundManager and the Underlying Fund, see the UnderlyingFundMemorandum. 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 masterfeeder 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 ofMillennium USA LP and the ConfidentialMemorandum ofMillennium 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 UnderlyingFund. 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 Both initial and additional applications for Class B Interests by INTERESTS 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 c