Common use of Special Statement for Uncovered Option Writers Clause in Contracts

Special Statement for Uncovered Option Writers. There are special risks associated with uncovered option writing which expose the investor to potentially significant loss. Therefore, this type of strategy may not be suitable for all customers approved for options transactions. A. The potential loss of uncovered call writing is unlimited. The writer of an uncovered call is in an extremely risky position, and may incur large losses if the value of the underlying instrument increases above the exercise price. B. As with writing uncovered calls, the risk of writing uncovered put options is substantial. The writer of an uncovered put option bears a risk of loss if the value of the underlying instrument declines below the exercise price. Such loss could be substantial if there is a significant decline in the value of the underlying instrument. C. Uncovered option writing is thus suitable only for the knowledgeable investor who understands the risks, has the financial capacity and willingness to incur potentially substantial losses, and has sufficient liquid assets to meet applicable margin requirements. In this regard, if the value of the underlying instrument moves against an uncovered writer’s options position, the investor’s broker may request significant additional margin payments. If an investor does not make such margin payments, the broker may liquidate stock or options positions in the investor’s account, with little or no prior notice in accordance with the investor’s margin agreement. D. For combination writing, where the investor writes both a put and a call on the same underlying instrument, the potential risk is unlimited. E. If a secondary market in options were to become unavailable, investors could not engage in closing transactions, and an option writer would remain obligated until expiration or assignment. F. The writer of an American-style option is subject to being assigned an exercise at any time after he has written the option until the option expires. By contrast, the writer of a European- style option is subject to exercise assignment only during the exercise period. Note: It is expected that you will read the booklet entitled “Characteristics and Risks of Standardized Options” available from your “Broker/Dealer.” In particular, your attention is directed to the chapter entitled “Risks of Buying and Writing Options.” This statement is not intended to enumerate all of the risks entailed in writing uncovered options. Notice to Customer FINRA Rule 4311. Financial Industry Regulatory Authority, Inc. Rule 4311 requires that your Broker/Dealer and NFS allocate between them certain functions regarding the administration of your brokerage account. The following is a summary of the allocation services performed by your Broker/Dealer and NFS. A more complete description is available upon request. Investment Objectives

Special Statement for Uncovered Option Writers. There are special risks associated with uncovered option writing writing, which expose the investor Client to potentially significant losslosses. Therefore, this type of strategy may not be suitable for all customers approved for options transactions. A. . The potential loss of uncovered call option writing is unlimited. The writer of an uncovered call is in an extremely risky position, position and must understand that he/she may incur large losses if the value of the underlying instrument increases above the exercise price. B. . As with writing uncovered calls, the risk of writing uncovered put puts options is substantial. The writer of an uncovered put option bears a risk of loss if the value of the underlying instrument declines below the exercise price. Such loss could be substantial if there is a significant decline in the value of the underlying instrument. C. . Uncovered option options writing is thus suitable only for the knowledgeable investor Client who understands the risks, has the financial capacity and the willingness to incur potentially substantial losses, losses and has sufficient liquid assets to meet applicable margin requirements. In this regard, if the value of the underlying instrument moves against an uncovered writer’s 's options position, the investor’s broker Introducing Broker, and or Velox, may request significant additional margin payments. If an investor does not make such margin payments, the broker payments and may liquidate stock or options option positions in the investor’s account, Client's account with little or no prior notice in accordance with the investor’s Client's margin agreement. D. . For combination and/or straddle writing, where the investor writes both a put and a call on the same underlying instrument, the potential risk is unlimited. E. . If a secondary market in options were to become unavailable, investors could not engage in closing transactions, and an option writer would remain obligated until expiration or assignment. F. . The writer of an American-style option is subject to being assigned an exercise at any time after he has written the option until the option expires. By contrast, the writer of a European- European-style option is subject to exercise assignment only during the exercise period. Note: It is expected The undersigned does hereby understand that you will read the booklet entitled “Characteristics and Risks of Standardized Options” available from your “Broker/Dealer.” In particular, your attention is directed to the chapter entitled “Risks of Buying and Writing Options.” This this special statement for uncovered option writers is not intended to enumerate all of the risks entailed in writing uncovered options. Notice to Customer FINRA Rule 4311. Financial Industry Regulatory Authority, Inc. Rule 4311 requires that your Broker/Dealer and NFS allocate between them certain functions regarding the administration of your brokerage account. The following is a summary of the allocation services performed by your Broker/Dealer and NFS. A more complete description is available upon request. Investment Objectives.

Special Statement for Uncovered Option Writers. There are special risks associated with uncovered option writing which expose the investor to potentially significant loss. Therefore, this type of strategy may not be suitable for all customers approved for options transactions. A. The potential loss of uncovered call writing is unlimited. The writer of an uncovered call is in an extremely risky position, and may incur large losses if the value of the underlying instrument increases above the exercise price. B. As with writing uncovered calls, the risk of writing uncovered put options is substantial. The writer of an uncovered put option bears a risk of loss if the value of the underlying instrument declines below the exercise price. Such loss could be substantial if there is a significant decline in the value of the underlying instrument. C. Uncovered option writing is thus suitable only for the knowledgeable investor who understands the risks, has the financial capacity and willingness to incur potentially substantial losses, and has sufficient liquid assets to meet applicable margin requirements. In this regard, if the value of the underlying instrument moves against an uncovered writer’s options position, the investor’s broker may request significant additional margin payments. If an investor does not make such margin payments, the broker may liquidate stock or options positions in the investor’s account, with little or no prior notice in accordance with the investor’s margin agreement. D. For combination writing, where the investor writes both a put and a call on the same underlying instrument, the potential risk is unlimited. E. If a secondary market in options were to become unavailable, investors could not engage in closing transactions, and an option writer would remain obligated until expiration or assignment. F. The writer of an American-style American−style option is subject to being assigned an exercise at any time after he has written the option until the option expires. By contrast, the writer of a European- style European−style option is subject to exercise assignment only during the exercise period. NoteNOTE: It is expected that you will read the booklet entitled “Characteristics and Risks of Standardized Options” available from your “Broker/Dealer.” Royal Alliance. In particular, your attention is directed to the chapter entitled “Risks of Buying and Writing Options.” This statement is not intended to enumerate all of the risks entailed in writing uncovered options. Notice to Customer FINRA Rule 4311. Financial Industry Regulatory AuthorityTo: My Broker/Dealer, Royal Alliance Associates, Inc. Rule 4311 requires and National Financial Services LLC (“NFS” or “you”) 1. I agree as follows with respect to all of my brokerage accounts, in which I have an interest alone or with others, which I have opened or will open in the future, with you through Royal Alliance for the purchase and sale of securities. I hereby acknowledge that I have read, understand and agree to the terms set forth below. Upon acceptance of my application(s); I understand Royal Alliance will maintain an account for me at NFS, and Royal Alliance may buy or sell securities or other products according to my instructions. All decisions relating to my investment or trading activity shall be made by me, Royal Alliance or my duly authorized representative. Any information provided in this brokerage account application and agreement will be subject to verification, and I authorize you and/or Royal Alliance to obtain a credit report about me at any time. Upon written request, NFS or Royal Alliance will provide the name and address of the credit reporting agency used. I authorize NFS and Royal Alliance to exchange credit information about me. You and/or Royal Alliance also may tape record conversations with me in order to verify data concerning any transactions I request, and I consent to such recording. I also understand that my brokerage account(s) is carried by NFS, and that all terms of this Agreement also apply between me and NFS. I have carefully examined my financial resources, investment objectives, tolerance for risk along with the terms of the margin agreement and have determined that margin financing is appropriate for me. I understand that investing on margin involves the extension of credit to me and that my financial exposure could exceed the value of securities in my account. I agree to notify Royal Alliance in writing of any material changes in my financial circumstances or investment objectives. NFS may use certain securities in your Broker/Dealer account in connection with short sales and NFS allocate between them certain functions regarding may receive compensation in connection therewith. For the administration purposes of this Agreement, assets in any FDIC−Insured Bank Deposit Sweep Program are deemed to be part of your brokerage account and are treated as cash deposits. 2. I am of legal age in the state in which I reside and represent that, except as otherwise disclosed to you in writing, I am not an employee of any Exchange or of a Member Firm of any Exchange or the NASD, and I will promptly notify you if I become so employed. I am not employed as a director, 10% shareholder, or policy making executive officer of a publicly traded company, and I will promptly 3. All transactions are subject to the constitution, rules, regulations, customs, and usages of the exchange, market or clearinghouse where executed, as well as to any applicable federal or state laws, rules and regulations. 4. Any credit balances, including, but not limited to, any funds held at any Bank pursuant to any FDIC−Insured Bank Deposit Sweep Program, as described in the Customer Brokerage Agreement, or any amendment thereto, securities, assets or related contracts, and all other property in which I may have an interest held by you or carried for my brokerage accounts, shall be subject to a general lien for the discharge of my obligations to you (including unmatured and contingent obligations) and you may sell, transfer, or assign such assets or property to satisfy a margin deficiency or other obligation whether or not you have made advances with respect to such property. Securities and other property held in my retirement account(s) maintained by you, which may include IRAs or qualified plans, are not subject to this general lien and such securities or other property may only be used to satisfy my indebtedness or other obligations to Royal Alliance and/or NFS related to my retirement account(s). Without notice to me, such property may be carried in your general loans, and all your securities may be pledged, repledged, hypothecated or rehypothecated, separately or in common with other securities or any other property, for the sum due to you or for a greater sum, and without retaining in your possession and control for delivery a like amount of similar securities or other property. At any time in your discretion, you may, without notice to me, apply and/or transfer any securities, related contracts, cash or any other property, interchangeably between my brokerage accounts, including, but not limited to, any funds held at any Bank pursuant to any FDIC−Insured Bank Deposit Sweep Program, as described in the Customer Brokerage Agreement, and any amendment thereto whether individual or joint, from any of my brokerage accounts to any brokerage account guaranteed by me. You are specifically authorized to transfer to my cash account, on the settlement day following a purchase made in that brokerage account, excess funds available in any of my brokerage accounts, including, but not limited to, any free balances in any margin account, sufficient to make full payment of this cash purchase. I agree that any debit occurring in any of my brokerage accounts may be transferred by you at your option to my margin account. The following In return for your extension or maintenance of credit in connection with my account, I acknowledge that the securities in my margin account, together with all attendant rights of ownership, may be lent to you or lent by you to others. In connection with such loans and in connection with securities loans made to me to facilitate short sales, you may receive and retain certain benefits to which I will not be entitled. Such loans may limit, in whole or in part, my ability to exercise voting rights and/or my entitlement to interest, dividends, and/or other distributions with respect to the securities lent. I understand that, while a security in my account is lent to you or to others, the 5. I will maintain such margins as you require in your discretion at any time and will pay on demand any debit balance owing on any of my brokerage accounts. If any brokerage account is liquidated in whole or in part by you or me to satisfy the debt, I will be liable to you for any deficiency and shall make payment of such deficiency on demand. Whenever in your discretion you deem it desirable for your protection (and without the necessity of a summary margin call), including, but not limited to, extreme market volatility or trading volumes, an instance where a petition in bankruptcy or for the appointment of a receiver is filed by or against me, or an attachment is levied against my brokerage account, or in the event of notice of my death or incapacity, or in compliance with the orders of the allocation services performed by Exchange, you may, without prior demand, tender, and without any notice of the time or place of sale, all of which are expressly waived, sell any or all of securities or related contracts that may be in your Broker/Dealer possession, at your selection, or which you may be carrying for me, or buy any securities, or related contracts relating thereto of which my brokerage account or brokerage accounts may be short, in order to close out in whole or in part any commitment in my behalf. You may also place stop orders with respect of such securities and NFSsuch sale or purchase be made at your discretion on any exchange, including before or after hours markets or other markets where such business is then transacted, or at public auction or private sale, with or without advertising, and neither any demands, calls, tenders or notices which you may make or give in any one or more instances nor any prior course of conduct or dealings between us shall invalidate the aforesaid waivers on my part. A more complete description You shall have the right to purchase for your own account any or all of the aforesaid property at such sale, discharged of any right of redemption which is available upon request. Investment Objectiveshereby waived.

Special Statement for Uncovered Option Writers. There are special risks associated with uncovered option writing which expose the investor to potentially significant loss. Therefore, this type of strategy may not be suitable for all customers approved for options transactions. A. The potential loss of uncovered call writing is unlimited. The writer of an uncovered call is in an extremely risky position, and may incur large losses if the value of the underlying instrument increases above the exercise price. B. As with writing uncovered calls, the risk of writing uncovered put options is substantial. The writer of an uncovered put option bears a risk of loss if the value of the underlying instrument declines below the exercise price. Such loss could be substantial if there is a significant decline in the value of the underlying instrument. C. Uncovered option writing is thus suitable only for the knowledgeable investor who understands the risks, has the financial capacity and willingness to incur potentially substantial losses, and has sufficient liquid assets to meet applicable margin requirements. In this regard, if the value of the underlying instrument moves against an uncovered writer’s options position, the investor’s broker may request significant additional margin payments. If an investor does not make such margin payments, the broker may liquidate stock or options positions in the investor’s account, with little or no prior notice in accordance with the investor’s margin agreement. D. For combination writing, where the investor writes both a put and a call on the same underlying instrument, the potential risk is unlimited. E. If a secondary market in options were to become unavailable, investors could not engage in closing transactions, and an option writer would remain obligated until expiration or assignment. F. The writer of an American-style option is subject to being assigned an exercise at any time after he has written the option until the option expires. By contrast, the writer of a European- European-style option is subject to exercise assignment only during the exercise period. NoteNOTE: It is expected that you will read the booklet entitled “Characteristics and Risks of Standardized Options” available from your “Broker/Dealer.” Royal Alliance. In particular, your attention is directed to the chapter entitled “Risks of Buying and Writing Options.” This statement is not intended to enumerate all of the risks entailed in writing uncovered options. 1. Notice I agree as follows with respect to Customer FINRA Rule 4311all of my brokerage accounts, in which I have an interest alone or with others, which I have opened or will open in the future, with you through Royal Alliance for the purchase and sale of securities. Financial Industry Regulatory AuthorityI hereby acknowledge that I have read, Inc. Rule 4311 requires understand and agree to the terms set forth below. Upon acceptance of my application(s); I understand Royal Alliance will maintain an account for me at NFS, and Royal Alliance may buy or sell securities or other products according to my instructions. All decisions relating to my investment or trading activity shall be made by me, Royal Alliance or my duly authorized representative. Any information provided in this brokerage account application and agreement will be subject to verification, and I authorize you and/or Royal Alliance to obtain a credit report about me at any time. Upon written request, NFS or Royal Alliance will provide the name and address of the credit reporting agency used. I authorize NFS and Royal Alliance to exchange credit information about me. You and/or Royal Alliance also may tape record conversations with me in order to verify data concerning any transactions I request, and I consent to such recording. I also understand that my brokerage account(s) is carried by NFS, and that all terms of this Agreement also apply between me and NFS. I have carefully examined my financial resources, investment objectives, tolerance for risk along with the terms of the margin agreement and have determined that margin financing is appropriate for me. I understand that investing on margin involves the extension of credit to me and that my financial exposure could exceed the value of securities in my account. I agree to notify Royal Alliance in writing of any material changes in my financial circumstances or investment objectives. NFS may use certain securities in your Broker/Dealer account in connection with short sales and NFS allocate between them certain functions regarding may receive compensation in connection therewith. For the administration purposes of this Agreement, assets in any FDIC-Insured Bank Deposit Sweep Program are deemed to be part of your brokerage account and are treated as cash deposits. 2. I am of legal age in the state in which I reside and represent that, except as otherwise disclosed to you in writing, I am not an employee of any Exchange or of a Member Firm of any Exchange or the NASD, and I will promptly notify you if I become so employed. I am not employed as a director, 10% shareholder, or policy making executive officer of a publicly traded company, and I will promptly notify you if I become so employed. 3. All transactions are subject to the constitution, rules, regulations, customs, and usages of the exchange, market or clearinghouse where executed, as well as to any applicable federal or state laws, rules and regulations. 4. Any credit balances, including, but not limited to, any funds held at any Bank pursuant to any FDIC-Insured Bank Deposit Sweep Program, as described in the Customer Brokerage Agreement, or any amendment thereto, securities, assets or related contracts, and all other property in which I may have an interest held by you or carried for my brokerage accounts, shall be subject to a general lien for the discharge of my obligations to you (including unmatured and contingent obligations) and you may sell, transfer, or assign such assets or property to satisfy a margin deficiency or other obligation whether or not you have made advances with respect to such property. Securities and other property held in my retirement account(s) maintained by you, which may include IRAs or qualified plans, are not subject to this general lien and such securities or other property may only be used to satisfy my indebtedness or other obligations to Royal Alliance and/or NFS related to my retirement account(s). Without notice to me, such property may be carried in your general loans, and all your securities may be pledged, repledged, hypothecated or rehypothecated, separately or in common with other securities or any other property, for the sum due to you or for a greater sum, and without retaining in your possession and control for delivery a like amount of similar securities or other property. At any time in your discretion, you may, without notice to me, apply and/or transfer any securities, related contracts, cash or any other property, interchangeably between my brokerage accounts, including, but not limited to, any funds held at any Bank pursuant to any FDIC-Insured Bank Deposit Sweep Program, as described in the Customer Brokerage Agreement, and any amendment thereto whether individual or joint, from any of my brokerage accounts to any brokerage account guaranteed by me. You are specifically authorized to transfer to my cash account, on the settlement day following a purchase made in that brokerage account, excess funds available in any of my brokerage accounts, including, but not limited to, any free balances in any margin account, sufficient to make full payment of this cash purchase. I agree that any debit occurring in any of my brokerage accounts may be transferred by you at your option to my margin account. The following In return for your extension or maintenance of credit in connection with my account, I acknowledge that the securities in my margin account, together with all attendant rights of ownership, may be lent to you or lent by you to others. In connection with such loans and in connection with securities loans made to me to facilitate short sales, you may receive and retain certain benefits to which I will not be entitled. Such loans may limit, in whole or in part, my ability to exercise voting rights and/or my entitlement to interest, dividends, and/or other distributions with respect to the securities lent. I understand that, while a security in my account is lent to you or to others, the borrower or the party to whom the borrower has sold the security may be entitled to interest, dividends, and/or other distributions and I may be allocated and receive substitute payments in lieu of such interest, dividends, and/or other distributions. I understand that substitute payments may not be afforded the same tax treatment as actual interest, dividends, and/or other distributions, and that I may incur additional tax liability for substitute payments that I receive. NFS may allocate substitute payments in any manner permitted by law, rule, or regulation, including, but not limited to, by means of a summary lottery allocation method. I acknowledge that I am not entitled to any compensation in connection with securities lent from my account or for additional taxes I may be required to pay as a result of any tax treatment differential between substitute payments and actual interest, dividends, and/or other distributions. 5. I will maintain such margins as you require in your discretion at any time and will pay on demand any debit balance owing on any of my brokerage accounts. If any brokerage account is liquidated in whole or in part by you or me to satisfy the debt, I will be liable to you for any deficiency and shall make payment of such deficiency on demand. Whenever in your discretion you deem it desirable for your protection (and without the necessity of a margin call), including, but not limited to, extreme market volatility or trading volumes, an instance where a petition in bankruptcy or for the appointment of a receiver is filed by or against me, or an attachment is levied against my brokerage account, or in the event of notice of my death or incapacity, or in compliance with the orders of the allocation services performed by Exchange, you may, without prior demand, tender, and without any notice of the time or place of sale, all of which are expressly waived, sell any or all of securities or related contracts that may be in your Broker/Dealer possession, at your selection, or which you may be carrying for me, or buy any securities, or related contracts relating thereto of which my brokerage account or brokerage accounts may be short, in order to close out in whole or in part any commitment in my behalf. You may also place stop orders with respect of such securities and NFSsuch sale or purchase be made at your discretion on any exchange, including before or after hours markets or other markets where such business is then transacted, or at public auction or private sale, with or without advertising, and neither any demands, calls, tenders or notices which you may make or give in any one or more instances nor any prior course of conduct or dealings between us shall invalidate the aforesaid waivers on my part. A more complete description You shall have the right to purchase for your own account any or all of the aforesaid property at such sale, discharged of any right of redemption which is available upon request. Investment Objectiveshereby waived.