X.X. XXXXXXXXX & COMPANY, LLC
000 00xx Xxxxxx, Xxxxx 0
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
________ ___, 1998
MASTER SELECTED DEALERS AGREEMENT
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Ladies and Gentlemen:
In connection with public offerings of securities underwritten by X.X.
Xxxxxxxxx & Company, LLC ("WRH"), or by a group of Underwriters represented by
WRH (together with WRH, the "Representatives"), you and other securities dealers
(collectively, the "Dealers") may be offered from time to time the opportunity
to purchase a portion of such securities, as principals, at a discount from the
public offering price representing a selling concession or reallowance granted
as consideration for services rendered in the distribution of such securities.
The Appendix hereto sets forth the general terms, conditions and
representations applicable to any such purchase where WRH is responsible for
reservations of securities for sale to Dealers unless WRH expressly informs you
that such terms, conditions and representations shall not be applicable to any
such purchase. Acceptance of any reservation of any such securities by you, as a
Dealer, shall constitute acceptance of, and agreement to, such terms, conditions
and representations, together with, and subject to, any additional or
supplementary terms, conditions and representations communicated to you in
connection with any specific offering.
As used herein and the Appendix hereto, the term "Agreement" shall mean
this Agreement, including the Appendix attached hereto and incorporated herein
by reference, and, after receipt by you of written notice thereof, any amendment
or supplement hereto, plus any additional or supplementary terms, conditions and
representations communicated to you by the Representatives in connection with
any offering of securities. This Agreement shall constitute a binding agreement
between you and WRH, individually, or as Representative of the several
Underwriters of such securities.
This Agreement supersedes any prior understanding you have with WRH
with respect to the subject matter hereof. If the foregoing, including the
general terms, conditions and representations of the Appendix incorporated
herein by reference is acceptable to you, please sign and return the enclosed
copy of this Agreement.
Very truly yours,
X.X. Xxxxxxxxx & Company, LLC
By
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Name
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Title
The foregoing Agreement is hereby
acknowledged and accepted as of
_____________ ___, 1998
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By:
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Name:
Title:
Address:
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E-Mail Address:
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APPENDIX
General Terms, Conditions and Representations Applicable
in Underwritten Public Offerings of Securities Managed
by X.X. Xxxxxxxxx & Company, LLC
1. Offering to Dealers. In connection with public offerings
("Offerings") of securities ("Securities") underwritten by underwriters
("Underwriters") represented by X.X. Xxxxxxxxx & Company, LLC ("WRH") alone or
in conjunction with other firms (together with WRH, the "Representatives"), the
Underwriters may severally offer to one or more securities dealers ("Dealers")
the right to purchase from the Underwriters a portion of the Securities, subject
to the receipt and acceptance thereof by the Underwriters and subject to the
terms, conditions and representations set forth (a) herein, (b) in the effective
registration statement relating to the offering of the Securities and (c) in any
letter, electronic message, facsimile message and/or telegram sent by the
Representatives to Dealers in connection with an offer to Dealers expressly
informing such Dealers that such terms, conditions and representations shall be
applicable. Any such offer to Dealers will be extended only on behalf of such
Underwriters as may lawfully sell the Securities in said Dealer's state.
Following the filing of a registration statement with respect to
Securities to be offered, the Underwriters will accept by electronic
transmission or orally, on behalf of specific brokerage accounts for which
Dealer acts as broker ("Accounts") indications of interests ("Indications") to
purchase the Securities. Such Indications shall set forth the number of
Securities which such Account proposes to purchase and the price per Security
that such Account proposes to pay in purchasing such Securities. No Indication
shall be submitted on behalf of any Account that has not executed or
electronically consented to the terms and conditions of an Electronic OpenIPO
Participation Agreement substantially in the form of Exhibit A. The
Representatives shall have the right, in their sole discretion, to accept or
reject any Indication for any reason. The Representatives shall determine, in
their sole discretion, the point in time following the declaration of
effectiveness of the registration statement with respect to the Securities to be
offered at which no additional Indications shall be accepted (the "Auction
Close"). Following the Auction Close, the Representatives shall determine the
initial public offering price of the Securities to the public (the "Public
Offering Price") and the Accounts which bid for which Indications have been
accepted ("Successful Bidders").
Dealers to whom an offer to purchase is made by the Representatives
pursuant to this Agreement will be notified by the Representatives by electronic
message, telegram or facsimile message of the method and terms of the Offering,
the time of the release of the Securities for sale to the public, the Public
Offering Price, the identity of the Successful Bidders and terms of the
acceptance of such Indications ("Accepted Terms"), the selling concession, the
time at which books will be opened, the total amount, if any, of Securities
reserved for purchase by such Dealer, and the period of such reservation (the
"Transaction Notification"). Pursuant to Section 9 of this Agreement, such
Transaction Notification shall be deemed a supplement of this
Agreement and the terms of this Agreement shall apply to any offering for which
a Transaction Notification is forwarded to Dealers by the Representatives.
Acceptance of the terms hereof (as supplemented by any Transaction
Notice) constitutes an obligation on the part of each Dealer to purchase, upon
the terms and conditions hereof (as supplemented by any Transaction Notice), the
amount of Securities reserved and accepted by such Dealer and to perform and
observe all the terms and conditions hereof.
2. Offering by Dealers. Immediately upon receipt of the telegram,
letter or transmission referred to in clause (c) of the first paragraph of
Section 1 hereof, Dealers may reoffer the Securities purchased by them
hereunder, subject to receipt and acceptance of the Securities by the
Underwriters, and upon the other terms, conditions and representations set forth
herein and in the effective registration statement relating to such Securities.
Each Dealer hereby represents and agrees that such Dealer shall reoffer the
Securities to Successful Bidders pursuant to the Accepted Terms and will not
offer any of the Securities for sale to other prospective purchasers except as
consented to in writing by the Representatives. Securities purchased hereunder
or are to be offered to the public at the Public Offering Price. You agree that
any Securities purchased from you in connection with your participation as a
Dealer will be evidenced by an electronic or written confirmation setting forth
the Accepted Terms and otherwise meeting the requirements of the applicable
federal regulations, and be subject to the terms and conditions set forth in
such confirmation and in the Prospectus.
With the consent of the Representatives, Dealers and Underwriters may
deal in Securities with each other at the Public Offering Price less an amount
not exceeding the concession to Dealers. After the initial public offering, the
Representatives are authorized to vary the Public Offering Price, concession and
other selling terms of the Securities.
3. Payment and Delivery. The Securities offered to and accepted by
Dealers are to be paid for at the Public Offering Price prior to 6 o'clock a.m.,
Pacific time, on the Closing Date, as defined in the agreement for the purchase
of the Securities by the Underwriters (the "Underwriting Agreement"). Unless
otherwise indicated, such payment is to be made at the Clearing Agent' offices,
[ADDRESS], by certified or bank cashier's check payable in next day funds (or
such other funds as the Representatives may advise), to the order of the
Representatives against delivery of such Securities. Delivery of any Securities
purchased by Dealers shall be made through the facilities of The Depository
Trust Company if Dealers are members thereof, unless the Representatives
otherwise notifies Dealers in its discretion. If a Dealer is not a member of The
Depository Trust Company, such delivery shall be made through a correspondent
who is such a member, and such Dealer will advise the Clearing Agent and the
Representatives of the name of such bank or correspondent at least 48 hours
prior to the Closing Date.
4. Termination of the Offering. With respect to any particular
Offering, the terms and conditions of this Agreement shall terminate upon the
earlier of notice to you from the Representatives of (a) termination of the
Offering pursuant to the termination provisions of the underwriting agreement or
any other agreement in connection with the distribution; (b) the completion of
the distribution pursuant to such Offering; or (c) if not previously terminated,
on
the thirtieth (30th) day after the date upon which the Underwriters first
commence accepting Offers as set forth in Section 1. Unless the Offering is
terminated pursuant to clause (a) of this paragraph, promptly following such
termination, there shall become payable to each Dealer the selling concession on
all Securities purchased by such Dealer pursuant to the terms hereto and which
have not been purchased or contracted for by the Underwriters in the open market
or otherwise (except pursuant to the second paragraph of Section 5 hereof),
during the term of such Offering for the account of one or more of the several
Underwriters.
5. Obligations and Positions of Dealers. Dealer agrees in reoffering
the Securities to comply with all applicable requirements of the federal
securities laws and all applicable rules and regulations promulgated thereunder.
If any Dealer fails to pay for the Securities offered to and accepted by such
Dealer or fails to perform any of such Dealer's other obligations hereunder, the
Representatives may, in the Representatives' discretion and without demand,
notice or legal proceedings, and in addition to any and all remedies otherwise
available to the Representatives and to the other several Underwriters, (a)
terminate any right or interest on such Dealer's part, and (b) at any time and
from time to time sell, without notice to such Dealer, any of the Securities
then held for such Dealer's account at public or private sale (i) to other
Dealers on terms substantially equivalent to those set forth herein, or (ii) if
in the sole discretion of the Representatives circumstances so warrant, to such
parties and at such price or prices and upon such terms and conditions as the
Representatives may deem fair, and apply the net proceeds so realized, as
determined by the Representatives, toward payment of any obligations in respect
of which such Dealer is in default, and, notwithstanding any action taken under
(a) or (b) above, or both, such Dealer shall remain liable to the Underwriters,
severally, to the extent of the Dealers' respective interests, or at the
Representatives' election, to the Representatives for the respective accounts of
the several Underwriters to a like extent, for all loss and expense resulting
from such Dealer's default. At any such sale or sales, any of the Underwriters
may, for such Underwriter's own account or for the account of any other person,
become the purchaser of any Securities so sold, free from any right or interest
on any Dealer's part in such Securities. A default by one or more Dealers shall
not release any other Dealer from any obligation hereunder.
Dealers agree to advise the Representatives, upon request, as to the
number of the Securities accepted by such Dealer in any particular Offering
which then remain unsold; and Dealers further agree, upon request of the
Representatives, to sell to the Representatives for the account of one or more
of the Underwriters such number of such unsold Securities as the Representatives
may specify (in order to enable the Representative to deliver the Securities
sold by or for the account of one or more of the several Underwriters) at the
Public Offering Price less an amount determined by the Representatives not in
excess of the concession to Dealers.
Dealers (a) are not authorized by any of the Underwriters to give any
information or to make any representations in connection with the offering or
sale of the Securities other than those contained in the prospectus relating to
such Securities; (b) are not authorized to act as agent for any of the
Underwriters when offering the Securities to the public or otherwise; (c)
acknowledge and agree that the issuer is not authorized to give any information
or to make any representations to Dealers in connection with the offering or
sale of the Securities other than those contained in the effective registration
statement relating to the Securities; and (d) agree not
to give any information or make any representations in connection with the
offering or sale of the Securities other than those contained in the prospectus
relating to such Securities on behalf of the issuer or act as agent for the
issuer when offering the Securities to the public or otherwise. Nothing
contained herein shall constitute the Dealers as an association or partnership
with the Underwriters, the Representatives, WRH or each other, or as an
unincorporated business or other separate entity.
The Representatives undertake in any offering of Securities to make
available copies of prospectuses (i) electronically by reference to an address
on the World Wide Web where such prospectuses shall be posted and available to
be printed and (ii) by mail upon request by Dealers for the benefit of persons
requesting printed prospectuses and as otherwise required by federal securities
laws and regulations. Each Dealer undertakes to deliver such prospectuses to all
persons to whom Securities are reoffered or as otherwise required by federal and
applicable state securities laws and regulations in accordance with such laws
and regulations. Each Dealer represents that it is familiar with Rule 15c2-8
under the Securities Exchange Act of 1934, as amended (the "1934 Act") relating
to the distribution of preliminary and final prospectuses and agrees that such
Dealer will comply therewith.
Each Dealer hereby represents that it is (i) a member of the National
Association of Securities Dealers ("NASD") in good standing (a "NASD Member");
(ii) a foreign bank, broker, dealer or institution ineligible for membership in
the NASD (a "Foreign Bank") or (iii) a bank that is not a member of the NASD (a
"Non-Member Bank"). Each Dealer that is an NASD Member agrees that in making
sales of Securities, such Dealer will comply with all applicable rules of the
NASD. Each Dealer that is a Foreign Bank or Non-Member Bank agrees to comply
with Conduct Rules 2730, 2740 and 2750 of the NASD and to comply with the
requirements of the NASD's Interpretation with Respect to Free-Riding and
Withholding as if such Foreign Bank or Non-Member Bank were an NASD Member. Each
Dealer that is a Foreign Bank agrees not to offer or sell any Securities in the
United States of America except through the Representatives and in making sales
of Securities agrees to comply with Conduct Rule 2420 of the NASD as it applies
to brokers and dealers in foreign jurisdictions. Each Dealer that is a
Non-Member Bank agrees to comply with NASD Conduct Rule 2420 as though it were a
NASD Member and not to accept any portion of the management fee paid to the
Representatives with respect to the offering of any Securities or, except with
respect to "exempted securities" within the meaning of Section 3(a)(12) of the
Securities Exchange Act of 1934, purchase any Securities at a discount from the
Public Offering Price from any Underwriter or Dealer or otherwise accept any
selling concession, discount or other allowance form any Underwriter or Dealer,
which in such case is not permitted under the NASD's Rules of Fair Practice.
Each Dealer represents that such Dealer will not effect any transaction
in violation of the provisions of Regulation M under the 1934 Act, applicable to
a particular Offering, and each Dealer agrees that it will not, until the
completion of the distribution by it of the Securities in a particular Offering
pursuant to this Agreement, bid for, purchase, sell or deal in, or attempt to
induce others to purchase such Securities, except (i) as provided for in this
Agreement, the Underwriting Agreement or as otherwise approved by the
Representatives or (ii) in brokerage transactions not involving the solicitation
of a customer's order.
Each Dealer agrees that such Dealer will not confirm sales to any
Account over which such Dealer has discretionary trading authority, or make
allocations of the type discussed in Release No. 4150 under the Securities Act
of 1933, as amended.
Each Dealer agrees that such Dealer shall be solely responsible for
determining the suitability of any Account submitting an indication of interest
and that such Dealer will undertake such steps as are necessary to determine
that each Offering is a suitable investment for each Account with respect to
whom an indication of interest is submitted to WRH with respect to such Offering
and that no sales of Securities with respect to any Offering shall be made to
any Account for which an investment in such Securities is not suitable.
6. Blue Sky Matters. The Representatives will advise Dealers of the
jurisdictions where counsel for the Underwriters has advised the Underwriters
that the Securities have been qualified for public offering and sale, or are
exempt from qualification under applicable Blue Sky or state securities laws.
The Representatives shall, however, be under no responsibility whatsoever to any
Dealer with respect to the right of such Dealer to sell the Securities in any
jurisdiction. Each Dealer, including, without limitation, each Foreign Dealer
acknowledges that no action will be taken by the Underwriters or the issuer to
permit a public offering in any jurisdiction other than the United States where
action would be required for such purpose.
7. Limitation of Liability. The Representatives shall have full
authority to take such action as they deem advisable in respect of all matters
pertaining to the offering or arising hereunder. Neither the Representatives nor
any Underwriter shall be under any liability, except for their own want of good
faith, for or in respect of the validity of, or title to, any of the Securities;
the form of, or the statements contained in, or the validity of the prospectuses
or any amendment or supplement thereto, any document incorporated by reference
therein or any other instruments executed by or on behalf of the issuer or
seller of the Securities or others; the form or validity of the Underwriting
Agreement or this Agreement; the delivery of the Securities, the performance by
the issuer or seller of the Securities or others of any agreement on its or
their part; the qualifications of the Securities for sale or the legality of the
Securities for investment under the laws of any jurisdiction; any act or
ommission, or any matter in connection with any of the foregoing; provided,
however, that nothing in this paragraph shall be deemed to relieve the
Representatives or any Underwriter from any liability imposed by federal
securities laws or liability related to obligations expressly assumed by the
Underwriters in this Agreement.
8. Notices. All communications from Dealers should be addressed to X.X.
Xxxxxxxxx & Company, LLC, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX, 00000,
Attention: Mr. Xxxxxx Eu. Any notice from the Representatives to a Dealer shall
be deemed to have been duly authorized by the Underwriters and to have been duly
given if mailed or telegraphed to such Dealer at the address appearing in this
Agreement or delivered electronically to the e-mail address appearing in this
Agreement.
9. Amendment. This Agreement may not be amended without the written
consent of both parties hereto; provided, however, that with respect to the
information specified in the third paragraph of Section 1, this agreement may be
supplemented by WRH by delivery to you of a
Transaction Notice. Any such supplement or amendment to this Agreement shall be
effective with respect to any Offering to which this Agreement applies after the
date of such supplement or amendment.
10. Termination. This Agreement shall continue in full force and effect
until terminated by either party by five business days' written notice to the
other, provided that, if this Agreement has become effective with respect to any
offering of Securities, this Agreement shall remain in full force and effect as
to such offering and shall terminate as otherwise provided in Section 4.
Notwithstanding any distribution and settlement of accounts, Dealers shall be
liable for the proper proportion of any transfer tax or other liability which
may be asserted against the Representatives or any of the Underwriters or
Dealers based upon the claim that the Dealers, or any of them, constitute a
partnership, an association, an unincorporated business or other separate
entity.
11. Governing Law. This Agreement shall be governed by the laws of the
State of California.
OpenIPO Participation Agreement
(With X. X. Xxxxxxxxx + Co. and your broker)
The following OpenIPO Participation Agreement ("Agreement") by you with X. X.
Xxxxxxxxx + Co., LLC ("WRHCo") and your broker _______________________("Broker")
governs your participation in the system (the "OpenIPO System") for new
offerings underwritten by WRHCo, or by a group of Underwriters represented by
WRHCo (together with WRHCo, the "Underwriters") and available for purchase
through Broker. Acceptance of the terms and conditions of this Agreement and the
establishment of a brokerage account with Broker ("Account") is a condition
precedent to your participation in the OpenIPO System. This Agreement is
separate and distinct from any other account agreement you may have with Broker.
A copy of this Agreement should be retained by you for your future reference.
General Terms
As consideration for WRHCo and Broker permitting you access to the OpenIPO
System you agree to the terms and conditions contained in this Agreement as
amended from time to time. This Agreement can be amended at any time by WRHCo or
Broker upon notice delivered to you.
"You" and "your" as used in this Agreement refers to each person listed as
account holders on your current account agreement with Broker ("Account
Agreement") or a designate of any such person.
1. Access to and Delivery of OpenIPO Information. Access to the OpenIPO System
requires you to provide a mailing address ("Mailing Address") and an electronic
mail address ("E-mail Address") to the extent such information is not provided
in your Account Agreement. The Underwriters and Broker, as the case may be, are
hereby authorized to deliver any and all communications including, without
limitation, prospectuses, confirmations, notices and all other documents
required in connection with securities offerings under the OpenIPO System
("OpenIPO Information") to your Mailing Address or E-Mail Address, at their
discretion, by mail, electronic mail or other means as described herein. You
hereby agree you will not, for any reason, alter any OpenIPO Information or URL
Notice (as defined below) delivered to you electronically or otherwise.
The Underwriters and Broker are authorized to deliver to you any OpenIPO
Information by providing you with notice which directs you to an Internet world
wide web address ("URL") where the OpenIPO Information is posted and may be read
and printed. The provision of any such notice (a "URL Notice") shall be deemed
effective delivery of the OpenIPO Information referenced in such URL Notice and
the Underwriters and Broker shall be under no further obligation to deliver such
OpenIPO Information except as specifically set forth herein. The Underwriters or
Broker may, in their discretion, provide you with URL Notice by mail, electronic
mail, notification set forth in this Agreement or notification by WRHCo or
Broker upon submission of an OpenIPO Bid (as defined below). You hereby consent
to delivery of OpenIPO information through URL Notice and acknowledge that such
delivery shall constitute good and effective delivery to you of the OpenIPO
Information referenced in the URL Notice whether or not you access or review the
OpenIPO information referenced in the URL Notice.
YOU ACKNOWLEDGE AND UNDERSTAND THAT THE PRELIMINARY AND FINAL PROSPECTUS WITH
RESPECT TO EACH OFFERING SHALL BE AVAILABLE AT THE FOLLOWING WEBSITE:
xxx.xxxxxxx.xxx AND THAT THIS NOTICE CONSTITUTES A "URL NOTICE."
OpenIPO Information and URL Notice properly sent by WRHCo or Broker to the
E-mail Address or Mailing Address provided by you shall be deemed delivered
regardless of whether actually received or not, unless you have notified WRHCo
and Broker in writing or by E-Mail of a different address not less than 10 days
prior to delivery. To the extent permitted by applicable law, OpenIPO
Information and URL Notices may also be provided to you orally. For purposes of
this Agreement, OpenIPO Information and URL Notices sent by electronic mail
shall be deemed delivered by Broker or the Underwriters upon transmission to
your E-Mail Address. All notices sent by you to Broker or the Underwriters,
including without limitation, OpenIPO Bids (as defined below) shall be deemed
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received by Broker or the Underwriters only upon actual receipt by Broker or the
Underwriters of such notice.
If you so request, the Underwriters or Broker, as applicable, shall deliver a
paper copy to you of any OpenIPO Information legally required to be provided to
you. You may make your request to Broker or to WRHCo, as applicable. You agree
that despite any such request and compliance with any such request by the
Underwriters or Broker, electronic delivery of such OpenIPO Information or
delivery by URL Notice shall constitute good and effective delivery of such
OpenIPO Information and that the fact that a paper copy of such OpenIPO
Information was requested or delivered shall not imply the contrary.
2. OpenIPO Bids. With respect to public offerings of securities ("Offerings")
within the OpenIPO System, after a registration statement relating to such
offering has been filed, you may be permitted to enter a conditional bid (an
"OpenIPO Bid") with Broker constituting an indication of interest in purchasing
the securities proposed to be sold in the Offering when and if issued. Such
OpenIPO Bids shall be transmitted by Broker to WRHCo in accordance with the
terms of a Master Selected Dealers' Agreement by and between the Broker and the
Underwriters. With respect to each Offering within the OpenIPO System in which
you place a OpenIPO Bid, you shall be informed by Broker or WRHCo, prior to the
submission of your OpenIPO Bid to WRHCo, as to the first date after which Broker
and WRHCo may refuse to accept any additional OpenIPO Bids (the "Auction
Close"). The Auction Close may occur upon such indicated date or at any time
thereafter, but in no event shall the Auction Close occur prior to the effective
date of the registration statement relating to such Offering.
Posting of a notice of an Offering through the OpenIPO System shall not
constitute an offer to sell or the solicitation of an offer to buy securities.
No OpenIPO Bid may be accepted and no part of the purchase price can be received
until the registration statement relating to such Offering has become effective,
and any OpenIPO Bid may be withdrawn, modified or revoked, without obligation or
commitment of any kind, at any time prior to notice of its acceptance after
effectiveness of such registration statement and the Auction Close. An OpenIPO
Bid submitted to broker will involve no obligation or commitment of any kind.
OpenIPO Bids shall include the number of securities which you propose to
purchase and the price per security which you propose to pay for such
securities. The price per share included in an OpenIPO Bid shall be in
increments of at least 1/32 of a dollar. No OpenIPO Bid that alone, or that when
cumulated with other OpenIPO Bids submitted and not canceled on behalf of your
Account, would constitute a bid for 10% or more of the shares available in the
Offering will be accepted. All OpenIPO Bids that alone, or that when cumulated
with other OpenIPO Bids submitted and not canceled on behalf of your Account,
constitute a bid for in excess of 1% of the shares available in the Offering (a
"Large Quantity Bid") shall be subject to WRHCo's rules with respect to Large
Quantity Bids as set forth below.
Each OpenIPO Bid will be authorized by you and subject to the terms and
conditions of this Agreement. Any OpenIPO Bid accepted by Broker and the
Underwriters shall be accepted on the basis that an actual purchase is intended
and that you shall be obligated, in every case, to pay for the securities bid
for upon closing of the sale of the securities bid for on behalf of your
Account. The execution of a firm commitment underwriting agreement by WRHCo will
be a condition to your obligation to pay for any securities.
If an OpenIPO Bid is submitted by you with respect to a particular Offering, and
such OpenIPO Bid includes a price in excess of the "Clearing Price" (as defined
below), Broker has agreed with WRHCo to attempt to accept such OpenIPO Bid and
transact for the sale of all or a portion of the securities which you have
offered to purchase as provided in such OpenIPO Bid at the "Offering Price" (as
defined below) prior to sale of such securities to other parties, subject to
adjustments consented to by the Underwriters. Without limiting their rights as
set forth herein to alter the method of allocation and pricing and subject to
their rights with respect to Large Quantity Bids (as set forth below), the
Underwriters and Broker shall use reasonable efforts to accept in whole all
OpenIPO Bids setting forth a price in excess of the Clearing Price (as defined
below) and accept in part all OpenIPO Bids setting forth a price equal to the
Clearing Price. Notwithstanding the foregoing, you hereby agree that the
submission of an OpenIPO bid on behalf of your Account in no way entitles you to
purchase the securities offered and that Broker and the Underwriters reserve the
right and authority, in their discretion and without notice, to reject any
OpenIPO Bid that
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the Underwriters deem manipulative of the OpenIPO System, disruptive with
respect to a particular Offering, disruptive to the securities market, unusual
in size, type or credit risk or which the Underwriters otherwise deem necessary
or beneficial to facilitate the orderly completion of the Offering. In addition
the Underwriters reserve the right and authority to, in their own discretion and
without notice, alter the proposed method of allocation and allocate securities
on a different basis if they deem necessary to facilitate the orderly completion
of the Offering.
Broker may require that your Account contain available funds or cleared funds
equal to or in excess of the aggregate purchase price reflected by your OpenIPO
Bids. Broker reserves the right and authority to, in its sole discretion, reject
any OpenIPO Bid received without requisite funds in your Account prior to the
Auction close or, if not rejected, and additional funds are not submitted prior
to settlement, to liquidate your Account.
The "Clearing Price" with respect to any particular Offering shall be the price
at which sufficient OpenIPO Bids have been submitted to WRHCo to sell all of the
securities proposed to be sold in such Offering. You understand and acknowledge
that the price at which the securities in any Offering are sold to the public
(the "Offering Price") may be less than the Clearing Price. Any OpenIPO Bid
submitted by you that includes a price in excess of the Offering Price may be
accepted by Broker (at the Offering Price), in whole or in part, whether or not
such OpenIPO Bid is in excess of the Clearing Price.
3. Modification and Cancellation of OpenIPO Bids. Any request to cancel or
modify an OpenIPO Bid will only be effected if such request is received by
Broker and transmitted to the Underwriters prior to time at which your OpenIPO
Bid is accepted.
4. Applicable Rules and Regulations. Broker's processing of any OpenIPO Bid and
all transactions on behalf of your Account with respect to the OpenIPO System
shall be subject to Broker's rules and regulations and the rules and regulations
of WRHCo as managing underwriter of the Offering, which are subject to change at
any time without notice. The rules and procedures applicable to use of the
OpenIPO System shall be made available to you at any time upon request to Broker
and may be delivered to you in the same manner as any other OpenIPO Information
(including by URL Notice). In addition, where applicable, the transactions in
your Account with respect to the OpenIPO System shall be subject to the
provisions of the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, and to the rules and regulations of the Securities and
Exchange Commission, the Board of Governors of the Federal Reserve System, the
National Association of Securities Dealers and any other applicable
self-regulatory organization ("Applicable Regulations").
Violation by you of Applicable Regulations, (including without limitation,
restrictions on "Free-Riding" in violation of Regulation T of the Federal
Reserve Board) may result in restrictions being placed on your ability to
participate in Offerings through OpenIPO System.
5. Large Quantity Bids. Without limiting any of the foregoing, the Underwriters
and the Broker shall have the right to accept any Large Quantity Bid in part and
limit the allocation of securities with respect to any Large Quantity Bid to an
amount less than the total number of shares requested pursuant to such Large
Quantity Bid, if in the sole discretion of the Underwriters, such partial
allocation of shares is necessary to facilitate a reasonable public distribution
of the securities available in the Offering.
6. Transactions and Settlement. The purchase and sale of securities through the
OpenIPO System are settled on "settlement date," which generally shall be the
third business day after an OpenIPO Bid is accepted by Broker and or the
Underwriters. If funds for settlement are not available in the Account and your
OpenIPO bid is accepted, your payment via wire or personal check or money order
must immediately be submitted to Broker. The payment must be sent to the
Broker's clearing firm if the broker uses a clearing firm. If payment is not
received, at Broker's discretion, your Account may be liquidated without prior
notice. In the event your Account is liquidated, you will be liable for
resulting losses and all associated costs incurred by Broker and/or the
Underwriters.
7. Restrictions. For their protection, the Underwriters or Broker may at any
time, at their discretion and without prior notice to you, place restrictions on
your ability to participate in the OpenIPO System.
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8. Agency. You understand that with respect to Offerings through the OpenIPO
System, Broker is acting as a principal. Broker will purchase the shares from
WRHCo and sell them to you.
9. Electronic Products and Services. All products and services currently offered
or offered in the future by Broker or WRHCo which, through the use of electronic
or interactive data communications, allow you (i) to communicate with Broker,
the Underwriters or any authorized service provider with respect to the OpenIPO
System, (ii) to obtain information with respect to an Offering through the
OpenIPO System, or (iii) to buy securities in any Offering conducted within the
OpenIPO System through Broker (each an "EPS") shall be utilized only in
accordance with this Agreement.
You hereby agree that you shall be the only authorized user of any EPS under
this Agreement and that you shall be solely responsible for the
telecommunications costs (including internet access fees) incurred directly by
you in accessing any EPS. You shall be solely responsible for the
confidentiality of any user name, password or other alpha-numeric code or other
device required to participate in the OpenIPO System or otherwise access any EPS
("Passwords"). You understand that you shall be solely responsible for all
OpenIPO Bids submitted on behalf of your account utilizing such Passwords.
If you become aware of any unauthorized use of your Account with respect to
transactions through the OpenIPO System, you shall immediately notify WRHCo and
Broker in writing or via E-mail. Upon receipt of such notice, Broker and WRHCo
shall take reasonable steps to stop any activity in your Account, but neither
Broker, WRHCo, the Underwriters nor any of their respective managers, directors,
officers, employees, agents, affiliates, representatives or subsidiaries can or
will have any responsibility or liability to you or to any other person whose
claim may arise through you for any claims with respect to the handling or
mishandling of any transaction in the OpenIPO System resulting from the
unauthorized use of your Account. If you notify Broker only, WRHCo is not
responsible for any unauthorized use of your Account. WRHCo, furthermore, is not
responsible for any acts of Broker relating to your Account.
WRHCo or Broker may modify or discontinue any EPS without prior notice.
NEITHER WRHCo, THE UNDERWRITERS, BROKER NOR THEIR RESPECTIVE AFFILIATES,
MANAGERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES OR
SUBSIDIARIES SHALL BE LIABLE FOR ANY DAMAGES, WHETHER DIRECT OR INDIRECT,
(INCLUDING, WITHOUT LIMITATION, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES)
THAT RESULT FROM INCONVENIENCE, DELAY OR LOSS OF THE USE OF ANY EPS
NOTWITHSTANDING THE FACT THAT BROKER OR WRHCo HAS BEEN ADVISED OF THE
POSSIBILITY OF ANY SUCH DAMAGES. WRHCo DOES NOT MAKE ANY WARRANTY OR OTHER
ASSURANCES AS TO THE OPERATION OR FUNCTIONALITY OF ITS WEB SITE, ACCESS TO WHICH
MAY BE INTERRUPTED, RESTRICTED OR DELAYED FROM TIME TO TIME FOR A VARIETY OF
REASONS WHICH ARE BEYOND ITS CONTROL.
10. Eligibility. You hereby acknowledge that WRHCo or Broker may notify you
through electronic mail or otherwise of opportunities to participate in
Offerings through the OpenIPO System. You understand that Offerings are
considered to be high risk investments. You agree that such notices from WRHCo
or Broker of opportunities to participate in Offerings through the OpenIPO
system are not intended to be, and shall not be considered to be,
recommendations by WRHCo or Broker that Offerings in general or any Offering in
particular is a suitable investment for you. On the contrary, you acknowledge
and agree that investing in Offerings is speculative and highly risky and
therefore only appropriate for investors who desire to take and can bear such
risks. You further represent and warrant that you have disclosed to Broker in
your account application or otherwise if you are an employee of any securities
exchange, or of any corporation in which any securities exchange owns a majority
of the capital stock, or a member of any exchange, or of a member firm or any
securities exchange or the National Association of Securities Dealers, Inc.
("NASD"), or of a bank, trust company, insurance company, or of any corporation,
firm, or individual engaged in the business of dealing, either directly or as a
broker or principal, in
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securities, bills of exchange, acceptances or other forms of commercial paper,
or if you are a member of the immediate family of any such person. You hereby
agree to notify Broker in writing if you or a member of your immediate family
become or becomes so affiliated and to furnish Broker such information that
Broker requests to verify or confirm such representation. You represent, warrant
and agree that you will not submit an OpenIPO Bid with respect to any Offering
which is not a suitable investment for you based on your investment objectives,
your other securities holdings and your financial situation and needs. You
hereby certify, nevertheless, that you have furnished Broker with personal
information about your investment objectives, your other securities holdings and
your financial situation and needs, and that such information is now accurate
and current, and will be accurate and current, as of the date of each OpenIPO
Bid. You agree to promptly furnish Broker with any changes in such information.
If applicable, you also represent, warrant and agree that you will not open an
Account with Broker or submit an OpenIPO Bid for which you have not obtained
approval from your compliance officer prior to opening such Account and
submitting such OpenIPO Bid. You agree, furthermore, that Broker or WHRCo may
reject your bid in its entirety or reduce the amount of shares for which you bid
in either of their respective discretion based on the information you furnished
to Broker.
11. Severability. If any provision of this Agreement is held to be invalid, void
or unenforceable by reason of any law, rule, administrative order or judicial
decision, that determination shall not affect the validity of the remaining
provisions of this Agreement.
12. Waiver. Except as specifically permitted in this Agreement, no provision of
this Agreement can be, nor be deemed to be, waived, altered, modified or amended
unless agreed to in writing signed by an authorized officer of Broker and WRHCo,
respectively.
13. Successors. You hereby agree that this Agreement and all the terms hereof
shall be binding upon your heirs, executors, administrators, personal
representatives and assigns. This Agreement shall inure to the benefit of
Broker, WRHCo, the Underwriters and their respective successors, assigns and
agents.
14. Captions. The caption of each provision hereof is for convenience only and
shall not be deemed to modify or qualify any of the rights or obligations set
forth or be used to construe or interpret any of the provisions hereunder.
15. Arbitration.
A. The following general provisions apply to all arbitrations pursuant to
the arbitration provisions of this section:
(i) Arbitration is final and binding on the parties.
(ii) The parties are waiving their right to seek
remedies in court, including the right to jury
trial.
(iii) Pre arbitration discovery is generally more limited
than and different from court proceedings.
(iv) The arbitrators award is not required to include
factual findings or legal reasoning and any party's
right to appeal or to seek modification of rulings
by the arbitrators is strictly limited.
(v) The panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated
with the securities industry.
B. You agree that the following conditions apply to any and all
controversies arising between You and Broker or WRHCo, and/or any of
their respective managers, directors, officers, controlling persons,
agents, employees, representatives or agents with respect to this
Agreement or to any Offering: All controversies which may arise between
You and/or Your agents, employees or representatives, and WRHCo and/or
Broker, and/or WRHCo's or Broker's respective managers, directors,
officers, controlling persons, employees, representatives or agents,
concerning any transaction, the construction, performance or breach of
this Agreement, or relating to any OpenIPO Bid or any Offering, whether
such transaction or OpenIPO Bid was entered into prior, on or
subsequent to the date hereof, shall be determined by arbitration held
pursuant to the then current Code of Arbitration Procedure of the NASD.
Arbitration must be commenced by service upon the other
5
party or parties of a written demand for arbitration or a written
notice of intention to arbitrate. This agreement to arbitrate shall be
specifically enforceable under prevailing law and procedures, the award
rendered by the arbitrators shall be final, and judgment may be entered
upon it in any court having jurisdiction over the parties. Counsel can
advise you on how this provision may affect you.
C. This agreement to arbitrate constitutes a waiver of the right to seek a
judicial forum unless such a waiver would be void under the federal
securities laws.
D. No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement
against any person who has initiated in court a putative class action;
or who is a member of a putative class who has not opted out of the
class with respect to any claims encompassed by the putative class
action until:
(i) the class certification is denied;
(ii) the class is decertified; or
(iii) the customer is excluded from the class by the court.
Such forbearance to enforce an agreement to arbitrate shall not
constitute a waiver of any rights under this agreement except to the extent
stated herein.
The undersigned (referred to as "You" in this Agreement) acknowledges that the
undersigned has read and understands this Agreement and that this Agreement
contains a predispute arbitration clause at Section 15 on pages 5 and 6. The
undersigned acknowledges receipt of a copy of this Agreement.
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Name of Account
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Signature Signature (if more than one)
Date: Date:
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------------------------------------- -----------------------------------
Printed Name and Title (if any) Printed Name and Title (if any)
Mailing Address:
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Street Apt. No.
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City State Zip
E-mail Address:
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