RULES UNDER SECTION 7 OF THE ACT

EXEMPTION OF CERTAIN SECURITIES FROM THE OPERATION OF SECTION 7 (c) (2)

Rule X-7C2-1. Exemption from Section 7 (c) (2) of Certain Securities Exempted From Registration or Admitted to Trading on Exchanges Exempted From Registration. (a) So long as any security continues to be listed on a national securities exchange as a security exempted from the operation of section 12 (a), pursuant to a rule which specifically provides that this rule shall be applicable to such security, such security shall be exempt from the operation of section 7 (c) (2) to the extent necessary to render lawful any direct or indirect extension or maintenance of credit thereon or any direct or indirect arrangement therefor which would not have been unlawful if such security had been a security (other than an exempted security) registered on a national securities exchange.

(b) So long as any security which is not registered on a national securities exchange continues to be admitted to either listed or unlisted trading privileges on any exchange which is exempted from registration as a national securities exchange, such security shall be exempt from the operation of section 7 (c) (2) to the extent necessary to render lawful any direct or indirect extension or maintenance of credit thereon or any direct or indirect arrangement therefor which would not have been unlawful if such security had been a security (other than an exempted security) registered on a national securities exchange.

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RULES UNDER SECTION 10 OF THE ACT

SHORT SALES

Rule X-10A-1. Short Sales.

(a) No person shall, for his own account or for the account of any other person, by the use of any facility of any national securities exchange effect a short sale of any security at or below the price at which the last sale thereof, regular way, was effected on such exchange.

(b) No member of a national securities exchange shall, by the use of any facility of such exchange, execute any sell order unless such order is marked either "long" or "short."

(c) No member of a national securities exchange shall mark a sell order "long" unless (1) the security to be delivered after sale is carried in the account for which the sale is to be effected, or (2) such member is informed that the seller owns the security ordered to be sold and, as soon as is possible without undue inconvenience or expense, will deliver the security owned to the account for which the sale is to be effected.

(d) The provisions of paragraph (a) hereof shall not apply to (1) any sale by any person, for an account in which he has an interest, if such person owns the security sold and intends to deliver such security as soon as is possible without undue inconvenience or expense; (2) any member in respect of a sale, for an account in which. he has no interest, pursuant to an order to sell which is marked "long"; (3) any sale of an odd-lot; (4) any sale by an odd-lot dealer to offset odd-lot orders of customers; (5) any sale by an oddlot dealer to liquidate a long position which is less than a round lot, provided such sale does not change the position of such oddlot dealer by more than the unit of trading; (6) any sale of a security on a national securities exchange effected with the approval of such exchange which is necessary to equalize the price of such security thereon with the current price of such security on another national securities exchange which is the principal exchange market for such security; or (7) any sale of a security for a special arbitrage account by a person who then owns another security by virtue of which he is, or presently will be, entitled to acquire an equivalent number of securities of the same class as the securities sold; provided each sale, or the purchase which such

sale offsets, is effected for the bona fide purpose of profiting from a current difference between the price of the security sold and the security owned and that such right of acquisition was originally attached to or represented by another security or was issued to all the holders of any class of securities of the issuer.

Rule X-10A-2. Requirements for Covering Purchases.

(a) No member of a national securities exchange shall lend, or arrange for the loan of, any security for delivery to the broker for the purchaser after sale, or shall fail to deliver a security on the date delivery is due, if such member knows or has reasonable grounds to believe that the sale was effected, or will be effected, pursuant to an order marked "long," unless such member knows, or has been informed by the seller, (1) that the security sold has been forwarded to the account for which the sale was effected; or (2) that the seller owns the security sold, that it is then impracticable to deliver to such account the security owned and that he will deliver such security to such account as soon as is possible without undue inconvenience or expense.

(b) The provisions of this rule shall not apply to the lending of a security by a member through the medium of a loan to another member.

MANIPULATIVE AND DECEPTIVE DEVICES AND CONTRIVANCES Rule X-10B-1. Prohibition of Use of Manipulative or Deceptive Devices or Contrivances With Respect to Certain Securities Exempted From Registration.

The term manipulative or deceptive device or contrivance, as used in section 10 (b), is hereby defined to include any act or omission to act with respect to any security exempted from the operation of section 12 (a) pursuant to a rule which specifically provides that this rule shall be applicable to such security, if such act or omission to act would have been unlawful under section 9 (a), or any rule or regulation heretofore or hereafter prescribed thereunder, if done or omitted to be done with respect to a security registered on a national securities exchange, and the use of any means or instrumentality of interstate commerce or of the mails or of any facility of any national securities exchange to use or employ any such device or contrivance in connection with the purchase or sale of any such security is hereby prohibited.

Rule X-10B-2. Solicitation of Purchases on an Exchange to Facilitate a Distribution of Securities.

(a) No person, participating or otherwise financially interested in the primary or secondary distribution of any security of any issuer,

shall, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange

(1) Pay or offer or agree to pay, directly or indirectly, to any person any compensation for soliciting another to purchase any security of the same issuer on a national securities exchange, or for purchasing any security of the same issuer on any such exchange for any account other than the account of the person who pays or is to pay such compensation; or

(2) Sell, offer to sell or induce an offer to buy such security, or deliver such security after sale, if, in connection with such distribution, such person has paid, or has offered or agreed to pay, directly or indirectly, to any person, any compensation for soliciting another to purchase any security of the same issuer on any national securities exchange, or for purchasing any security of the same issuer on any such exchange for any account other than the account of the person who has paid or is to pay such compensation.

(b) No person, participating or otherwise financially interested in the primary or secondary distribution of any security of any issuer, shall cause a purchase or sale of any security of the same issuer on a national securities exchange by paying or offering or agreeing to pay, directly or indirectly, to any person any compensation for soliciting another to purchase such security on any such exchange, or for purchasing such security on any such exchange for any account other than the account of the person who pays or is to pay such compensation.

(c) The provisions of this rule shall not apply in respect to any salary paid by a broker or dealer to any person regularly employed by him whose ordinary duties include the solicitation or execution of brokerage orders on a national securities exchange, if such salary represents only ordinary compensation for the discharge by such person of such duties in the regular course of his employment, and is not paid, in whole or in part, directly or indirectly, for the inducement by such person of the purchase or sale on a national securities exchange of any security of the issuer of the security in the primary or secondary distribution of which such broker or dealer is participating or otherwise financially interested.

Rule X-10B-3. Employment of Manipulative and Deceptive Devices.

It shall be unlawful for any broker or dealer, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, to use or employ, in connection with the purchase or sale of any security otherwise than on a national securities exchange, any act,