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Exemptive Letter regarding Rule 2710, Issued by the Corporate Financing Department

Re: Summary of Exemption Decision Re: Rule 2710 Issued by Corporate Financing Department - August 2000 NASD Regulation, Inc.

Letter 2710-1, dated August 31, 2000

Exemption not granted to the prohibition in Rule 2710(c)(6)B)(viii)(g) on the disproportionate exercise of anti-dilution provisions in the underwriter's warrant agreement on the basis that the issuer had not engaged in the types of issuances of securities to all shareholders (e.g., stock dividend or stock split) that was an appropriate basis for the underwriter to receive additional shares or to lower the warrant exercise price from the terms agreed on at the time of the public offering. The member was advised that it was the responsibility of the member to ensure that it only relies on appropriate events that affect all shareholders to trigger the anti-dilution provision in its warrant agreement. See Securities Exchange Act Release No. 32940 (September 22, 1993) and Notice to Members 93-84 (December 1993).