Document:

ex_132010.htm

Exhibit 4.2

  

 

 

iShares® Gold Trust Micro

 

Standard Terms for Authorized Participant Agreements 

 

Dated as of ______________ ___, 2019

 

 

 

 

 

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	
			ARTICLE I      ORDERS FOR PURCHASE AND REDEMPTION

				
			1

			
	 	 	 
	
			Section 1.01.

				
			Authorization to Purchase and Redeem Baskets

				
			1

			
	 	 	 
	
			Section 1.02.

				
			Procedures for Orders

				
			1

			
	 	 	 
	
			Section 1.03.

				
			Consent to Recording

				
			1

			
	 	 	 
	
			Section 1.04.

				
			Irrevocability

				
			1

			
	 	 	 
	
			Section 1.05.

				
			Costs and Expenses

				
			1

			
	 	 	 
	
			Section 1.06.

				
			Delivery of Property to the Trust

				
			1

			
	 	 	 
	
			Section 1.07.

				
			Title to Deposit Property and iShares Surrendered for Redemption

				
			1

			
	 	 	 
	
			Section 1.08.

				
			Certain Payments or Distributions

				
			2

			
	 	 	 
	
			ARTICLE II     AUTHORIZED REPRESENTATIVES

				
			2

			
	 	 	 
	
			Section 2.01.

				
			Certification

				
			2

			
	 	 	 
	
			Section 2.02.

				
			PIN Numbers

				
			2

			
	 	 	 
	
			Section 2.03.

				
			Termination of Authority

				
			3

			
	 	 	 
	
			Section 2.04.

				
			Verification

				
			3

			
	 	 	 
	
			ARTICLE III     STATUS OF THE AUTHORIZED PARTICIPANT

				
			3

			
	 	 	 
	
			Section 3.01.

				
			Clearing Status

				
			3

			
	 	 	 
	
			Section 3.02.

				
			Broker-Dealer Status.

				
			3

			
	 	 	 
	
			Section 3.03.

				
			Foreign Status

				
			4

			
	 	 	 
	
			Section 3.04.

				
			Compliance with Certain Laws

				
			4

			
	 	 	 
	
			Section 3.05.

				
			Authorized Participant Status

				
			4

			
	 	 	 
	
			ARTICLE IV     ROLE OF AUTHORIZED PARTICIPANT

				
			4

			
	 	 	 
	
			Section 4.01.

				
			Independent Contractor

				
			4

			
	 	 	 
	
			Section 4.02.

				
			Rights and Obligations of DTC Participant

				
			4

			
	 	 	 
	
			Section 4.03.

				
			Beneficial Owner Communications

				
			4

			
	 	 	 
	
			ARTICLE V     MARKETING MATERIALS AND REPRESENTATIONS

				
			5

			
	 	 	 
	
			Section 5.01.

				
			Authorized Participant’s Representation

				
			5

			
	 	 	 
	
			Section 5.02.

				
			Prospectus

				
			5

			
	 	 	 
	
			ARTICLE VI     INDEMNIFICATION; LIMITATION OF LIABILITY

				
			6

			
	 	 	 
	
			Section 6.01.

				
			Indemnification

				
			6

			

 

i

 

 

TABLE OF CONTENTS

(continued)

 

	 	 	Page
	 	 	 
	
			ARTICLE VII     MISCELLANEOUS

				
			6

			
	 	 	 
	
			Section 7.01.

				
			Commencement of Trading

				
			6

			
	 	 	 
	
			Section 7.02.

				
			Definitions

				
			6

			

 

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STANDARD TERMS FOR AUTHORIZED PARTICIPANT AGREEMENTS (the “Standard Terms”) agreed to as of ____________ ___, 2019, by and between The Bank of New York Mellon, a New York banking corporation, and iShares Delaware Trust Sponsor LLC, a Delaware limited liability company.

 

ARTICLE I

 

ORDERS FOR PURCHASE AND REDEMPTION

 

Section 1.01. Authorization to Purchase and Redeem Baskets. Subject to the provisions of the Authorized Participant Agreement, during the term of the Authorized Participant Agreement, the Authorized Participant will be authorized to purchase and redeem Baskets of iShares in compliance with the provisions of the Trust Agreement.

 

Section 1.02. Procedures for Orders. Each party hereto agrees to comply with the provisions of the Trust Agreement and the Procedures to the extent applicable to it.

 

Section 1.03. Consent to Recording. The phone lines used by the Trustee, the Custodian or their affiliated persons may be recorded, and the Authorized Participant hereby consents to the recording of all calls with any of those parties.

 

Section 1.04. Irrevocability. The Authorized Participant agrees on behalf of itself and any Authorized Participant Client that delivery to the Trustee of an Order shall be irrevocable; provided that each of the Trust and the Sponsor reserves the right to reject any Order in compliance with the provisions of the Trust Agreement.

 

Section 1.05. Costs and Expenses. The Authorized Participant shall be responsible for any and all expenses and costs incurred by the Trust in connection with any Orders.

 

Section 1.06. Delivery of Property to the Trust. The Authorized Participant understands and agrees that in the event Deposit Property is not transferred to the Trust by the time specified in the Purchase Order and in compliance with the Procedures and the Trust Agreement, a Purchase Order may be cancelled by the Trustee and the Authorized Participant will be solely responsible for all costs incurred by the Trust, the Trustee or the Custodian related to the cancelled Order.

 

Section 1.07. Title to Deposit Property and iShares Surrendered for Redemption. The Authorized Participant represents and warrants to the Trustee that:

 

 a.     in connection with each Purchase Order, the Authorized Participant will have full power and authority to transfer to the Trust the corresponding Deposit Property, and that upon delivery of such Deposit Property to the Custodian and/or the relevant subcustodian in accordance with the Procedures, the Trust will acquire good and unencumbered title to such property, free and clear of all liens, charges, duties imposed on the transfer of assets and encumbrances and not subject to any adverse claims or transferability restrictions, whether arising by operation of law or otherwise; and

 

b.     in connection with a Redemption Order, the Authorized Participant will have full power and authority to surrender to the Trustee for redemption the corresponding iShares, and upon such surrender the Trust will acquire good and unencumbered title to such iShares, free and clear of all liens, charges, duties imposed on the transfer of assets and encumbrances and not subject to any adverse claims, transferability restrictions (whether arising by operation of law or otherwise), loan, pledge, repurchase or securities lending agreements or other arrangements which would preclude the delivery of such iShares on a “regular way” basis.

 

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Section 1.08. Certain Payments or Distributions.

 

a.     With respect to any Purchase Order, the Trust acknowledges and agrees to return to the Authorized Participant any payment, distribution or other amount paid to the Trust in respect of any Deposit Property transferred to the Trust that, based on the valuation of such Deposit Property at the time of transfer, should have been paid to the Authorized Participant. Likewise, the Authorized Participant acknowledges and agrees to return to the Trust any payment, distribution or other amount paid to the Authorized Participant or any Authorized Participant Client in respect of any Deposit Property transferred to the Trust that, based on the valuation of such Deposit Property at the time of transfer, should have been paid to the Trust.

 

b.     With respect to any Redemption Order, the Authorized Participant on behalf of itself and any Authorized Participant Client acknowledges and agrees to return to the Trust any payment, distribution or other amount paid to it or an Authorized Participant Client in respect of any property transferred to the Authorized Participant or any Authorized Participant Client that, based on the valuation of such property at the time of transfer, should have been paid to the Trust. The Trust is entitled to reduce the amount of any property due to the Authorized Participant or any Authorized Participant Client by an amount equal to any payment, distribution or other sum to be paid to the Authorized Participant or to the Authorized Participant Client in respect of any property transferred to the Authorized Participant or any Authorized Participant Client that, based on the valuation of such property at the time of transfer, should be paid to the Trust. Likewise, the Trust acknowledges and agrees to return to the Authorized Participant or any Authorized Participant Client any payment, distribution or other amount paid to it in respect of any iShares transferred to the Trust that, based on the valuation of such iShares at the time of transfer, should have been paid to the Authorized Participant or such Authorized Participant Client.

 

ARTICLE II

 

AUTHORIZED REPRESENTATIVES

 

Section 2.01. Certification. Concurrently with the execution of the Authorized Participant Agreement, the Authorized Participant shall deliver to the Trust a certificate signed by the Authorized Participant’s Secretary or other duly authorized official setting forth the names, e-mail addresses and telephone and facsimile numbers of all persons authorized to give instructions relating to any activity contemplated hereby or any other notice, request or instruction on behalf of the Authorized Participant (each an “Authorized Representative”) The Trustee may request updates to such certificate from time to time, in a form approved by the Trustee, but no less frequently than annually. Such certificate and any updates thereto may be accepted and relied upon by the Trust as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until (i) receipt by the Trustee of a superseding certificate or update to a certificate in a form approved by the Trustee bearing a subsequent date, or (ii) termination of the Authorized Participant Agreement.

 

Section 2.02. PIN Numbers. The Trustee shall issue to each Authorized Participant a unique personal identification number (“PIN Number”) by which such Authorized Participant shall be identified and instructions issued by the Authorized Participant shall be authenticated. The PIN Number shall be kept confidential and only provided to Authorized Representatives. The Authorized Participant may revoke the PIN Number at any time upon written notice to the Trustee, and the Authorized Participant shall be responsible for doing so in the event that it becomes aware that an unauthorized person has received access to its PIN Number or has or intends to use the PIN Number in an unauthorized manner.

 

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Upon receipt of such written request, the Trustee shall, as promptly as practicable, de-activate the PIN Number. If an Authorized Participant’s PIN Number is changed, the new PIN Number will become effective on a date mutually agreed upon by the Authorized Participant and the Trustee. The Authorized Participant agrees that, absent the Trustee’s fraud, willful misconduct or failure to cancel the PIN Number promptly following a written request to do so from the Authorized Participant or the termination of the Authorized Participant Agreement, none of the Trust or the Trustee shall be liable for losses incurred by the Authorized Participant as a result of unauthorized use of the Authorized Participant’s PIN Number prior to the time the Authorized Participant provides notice to the Trustee of the termination or revocation of authority pursuant to Section 2.03.

 

Section 2.03. Termination of Authority. Upon the termination or revocation of authority of an Authorized Representative by the Authorized Participant, the Authorized Participant shall (i) give immediate written notice of such fact to the Trustee and such notice shall be effective upon receipt by the Trustee; and (ii) request a new PIN Number. The Trustee shall, as promptly as practicable, deactivate the PIN Number upon receipt of such written notice.

 

Section 2.04. Verification. The Trustee may assume that all instructions issued to it using the Authorized Participant’s PIN Number have been properly placed by Authorized Representatives, unless the Trustee has actual knowledge to the contrary or the Authorized Participant has revoked its PIN Number. The Trustee shall have no duty to verify that an Order is being placed by an Authorized Representative. The Authorized Participant agrees that the Trustee shall not be responsible for any losses incurred by the Authorized Participant as a result of an Authorized Representative identifying himself or herself as a different Authorized Representative or an unauthorized person identifying himself or herself as an Authorized Representative, unless the Trustee previously received from the Authorized Participant written notice to revoke its PIN Number.

 

ARTICLE III

 

STATUS OF THE AUTHORIZED PARTICIPANT

 

Section 3.01. Clearing Status. The Authorized Participant represents, covenants and warrants that, as of the date of execution of the Authorized Participant Agreement, and at all times during the term of the Authorized Participant Agreement, the Authorized Participant is and will be entitled to use the clearing and settlement services of each of the national or international clearing and settlement organizations through which, in compliance with the Procedures, the transactions contemplated hereby will clear and settle. Any change in the foregoing status of the Authorized Participant shall terminate the Authorized Participant Agreement and the Authorized Participant shall give prompt written notice thereof to the Trustee.

 

Section 3.02. Broker-Dealer Status. The Authorized Participant represents and warrants that, unless the following paragraph is applicable to it, it is (i) registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (ii) qualified to act as a broker or dealer in the states or other jurisdictions where it transacts business to the extent so required by applicable law, and (iii) a member in good standing of FINRA. The Authorized Participant agrees that it will maintain such registrations, qualifications, and membership in good standing and in full force and effect throughout the term of the Authorized Participant Agreement. The Authorized Participant further agrees to comply with all Federal laws, the laws of the states or other jurisdictions concerned, and the rules and regulations promulgated thereunder, to the extent such laws and regulations are applicable to the Authorized Participant’s transactions in iShares, and with the Constitution, By-Laws and Conduct Rules of FINRA applicable to its activities as an Authorized Participant, and that it will not offer or sell iShares in any state or jurisdiction where they may not lawfully be offered and/or sold.

 

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Section 3.03. Foreign Status. If the Authorized Participant is offering and selling iShares in jurisdictions outside the several states, territories and possessions of the United States and is not otherwise required to be registered, qualified, or a member of FINRA as set forth in the preceding paragraph, the Authorized Participant nevertheless agrees to observe the applicable laws of the jurisdiction in which such offer and/or sale is made (e.g., it will not offer or sell iShares of the Trust in any state or jurisdiction where they may not lawfully be offered and/or sold), to comply with the full disclosure requirements of the 1933 Act and the regulations promulgated thereunder and to conduct its business in accordance with the spirit of the FINRA Conduct Rules.

 

Section 3.04. Compliance with Certain Laws. If the Authorized Participant is subject to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (“U.S.A. PATRIOT Act”), the Authorized Purchaser is in compliance with the anti-money laundering and related provisions of the U.S.A. PATRIOT Act.

 

Section 3.05. Authorized Participant Status.

 

a.     The Authorized Participant understands and acknowledges that the method by which Baskets of iShares will be created and traded may raise certain issues under applicable securities laws. For example, because new Baskets of iShares may be issued and sold by the Trust on an ongoing basis, at any point a “distribution”, as such term is used in the 1933 Act, may occur. The Authorized Participant understands and acknowledges that some activities on its part, depending on the circumstances, may result in its being deemed a participant in a distribution in a manner which could render it a statutory underwriter and subject it to the prospectus delivery and liability provisions of the 1933 Act.

 

b.     The Sponsor shall ensure that the Prospectus contains an accurate and current listing of Authorized Participants.

 

ARTICLE IV

 

ROLE OF AUTHORIZED PARTICIPANT

 

Section 4.01. Independent Contractor. The Authorized Participant acknowledges and agrees that for all purposes of the Authorized Participant Agreement, the Authorized Participant will be deemed to be an independent contractor, and will have no authority to act as agent for the Trust or the Trustee in any matter or in any respect. The Authorized Participant agrees to make itself and its employees available, upon request, during normal business hours to consult with the Trustee, the Sponsor or their designees concerning the performance of the Authorized Participant’s responsibilities under the Authorized Participant Agreement; provided, however, that the Authorized Participant shall be under no obligation to divulge or otherwise disclose any information that the Authorized Participant reasonably believes (i) it is under legal obligation not to disclose, or (ii) it is confidential or proprietary in nature.

 

Section 4.02. Rights and Obligations of DTC Participant. In executing the Authorized Participant Agreement, the Authorized Participant agrees in connection with any purchase or redemption transactions in which it acts for an Authorized Participant Client or for any other DTC Participant or indirect participant, or any other Beneficial Owner, that it shall extend to any such party all of the rights, and shall be bound by all of the obligations, of a DTC Participant in addition to any obligations that it undertakes hereunder or in accordance with the Procedures.

 

Section 4.03. Beneficial Owner Communications. The Authorized Participant agrees, subject to any limitations arising under federal or state securities laws relating to privacy or other obligations it may have to its customers, to assist the Trustee or the Sponsor in determining the ownership level of each beneficial owner relating to positions in iShares that the Authorized Participant may hold as record holder. In addition, the Authorized Participant agrees, in accordance with applicable laws, rules and regulations, at the request of the Sponsor or the Trustee to forward to such beneficial owners written materials and communications received from the requesting party in sufficient quantities to allow mailing thereof to such beneficial owners, including notices, annual reports, disclosure or other informational materials and any amendments or supplements thereto that may be required to be sent by the Sponsor or the Trustee to such beneficial owners pursuant to the Trust Agreement or applicable law or regulation, or that the Sponsor or the Trustee reasonably wishes to distribute, at its own expense, to such beneficial owners.

 

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ARTICLE V

 

MARKETING MATERIALS AND REPRESENTATIONS

 

Section 5.01. Authorized Participant’s Representation. The Authorized Participant represents, warrants and agrees that it will not make, or permit any of its representatives to make, any representations concerning iShares other than those contained in the Trust’s then current Prospectus or in any promotional materials or sales literature furnished to the Authorized Participant by the Sponsor. The Authorized Participant agrees to provide each purchaser of iShares, whenever required by Rule 173 under the 1933 Act, a notice in compliance with the provisions of such Rule. The Authorized Participant agrees not to furnish or cause to be furnished to any person or display or publish any information or materials relating to iShares (including, without limitation, promotional materials and sales literature, advertisements, press releases, announcements, statements, posters, signs or other similar materials), except such information and materials as may be furnished to the Authorized Participant by the Sponsor and such other information and materials as may be approved in writing by the Sponsor. The Authorized Participant understands that the Trust will not be advertised as offering redeemable securities, and that any advertising materials will prominently disclose that the iShares are not redeemable units of beneficial interest in the Trust. Notwithstanding the foregoing, the Authorized Participant may, without the written approval of the Sponsor, prepare and circulate in the regular course of its business reports, research or similar materials that include information, opinions or recommendations relating to iShares (i) for public dissemination, provided that such reports, research or similar materials compare the relative merits and benefits of iShares with other products and do not discuss iShares more prominently than such other products and (ii) for internal use by the Authorized Participant. Copies of the then current Prospectus of the Trust will be supplied by the Sponsor to the Authorized Participant in reasonable quantities upon request.

 

Section 5.02. Prospectus. The Sponsor will provide, or cause to be provided, to the Authorized Participant copies of the then current Prospectus and any printed supplemental information in reasonable quantities upon request. The Sponsor will notify, or cause to be notified, the Authorized Participant when a revised, supplemented or amended Prospectus for the iShares is available, and make available to the Authorized Participant copies of such revised, supplemented or amended Prospectus at such time and in such quantities as may be reasonable to permit the Authorized Participant to comply with any obligation the Authorized Participant may have to deliver such Prospectus to its customers. The Sponsor shall be deemed to have complied with this Section 5.02 when the Authorized Participant has received such revised, supplemented or amended Prospectus by e-mail, in printable form, with such number of hard copies as may be agreed from time to time by the parties promptly thereafter.

 

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ARTICLE VI

 

INDEMNIFICATION; LIMITATION OF LIABILITY

 

Section 6.01. Indemnification. The provisions of this Section 6.01 shall survive termination of the Agreement.

 

a.     The Authorized Participant shall indemnify and hold harmless the Sponsor, the Trustee, the Trust, the Custodian (which the parties agree is a third-party beneficiary under this Subsection 6.01(a)) their respective subsidiaries, Affiliates, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each an “Indemnified Party”) from and against any loss, liability, cost and expense (including attorneys’ fees) incurred by such Indemnified Party as a result of (i) any breach by the Authorized Participant of any representations or warranties of the Authorized Participant (including under Section 3.2 of the Depositary Trust Agreement); (ii) any failure on the part of the Authorized Participant to perform any of its obligations set forth in the Authorized Participant Agreement; (iii) any failure by the Authorized Participant to comply with applicable laws, including rules and regulations of self-regulatory organizations, that apply to it; or (iv) actions of such Indemnified Party in reliance upon any instructions issued in accordance with the Procedures reasonably believed by such Indemnified Party to be genuine and to have been given by the Authorized Participant.

 

b.     The Authorized Participant shall not be liable to any Indemnified Party for any damages arising out of (i) mistakes or errors in data provided in connection with purchase or redemption transactions except for data provided by the Authorized Participant, or (ii) mistakes or errors by, or arising out of interruptions or delays of communications with, the Trustee or any Indemnified Party.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01. Commencement of Trading.     The Authorized Participant may not submit an Order prior to the effectiveness of the registration statement, or amendment to the registration statement, filed with the Securities and Exchange Commission and pursuant to which the Authorized Participant is identified as such in the Prospectus.

 

Section 7.02.     Definitions. The capitalized terms used herein are defined as follows.

 

a.     “1933 Act” means the U.S. Securities Act of 1933, as amended.

 

b.     “Affiliate” shall have the meaning given to it by Rule 501(b) under the 1933 Act.

 

c.     “Authorized Participant Agreement” shall mean each Authorized Participant Agreement among the Authorized Participant, the Trustee and the Sponsor into which these Standard Terms shall have been incorporated by reference.

 

d.     “Authorized Participant” shall have the meaning ascribed to it in the introductory paragraph of the Authorized Participant Agreement.

 

e.     “Authorized Participant Client” means any party on whose behalf the Authorized Participant acts in connection with an Order (whether a customer or otherwise).

 

f.     “Authorized Representative” shall have the meaning ascribed to it in Section 2.01 hereof.

 

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g.     “Basket” shall have the meaning ascribed to it in the Recitals to the Authorized Participant Agreement.

 

h.     “Beneficial Owner” shall have the meaning given to it by Rule 16a-1(a)(2) of the Securities Exchange Act of 1934.

 

i.     “Business Day” shall mean each day the exchange on which the iShares trade is open for regular trading.

 

j.     “Custodian” shall have the meaning ascribed to it in the Procedures.

 

k.     “Deposit Property” means property which, in compliance with the provisions of the Trust Agreement, must be transferred by the Authorized Participant to the Trust in exchange for iShares.

 

l.     “DTC” means The Depository Trust Company.

 

m.     “FINRA” means the Financial Industry Regulatory Authority.

 

n.     “Indemnified Party” shall have the meaning ascribed to it in Section 6.01.a hereof.

 

o.     “iShares” means iShares issued by the Trust pursuant to the provisions of the Trust Agreement.

 

p.     “Order” shall have the meaning ascribed to it in Section 1 of the Authorized Participant Agreement.

 

q.     “Procedures” shall have the meaning ascribed to it in Section 1 of the Authorized Participant Agreement.

 

r.     “Prospectus” means the Trust’s current prospectus included in its effective registration statement, as supplemented or amended from time to time.

 

s.     “Purchase Order” shall have the meaning ascribed to it in Section 1 of the Authorized Participant Agreement.

 

t.     “Redemption Order” shall have the meaning ascribed to it in Section 1 of the Authorized Participant Agreement.

 

u.     “Sponsor” shall have the meaning ascribed to it in the introductory paragraph of the Authorized Participant Agreement.

 

v.     “Trust” shall have the meaning ascribed to it in the introductory paragraph of the Authorized Participant Agreement.

 

w.     “Trust Agreement” shall have the meaning ascribed to it in the introductory paragraph of the Authorized Participant Agreement.

 

x.     “Trustee” shall have the meaning ascribed to it in the introductory paragraph of the Authorized Participant Agreement.

 

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IN WITNESS WHEREOF, the Sponsor and the Trustee have executed these Standard Terms as of the date set forth above.

 

 

THE BANK OF NEW YORK MELLON, in its capacity as Trustee

 

 

By:                                                   

Name:                                     

Title:                                          

 

 

iSHARES DELAWARE TRUST SPONSOR LLC, in its capacity as Sponsor

 

 

By:                                                   

Name:                                     

Title:Exhibit

NATIONAL HOLDINGS CORPORATION
2013 OMNIBUS INCENTIVE PLAN
Nonqualified Stock Option Agreement

No. of shares subject to
Nonqualified Stock Option: ___________
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) dated as of the ____ day of __________, 20__, between National Holdings Corporation, a Delaware corporation (the “Company”), and ___________________ (the “Participant”), is made pursuant and subject to the provisions of the Company’s 2013 Omnibus Incentive Plan (the “Plan”), a copy of which is attached hereto.  All terms used herein that are defined in the Plan have the same meaning given them in the Plan, except as provided in this Agreement.
1.Grant of Option.  Pursuant to the Plan, the Company, on ______________, 20__ (the “Date of Grant”), grants to the Participant, subject to the terms and conditions of the Plan and subject further to the terms and conditions set forth herein, the right and option to purchase from the Company all or any part of an aggregate of ________ shares of the Common Stock of the Company, at the price of $__ per share (which is not less than the Fair Market Value of a share of Common Stock on the Date of Grant) (this “Option”).  This Option is intended to be treated as a nonqualified stock option, which is not subject to Code Section 421.  This Option is exercisable as hereinafter provided.
2.    Terms and Conditions.  This Option is subject to the following terms and conditions:
(a)    Expiration Date.  The Option shall expire at 11:59 p.m. on ______________, 20__ (the “Expiration Date”) or, if earlier, the time set forth in Sections 3, 4, 5 or 6, as applicable.  No Option may be exercised after the Option expires.
(b)    Vesting of Option.  
(i)    In General.  Except as otherwise provided below, the Option shall be exercisable [                                                                    ] subject to the Option, provided the Participant has been continuously employed by, or providing services to, the Company or an Affiliate from the Date of Grant until such time.  Notwithstanding Section 14.09 of the Plan, no additional portion of the Option shall become exercisable solely because the Participant’s employment or service with the Company and its Affiliates terminates as a result of the Participant’s Disability.  Once this Option has become exercisable, it shall continue to be exercisable until the earlier of the termination of the Participant’s rights hereunder pursuant to Sections 3, 4 or 5 of this Agreement or the Expiration Date.  A partial exercise of this Option shall not affect the Participant’s right to exercise this Option with respect to the remaining shares of Common Stock, subject to the conditions of the Plan and this Agreement.
(ii)    Change in Control.  Notwithstanding the foregoing or any provision of Section 14.05 of the Plan to the contrary, in the event a Change in Control occurs and no provision is made for the continuance, assumption or substitution of the Option by the Company or its successor in connection with a Change in Control, then, the Option shall become exercisable in full, to the extent not exercisable previously, on the earlier of the Control Change Date or the date the Option is to be terminated in connection with the Change in Control, provided the Participant has remained continuously employed by, or providing service to, the Company or any Affiliate from the Date of Grant until such time.  However, notwithstanding the foregoing or any provision of Section 14.05 of the Plan to the contrary, in the event a Change in Control occurs and provision is made for the continuance, assumption or substitution of the Option by the Company or its successor in connection with the Change in Control, the Option shall become exercisable in full, to the extent not exercisable previously, upon the Participant’s Disability or involuntary termination of employment or service by the Company without Cause, if such Disability or termination occurs within the twenty-four (24) month period after the Change in Control, provided the Participant has remained continuously employed by, or providing services to, the Company or any Affiliate from the Date of Grant until such time.
(iii)    Death.  Notwithstanding the foregoing, this Option also shall become exercisable in full, to the extent not exercisable previously, in the event the Participant’s employment or service with the Company and its Affiliates is terminated as a result of the Participant’s death. 
(c)    Method of Option Exercise and Payment for Shares.  The Option shall be exercised by delivering written notice of exercise, along with the Option price for the portion of the Option being exercised and all applicable tax withholdings, to the attention of the Company’s Secretary at the Company principal office’s address specified in Section 11 below, no later than one (1) business day in advance of the effective date of the proposed exercise.  The exercise date shall be the day after delivery. The Participant shall pay the Option price and all applicable tax withholdings in cash or cash equivalent acceptable to the Committee.  As soon as practicable upon the Company’s receipt of the Participant’s notice of exercise and payment, the Company shall direct the due issuance of the shares of Common Stock so purchased. 
(d)    Transferability.  Except as provided herein, this Option is nontransferable and, during the Participant’s lifetime, only the Participant may exercise this Option, or in the event of the Participant’s legal incapacity, the Participant’s guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law and court supervision may exercise this Option.  Notwithstanding the foregoing, this Option may be transferred by will or the laws of descent and distribution. 
3.    Exercise in the Event of Death or Disability.  This Option shall be exercisable for all or part of the number of shares of Common Stock that the Participant is entitled to purchase pursuant to Section 2(b) as of the date the Participant ceases to be employed by, or provide services to the Company and its Affiliates as a result of the Participant’s death or Disability, so long as the death or Disability occurs prior to the Expiration Date.  In that event, this Option may be exercised by the Participant, the Participant’s estate, or the person or persons to whom the Participant’s rights under this Option shall pass by will or the laws of descent and distribution, for the remainder of the period preceding the Expiration Date or within nine (9) months after the date the Participant ceases to be employed by or provide services to the Company and its Affiliates as a result of the Participant’s death or Disability, whichever period is shorter.  
4.    Exercise After Other Termination of Employment.  This Option shall be exercisable for all or part of the number of shares of Common Stock that the Participant is entitled to purchase pursuant to Section 2(b) as of the date the Participant ceases to be employed by, or provide services to, the Company as a result of termination of service or employment by the Company and its Affiliates without Cause, and for reasons other than death or Disability, so long as such termination occurs prior to the Expiration Date.  In that event, the Participant may exercise this Option for the remainder of the period preceding the Expiration Date or within three (3) months after the date Participant ceases to be employed by the Company and its Affiliates as a result of termination of service or employment by the Company and its Affiliates without Cause, whichever period is shorter.
5.    Termination of Employment for Cause.  Notwithstanding any other provision of this Agreement, all rights hereunder will be immediately discontinued and forfeited, and the Company shall not have any further obligation hereunder to the Participant, and the Option will not be exercisable for any number of shares of Common Stock (even if the Option previously became exercisable), on or after the time the Participant is discharged from employment with the Company and its Affiliates by the Company or an Affiliate for Cause. 
6.    Agreement to Terms of the Plan and Agreement.  The Participant has received a copy of the Plan, has read and understands the terms of the Plan and this Agreement, and agrees to be bound by their terms and conditions except as modified herein.  
7.    Tax Consequences.  The Participant acknowledges (i) that there may be adverse tax consequences upon acquisition or disposition of the shares of Common Stock received upon exercise of this Option or payment thereof and (ii) that Participant should consult a tax adviser prior to such acquisition or disposition of the shares of Common Stock.  The Participant is solely responsible for determining the tax consequences of this Option and for satisfying the Participant’s tax obligations with respect to this Option.
8.    Fractional Shares.  Fractional shares shall not be issuable hereunder, and when any provision hereof may entitle the Participant to a fractional share such fractional share shall be disregarded. 
9.    Adjustments; Change in Capital Structure.  The terms of this Option shall be adjusted, if at all, in accordance with the terms and conditions of the Plan as the Committee determines is equitably required in the event the Company effects one or more extraordinary dividends, stock dividends, stock splits, subdivisions or consolidations of shares or other similar changes in capitalization. 
10.    Notice.  Any notice or other communication given pursuant to this Agreement, or in any way with respect to this Option hereunder, shall be in writing and shall be personally delivered or mailed by United States registered or certified mail, postage prepaid, return receipt requested, to the following addresses:
If to the Company:    National Holdings Corporation
200 Vesey Street, 25th Floor
New York, New York 10281
    

If to the Participant:        
        
        

11.    Shareholder Rights.  The Participant shall not have any rights as a shareholder with respect to shares of Common Stock subject to this Option until the issuance of the shares of the Common Stock upon exercise of the Option.  
12.    No Right to Continued Employment or Service.  Neither the Plan, the granting of the Option nor any other action taken pursuant to the Plan or the Option constitutes or is evidence of any agreement or understanding, expressed or implied, that the Company or any Affiliate shall retain the Participant as an employee or other service provider for any period of time or at any particular rate of compensation.  
13.    Binding Effect.  Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of the Participant and the successors of the Company.
14.    Conflicts.  In the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Agreement shall govern.  All references herein to the Plan shall mean the Plan as in effect on the date hereof.
15.    Counterparts.  This Agreement may be executed in a number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one in the same instrument.
16.    Miscellaneous.  The parties agree to execute such further instruments and take such further actions as may be necessary to carry out the intent of the Plan and this Agreement.  This Agreement and the Plan shall constitute the entire agreement of the parties with respect to the subject matter hereof.
17.    Section 409A.  Notwithstanding any of the provisions of this Agreement, the parties intend that the Option be exempt from Code Section 409A.   Notwithstanding the preceding, neither the Company nor any Affiliate shall be liable to the Participant or any other person if the Internal Revenue Service or any court or other authority have any jurisdiction over such matter determines for any reason that this Option is subject to taxes, penalties or interest as a result of failing to be exempt from, or comply with, Code Section 409A.  
18.    Governing Law.  This Agreement shall be governed by the laws of the State of Delaware, except to the extent federal law applies.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized officer, and the Participant has affixed his signature hereto.
COMPANY:
NATIONAL HOLDINGS CORPORATION
By:    
Name:    
Title:    
PARTICIPANT:
    

1

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