Agreement to Serve as an OTCQX Advisor/PAL
Attorneys and Investment Banks
THIS AGREEMENT to serve as an OTCQX Advisor or a Principal American Liaison (“PAL”)
is by and between OTC Markets Group Inc., a Delaware corporation with an office located at 304
Hudson Street, 3rd Floor, New York, NY 10013 (“OTC Markets Group”), and the attorney or
investment bank that is a registered broker dealer and member of the Financial Industry Regulatory
Authority (“FINRA”) indicated below, dated as of the date executed by OTC Markets Group below:
Full Name and Principal Address of Attorney or Investment Bank:
W I T N E S S E T H:
WHEREAS, the OTCQX Advisor or PAL has completed an “Application to Serve as an OTCQX
Advisor/PAL” (the “Application”);
WHEREAS, after review of the Application, OTC Markets Group has approved of the OTCQX
Advisor or PAL’s Application; and
WHEREAS, the OTCQX Advisor or PAL, as applicable, wishes to serve as an OTCQX Advisor
or PAL for companies trading, or applying to trade, on OTCQX (collectively, “Issuers”).
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained
herein, OTC Markets Group and the OTCQX Advisor or PAL, as applicable (collectively, the “Parties”),
agree hereto as follows:
ARTICLE 1
TERMS
1.1
Serving as OTCQX Advisor or PAL. The attorney or investment bank, as applicable,
agrees to serve as an OTCQX Advisor or Principal American Liaison to Issuers in accordance with the
guidelines set forth in the OTCQX Rules for U.S. Companies and OTCQX Rules for International
Companies (the “Rules”) (which Rules may be amended from time to time by OTC Markets Group in its
sole discretion) and subject to the terms and conditions contained herein, and to use its best efforts to
discharge its responsibilities and obligations under such Rules and this Agreement.
1.2
Appointment by Issuer. Any OTCQX Advisor or PAL who desires to serve as an
OTCQX Advisor or PAL to any Issuer must enter into a written agreement with that Issuer prior to
providing any services as an OTCQX Advisor or PAL, using the form of agreement provided by OTC
Markets Group (the “Issuer Appointment”).
1.3
Fees. The OTCQX Advisor or PAL, as applicable, shall pay to OTC Markets Group an
annual fee set forth in the Rules, as amended from time to time, in respect of each year it desires to be
an OTCQX Advisor or PAL. Each OTCQX Advisor or PAL, as applicable, must make such payment
within the time limits established by OTC Markets Group, as set forth in the Rules.
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1.4
Approved OTCQX Advisor/PAL List. OTC Markets Group agrees, upon execution of this
Agreement, to list the OTCQX Advisor or PAL on its list of approved OTCQX Advisors and PALs (the
“OTCQX Advisor/PAL List”), which appears on OTC Markets Group’s website at
www.otcmarkets.com. OTC Markets Group further agrees to permit such OTCQX Advisor or PAs to be
appointed by Issuers as their OTCQX Advisor or PAL, as applicable, in accordance with the procedures
contained in the Rules.
ARTICLE 2
REPRESENTATIONS AND COVENANTS OF THE OTCQX ADVISOR OR PAL
2.1
Application. The OTCQX Advisor or PAL, as applicable, represents that the information
supplied to OTC Markets Group in the Application, together with any information provided
supplementally with its Application (collectively, the “Application Information”), all of which is hereby
incorporated by reference in this Agreement, (i) was true, complete and correct, and contained no
material misstatements or omissions, as of the date of such Application, and (ii) continues to be true,
complete and correct, and contain no material misstatements or omissions, as of the date hereof.
2.2
Eligibility. The OTCQX Advisor or PAL, as applicable, represents that it continues to
satisfy the Eligibility Criteria contained in the applicable sections of Part B of the Application.
2.3
Compliance with this Agreement and the Rules. An OTCQX Advisor represents that it
has read in its entirety and fully understands the OTCQX Rules for U.S. Companies, and a PAL
represents that it has read in its entirety and fully understands the OTCQX Rules for International
Companies, each of which are hereby incorporated by reference into this Agreement, and agrees that it
shall comply with all applicable sections of this Agreement and the Rules, as such documents may be
amended from time to time.
2.4
Written Procedures. The OTCQX Advisor or PAL, as applicable, shall adopt, maintain
and implement:
(a)
Written policies and procedures reasonably designed to require that any conflict
of interest that may affect the advice given by the OTCQX Advisor or PAL to any
Issuer for which it serves as an OTCQX Advisor or PAL be publicly disclosed in
the information the Issuer provides to OTC Markets Group for distribution through
the OTC Disclosure & News Service or publishes on the Securities and
Exchange Commission’s EDGAR database; and
(b)
Such other written policies and procedures that it reasonably believes are
sufficient for it to discharge its ongoing obligations an OTCQX Advisor or PAL, as
applicable, including but not necessarily limited to procedures regarding
supervision of persons providing advice.
2.5
FOCUS Reports. An OTCQX Advisor or PAL that is an investment bank agrees to
provide a copy of its most recent FOCUS Report to OTC Markets Group, as submitted to FINRA,
initially upon application to become an OTCQX Advisor or PAL and annually at the time its December
31st FOCUS Report is submitted to FINRA.
2.6
Maintenance of Records. The OTCQX Advisor or PAL, as applicable, shall retain for at
least five years all documents and records that were generated in connection with (a) the advice it
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provided to any Issuer for which it acts or acted as an OTCQX Advisor or PAL, and (b) its review of the
filings and documents of each such Issuer.
2.7
Cooperation with OTC Markets Group and Regulators. The OTCQX Advisor or PAL, as
applicable, agrees to fully cooperate with OTC Markets Group, any federal or state securities regulator,
any governmental authority and any self-regulatory organization in any review of the Issuer, including,
but not limited to, providing access to persons providing advice and to the documents containing such
advice and supporting such advice; provided, however, that the OTCQX Advisor or PAL shall not be
required to provide any information or documents that are privileged or confidential.
2.8
Notifications to OTC Markets Group. The OTCQX Advisor or PAL shall promptly notify
OTC Markets Group in writing:
(a)
In the event that the OTCQX Advisor or PAL, as applicable, becomes the subject
of any disciplinary proceeding or similar action by any federal or state securities
regulator, or by any self-regulatory organization;
(b)
In the case of an investment bank OTCQX Advisor or PAL, in the event that the
net capital, computed pursuant to the provisions of Rule 15c3-1 under the
Securities Exchange Act of 1934 (the “Exchange Act”), as amended, of the
investment bank falls below $1 million, the OTCQX Advisor or PAL shall notify
OTC Markets Group and submit a copy of the firm’s FOCUS Report each month
at the time it is submitted to FINRA until such time as the net capital exceeds $1
million or until otherwise notified by OTC Markets Group;
(c)
Of any change to any person who has been designated to act in the capacity of
OTCQX Advisor or PAL, as applicable; and
(d)
Of the OTCQX Advisor’s or PAL’s resignation or dismissal from serving as an
OTCQX Advisor or PAL for any Issuer.
ARTICLE 3
REMOVAL AND WITHDRAWAL
3.1
Violations and Disciplinary Actions. The OTCQX Advisor or PAL, as applicable,
acknowledges and agrees that:
(a)
Violations. OTC Markets Group may take the disciplinary action set forth below
in subsection (b) of this Section 3.1 against the OTCQX Advisor or PAL in the
event that OTC Markets Group, in its sole and absolute discretion, makes any of
the following determinations:
(i)
That the OTCQX Advisor or PAL is in breach of, or has failed to comply with,
any provision of this Agreement or the Rules, as amended from time to time;
(ii)
In the case of an investment bank OTCQX Advisor or PAL, that the
investment bank’s net capital, computed pursuant to the provisions of Rule
15c3-1 under the Exchange Act, falls below $1 million;
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(iii)
That the OTCQX Advisor or PAL has failed to meet its contractual
responsibilities pursuant to any Issuer Appointment;
(iv)
That the OTCQX Advisor or PAL has failed to provide appropriate advice to
an Issuer for which it is serving as OTCQX Advisor or PAL, or conduct
appropriate reviews of such Issuer’s filings and documentation;
(v)
That the OTCQX Advisor or PAL is unsuitable to continue to act as an
OTCQX Advisor or PAL; or
(vi)
That the continued inclusion of the OTCQX Advisor or PAL as an approved
OTCQX Advisor or PAL would be likely to impair the integrity of OTC Markets
Group or be detrimental to the interests of investors.
(b)
Disciplinary Actions. In the event that OTC Markets Group makes a
determination of a violation pursuant to subsection (a) of this Section 3.1, OTC
Markets Group is authorized, in its sole and absolute discretion, to take any or all
of the following disciplinary actions against the OTCQX Advisor or PAL:
(i)
Censure the OTCQX Advisor or PAL;
(ii)
Remove the OTCQX Advisor or PAL from their role as OTCQX Advisor or
PAL with respect to a particular Issuer;
(iii)
Revoke the status of the OTCQX Advisor or PAL as an eligible OTCQX
Advisor or PAL, and remove such OTCQX Advisor or PAL from the OTCQX
Advisor/PAL List;
(iv)
Publish the action(s) it has taken and the reason(s) for such action(s) on its
website; and
(v)
Notify the Issuers that have retained the OTCQX Advisor or PAL of the
OTCQX Advisor’s or PAL’s non-compliance with the Rules or deficiency in
meeting the eligibility requirements.
3.2
Withdrawal and Termination by OTCQX Advisor or PAL. The OTCQX Advisor or PAL,
as applicable, may withdraw from their status as an approved OTCQX Advisor or PAL and terminate
this Agreement at any time by providing written notice simultaneously to OTC Markets Group and any
Issuer with which they have entered into an Issuer Appointment. OTC Markets Group will cause the
OTCQX Advisor/PAL List to be updated to reflect such withdrawal as soon as is reasonably practicable,
but in any event no later than 30 days after its receipt of such written notice.
3.3
Termination by OTC Markets Group. OTC Markets Group may terminate this
Agreement at any time by providing written notice to the OTCQX Advisor or PAL. OTC Markets Group
will promptly provide a copy of any such notice of termination of this Agreement to any Issuer that has
entered into an Issuer Appointment with the OTCQX Advisor or PAL.
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ARTICLE 4
MISCELLANEOUS
4.1
Limitation of Liability. The OTCQX Advisor or PAL agrees that OTC Markets Group shall
not have any liability whatsoever to the OTCQX Advisor or PAL or any of its affiliates in connection with
or related to this Agreement, including, without limitation, any refusal or failure by OTC Markets Group
to accept the OTCQX Advisor or PAL as an OTCQX Advisor or PAL or in the event of any disciplinary
action against the OTCQX Advisor or PAL pursuant to Section 3.1 herein. In no event shall OTC
Markets Group, its licensors or its suppliers be liable to the OTCQX Advisor or PAL or any other
person, regardless of the cause, for any failure of performance, or for any delays, inaccuracies, errors,
interruptions, or omissions in any of OTC Markets Group’s services, or for taking any disciplinary action
against the OTCQX Advisor or PAL authorized by this Agreement, or for any special, indirect,
incidental, punitive or consequential damages, even if one or more of them was advised of the
possibility of such damage; provided, however, that in the event that OTC Markets Group, its licensors
or its suppliers is held liable for any reason whatsoever, such liability shall be limited to the amount of
the fee paid by the OTCQX Advisor/PAL during the twelve months preceding the date of the event
giving rise to the accrual of the claim.
4.2
Gross Negligence and Willful Misconduct. Section 4.1 above shall not relieve OTC
Markets Group from liability for damages that result from its own gross negligence or willful misconduct.
4.3
Governing Law. This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, except for its conflicts of laws provisions. The
OTCQX Advisor or PAL, as applicable, and OTC Markets Group hereby submit to the jurisdiction of the
United States District Court for the Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal proceedings arising out of this Agreement or the
transactions contemplated hereby. The OTCQX Advisor or PAL, as applicable, and OTC Markets
Group hereby waive, to the fullest extent permitted by applicable law, any objection that it may now or
hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an inconvenient forum. The
OTCQX Advisor or PAL agrees that in the event OTC Markets Group obtains a favorable judgment,
whether as plaintiff, defendant or otherwise, against the OTCQX Advisor or PAL in any legal
proceeding arising out of this Agreement or the transactions contemplated hereby, OTC Markets Group
shall, in addition to any other remedies awarded by the court, be entitled to recover from the OTCQX
Advisor or PAL all costs and expenses, including attorneys’ fees, litigation costs, and expenses of
investigation incurred in connection with any such proceeding.
4.4
Assignment. Neither this Agreement nor any of the rights and obligations of the OTCQX
Advisor or PAL hereunder may be assigned or transferred to any other person, except upon the written
consent of OTC Markets Group. OTC Markets Group shall have the right to assign this agreement to
successors and subsidiaries.
4.5
No Third Party Beneficiaries. Nothing, express or implied, in this Agreement or any
letter or certification provided by the OTCQX Advisor or PAL to an Issuer or OTC Markets Group is
intended to confer on any person other than such Issuer, OTC Markets Group or the OTCQX Advisor or
PAL, or their respective permitted successors or assigns, any rights or remedies under or by reason of
this Agreement or such letters or certifications.
4.6
Headings. The headings in this Agreement are inserted for convenience only and do not
describe, interpret, define or limit the scope, extent or intent of the Agreement or any provision hereof.
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The words “herein” and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular Section or other subdivision.
4.7
Binding Effect. Except as herein otherwise provided to the contrary, this Agreement
shall be binding upon and inure to the benefit of the OTCQX Advisor or PAL, as applicable, and OTC
Markets Group, and their respective permitted successors and assigns.
4.8
Severability. In the event that any provision of this Agreement shall be determined to be
invalid or unenforceable, either in whole or in part, by a court of competent jurisdiction, this Agreement
shall be deemed amended to delete or modify as necessary, the offending provision and to alter the
balance of this Agreement in order to render the same valid and enforceable to the fullest extent
permissible.
4.9
Entire Agreement. This Agreement, which includes the other agreements and
documents incorporated by reference herein, constitutes the entire agreement between the parties
hereto relating to the subject matter hereof, and supersedes all previous contracts and agreements
between the parties hereto, both oral and written.
4.10 Modification and Waiver. OTC Markets Group may alter any term or condition of this
Agreement, whether by altering a term in this Agreement directly or by amending any document
incorporated by reference herein, on sixty (60) days’ written notice to the OTCQX Advisor or PAL, as
applicable. The failure of any OTCQX Advisor or PAL to withdraw from their status as an approved
OTCQX Advisor or PAL at that time pursuant to Section 3.2 hereof shall be deemed acceptance of the
new term or condition. No failure on the part of OTC Markets Group or the OTCQX Advisor or PAL, as
applicable, to exercise, no delay in exercising, and no course of dealing with respect to any right,
power, or privilege under the Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or
the exercise of any other right, power, or privilege under the Agreement.
4.11 Force Majeure. Neither party shall be liable for any delays or failures to perform any of
its obligations hereunder to the extent that such delays or failures are due to circumstances beyond its
reasonable control, including acts of God, strikes, riots, acts of war, or governmental regulations
imposed after the date of this Agreement.
4.12 Notices. All notices, requests or communications required or permitted pursuant to this
Agreement shall be in writing and shall be delivered personally, by an overnight courier service, or by
registered or certified mail, postage prepaid, return receipt requested, to the appropriate Party at the
address set forth on the first page of this Agreement.
4.13 Survival. Notwithstanding the termination of this Agreement for any reason, Sections
4.1, 4.2, 4.3 and 4.12 shall survive any termination of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed or caused their duly authorized officers to
execute this Agreement.
OTCQX ADVISOR/PAL
By (signature): __________________________________
Name (print):
Title:
Date:
OTC MARKETS GROUP INC.
By: __________________________________
Name: Lisabeth Heese
Title: EVP, Issuer and Information Services
Date Executed by OTC Markets Group:
___________________________________
A signed copy will be sent to the OTCQX Advisor or PAL, as
applicable, for their records.
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OTCQX Advisor/PAL Logo Authorization Form
This form should be completed by the OTCQX Advisor or PAL, as applicable, contemporaneously with
the Agreement to Serve as an OTCQX Advisor or PAL.
Submission – Please check appropriate space:
Logo at time of initial authorization
Updated logo
OTCQX ADVISOR/PAL NAME
AUTHORIZED LOGO RELEASE CONTACT NAME
TITLE
ADDRESS
ADDRESS
TELEPHONE
EMAIL
WEBSITE
In order to publicize the OTCQX Advisor/PAL’s association with an OTCQX issuer, as applicable, the
OTCQX Advisor or PAL authorizes OTC Markets Group to use the Applicant’s corporate logos, trade
names, and trade or service marks on the pages displaying the issuer’s quote information on
www.otcmarkets.com and through other web portals and data feeds. In addition, the OTCQX
Advisor/PAL’s approval allows OTC Markets Group to include the OTCQX Advisor/PAL’s logo in other
communication materials (video, audio, electronic broadcasts, print promotion and advertising) to
further increase awareness of the OTCQX Advisor/PAL’s association with an OTCQX issuer, as
applicable.
In order to ensure the accuracy of the information, the OTCQX Advisor/PAL agrees to provide OTC
Markets Group with its current corporate logos, trade names, and trade or service marks and with any
subsequent changes. By signing this agreement, the OTCQX Advisor/PAL indicates that the use
granted is indemnified and held harmless from any third party rights and/or claims, without waiver of
any legal privileges.
Other than the rights granted here and in the Appointment of an OTCQX Advisor: Attorneys and
Investment Banks, or the Appointment of a Principal American Liaison: Attorneys and Investment
Banks , as applicable, OTC Markets Group acknowledges that it has no other rights in the Applicant’s
corporate logos, trade names, and trade or service marks.
AUTHORIZED SIGNATURE:
DATE:
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