UNITED STATES DISTRICT COURT FOR

THE SOUTHERN DISTRICT OF NEW YORK

______________________________
)
UNITED STATES OF AMERICA, )
)
PLAINTIFF, )
)
v. ) Civil Action No.
ALEX. BROWN & SONS INC.; )
BEAR, STEARNS & CO. INC.; CS )
FIRST BOSTON CORP.; DEAN )
WITTER REYNOLDS INC.; )
DONALDSON, LUFKIN & JENRETTE )
SECURITIES CORP.; FURMAN SELZ )
LLC; GOLDMAN, SACHS & CO.; )
HAMBRECHT & QUIST LLC; HERZOG,)
HEINE, GEDULD, INC.; J.P. )
MORGAN SECURITIES, INC.; )
LEHMAN BROTHERS, INC.; MAYER )
& SCHWEITZER, INC.; MERRILL )
LYNCH, PIERCE, FENNER & SMITH,)
INC.; MORGAN STANLEY & CO., )
INC.; NASH, WEISS & CO.; OLDE )
DISCOUNT CORP.; PAINEWEBBER )
INC.; PIPER JAFFRAY INC.; )
PRUDENTIAL SECURITIES INC.; )
SALOMON BROTHERS INC.; )
SHERWOOD SECURITIES CORP.; )
SMITH BARNEY INC.; SPEAR )
LEEDS & KELLOGG, LP; and )
UBS SECURITIES LLC )
)
DEFENDANTS. )
______________________________)

STIPULATION AND ORDER

WHEREAS, plaintiff, United States of America, having filed

its complaint on July 17, 1996, and plaintiff and defendants, by

their respective attorneys, having agreed to the entry of this

stipulation and order without trial or adjudication of any issue

of fact or law herein and without this stipulation and order

constituting any evidence against or an admission by any party

with respect to any such issue;

NOW, THEREFORE, before the taking of any testimony and

without trial or adjudication of any issue of fact or law herein,

Plaintiff and defendants hereby agree as follows:

I.

JURISDICTION AND VENUE

This Court has jurisdiction over the subject matter of and

the parties to this action. Venue is proper in the Southern

District of New York.

II.

DEFINITIONS

As used in this stipulation and order:

A. "Any" means one or more.

B. "Ask" or "offer" means the price quoted on Nasdaq at

which a market maker offers to sell a specific quantity of a

particular Nasdaq security.

C. "Bid" means the price quoted on Nasdaq at which a

market maker offers to buy a specific quantity of a particular

Nasdaq security.

D. "Dealer spread" means the difference between a market

maker's bid and ask on Nasdaq for a particular Nasdaq security at

any given time.

- 2 -
 E. "Defendant" means a defendant that has executed this

stipulation and order.

F. "Effective date" means the date on which plaintiff and

defendants have indicated their agreement by executing this

stipulation and order.

G. "Inside spread" means the difference between the

highest bid and the lowest ask on Nasdaq of all market makers for

a particular Nasdaq security at any given time.

H. "Market maker" means a NASD member firm that qualifies

as a market maker under Section 3(a)(38) of the Securities

Exchange Act of 1934, as amended.

I. "NASD" means the National Association of Securities

Dealers, Inc.

J. "Nasdaq" means the computerized stock quotation system

operated by The Nasdaq Stock Market, Inc. that displays the

quotes of market makers in Nasdaq securities.

K. "Nasdaq security" means any Nasdaq National Market

System stock or any Nasdaq Small Cap Security stock quoted on

Nasdaq, or, should these terms be changed or amended, any

successor group of stocks quoted on Nasdaq.

L. "Or" means and/or.

M. "OTC desk" means any organizational element of a

defendant engaged in market making, or its successor, that

accounted for ten percent (10%) or more of such defendant's total

- 3 -
market-making volume, measured in shares, in Nasdaq securities in

the immediately preceding fiscal year;

N. "Person" means any individual, corporation,

partnership, company, sole proprietorship, firm, or other legal

entity. "Other person" means a person who is not an officer,

director, partner, employee, or agent of a defendant.

O. "Price" means the price at which a Nasdaq security is

bought or sold.

P. "Quote increment" means the difference between a market

maker's bid or ask on Nasdaq and that market maker's immediately

preceding or immediately subsequent bid or ask on Nasdaq for a

particular Nasdaq security.

Q. "Quote" means a bid or an ask on Nasdaq.

R. "Quoting convention" means any practice of quoting

Nasdaq securities whereby stocks with a three-quarter (3/4) point

or greater dealer spread are quoted on Nasdaq in even eighths and

are updated in quarter-point (even eighth) quote increments.

S. "SEC" means the United States Securities and Exchange

Commission.

T. "Trader hours" means the number derived by multiplying

the number of traders and assistant traders on the OTC desk and

any other persons actually engaged in making markets in Nasdaq

securities on the OTC desk of a defendant by the number of hours

Nasdaq operates per day.

- 4 -
 III.

APPLICABILITY

This stipulation and order applies to each defendant; to

each of its executive officers, directors, partners, successors,

and assigns, during the respective periods that they serve as

such; and to any agents or employees assigned to defendant’s OTC

desk, including supervisory employees, whose duties or

responsibilities include market making in any Nasdaq security,

during the respective periods that they serve as such; and

applies to all other persons in active concert or participation

with any of them who shall have received actual notice of this

stipulation and order by personal service or otherwise.

IV.

PROHIBITED CONDUCT

A. Unless permitted to engage in activities by Section IV.

B. of this stipulation and order, each defendant shall not,

directly or through any trade association, in connection with the

activities of its OTC desk in making markets in Nasdaq

securities:

(1) Agree with any other market maker to fix, raise, lower,

or maintain quotes or prices for any Nasdaq security;

(2) Agree with any other market maker to fix, increase,

decrease, or maintain any dealer spread, inside spread,

or the size of any quote increment (or any relationship

- 5 -
 between or among dealer spread, inside spread, or the

size of any quote increment), for any Nasdaq security;

(3) Agree with any other market maker to adhere to a

quoting convention;

(4) Agree with any other market maker to adhere to any

understanding or agreement (other than an agreement on

one or a series of related trades) requiring a market

maker to trade at its quotes on Nasdaq in quantities of

shares greater than either (1) the minimum size

required by Nasdaq or NASD rules or (2) the size

displayed or otherwise communicated by that market

maker, whichever is greater;

(5) Engage in any harassment or intimidation of any other

market maker, whether in the form of written,

electronic, telephonic, or oral communications, for

decreasing its dealer spread or the inside spread in

any Nasdaq security;

(6) Engage in any harassment or intimidation of any other

market maker, whether in the form of written,

electronic, telephonic, or oral communications, for

refusing to trade at its quoted prices in quantities of

shares greater than either (1) the minimum size

required by Nasdaq or NASD rules or (2) the size

- 6 -
 displayed or otherwise communicated by that market

maker;

(7) Engage in any harassment or intimidation of any other

market maker, whether in the form of written,

electronic, telephonic, or oral communications, for

displaying a quantity of shares on Nasdaq in excess of

the minimum size required by Nasdaq or NASD rules; and

(8) Refuse, or threaten to refuse to trade, (or agree with

or encourage any other market maker to refuse to trade)

with any market maker at defendant’s published Nasdaq

quotes in amounts up to the published quotation size

because such market maker decreased its dealer spread,

decreased the inside spread in any Nasdaq security, or

refused to trade at its quoted prices in a quantity of

shares greater than either (1) the minimum size

required by Nasdaq or NASD rules or (2) the size

displayed or otherwise communicated by that market

maker.

B. Notwithstanding the provisions of Section IV.A.(1) -

(8), any defendant shall be entitled to:

(1) Set unilaterally its own bid and ask in any Nasdaq

security, the prices at which it is willing to buy or

sell any Nasdaq security, and the quantity of shares of

any Nasdaq security that it is willing to buy or sell;

- 7 -
(2) Set unilaterally its own dealer spread, quote

increment, or quantity of shares for its quotations (or

set any relationship between or among its dealer

spread, inside spread, or the size of any quote

increment) in any Nasdaq security;

(3) Communicate its own bid or ask, or the price at or the

quantity of shares in which it is willing to buy or

sell any Nasdaq security to any person, for the purpose

of exploring the possibility of a purchase or sale of

that security, and to negotiate for or agree to such

purchase or sale;

(4) Communicate its own bid or ask, or the price at or the

quantity of shares in which it is willing to buy or

sell any Nasdaq security, to any person for the purpose

of retaining such person as an agent or subagent for

defendant or for a customer of defendant (or for the

purpose of seeking to be retained as an agent or

subagent), and to negotiate for or agree to such

purchase or sale;

(5) Engage in any conduct or activity authorized or

required by the federal securities laws, including but

not limited to the rules, regulations, or

interpretations of the SEC, the NASD, or any other

self-regulatory organization, as defined in Section

- 8 -
 3(a)(26) of the Securities Exchange Act of 1934, as

amended;

(6) Engage in any underwriting (or any syndicate for the

underwriting) of securities to the extent permitted by

the federal securities laws;

(7) Act as Qualified Block Positioners as defined in SEC

Rule 3b-8(c), promulgated under the Securities Exchange

Act of 1934, as amended, to the extent permitted by the

federal securities laws;

(8) Except as provided in Sections IV.A.(5) - (8) of this

stipulation and order, take any unilateral action or

make any unilateral decision regarding the market

makers with which it will trade and the terms on which

it will trade; and

(9) Engage in conduct protected under the Noerr-Pennington

doctrine.

No finding of any violation of this stipulation and order

may be made based solely on parallel conduct.

C. In order to ensure compliance with the provisions of

Section IV.A. of the stipulation and order, each defendant shall:

(1) Initiate and maintain an antitrust compliance program,

which shall include designating, within ninety (90)

days of the effective date hereof, an Antitrust

Compliance Officer, who shall be responsible for

- 9 -
establishing and maintaining an antitrust compliance

program designed to provide reasonable assurance of

compliance with this stipulation and order and with the

federal antitrust laws by the defendant in its market

making activities in Nasdaq securities on its OTC desk.

The Antitrust Compliance Officer shall personally or

through his designee:

(a) Distribute, within thirty (30) days from the

effective date hereof or from the date of

designation of the Antitrust Compliance Officer,

whichever is later, a copy of this stipulation and

order to: (i) all members of the board of

directors of the defendant (or if there is no

board of directors, to such persons as have

substantially equivalent responsibilities); and

(ii) all employees and all officers of the

defendant whose duties or responsibilities include

market making in any Nasdaq security on Nasdaq;

(b) Distribute within thirty (30) days of appointment

or assignment a copy of this stipulation and order

(i) to any person who becomes a member of the

board of directors of the defendant (or if there

is no board of directors, to such persons as have

substantially equivalent responsibilities) and

- 10 -
 (ii) any employee or officer of the defendant

whose duties or responsibilities include market

making in any Nasdaq security on Nasdaq;

(c) Brief semi-annually those persons designated in

paragraphs (a)(ii) and (b)(ii) of this subsection

on the meaning and requirements of the federal

antitrust laws and this stipulation and order in

connection with defendant’s market making

activities on its OTC desk in Nasdaq securities,

and inform them that the Antitrust Compliance

Officer or a designee of the Antitrust Compliance

Officer is available to confer with them regarding

compliance with such laws and with this

stipulation and order;

(d) Obtain from each person designated in paragraphs

a(i) and b(i) of this subsection a one time

certification that he or she: (i) has read and

agrees to abide by the terms of this stipulation

and order; and (ii) has been advised and

understands that a violation of this stipulation

and order by such person may result in his or her

being found in civil or criminal contempt of

court;

- 11 -
 (e) Obtain from each person designated in paragraphs

(a)(ii) and (b)(ii) of this subsection an annual

written certification that he or she: (i) has

read and agrees to abide by the terms of this

stipulation and order; and (ii) has been advised

and understands that a violation of this

stipulation and order by such person may result in

his or her being found in civil or criminal

contempt of court; and

(f) Maintain a record of persons to whom this

stipulation and order has been distributed and

from whom the certification required by paragraphs

(d) and (e) of this subsection has been obtained.

(2) Within forty-five (45) days of entry of this

stipulation and order by the Court, each defendant is

required to install a system or systems capable of

monitoring and recording any conversation on the

telephones on its OTC desk used by such defendant to

make markets in Nasdaq securities.

(3) The Antitrust Compliance Officer of each defendant

shall devise a methodology for complying with

paragraphs 2, 3, and 4 of this Section. No tape

recorded segment shall be shorter than fifteen (15)

minutes. Within thirty (30) days of entry of this

- 12 -
 stipulation and order by the Court, the methodology

proposed to be employed shall be submitted to the

Antitrust Division for review and approval.

(4) The Antitrust Compliance Officer, with such trained

staff as necessary, shall record (and listen to) not

less than three and one-half percent (3.5%) of the

total number of trader hours of such defendant;

provided, however, that in no case shall the total

number of hours required to be recorded (and listened

to) exceed seventy (70) hours per week. Persons whose

conversations are subject to monitoring as provided by

this paragraph (4) shall be told of the existence of

the taping system but shall not be informed as to the

times when their conversations will or might be

monitored or recorded.

(5) Upon discovery of a conversation which the Antitrust

Compliance Officer of a defendant believes may violate

this stipulation and order, the Antitrust Compliance

Officer shall retain a tape of such conversation, and,

shall within ten (10) business days, furnish such tape,

and any explanation thereof to the Antitrust Division,

in standard audio cassette format, or such other format

as may be acceptable to the Antitrust Division.

- 13 -
(6) Tapes made pursuant to this stipulation and order shall

be retained by each defendant for at least thirty (30)

days from the date of recording, and may be recycled

thereafter. Tapes made pursuant to this stipulation

and order shall not be subject to civil process except

for process issued by the Antitrust Division, the SEC,

the NASD, or any other self-regulatory organization, as

defined in Section 3(a)(26) of the Securities Exchange

Act of 1934, as amended. Such tapes shall not be

admissible in evidence in civil proceedings, except in

actions, proceedings, investigations, or examinations

commenced by the Antitrust Division, the SEC, the NASD,

or any other self-regulatory organization, as defined

in Section 3(a)(26) of the Securities Exchange Act of

1934, as amended.

(7) The Antitrust Division may visit, during regular

business hours, any defendant's facilities unannounced,

and may, while there, from a location not observable by

traders, monitor conversations required to be monitored

and recorded pursuant to paragraphs (2) and (4) of this

Section in real time in order to ensure compliance with

this stipulation and order.

(8) Upon request of the Antitrust Division, a defendant

shall immediately identify all tape recordings made

- 14 -
 pursuant to this stipulation and order that are in its

possession or control, shall provide the Antitrust

Division with the opportunity to listen to any tape

recording made pursuant to this stipulation and order,

and shall produce to the Antitrust Division such tapes

as the Antitrust Division may request.

(9) The Antitrust Division may receive complaints or

referrals concerning asserted possible violations of

the stipulation and order and may, based upon such

complaints or referrals, or for the purpose of

monitoring or enforcing compliance with the stipulation

and order, require the Antitrust Compliance Officer (a)

to use the system or systems required by Section

IV.C.(2) of this stipulation and order to tape the

conversations of a particular person or group of

persons on its OTC desk for any period of time and (b)

not to give notice of such recordation to such

person(s). Such requests to tape shall be subject to

the time limitations set forth in paragraph (4) of this

subsection.

(10) Each Antitrust Compliance Officer shall (in addition to

making reports of violations within ten (10) business

days) report quarterly to the Antitrust Division

concerning activities undertaken to ensure the

- 15 -
 defendant's compliance with the stipulation and order

and, specifically, the requirements of paragraphs (2)-

(9) of this Section. Such reports shall detail the

precise times when conversations were monitored by the

Antitrust Compliance Officer pursuant to the

requirements of this stipulation and order and the name

of each person employed by the defendant whose

conversations were recorded during such times.

V.

CERTIFICATIONS

Each defendant shall certify in the form attached hereto:

A. Within ninety (90) days from the effective date of this

stipulation and order, that the defendant has designated an

Antitrust Compliance Officer, specifying his or her name,

business address, and telephone number;

B. Within forty-five (45) days from the entry of the

stipulation and order by the Court, that the defendant has

complied with the requirements of Sections IV.C.(1)(a) and (b);

and

C. For five (5) years after entry of this stipulation and

order by the Court, within thirty (30) days of the anniversary of

its entry, each defendant shall certify annually (i) whether

defendant has complied with the provisions of Sections IV.A. and

IV.C. of this stipulation and order; and (ii) whether defendant

- 16 -
has made changes in its organizational structure likely to have a

significant effect on its compliance with this stipulation and

order.

VI.

PLAINTIFF'S ACCESS

A. For the sole purpose of determining or securing

compliance with this stipulation and order, and subject to any

legally recognized privilege or work product protection, from

time to time duly authorized representatives of the Department of

Justice shall, upon written request of the Attorney General or of

the Assistant Attorney General in charge of the Antitrust

Division, and on reasonable notice to any defendant at its

principal office, be permitted:

(1) Access during office hours of such defendant, which may

have counsel present, to inspect and copy (or to

require defendants to produce copies of) all records

and documents, excluding individual customer records,

in the possession or under the control of such

defendant, and which relate to compliance with this

stipulation and order; and

(2) Subject to the reasonable convenience of such defendant

and without restraint or interference from the

defendant, to interview officers, employees, or agents

of such defendant, each of whom may have counsel

- 17 -
 present, regarding compliance with this stipulation and

order.

B. Upon the written request of the Attorney General or the

Assistant Attorney General in charge of the Antitrust Division

made to any defendant, such defendant shall prepare and submit

such written reports, under oath if requested, relating to

defendant’s compliance with this stipulation and order as may be

requested.

C. No information, tape recordings, or documents obtained

by the means provided in Sections IV, V, and VI shall be divulged

by any representative of the Department of Justice to any person

other than a duly authorized representative of the Executive

Branch of the United States, or the SEC, except in the course of

legal proceedings to which the United States is a party, or for

the purpose of securing compliance with this stipulation and

order, or as otherwise required by law.

D. If at the time information, tape recordings, or

documents are furnished by any defendant to plaintiff, such

defendant represents and identifies in writing the material in

any such information or documents to which a claim of protection

may be asserted under Rule 26(c)(7) of the Federal Rules of Civil

Procedure and said defendant marks each page of such material,

"Subject to Claim of Protection under Rule 26(c)(7) of the

Federal Rules of Civil Procedure," then ten (10) days notice

- 18 -
shall be given by plaintiff to such defendant at its Office of

General Counsel prior to divulging such material in any legal

proceeding (other than a grand jury proceeding) to which that

defendant is not a party.

E. Defendants may claim (which claim plaintiff shall honor

to the extent legally permissible) protection from public

disclosure, under the Freedom of Information Act, 5 U.S.C. § 552,

or any other applicable law or regulation, for any material

submitted to the Antitrust Division under this stipulation and

order.

VII.

RESCISSION BY PLAINTIFF

The parties agree that the Court may enter this stipulation

and order, upon motion of any party or upon the Court's own

motion, at any time after compliance with the requirements of the

Antitrust Procedures and Penalties Act, 15 U.S.C. § 16, and

without further notice to any party or other proceedings,

provided that plaintiff has not notified the parties and the

Court that it wishes to rescind its agreement to entry of the

stipulation and order. Plaintiff may rescind its agreement to

entry of the stipulation and order at any time before entry of

the stipulation and order by the Court by serving notice thereof

on the defendants and by filing that notice with the Court. In

the event plaintiff rescinds its agreement to entry of the

- 19 -
stipulation and order, the stipulation and order shall be of no

effect whatever, and the agreement among the parties shall be

without prejudice to any party in this or any other proceeding.

VIII.

JURISDICTION RETAINED

Jurisdiction shall be retained by the Court to enable any of

the parties to this stipulation and order to apply to the Court

at any time for such further orders and directions as may be

necessary or appropriate for the construction or implementation

of this stipulation and order, for the enforcement or

modification of any of its provisions, or for punishment by

contempt.

IX.

EXPIRATION OF STIPULATION AND ORDER

This stipulation and order shall expire ten (10) years from

its date of entry by the Court, except that (a) Section IV.C.(2)

- (10) shall expire five (5) years from the date of entry of this

stipulation and order by the Court, except that the Antitrust

Division may, after two (2) years, in its sole discretion, notify

in writing any defendant that it shall no longer be subject to

Section IV.C.(2) - (10); and (b) Section VI.C., D., and E. shall

not expire.

- 20 -
FOR PLAINTIFF
UNITED STATES OF AMERICA:

____________________________
ANNE K. BINGAMAN (AB-1463)
Assistant Attorney General

____________________________
HAYS GOREY, JR. (HG-1946)

____________________________
JOHN D. WORLAND, JR (JW-1962)

____________________________
GEORGE S. BARANKO (GB-9336)

JESSICA N. COHEN (JC-2089)

BIRGITTA C. DICKERSON (BD-6839)
SCOTT A. SCHEELE (SS-0496)
ALLEN P. GRUNES (AG-4775)
WEEUN WANG (WW-8178)
RICHARD L. IRVINE (RI-8783)
WILLIAM J. HUGHES, JR. (WH-1924)

Attorneys
U.S. Department of Justice
Antitrust Division
600 E Street, N.W., Room 9500
Washington, D.C. 20530
202/616-5119 phone
202/616-8544 fax

- 21 -
FOR DEFENDANTS:

PIPER & MARBURY

By: ______________________
Lewis A. Noonberg
(LN-8864)

1200 19th Street, N.W.

Washington, D.C. 20036-2430
Tel: (202) 861-3900

Attorneys for Alex. Brown &

Sons Incorporated

KRAMER, LEVIN, NAFTALIS

& FRANKEL

By: ________________________
Robert M. Heller
(RH-1297)

919 Third Avenue

New York, New York 10022
Tel: (212) 715-9100

Attorneys for Bear, Sterns &

Co., Inc.

KIRKLAND & ELLIS

By: ______________________
Frank M. Holozubiec
(FH-0442)

Citicorp Center
153 E. 53rd Street, 39th Floor
New York, New York 10022
Tel: (212) 446-4800

Attorneys for Dean Witter

Reynolds, Inc.

- 22 -
ROGERS & WELLS

By: _________________________
Richard A. Cirillo
(RC-7472)

200 Park Avenue, 53rd Floor

New York, New York 10166
Tel: (212) 878-8000

EPSTEIN BECKER & GREEN, P.C.

By: _________________________
Stuart M. Gerson
(SG-3017)

1227 25th Street, N.W.

Suite 750
Washington, D.C. 20037
Tel: (202) 861-0900

Attorneys for CS First Boston

Corp.

DAVIS POLK & WARDWELL

By: ____________________
Robert F. Wise, Jr.
(RW-1508)

450 Lexington Avenue

New York, New York 10017
Tel: (212) 450-4000

Attorneys for Donaldson,

Lufkin & Jenrette Securities
Corporation

- 23 -
SULLIVAN & CROMWELL DAVIS POLK & WARDWELL

By: ________________________ By: _______________________

John L. Warden (JW-6918) Robert F. Wise, Jr.
(RW-1508)
125 Broad Street
New York, New York 10004 450 Lexington Avenue
Tel: (212) 558-4000 New York, New York 10017
Tel: (212) 450-4000
Attorneys for Goldman,
Sachs & Co. Attorneys for J.P. Morgan
Securities Inc.

SIMPSON THACHER & BARTLETT CADWALADER, WICKERSHAM & TAFT

By: _______________________ By: _______________________

Charles E. Koob Jeffrey Q. Smith
(CK-1601) (JS-7435)

425 Lexington Avenue 100 Maiden Lane

New York, New York 10017 New York, New York 10038
Tel: (212) 455-2000 Tel: (212) 504-6000

Attorneys for Lehman Brothers

Attorneys for Hambrecht & Inc.
Quist LLC

SHEARMAN & STERLING MORGAN, LEWIS & BOCKIUS

By: _________________________ By: ______________________

James T. Halverson Catherine A. Ludden
(JH-0732) (CL-4326)

153 East 53rd Street 101 Park Avenue

New York, New York 10022 New York, New York 10178
Tel: (212) 848-4000 Tel: (212) 309-6133

Attorneys for Herzog, Heine, Attorneys for Mayer &

Geduld, Inc. Schweitzer, Inc.

- 24 -
WEIL, GOTSHAL & MANGES WILMER, CUTLER & PICKERING

By: ______________________ By: _______________________

Otto G. Obermaier A. Douglas Melamed
(OO-4399) (AM-4601)

767 Fifth Avenue 2445 M Street, N.W.

New York, New York 10153 Washington, D.C. 20037-1420
Tel: (212) 310-8000 Tel. (202) 663-6000

Attorneys for Merrill Lynch Attorneys for PaineWebber

Pierce Fenner & Smith Incorporated

DAVIS POLK & WARDWELL SHANLEY & FISHER, P.C.

By: ______________________ By: ______________________

Robert F. Wise, Jr. Neil Cartusciello
(RW-1508) (NC-2460)

450 Lexington Avenue One World Trade Center

New York, New York 10017 89th Floor
Tel: (212) 450-4000 New York, New York 10048
Tel: (212) 321-1812

Attorneys for Morgan Stanley Attorneys for Piper Jaffrey

& Co. Incorporated Inc.

DONAHUE BROWN MATHEWSON SKADDEN, ARPS, SLATE, MEAGHER

& SMYTH & FLOM

By: ____________________ By: _______________________

Norman J. Barry, Jr. William P. Frank
(NB-6904) (WF-7504)

20 North Clarke Street 919 Third Avenue

Suite 900 New York, New York 10022
Chicago, Illinois 60602 Tel: (212) 735-3000
Tel: (312) 422-0908
Attorneys for Prudential
Attorneys for OLDE Discount Securities Incorporated
Corporation

- 25 -
ROSENMAN & COLIN LLP CAHILL GORDON & REINDEL

By: _______________________ By: ____________________

James J. Calder (JC-8095) Charles A. Gilman
(CG-3924)
575 Madison Avenue
New York, New York 10022 80 Pine Street
Tel: (212) 940-8800 New York, New York 10005
Tel: (212) 701-3000
Attorneys for Furman Selz LLC
Attorneys for Smith Barney
Inc.

SALOMON BROTHERS INC. DICKSTEIN SHAPIRO MORIN &

OSHINSKY, L.L.P.

By: ________________________
Robert H. Mundheim By: ______________________
(RM-3766) Howard Schiffman
Managing Director (HS-7601)

Seven World Trade Center 2102 L Street, N.W.

New York, New York 10048 Washington, D.C. 20037
Tel: (212) 783-7508 Tel: (202) 785-9700

Attorneys for Spear, Leeds &

Kellogg, LP (Troster Singer)

CRUMMY, DEL DEO, DOLAN SULLIVAN & CROMWELL

GRIFFINGER & VECCHIONE, P.C.

By: _______________________ By: _______________________

Brian J. McMahon Philip L. Graham, Jr.
(BM-2377) (PG-5028)

One Riverfront Plaza 125 Broad Street

Newark, New Jersey 07102 New York, New York 10004
Tel: (201) 596-4500 Tel: (212) 558-4000

Attorneys for Sherwood Attorneys for UBS Securities

Securities Corp. LLC

- 26 -
NASH, WEISS & Co.

_________________________
PAUL B. UHLENHOP
Lawrence, Kamin, Saunders &
Uhlenhop
208 South LaSalle Street
#1750
Chicago, Illinois 60604
Tel: 312/372-1947
Fax: 312/372-2389

- 27 -
 The Court having reviewed the Complaint and other filings by

the United States, having found that this Court has jurisdiction

over the parties to this stipulation and order, having heard and

considered the respective positions of the United States and the

defendants [at a hearing on __________________, 1996,] and having

concluded that entry of this stipulation and order is in the public

interest, it is hereby ORDERED:

THAT the parties comply with the terms of this stipulation and

order;

THAT the Complaint of the United States is dismissed with

prejudice;

THAT the Court retains jurisdiction to enable any of the

parties to this stipulation and order to apply to the Court at any

time for such further orders and directions as may be necessary or

appropriate for the construction or implementation of this

stipulation and order, for the enforcement or modification of any of

its provisions, or for punishment by contempt.

SO ORDERED this _________ day of __________, 1996.

____________________________________

UNITED STATES DISTRICT JUDGE

- 28 -