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Title: Where is the best place in the world to live without the government messing with you? Question:Where do you have the most rights/freedoms as a citizen? Edit I live in New York USA Answer #1: Somalia comes to mind. Answer #2: Frankly: your best bet is to become leader of a small nation where you have absolute power so you **are** the government. I'm reasonably certain that Kim Jong-un lives the life you are seeking.Answer #3: You do realize that in most cases those two are mutually exclusive? For example your right to life constrains my freedom to bash your head in with a brick.Answer #4: You might want to peruse [this](http://www.freetheworld.com/2015/freedomIndex/Human-Freedom-Index-2015.pdf) report, which reckons it's Hong Kong (followed by Switzerland, Finland, Denmark and New Zealand). Answer #5: I hear Vermont is nice.

EXHIBIT 31.1 RULE 13A-14(A) / 15D-14(A) CERTIFICATIONS I, Haim Tsuff, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Isramco, Inc. for the quarter ended September 30, 2010; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons fulfilling the equivalent function): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. ISRAMCO, INC Date: NOVEMBER 9, 2010 By: /s/HAIM TSUFF HAIM TSUFF CHIEF EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE OFFICER)

EXHIBIT 32.01 CERTIFICATION OF PRESIDENT PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION -OXLEY ACT OF 2002 In connection with the Annual Report of Morgan Stanley Smith Barney Charter Campbell L.P. (the “Partnership”) on Form 10-K for the period ended December 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alper Daglioglu, President and Director of Ceres Managed Futures LLC, the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. By: /s/Alper Daglioglu Name:Alper Daglioglu Title:President and Director of Ceres Managed Futures LLC, General Partner of the registrant Date:March 26, 2014

Exhibit 5.1 July 22, 2010 Old Line Bancshares, Inc. 1525 Pointer Ridge Place Bowie, Maryland 20716 Re: Old Line Bancshares, Inc. 2010 Equity Incentive Plan (the “Plan”) -Registration Statement on Form S-8 for 550,000 Shares of Common Stock Ladies and Gentlemen: We have acted as counsel for Old Line Bancshares, Inc. (the “Company”) in connection with the registration under the Securities Act of 1933, as amended, (the “Act”) on Form S-8 (the “Registration Statement”) of 550,000 shares (the “Shares”) of the Company’s Common Stock, $0.01 par value (the “Common Stock”), to be issued under the Old Line Bancshares, Inc. 2010 Equity Incentive Plan (the “Plan”).As such counsel, we have made such legal and factual examinations and inquiries as we deemed advisable for the purpose of rendering this opinion. In rendering the opinion expressed herein, we have reviewed originals or copies, certified or otherwise identified to our satisfaction, of the Registration Statement, the Company’s Articles of Amendment and Restatement and Articles of Amendment thereto (collectively, the “Charter”) and the Company’s Amended and Restated Bylaws (the “Bylaws”), the Plan, the proceedings of the Board of Directors of the Company relating to the issuance of the Shares, a short-form good standing certificate for the Company issued as of a recent date by the Maryland State Department of Assessments and Taxation, a Certificate of the Secretary of the Company dated July 22, 2010, and such other statutes, certificates, instruments and documents relating to the Company and maters of law as we have deemed necessary to the issuance of this opinion. In our examination of the aforesaid documents, we have assumed, without independent investigation, the genuineness of all signatures, the legal capacity of all individuals who have executed any of the aforesaid documents, the authenticity of all documents submitted to us as originals, the conformity with originals of all documents submitted to us as copies (and the authenticity of the originals of such copies), and the accuracy and completeness of all public records reviewed by us.As to any facts material to this opinion which we did not independently establish or verify, we have relied solely on the Certificate of the Secretary. In addition to the qualifications set forth above, this opinion is subject to the additional assumptions, qualifications, and limitations as follows: (a)We have made no investigation of, and we express no opinion as to, the laws of any jurisdiction other than the laws of the Sate of Maryland.To the extent that any documents referred to herein are governed by the laws of the jurisdiction other than Maryland, we have assumed that the laws of such jurisdiction are the same as the laws of Maryland. (b)This opinion concerns only the effect of the laws (exclusive of the principles of conflict of laws) of the State of Maryland as currently in effect.We assume no obligation to supplement this opinion if any applicable laws change after the date hereof or if any facts or circumstances come to our attention after the date hereof that might change this opinion. (c)We express no opinion as to compliance with the securities (or “blue sky”) laws of the State of Maryland. (d)We assume that the issuance of the Shares will not cause the Company to issue shares of Common Stock in excess of the number of shares of Common Stock authorized by the Company’s Charter at the time of their issuance. (e)This opinion is limited to the matters set forth herein, and no other opinion should be inferred beyond the matters expressly stated. Based on the foregoing assumptions, qualifications and limitations, having regard for such legal considerations as we deem relevant, it is our opinion that, when the Registration Statement has become effective, the Shares reserved for issuance under the Plan, upon the issuance and delivery of the Shares in the manner and for the consideration described in the Plan, will be legally issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Company’s Registration Statement on Form S-8.In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, /s/ OBER, KALER, GRIMES & SHRIVER OBER, KALER, GRIMES & SHRIVER

Exhibit 10.1     EAST TRACT GROUND LEASE AGREEMENT   BETWEEN   EDWARD J. STELLA, JR.   LANDLORD   AND   ATLANTIC GREEN POWER CORPORATION   TENANT               *NOTE:  Certain portions of this exhibit have been omitted based upon a request for confidential treatment.  The non-public information has been filed separately with the Securities and Exchange Commission.         TABLE OF CONTENTS   Page       ARTICLE 1 - DEMISE, PREMISES, TERM, RENT 1 1.1. Demise and Premises 1 1.2. Term 2 1.3. Rent and Payments. 2 1.4. Additional Rent 3 1.5. Net Lease 4 1.6. Subdivision 4 ARTICLE 2 - USE 4 ARTICLE 3 - TAXES, UTILITIES AND ASSESSMENTS 4 ARTICLE 4 - ARTICLE  - ALTERATIONS AND IMPROVEMENTS 5 ARTICLE 5 - SURRENDER AT EXPIRATION 5 ARTICLE 6 - INSURANCE 5 6.1. Casualty and Liability Insurance 5 6.2. Insurers 5 6.3. Insureds 6 6.4. Notice of Cancellation 6 ARTICLE 7 - PERFORMANCE OF TENANT’S COVENANTS 6 ARTICLE 8 - REPAIRS AND MAINTENANCE 6 8.1. Repairs to Premises 6 8.2. Waste 7 8.3. Tenant’s Property 7 ARTICLE 9 - COMPLIANCE WITH LAWS AND ORDINANCES 7 9.1. Compliance with Laws 7 9.2. Compliance with Insurance Requirements 7 ARTICLE 10 - REGULATORY APPROVALS 7 ARTICLE 11 - INDEMNIFICATION 8 ARTICLE 12 - REPRESENTATIONS AND WARRANTIES 8 12.1. Landlord’s Representation 8 12.2. Tenant’s Representations 9 ARTICLE 13 - DEFAULT BY TENANT 9 13.1. Event of Default 9 13.2. Landlord’s Remedies for Tenant’s Default 9 13.3. Remedies Not Exclusive 11 13.4. Waiver of Performance 11 ARTICLE 14 - CONDEMNATION 11 ARTICLE 15 - NOTICES 12 ARTICLE 16 - QUIET ENJOYMENT 13 ARTICLE 17 - SUBORDINATION AND ATTORNMENT 13 ARTICLE 18 - ASSIGNMENT AND SUBLETTING 13     i     ARTICLE 19 - MISCELLANEOUS PROVISIONS 14 19.1. Integration; Entire Agreement 14 19.2. Severability 14 19.3. Headings 14 19.4. Successors and Assigns 14 19.5. Time of the Essence 14 19.6. Governing Law 14 19.7. Recordation 14 19.8. Counterparts 14 19.9. Brokers 15 ARTICLE 20 - PURCHASE OPTION AND RIGHT OF FIRST REFUSAL 15 20.1. Purchase Option 15 20.2. Right of First Refusal 15   EXHIBIT A                     -         Description of East Tract Stella Property and Premises     ii       THIS EAST TRACT GROUND LEASE AGREEMENT (the “Lease”) made and executed as of this 6th day of August, 2010 (the “Effective Date”), by and between EDWARD J. STELLA, JR., an individual (“Landlord”), and ATLANTIC GREEN POWER CORPORATION, a New Jersey corporation (“Tenant”).     WHEREAS, Landlord is the owner of certain land located in Upper Pittsgrove Township, Salem County, New Jersey identified on the Upper Pittsgrove Municipal Tax Map as Block 40, Lot 26 and Block 55, Lot 16, known as the East Tract, as more particularly described on Exhibit ”A” attached hereto and made a part hereof (hereinafter, the “East Tract Stella Property”);   WHEREAS, Landlord leased to Tenant and Tenant leased from Landlord a portion of the Stella Property consisting of up to approximately 700 acres, subject to adjustment (the “Original Premises”), in accordance with the terms and conditions of a Ground Lease Agreement, dated November 30, 2009 (the “Original Lease Agreement”);   WHEREAS, since the time the Original Lease Agreement was negotiated and made effective, new facts and circumstances have developed and have been learned about development of the System and conditions of the Regulatory Approvals;   WHEREAS, Landlord now desires to lease to Tenant and Tenant desires to lease from Landlord a portion of the East Tract Stella Property as described on Exhibit A (the “Premises”), in accordance with the terms and conditions and for the purposes herein set forth;   WHEREAS, Landlord and Tenant wish to amend and restate the terms of the Original Lease in the form of this East Tract Lease and a separate West Tract Lease;   WHEREAS, Landlord shall continue to own, free of this Lease, that portion of the East Tract Stella Property that is not part of the Premises (the “Excluded Property”) which is cross-hatched on Exhibit “A”.   NOW, THEREFORE, in consideration of the premises, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:       1.1. Demise and Premises.  Landlord does hereby demise and let unto Tenant, and Tenant does lease and take from Landlord, the Premises, for the term and upon the covenants, terms and conditions hereinafter set forth.  The Excluded Property shall not be part of the Premises.  The parties acknowledge and agree that the Premises are inclusive of any buffer areas, areas used for utilities servicing the System (hereinafter defined) wetlands, transition areas, and/or setbacks imposed in connection with the approvals for the System and that all such areas, and/or setbacks are a part of the Premises.     1     1.2. Term.  (a) This Lease shall be effective from November 30, 2009, the Effective Date of the Original Lease Agreement.  The initial Term of the Lease shall run for a period of twenty-five (25) years commencing on the first day of the calendar month following the Rent Commencement Date (defined in Section 1.3(a)), subject to the renewal options described below.   (b)           Provided Tenant is not in default of any of the terms of the Lease, beyond any applicable notice and cure periods, Tenant is hereby granted the option to extend the Term beyond the original twenty-five (25) years for four (4) additional successive periods of five (5) years each on the same terms and conditions as contained in this Lease.  The options shall be deemed automatically exercised without any action on Tenant’s behalf unless Tenant shall provide Landlord notice of termination of this Lease no later than one (1) year prior to the end of the initial Term or the extended Term period then ending.   1.3. Rent and Payments.   (a) The base rent (“Base Rent”) for the Term, shall be as follows:  Based on 130 acres at [                    ]* per year, paid on a monthly basis, phased-in as each ten (10) acre increment of the Premises begins producing electricity.  Base Rent shall be phased in on a pro-rata basis as any portion of the Premises for which solar panels are approved (a “Panel Area”) begins producing electricity.  Base Rent shall be payable in accordance with a formula the numerator of which shall be ten (10), the denominator shall be 90 (representing the number of total acres in all Panel Areas), the result of which is multiplied by [                    ].*  Tenant shall provide written notice to Landlord as to the number of acres (but always in at least ten (10) acre increments) for which construction is completed and electricity is being generated (each, a “Production Notice”).  The date of the first Production Notice is the “Rent Commencement Date.”  If the Rent Commencement Date occurs on a day other than the beginning of a calendar month, the Base Rent for such partial month shall be prorated.  Notwithstanding the above, Tenant shall be obligated to pay Base Rent on the entirety of the Premises no later than three (3) years following November 30, 2009, regardless of the status of construction, status of Regulatory Approvals and/or generation of electricity.  If any installment of Base Rent due under this Lease is not paid within ten (10) days of the time and place and in the manner specified, Landlord, in addition to other available remedies, shall be entitled to receive a large charge fee of five percent (5%) of such payment, which Landlord and Tenant agree are liquidated damages (and not a penalty) for costs incurred by Landlord as a result of such late payment.  The parties acknowledge and agree that the Premises may not in fact be 130 acres, but have agreed that Base Rent will be ultimately paid on a total of 130 acres, even though the acreage of the Premises as depicted on Exhibit A may be different.   (b) Tenant shall pay to Landlord the following sums:   (i) [                    ]* to be paid immediately following issuance of Upper Pittsgrove construction permits to construct any portion of the System on any portion of the Premises (the “Construction Permits”) and the sending for recording the Deed of Easement between Landlord and the Township of Upper Pittsgrove restricting the use and development of East Tract Stella Property, consisting of approximately 174 acres and which is a condition of a Regulatory Approval (the “Deed of Easement”), which Deed of Easement Landlord shall execute and deliver to Tenant no later than immediately prior to issuance of the Construction Permits;     2     (ii) [                        ]* to be paid upon recording of the Deed of Easement; and   (iii) [                    ]* per megawatt of power generated by the System on the Premises, as each megawatt comes on line and is generating electricity, up to an amount of [                    ]* regardless of the amount of power ultimately generated by the System, provided however that the total amount of [                    ],* in accordance with subsections (b)(i), (ii) and (iii) shall be paid to Landlord no later than nine (9) months from the date of issuance of the Construction Permits.   The payment obligations described in (i) – (iii) are collectively defined as “Other Payments”.  It is intended that Landlord receive a total of [                    ]* under this subsection as payment for the Deed of Easement regardless of the amount of panels approved or ultimately erected and/or the quantity of electricity generated by the System.  If the Other Payments due hereunder are not paid within ten (10) days of the time and at the place and in the manner specified, then Landlord, in addition to other available remedies, shall be entitled to receive a large charge fee of five percent (5%) of such payment, which Landlord and Tenant agree are liquidated damages (and not a penalty) for costs incurred by Landlord as a result of such late payment.   (c) Tenant shall be responsible to compensate Landlord for the loss of farming contract revenue due to this Lease.  Landlord shall provide to Tenant a schedule of his farming leases, including a description of the term of the lease, the rental income and the types of crops.  Tenant shall advise in writing which leases should be terminated by Landlord and at which times.  Tenant shall pay Landlord for the lost rents as a result of termination of each farming lease (the “Development Fee”).  The Development Fee shall not exceed [                    ]* in any year.  Tenant shall only be obligated to pay Development Fees until Tenant is obligated to commence the payment of Base Rent.   (d) All Base Rent, Additional Rent and the amounts payable by Tenant to Landlord under the terms of this Lease shall be received by Landlord on or before the due date, at the office of Landlord set forth herein in Article 15 or at such other place or places as Landlord shall from time to time designate by written notice to Tenant, without notice or prior demand therefor, and without any deduction or offset of any amount for any reason whatsoever, except as provided in this Lease.   1.4. Additional Rent.  All sums in addition to Base Rent which Tenant assumes or “Additional Rent”, and, in the event of any non-payment thereof, Landlord shall have all the rights and remedies provided for herein or by law in the case of non-payment of rent or of a breach of condition.  For purposes of this Lease, the term “Rent” shall include Base Rent and Additional Rent.     3     1.5. Net Lease.  Except as expressly set forth herein, it is the parties’ intention that the Base Rent and Additional Rent herein specified shall be net, net, net to the Landlord in each lease year, that all costs, property taxes, rollback taxes, special taxes, maintenance costs, assessments, added assessments, utility costs, insurance costs, expenses and obligations of every kind relating to the Tenant’s use and occupancy of the Premises which may arise during the term of this Lease shall be paid by Tenant and that Landlord shall be indemnified by Tenant against any such costs, expenses and obligations.   1.6. Subdivision.  In the event that Tenant’s use of the Premises or application for the Regulatory Approvals calls for a subdivision of the Premises from the East Tract Stella Property, Tenant shall cause such subdivision to be completed at its own sole cost and expense, and Landlord shall bear no costs associated with subdivision(s).  In the event Landlord desires that any portion of the East Tract Stella Property be subdivided, Landlord may cause such subdivision to be completed at its sole cost and expense and Tenant shall bear no costs associated with subdivision(s).  Subject to modification of the Premises as a result of the Regulatory Approvals, no subdivision may result in the amount of Premises being altered without the consent of both parties.  The parties shall reasonably cooperate with one another to cause subdivision approval to be granted, if requested.   ARTICLE 2 - USE   The Premises shall be used for the development and operation of a renewable energy system and related activities, as determined by Tenant and in accordance with the Regulatory Approvals (the “System”).  Landlord and his current lessees reserve the right to continue farming operations on the portions of the Premises for which Tenant is not paying Base Rent and for which no Development Fee has been paid.  The parties shall cooperate for an orderly transition from farming to development activities through a written schedule.  Landlord shall have the non-exclusive right of access, including ingress, egress and regress through the Premises to the East Tract Stella Property.  Such access rights may not be used to interfere with Tenant’s operations.  All components of the System and any personal property used by Tenant at the Premises are and shall be the sole and exclusive property of Tenant or its agents.     Tenant shall use commercially reasonable efforts to be separately billed for and shall pay before any interest or penalty shall accrue thereon, all real estate taxes and assessments and special assessments (“Taxes”) and all charges for gas, electricity, telephone and communication services and other utility services and all connection fees incurred with respect to any such services used, rendered or consumed upon the Premises during the Term hereof (collectively “Impositions”).  If separate tax bills are not able to be generated, the parties will cooperate, including with the municipal tax assessor, to pro-rate taxes for tax lots that include Excluded Property.  Tenant shall be responsible for the payment of all Taxes on the Premises beginning on the earlier of:  (i) the Rent Commencement Date; and (ii) the date the real property taxes at the Premises are increased as a result of Tenant’s development activities.  Prior to that time, Landlord shall be responsible for the payment of Taxes for the Premises.  Tenant shall be responsible for any Impositions in addition to being responsible for all roll-back taxes resulting from cessation of farmland assessments due to Tenant’s use of the Premises regardless of the date of any new assessment resulting from Tenant’s use.  Tenant shall have sole control over the negotiation of the assessment for the Premises and the prosecution and defense of any tax appeals for the Premises.     4       Tenant may construct, erect, install or demolish any buildings, structures or other improvements in, on or under the Premises, may make any other alterations or improvements to the Premises and may clear any trees or shrubbery and may store soil or materials on the Premises. In the event the installation of the System requires the removal of topsoil from the Premises, said topsoil shall be stockpiled on the Premises for use by Landlord at the end of the Term, unless the topsoil is contaminated or it is required by law to be removed.     Tenant shall, on the expiration date, or upon any earlier termination of this Lease,  or upon any re-entry by Landlord upon the Premises pursuant to the terms hereof, surrender and deliver the Premises into the possession of Landlord in the same condition as delivered to Tenant, and with the System and all improvements removed, reasonable wear and tear and damage by casualty excepted, free and clear of all liens and encumbrances other than those caused or approved by Landlord. In the event Tenant fails to remove the System or any component thereof within one (1) year following the expiration or earlier termination of this Lease, such items will be considered to have reverted to the status of building improvements belonging to the Landlord or to have been abandoned by the Tenant. All such items shall become the property of the Landlord.  Tenant shall be responsible for the payment of Rent on a pro-rated basis for that portion of the Premises it occupies following expiration.     ARTICLE 6 - INSURANCE   6.1. Casualty and Liability Insurance.  During the Term, Tenant, at Tenant’s sole cost and expense, shall:   (i) Maintain commercial general liability insurance against any claims for bodily injury, death or property damage, occurring on, in or about the Premises, or the improvements, and against contractual liability for any such claims, in an amount not less than $2,000,000 combined single limit with respect to bodily injury, death or property damage;   (ii) Maintain workers’ compensation insurance covering all persons employed in connection with any work done on or about the Premises as required by law and in amounts not less than the statutory amounts; and   (iii) Maintain such other insurance with respect to the Premises against such additional risks which at that time are commonly insured against in the case of comparable premises and improvements of similar location.   6.2. Insurers. Tenant shall deliver all policies or certificates evidencing coverage in form and from reputable companies licensed in the State of New Jersey, including renewal policies or certificates, to Landlord, or other evidence of the existence of such insurance which is reasonably satisfactory to Landlord, and, in the case of insurance about to expire, shall deliver renewal policies or certificates of insurance not less than thirty (30) days prior to their respective dates of expiration.     5     6.3. Insureds.  All policies of insurance provided for herein shall name Landlord as additional insured, as its interest may appear.   6.4. Notice of Cancellation.  Each policy or certificate therefor obtained by Tenant pursuant to this Article 6 shall contain an agreement by the insurer that such policy shall not be cancelled or modified without at least thirty (30) days’ prior written notice to Landlord and Tenant.     If Tenant shall at any time fail to pay any Imposition in accordance with the provisions of Article 3 hereof, or to take  out, pay for, maintain or deliver any of the insurance policies (or certificates of the insurers) required by Article 6 hereof, or shall fail to make any other payment or perform any other act on Tenant’s part to be made or performed under this Lease and (i) such default shall continue for a period of ten (10) days after written notice as to a default in the payment of any sum of money, or (ii) as to any default other than in the payment of money, if within thirty (30) days after notice by Landlord to Tenant, Tenant shall not have cured such default or (except with respect to monetary defaults) shall not have commenced and shall not be diligently proceeding to cure it, Landlord may (but shall be under no obligation to):   (a) Pay such Imposition; or   (b) Take out, pay for and maintain such insurance policy or policies; or   (c) Make such other payment or perform such other act, as the case may be, and take all such action as may be necessary with respect thereto.   Notwithstanding anything herein to the contrary, Landlord may, at any time, without notice, take such reasonable action as Landlord may deem necessary to assure that the Premises are covered by adequate insurance, including, without limitation of the foregoing, Landlord’s right to pay any premiums due or cure any default by Tenant under any policy at any time during the notice period provided for in Section 6.4 hereof.   All sums paid by Landlord and all costs and expenses incurred by Landlord pursuant to this Article shall constitute Additional Rent payable by Tenant under this Lease and shall be payable by Tenant to Landlord on demand.       8.1. Repairs to Premises.  Throughout the Term, Tenant, at Tenant’s sole cost and expense, will operate, maintain and take good care of the Premises, the System and any other improvements on the Premises.     6     8.2. Waste.  Tenant shall not cause or permit any waste or damage, disfigurement or injury to the Premises or the improvements, if any, or any part thereof.   8.3. Tenant’s Property.  Tenant represents and acknowledges that all of the System, equipment, fixtures, effects and property of any kind, nature and description of Tenant and of all persons claiming under Tenant, that may be on the Premises, are and shall be at the sole risk and hazard of Tenant, and if the whole or any part thereof shall be destroyed or damaged by fire, water, theft, vandalism or otherwise, no part of said loss or damage is to be charged to or borne by Landlord. Security of the Premises and the System is solely the responsibility of the Tenant and the Landlord shall not be held liable due to trespass, theft or vandalism of the System or the Premises.     9.1. Compliance with Laws.  Throughout the Term, both Landlord and Tenant, will conform to, comply with and take any and all action necessary to comply with and avoid or eliminate any violation of, any present or future law, ordinance, regulation or other requirement of any federal, state or municipal government, department, commission, board or officers having jurisdiction, which shall be applicable to the Premises, or to the use or manner of use thereof by the Tenant or occupants thereof.   9.2. Compliance with Insurance Requirements.  Tenant likewise shall observe and comply with the requirements of all policies of insurance which Tenant is required to maintain with respect to the Premises and the improvements.     Tenant shall diligently pursue, in a commercially reasonable manner, at its sole cost and expense, the receipt of all permits, waivers, and approvals it may deem necessary for the construction, operation and maintenance of the System, including but not limited local, county, state, federal and utility company approvals, in final, unappealed, and unappealable form on an acceptable study opining on the System (the “Regulatory Approvals”).  Tenant shall have a period of eighteen (18) months following November 30, 2009 (the “Approval Period”) to obtain the Regulatory Approvals.  Notwithstanding the foregoing, if Tenant is diligently pursuing the Regulatory Approvals, but has been unable to obtain all of them, Tenant shall have the right to extend the Approval Period for two (2) additional, consecutive six (6) month periods, upon written notice to Landlord delivered no later than 5:00 pm (EST) on the last day of the Approval Period, as it may be extended, such notice to be accompanied by a non-refundable payment of     [                    ]* for each six month extension (each an “Extension Fee”).  If Tenant does not obtain all Regulatory Approvals by the end of the Approval Period, as may be extended, Tenant, at its sole option, shall have the right to terminate this Lease by delivering written notice to Landlord.  If Tenant terminates this Lease pursuant to this Section, to the extent assignable, and provided they are in Tenant’s possession, Tenant shall immediately deliver to Landlord all reports and documents prepared by Tenant or on behalf of Tenant relating to the Premises and the System and Tenant shall unconditionally assign to Landlord all rights of Tenant in all plans, permits and Regulatory Approvals obtained by Tenant to the extent assignable and provided they are in Tenant’s possession, to be utilized by Landlord in Landlord’s sole discretion.  If a document, report, or plan is not in Tenant’s possession, it will use commercially reasonable efforts to cause it to be released and delivered to Landlord.     7     Notwithstanding the above, if Tenant is diligently pursuing the Regulatory Approvals, and has properly exercised both of its options to extend the Approval Period for twelve (12) months, but has been unable to obtain the Regulatory Approvals prior to expiration of the extended Approval Period, Tenant shall have the right to further extend the Approval Period beyond the thirty (30) month period for two (2) successive three (3) month periods, upon written notice to Period as it may be extended, such notice to be accompanied by a payment of [                    ]* as an Extension Fee for each three (3) month extension period.  All Extension Fees shall be non-refundable to Tenant and non-applicable to the Base Rent due hereunder and fully earned by Landlord upon its receipt.   Landlord shall have the sole authority to make all decisions related to the Regulatory Approvals or conditions imposed in connection therewith which both impact Landlord’s interest and which are beyond Tenant’s interest in the Lease.   ARTICLE 11 - INDEMNIFICATION   Tenant hereby covenants and agrees that it will indemnify, defend and hold harmless, Landlord from any and all claims, demands, suits, causes of action, losses, damages to any person or property while on the Premises, expenses and/or any and all litigation arising out of occurrences, in or at the Premises or as occasioned or suffered by Landlord or any of his employees, agents, invitees, occupants, or other persons in attendance in or at the Premises, including for any damages awarded for such claims, demands, causes of action, losses, damages and expenses or for costs or attorney’s fees, due to the negligence, error, act or omission of Tenant.     12.1. Landlord’s Representation.  Landlord represents and warrants to Tenant that Landlord has authority to execute, deliver and perform this Lease and each instrument and agreement to be executed and delivered by Landlord pursuant hereto and to take all of the actions contemplated hereby to be taken by Landlord, including, but not limited to, delivery of possession of the Premises to Tenant free and clear of all leases, subleases and subtenancies in substantially the same condition and state of repair as of the date of November 30, 2009 subject, however, to all liens, encumbrances, covenants, conditions and restrictions of record pertaining to the Premises as of November 30, 2009.  There is no pending proceeding to which Landlord is a party, or of which it has been given notice concerning any condemnation proceedings, which would materially and adversely affect the Premises.  There are no actions, suits, investigations or proceedings pending or, to the Landlord’s knowledge, threatened to be brought in any court or before any governmental agency which could have a materially adverse effect on the ability of Tenant to operate the System on the Premises or delay or prohibit possession of the Premises by Tenant as contemplated by this Lease, nor are there any unsatisfied judgments or consent decrees which could have any such effect.  Landlord, to Landlord’s knowledge, is not in default with respect to or in violation of any order, writ, injunction or decree of any court, governmental department, agency or instrumentality having jurisdiction over the Premises, which relates to the Premises.  To Landlord’s knowledge, the Premises is in compliance with all environmental laws, rules and regulations.     8     12.2. Tenant’s Representations.  Tenant represents and warrants to Landlord that Tenant has authority to execute, deliver and perform this Lease, and each instrument and agreement to be executed and delivered by Tenant pursuant hereto, and the taking by Tenant of the actions contemplated hereby including, but not limited to, taking possession of the Premises, constructing the System on the Premises.  There is no pending proceeding to which Tenant is a party, or of which it has been given notice which would materially or adversely affect Tenant’s obligations under this Lease.  There are no actions, suits, investigations or proceedings pending or, to the best of Tenant’s knowledge, System on the Premises.  Tenant is not in default with respect to or in violation of any order, writ, injunction or decree of any court, governmental department, agency or instrumentality having jurisdiction over Tenant or its property.     13.1. Event of Default.  At any time during the Term, if any one of the following events (each herein sometimes referred to as an “Event of Default” or “Default”) shall occur, the same shall constitute a Default hereunder:   (a) If Tenant shall fail to pay any Base Rent or Additional Rent provided for herein, or any other sum or charge required to be paid by Tenant hereunder, or any part thereof, or any Imposition when the same shall become due and payable, and such failure shall continue for ten (10) days after written notice thereof from Landlord; or   (b) If Tenant shall be adjudicated a bankrupt, or if any petition shall be filed against Tenant in any court whether or not pursuant to any statute of the United States or of any State, in any reorganization, composition, extension, arrangement or insolvency proceedings, and if such proceedings shall not be dismissed within sixty (60) days after the institution of same, or if any such petition shall be so filed by Tenant;   (c) If, in any proceeding, a receiver, trustee or liquidator be appointed for all or any portion of Tenant’s property, and such shall not be discharged within sixty (60) days after the appointment; or   (d) If Tenant defaults in the performance of, or compliance with, any of the terms, covenants, agreements, conditions or provisions of this Lease and such default continues beyond all applicable notice and cure periods   13.2. Landlord’s Remedies for Tenant’s Default.  Upon the happening of any one or more of the Events of Default as defined in Section 13.1, at the option of Landlord, but without further notice to Tenant, then:     9     (a) Landlord shall have the right to immediately terminate this Lease on a date specified in the notice of default to Tenant required by Section 13.1, which date shall not be less than the applicable notice and grace periods set forth in Section 13.1, and on the date specified in the notice, Tenant’s right to possession of the Premises shall cease; and Tenant shall peaceably and quietly yield and surrender to Landlord the Premises, and this Lease shall thereupon be terminated, and all of the right, title and interest of Tenant hereunder shall wholly cease and expire in the same manner and with the same force and effect as if the date specified in such notice of default was the date originally specified herein for the expiration of this Lease.  In the event of such termination, Tenant shall pay to Landlord, an amount equal to all Rent which is due and payable as of the date of such termination; and   (b) Landlord may re-enter and repossess the Premises and remove any and all persons and property therefrom and take and retain possession as permitted under applicable law and as otherwise provided in this Lease, and Tenant shall nevertheless remain liable to Landlord in a sum equal to all Additional Rent and other charges payable hereunder for the remainder of the Term, including reasonable attorneys’ fees incurred in the enforcement of Article 13.  Landlord shall have the obligation to mitigate his damages.   In the event that this Lease is terminated as a result of any defaults contained herein or shall be otherwise terminated for breach of any obligation of Tenant, Tenant covenants to pay punctually to Lessor all the sums and perform all the obligations which Tenant covenants in this Lease to pay and to perform in the same manner and to the same extent and at the same time as if this Lease had not been terminated so long as such obligations shall have not been rendered unnecessary or impossible of performance by the subsequent re-letting or other occupancy permitted by Landlord.  In calculating the amounts to be paid by Tenant under the foregoing covenant, Tenant shall be credited with the net proceeds of any rent or the value of other considerations obtained by Lessor by re-letting the Premises, after deducting all Landlord’s expenses in connection with such re-letting, including, without limitation, all repossession costs, brokerage commissions, reasonable fees for legal services and expenses of preparing the Premises for such re-letting, it being agreed by Tenant that Landlord may (i) re-let the Premises or any part or parts thereof, for a term or terms which may at Landlord’s option be equal to,  less than or   in excess of  the period which would otherwise have constituted the balance of the  term, and (ii) make such alterations, repairs and decorations in the Premises as Landlord in its sole judgment considers advisable or necessary to re-let the same.  Nothing contained in this Lease shall, however, limit or prejudice the right of Landlord to prove for and obtain in proceedings for bankruptcy or insolvency by reason of the termination of this Lease, an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which, the damages are to be proved, whether or not the amount be greater, equal to, or less than the amounts of the loss or damages referred to above.   In the event that this Lease is properly terminated by Landlord as a result of a material Tenant default, to the extent assignable, Tenant shall promptly deliver relating to the Premises and the System, that are within Tenant’s possession and Tenant shall unconditionally assign to Landlord all rights of Tenant, to the extent assignable and provided they are in Tenant’s possession, in all plans, permits and Regulatory Approvals obtained by Tenant to be utilized by Landlord in Landlord’s sole discretion.  If a document, report, or plan is not in Tenant’s possession, it will use commercially reasonable efforts to cause it to be released and delivered to Landlord.     10     (c) In addition to the above, any time after an Event of Default, all amounts due and payable following applicable notice and cure periods shall accrue interest at the  rate of five percent (5%) of the monthly amount then in default, which shall constitute Additional Rent under this Lease and shall be payable upon demand.   13.3. Remedies Not Exclusive.  Except as herein specifically provided, no right exclusive of any other right or remedy, and every right and remedy shall be or hereafter existing at law.  In the event of a breach or threatened breach by Tenant of any of the covenants or provisions hereof, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity as if reentry, summary proceedings and other remedies were not herein provided for.   13.4. Waiver of Performance.  No failure by Landlord to insist upon the strict performance of any covenant, agreement, term or condition of this Lease on the part of Tenant to be performed, or to exercise any permitted right or remedy consequent upon a Default herein, and no acceptance of payment of full or partial Additional Rent during the continuance of any such Default shall constitute a waiver by Landlord of such Default or of such covenant, agreement, term or condition.  No covenant, agreement, term or condition of this Lease to be performed or complied with by Tenant, and no Default herein, shall be waived, altered, modified or terminated except by written instrument executed by Landlord.  No waiver of any Default shall otherwise affect or alter this Lease, but each and every covenant, agreement, term and condition of this Lease shall continue in full force and effect with respect to any other then existing or subsequent Default herein.   ARTICLE 14 - CONDEMNATION   (a) If the whole of the Premises shall be taken by condemnation or other eminent domain proceedings pursuant to any law, this Lease shall terminate as of the date that possession has been taken, and neither party shall have any further rights or liabilities hereunder, except with respect to obligations and liabilities of Tenant, actual or contingent, under this Lease which expressly survive termination or which arose on or prior to such date of termination.   (b) In the event of a taking of the whole of the Premises, resulting in the termination of this Lease pursuant to the provisions of subparagraph (a) above, the Landlord and Tenant shall cooperate in applying for and in prosecuting any claim for such taking, and the award shall be distributed as follows:   (i) To Landlord, the amount awarded for its interest in the Premises; and     11     (ii) To Tenant, the value of its interest in the System and improvements, for its relocation costs, and for the loss of the leasehold estate.     (c) In the event of a taking of less than the whole of the Premises after the commencement of this Lease, all compensation paid upon such partial taking shall be distributed as follows:   (i) To Landlord, the amount awarded for its loss of interest in the Premises; and   (ii) To Tenant, the value of its loss of interest in the System and improvements that are taken and the diminution in value of its leasehold estate as determined by an independent appraiser approved by both Landlord and Tenant.   ARTICLE 15 - NOTICES   All notices, approvals, consents, demands and requests which may or are requested to be given by one party to the other party shall be in writing and shall be deemed to have been properly given if and when delivered personally, or three (3) days after sent by registered or certified mail, postage prepaid, or the next business day after sent by overnight mail service addressed as follows:     (a)   If to Landlord:   Edward Stella, Jr. 586 Route 40 Elmer, NJ 08318 With a copy to: Matthew P. Madden, Esquire Madden & Madden, P.A. 108 Kings Highway East Suite 200 Haddonfield, NJ 08033 or at such other place, and to such other persons, as Landlord may from time to time designate;     (b)   If to Tenant:   Atlantic Green Power Corporation Bayport One Suite 455 8025 Black Horse Pike W. Atlantic City, NJ  08232 Attn:   R. Scott Byrne              Robert Demos, Jr.     12   Mark D. Shapiro, Esquire Hyland Levin LLP 1000 Main Street, Suite 400 Voorhees, NJ  08043 or at such other place, and to such other persons, as Tenant may from time to time designate.     Landlord covenants and agrees that Tenant shall and may peaceably hold and enjoy the Premises.     Landlord shall deliver to Tenant a Subordination and Non-Disturbance Agreement (an “SNDA”) in form reasonably acceptable to Tenant from Landlord’s Mortgagee.  Provided that the SNDA is delivered and agreed upon, this Lease shall be subordinate to the mortgage lien and if Landlord’s interest in the Premises is acquired by any mortgagee, or purchaser at a foreclosure sale or other judicial sale, Tenant shall attorn to the transferee of or successor to Landlord’s interest in the Premises and recognize such transferee or successor as Landlord under this Lease.  Tenant waives the protection of any statute or rule of law which gives or purports to give Tenant any right to terminate this Lease or surrender possession of the Premises upon the transfer of Landlord’s interest.     Tenant may assign this Lease or sublet all or part of the Premises and finance this Lease with the prior written consent of Landlord which shall not be unreasonably withheld, conditioned or delayed; provided, however, Tenant shall not be relieved of any of its obligations under this Lease by reason of any such assignment, sublease or financing, except as provided below.  In the event of any assignment, the assignee must conform to all the terms, covenants and conditions of this Lease.  Notwithstanding the above, Tenant may assign or transfer its right, title and interest in and to the Lease to any wholly owned subsidiary, parent corporation or affiliate of Tenant, or surviving entity in the event of a merger or consolidation of Tenant with another corporation or legal entity, in the event of a sale or transfer of all or substantially all of Tenant’s assets, without Landlord’s prior written consent, provided that Tenant has given Landlord fifteen (15) days advance notice of such assignment or transfer.  In no event, however, shall any such assignment or transfer affect or reduce any of the obligations of Tenant which shall nevertheless remain fully liable as a principal, and not as a guarantor or surety for the payment of all Rent, Additional Rent and other amounts required to be paid by Tenant under this Lease and for the performance of all terms, obligations and conditions of Tenant under this Lease as if no assignment had been made.  Tenant however shall be released from all liability under the Lease if the permitted assignee has a net worth determined in accordance with generally accepted accounting principles at the time of such assignment greater than Tenant’s net worth as of the Effective Date.     13     Landlord shall be permitted to assign this Lease to a limited liability company or other entity to be formed by Landlord in which Landlord maintains a controlling interest.     19.1. Integration; Entire Agreement.  This Lease and the documents referred to herein set forth all the promises, agreements,  conditions and understandings between Landlord and Tenant relative to the leasing of the Premises, and there is no promise, agreement, condition or understanding, either oral or written, between them other than as are herein set forth.  It is further understood and agreed that, except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them.  It is the parties’ intention that this Lease amends and restates a portion of the Original Lease and supersedes it.   19.2. Severability.  Each covenant and agreement contained in this Lease shall for all purposes be construed to be a separate and independent covenant and agreement.  If any term or provision of this Lease or the application thereof to any person or circumstance shall to any extent be invalid and unenforceable, the remainder of this Lease or the application of such term or provision to persons or circumstances, other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and shall be enforced to the extent permitted by law.   19.3. Headings.  The headings to the various Articles and Sections of this Lease have been inserted for convenient reference only and shall not modify, amend or change the express terms and provisions of this Lease.   19.4. Successors and Assigns.  This Lease shall bind and inure to the benefit of Landlord and Tenant and their respective successors and assigns.   19.5. Time of the Essence.  Time is of the essence with respect to any time period for the performance of any conduct or act by either Party set forth in this Lease.   19.6. Governing Law.  This Lease shall be governed by and construed in accordance with the substantive laws of the State of New Jersey and both parties consent to the jurisdiction of the courts of the State of New Jersey with respect to any legal proceeding arising out of this Lease.   19.7. Recordation.  A memorandum of this Lease may be recorded in the land records of the county in which the Premises is located.   19.8. Counterparts.  This Lease may be executed in any number of counterparts each of which shall be an original and all, when taken together, shall constitute one and the same document.  Transmission by facsimile of an executed counterpart of this Lease shall be deemed to constitute due and sufficient delivery of such counterpart.     14     19.9. Brokers.  Landlord and Tenant each warrants to the other party that there are no claims for broker’s commissions or finder’s fees in connection with the execution of this Lease.  Each party agrees to indemnify and save harmless the other from any liability that may arise from such claims, including reasonable attorneys’ fees.     20.1. Purchase Option.  Tenant is hereby granted the right to purchase the Premises (the “Purchase Option”) while this Lease is in effect (the “Purchase Period”).  Tenant shall provide written notice to Landlord that Tenant is exercising its right to the Purchase Option (the “Purchase Notice”).  The purchase price for Premises shall be [                    ].*  Tenant shall receive a credit against the purchase price in an amount equal to one hundred percent (100%) of amounts paid to Landlord (including the Other Payments and Rent) if the Purchase Option is exercised on or before the date that is thirty-six (36) months after November 30, 2009, provided however, Tenant shall not receive credit for payments of the Development Fee or Extension Fees, but shall receive credit for any other payments from Tenant to Landlord.  If the Purchase Option is exercised between the thirty-seventh (37th) and forty-eighth (48th) month following November 30, 2009, the credit shall be reduced from one hundred percent (100%) to seventy-five percent (75%), but the credit calculation shall remain the same.  If Tenant exercises the Purchase Option after the date that is forty-eight (48) months following November 30, 2009, there shall be no credit against the Purchase Price.  Tenant must purchase the entire Premises under this Purchase Option.  If the Premises are not separately subdivided from the balance of the East Tract Stella Property, Tenant shall be responsible for subdividing the Premises from the East Tract Stella Property for sale to Tenant.  Settlement for the purchase of the Premises shall take place within ninety (90) days of either: (1) the Purchase Notice or (2) receipt of final subdivision approval creating the Premises as separate parcels, in accordance with a purchase and sale agreement containing customary and commercially reasonable terms.   20.2. Right of First Refusal.  Tenant is hereby granted a right of first refusal (the “Right of First Refusal”) with respect to the Premises.  If, at any time following the Effective Date, Landlord receives a bona fide offer to purchase the Premises or any portion thereof, which Landlord intends to accept, Landlord shall send an exact and complete copy of such offer (“Landlord’s Notice”) to Tenant and Tenant may, within twenty (20) days thereafter, elect to purchase the Premises on the same terms as those set forth in such offer.  If Landlord shall receive an offer for the purchase of the Premises, which is not consummated by delivering a deed to the offerer, the Tenant’s right of first refusal to lease and/or purchase shall remain applicable to subsequent offers.  If Landlord shall sell the Premises after a failure of Tenant to exercise its right of first refusal, such shall be subject to the Lease.  Notwithstanding the foregoing, Tenant’s right of first refusal shall not apply or extend to any sales or transfers between Landlord and any affiliates in which the principals of the Landlord are the majority shareholders to any family trusts or to the heirs of the principals of Landlord.  In the event Tenant notifies Landlord within such time of its intention to purchase the Premises, then Tenant shall be obligated to complete the purchase.  In the event, however, that Tenant fails to timely respond to Landlord’s Notice or rejects such right of purchase, then Landlord shall be free to sell and convey the Premises substantially in accordance with Landlord’s Notice.  Landlord shall not transfer, sell, convey or dispose of the Premises or any portion thereof in any manner during the Term without complying with the requirements of this Section.   [SIGNATURES ON FOLLOWING PAGE]     15     IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly   TENANT ATLANTIC GREEN POWER CORPORATION, a New Jersey corporation By: /s/ Robert Demos, Jr.                                                                            Name: Robert Demos, Jr. LANDLORD   /s/ Edward J. Stella, Jr.                                                                                16     EXHIBIT A     Description of East Tract Stella Property and Premises     [atlanticgrnex10i.gif]

Name: Commission Regulation (EEC) No 1081/90 of 27 April 1990 introducing a countervailing charge on aubergines originating in the Canary Islands Type: Regulation Date Published: nan 28. 4. 90 Official Journal of the European Communities No L 108/83 COMMISSION REGULATION (EEC) No 1081/90 of 27 April 1990 introducing a countervailing charge on aubergines originating in the Canary Islands Whereas, in accordance with Article 3 (1 ) of Commission Regulation (EEC) No 21 18/74 (*), as last amended by Regulation (EEC) No 381 1 /85 (*), the prices to be taken into consideration must be recorded on the representative markets or, in certain circumstances, on other markets ; whereas it is necessary to multiply the prices with the coefficient fixed in the first indent of Article 1 (2) of Regulation (EEC) No 830/90 ; Whereas, for aubergines originating in the Canary Islands the entry price calculated in this way has remained at least 0,6 ECU below the reference price for two consecu ­ tive market days ; whereas a countervailing charge should therefore be introduced for these aubergines ; Whereas, if the system is to operate normally, the entry price should be calculated on the following basis : ” in the case of currencies which are maintained in rela ­ tion to each other at any given moment within a band of 2,25 %, a rate of exchange based on their central rate, multiplied by the corrective factor provided for in the last paragraph of Article 3 (1 ) of Council Regula ­ tion (EEC) No 1676/85 f), as last amended by Regula ­ tion (EEC) No 1636/87 (8), ” for other currencies, an exchange rate based on the arithmetic mean of the spot market rates of each of these currencies recorded over a given period in rela ­ tion to the Community currencies referred to in the previous indent, and the aforesaid coefficient, THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to the Act of Accession of Spain and Portugal, Having regard to Council Regulation (EEC) No 1035/72 of 18 May 1972 on the common organization of the market in fruit and vegetables ('), as last amended by Regulation (EEC) No 11 19/89 (2), and in particular the second subparagraph of Article 27 (2) thereof, Whereas, in accordance with Article 4 of Protocol 2 to the Act of Accession of Spain and Portugal, the products, including aubergines, specified in Annex A to the Protocol, qualify for preferential arrangements, subject to the tariff quota determined by Council Regulation (EEC) No 1391 /87 (3) concerning certain adjustments to the arrangements applicable to the Canary Islands ; Whereas Article 25 (1 ) of Regulation (EEC) No 1035/72 provides that, if the entry price of a product imported from a third country remains at least ECU 0,6 below the reference price for two consecutive market days, a coun ­ tervailing charge must be introduced in respect of the exporting country concerned, save in exceptional circum ­ stances ; whereas this charge is equal to the difference between the reference price and the arithmetic mean of the last two entry prices available for that exporting country ; Whereas Commission Regulation (EEC) 574/90 of 7 March 1990 fixing for the 1990 marketing year the reference prices for aubergines (4) fixed the reference price for products of class I for the month of April 1990 at ECU 97,72 per 100 kilograms net ; Whereas the entry price for a given exporting country is equal to the lowest representative prices recorded for at least 30 % of the quantities from the exporting country concerned which are marketed on all representative markets for which prices are available less the duties and the charges indicated in Article 24 (3) of Regulation (EEC) No 1035/72 the provisions of Regulation (EEC) No 1391 /87 ; whereas the meaning of representative price is defined in Article 24 (2) of Regulation (EEC) No 1035/72 : HAS ADOPTED THIS REGULATION ^ Article 1 When aubergines falling within CN code 0709 30 00 and originating in the Canary Islands are imported, a counte ­ vailing charge shall be levied, the amount of which shall be fixed at ECU 10,03 per 100 kilograms net weight. However this charge shall not be levied on quantities imported into Spain within the tariff quotas fixed by Regulation (EEC) No 1391 /87. Article 2 This Regulation shall enter into force on 1 May 1990. (') OJ No L 118, 20 . 5 . 1972, p. 1 . (2) OJ No L 118 , 29 . 4. 1989, p. 12. (3) OJ No L 133, 22. 5 . 1987, p. 5. (4) OJ No L 59, 8 . 3 . 1990, p. 16. 0 OJ No L 220, 10 . 8 . 1974, p. 20. fa OJ No L 368 , 31 . 12. 1985, p. 1 . 0 OJ No L 164, 24 . 6 . 1985, p. 1 . ( «) OJ No L 153, 13 . 6 . 1987, p. 1 . No L 108/84 28 . 4. 90Official Journal of the European Communities This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels , 27 April 1990. For the Commission Ray MAO SHARRY Member of the Commission

Exhibit EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES Section 1350 Certifications In connection with the Annual Report of Eastman Chemical Company (the "Company") on Form 10-K for the year ending December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. A signed original of this written statement required by Section 906 has been provided to Eastman Chemical Company and will be retained by Eastman Chemical Company and furnished to the Securities and Exchange Commission or its staff upon request. Date:February 28, 2008 \s\Richard A.

  Exhibit 10.4   TERM NOTE (CONVERTED LOAN) $720,739.00 Chicago, Illinois   April 7, 2011   FOR VALUE RECEIVED, The Wood Energy Group, Inc., a Missouri corporation (the “Maker”) promises to pay to the order of Fifth Third Bank , an Ohio banking corporation (“Bank”) at its offices at 222 South Riverside Plaza, 32nd Floor, Chicago, Illinois 60606 or at such other place as the holder of this Note may designate in writing to the Maker, on or before September 3, 2014, the principal sum of Seven Hundred Twenty Thousand Seven Hundred Thirty Nine and No/100 Dollars ($720,739.00). This Note represents a term loan made to the Maker by the Bank pursuant 10, and is governed by, a certain Loan and Security Agreement made by and between the Maker and the Bank dared as of September 4, 2009, as amended on May 21, 2010 and April 7,2011, as the same may be further amended from time to time (the “Loan Agreement”), the terms of which are incorporated by reference and made a part of this Note as though fully set out herein. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement The outstanding amount of the Term Loan as shown on the books and records of the Bank shall be considered correct and conclusively binding on the Maker absent manifest error.   The Maker shall repay the principal amount of the Term Loan, and shall pay interest thereon, as provided in the Loan Agreement. Principal amounts repaid on the Term Loan may not be borrowed again.   All payments received from the Maker hereunder shall be applied by the Bank in accordance with the terms of the Loan Agreement.   This Note and any renewals and extensions hereof, and any other Obligations of the undersigned to the Holder hereof (the term “Holder” shall include the Bank and any subsequent holder hereof) due or to become due, now existing or hereafter contracted, and howsoever acquired by the Holder, are secured in the manner described in the Loan Agreement.   This Note is issued under the Loan Agreement and this Note and the Holder are entitled to all of the benefits provided for by the Loan Agreement or referred to therein, to which Loan Agreement reference is made for a statement thereof. Pre-payments may be made hereon only at the times, in the events and in the manner provided in the Loan Agreement.   All unpaid amounts owing on this Note or on any other Obligations immediately shall become due and payable at the option of the Holder, without notice or demand, upon the occurrence of any Event of Default.   This Note is issued in substitution for and in replacement of, but not payment of, that certain Substitute Capex Note dated May 29, 2010, payable to the order of the Bank. in the original principal amount of One Million Dollars ($1,000,000.00).           Execution Copy   In the event of default in the payment of any sums due under this Note, the Maker hereby agrees that the Bank may offset all money, bank or other deposits or credits now or hereafter held by the Bank or owed by the Bank to Maker against all amounts due under this Note or against any other amounts which may be due the Bank from the Maker,   No clause or provision contained in this Note or any documents related hereto shall be construed or shall so operate (a) to raise the interest rate set forth in this Note above the lawful maximum, if any, in effect from time to time in the applicable jurisdiction for loans to borrowers of the type, in the amount, for the purposes, and otherwise of the kind contemplated, or (b) to require the payment or the doing of any act contrary to law, but if any clause or provision contained herein shall otherwise so operate to invalidate this Note, in whole or in part, then (i) such clauses or provisions shall be deemed modified to the extent necessary to be in compliance with the law, or (ii) to the extent not possible, shall be deemed void as though not contained and the remainder of this Note and such document shall remain operative and in full force and effect.   All makers and any endorsers, guarantors, sureties, accommodation parties and all other persons liable or to become liable for all or any part of this indebtedness, jointly and severally waive diligence, presentment, protest and demand, and also notice of protest, of demand, of nonpayment, of dishonor and of maturity and also recourse or suretyship defenses generally; and they also jointly and severally hereby consent to any and all renewals, extensions or modifications of the terms of this Note, including time for payment, and further agree that any such renewals, extensions or modifications of the terms of this Note or the release or substitution of any security for the indebtedness under this Note or any other indulgences shall not affect the liability of any of the parties for the indebtedness evidenced by this Note, Any such renewals, extensions or modifications may be made without notice to any of said parties,   The Maker shall be liable to the Holder for all reasonable costs- and expenses incurred in connection with collection, whether by suit or otherwise, of any amount due under this Note, including, without limitation, attorneys’ fees, as more fully set forth in the Loan Agreement   This Note shall be governed by and construed in accordance with the laws of the State of Illinois.   The Wood Energy Group, Inc. By: /s/ Gary O. Marino   Its: CEO        

Exhibit 10.4     ZEPHYR VOTING AND GOVERNANCE AGREEMENT   by and between   NRG YIELD, INC.   and   ZEPHYR RENEWABLES LLC   Dated as of August 31, 2018       TABLE OF CONTENTS       Page         ARTICLE I     DEFINITIONS         Section 1.1. Certain Defined Terms 1 Section 1.2. Interpretation 4         ARTICLE II     CORPORATE GOVERNANCE         Section 2.1. Board Size and Composition 5 Section 2.2. Implementation of Staggered Board 5 Section 2.3. CEO 5 Section 2.4. Future Dispositions by Sponsor 5         ARTICLE III     EFFECTIVENESS AND TERMINATION         Section 3.1. Term 6 Section 3.2. Effect of Termination 6         ARTICLE IV     MISCELLANEOUS         Section 4.1. Amendments and Modifications 6 Section 4.2. Waivers, Delays or Omissions 6 Section 4.3. Successors, Assigns and Transferees 6 Section 4.4. Notices 7 Section 4.5. Entire Agreement 10 Section 4.6. Governing Law 10 Section 4.7. Submission to Jurisdiction 10 Section 4.8. Waiver of Jury Trial 10 Section 4.9. Severability 11 Section 4.10. Third-Party Beneficiaries 11 Section 4.11. Enforcement 11 Section 4.12. Titles and Subtitles 12 Section 4.13. Counterparts 12   i   VOTING AND GOVERNANCE AGREEMENT   This VOTING AND GOVERNANCE AGREEMENT (this “Agreement”), dated as of August 31, 2018 (the “Effective Date”), is entered into by and between NRG Yield, Inc., a Delaware corporation (“NYLD”), Zephyr Renewables LLC, a Delaware limited liability company (“Sponsor”), and each other member of the Sponsor Group that becomes party to this Agreement from time to time pursuant to Section 4.3 (collectively with Sponsor, the “Sponsor Parties”). Each of NYLD and the Sponsor Parties is referred to herein as a “Party”, and together as the “Parties”.   RECITALS   WHEREAS, NRG Energy, Inc., a Delaware corporation, NRG Repowering Holdings LLC, a Delaware limited liability company, and GIP III Zephyr Acquisition Partners, L.P. (“Purchaser”), a Delaware limited partnership, have entered into that certain Purchase and Sale Agreement, dated as of February 6, 2018 (the “PSA”), pursuant to which, among other things, Purchaser purchased, as of the Effective Date, one hundred percent (100%) of the outstanding membership interests of Sponsor, which owns, among other assets, (a) one hundred percent (100%) of the Class B shares and one hundred percent (100%) of the Class D shares of NYLD, and (b) one hundred percent (100%) of the Class B membership units and one hundred percent (100%) of the Class D membership units of NRG Yield LLC, a Delaware limited liability company (“NYLD LLC”); and   WHEREAS, the Parties desire to establish herein certain rights and obligations with respect to the governance of NYLD and the relationship between the Sponsor Parties (as defined below) and NYLD at and following the Effective Date.   agreements herein contained, and intending to be legally bound hereby, the Parties agree as follows:   ARTICLE I DEFINITIONS   Section 1.1.                                Certain Defined Terms.   As used herein, the following terms shall have the following meanings:   “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is in common control with, such Person.   “Agreement” has the meaning assigned to such term in the preamble.   “Beneficial owner” or “beneficially own” has the meaning given such term in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended, and a Person’s beneficial ownership of Voting Securities shall be calculated in accordance with the provisions of such rules; provided, however, that for purposes of determining beneficial ownership, (a) a   1   Person shall be deemed to be the beneficial owner of any security which may be acquired by such Person, whether within sixty (60) days or thereafter, upon the conversion, exchange or exercise of any warrants, options, rights or other securities and (b) no Person shall be deemed beneficially to own any security solely as a result of this Agreement.   “Board” means the board of directors of NYLD.   “Business Day” means any day that is not a Saturday, a Sunday or a day which is a statutory or civic holiday in the State of New York.   “Bylaws” means the third amended and restated bylaws of NYLD, as amended and restated as of February 23, 2016, and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof and the terms of the Charter or this Agreement.   “CEO” means the Chief Executive Officer of NYLD.   “Charter” means the restated certificate of incorporation of NYLD, as restated as of May 2, 2016, and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof or this Agreement.   “Common Stock” means, collectively (a) the Class A common stock, par value $0.01 per share, (b) the Class B common stock, par value $0.01 per share, (c) the Class C common stock, par value $0.01 per share, and (d) the Class D common stock, par value $0.01 per share, in each case, of NYLD.   “Conflicts Committee” means the committee of the Board designated as the “Corporate Governance, Conflicts and Nominating Committee”.   “Conflicts Committee Charter” means the charter of the Conflicts Committee, adopted on July 16, 2013, as amended on September 28, 2017, and as the same may with the terms thereof.   “Control” or “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.   “Controlled Affiliate” means, with respect to any Person, any other Person controlled by   2   such Person.   “Director” means any director of the Board.   “Effective Date” has the meaning assigned to such term in the preamble.   “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.   “Governmental Authority” means any (a) international, national, multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, including any independent electricity system operator, a regional transmission organization, national system operator or any other similar organization overseeing the transmission of electricity, (b) self-regulatory organization or stock exchange, (c) subdivision, agent, commission, board or authority of any of the foregoing, or (d) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing.   “Independent” means, with respect to any person that serves as a Director or is nominated or designated to serve as a Director at any time, the satisfaction by such person of the requirements to be “independent” under the Stock Exchange Rules and any applicable rules and regulations of the Securities and Exchange Commission (or any successor agency).   “Initial Sponsor Directors” means Nathaniel Anschuetz, Jonathan Bram, Bruce MacLennan, E. Stanley O’Neal and Scott Stanley.   “Independent Directors” means the Directors who are Independent.   “Law” means any (a) law, constitution, treaty, statute, code, ordinance, principle of common and civil law and equity, rule, regulation and municipal bylaw, whether domestic, foreign or international, (b) judicial, arbitral, administrative, ministerial, departmental and regulatory judgment, order, writ, injunction, decision and award of any Governmental Authority, and (c) policy, practice and guideline of any Governmental Authority which, although not actually having the force of law, is considered by such Governmental Authority as requiring compliance as if having the force of law, and the term “applicable”, with respect to such Law and in the context that refers to one or more Persons, means such Law that applies to such Person or Persons or its or their business, undertaking, property or securities at the relevant time and that emanates from a Governmental Authority having jurisdiction over the Person or Persons or its or   3   their business, undertaking, property or securities.   “Notice” has the meaning assigned to such term in Section 4.4(a).   “NYLD” has the meaning assigned to such term in the preamble.   “NYLD LLC” has the meaning assigned to such term in the recitals.   “Party” has the meaning assigned to such term in the preamble.   “Person” means any individual, partnership, corporation, limited liability company, joint venture, trust, association or other unincorporated organization or other entity, including any government or any agency or political subdivision thereof.   “PSA” has the meaning assigned to such term in the recitals.   “Sponsor” has the meaning assigned to such term in the preamble.   “Sponsor Directors” means (a) as of the Effective Date, the Initial Sponsor Directors, (b) following the Effective Date (as the case may be), the Initial Sponsor Directors or the Directors designated by the Sponsor and either elected or appointed to the Board pursuant to this Agreement.   “Sponsor Group” means Sponsor and its Affiliates (other than NYLD and its Controlled Affiliates).   “Sponsor Party” has the meaning assigned to such term in the preamble.   “Stock Exchange Rules” means the rules and regulations of the New York Stock Exchange or, if the shares of Common Stock are listed on another primary securities exchange, of the securities exchange on which the shares of Common Stock are listed at such time.   “Voting Securities” means, at any time, (a) the Common Stock and (b) shares of any other class of capital stock of NYLD then entitled to vote generally in the election of Directors.   Section 1.2.                                Interpretation.   (a)                                 The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Article and Section references are to this Agreement unless otherwise specified. The words “include”, “includes” and “including” are not words of limitation and shall be deemed to be followed by the words “without limitation”.   (b)                                 The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.   (c)                                  References to a party to this Agreement include its successors and   4   permitted assigns.   ARTICLE II CORPORATE GOVERNANCE   Section 2.1.                                Board Size and Composition.   At the Effective Date, the Board shall be comprised of nine (9) Directors, which shall include:   (a)                                 three (3) Independent Directors;   (b)                                 five (5) Sponsor Directors; and   (c)                                  the CEO.   Section 2.2.                                Implementation of Staggered Board.   (a)                                 Following the Effective Date, the Parties shall use their respective commercially reasonable efforts to cause to be considered at the first annual meeting of NYLD stockholders following the Effective Date a proposal for an amendment to the Charter to provide for a classified Board consisting of two (2) classes, each with a two (2)-year term (other than the initial term of the Class I Directors) and which shall be designated as Class I and Class II. Class I shall include two (2) Sponsor Directors, two (2) Independent Directors and the CEO, and Class II shall include three (3) Sponsor Directors and one (1) Independent Director. The initial term of the Class I Directors shall be one (1) year, and the initial term of the Class II Directors shall be two (2) years. Thereafter, each class of Directors shall serve for a two (2)-year term.  The Charter amendment proposal shall also provide that Article Ten, Section 1 of the Charter is revised to provide that NYLD stockholders may remove Directors before the end of their respective terms only for cause.   (b)                                 Each Sponsor Party shall vote all Voting Securities owned by it in favor of the proposal to approve an amendment to the Charter to create a classified Board as described in Section 2.2(a)   (c)                                  Each Sponsor Party agrees that it will not seek to remove any Independent Director from the Board prior to the first annual meeting of NYLD stockholders following the Effective Date (other than for cause).   Section 2.3.                                CEO. Following the Effective Date, the CEO shall be employed by NYLD and shall devote his or her full professional time and energy to NYLD. The CEO shall not be required to provide services to any Person other than NYLD and its Controlled Affiliates.   Section 2.4.                                Future Dispositions by Sponsor. In connection with any proposed sale, assignment or other transfer (in each case, directly or indirectly, by operation of law or otherwise) by a member of the Sponsor Group of record or beneficial ownership of any Voting Securities or of any membership interests of NYLD LLC (any such transaction, a “Disposition”), NYLD shall provide all cooperation and assistance and take such customary actions as may be   5   reasonably requested by Sponsor to effectuate the Disposition, including, without limitation, making available to a potential transferee of Sponsor or such member of the Sponsor Group information concerning NYLD and its subsidiaries that may be reasonably requested by Sponsor (subject to customary confidentiality arrangements). If NYLD consent to such Disposition is required or is requested by the Sponsor, NYLD will not unreasonably withhold, condition or delay such consent.   ARTICLE III EFFECTIVENESS AND TERMINATION   Section 3.1.                                Term. This Agreement shall take effect immediately upon the Effective Date and, subject to Section 4.3(d), shall terminate upon the Sponsor Parties collectively owning less than 50% of the voting interest of NYLD.   Section 3.2.                                Effect of Termination. Upon the termination of this Agreement, all provisions of this Agreement, other than this Article III and Section 1.2, Section 2.4, Section 4.4, Section 4.5, Section 4.6, Section 4.7, Section 4.8, Section 4.9, Section 4.10, Section 4.11 and Section 4.12, shall terminate and be of no further force and effect.   ARTICLE IV MISCELLANEOUS   Section 4.1.                                Amendments and Modifications. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each Party. The approval by NYLD of any such amendment, modification or supplement shall be subject to approval by a majority of the Board and a majority of the Conflicts Committee.   Section 4.2.                                Waivers, Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any Party, upon any breach, default or noncompliance by another Party under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach, default or noncompliance under this Agreement or any waiver on such Party’s part of any provisions or conditions of this Agreement, must be in writing and executed and delivered by a duly authorized officer on behalf of such Party and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law or otherwise afforded to any party, will be deemed cumulative with and not exclusive of any other remedy, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy.   Section 4.3.                                Successors, Assigns and Transferees.   (a)                                 This Agreement shall bind and inure to the benefit of and be enforceable   6   by the Parties and their respective successors and permitted assigns.   (b)                                 Upon any sale, assignment or other transfer by a Sponsor Party of record and beneficial ownership of any Voting Securities held by it to a member of the Sponsor Group that is not then a Sponsor Party, the transferor Sponsor Party shall cause the transferee member of the Sponsor Group to become a party to this Agreement by executing and delivering to NYLD a joinder to this Agreement substantially in the form of Exhibit A, which execution and delivery shall be a condition to the effectiveness of the transfer of such Voting Securities to the transferee member of the Sponsor Group. Any sale, assignment or other transfer of record and beneficial ownership of Voting Securities by a Sponsor Party to a member of the Sponsor Group that is not then a Sponsor Party that does not include the execution and delivery to NYLD of such joinder prior to or concurrently with such sale, assignment or transfer shall be void ab initio and the Voting Securities that otherwise would have been transferred to such Person shall be deemed to be held or returned to the Sponsor Party that last held such Voting Securities.   (c)                                  Upon the acquisition by any member of the Sponsor Group that is not then a Sponsor Party of record and beneficial ownership of Voting Securities from a Person that is not a Sponsor Party, each Sponsor Party shall cause such acquiring member of the Sponsor Group to become a party to this Agreement by executing and delivering to NYLD a joinder to this Agreement substantially in the form of Exhibit A as promptly as practicable following such acquisition (but in no event later than ten (10) Business Days thereafter).   (d)                                 Notwithstanding Section 3.1 and subject to the acquiror or acquirors executing and delivering to NYLD a joinder to this Agreement substantially in the form of Exhibit A, the Sponsor Parties shall have the right to assign this Agreement to and for the benefit of any Person or group (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that acquires more than 50% of the voting interest of NYLD. Following such assignment, the definitions of “Sponsor”, “Sponsor Group” and “Sponsor Party” shall be deemed to have been amended as appropriate to refer to such acquiror or acquirors.   (e)                                  Subject to Section 4.3(b), a Sponsor Party shall cease to be a party to this Agreement and shall automatically be released from all obligations hereunder in the event that such Sponsor Party is no longer a record or beneficial owner of any Voting Securities.   (f)                                   Except as set forth in Section 4.3(b), Section 4.3(c) and Section 4.3(d) above, this Agreement shall not be assigned, by operation of law or otherwise, without the prior written consent of the Parties and any such assignment or attempted assignment without such consent shall be void.   (g)                                  All Sponsor Parties at any time may, by written notice to NYLD, designate any individual Sponsor Party among them as their representative for purposes of this Agreement and such representative shall be referred to as the “Sponsor.” The Sponsor designated as of the Effective Date is Zephyr Renewables LLC.   Section 4.4.                                Notices.   (a)                                 Method of Delivery. All notices, requests, demands and other communications (each, a “Notice”) required to be provided to the other Party pursuant to this   7   Agreement shall be in writing and shall be delivered (i) in person, (ii) by certified U.S. mail, with postage prepaid and return receipt requested, (iii) by overnight courier service, (iv) by facsimile transmittal or (v) by email (which requires an acknowledgement by the recipient, it being understood that the recipient shall be obligated to confirm receipt if requested); provided, that in the case of clauses (iv) and (v), a verification copy is sent on the same day by any of the methods set forth in clauses (i), (ii) and (iii), to the other Party to this Agreement at the following address, facsimile number or email address (or to such other address, facsimile number or email address as Zephyr or Yield may designate from time to time pursuant to this Section 4.4):   If to the Sponsor Parties:   c/o Global Infrastructure Management, LLC 1345 Avenue of the Americas, 30th Floor New York, New York 10105 Attention: Jonathan Bram Fax: +1 646 282 1500 Email: jonathan.bram@global-infra.com     c/o Global Infrastructure Management, LLP The Peak 5 Wilton Road, 6th Floor London, SW1V 1AN United Kingdom Attention: Joseph Blum Fax: +44 207 798 0530 Email: joe.blum@global-infra.com     425 Lexington Avenue Attn: David Lieberman Fax: +1 212 455 2502 Email: dlieberman@stblaw.com   If to NYLD:   NRG Yield, Inc. 300 Carnegie Center, Suite 300 Princeton, NJ 08540 Attention:       Christopher Sotos Chad Plotkin Email:            christopher.sotos@nrgyield.com chad.plotkin@nrg.com   8     Crowell & Moring LLP 1001 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2595 Attn: Patrick W. Lynch E-mail: plynch@crowell.com Fax: (202) 628-5116   If to the Conflicts Committee:   Princeton, NJ 08540 Attention:       Christopher Sotos Chad Plotkin chad.plotkin@nrg.com     Sullivan & Cromwell LLP 125 Broad Street Attn: Joseph B. Frumkin Brian E. Hamilton Fax: (212) 558-3588 E-mail:        frumkinj@sullcrom.com hamiltonb@sullcrom.com   (b)                                 Receipt of Notices. All Notices sent by the Parties under this Agreement shall be deemed to have been received by the Party to whom such Notice is sent (i) in the case of delivery by hand, when delivered; (ii) in the case of delivery by first class certified mail, receipt requested, five (5) Business Days after being deposited in the mail, (iii) in the case of overnight courier service guaranteeing next day delivery, on the next Business Day after timely delivery to the courier (iv) in the case of facsimile, on acknowledgement of the addressee’s facsimile receiving equipment if received prior to 5 p.m., recipient’s time, on the Business Day of such transmittal, or on the next Business Day if received later than 5 p.m., recipient’s time or (v) in the case of an email, which requires an acknowledgement of receipt to be sent to the sender, at the time such acknowledgement is received by the sender if received prior to 5 p.m., recipient’s time, on the Business Day of such transmittal, or on the next Business Day if received later than 5 p.m., recipient’s time. If any Party attempts to deliver Notice and such recipient Party refuses delivery of such Notice or such recipient Party is no longer at such address, facsimile number or email address, and such recipient Party failed to provide the sending Party with its current address, facsimile number or email address pursuant to this Section 4.4, then such Notice shall be deemed to have been received by the recipient Party upon the sending Party’s attempted   9   delivery.   (c)                                  Change of Address. Zephyr and Yield and their respective counsel shall have the right to change their respective address, facsimile number and/or email address for the purposes of this Section 4.4 by providing a Notice of such change in address, facsimile number and/or email address as required under this Section 4.4.   Section 4.5.                                Entire Agreement. This Agreement, the Charter, the Bylaws and the Conflicts Committee Charter constitute the entire agreement, and supersede all prior written agreements, arrangements, communications, understandings, representations and warranties, both written and oral, among the Parties with respect to the subject matter hereof and thereof.   Section 4.6.                                Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be deemed to be made in and in all respects shall be interpreted, governed by and construed in accordance with, the internal laws of the State of Delaware, without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.   Section 4.7.                                Submission to Jurisdiction. EACH OF THE PARTIES EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE PERSONAL JURISDICTION OF THE DELAWARE COURT OF CHANCERY OR, TO THE EXTENT SUCH COURT DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY FEDERAL COURT OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVES, AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SUCH COURTS OR THAT SUCH COURTS ARE AN INCONVENIENT FORUM, OR THAT THE VENUE OF SUCH COURTS MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH A DELAWARE COURT OF CHANCERY OR FEDERAL COURT. EACH OF THE PARTIES FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH IN SECTION 4.4 SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS SECTION.   Section 4.8.                                Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED-FOR INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY   10   EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (d) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.8.   Section 4.9.                                Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application of such provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision, in any other jurisdiction.   Section 4.10.                         Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.   Section 4.11.                         Enforcement. THE PARTIES ACKNOWLEDGE AND AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED AND THAT MONETARY DAMAGES WOULD NOT BE AN ADEQUATE REMEDY THEREFOR. IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OR THREATENED BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF THIS AGREEMENT IN ANY COURT OF COMPETENT JURISDICTION, IN EACH CASE WITHOUT PROOF OF DAMAGES OR OTHERWISE (AND EACH PARTY HEREBY WAIVES ANY REQUIREMENT FOR THE SECURING OR POSTING OF ANY BOND IN CONNECTION WITH SUCH REMEDY), THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. THE PARTIES AGREE NOT TO ASSERT THAT A REMEDY OF SPECIFIC ENFORCEMENT IS UNENFORCEABLE, INVALID, CONTRARY TO LAW OR INEQUITABLE FOR ANY REASON, NOR TO ASSERT THAT A REMEDY OF   11   MONETARY DAMAGES WOULD PROVIDE AN ADEQUATE REMEDY.   sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.   Section 4.13.                         Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto on separate counterparts, each of which shall be deemed an original, but all the counterparts shall together constitute one and the same instrument. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto and thereto, to the extent signed and delivered by facsimile or in electronic format (e.g., “pdf” or “tif”) shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.   [The remainder of this page is intentionally left blank]   12   IN WITNESS WHEREOF, the parties hereto have executed this Voting and Governance           By: /s/ Chad Plotkin     Name: Chad Plotkin     Title: Senior Vice President & CFO       ZEPHYR RENEWABLES LLC       By: /s/ Craig Cornelius     Name: Craig Cornelius     Title: President   [Signature Page to Voting and Governance Agreement]     EXHIBIT A   Form of Joinder   JOINDER AGREEMENT   This Joinder Agreement, dated as of [·] (this “Joinder Agreement”), is a joinder to the Voting and Governance Agreement, dated as of August 31, 2018, by and among NRG Yield, Inc. (the “Company”), Zephyr Renewables LLC (the “Sponsor”) and the other parties party thereto from time to time (the “Voting and Governance meaning given to such terms in the Voting and Governance Agreement.   1.                                      [Each of] [t]he undersigned, having received and reviewed a copy of the Voting and Governance Agreement, hereby agrees to be bound by the terms, conditions and other provisions of the Voting and Governance Agreement as though it is a “Sponsor Party” under the Voting and Governance Agreement, with all attendant rights, duties and obligations stated therein applicable to the “Sponsor Parties” in the same manner as if the undersigned were party to the Voting and Governance Agreement as of the date on which it was originally executed.   2.                                      This Joinder Agreement shall be deemed to be made in and in all respects shall be interpreted, governed by and construed in accordance with, the internal laws of the State of Delaware, without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.   3.                                      This Joinder Agreement may be executed in any number of counterparts and by the parties hereto on separate counterparts shall together constitute one and the same instrument. This Joinder this Joinder Agreement, and any amendments or waivers hereto and thereto, to the “tif”) shall be treated in all manner and respects as an original agreement or     A-1   IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Joinder Agreement as of the date first written above.       [NEW PARTY]           By:         Name:       Title:           [NEW PARTY]           By:         Name:       Title:       AGREED AND ACKNOWLEDGED:                     By:       Name:     Title:       A-2

Exhibit 10.5   TAX MATTERS AGREEMENT   by and between   General Growth Properties, Inc.   and   The Howard Hughes Corporation   Dated as of November 9, 2010     TAX MATTERS AGREEMENT   THIS TAX MATTERS AGREEMENT (this “Agreement”), dated as of November 9, 2010, is by and between General Growth Properties, Inc., a Delaware corporation (“GGP”) and The Howard Hughes Corporation, a Delaware corporation (“Spinco”).  Each of GGP and Spinco is sometimes referred to herein as a “Party” and, collectively, as the “Parties.”   WHEREAS, the board of directors of GGP has determined that it is in the best interests of GGP and its shareholders to create a new publicly traded company which shall operate the Spinco Business;   WHEREAS, the board of directors of GGP and the board of directors of Spinco have approved (i) the Restructuring, and (ii) the Distribution, all as more fully described in the Separation Agreement and the other Transaction Documents;   WHEREAS, for U.S. federal income tax purposes, certain steps of the Restructuring and the Distribution are intended to qualify for tax-free treatment under Sections 351, 355, 368(a) and related provisions of the Code;   WHEREAS, GGP has received the Private Letter Ruling from the IRS to the effect that, among other things, (i) certain steps of the Restructuring and the Distribution, taken together, qualify as a transaction (a) that is described in Sections 355(a) and 368(a)(1)(G) of the Code, (b) in which the Spinco Common Stock distributed is “qualified property” under Section 361(c) of the Code and (c) in which the holders of GGP Common Shares recognize no income or gain for U.S. federal income tax purposes under Section 355 of the Code, and (ii) certain other steps of the Spinoff Plan qualify as transactions that are described in   WHEREAS, as a result of the Restructuring and Distribution, the Parties desire to enter into this Agreement to provide for certain Tax matters, including the assignment of responsibility for the preparation and filing of Tax Returns, the payment of and indemnification for Taxes (including any Taxes incurred in connection with the Restructuring and Distribution), entitlement to refunds of Taxes, and the prosecution and defense of any Tax controversies;   NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, each of the Parties mutually covenants and agrees as follows:   ARTICLE I   DEFINITIONS   Section 1.01.        General.  As used in this Agreement, the following terms shall have the following meanings:     “Accounting Firm” has the meaning set forth in Section 9.01.   “Adjusted CDND” has the meaning ascribed to it in the Investment Agreements.   “Adjustment” means any proposed or final change in the Tax liability of a taxpayer.   “Agreement” has the meaning set forth in the preamble to this Agreement.   “Common Parent” means (i) for U.S. federal income tax purposes, the “common parent corporation” of an “affiliated group” (in each case, within the meaning of Section 1504 of the Code) filing a U.S. federal consolidated income Tax Return, or (ii) for state, local or foreign Tax purposes, the common parent (or the equivalent thereof) of a Tax Group.   “Consolidated Return” means, with respect to the GGP Group and Spinco Group, respectively, the U.S. federal income Tax Return required to be filed by (i) a GGP Entity as the Common Parent or (ii) a Spinco Entity as the Common Parent.   “Cornerstone Investment Agreement” means that certain Cornerstone Investment Agreement effective as of March 31, 2010 between REP Investments LLC and GGP, as amended to the date hereof.   “Disqualifying Action” means a GGP Disqualifying Action or a Spinco Disqualifying Action.   “Due Date” means (i) with respect to a Tax Return, the date (taking into account all valid extensions) on which such Tax Return is required to be filed under applicable Law and (ii) with respect to a payment of Taxes, the date on which such payment is required to be made to avoid the incurrence of interest, penalties and/or additions to Tax.   “Effective Date” means the date of the Distribution.   “Excess Surplus Amount” has the meaning ascribed to it in the Investment Agreements.   “Final Determination” means the final resolution of liability for any Tax for any taxable period, by or as a result of (i) a final decision, judgment, decree or other order by any court of competent jurisdiction that can no longer be appealed; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the Laws of other jurisdictions, which resolves the entire Tax liability for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund or credit may be recovered by the jurisdiction imposing the Tax; or (iv) any other final resolution, including by reason of the expiration of the applicable statute of limitations or the execution of a pre-filing agreement with the IRS or other Taxing Authority.   “GGP” has the meaning set forth in the preamble to this Agreement.   2   “GGP Disqualifying Action” means (i) any action (or the failure to take any action) within its control by any GGP Entity (including entering into any agreement, understanding or arrangement or any negotiations with respect to any transaction or series of transactions) that, (ii) any event (or series of events) involving the capital stock of GGP or any assets of any GGP Entity that, or (iii) any breach by any GGP Entity of any representation, warranty or covenant made by them in the Transaction Documents that, in each case, would reasonably be expected to negate the Tax-Free Status of the Transactions; provided, however, the term “GGP Disqualifying Action” shall not include any action required by the Separation Agreement or any other Transaction Document or that is undertaken pursuant to the Restructuring or the Distribution.   “GGP Entity” means any member of the GGP Group.   “GGP Liability Percentage” means the quotient, expressed as a percentage and rounded to two (2) decimal points, of (i) the GGP Market Capitalization, divided by (ii) the sum of the GGP Market Capitalization plus the Spinco Market Capitalization.   “GGP Market Capitalization” means the product of (i) the volume-weighted average trading price per share of GGP Common Shares for the twenty (20) consecutive trading days beginning on and following the thirty-first (31st) trading day following the Effective Time, as quoted by Bloomberg Financial Services through its “Volume at Price” function, rounded to the nearest whole cent, multiplied by (ii) the arithmetic average of the number of GGP Common Shares outstanding, on a fully-diluted basis, on each of such twenty (20) trading days, rounded to two (2) decimal points.   “GGP Taxes” means any Taxes allocated to GGP pursuant to Article II.   “Income Taxes” means any Taxes based upon, measured by, or calculated with respect to net income, profits, or gains (including, but not limited to, any capital gains, minimum Tax or any Tax on items of Tax preference, but not including sales, use, real or personal property, excise, or transfer or similar Taxes).   “Indemnity Cap” has the meaning ascribed to it in Section 2.01(b).   “Indemnifying Party” means the Party from which the other Party is entitled to seek indemnification pursuant to the provisions of Article IV.   “Indemnified Party” means the Party which is entitled to seek indemnification from the other Party pursuant to the provisions of Article IV.   “Independent Firm” has the meaning set forth in Section 8.01(b).   “Information” has the meaning set forth in Section 8.01(a).   “Information Request” has the meaning set forth in Section 8.01(a).   “IRS” means the U.S. Internal Revenue Service or any successor thereto, including, but not limited to its agents, representatives, and attorneys.   3   “MPC Assets” means residential and commercial lots in the “master planned communities” owned, for federal income tax purposes, by Howard Hughes Properties, Inc. or The Hughes Corporation or related to the Emerson Master Planned Community.   “MPC Taxes” means all liability for Income Taxes in respect of sales of MPC assets sold prior to March 31, 2010.   “New GGPI” means, after the Distribution, the publicly held corporation that will indirectly acquire 100% of the outstanding common stock of GGP.   “Notified Action” has the meaning set forth in Section 7.02(a).   “Party” has the meaning set forth in the preamble to this Agreement.   “Past Practice” has the meaning set forth in Section 3.03(a)(i).   “Pre-Closing Period” means any taxable period ending on or before the Effective Date.   “Post-Closing Period” means any taxable period beginning after the Effective Date.   “Refund” means any refund (or credit in lieu thereof) of Taxes (including any overpayment of Taxes that can be refunded or, alternatively, applied to other Taxes payable), including any interest paid on or with respect to such refund of Taxes.   “Restructuring/Distribution Taxes” means any Taxes incurred in or by reason of the Restructuring or the Distribution, other than Spin-Off Taxes.  For the avoidance of doubt, Restructuring/Distribution Taxes include Taxes by reason of deferred intercompany transactions triggered by the Restructuring or the Distribution.   “Representative” has the meaning set forth in Section 8.01(b).   “Response Deadline” has the meaning set forth in Section 8.01(b).   “Separate Return” means (i) in the case of the GGP Group, a Tax Return of any GGP Entity (including any Consolidated, combined, affiliated, or unitary Tax Return) that does not include, for any portion of the relevant taxable period, any Spinco Entity that is a regarded entity for U.S. federal income tax purposes and (ii) in the case of the Spinco Group, a Tax Return of any Spinco Entity (including any Consolidated, combined, affiliated, or unitary Tax Return) and that does not include, for any portion of the relevant taxable period, any GGP Entity that is a regarded entity for U.S. federal income tax purposes.   “Separation Agreement” means the Separation Agreement by and between the Parties dated as of November 9, 2010.   “Spin-off Taxes” means any Taxes or other Liabilities incurred solely as a result of the failure of the Tax-Free Status of the Transactions.   4   “Spinco” has the meaning set forth in the preamble to this Agreement.   “Spinco Disqualifying Action” means (i) any action (or the failure to take any action) within its control by any Spinco Entity (including entering into any events) involving the capital stock of Spinco or any assets of any Spinco Entity that, or (iii) any breach by any Spinco Entity of any representation, warranty or covenant made by them in the Transaction Documents that, in each case, would provided, however, the term “Spinco Disqualifying Action” shall not include any   “Spinco Entity” means any member of the Spinco Group.   “Spinco Liability Percentage” means the difference, expressed as a percentage, of (i) one hundred percent (100%) minus (ii) the GGP Liability Percentage.   “Spinco Market Capitalization” means the product of (i) the volume-weighted average trading price per share of shares of Spinco Common Stock for the twenty (20) consecutive trading days beginning on and following the thirty-first (31st) trading day following the Effective Time, as quoted by Bloomberg Financial Services through its “Volume at Price” function, rounded to the nearest whole cent, multiplied by (ii) the arithmetic average of the number of shares of Spinco Common Stock outstanding, on a fully-diluted basis, on each of such twenty (20) trading days, rounded to two (2) decimal points.   “Spinco Taxes” means any Taxes allocated to Spinco pursuant to Article II.   “Straddle Period” means any taxable period that begins on or before and ends after the Effective Date.   “Supplemental Ruling” means a private letter ruling, without substantive qualifications, of the IRS, to the effect that a transaction will not affect the Tax-Free Status of the Transactions.   “Suspended Deductions” means the interest deductions of The Hughes Corporation suspended by Section 163(j) of the Code and available for use as of the Effective Date.  Such deductions were estimated to be approximately $406,000,000 as of December 31, 2009.  The amount of Suspended Deductions available for use as of the Effective Date will be calculated based on an interim closing of the books and records of The Hughes Corporation as of the close of business on the Effective Date.   “Tax” means (i) all taxes, charges, fees, duties, levies, imposts, or other similar assessments, imposed by any U.S. federal, state or local or foreign governmental authority, including, but not limited to, income, gross receipts, excise, property, sales, use, license, capital stock, transfer, franchise, payroll, withholding, social security, value added and other taxes, (ii) any interest, penalties or additions attributable thereto and (iii) all liabilities in respect of any   5   items described in clauses (i) or (ii) payable by reason of assumption, transferee or successor liability, operation of Law or Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision under Law).   “Tax Attributes” means net operating losses, capital losses, earnings and profits, overall foreign losses, previously taxed income, separate limitation losses, deferred or suspended losses or deductions, foreign tax credits or other tax credits and all other Tax attributes.   “Tax Detriment” shall mean an increase in the Tax liability of a Person for any Taxable Period.  Except as otherwise provided in this Agreement, a Tax Detriment shall be deemed to have been realized or suffered from a Tax Item or Items in a taxable period only if and to the extent that the Tax liability of such Person for such period is greater than it would have been if such Tax liability were determined without regard to such Tax Item.   “Tax-Free Status of the Transactions” means the tax-free treatment accorded to certain of the transactions taken in connection with the Restructuring and the Distribution as set forth in the Private Letter Ruling.   “Tax Group” means any U.S. federal, state, local or foreign affiliated, consolidated, combined, unitary or similar group or fiscal unity that joins in the filing of a single Tax Return.   “Taxing Authority” means any governmental authority or any subdivision, agency, commission or entity thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).   “Tax Item” shall mean any item of income, gain, loss, deduction, credit, recapture of credit, Tax Attribute, or any other item which may have the effect of increasing or decreasing Taxes paid or payable.   “Tax Matter” has the meaning set forth in Section 8.01(a).   “Tax Package” means all relevant Tax-related information relating to the operations of the GGP Business or the Spinco Business, as applicable, that is reasonably necessary to prepare and file the applicable Tax Return.   “Tax Proceeding” means any audit, assessment of Taxes, pre-filing agreement, other examination by any Taxing Authority, proceeding, appeal of a proceeding or litigation relating to Taxes, whether administrative or judicial, including proceedings relating to competent authority determinations.   “Tax Return” means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, or declaration of estimated Tax) supplied to, or filed with, or required to be supplied to, or filed with, a Taxing Authority with respect to Taxes.   6   “Treasury Regulations” means the final and temporary (but not proposed) income Tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).   “Unqualified Tax Opinion” means a “will” opinion, without substantive qualifications, of a nationally recognized law firm, which law firm is reasonably acceptable to GGP and Spinco, to the effect that a transaction will not affect the Tax-Free Status of the Transactions.   Section 1.02.        Additional Definitions.   (a)           Capitalized terms not defined in this Agreement shall have the meaning ascribed to them in the Separation Agreement.   ARTICLE II   ALLOCATION OF TAX LIABILITIES AND REFUNDS   Section 2.01.        Allocation of Tax Liabilities.   (a)           Income and Other Taxes.   (i)            Except as provided in Section 2.01 (d), GGP shall be liable for all Taxes of GGP Entities for all taxable periods; provided, that Spinco shall be liable for and shall indemnify GGP from and against all Taxes imposed on a GGP Entity pursuant to Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision under Law) resulting from operations of a Spinco Entity.   (ii)           Except as provided in Section 2.01(b), (c) and (d), Spinco shall be liable for all Taxes of Spinco Entities for all taxable periods; provided that (A), notwithstanding any provision of any of the Investment Agreements to the contrary, if Spinco is obligated to pay in cash (after utilization of any available Tax Attributes), in the period ending 36 months after the Effective Date, any MPC Taxes and GGP is not liable for its allocable share of such MPC Taxes pursuant to Section 2.01(b) below as a consequence of the Indemnity Cap, then GGP shall loan to Spinco the amount of such MPC Taxes not payable by GGP as a consequence of the Indemnity Cap (any such loan shall have the terms and conditions described in Section 5.17(g) of the Cornerstone Investment Agreement); and (B) GGP shall be liable for and shall indemnify Spinco from and against Taxes imposed on a Spinco Entity pursuant to Treasury Regulation similar provision under Law) resulting from operations of a GGP Entity.   (b)           MPC Taxes.  Notwithstanding any provision of any of the Investment Agreements or any provision of this Agreement or any of the other Transaction Documents to the contrary, GGP shall be liable for 93.75% of any MPC Taxes payable in cash by Spinco or any of its Subsidiaries; provided, however, that, except as provided herein with respect to interest or penalties, GGP’s liability pursuant to this Section 2.01(b) shall be capped at the lesser of (i) $303,750,000 and (ii) the then effective Excess Surplus Amount (if any) (the applicable amount described in clause (i) or clause (ii) is referred to herein as the “Indemnity Cap”).  In the event   7   that any Suspended Deductions are utilized by Spinco or any of its Subsidiaries to offset taxable income or gain realized by Spinco or any of its Subsidiaries other than taxable income attributable to sales of MPC Assets sold prior to March 31, 2010, GGP’s current and future liability, if any, pursuant to this Section 2.01(b) shall be reduced by an amount equal to 93.75% of the incremental Taxes that would have been payable in cash by Spinco or any of its Subsidiaries had such Suspended Deductions not been so utilized.  In the event that any Tax Attributes other than Suspended Deductions are utilized by Spinco or any of its Subsidiaries to offset and reduce taxable income or gain generated with respect to sales of MPC Assets sold prior to March 31, 2010, GGP shall be liable for 93.75% of any Income Taxes payable in cash by Spinco or any of its Subsidiaries that would not have been so payable had such Tax Attributes not been so utilized.  In addition, notwithstanding any provision of the Investment Documents to the contrary, GGP shall also be liable for one hundred percent (100%) of any interest or penalties attributable to any MPC Taxes which interest or penalties accrue with respect to periods ending on or before the date that Spinco assumes control of all Tax Proceedings relating to MPC Taxes pursuant to Section 6.03 (it being understood and agreed by the parties hereto that, for purposes of this Agreement, all penalties are deemed to accrue as of the date that the applicable penalty has been asserted or claimed by the IRS) and GGP’s liability for such interest or penalties shall not be limited by or subject to the Indemnity Cap.  Spinco shall use commercially reasonable efforts to utilize the Suspended Deductions as expeditiously as possible and will not take any action, the principal purpose of which is, to cause GGP’s aggregate liability pursuant to this Section 2.01(b) to be materially greater than it would have been had such action not been taken.   In order to place Spinco and GGP in the same economic position as they would have been had certain post-Effective Date determinations been made as of the Effective Date, the Indemnity Cap shall be re-calculated and adjusted to reflect any such determination using the Adjusted CDND as provided in the Investment Agreements.  Additionally, to the extent any promissory note was issued by Spinco in favor of GGP pursuant to Section 2.01(a)(ii), then, in order to place Spinco and GGP in the same economic position as they would have been had the recalculated Indemnity Cap been used for purposes of calculating such note, (i) the principal amount of such note will be reduced based on the new calculation using the Adjusted CDND, and (ii) to the extent applicable, any interest payments made by Spinco to GGP on such note prior to such re-calculation shall be refunded in respect of such reductions and accrued but unpaid interest in respect of such reductions shall be eliminated.  Consistent with the foregoing, this Section 2.01(b) shall be retroactively applied using the recalculated Indemnity Cap and any resulting amounts payable thereunder shall be promptly paid by GGP.   (c)           Restructuring/Distribution Taxes.   (i)            GGP shall be liable for all Restructuring/Distribution Taxes.   (d)           Spin-Off Taxes.   (i)            GGP shall be liable for any Spin-Off Taxes attributable to a GGP Disqualifying Action.   8   (ii)           Spinco shall be liable for any Spin-Off Taxes attributable to a Spinco Disqualifying Action.   (iii)          Any Spin-Off Taxes that are not the result of a Disqualifying Action shall be allocated between GGP and Spinco according to the GGP Liability Percentage and the Spinco Liability Percentage, respectively.   Section 2.02.        Allocation of Refunds.   (a)           Except as provided in Section 2.02(b), GGP shall be entitled to all Refunds with respect to Taxes for which GGP is or may be liable pursuant to Article II, and Spinco shall be entitled to all Refunds of Taxes for which Spinco is or may be liable pursuant to Article II.  A Party receiving a Refund to which the other Party is entitled pursuant to this Agreement shall pay the amount to which such other Party is entitled (less any costs or Taxes incurred with respect to the receipt thereof) within ten (10) days after the receipt of such Refund.   (b)           To the extent that the amount of any Refund under this Section 2.02 is later reduced by a Taxing Authority or a Tax Proceeding, such reduction shall be allocated to the Party to which such Refund was allocated pursuant to this Section 2.02 and an appropriate adjusting payment shall be made.   ARTICLE III   PREPARATION, FILING AND PAYMENT OF TAXES SHOWN DUE ON TAX RETURNS   Section 3.01.        Preparation and Filing of Tax Returns.  GGP shall prepare and file all Tax Returns of the GGP Group (including Consolidated Returns of the GGP Group) relating to any taxable period and shall pay all Taxes shown to be due and payable on such Tax Returns.  Spinco shall prepare and file all Tax Returns of the Spinco Group (including Consolidated Returns of the Spinco Group) relating to any taxable period and shall pay all Taxes shown to be due and payable on such Tax Returns.   Section 3.02.        Amended Tax Returns.   (a)           Returns Filed by GGP.  GGP shall, in its sole discretion, be permitted to amend any Tax Return that a GGP Entity is responsible for filing pursuant to Section 3.01; provided, however, that, unless otherwise required by Law or a Final Determination, GGP shall not amend any such Tax Return to the extent that any such amendment would reasonably be expected to cause a Spinco Entity to experience any Tax Detriment (including through an increase in Taxes or a loss or reduction of a Tax Attribute regardless of whether or when such Tax Attribute otherwise would have been used), without the prior written consent of Spinco, which consent shall not be unreasonably withheld or delayed.   (b)           Returns Filed by Spinco.  Spinco shall, in its sole discretion, be permitted to amend any Tax Return that a Spinco Entity is responsible for filing Law or a Final Determination, Spinco shall not amend any such Tax Return to the extent that any such amendment would reasonably   9   be expected to cause a GGP Entity to experience any Tax Detriment (including through an increase in Taxes or a loss or reduction of a Tax Attribute regardless of whether or when such Tax Attribute otherwise would have been used) without the prior written consent of GGP, which consent shall not be unreasonably withheld or delayed.   Section 3.03.        Tax Return Procedures.   (a)           Procedures Relating to the Manner of Preparing Tax Returns.   (i)            All Tax Returns prepared by GGP that include a member of the Spinco Group or by Spinco that include a member of the GGP Group shall be prepared in accordance with past practices, accounting methods, elections and conventions (“Past Practice”), unless otherwise required by Law or agreed to in writing by Spinco or GGP, as applicable.   (ii)           In the event that Past Practice is not applicable to a particular item or matter arising in a Tax Return described in Section 3.03(a)(i), GGP or Spinco, as applicable, shall determine the reporting of such item or matter provided that such reporting is more likely than not to be sustained and provided further that the other Party shall agree as to the reporting of any such item or matter which is not more likely than not to be sustained.  The Parties shall attempt in good faith to mutually resolve any disagreements, including by appointing an Accounting Firm pursuant to Section 9.01, regarding such items or matters prior to the Due Date for filing the applicable Tax Return; provided, that the failure to resolve all disagreements prior to such date shall not relieve the Indemnified Party of its obligation to file (or cause to be filed) such Tax Return.   (b)           Timing of Tax Return Filing and Payments.  All Taxes or Tax Returns required to be paid or filed pursuant to this Article III by either GGP or Spinco to or with an applicable Taxing Authority shall be paid or filed on or before the Due Date for the payment or filing of such Taxes or Tax Returns.   (c)           Review of Tax Returns.  With respect to any Tax Return including Taxes subject to indemnification pursuant to Article IV, the Indemnified Party preparing such Tax Return shall, at least 10 days prior to the Due Date applicable to such Tax Return, prepare and deliver to the Indemnifying Party a schedule showing in reasonable detail the Indemnified Party’s good faith calculation of any indemnification payments to be made by the Indemnifying Party.  The Indemnifying Party shall have the right to review and approve (such approval shall not be unreasonably withheld) such schedule.  The Parties shall attempt in good faith to mutually resolve any disagreements, including by appointing an Accounting Firm pursuant to Section 9.01, regarding such schedule prior to the Due Date for filing the applicable Tax Return; provided, however, that the failure to resolve all disagreements prior to such date shall not relieve the Indemnified Party of its obligation to file (or cause to be filed) such Tax Return.   Section 3.04.        Expenses.  Except as otherwise provided in this Agreement, each Party shall bear its own expenses incurred in connection with this Article III.   10   ARTICLE IV   INDEMNIFICATION   Section 4.01.        Indemnification by GGP.  GGP shall pay, and shall indemnify and hold the Spinco Indemnified Parties harmless from and against, without duplication, (i) all GGP Taxes, (ii) all Taxes incurred by Spinco or any Spinco Entity by reason of the breach by GGP of any of its representations, warranties or covenants hereunder, and (iii) any costs and expenses related to the foregoing (including reasonable attorneys’ fees and expenses).   Section 4.02.        Indemnification by Spinco.  Spinco shall pay, and shall indemnify and hold the GGP Indemnified Parties harmless from and against, without duplication, (i) all Spinco Taxes, (ii) all Taxes incurred by GGP or any GGP Entity by reason of the breach by Spinco of any of its representations, warranties or covenants hereunder, and (iii) any costs and expenses related to the foregoing (including reasonable attorneys’ fees and expenses).   Section 4.03.        Characterization of and Adjustments to Payments.  For all Tax purposes, GGP and Spinco agree to treat (i) any payment required by this Article IV (other than payments with respect to interest accruing after the Effective Date) as either a contribution by GGP to Spinco or a distribution by Spinco to GGP, as the case may be, occurring immediately prior to the Effective Date or as a payment of an assumed or retained liability and (ii) any payment of non-federal Taxes by or to a Taxing Authority or any payment of interest as taxable or deductible, as the case may be, to the Party entitled under this Agreement to retain such payment or required under this Agreement to make such payment, in either case except as otherwise required by applicable Law.   Section 4.04.        Timing of Indemnification Payments.  Indemnification payments in respect of any Liabilities for which an Indemnified Party is entitled to indemnification pursuant to this Article IV shall be paid by the Indemnifying Party to the Indemnified Party (i) with respect to Liabilities requiring a payment to a Taxing Authority, not later than one business day prior to the Due Date of such Liability, and (ii) with respect to any other Liabilities, as such Liabilities are incurred upon demand by the Indemnified Party, including reasonably satisfactory documentation setting forth the basis for the amount of such indemnification payment.   ARTICLE V   CARRYBACKS, AMENDMENTS AND TAX ITEMS   Section 5.01.        Carrybacks.   (a)           The carryback of any loss, credit or other Tax Attribute from any Post-Closing Period shall be in accordance with the provisions of the Code and Treasury Regulations (and any applicable state, local or foreign Laws).   (b)           To the extent permitted by applicable Law, GGP and Spinco shall waive the right to carryback any Tax Attribute of a member of their respective Groups arising in a Post-Closing Period to a Pre-Closing or Straddle Period; provided, however,  that (i) GGP and Spinco may carryback any Tax Attribute if such carryback claim is reported on a Separate Return or is   11   utilized to offset and reduce the liability for MPC Taxes, (ii) GGP may carryback any Tax Attribute if such carryback claim is reported on a Consolidated Return of the GGP Group, and (iii) Spinco may carryback any Tax Attribute if such carryback claim is reported on a Consolidated Return of the Spinco Group.   (c)           In the event that, notwithstanding Section 5.01(b), GGP or Spinco is required to carryback Tax Attributes in order to avoid losing the benefit of such Tax Attributes, the Party responsible for filing the Tax Return on which such carryback claim is reported will cooperate with the other Party in seeking from the appropriate Taxing Authority any Refund that would be allocated to the other Party pursuant to Section 2.02 and that reasonably would result from such carryback (including by filing an amended Tax Return) at the other Party’s cost and expense; provided, however, that no Party shall be required or permitted to seek such Refund to the extent that such Refund would reasonably be expected to result in a Tax Detriment to a GGP Entity or a Spinco Entity, as the case may be, (including through an increase in Taxes or a loss or reduction of a Tax Attribute regardless of whether or when such Tax Attribute otherwise would have been used), in each case, without the prior written consent of GGP or Spinco, as applicable, which consent shall not be unreasonably withheld or delayed.   Section 5.02.        Tax Items.   (a)           Tax Items arising in a Pre-Closing Period shall be allocated to the GGP Group and the Spinco Group in accordance with the Code and Treasury Regulations (and any applicable state, local and foreign Laws) and in accordance with the allocation of Tax Liabilities in Article II.  GGP and Spinco shall jointly determine the allocation of such Tax Items arising in Pre-Closing Periods as soon as reasonably practicable following the Effective Date, and hereby agree to compute all Taxes for all Straddle Periods and Post-Closing Periods consistently with that determination unless otherwise required by Law or a Final Determination.   (b)           To the extent that the amount of any Tax Item is later reduced or increased by a Taxing Authority or Tax Proceeding, such reduction or increase shall be allocated to or borne by the Party to which such Tax Item was allocated pursuant to Section 5.02(a).   Section 5.03.        Treatment of Deductions Associated with Equity-Related Compensation.   (a)           To the extent permitted by Law, solely GGP, New GGPI, or a GGP Entity, as the case may be, shall be entitled to claim any Tax deduction associated with the following items:   (i)            The exercise of any Spinco stock options or stock appreciation rights by any GGP Employee (as defined below) and the vesting of Spinco restricted stock or the vesting or settlement of Spinco restricted stock units held by any GGP Employee and the payment of any dividends with respect to such Spinco restricted stock.   (ii)           The exercise of any GGP or New GGPI stock options or stock appreciation rights by any GGP Employee and the vesting of GGP or New GGPI restricted stock or the vesting or settlement of GGP or New GGPI restricted stock units held by any GGP Employee (and payment of any dividends on such GGP restricted stock).   12   (b)           To the extent permitted by Law, solely Spinco or a Spinco Entity, as the case may be, shall be entitled to claim any Tax deduction associated with the following items:   (i)            The exercise of any GGP or New GGPI stock options or stock appreciation rights by any Spinco Employee (as defined below) and the vesting of GGP or New GGPI restricted stock or the vesting or settlement of GGP or New GGPI restricted stock units held by any Spinco Employee and the payment of any dividends on such restricted stock at any time on or after the first date any Spinco Entity employed such Spinco Employee.   (ii)           The exercise of any Spinco stock options or stock appreciation rights by any Spinco Employee and the vesting of Spinco restricted stock or the vesting or settlement of Spinco restricted stock units held by any Spinco Employee and the payment of any dividends with respect to such Spinco restricted stock.   (c)           The following terms shall have the following meanings:   (i)            “Spinco Employee” means any person employed or formerly employed by any Spinco Entity at the time of the exercise, vesting, settlement, disqualifying disposition or payment, as appropriate, unless, at such time, such person is employed by a member of the GGP Group or was more recently employed by a GGP Entity than by a Spinco Entity;   (ii)           “GGP Employee” means any person employed or formerly employed by any GGP Entity at the time of the exercise, vesting, settlement, disqualifying disposition or payment, as appropriate, unless, at such time, such person is a Spinco Employee.   ARTICLE VI   TAX PROCEEDINGS   Section 6.01.        Notification of Tax Proceedings.  Within ten (10) days after an Indemnified Party becomes aware of the commencement of a Tax Proceeding that may give rise to Taxes for which an Indemnifying Party is responsible pursuant to Article II, such Indemnified Party shall notify the Indemnifying Party of such Tax Proceeding, and thereafter shall promptly forward or make available to the Indemnifying Party copies of notices and communications relating to such Tax Proceeding.  The failure of the Indemnified Party to notify the Indemnifying Party of the commencement of any such Tax Proceeding within such ten (10) day period or promptly forward any further notices or communications shall not relieve the Indemnifying Party of any obligation which it may have to the Indemnified Party under this Agreement except to the extent that the Indemnifying Party is actually prejudiced by such failure.   Section 6.02.        Statute of Limitations.  Any extension of the statute of limitations for any Taxes or a Tax Return for any Pre-Closing Period or a Straddle Period shall be made by the Party required to file such Tax Return or pay such Taxes to a Taxing Authority; provided that to the extent such Taxes or Tax Return may result in an indemnity payment pursuant to this Agreement by the Party other than the filing Party, the Indemnifying Party may, in its reasonable discretion, require that the filing Party extend the applicable statute of limitations for such period as determined by the Indemnifying Party.   13   Section 6.03.        Tax Proceeding Procedures Generally.  Except as provided herein or in Section 6.04, each Party shall be entitled to contest, compromise and settle any Adjustment proposed, asserted or assessed pursuant to any Tax Proceeding involving a Tax reported (or that, it is asserted, should have been reported) on a Tax Return that such Party is responsible for preparing and filing (or causing to be prepared and filed) pursuant to Article III; provided, however, that (A) GGP shall retain exclusive control over all Tax Proceedings relating to MPC Taxes (whether ongoing as of the date of this Agreement or not) for so long as GGP may be liable under Section 2.01(b) for more than 50% of the total MPC Taxes at issue in the relevant Tax Proceeding, (B) GGP may not enter into any closing, settlement or other similar agreement with any Taxing Authority with respect to Tax Proceedings described in the preceding clause (A) without the prior written consent of Spinco, which consent shall not be unreasonably withheld, (C) GGP shall keep Spinco informed in a timely manner of all actions proposed to be taken by GGP and shall permit Spinco to observe (at its own cost) all proceedings with respect to such Tax Proceedings, (D) GGP shall provide Spinco with written notice reasonably in advance of, and Spinco shall have the right to attend and participate in (at its own cost), any scheduled meetings with any Taxing Authority with respect to such Tax Proceedings and (E) notwithstanding the foregoing, Spinco shall have the right (but not the obligation) to immediately assume control of any and all Tax Proceedings relating to MPC Taxes, at its own cost and expense, if, at any time prior to the conclusion of such Tax Proceeding, the potential liability of GGP for MPC Taxes under the provisions set forth in Section 2.01(b) is less than fifty percent (50%) of the total liability for MPC Taxes at issue in the relevant Tax Proceeding.   Section 6.04.        Tax Proceedings in Respect of Indemnified Taxes.   (a)           In General.  Notwithstanding Section 6.03, if the Party entitled to control a Tax Proceeding is an Indemnified Party, any defense of the Tax Proceeding shall be conducted by such Party diligently and in good faith; provided, however, that the Indemnified Party shall keep the Indemnifying Party informed in a timely manner of all actions proposed to be taken by the Indemnified Party and shall permit the Indemnifying Party to observe (at its own cost) all proceedings with respect to such Tax Proceeding; and provided further, that, if the applicable Tax Proceeding (or any Adjustments proposed or asserted in connection therewith) reasonably would be expected to give rise to an indemnity obligation in excess of $1 million, in the aggregate, then, unless waived by the Parties in writing, the Indemnified Party shall (a) prepare all correspondence or filings to be submitted to any Taxing Authority or judicial authority in a manner consistent with the Tax Return which is the subject of such Adjustment as filed and timely provide the Indemnifying Party with copies of any such correspondence or filings for the Indemnifying Party’s prior review and consent, which consent shall not be unreasonably withheld, (b) provide the Indemnifying Party with written notice reasonably in advance of, and the Indemnifying Party shall have the right to attend and participate in (at its own cost), any formally scheduled meetings with any Taxing Authority or hearings or proceedings before any judicial authority with respect to such Adjustment, (c) not enter into any closing, settlement or other similar agreement with any Taxing Authority with respect to the relevant Tax Proceeding (or any proposed Adjustment) without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld and (d) not contest any proposed or asserted Adjustment before a judicial authority unless (A) such Adjustment (separately or together with other proposed or asserted Adjustments) reasonably would be expected to give rise to Taxes payable by the Indemnified Party in an amount of $1 million or more, in the aggregate, or (B) the   14   Indemnified Party has received an opinion of a nationally recognized law firm that it is more likely than not to prevail on the merits.   (b)           Tax Proceedings in Respect of Restructuring/Distribution Taxes and Disqualifying Actions.  Notwithstanding Section 6.03, GGP and Spinco shall be entitled to jointly contest, compromise and settle any Adjustment proposed, asserted or assessed pursuant to any Tax Proceeding relating to (i) Restructuring/Distribution Taxes and (ii) any Taxes attributable to a Spinco Disqualifying Action.  Notwithstanding Section 6.03, GGP shall be entitled to contest, compromise and settle any Adjustment proposed, asserted or assessed pursuant to any Tax Proceeding relating to any Taxes attributable to a GGP Disqualifying Action and shall defend such Adjustment diligently and in good faith; provided, that, unless waived by the Parties in writing, GGP shall (i) keep Spinco informed in a timely manner of all actions taken or proposed to be taken by GGP, (ii) provide copies of all correspondence or filings to be submitted to any Taxing Authority or judicial authority to Spinco for its prior review and consent, which consent shall not be unreasonably withheld and (iii) provide Spinco with written notice reasonably in advance of, and Spinco shall have the right to attend (at its own cost), any formally scheduled meetings with any Taxing Authority or hearings or proceedings before any judicial authority.   ARTICLE VII   TAX-FREE STATUS OF THE DISTRIBUTION   Section 7.01.        Representations and Warranties.   (a)           Tax Reporting.  Each of GGP and Spinco covenants and agrees that it will not take, and will cause its respective Affiliates to refrain from taking, any position on any Tax Return that is inconsistent with the Tax-Free Status of the Transactions.   (b)           Restrictions Relating to the Distribution.  Neither GGP nor Spinco shall, nor shall GGP or Spinco permit any GGP Entity or any Spinco Entity, respectively, to, take or fail to take, as applicable, any action that constitutes a Disqualifying Action described in the definitions of GGP Disqualifying Action and Spinco Disqualifying Action, respectively.   (c)           Ordinary Course of Business.  GGP represents that neither it nor any of its Subsidiaries altered the manner in which they satisfied their respective Tax payment obligations as a result of the pendency of the Restructuring and Distribution.   Section 7.02.        Procedures Regarding Opinions and Rulings.   (a)           If Spinco notifies GGP that it desires to take one of the actions potentially described in Section 7.01 (a “Notified Action”), GGP shall cooperate with Spinco and use its reasonable best efforts to seek to obtain, as expeditiously as possible, a Supplemental Ruling or an Unqualified Tax Opinion for the purpose of permitting Spinco to take the Notified Action unless GGP shall have waived the requirement to obtain such ruling or opinion.  If such a ruling is to be sought, GGP shall apply for such ruling and GGP and Spinco shall jointly control the process of obtaining such ruling.  In no event shall GGP be required to file any such request unless Spinco represents that (i) it has read such request, and (ii) all information and   15   representations, if any, relating to any member of the Spinco Group, contained in such request documents are (subject to any qualifications therein) true, correct and complete.  Spinco shall reimburse GGP for all reasonable costs and expenses incurred by the GGP Group in obtaining a Supplemental Ruling or Unqualified Tax Opinion requested by Spinco within ten (10) days after receiving an invoice from GGP therefor.   (b)           GGP shall have the right to obtain a Supplemental Ruling or an Unqualified Tax Opinion at any time in its sole and absolute discretion. If GGP determines to obtain such ruling or opinion, Spinco shall (and shall cause each Spinco Entity to) cooperate with GGP and take any and all actions reasonably requested by GGP in connection with obtaining such ruling or opinion (including by making any representation or reasonable covenant or providing any materials requested by the IRS or the law firm issuing such opinion); provided that Spinco shall not be required to make (or cause a Spinco Entity to make) any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control. In connection with obtaining such ruling, GGP shall apply for such ruling and shall have sole and exclusive control over the process of obtaining such ruling.  GGP shall reimburse Spinco for all reasonable costs and expenses incurred by the Spinco Group in obtaining a Supplemental Ruling or Unqualified Tax Opinion requested by GGP.   (c)           Except as provided in Sections 7.02(a) and (b), no Spinco Entity shall seek any guidance from the IRS or any other Tax Authority (whether written, verbal or otherwise) at any time concerning the Restructuring or Distribution (including the impact of any transaction on the Restructuring or Distribution).   ARTICLE VIII   COOPERATION   Section 8.01.        General Cooperation.   (a)           Subject to Section 8.03, the Parties shall each cooperate fully (and each shall cause its respective Subsidiaries to cooperate fully) with all reasonable requests in writing (“Information Request”) from another Party hereto, or from an agent, representative or advisor to such Party, in connection with the preparation and filing of Tax Returns (including the preparation of Tax Packages), claims for Refunds, Tax Proceedings, and calculations of amounts required to be paid pursuant to this Agreement, in each case, related or attributable to or arising in connection with Taxes of any of the Parties or their respective Subsidiaries covered by this Agreement and the establishment of any reserve required in connection with any financial reporting (a “Tax Matter”).  Such cooperation shall include the provision of any information reasonably necessary or helpful in connection with a Tax Matter (“Information”) and shall include, without limitation, at each Party’s own cost:   (i)            the provision of any Tax Returns of the Parties and their respective Subsidiaries, books, records (including information regarding ownership and Tax basis of property), documentation and other information relating to such Tax Returns, including accompanying schedules, related work papers, and documents relating to rulings or other determinations by Taxing Authorities;   16   (ii)           the execution of any document (including any power of attorney) in connection with any Tax Proceedings of any of the Parties or their respective Subsidiaries, or the filing of a Tax Return or a Refund claim of the Parties or any of their respective Subsidiaries;   (iii)          the use of the Party’s reasonable best efforts to obtain any documentation in connection with a Tax Matter; and   (iv)          the use of the Party’s reasonable best efforts to obtain any Tax Returns (including accompanying schedules, related work papers, and documents), documents, books, records or other information in connection with the filing of any Tax Returns of any of the Parties or their Subsidiaries.   Each Party shall make its employees, advisors, and facilities available, without charge, on a reasonable and mutually convenient basis in connection with the foregoing matters.   (b)           Subject to Section 8.03, with respect to any written request by a Party in accordance with the provisions of Section 8.01(a) for access to Information or Representatives of the other Party and members of such other Party’s Tax Group in connection with any Tax Return, Tax Proceeding or otherwise in connection with this Agreement:   (i)            The responding Party shall (A) make available to the requesting Party the requested Information within the deadline reasonably agreed upon by the Parties (the Response Deadline”), and (B) following the Response Deadline, promptly (and no later than five (5) days following its discovery of such Information) make available to the requesting Party any other Information it discovers that is within its possession or control which would reasonably be expected to be relevant to the Information Request.   (ii)           In the event that the responding Party breaches its obligations under the preceding sentence by (A) failing to respond to the Information Request by the Response Deadline without providing a legitimate reason for such failure that is reasonably satisfactory to the requesting Party (provided, that the provision of Information by the responding Party after the Response Deadline pursuant to paragraph (b)(i)(B) shall not be deemed to be a breach described in this clause (A)) or (B) withholding Information within its possession or control that is material to the Information Request, then the provisions of paragraph (b)(iii) shall apply.   (iii)          In the event of a breach described in paragraph (b)(ii)(A) that is not cured within ten (10) days following the Response Deadline or an alleged breach described in Paragraph (b)(ii)(B), the requesting Party shall have the right to engage an independent consulting, accounting or law firm selected in its sole discretion (the “Independent Firm”) to access any and all books, records and other documents of the responding Party and any applicable members of such responding Party’s group or an agent, representative or advisor of the responding Party (or such members of their relevant group) (“Representative”) for purposes of identifying and extracting the Information requested by the requesting Party and the responding Party shall be required to provide to the Independent Firm access to all such books, records and other documents and Representatives; provided, that (x) the Independent Firm shall have executed, for the benefit of both parties, a non-disclosure and confidentiality agreement that   17   is in form and substance customary for similar engagements, (y) such access shall be provided by the responding Party only upon at least two (2) days prior written notice and during reasonable business hours, and (z) in the event of a breach described in paragraph (b)(ii)(A) that is not cured within ten (10) days following the Response Deadline or a breach described in paragraph (b)(ii)(B), as determined by the Independent Firm following its extraction of Information pursuant to this sentence, the costs and expenses of the Independent Firm shall be borne by (i) the responding Party in the event of a breach by the responding Party of paragraph (b)(i), or (ii) the requesting Party in the event there has been no breach by the responding Party of paragraph (b)(i).   Section 8.02.        Retention of Records.  GGP and Spinco shall retain or cause to be retained all Tax Returns, schedules and workpapers, and all material records or other documents relating thereto in their possession, until sixty (60) days after the expiration of the applicable statute of limitations (including any waivers or extensions thereof) of the taxable periods to which such Tax Returns and other documents relate or until the expiration of any additional period that any Party reasonably requests, in writing, with respect to specific material records or documents.  A Party intending to destroy any material records or documents shall provide the other Party with reasonable advance notice and the opportunity to copy or take possession of such records and documents.  The Parties hereto will notify each other in writing of any waivers or extensions of the applicable statute of limitations that may affect the period for which the foregoing records or other documents must be retained.   Section 8.03.        Confidentiality.  Notwithstanding any other provision of this Agreement or any other Transaction Document, any information obtained by either Party under this Agreement shall be kept confidential, except as may be necessary in connection with the filing of Tax Returns or claims for Refunds or in connection with any Tax Proceeding or any dispute, proceeding, suit or action concerning any issues or matters addressed in this Agreement, or unless a Party is compelled to disclose information by judicial or administrative process, or, in the opinion of its counsel, by other requirements of Law.  Spinco shall not be required to make available to GGP or its representatives any books, records, documents or other information that Spinco reasonably determines to be subject to attorney-client privilege; provided, however, that Spinco shall be required to make available to GGP any information reasonably requested by GGP pursuant to Section 8.01 in connection with the preparation of any Tax Return required to be prepared by GGP pursuant to this Agreement or any Tax Proceeding in connection with such Tax Returns.  GGP shall not be required to make available to Spinco or its representatives any books, records, documents or other information that GGP reasonably determines to be subject to attorney-client privilege; provided, however, that GGP shall be required to make available to Spinco any information reasonably requested by Spinco pursuant to Section 8.01 in connection with the preparation of any Tax Return required to be prepared by Spinco pursuant to this Agreement or any Tax Proceeding in connection with such Tax Returns.   ARTICLE IX   MISCELLANEOUS   Section 9.01.        Dispute Resolution.  Other than as set forth in Section 8.01(b)(iii), with respect to any dispute between the Parties as to any matter covered by this Agreement, the   18   Parties shall appoint a nationally recognized independent public accounting firm (the “Accounting Firm”) to resolve such dispute.  In this regard, the Accounting Firm shall make determinations with respect to the disputed items based solely on representations made by GGP and Spinco and their respective representatives, and not by independent review, and shall function only as an expert and not as an arbitrator and shall be required to make a determination in favor of one Party only.  The Parties shall require the Accounting Firm to resolve all disputes no later than thirty (30) days after the submission of such dispute to the Accounting Firm, but in no event later than the Due Date for the payment of Taxes or the filing of the applicable Tax Return, if applicable, and agree that all decisions by the Accounting Firm with respect thereto shall be final and conclusive and binding on the Parties.  The Accounting Firm shall resolve all disputes in a manner consistent with this Agreement and, to the extent not inconsistent with this Agreement, in a manner consistent with the Past Practices of GGP and its Subsidiaries, except as otherwise required by applicable Law.  The Parties shall require the Accounting Firm to render all determinations in writing and to set forth, in reasonable detail, the basis for such determination.  The fees and expenses of the Accounting Firm shall be paid by the non-prevailing Party.   Section 9.02.        Tax Sharing Agreements.  All Tax sharing, indemnification and similar agreements, written or unwritten, as between a GGP Entity, on the one hand, and a Spinco Entity, on the other (other than this Agreement or any other Transaction Document), shall be or shall have been terminated on or before the Effective Date and, after the Effective Date, no GGP Entity, on the one hand, or Spinco Entity, on the other, shall have any further rights or obligations with respect to each other under any such Tax sharing, indemnification or similar agreement.   Section 9.03.        Interest on Late Payments.  With respect to any payment between the Parties pursuant to this Agreement not made by the due date set forth in this Agreement for such payment, the outstanding amount will accrue interest at a rate per annum equal to the rate in effect for underpayments under Section 6621 of the Code from such due date to and including the earlier of the ninetieth (90th) day or the payment date and thereafter will accrue interest at a rate per annum equal to 9%.   Section 9.04.        Survival of Covenants.  Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Effective Date and remain in full force and effect in accordance with their applicable terms, provided, however, that the representations and warranties and all indemnification for Taxes shall survive until sixty (60) days following the expiration of the applicable statute of limitations (taking into account all extensions thereof), if any, of the Tax that gave rise to the indemnification, provided, further, that, in the event that notice for indemnification has been given within the applicable survival period, such indemnification shall survive until such time as such claim is finally resolved.   Section 9.05.        Termination.  This Agreement may not be terminated except by an agreement in writing signed by each of the Parties to this Agreement.   Section 9.06.        Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any Law or as a matter of public policy, all   19   other conditions and provisions of this Agreement shall remain in full force and effect.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties to this Agreement shall intent of the Parties as closely as possible in a mutually acceptable manner.   in this Agreement, this Agreement constitutes the entire agreement of the Parties hereto with respect to the subject matter of this Agreement and supersedes all prior agreements and undertakings, both written and oral, between or on behalf of the Parties hereto with respect to the subject matter of this Agreement.   Section 9.08.        Assignment; No Third-Party Beneficiaries.  This Agreement shall not be assigned by any Party without the prior written consent of the other Party hereto, except that GGP may assign (i) any or all of its rights and obligations under this Agreement to any of its Affiliates and (ii) any or all of its rights and obligations under this Agreement in connection with a sale or disposition of any assets or entities or lines of business of GGP; provided, however, that, in each case, no such assignment shall release GGP from any liability or obligation under this Agreement nor change any of the steps in the Spinoff Plan.  Except as provided in Article IV with respect to indemnified Parties, this Agreement is for the sole benefit of the Parties to this Agreement and their respective Subsidiaries and their permitted successors and assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.   Section 9.09.        Specific Performance.  In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party who is or is to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.  The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, may be inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived.  Any requirements for the securing or posting of any bond with such remedy are waived by the Parties to this Agreement.   Section 9.10.        Amendment.  No provision of this Agreement may be amended or modified except by a written instrument signed by the Parties to this Agreement.  No waiver by any Party of any provision of this Agreement shall be effective unless explicitly set forth in writing and executed by the Party so waiving.  The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.   Section 9.11.        Rules of Construction.  Interpretation of this Agreement shall be governed by the following rules of construction:  (i) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires; (ii) references to the terms Article, Section, paragraph, clause, Exhibit and   20   Schedule are references to the Articles, Sections, paragraphs, clauses, exhibits and schedules of this Agreement unless otherwise specified; (iii) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement, including the Schedules and Exhibits hereto; (iv) references to “$” shall mean U.S. dollars; (v) the word “including” and words of similar import when used in this Agreement shall mean “including without limitation,” unless otherwise specified; (vi) the word “or” shall not be exclusive; (vii) references to “written” or “in writing” include in electronic form; (viii) provisions shall apply, when appropriate, to successive events and transactions; (ix) the table of contents and headings contained in this meaning or interpretation of this Agreement; (x) GGP and Spinco have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or burdening either Party by virtue of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement; and (xi) a reference to any Person includes such Person’s successors and permitted assigns.   Section 9.12.        Counterparts.  This Agreement may be executed in one or more counterparts each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) shall be as effective as delivery of a manually executed counterpart of any such Agreement.   Section 9.13.        Coordination with the Employee Matters Agreement.  To the extent any covenants or agreements between the Parties with respect to employee withholding Taxes are set forth in the Employee Matters Agreement, such Taxes shall be governed exclusively by the Employee Matters Agreement and not by this Agreement.   Section 9.14.        Coordination with the Separation Agreement.  To the extent any representations, warranties, covenants or agreements between the parties with respect to Taxes or other Tax matters are set forth in this Agreement, such Taxes and other Tax matters shall be governed exclusively by this Agreement and not by the Separation Agreement.   Section 9.15.        Effective Date.  This Agreement shall become effective only upon the occurrence of the Distribution.   [The remainder of this page is intentionally left blank.]   21   IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed     GENERAL GROWTH PROPERTIES, INC.             By: /s/ Thomas H. Nolan, Jr.   Name: Thomas H. Nolan, Jr.   Title: President             THE HOWARD HUGHES CORPORATION             By: /s/ David Arthur   Name: David Arthur   Title: Interim Chief Executive Officer   Signature Page to Tax Matters Agreement  

Name: Commission Regulation (EC) No 1799/95 of 25 July 1995 amending Regulation (EC) No 2715/94 laying down specific rules on compensatory payments for certain irrigated arable crops Type: Regulation Subject Matter: agricultural structures and production; economic policy; agricultural policy; Europe; plant product; cultivation of agricultural land Date Published: nan No L 174/22 | EN | Official Journal of the European Communities 26. 7. 95 COMMISSION REGULATION (EC) No 1799/95 of 25 July 1995 amending Regulation (EC) No 2715/94 laying down specific rules on compensatory payments for certain irrigated arable crops THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No 1765/92 of 30 June 1992 establishing a support system for produ ­ cers of certain arable crops ('), as last amended by Commission Regulation (EC) No 1 664/95 (2), and in parti ­ cular Article 12 thereof, Whereas the French regionalization plan established in conformity to Article 3 of Regulation (EEC) No 1765/92 for application from the 1995/96 marketing year, limits eligibility for 'irrigated' compensatory payments to a single oil seed crop, namely soya ; whereas it is therefore necessary to fix a specific ceiling for that crop and to amend Commission Regulation (EC) No 2715/94 (3); whereas the measures provided for in this Regulation are in accordance with the opinion of the Joint Management Committee for Cereals, Oils and Fats and Dried Fodder, HAS ADOPTED THIS REGULATION : Article 1 In the Annex to Regulation (EC) No 2715/94, the table under the heading 'France' is hereby replaced by the table in the Annex hereto. Article 2 This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities. It shall be applicable from the 1995/96 marketing year. This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels, 25 July 1995. For the Commission Franz FISCHLER Member of the Commission (>) OJ No L 181 , 1 . 7. 1992, p. 12. (2) OJ No L 158, 8 . 7. 1995, p. 13 . (3) OJ No L 288 , 9. 11 . 1994, p. 11 . 26. 7. 95 | EN | Official Journal of the European Communities No L 174/23 ANNEX FRANCE (in hectares) Irrigated soya ceiling Zone I 17 000 Zone II 78 000

Name: Commission Regulation (EEC) No 233/90 of 29 January 1990 fixing the export refunds on fruit and vegetables Type: Regulation Date Published: nan No L 26/14 Official Journal of the European Communities 30. 1 . 90 COMMISSION REGULATION (EEC) No 233/90 of 29 January 1990 fixing the export refunds on fruit and vegetables THE COMMISSION OF THE EUROPEAN COMMUNITIES, Whereas the situation with regard to international trade or the specific requirements of certain markets may make it necessary to vary the refund for a given product according to the destination of that product ;Having regard to the Treaty establishing the European Economic Community, Having regard to the Act of Accession of Spain and Portugal, Whereas tomatoes, fresh lemons, sweet freshoranges and apples, of the common quality standards 'Extra' Class, Class I and Class II, 'Extra' Class and Class I table grapes, almonds and hazelnuts, and unshelled walnuts may at present be exported in economically significant quanti ­ ties ;Having regard to Council Regulation (EEC) No 1035/72 of 18 May 1972 on the common organization of the market in fruit and vegetables ('), as last amended by Regulation (EEC) No 1119/89 (2), and in particular Article 30 (4) thereof, Whereas, if the refund system is to operate normally, refunds should be calculated on the following basis : Having regard to the opinion of the Monetary Committee, Whereas Article 30 of Regulation (EEC) No 1035/72 provides that, to the extent necessary to allow econom ­ ically significant quantities to be exported, the difference between prices in international trade for the products referred to in that Article and prices for the products within the Community may be covered by an export refund ; ” in the case of currencies which are maintained in rela ­ tion to each other at any given moment within a band of 2,25 %, a rate of exchange based on their central rate, multiplied by the coefficient provided for in the last indent of Article 3 (1 ) of Council Regulation (EEC) No 1676/85 0, as last amended by Regulation (EEC) No 1636/87 (*), ” for other currencies, an exchange rate based on the arithmetic mean of the spot market rates of each of these currencies recorded over a given period in rela ­ tion to the Community currencies referred to in the previous indent, and the aforesaid coefficient ;Whereas Article 2 of Council Regulation (EEC) No2518/69 of 9 December 1969 laying down general rules for the granting of refunds on exports of fruit and vegeta ­ bles and criteria for fixing their amounts (3), as amended by Regulation (EEC) No 2455/72 (4), provides that when refunds are being fixed, account must be taken of the existing situation and future trends with regard to prices and availabilities of fruit and vegetables on the Commu ­ nity market on the one hand and prices in international trade on the other ; whereas account must also be taken of the costs indicated in (b) of that Article and of the economic aspects of the proposed exports ; Whereas it follows from applying these detailed rules to the present market situation and to its future trends, and in particular to quotations and prices for fruit and vegeta ­ bles in the Community and in international trade that the refunds should be as set out in the Annex hereto ; Whereas the obligations under Article 5 ( 1 ) (b) of Commission Regulation (EEC) No 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agri ­ cultural products f), as last amended by Regulation (EEC) No 3993/88 ( ®), may be relaxed in the case of exports to non-member countries outside Europe ; whereas, in such a case, Article 19 ( 1 ) (c) of Regulation (EEC) No 3665/87 may be applied ; Whereas, pursuant to Article 3 of Regulation (EEC) No 2518/69, when prices on the Community market are being determined account must be taken of the prices which are most favourable from the exportation point of view ; whereas, when prices in international trade are being determined, the quotations and prices referred to in paragraph 2 of that Article must be taken into account ; (') OJ No L 118, 20 . 5. 1972, p. 1 . (2 OJ No L 118, 29. 4. 1989, p. 12. 0 OJ No L 164, 24. 6 . 1985, p. 1 . ( «) OJ No L 153, 13. 6. 1987, p. 1 . o OJ No L 351 , 14. 12. 1987, p. 1 . (8) OJ No L 354, 22. 12. 1988, p. 22. (3) OJ No L 318, 18. 12. 1969, p . 17 . b) OJ No L 266, 25. 11 . 1972, p . 7. 30. 1 . 90 Official Journal of the European Communities No L 26/15 HAS ADOPTED THIS REGULATION : Article 1 1 . The export refunds on fruit and vegetables shall be as set out in column I of the Annex hereto. However, the refunds applicable on products harvested in Spain shall be those given in column II of the Annex. 2. The provisions of Articles 5 (l)(b) and 19 (l)(c) of Regulation (EEC) No 3665/87 shall apply to exports of sweet oranges, lemons, table grapes, walnuts in shell, shelled hazelnuts and apples as set out in the Annex hereto. Whereas, for Spain and Portugal, the Act of Accession introduced transitional measures by phases and stages respectively ; Whereas for Spain the second stage of the transitional period began on 1 January 1990 ; whereas pursuant to Article 87 of the Act of Accession when the refunds are set for Spanish products account is to be taken for each product of the price difference that is economically justified ; Whereas Article 275 provides for a special procedure for the grant of refunds on exports to Portugal from the Community as constituted at 31 December 1985 ; whereas, pursuant to Article 283, the Portuguese Republic is to be authorized to maintain, during the first stage, for exports to third countries, the arrangements in force before its accession for such trade* including any export aid or subsidies ; whereas, under those circumstances, refunds for such exports should not be provided for in this Regulation ; Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Fruit and Vegetables, Article 2 This Regulation shall enter into force on 1 February 1990. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 29 January 1990. For the Commission Ray MAC SHARRY Member of the Commission No L 26/16 Official Journal of the European Communities 30. 1 . 90 ANNEX to the Commission Regulation of. 29 January 1990 fixing the export refunds on fruit and vegetables (ECU/100 kg net) Product code Destination of refund (') Amounts of refunds f) Community as constituted on 31 December 1985 (I) Spain (II) 0702 00 10 100 - 4,50 I 0702 00 10 900 ” ” ” ¢ 0702 00 90 100 4,50 ” 0702 00 90 900 ” ” ” . 080212 90 000 07 9,67 . 9,67 0802 21 00 000 07 11,30 11,30 0802 22 00 000 07 21,80 21,80 0802 31 00 000 07 14,00 14,00 0805 10 11 100 01 11,00 5,88 06 11,00 - 5,88 0805 10 11 300 01 11,00 5,88 06 11,00 5,88 0805 10 11 900 ” ” ” 080510 15 100 01 11,00 5,88 06 11,00 5,88 0805 10 15 300 01 11,00 5,88 06 11,00 5,88 0805 10 15 900 ” ” ” 0805 10 19 100 01 11,00 5,88 I 06 11,00 5,88 0805 10 19 300 01 11,00 5,88 06 11,00 5,88 0805 10 19 900 ” ” ” 0805 10 21 100 01 11,00 5,88 l 06 11,00 5,88 0805 10 21 300 01 11,00 5,88 06 11,00 5,88 0805 10 21 900 ” . ” 0805 10 25 100 01 11,00 5,88 l 06 11,00 5,88 0805 10 25 300 01 11,00 5,88 06 11,00 5,88 0805 10 25 900 ” – – ” ' ” 0805 10 29 100 01 11,00 5,88 I 06 11,00 5,88 0805 10 29 300 01 11,00 . 5,88 06 11,00 5,88 0805 10 29 900 ” ” ” 0805 10 31 100 01 11,00 5,88 l 06 11,00 5,88 0805 10 31 300 01 11,00 5,88 \ 06 11,00 5,88 j 0805 10 31 900 ” ” ” 0805 10 35 100 01 11,00 5,88 06 11,00 5,88 0805 10 35 300 01 11,00 5,88 06 11,00 5,88 0805 10 35 900 ” ” ” 30. 1 . 90 Official Journal of the European Communities No L 26/17 (ECU/100 kg net) Product code Destination of refund (') Amounts of refunds (*) Community as constituted on 31 December 1985(1) Spain (II) 0805 10 39 100 01 11,00 5,88 06 11,00 5,88 0805 10 39 300 01 11,00 5,88 06 11,00 5,88 0805 10 39 900 ” ” 0805 10 41 100 01 11,00 5,88 \ 06 11,00 5,88 0805 10 41 300 01 11,00 5,88 06 11,00 5,88 0805 10 41 900 ” ” ” 0805 10 45 100 01 11,00 5,88 06 11,00 5,88 0805 10 45 300 01 11,00 5,88 06 11,00 5,88 0805 10 45 900 ” ” ” 080510 49 100 01 11,00 5,88 06 11,00 5,88 0805 10 49 300 01 11,00 5,88 06 11,00 5,88 0805 10 49 900 ” ” ” 0805 20 50 100 ” ” ” 0805 20 50 900 ” ” ” 0805 30 10 100 01 15,00 3,92 08 10,00 3,92 0805 30 10 900 ” . : ” 0806 10 11 100 07 10,50 10,50 0806 10 11 300 07 10,50 10,50 0806 10 11 900 ” ' ” 0806 10 15 100 07 10,50 10,50 0806 10 15 300 07 10,50 10,50 080610 15 900 ” ” ” – 0806 10 19 100 07 10,50 10,50 0806 10 19 300 07 10,50 10,50 080610 19 900 ” ” ” 0808 10 91 100 ” ” 08081091 910 02 14,00 5,00 I 03 4,50 ” 04 ” ” 0808 10 91 990 i ” ” ' 0808 10 93 100 ” ” ” 0808 10 93 910 02 14,00 5,00 l 03 4,50 ” l 04 ” ” 0808 10 93990 ” ” ” 0808 10 99100 ” ” ” 0808 10 99 910 02 14,00 5,00 03 4,50 ” 04 ” ” 0808 10 99 990 ” ” ” 0809 30 00 110 05 ” - 0809 30 00 190 ” ” ” 0809 30 00 900 05 ” ” No L 26/18 Official Journal of the European Communities 30 . 1 . 90 (') The destinations are as follows : 01 countries or States with a planned economy in central or eastern Europe and Yugoslavia, 02 Botswana, Lesotho, Swaziland, Zambia, Malawi, Mozambique, Tanzania, Kenya, Rwanda, Burundi, Uganda, Somalia, Madagascar, Comoros, Mauritius, Sudan, Ethiopia, Djibouti, the countries of the Arabian peninsu ­ la including the territories attached thereto (Saudi Arabia, Bahrain, Qatar, Kuwait, Oman, United Arab Emirates (Abu Dhabi, Dubai, Sharjah, Ajman, Umm al Qaiwain, Fujairah and Ras al Khaimah), Yemen Arab Republic and People's Democratic Republic of Yemen), Iran, Iraq and Jordan, 03 countries and territories of Africa other than those mentioned above and South Africa, Syria, countries with a planned economy in central or eastern Europe, Yugoslavia, Bolivia, Brazil, Venezuela, Peru, Panama, Ecuador, Colombia, Iceland, Norway, Sweden, Austria, the Faroe Islands, Finland, Greenland anu Malta, 04 Hong Kong, Singapore, Malaysia, Indonesia, Thailand and Taiwan, 05 all destinations excluding Switzerland and Austria, 06 Austria, Switzerland, Finland, Sweden, Greenland, Norway, Iceland and Malta, 07 All destinations excepting that part of Community territory located outside the customs territory of the Community, 08 Other destination excepting that part of Community territory located outside the customs territory of the Community. (2) These refunds shall not apply to exports to Portugal from the Community as constituted at 31 December 1985 and Spain.

EXHIBIT 32.2 CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION -OXLEY ACT OF 2002 In connection with the quarterly report of Berry Plastics Corporation (the “Registrant”) on Form 10-Q for the quarter ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James M. Kratochvil, the Executive Vice-President, Chief Financial Officer, Secretary and Assistant Treasurer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. /s/ James M. Kratochvil James M. Kratochvil Chief Financial Officer (Principal Financial and Accounting Officer) Date:May 14, 2012

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 15, 2013 Structured Obligations Corporation (Exact name of registrant as specified in its charter) Delaware 001-32013 13-3741177 (State or other jurisdiction of incorporation or organization) (Commission File Number) (IRS Employer Identification Number) 270 Park Avenue, New York, New York10013 (Address of principal executive offices)(Zip Code) Registrant's telephone number including area code (212) 834-6000. Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: ¨ Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425) ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12) ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c)) 1 Section 8 - Other Events Item 8.01 Other Events. This current report on Form 8-K relates to a distribution made to holders of the Certificates issued by the Select Notes Trust LT 2003-3. Each issuer of an underlying security, or guarantor thereof, or successor thereto, as applicable, which represents ten percent (10%) or more of the trust is subject to the information reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act").Periodic reports and other information required to be filed pursuant to the Exchange Act, by an issuer of an underlying security, or guarantor thereof, or successor thereto, as applicable, may be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission (the "Commission") at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a site on the World Wide Web at "http://www.sec.gov" at which users can view and download copies of reports, proxy and information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval system. Neither Structured Obligations Corporation nor the trustee has participated in the preparation of such reporting documents, or made any due diligence investigation with respect to the information provided therein. Neither Structured Obligations Corporation nor the trustee has verified the accuracy or completeness of such documents or reports. There can be no assurance that events affecting an issuer of an underlying security, or guarantor thereof, or successor thereto, as applicable, or an underlying security have not occurred or have not yet been publicly disclosed which would affect the accuracy or completeness of the publicly available documents described above. Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits. (c) Exhibits: 1. Trustee's Report with respect to the April 15, 2013 Distribution Date for the Select Notes Trust LT 2003-3 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. By:/s/Chadwick S. Parson Name:Chadwick S. Parson Title:Managing Director and President April 15, 2013 3 EXHIBIT INDEX Exhibit Page 1 Trustee's Report with respect to the April 15, 2013 Distribution Date for the Select Notes Trust LT 2003-3 5 4 Exhibit 1 To the Holders of: Select Notes Trust LT 2003-3 Long Term CertificatesSeries 2003-3 *CUSIP: 81619PAC1 U.S. Bank Trust National Association, as Trustee for the Select Notes Trust LT 2003-3 (the "Trust"), hereby gives notice with respect to Interest Period commencing on the day after March 15, 2013 and including the April 15, 2013 Interest Distribution Date (the "Interest Period") in respect of the April 15, 2013 Interest Distribution Date (the "Interest Distribution Date") as follows: 1. The amount of interest received by the Trust during the Interest Period is as set forth below (each Certificateholder's pro rata portion of this amount is the amount to be included in such Certificate holder's Form 1099). $ 0.00 a. Per certificate held amount of interest income to be included in Form 1099 for the year ending December 31, 2012 is set forth below. $ 0.000000 2. The total of all interest distributed to Certificate holders during the Interest Period is set forth below. $ 169,020.00 3. Total amount of advances made to the Trustee on the Interest Distribution Date is$ 169,021.00 4. Total amount of advances repaid to the Advancing Party during the Interest Period is$ 0.00 5. The net total of advances made during the Interest Period is$ 169,021.00 a. The net amount owed by the Trust to the Advancing Party on the Interest Distribution Date is set forth below. $ 479,053.83 6. The total amount of interest expense paid to the Advancing Party during the Interest Period is set forth below (each Certificateholder's pro rata portion of this amount should be included in a footnote to such Certificateholder's Form 1099 indicating that such amount should constitute investment indebtedness interest, which can be deducted by non-corporate taxpayers to the extent of such net investment income). $ 12,500.00 a. Per certificate held amount of interest expense to be included in Form 1099 for the year ending December 31, 2012 is set forth below. $ 0.351617 7. At the close of business on the Interest Distribution Date, there were 35,550 Certificates outstanding. 8. Payments made on Underlying Securities during the Interest period are as set forth below. $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 U.S. Bank Trust National Association, as Trustee *The Trustee shall not be held responsible for the selection or use of the CUSIP number nor is any representation made as to its correctness.It is included solely for the convenience of the Holders. 5

Exhibit 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION -OXLEY ACT OF 2002 Based on my knowledge, I, Peter P. Gassner, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Veeva Systems Inc. on Form 10-Q for the quarterly period ended April 30, 2017 fully complies with the requirements of Section13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Veeva Systems Inc. /s/ PETER P. GASSNER Peter P. Gassner Chief Executive Officer and Director (Principal Executive Officer) Date: June 8, 2017

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported):June 19, 2008 Charter Communications, Inc. (Exact name of registrant as specified in its charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 000-27927 43-1857213 (Commission File Number) (I.R.S. Employer Identification Number) 12405 Powerscourt Drive St. Louis, Missouri 63131 (Address of principal executive offices including zip code) (314) 965-0555 (Registrant's telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 5.02 DEPARTURE OF CERTAIN DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. On June 19, 2008, Charter Communications, Inc. ("Charter") announced that it has named Eloise E. Schmitz Executive Vice President and Chief Financial Officer of Charter effective July 1, 2008. Ms. Schmitz has served as Senior Vice President and Interim Chief Financial Officer since April 4, 2008. Prior to assuming the Interim Chief Financial Officer role, Ms. Schmitz, 43, served as Senior Vice President, Strategic Planning.Ms. Schmitz joined Charter in 1998 and has served in roles of increasing responsibility in finance and strategic planning since that time. Charter also announced that Robert A.

Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing ING LOGO AMERICAS US Legal Services Maria Stewart Prospectus Unit (860) 723-2234 Fax: (860) 723-2215 Maria.Stewart@us.ing.com December 22, 2006 Securities and Exchange Commission treet, N.E. Washington, DC 20549 Attention: Filing Desk Re: ING Life Insurance and Annuity Company and its Variable Annuity Account C Prospectus Title: ING express Variable Annuity File Nos.: 333-129091 and 811-02513 Rule 497(j) Filing Ladies and Gentlemen: Pursuant to Rule 497(j) under the Securities Act of 1933 (the “33 Act”), this is to certify that the Supplement to the Contract Prospectus and Statement of Additional Information contained in Post-Effective Amendment No. 2 to the Registration Statement on Form N-4 (“Amendment No. 2”) for Variable Annuity Account C of ING Life Insurance and Annuity Company (the “Registrant”) that would have been filed pursuant to Rule 497(c) under the 33 Act would not have differed from that contained in Amendment No. 2 which was declared effective on December 20, 2006. The text of Amendment No. 2 was filed electronically on December 20, 2006. If you have any questions regarding this submission, please contact the undersigned or Michael Pignatella at 860-723-2239. Sincerely, /s/ Maria R. Stewart Maria R. Stewart Hartford Site ING North America Insurance Corporation 151 Farmington Avenue, TS31 Hartford, CT 06156-8975

EXHIBIT 10.2 DATED 15 AUGUST, 2006 SOTHEBY’S and ROBIN WOODHEAD SERVICE AGREEMENT TABLE OF CONTENTS       1 DEFINITIONS AND INTERPRETATION 1       2 TERM OF EMPLOYMENT 2       3 NOTICE 2       4 REMUNERATION 2       5 PENSION SCHEME 2       6 VALUE CREATION PLAN 3       7 OTHER BENEFITS 3       8 COMPANY CAR/CAR ALLOWANCE 3       9 ILLNESS 3       10 TERMINATION OF EMPLOYMENT 4       11 SUSPENSION AND GARDEN LEAVE 5       12 RESIGNATION AND RETURN OF COMPANY PROPERTY 5       13 RECONSTRUCTION OR AMALGAMATION 6       14 SEVERANCE AGREEMENT 6       15 SEVERABILITY 6       16 THIRD PARTIES 6       17 STATUTORY INFORMATION 6       18 MISCELLANEOUS 6       SCHEDULE Statement Of Particulars Pursuant To The Employment Rights Act 1996 8       EXHIBIT A 9 THIS AGREEMENT is made on 15 August, 2006 BETWEEN:     (1) SOTHEBY’S whose registered office is at 34-35 New Bond Street, London, W1A 2AA (the “Company”); and     (2) ROBIN WOODHEAD of 23 Onslow Court, Drayton Gardens, London, SW10 9RL (the “Executive”). RECITAL The Company shall employ the Executive and the Executive shall serve the Company as the Chief Executive Officer of the Company on the following terms and subject to the following conditions (the “Agreement”): IT IS AGREED AS FOLLOWS:       1 DEFINITIONS AND INTERPRETATION     1.1 In this Agreement unless the context otherwise requires the following expressions shall have the following meanings:         “Associated Company”       (a) a company which is not a Subsidiary of the Parent but whose issued equity share capital (as defined in s744 of the Companies Act 1985) is owned as to at least twenty per cent (20%) by the Parent or one of its Subsidiaries; or         (b) a Subsidiary (as defined below)         “Board”       the board of directors for the time being of the Company;       “Cause”       any of the events or circumstances described in clause 3 below;       Group”       the Parent and its subsidiaries and Associated Companies for the time being and “Group Company” means any one of them;       “Parent”       Sotheby’s, Inc. or any other company which is for the time being the ultimate holding company of the Company within the meaning of s736 of the Companies Act 1985       “Regulations”       the Working Time Regulations 1998       “Subsidiary”       a Subsidiary within the meaning of s736 of the Companies Act 1985.     1.2 Any reference to a statutory provision shall be deemed to include a reference to any statutory modification or re-enactment of it.       1.3 The headings in this Agreement are for convenience only and shall not affect its construction or interpretation.     1.4 References in this Agreement to a person include a body corporate and an incorporated association of persons and references to a company include any body corporate.     1.5 Where appropriate, references to the Executive include his personal representatives.     2 TERM OF EMPLOYMENT     2.1 The employment of the Executive commenced on 7 January 1998 and is subject to termination in accordance with clause 3 below.     2.2 Notwithstanding clause 3 below the employment of the Executive shall automatically terminate on the day when the Executive reaches age 65.     3 NOTICE     3.1 The Company may terminate the Executive’s employment on giving to him not less than 12 months’ notice in writing. The Executive may terminate his employment on giving the Company not less than 6 months’ notice in writing.     4 REMUNERATION     4.1 The Company shall pay to the Executive a salary at the rate of two hundred and sixty two thousand, three hundred and fifty pounds (£262,350) gross per year inclusive of any directors’ fees payable to him. The Company may review your salary in January. Salary increases, if any, will be at the Company’s discretion.     4.2 The Executive’s salary shall accrue from day to day and be payable by equal monthly instalments in arrears on the 28th day of each month.     4.3 The Executive’s annual incentive bonus target, with effect from 1 January 2006, is £200,000. The criteria for bonus awards under the incentive bonus plan may vary from time to time.     4.4 The Executive shall participate in the Sotheby’s Executive Bonus Plan (EBP) with a minimum award if the minimum performance standards are met of £100,000, and a maximum award if maximum performance standards are met of £400,000. Any awards under the EBP may be paid to the Executive wholly by way of Restricted Shares.     4.5 Any bonus will continue to accrue during any period of notice, except as otherwise provided in clause 11 below.     5 PENSION SCHEME     5.1 The Company operates a contributory occupational pension scheme, the final salary section of which the Executive shall remain a member in accordance with the provisions of its trust deed and rules from time to time in force. The full terms of the scheme (which include the Company’s right to alter or terminate the scheme) are set out in the trust deed and rules, copies of which are available to the Executive on request from Human Resources.     5.2 A contracting-out certificate is in force in respect of the Executive’s membership of the Sotheby’s Pension Scheme.       6 VALUE CREATION PLAN     6.1 Upon execution of the Agreement, you will receive a special one-time grant under the Sotheby’s 2003 Restricted Stock Plan of 38,344 shares of restricted stock (the “VCP Shares”), which will vest subject to the satisfaction of certain performance criteria, as described in Exhibit A.     7 OTHER BENEFITS     7.1 The Executive is entitled to membership of the following schemes (each referred to below as an “insurance scheme”):       7.1.1 a medical expenses insurance scheme providing such cover for the Executive as the Company may from time to time notify to him;         7.1.2 a salary continuance on long-term disability insurance scheme providing such cover for the Executive as the Company may from time to time notify to him;         7.1.3 a life insurance scheme under which a lump sum benefit shall be payable on the Executive’s death while the Agreement continues; the benefit of which shall be paid to such dependants of the Executive or other beneficiary as the trustees of the scheme select at their discretion, after considering any beneficiaries identified by the Executive in any expression of his wishes delivered to the trustees before his death. The benefit is equal to 4 times the Executive’s basic annual salary at his death;       7.2 Benefits under any insurance scheme shall be subject to the rules of the scheme(s) and the terms of any applicable insurance policy and are conditional upon the Executive complying with and satisfying any applicable requirements of the insurers. Copies of these rules and policies and particulars of the requirements shall be provided to the Executive on request. The Company shall not have any liability to pay any benefit to the Executive under any insurance scheme unless it receives payment of the benefit from the insurer under the scheme.     7.3 Any insurance scheme which is provided for the Executive is also subject to the Company’s right to alter the cover provided or any term of the scheme or to cease to provide (without replacement) the scheme at any time if in the opinion of the Board the state of health of the Executive is or becomes such that the Company is unable to insure the benefits under the scheme at the normal premiums applicable to a person of the Executive’s age provided always that any variation to the current arrangements shall not be made so as to treat the Executive materially less favourably than other members of the Board of the Company.     7.4 Without prejudice to any right the Executive many have in respect of damages or compensation, the provision of any insurance scheme does not in any way prevent the Company from lawfully terminating this Agreement in accordance with the provisions of this Agreement even if to do so would deprive the Executive of membership of or cover under any such scheme.     8 CAR ALLOWANCE       The Company shall provide the Executive with a non-pensionable car allowance of fifteen thousand pounds (£15,000) gross per annum payable monthly in arrears, together with payment of salary pursuant to clause 4, with effect from 1 January 2006.     9 ILLNESS     9.1 The Executive shall continue to be paid during sickness absence (such payment to be inclusive of any statutory sick pay or social security benefits to which he may be entitled) for a total of up to 6 months in any 12 consecutive months.     9.2 Thereafter the Executive shall continue to be paid salary at the discretion of the Company provided that if such absence shall aggregate 26 weeks in any 52 consecutive weeks the Company may terminate the employment of the Executive with immediate effect provided always that the Company shall not terminate the employment by reason of his illness or absence where to do so would deprive him of any rights under the insurance scheme referred to at clause 7.1.2.     9.3 If the Executive is incapable of performing his duties by reason of injury sustained wholly or partly as a result of negligence, nuisance or breach of any statutory duty on the part of a third party and the Executive recovers an amount by way of compensation for loss of earnings from that third party, he shall immediately pay that amount to the Company, not exceeding the total sick pay that has been paid to the Executive by the Company.     9.4 The Company shall be entitled to require the Executive to undergo examinations by a medical adviser appointed or approved by the Company and the Executive authorises the medical adviser and/or will provide such consents as are necessary to disclose to the Company the results of such examinations.     10 TERMINATION OF EMPLOYMENT     10.1 The employment of the Executive may be terminated by the Company without notice if the Executive:         10.1.1 is guilty of any serious misconduct or any other conduct which affects or is likely to affect materially and prejudicially the interests of the Company or any Group Company; or         10.1.2 commits any serious or repeated breach or non-observance by the Executive of any of the provisions contained in this Agreement; or         10.1.3 has an interim receiving order made against him, becomes bankrupt or makes any composition or enters into any deed of arrangement with his creditors; or         10.1.4 is convicted of with any arrestable criminal offence (other than an offence under road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed); or         10.1.5 is disqualified from holding office in the Company by reason of an order of a court of competent jurisdiction; or         10.1.6 shall become of unsound mind or become a patient under the Mental Health Act 1983; or         10.1.7 is convicted of an offence under the Criminal Justice Act 1993 in relation to insider dealings or under any other present or future relevant statutory enactment or regulations relating to insider dealings; or         10.1.8 ceases to be a director of the Company otherwise than (a) at the request of the Company or any Associated Company or (b) as a result of any failure to procure his continuance as a statutory director or his reappointment or re-election as a director following any retirement under the documentation governing the Company       10.2 Any delay by the Company in exercising the right to terminate without notice is not a waiver thereof.     11 SUSPENSION AND GARDEN LEAVE     11.1 The Company may suspend the Executive on full pay to allow the Company to investigate any complaint made against the Executive in relation to his employment with the Company.     11.2 Provided the Executive continues to enjoy his full contractual benefits, except to the extent set out in this clause and clause 11.3 below, and receive his pay (including pro rata bonus calculated at the rate of his most recently communicated incentive bonus target for any portion of his notice period in respect of which he does not otherwise receive an incentive bonus) in accordance with this Agreement, the Company may in its absolute discretion do all or any of the following during the notice period or any part of the notice period, after the Executive or the Company has given notice of termination to the other, without breaching this Agreement or incurring any liability or giving rise to any claim against it:         11.2.1 exclude the Executive from the premises of the Company and/or the Group;         11.2.2 require the Executive to carry out only specified duties (consistent with his status, role and experience) or to carry out no duties;         11.2.3 announce to any or all of its employees, suppliers, customers and business partners that the Executive has been given notice of termination or has resigned (as the case may be). The Company undertakes to consult with the Executive over the content of any such announcement with a view to reaching agreement on its contents provided that if no such agreement is reached, the Company may make such announcement as it in its sole discretion may determine.         11.2.4 prohibit the Executive from communicating in any way with any or all of the suppliers, customers, business partners, employees, agents or representatives of the Company or the Group until his employment has terminated except to the extent he is authorised to do so by his manager in writing or purely socially;         11.2.5 require the Executive to resign his directorship of any Group Company;         11.2.6 require the Executive to comply with any other reasonable conditions imposed by the Company.         The Executive will continue to be bound by all obligations (whether express or implied) owed to the Company under the terms of the Agreement or as an employee of the Company.       11.3 Any unvested VCP Shares or any other restricted stock or options granted to the Executive, shall continue to vest subject to satisfaction of any applicable performance or other criteria, for a period of six months after notice of termination is given by either party. No such stock or options will vest during the remainder of any notice or garden leave period.     12     12.1 Upon the termination by whatever means of this Agreement the Executive shall:       12.1.1 immediately resign from his office as a director of the Company and from such offices held by him in any Group Company without claim for compensation; and         12.1.2 immediately deliver to the Company all credit cards motor-cars, keys, computer media and other property, in whatever form, of or relating to the business of the Company or of any Group Company which may be in his possession or under his power or control.     12.2 If the Executive fails to comply with clause 11.2.5 and 12.1.1 the Company is hereby irrevocably authorised to appoint some person in his name and on his behalf to sign and complete any documents or do any thing necessary to give effect to this clause.     12.3 The Executive shall not without the consent of the Company at any time after the termination of this Agreement represent himself still to be connected with the Company or any Group Company.     13 RECONSTRUCTION OR AMALGAMATION       If the employment of the Executive under this Agreement is terminated by reason of the liquidation of the Company for the purpose of reconstruction or amalgamation and the Executive is offered employment with any concern or undertaking resulting from the reconstruction or amalgamation on terms and conditions not less favourable than the terms of this Agreement then the Executive shall have no claim against the Company or any Group Company in respect of the termination of his employment under this Agreement.     14 SEVERANCE AGREEMENT       Notwithstanding any other provision of the Agreement, if your employment by the Company is terminated and as a result of such termination you become eligible to receive payments and/or benefits under the Sotheby’s, Inc. Severance Plan, then you shall be entitled to receive and retain the full amount payable to you under the terms of such Plan, but the amount you receive under such Plan shall reduce (but not below zero) the amounts you shall be entitled to receive pursuant to this Agreement.     15 RESTRICTIVE COVENANTS       You agree to the restrictive covenants set out at Exhibit B to this agreement. These supersede any and all non-competition related agreements between you and the Company, the Parent or any Associated Company which shall be of no further force or effect.     16 SEVERABILITY       If any of the provisions of this Agreement become invalid or unenforceable for any reason by virtue of applicable law the remaining provisions shall continue in full force and effect and the Company and the Executive hereby undertake to use all reasonable endeavours to replace any legally invalid or unenforceable provision with a provision which will promise to the parties (as far as practicable) the same commercial results as were intended or contemplated by the original provision.     17 THIRD PARTIES       Unless the right of enforcement is expressly granted, it is not intended that a third party should have the right to enforce the provisions of this Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999.     18 STATUTORY INFORMATION       Schedule 1 to this Agreement sets out information required to be given to the Executive by the Employment Rights Act 1996.     19 MISCELLANEOUS     19.1 This Agreement is governed by and shall be construed in accordance with the laws of England.     19.2 The parties to this Agreement submit to the exclusive jurisdiction of the English courts.     19.3 This Agreement must be construed together with all other arrangements currently in force between you and the Company or any Group Company, including but not limited to the Pensions Letter dated 5 July 2006, Confidentiality Agreement, Disclosure Statement, Severance Plan letter dated 28 September 2000, and pension letter dated 5 January 2004.     19.4 The Executive authorises the Company to deduct from any remuneration payable to the Executive under this Agreement any sums due from him to the Company or any Group Company. SCHEDULE 1 Statement Of Particulars Pursuant To The Employment Rights Act 1996     1 The Executive’s period of continued employment commenced on 7 January 1998. A period of employment with a previous employer does not count as part of the Executive’s continuous employment with the Company.     2 There is no formal disciplinary or grievance procedure applicable to this position. Any grievance which the Executive wishes to exercise or any disciplinary action taken by the Company will be dealt with by the President and Chief Executive Officer of Sotheby’s, a Delaware corporation. If the Executive is dissatisfied with any decision he can within five (5) working days of that decision appeal to the Board whose decision shall be final and binding. For the avoidance of doubt any disciplinary or grievance procedure does not form part of the Service Agreement.     3 The Executive may be required to work overseas for periods exceeding one (1) month but there are currently no particulars to be entered.     4 The Company is not a party to any collective agreement which affects the Executive’s employment. Signed as a Deed by Sotheby’s acting by:         -s- George Bailey [a45104001.jpg] -s- Tom Christopherson [a45104002.jpg]   George Bailey Managing Director Tom Christopherson Company Secretary           Signed as a Deed by Robin Woodhead in the presence of:   -s- Robin Woodhead [a45104003.jpg]     Witness signature:   -s- ALEXANDRA L. MEDLIN [a45104004.jpg]     Name:   ALEXANDRA L. MEDLIN     Address:   FOXGLOVE COTTAGE, NEWTOWN         COMMON, NEWBURY, BEARS RG209AS     Occupation:   PERSONAL ASSISTANT     Exhibit A           Subject to the satisfaction of the performance criteria described below, 60% of the VCP Shares will vest on the third anniversary of the date of grant (the “2009 Vesting Date”) and the remaining 40% of the VCP Shares will vest on June 30, 2011 (the “2011 Vesting Date”). VCP Shares will vest on the 2009 Vesting Date if either (i) the compound annual growth rate (“CAGR”) in the common stock of Sotheby’s, including dividends, shall have been equal to or greater than 7.2% per annum from July 1, 2006 through June 30, 2009 or (ii) the cumulative CAGR of Sotheby’s net income shall have been equal to or greater than 10% per annum through the 12 months ended June 30, 2009 as compared with Sotheby’s net income for the 12 months ended June 30, 2006. VCP Shares will vest on the 2011 Vesting Date if either (i) the CAGR in Sotheby’s common stock, including dividends, shall have been equal to or greater than 7.2% per annum from July 1, 2006 through June 30, 2011 or (ii) the cumulative CAGR of Sotheby’s net income shall have been equal to or greater than 10% through the 12 months ended June 30, 2011 as compared with Sotheby’s net income for the 12 months ended June 30, 2006. If the performance criteria for the 2009 Vesting Date shall not have been satisfied by that date, but the performance criteria for the 2011 Vesting Date are satisfied, then 100% of the VCP Shares will vest on the 2011 Vesting Date. If your employment is terminated prior to the 2011 Vesting Date by the Company otherwise than pursuant to Clause 10 of the Agreement or as a result of your death or pursuant to clause 9 of the Agreement, (i) if the performance criteria for either or both of the 2009 Vesting Date or the 2011 Vesting Date have already been satisfied as of the date of termination of employment, the VCP Shares that would otherwise vest on the applicable measurement date will vest immediately and (ii) if the performance criteria have not yet been satisfied for either the 2009 Vesting Date or the 2011 Vesting Date, but have been satisfied through the end of all full 12-month periods ending June 30 occurring prior to the date of termination of employment, then a fraction of the VCP Shares shall vest immediately, the numerator of such fraction being the number of full 12-month periods ending June 30 for which the performance criteria have been satisfied and the denominator of such fraction being 5.           For purposes of measuring the CAGR in Sotheby’s common stock, the value of such common stock as of July 1, 2006 shall be the average of the closing price of Sotheby’s common stock on the New York Stock Exchange during the 30 calendar days prior to the date of grant of the VCP Shares and the value of such common stock at the end of each measurement period shall be the daily average of the closing price of Sotheby’s common stock on the New York Stock Exchange during the 30 calendar days prior to the end of such measurement period.           The cumulative CAGR in Sotheby’s net income for any measurement period will be deemed to be equal to or greater than 10% if the actual cumulative net income (net of any net loss) of Sotheby’s for such measurement period equals or exceeds Sotheby’s net income for the 12 months ended June 30, 2006, compounded at the rate of 10% per annum for the number of 12 month periods in such measurement period.           For purposes hereof, net income shall be determined in accordance with generally accepted accounting principles in the United States (“GAAP”); provided, however, that consistent with Sotheby’s objective to reward its executives based on the normalized operating performance of Sotheby’s, the Compensation Committee shall have the discretion to adjust Sotheby’s net income to account for extraordinary or unforeseen business events or developments during any measurement period, including, but not limited to, income or loss from discontinued operations, gains or losses from the sale of significant assets or business units, restructurings, asset impairments, unusual adjustments to tax valuation reserves, special charges, extraordinary items as defined by GAAP, material changes in GAAP or other nonrecurring events. Notwithstanding the foregoing, no adjustment shall increase the amount of compensation otherwise payable if such increase is prohibited by Section 162(m) of the Internal Revenue Code. Exhibit B NON-COMPETITION AGREEMENT Dear Robin Sotheby’s (together with its subsidiaries and affiliates, the “Corporation”) has offered you a revised service agreement dated       August 2006. This service agreement is contingent upon your executing this Non-Competition Agreement (the “Agreement”). As you are aware, the Corporation is in a highly competitive business, and the protection of its confidential information and customer relations is critical to its business success. In consideration for the Corporation’s revised service agreement for you, you and the Corporation hereby agree as follows:     1. For the longer of (i) six (6) months following the termination of your employment with the Corporation for any reason or (ii) twelve (12) months following the date on which any notice period begins pursuant to your employment agreement, you will not, without the consent of the Corporation, (i) directly or indirectly within the United Kingdom, France, Belgium, Switzerland, Germany, Netherlands, Spain, Italy, Hong Kong, and/or New York engage in the live or on-line Art Auction Business or any other business in which the Corporation is engaged as at the date of termination of your employment and in which you have participated at any time during the twelve (12) months immediately prior to the termination of your employment whether such engagement is as an officer, director, proprietor, employee, partner, owner, consultant, advisor, agent, sales representative or other participation. For purposes of this Agreement, the Art Auction Business involves auctions of property in the collecting categories that the Corporation offers for sale in its core business at the time of termination; or (ii) canvas or solicit business or approach or deal with any client or prospective client of the Corporation in respect of the live or termination of your employment; or (iii) in competition with the business of the Corporation, recruit, solicit or induce any key employee to terminate his or her employment with, or otherwise diminish their relationship with, the Corporation, or hire or assist another person or entity to hire any employee of the Corporation or any person who within the twelve (12) months immediately preceding the termination of your employment had been such a key employee of the Corporation and with whom you had had material dealings.       For the purposes of this clause “key employee” means any employee of the Corporation who has had substantial access to or knowledge of confidential aspects of the business of the Corporation and is a deputy director, director, senior director or board director. Notwithstanding the foregoing, the Corporation in its sole discretion may upon receipt of a written request from you waive any or all of this restriction over employment in which you plan to engage taking into account, among other things, (i) the nature of your planned employment; (ii) the nature of your work for the Corporation; and (iii) the business in which your planned employer engages.     2. You agree that the restrictions contained in Paragraph 1 are reasonable. However, if at any time there is a judicial determination by any court of competent jurisdiction that the time period, geographic scope, or any other restriction contained in this Agreement is unenforceable against you, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time period, geographic scope and to such other maximum extent as the court may judicially determine or indicate to be enforceable under United Kingdom law.     3. You acknowledge and agree that the Corporation’s remedies at law for a breach of any of the provisions of this Agreement would be inadequate and, in recognition of this fact, you agree that, in the event of such a breach, in addition to any remedies at law, the Corporation shall be entitled to obtain equitable relief in the form of specific performance, temporary or permanent injunction or any other equitable remedy which may then be available.     4. This Agreement shall be governed by, construed and enforced in accordance with the laws of the United Kingdom, and you consent to the jurisdiction of the courts situated in the United Kingdom for the purpose of adjudicating any dispute relating to this Agreement. Any waiver or amendment of any provision of this Agreement shall be in writing and signed by both parties.     5. This Agreement hereby supersedes any and all non-competition related agreements between you and the Corporation which shall be of no further force or effect. If the foregoing correctly sets forth our understanding with respect to the matters covered by this Agreement, please indicate your agreement by signing in the space provided below.         Very truly yours,         SOTHEBY’S         By -s- Susan Alexander [a45104006.jpg]          Susan Alexander     Executive Vice President     Human Resources The undersigned hereby acknowledges and agrees to the foregoing provisions of this Agreement.     -s- ROBIN WOODHEAD [a45104005.jpg]     ROBIN WOODHEAD       Date: August 15th, 2006  

Exhibit Form of Series A Common Stock Purchase Warrant Warrant to Purchase Common Stock Date of Issuance: October, 2009 Warrant to Purchase an Aggregate of shares of Common Stock FOR VALUE RECEIVED, Digital Lifestyles Group, Inc., a Delaware corporation (the “Company”), promises to issue in the name of, and sell and deliver to (the "Holder") a certificate or certificates for an aggregate of () shares of the Company’s common stock, par value $0.03 per share (the “Common Stock”), upon payment by the Holder of Thirty-one Cents ($0.31) per share (the “Exercise Price”), with the Exercise Price being subject to adjustment in the circumstances set forth below. 1. Exercise of Warrant. (A)Exercise Period.The Holder may exercise this Warrant, in whole or in part (but not as to fractional shares), at any time and time to time commencing on the date hereof and ending at 5:00 p.m., Eastern Time, on the third (3rd) anniversary of the date hereof (the “Exercise Period”). (B)Exercise Procedure. (i)This Warrant will be deemed to have been exercised at such time as the Company has received all of the following items (the “Exercise Date”): (a)a completed Exercise Agreement, in the form attached hereto as Exhibit 1, executed by the Holder (the “Purchaser”); and (b)a certified check or other immediately available funds payable to the Company in an amount equal to the sum of the product of the Exercise Price multiplied by the number of shares of Common Stock being purchased upon such exercise. (ii)Certificates for the shares of Common Stock purchased upon exercise of this Warrant will be delivered by the Company to the Purchaser within ten (10) business days after the Exercise Date.Unless this Warrant has expired or all of the purchase rights represented hereby have been exercised, the Company will prepare a new Warrant representing the rights formerly represented by this Warrant that have not expired or been exercised.The Company will, within such ten (10) day period, deliver such new Warrant to the Holder at the address set forth in this Warrant. (iii)The shares of Common Stock issuable upon the exercise of this Warrant will be deemed to have been transferred to the Purchaser on the Exercise Date, and the Purchaser will be deemed for all purposes to have become the record holder of such Common Stock on the Exercise Date. 1 (iv)The issuance of certificates for shares of Common Stock upon the exercise of this Warrant will be made without charge to the Purchaser for any issuance tax in respect thereof or any other cost incurred by the Company in connection with such exercise and related transfer of the shares; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate or instrument in a name other than that of the Holder of this Warrant, and that the Company shall not be required to issue or deliver any such certificate or instrument unless and until the person or persons requiring the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. (v)The shares of Common Stock issuable upon the exercise of this Warrant will be “restricted securities” as that term is defined in the Securities Act of 1933.

March 1, 2010 American Independence Funds Trust Prospectus Institutional Class Class A Class C* (Ticker/CUSIP) (Ticker/CUSIP) (Ticker/CUSIP) American Independence Stock Fund ISISX IFCSX ISFSX 026762708 026762807 026762732 American Independence International Equity Fund IMSSX IIESX NA 026762880 0267627872 NA American Independence Short-Term Bond Fund ISBSX ISTSX ITBSX 026762302 026762401 026762716 American Independence Intermediate Bond Fund IIISX IBFSX NA 026762500 026762609 NA American Independence Kansas Tax-Exempt Bond Fund SEKSX IKSTX IKTEX 026762864 026762856 026762682 American Independence International Bond Fund FFIFX FNIFX NA 30242R881 30242R659 NA American Independence U.S. Inflation-Indexed Fund FFIHX FNIHX FCIHX 30242R824 30242R642 026762575 American Independence Fusion Fund AFFSX AFFAX NA 026762450 026762443 NA NOT FDIC Insured. May lose value. No bank guarantee. The Securities and Exchange Commission has not approved or disapproved of these securities. Further, it has not determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. American Independence Financial Services, LLC is a limited liability company. * The Class C Shares are not available for all funds. The Notice of Privacy Policy and Practices of the Funds is included with this Prospectus, but is not considered to be a part of the Prospectus. Inside This Prospectus The Fund Summaries for each Fund include (1) Investment Objectives/Goals; (2) Fees and Expenses of the Fund; (3) Principal Investment Strategies, Risks and Performance; (4) Portfolio Management; (5) Purchase and Sale Information; (6) Tax Information and (7) Financial Intermediary Compensation. FUND SUMMARY – STOCK FUND 2 FUND SUMMARY – INTERNATIONAL EQUITY FUND 7 FUND SUMMARY – SHORT-TERM BOND FUND 13 FUND SUMMARY – INTERMEDIATE BOND FUND 19 FUND SUMMARY – KANSAS TAX-EXEMPT BOND FUND 25 FUND SUMMARY – INTERNATIONAL BOND FUND 30 FUND SUMMARY – U.S. INFLATION-INDEXED FUND 36 FUND SUMMARY – FUSION FUND 41 MORE ABOUT THE FUNDS 46 Additional Information About the Funds’ Investment Strategies 46 Related Risks 47 Fund Management 52 INVESTING WITH THE FUNDS 57 Choosing a Class of Shares 57 Opening an Account 61 Exchanging Shares 62 Redeeming From Your Account 62 Other Shareholder Servicing Information 63 Calculating Share Price 67 Distribution and Service (12b-1) Fee Plan 67 Dividends, Distributions and Taxes 68 FINANCIAL HIGHLIGHTS 70 SERVICE PROVIDERS 75 NOTICE OF PRIVACY POLICY & PRACTICES 76 ADDITIONAL INFORMATION 77 1 Stock Fund FUND SUMMARY – STOCK FUND Investment Objectives/Goals. The Fund’s investment objective is to provide investors with long-term capital appreciation. Fees and Expenses of the Fund. This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Investing With The Fund” starting on page of the Fund’s Prospectus. The table does not reflect charges that may be imposed in connection with an account through which you hold Fund shares. A broker dealer or financial institution maintaining an account through which you hold fund shares may charge separate account, service or transaction fees on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown here. Institutional Class A Class C Class Shares Shares Shares Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None 5.75 % None Maximum Deferred Sales Charge (Load) (as a percentage of the Net Asset Value purchase) None None1 ) 1.00 % Redemption Fee None None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fee 1.00 % 1.00 % 1.00 % Distribution (12b-1) and Service Fees None 0.25 % 1.00 % Other Expenses 0.40 % 0.40 % 0.40 % Acquired Fund Fees and Expenses 0.00 % 0.00 % 0.00 % Total Annual Fund Operating Expenses 1.40 % 1.65 % 2.40 % Fee Waivers and Expense Reimbursements -0.34 % -0.34 % -0.34 % Net Expenses 1.06 % 1.31 % 2.06 % (1) Class A shares that are purchased in amounts of $1,000,000 or more will be assessed a 1.0% CDSC if they are redeemed within one year of the date of purchase and a 0.50% CDSC if redeemed after the first year and within the second year. (2) Class C shares will be assessed a 1.00% CDSC if redeemed within one year of date of purchase. (3) The Board approved a Rule 12-b1 plan with a 0.25% distribution fee for Class A. In addition, the Board approved a Shareholder Services Plan for Class A shares which would provide for a fee paid monthly at an annual rate of up to 0.25%. At the present time, the Fund is not assessing a 12b-1 fee. Should the Fund wish to impose this fee, the implementation must be approved by the Board and shareholders must be provided with 60 days’ prior notice. (4) Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year restated. (5) The Fund is required to disclose “Acquired Fund Fees and Expenses” in the above fee table. Acquired Fund Fees and Expenses are indirect fees that funds incur from investing in the shares of other mutual funds 2 (“Acquired Fund(s)”). The indirect fee represents a pro rata portion of the cumulative expenses charged by the Acquired Fund. Acquired Fund Fees and Expenses are reflected in the Acquired Fund’s net asset value. Without Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would have been 1.40%, 1.65% and 2.40% for the Institutional Class Shares, Class A Shares and Class C Shares, respectively. (6) AIFS has contractually agreed to reduce the management fee and reimburse expenses until March 1, 2011 in order to keep the Total Annual Fund Operating Expenses at 0.99% of the Fund’s average net assets for the Institutional Class Shares, 1.24% of the Fund’s average net assets for the Class A Shares and 1.99% of the Fund’s average net assets for the Class C Shares. The contractual expense limitation does not apply to “Acquired Fund Fees and Expenses.” The Adviser is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid in any fiscal year of the Fund over the following three fiscal years, as long as the reimbursement does not cause the Fund’s operating expenses to exceed the expense cap. Example Based on the costs above, this example helps you compare the expenses of each share class with those of other mutual funds. The example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvest all dividends and distributions. This is only an example; actual expenses may be different. Because this example is hypothetical and for comparison only, your actual costs will be different. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund's performance. As of October 31, 2009, the Stock Fund’s portfolio turnover rate was 242%. Principal Investment Strategies, Risks and Performance. Principal Strategies. Under normal market conditions, the Fund intends to invest in the following manner: > At least 80% of its net assets, plus borrowings for investment purposes, in common and/or preferred stocks; > At least 65% of its total assets in such stocks issued by U.S. companies with large market capitalizations (over $5 billion) at the time of purchase; and > May also invest in securities that are convertible into common stock and preferred stock. Main types of securities the Fund may hold: Common stocks of companies traded on major stock exchanges Preferred stocks Convertible bonds Short term money market securities Principal Risks. Before investing in the Fund, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested and the amount of risk you are willing to take. The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations regarding particular securities or markets are not met. A summary of the principal risks of investing in the Fund can be found below. 3 Equity Market Risk. The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. When the value of the Fund’s securities goes down, your investment in the Fund decreases in value. Interest Rate Risk . The Fund's share price and total return will vary in response to changes in interest rates. If rates increase, the value of the Fund's investments generally will decline, as will the value of your investment in the Fund. Style Risk . Growth stocks and value stocks tend to perform differently in different markets. Because the Fund invests primarily in value stocks, its performance may lag when growth stocks outperform value stocks. Mid- and Small-Cap Risk. Because midsized and small companies tend to have limited business lines, financial resources, and competitive advantages compared to larger companies, their stock prices tend to fluctuate more than those of larger companies, and may move in a different direction than the broader market. Shares of small companies in particular may be thinly traded, making them potentially less easy to buy or sell at a desired time or price. Rising interest rates and changes in key personnel may hurt small businesses more than large ones. The Fund is “diversified” under the Investment Company Act of 1940, as amended (the “1940 Act”). Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government agency. You could lose money if you sell when the Fund’s share price is lower than when you invested. More information about fund risks, including additional risk factors not discussed above, is included in Fund Details and the fund's Statement of Additional Information. Past Performance. The bar chart and the table listed below give some indication of the risks of an investment in the Fund by showing in the bar chart how the Stock Fund performed from year to year and by comparing in the table the Fund’s performance over time to that of the Standard & Poor’s 500® Composite Stock Index (‘‘S&P 500®’’), a widely recognized, unmanaged index of common stocks. The Russell 1000 Value Index will be used as the Fund’s benchmark. The Russell 1000 Value Index is an unmanaged index of large cap value stocks. The Fund has been in existence since January 21, 1997, but until March 2, 2006, the Fund was organized as the Stock Fund of the former American Independence Funds Trust. From March 1, 2006 to March 1, 2007 the Fund was managed by Barrow, Hanley, Mewhinney & Strauss, Inc. Prior to December 1999, the Fund was managed by another sub-adviser. Prior to the reorganization on March 2, 2006, the Institutional Class Shares were previously known as Service Class Shares. The Fund has carried forward the performance history of the predecessor fund, as the predecessor fund is the accounting survivor. The performance of the Institutional Class shares of the Fund includes the performance of the predecessor fund’s Service Class shares prior to the reorganization, which has been restated to reflect differences in any applicable sales charges (but not differences in expenses). If the performance had been adjusted to reflect all differences in expenses, the performance of the Fund would be higher. The returns for the Institutional Class will differ from Class A and Class C shares because of differences in the expenses of each class. Of course, past performance (before and after taxes) does not indicate how the Fund will perform in the future. Both the bar chart and the table assume reinvestment of dividends and distributions and reflect voluntary and contractual fee reductions. Without such fee reductions, the Fund’s performance would have been lower. 4 (1) These figures are for the year ended December 31 of each year. Best quarter: % Q2 2003 Worst quarter: )% Q4 2008 AVERAGE ANNUAL TOTAL RETURNS For the Period Ending December 31, 2009 1 Year 5 Years 10 Years Institutional Class Shares Return Before Taxes % % % Return After Taxes on Distributions % % % Return After Taxes on Distribution and sale of shares % % % Class A Shares % % % Class C Shares % % % Russell 1000 Value Index % % % S&P 500® Index % % % (1) After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. (2) After-tax returns for Class A and Class C Shares, which are not shown, will vary from those shown for Institutional Class Shares. (3) Indices do not reflect the deduction for fees, expenses or taxes. Portfolio Management. Investment Adviser. The investment adviser for the Fund is American Independence Financial Services, LLC (“AIFS” or the “Adviser”). Mr. Jeffrey A. Miller, Ms. Ariel Frommer, Ms. Tammy Dalton, and Mr. Eric M. Rubin are responsible for the day to day management of the Fund. Managed the Manager Name Primary Title Fund Since Jeffrey A. Miller Portfolio Manager 2006 Eric Rubin Portfolio Manager 2006 Ariel Fromer Vice President, Assistant Portfolio Manager 2006 Tammy Dalton Vice President of Research 2006 5 For additional information about the Adviser and portfolio managers, please refer to the Fund Management section starting on page of this Prospectus. For more information regarding portfolio managers’ compensation, other accounts managed by the portfolio managers and the portfolio managers’ ownership of securities of the Funds they manage, please consult the SAI. Purchase and Sale Information. Purchase minimums Institutional Class A Class C Class Shares Shares Shares Initial Purchase $ 250,000 $ 5,000 $ 5,000 Subsequent Purchases $ 5,000 $ 250 $ 250 How to purchase shares through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by completing an application and sending a check to the Fund at the address below (an application can be obtained through the Fund’s website at www.aifunds.com or by calling (888) 266-8787): American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Shares of the Fund may not be available for sale in all states. Consult your investment representative or institution for specific information. Orders received by your broker or Service Organization for the Fund in proper order prior to the determination of net asset value and transmitted to the Fund prior to the close of its business day which is currently 4:00 p.m. Eastern Time, will become effective that day. How to redeem shares In general, you may redeem shares on any business day: through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by calling (888) 266-8787 or by writing to the Fund at the address below: American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Tax Information. The Fund intends to make distributions that may be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan. Financial Intermediary Compensation. If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Web site for more information. 6 International Equity Fund FUND SUMMARY – INTERNATIONAL EQUITY FUND Investment Objectives/Goals. The Fund’s goal is to provide investors with long-term capital appreciation. The Fund seeks its objective by investing in equity securities of issuers based outside of the United States. Fees and Expenses of the Fund. This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Investing With The Fund” starting on page of the Fund’s Prospectus. The table does not reflect charges that may be imposed in connection with an account through which you hold Fund shares. A broker dealer or financial institution maintaining an account through which you hold fund shares may charge separate account, service or transaction fees on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown here. Institutional Class Class A Shares Shares Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None 5.75% Maximum Deferred Sales Charge (Load) (as a percentage of the Net Asset Value purchase) None None (1) Redemption Fee None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fee 0.81 % 0.81 % Distribution (12b-1) and Service Fees None 0.50 % Other Expenses 0.52 % 0.52 % Acquired Fund Fees and Expenses 0.00 % 0.00 % Total Annual Fund Operating Expenses 1.33 % 1.83 % Fee Waivers and Expense Reimbursements -0.18 % -0.18 % Net Expenses 1.15 % 1.65 % (1) Class A shares that are purchased in amounts of $1,000,000 or more will be assessed a 1.0% CDSC if they are redeemed within one year of the date of purchase and a 0.50% CDSC if redeemed after the first year and within the second year. (2) The Board approved a Rule 12-b1 plan with a 0.25% distribution fee for Class A. In addition, the Board approved a Shareholder Services Plan for Class A shares which would provide for a fee paid monthly at an annual rate of up to 0.25%. (3) Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year restated. (4) The Fund is required to disclose “Acquired Fund Fees and Expenses” in the above fee table. Acquired Fund Fees and Expenses are indirect fees that funds incur from investing in the shares of other mutual funds (“Acquired Fund(s)”). The indirect fee represents a pro rata portion of the cumulative expenses charged by the Acquired Fund. Acquired Fund Fees and Expenses are reflected in the Acquired Fund’s net asset value. Without Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would have been 1.33% and 1.83% for the Institutional Class Shares and Class A Shares, respectively. 7 (5) AIFS has contractually agreed to reduce the management fee and reimburse expenses until March 1, 2011 in order to keep the Total Annual Fund Operating Expenses at 1.09% of the Fund’s average net assets for the Institutional Class Shares and 1.59% of the Fund’s average net assets for the Class A. The contractual expense limitation does not apply to “Acquired Fund Fees and Expenses.” The Adviser is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid in any fiscal year of the Fund over the following three fiscal years, as long as the reimbursement does not cause the Fund’s operating expenses to exceed the expense cap. Example Based on the costs above, this example helps you compare the expenses of each share class with those of other mutual funds. The example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvest all dividends and distributions. This is only an example; actual expenses may be different. Because this example is hypothetical and for comparison only, your actual costs will be different. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund's performance. As of October 31, 2009, the International Equity Fund’s portfolio turnover rate was 186%. Principal Investment Strategies, Risks and Performance. Principal Strategies. Under normal market conditions, the Fund intends to invest in the following manner: Primarily in the equity securities of companies located outside the U.S., including emerging markets; At least 80% of its net assets in ‘‘foreign securities’’, which means those securities issued by companies whose principal securities trading markets are outside the U.S.; (2) that are linked to non-U.S. dollar currencies; or (3) that are organized under the laws of, or with principal office in, a country other than the U. S.; > No more than 20% of net assets in developing countries or emerging market securities; > Invest in securities denominated in the currencies of a variety of countries, as well as in securities denominated in multinational currencies such as the Euro; May enter into currency hedges that may decrease or offset any losses from such fluctuations; Invest in American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and European Depository Receipts (EDRs) issued by sponsored or unsponsored facilities; > May invest in securities that are sold in private placement transactions between their issuers and their purchasers and that are neither listed on an exchange nor traded over-the counter; and > May invest in obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities. Main types of securities the Fund may hold: > Common stocks of companies traded on major stock exchanges of countries outside the U.S. (both developed and emerging market countries) 8 American Depositary Receipts, Global Depositary Receipts, European Depositary Receipts Short term money market securities Obligations issues or guaranteed by the U.S. Government, its agencies or instrumentalities Currency hedges Principal Risks. Before investing in the Fund, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested and the amount of risk you are willing to take. The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations regarding particular securities or markets are not met. A summary of the principal risks of investing in the Fund can be found below. Equity Market Risk. The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. When the value of the Fund’s securities goes down, your investment in the Fund decreases in value. Foreign Securities Risk. To the extent the Fund invests in depositary receipts, such investments are subject to additional risks including political and economic risks, greater volatility, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, and less stringent investor protection and disclosure standards of foreign markets. Emerging Market Country Risk. Investments in a country that is still relatively underdeveloped involves exposure to economic structures that are generally less diverse and mature than in the U.S. and to political and legal systems which may be less stable. In the past, markets of developing countries have had more frequent and larger price changes than those of developed countries. Political Risk. A greater potential for revolts, and the taking of assets by governments exists when investing in securities of foreign countries. Government Risk . The U.S. government’s guarantee of ultimate payment of principal and timely payment of interest on certain U. S. government securities owned by the Fund does not imply that the Fund’s shares are guaranteed or that the price of the Fund’s shares will not fluctuate. Bond Market Risk. Debt securities are subject to the risk that fixed income prices in general may lose value because of declines in the bond market. The prices of fixed income securities respond to a variety of economic factors, particularly interest rate changes, as well as to perceptions about the credit worthiness of both corporate and government issuers. Generally fixed income securities will decrease in value if interest rates rise and will increase in value if interest rates decline. Foreign currency risk. Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time. The Fund is “diversified” under the Investment Company Act of 1940, as amended (the “1940 Act”). Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government agency. You could lose money if you sell when the Fund’s share price is lower than when you invested. More information about fund risks, including additional risk factors not discussed above, is included in Fund Details and the fund's Statement of Additional Information. Past Performance. The bar chart and table listed below show how the International Equity Fund has performed from year to year. The Fund has been in existence since November 1, 1995 but until March 2, 2006, the Fund was organized as the International Multi Manager Stock Fund of the former American Independence Funds Trust. The performance shown in the bar chart and table represents the actual performance of the Fund from January 20, 1997 (its inception) through December 31, 2006; and the actual performance of the Portfolio from November 1, 1995 (its inception) through January 19, 1997. This 9 performance would have been significantly lower, taking into account the current fees of the Fund, because the Portfolio’s performance reflects no fees at the feeder level and the predecessor fund had lower fees. The bar chart provides some indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year. The table below it compares the Fund’s performance over time to that of the Morgan Stanley Capital International Europe, Australasia and Far East (‘‘MSCI EAFE’’) Index, a widely recognized, unmanaged representative of the aggregate performance of international stock markets. Prior to the reorganization on March 2, 2006, the predecessor fund offered a class of shares similar to the Fund’s Institutional Class shares known as the Service Class shares. As a result of the reorganization, the Fund has carried forward the performance history of the predecessor fund, as the predecessor fund is the accounting survivor. The performance of the Institutional Class shares of the Fund includes the performance of the predecessor fund’s Service Class shares prior to the reorganization, which has been restated to reflect differences in any applicable sales charges (but not differences in expenses). If the performance had been adjusted to reflect all differences in expenses, the performance of the Fund would be higher. The returns for the Institutional Class and Class A Shares will differ because of differences in the expenses of each class. Of course, past performance (before and after taxes) does not indicate how a Fund will perform in the future. Both the bar chart and the table assume reinvestment of dividends and distributions and reflect voluntary and contractual fee reductions. Without such fee reductions, the Fund’s performance would have been lower. (1) These figures reflect year-by-year total returns for the Fund, the Portfolio and the Predecessor and are for the year ended December 31 of each year. (2) The performance of the Portfolio was calculated by adjusting the performance of the Initial Feeder Fund to exclude fees and expenses paid at the level of the Initial Feeder Fund. Best quarter: % Q2 2003 Worst quarter: )% Q3 2002 10 AVERAGE ANNUAL TOTAL RETURNS For the Period Ending December 31, 2009 1 Year 5 Years 10 Years Institutional Class Shares Return Before Taxes % % % Return After Taxes on Distributions % % % Return After Taxes on Distribution and sale of shares % % % Class A Shares % % % MSCI EAFE Index % % % (1) After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. (2) After-tax returns for Class A Shares, which are not shown, will vary from those shown for Institutional Class Shares. (3) Indices do not reflect the deduction for fees, expenses or taxes. Portfolio Management. Investment Adviser. The investment adviser for the Fund is American Independence Financial Services, LLC (“AIFS” or the “Adviser”). Mr. Mr. Eric M. Rubin is responsible for the oversight of the sub-advisory relationship. Sub-Adviser. Securities Global Investors, LLC (“SGI”) located at 801 Montgomery Street, 2nd Floor, San Francisco, California 94133. Managed the . Manager Name Primary Title Fund Since David Whittall Portfolio Manager 2009 Scott Klimo Portfolio Manager 2009 Yon Perullo Portfolio and Risk Manager 2009 For additional information about the Adviser, Sub-adviser and portfolio managers, please refer to the Fund Management section starting on page of this Prospectus. For more information regarding portfolio managers’ compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities of the Funds he manages, please consult the SAI. Purchase and Sale Information. Purchase minimums Institutional Class A Class Shares Shares Initial Purchase $ 3,000,000 $ 5,000 Subsequent Purchases $ 5,000 $ 250 How to purchase shares through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by completing an application and sending a check to the Fund at the address below (an application can be obtained through the Fund’s website at www.aifunds.com or by calling (888) 266-8787): American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 11 Shares of the Fund may not be available for sale in all states. Consult your investment representative or institution for specific information. Orders received by your broker or Service Organization for the Fund in proper order prior to the determination of net asset value and transmitted to the Fund prior to the close of its business day which is currently 4:00 p.m. Eastern Time, will become effective that day. How to redeem shares In general, you may redeem shares on any business day: through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by calling (888) 266-8787 or by writing to the Fund at the address below: American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Tax Information. The Fund intends to make distributions that may be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan. Financial Intermediary Compensation. If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Web site for more information. 12 Short-Term Bond Fund FUND SUMMARY – SHORT-TERM BOND FUND Investment Objectives/Goals. The Fund’s goal is to provide investors with as high a level of current income as is consistent with liquidity and safety of principal by investing primarily in investment-grade bonds with maturities of 1-3 years. Fees and Expenses of the Fund. This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $100,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Investing With The Fund” starting on page of the Fund’s Prospectus. The table does not reflect charges that may be imposed in connection with an account through which you hold Fund shares. A broker dealer or financial institution maintaining an account through which you hold fund shares may charge separate account, service or transaction fees on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown here. Institutional Class Class A Class C Shares Shares Shares Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None 2.75% None Maximum Deferred Sales Charge (Load) (as a percentage of the Net Asset Value purchase) None None 1.00% Redemption Fee None None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fee 0.40 % 0.40 % 0.40 % Distribution (12b-1) and Service Fees None 0.50 % 1.00 % Other Expenses 0.24 % 0.24 % 0.24 % Acquired Fund Fees and Expenses 0.00 % 0.00 % 0.00 % Total Annual Fund Operating Expenses 0.64 % 1.14 % 1.64 % Fee Waivers and Expense Reimbursements -0.19 % -0.44 % -0.19 % Net Expenses 0.45 % 0.70 % 1.45 % (1) Class A shares that are purchased in amounts of $1,000,000 or more will be assessed a 1.0% CDSC if they are redeemed within one year of the date of purchase and a 0.50% CDSC if redeemed after the first year and within the second year. (2) Class C shares will be assessed a 1.00% CDSC if redeemed within one year of date of purchase. (3) The Board approved a Rule 12-b1 plan with a 0.25% distribution fee for Class A. In addition, the Board approved a Shareholder Services Plan for Class A shares which would provide for a fee paid monthly at an annual rate of up to 0.25%. (4) Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year restated. (5) The Fund is required to disclose “Acquired Fund Fees and Expenses” in the above fee table. Acquired Fund Fees and Expenses are indirect fees that funds incur from investing in the shares of other mutual funds (“Acquired Fund(s)”). The indirect fee represents a pro rata portion of the cumulative expenses charged by the 13 Acquired Fund. Acquired Fund Fees and Expenses are reflected in the Acquired Fund’s net asset value. Without Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would have been 0.64%, 1.14% and 1.64% for the Institutional Class Shares, Class A Shares and Class C Shares, respectively. (6) AIFS has contractually agreed to reduce the management fee and reimburse expenses until March 1, 2011 in order to keep the Total Annual Fund Operating Expenses at 0.45% of the Fund’s average net assets for the Institutional Class Shares, 0.70% of the Fund’s average net assets for the Class A Shares and 1.45% of the Fund’s average net assets for the Class C Shares. The contractual expense limitation does not apply to “Acquired Fund Fees and Expenses.” The Adviser is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid in any fiscal year of the Fund over the following three fiscal years, as long as the reimbursement does not cause the Fund’s operating expenses to exceed the expense cap. Example Based on the costs above, this example helps you compare the expenses of each share class with those of other mutual funds. The example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvest all dividends and distributions. This is only an example; actual expenses may be different. Because this example is hypothetical and for comparison only, your actual costs will be different. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund's performance. As of October 31, 2009, the Short-Term Bond Fund’s portfolio turnover rate was 61%. Principal Investment Strategies, Risks and Performance. Principal Strategies. Under normal market conditions, the Fund intends to invest in the following manner: In high quality debt securities; At least 65% of total assets in U.S. dollar-denominated securities; Maintain an average maturity between 1 and 3 years; Limit the Fund’s duration to 2 years or less; In derivatives for hedging and non-hedging purposes, such as to manage the effective duration of the Portfolio or as a substitute for direct investment; and > More than 25% of its total assets in the Banking and Finance industry. For purposes of this limitation, the Banking and Finance industry is deemed to include securities of issuers engaged in banking or finance businesses, including issuers of asset-and mortgage-backed securities. Main types of securities the Fund may hold: Asset-Backed Securities Bank Obligations Corporate Debt Instruments Derivative Instruments 14 Foreign Debt Instruments Mortgage-Backed Securities Other Investment Companies U.S. Government and Agency Securities Principal Risks. Before investing in the Fund, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested and the amount of risk you are willing to take. The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations regarding particular securities or markets are not met. A summary of the principal risks of investing in the Fund can be found below. Interest Rate Risk . The Fund's share price and total return will vary in response to changes in interest rates. If rates increase, the value of the Fund's investments generally will decline, as will the value of your investment in the Fund. Credit Risk . The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the lower the credit rating of a security, the greater the risk that the issuer will default on its obligation, which could result in a loss to the Fund. Prepayment Risk. Prepayment occurs when the issuer of a security can repay principal prior to the security’s maturity. Securities subject to prepayment can offer less potential for gains during a declining interest rate environment and similar or greater potential for loss in a rising interest rate environment. In addition, the potential impact of prepayment features on the price of a debt security can be difficult to predict and result in greater volatility. This risk could affect the total return of the Fund. Foreign Securities Risk. To the extent the Fund invests in depositary receipts, such investments are subject to additional risks including political and economic risks, greater volatility, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, and less stringent investor protection and disclosure standards of foreign markets. Political Risk. A greater potential for revolts, and the taking of assets by governments exists when investing in securities of foreign countries. Government Risk . The U.S. government’s guarantee of ultimate payment of principal and timely payment of interest on certain U. S. government securities owned by the Fund does not imply that the Fund’s shares are guaranteed or that the price of the Fund’s shares will not fluctuate. Investment Company Risk. The Fund may invest in closed-end funds and other investment companies ("Underlying Funds"). As a result, your cost of investing in the Fund may be higher than the cost of investing directly in Underlying Fund shares and may be higher than other mutual funds that invest directly in equities. You will indirectly bear fees and expenses charged by the underlying Funds in addition to the Fund’s direct fees and expenses. Derivatives Risk. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the Fund’s original investment. Many derivatives create leverage thereby causing the Fund to be more volatile than it would be if it had not used derivatives. Non-Diversified Fund Risk . The Fund is “non-diversified” and therefore not required to meet certain diversification requirements under federal laws. The Fund may invest a greater percentage of its assets in the securities of an issuer. However, a decline in the value of a single investment could cause the Fund’s overall value to decline to a greater degree than if the Fund held a more diversified portfolio. The Fund is “non-diversified” under the 1940 Act, meaning that it may invest in a limited number of issuers. Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government agency. You could lose money if you sell when the Fund’s share price is lower than when you invested. 15 More information about fund risks, including additional risk factors not discussed above, is included in Fund Details and the fund's Statement of Additional Information. Past Performance. The bar chart listed below shows how the Short-Term Bond Fund has performed from year to year. The table below it compares the Fund’s performance over time to those of the Barclay’s Capital 1-3 Year Aggregate Index, a widely recognized, unmanaged index generally representative of short-term securities. This table gives some indication of the risks of an investment in the Fund by comparing the Fund’s performance with a broad measure of market performance. The Fund has been in existence since January 21, 1997, but until March 2, 2006, the Fund was organized as the UltraShort Bond Fund of the former American Independence Funds Trust (the “predecessor fund”). The Fund has carried forward the performance of the predecessor fund, as the predecessor fund is the accounting survivor. The performance of the Institutional Class shares of the Fund includes the performance of the predecessor fund’s Service Class shares prior to the reorganization, which has been restated to reflect differences in any applicable sales charge (but not differences in expenses). If the performance had been adjusted to reflect all differences in expenses, the performance of the Fund would be higher. The returns for the Institutional Class, Class A and Class C will differ because of differences in the expenses of each class. Of course, past performance (before and after taxes) does not indicate how a Fund will perform in the future. Both the bar chart and the table assume reinvestment of dividends and distributions and reflect voluntary and contractual fee reductions. Without such fee reductions, the Fund’s performance would have been lower. (1) Institutional Class Shares were previously called Service Class. These figures are for the year ended December 31 of each year. While the Institutional Class has no sales charge, Service Class Shares did and performance would have been lower if sales charges were included. Best quarter: % Q3 2001 Worst quarter: )% Q2 2008 16 AVERAGE ANNUAL TOTAL RETURNS For the Period Ending December 31, 2009 1 Year 5 Years 10 Years Institutional Class Shares Return Before Taxes % % % Return After Taxes on Distributions % % % Return After Taxes on Distribution and sale of shares % % % Class A Shares % % % Class C Shares % % % Lehman Brothers 1-3 Aggregate Index % % % (1) For current performance information, including the Fund’s 30-day yield, call 1-888-266- 8787. (2) After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. (3) After-tax returns for Class A and Class C Shares, which are not shown, will vary from those shown for Institutional Class Shares. (4) The Index does not reflect the deduction for fees, expenses or taxes. Portfolio Management. Investment Adviser. The investment adviser for the Fund is American Independence Financial Services, LLC (“AIFS” or the “Adviser”). Mr. Robert A. Campbell and Mr. Eric M. Rubin are responsible for the oversight of the sub-advisory relationship. Sub-Adviser. Fischer Francis Trees & Watts, Inc. and two of its affiliates, Fischer Francis Trees & Watts, Inc., a corporate partnership organized under the laws of the United Kingdom, and Fischer Francis Trees & Watts (Singapore) PTE. LTD., a Singapore corporation, serves as the Sub-Adviser to the Fund. Managed the . Manager Name Primary Title Fund Since Kenneth O’Donnell Portfolio Manager 2008 Robert Campbell Portfolio Manager 2006 For additional information about the Adviser, Sub-adviser and portfolio managers, please refer to the Fund Management section starting on page of this Prospectus. For more information regarding portfolio managers’ compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities of the Funds he manages, please consult the SAI. Purchase and Sale Information. Purchase minimums Institutional Class A Class C Class Shares Shares Shares Initial Purchase $ 3,000,000 $ 5,000 $ 5,000 Subsequent Purchases $ 5,000 $ 250 $ 250 How to purchase shares through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by completing an application and sending a check to the Fund at the address below (an application can be obtained through the Fund’s website at www.aifunds.com or by calling (888) 266-8787): American Independence Funds P. O. Box 8045 17 Boston, MA 02266-8045 Shares of the Fund may not be available for sale in all states. Consult your investment representative or institution for specific information. Orders received by your broker or Service Organization for the Fund in proper order prior to the determination of net asset value and transmitted to the Fund prior to the close of its business day which is currently 4:00 p.m. Eastern Time, will become effective that day. How to redeem shares In general, you may redeem shares on any business day: through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by calling (888) 266-8787 or by writing to the Fund at the address below: American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Tax Information. The Fund intends to make distributions that may be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan. Financial Intermediary Compensation. If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Web site for more information. 18 Intermediate Bond Fund FUND SUMMARY – INTERMEDIATE BOND FUND Investment Objectives/Goals. The Fund’s goal is to provide investors with a competitive total return. A high level of current income is an important consideration in achieving the Fund’s overall goal. Fees and Expenses of the Fund. This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Investing With The Fund” starting on page of the Fund’s Prospectus. The table does not reflect charges that may be imposed in connection with an account through which you hold Fund shares. A broker dealer or financial institution maintaining an account through which you hold fund shares may charge separate account, service or transaction fees on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown here. Institutional Class Class A Shares Shares Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None 4.25% Maximum Deferred Sales Charge (Load) (as a percentage of the Net Asset Value purchase) None None (1 ) Redemption Fee None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fee 0.40 % 0.40 % Distribution (12b-1) and Service Fees None 0.50 % Other Expenses 0.43 % 0.43 % Acquired Fund Fees and Expenses 0.00 % 0.00 % Total Annual Fund Operating Expenses 0.83 % 1.33 % Fee Waivers and Expense Reimbursements -0.18 % -0.38 % Net Expenses 0.65 % 0.95 % (1) Class A shares that are purchased in amounts of $1,000,000 or more will be assessed a 1.0% CDSC if they are redeemed within one year of the date of purchase and a 0.50% CDSC if redeemed after the first year and within the second year. (2) The Board approved a Rule 12-b1 plan with a 0.25% distribution fee for Class A. In addition, the Board approved a Shareholder Services Plan for Class A shares which would provide for a fee paid monthly at an annual rate of up to 0.25%. (3) Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year restated. (4) The Fund is required to disclose “Acquired Fund Fees and Expenses” in the above fee table. Acquired Fund Fees and Expenses are indirect fees that funds incur from investing in the shares of other mutual funds (“Acquired Fund(s)”). The indirect fee represents a pro rata portion of the cumulative expenses charged by the Acquired Fund. Acquired Fund Fees and Expenses are reflected in the Acquired Fund’s net asset value. 19 Without Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would have been 0.83% and 1.33% for the Institutional Class Shares and Class A Shares, respectively. (5) AIFS has contractually agreed to reduce the management fee and reimburse expenses until March 1, 2011 in order to keep the Total Annual Fund Operating Expenses at 0.60% of the Fund’s average net assets for the Institutional Class Shares and 0.90% of the Fund’s average net assets for the Class A Shares. The contractual expense limitation does not apply to “Acquired Fund Fees and Expenses.” The Adviser is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid in any fiscal year of the Fund over the following three fiscal years, as long as the reimbursement does not cause the Fund’s operating expenses to exceed the expense cap. Example Based on the costs above, this example helps you compare the expenses of each share class with those of other mutual funds. The example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvest all dividends and distributions. This is only an example; actual expenses may be different. Because this example is hypothetical and for comparison only, your actual costs will be different. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund's performance. As of October 31, 2009, the Intermediate Bond Fund’s portfolio turnover rate was 426%. Principal Investment Strategies, Risks and Performance. Principal Strategies. Under normal market conditions, the Fund intends to invest in the following manner: In intermediate term investment-grade bonds; At least 80% of the value of its net assets, plus the amount of any borrowings for investment purposes, in bonds; Maintain an average maturity between 3 and 10 years; Limit the Fund’s average duration to 5 years or less; and At least 65% of the Fund’s total assets invested in Bonds that are rated, at the time of purchase, within the three highest long-term or two highest short-term rating categories assigned by a nationally recognized statistical rating organization, such as Moody’s Investors Service Inc. (‘‘Moody’s’’), Standard & Poor’s Corporation (‘‘S&P’’), or Fitch Ratings Ltd. (‘‘Fitch’’), or which are unrated and determined by the Fund’s adviser to be of comparable quality. Main types of securities the Fund may hold: U.S. Treasury Obligations U.S. Government Agency Securities Corporate Debt Securities Mortgage-backed Securities Derivative Securities Forward Commitment Transactions 20 Principal Risks. Before investing in the Fund, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested and the amount of risk you are willing to take. The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations regarding particular securities or markets are not met. A summary of the principal risks of investing in the Fund can be found below. Interest Rate Risk . The Fund's share price and total return will vary in response to changes in interest rates. If rates increase, the value of the Fund's investments generally will decline, as will the value of your investment in the Fund. Credit Risk . The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the lower the credit rating of a security, the greater the risk that the issuer will default on its obligation, which could result in a loss to the Fund. Prepayment Risk. Prepayment occurs when the issuer of a security can repay principal prior to the security’s maturity. Securities subject to prepayment can offer less potential for gains during a declining interest rate environment and similar or greater potential for loss in a rising interest rate environment. In addition, the potential impact of prepayment features on the price of a debt security can be difficult to predict and result in greater volatility. This risk could affect the total return of the Fund. Government Risk . The U.S. government’s guarantee of ultimate payment of principal and timely payment of interest on certain U. S. government securities owned by the Fund does not imply that the Fund’s shares are guaranteed or that the price of the Fund’s shares will not fluctuate. Derivatives Risk. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the Fund’s original investment. Many derivatives create leverage thereby causing the Fund to be more volatile than it would be if it had not used derivatives. Forward Commitment Risk . The Fund may purchase or sell securities on a forward commitment basis. A forward commitment transaction is an agreement by a Fund to purchase or sell securities at a specified future date. When a Fund engages in these transactions, the Fund relies on the buyer or seller, as the case may be, to consummate the sale. Failure to do so may result in the Fund missing the opportunity to obtain a price or yield considered to be advantageous. As part of an investment strategy, the Fund may sell the forward commitment securities before the settlement date or enter into new commitments to extend the delivery date into the future. Such securities have the effect of leverage on the Funds and may contribute to volatility of a Fund’s net asset value and create a higher portfolio turnover rate. The Fund is “diversified” under the Investment Company Act of 1940, as amended (the “1940 Act”). Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government agency. You could lose money if you sell when the Fund’s share price is lower than when you invested. More information about fund risks, including additional risk factors not discussed above, is included in Fund Details and the fund's Statement of Additional Information. Past Performance. The bar chart on this page shows how the Intermediate Bond Fund has performed from year to year. The table below it compares the Fund’s performance over time to that of the Barclays Capital U.S. Aggregate Index, a widely recognized, unmanaged index generally representative of intermediate bonds. This table gives some indication of the risks of an investment in the Fund by comparing the Fund’s performance with a broad measure of market performance. The Fund has been in existence since January 21, 1997, but until March 2, 2006, the Fund was organized as the Intermediate Bond Fund of the former American Independence Funds Trust (the “predecessor fund”). The Fund has carried forward the performance of the predecessor fund, as the predecessor fund is the accounting survivor. The performance of the Institutional Class shares of the Fund includes the 21 performance of the predecessor fund’s Service Class shares prior to the reorganization, which has been restated to reflect differences in any applicable sales charges (but not differences in expenses). If the performance had been adjusted to reflect all differences in expenses, the performance of the Fund would be higher. The returns for the Institutional Class and Class A Shares will differ because of differences in the expenses of each class. Of course, past performance (before and after taxes) does not indicate how a Fund will perform in the future. Both the bar chart and the table assume reinvestment of dividends and distributions and reflect voluntary and contractual fee reductions. Without such fee reductions, the Fund’s performance would have been lower. (1) Institutional Class Shares were previously called Service Class. These figures are for the year ended December 31 of each year. While the Institutional Class has no sales charge, Service Class Shares did and performance would have been lower if sales charges were included. Best quarter: % Q4 2008 Worst quarter: )% Q2 2004 AVERAGE ANNUAL TOTAL RETURNS For the Period Ending December 31, 2009 1 Year 5 Years 10 Years Institutional Class Shares Return Before Taxes % % % Return After Taxes on Distributions % % % Return After Taxes on Distribution and sale of shares % % % Class A Shares % % % Barclays Capital U.S. Aggregate Index % % % (1) For current performance information, including the Fund’s 30-day yield, call 1-888-266- 8787. (2) After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. (3) After-tax returns for Class A Shares, which are not shown, will vary from those shown for Institutional Class Shares. (4) The Index does not reflect the deduction for fees, expenses or taxes. 22 Portfolio Management. Investment Adviser. The investment adviser for the Fund is American Independence Financial Services, LLC (“AIFS” or the “Adviser”). Mr. Robert A. Campbell and Mr. Eric M. Rubin are responsible for the oversight of the sub-advisory relationship. Sub-Adviser. Fischer Francis Trees & Watts, Inc., and two of its affiliates, Fischer Francis Trees & Watts, Inc., a corporate partnership organized under the laws of the United Kingdom, and Fischer Francis Trees & Watts (Singapore) PTE. LTD., a Singapore corporation, serves as the Sub-Adviser to the Fund. Managed the . Manager Name Primary Title Fund Since David Marmon Portfolio Manager 2008 Robert Campbell Portfolio Manager 2006 For additional information about the Adviser, Sub-adviser and portfolio managers, please refer to the Fund Management section starting on page of this Prospectus. For more information regarding portfolio managers’ compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities of the Funds he manages, please consult the SAI. Purchase and Sale Information. Purchase minimums Institutional Class A Class Shares Shares Initial Purchase $ 3,000,000 $ 5,000 Subsequent Purchases $ 5,000 $ 250 How to purchase shares through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by completing an application and sending a check to the Fund at the address below (an application can be obtained through the Fund’s website at www.aifunds.com or by calling (888) 266-8787): American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Shares of the Fund may not be available for sale in all states. Consult your investment representative or institution for specific information. Orders received by your broker or Service Organization for the Fund in proper order prior to the determination of net asset value and transmitted to the Fund prior to the close of its business day which is currently 4:00 p.m. Eastern Time, will become effective that day. How to redeem shares In general, you may redeem shares on any business day: through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by calling (888) 266-8787 or by writing to the Fund at the address below: American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 23 Tax Information. The Fund intends to make distributions that may be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan. Financial Intermediary Compensation. If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Web site for more information. 24 Kansas Tax-Exempt Bond Fund FUND SUMMARY – KANSAS TAX-EXEMPT BOND FUND Investment Objectives/Goals. The Fund’s goal is to preserve capital while producing current income for the investor that is exempt from both federal and Kansas state income taxes. Fees and Expenses of the Fund. This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Investing With The Fund” starting on page of the Fund’s Prospectus. The table does not reflect charges that may be imposed in connection with an account through which you hold Fund shares. A broker dealer or financial institution maintaining an account through which you hold fund shares may charge separate account, service or transaction fees on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown here. Institutional Class Class A Class C Shares Shares Shares Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None 4.25 % None Maximum Deferred Sales Charge (Load) (as a percentage of the Net Asset Value purchase) None None (1 ) 1.00 % Redemption Fee None None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fee 0.30 % 0.30 % 0.30 % Distribution (12b-1) and Service Fees None 0.50 % 1.00 % Other Expenses 0.27 % 0.27 % 0.27 % Acquired Fund Fees and Expenses 0.00 % 0.00 % 0.00 % Total Annual Fund Operating Expenses 0.57 % 1.07 % 1.57 % Fee Waivers and Expense Reimbursements -0.17 % -0.27 % -0.17 % Net Expenses 0.40 % 0.80 % 1.40 % (1) Class A shares that are purchased in amounts of $1,000,000 or more will be assessed a 1.0% CDSC if they are redeemed within one year of the date of purchase and a 0.50% CDSC if redeemed after the first year and within the second year. (2) Class C shares will be assessed a 1.00% CDSC if redeemed within one year of date of purchase. (3) The Board approved a Rule 12-b1 plan with a 0.25% distribution fee for Class A. In addition, the Board approved a Shareholder Services Plan for Class A shares which would provide for a fee paid monthly at an annual rate of up to 0.25%. (4) Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year restated. (5) The Fund is required to disclose “Acquired Fund Fees and Expenses” in the above fee table. Acquired Fund Fees and Expenses are indirect fees that funds incur from investing in the shares of other mutual funds 25 (“Acquired Fund(s)”). The indirect fee represents a pro rata portion of the cumulative expenses charged by the Acquired Fund. Acquired Fund Fees and Expenses are reflected in the Acquired Fund’s net asset value. Without Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would have been 0.57%, 1.07% and 1.57% for the Institutional Class Shares, Class A Shares and Class C Shares, respectively. (6) AIFS has contractually agreed to reduce the management fee and reimburse expenses until March 1, 2011 in order to keep the Total Annual Fund Operating Expenses at 0.40% of the Fund’s average net assets for the Institutional Class Shares, 0.80% of the Fund’s average net assets for the Class A Shares and 1.40% of the Fund’s average net assets for the Class C Shares. The contractual expense limitation does not apply to “Acquired Fund Fees and Expenses.” The Adviser is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid in any fiscal year of the Fund over the following three fiscal years, as long as the reimbursement does not cause the Fund’s operating expenses to exceed the expense cap. Example Based on the costs above, this example helps you compare the expenses of each share class with those of other mutual funds. The example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvest all dividends and distributions. This is only an example; actual expenses may be different. Because this example is hypothetical and for comparison only, your actual costs will be different. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund's performance. As of October 31, 2009, the Kansas Tax-Exempt Bond Fund’s portfolio turnover rate was 14%. Principal Investment Strategies, Risks and Performance. Principal Strategies. Under normal market conditions, the Fund intends to invest in the following manner: > In municipal bonds with maturities ranging from 1 to 20 years and which are rated, at time of purchase, investment grade; Maintain a dollar weighted average portfolio maturity between 7 and 12 years; At least 80% of its net assets, plus borrowings for investment purposes, in municipal bonds which produce interest that is exempt from federal income tax and, in the opinion of bond counsel of the issuer of Kansas obligations, is exempt from Kansas state income taxes; and > At least 80% of its net assets in securities the income from which is not subject to the alternative minimum tax. Main types of securities the Fund may hold: Municipal Securities from the State of Kansas Municipal Securities from other states Short-Term Investments 26 Principal Risks. Before investing in the Fund, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested and the amount of risk you are willing to take. The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations regarding particular securities or markets are not met. A summary of the principal risks of investing in the Fund can be found below. Interest Rate Risk . The Fund's share price and total return will vary in response to changes in interest rates. If rates increase, the value of the Fund's investments generally will decline, as will the value of your investment in the Fund. Credit Risk . The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the lower the credit rating of a security, the greater the risk that the issuer will default on its obligation, which could result in a loss to the Fund. State Specific Risk . State specific risk is the chance that the Fund, because it invests primarily in securities issued by Kansas and its municipalities, is more vulnerable to unfavorable developments in Kansas than funds that invest in municipal bonds of many different states. Prepayment Risk. Prepayment occurs when the issuer of a security can repay principal prior to the security’s maturity. Securities subject to prepayment can offer less potential for gains during a declining interest rate environment and similar or greater potential for loss in a rising interest rate environment. In addition, the potential impact of prepayment features on the price of a debt security can be difficult to predict and result in greater volatility. This risk could affect the total return of the Fund. The Fund is “diversified” under the Investment Company Act of 1940, as amended (the “1940 Act”). Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government agency. You could lose money if you sell when the Fund’s share price is lower than when you invested. More information about fund risks, including additional risk factors not discussed above, is included in Fund Details and the fund's Statement of Additional Information. Past Performance. The bar chart and table below show how the Kansas Tax-Exempt Bond Fund has performed and how its performance has varied from year to year. The information provides some indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and showing in the table how the Fund’s average annual returns compare with the returns of the Barclays Capital 7-Year Municipal Index, a widely recognized unmanaged index generally representative of intermediate- and short-term municipal bonds. The Fund has been in existence since December 10, 1990. From its inception to May 17, 1997, the Fund was organized as the Kansas Tax Exempt Income Portfolio of the SEI Tax Exempt Trust. From May 17, 1997 until March 2, 2006, the Fund was organized as the Kansas Tax Exempt Bond Fund of the former American Independence Funds Trust. Since March 2, 2006, the Fund has been organized in its current status. Since November 2000, the Fund has been managed by its current manager. The Fund has carried forward the performance of the predecessor fund, as the predecessor fund is the accounting survivor. The performance of the Institutional Class shares of the Fund includes the performance of the predecessor fund’s Service Class shares prior to the reorganization, which has been restated to reflect differences in any applicable sales charges (but not differences in expenses). If the performance had been adjusted to reflect all differences in expenses, the performance of the Fund would be higher. The returns for the Institutional Class, Class A and Class C will differ because of differences in the expenses of each class. Of course, past performance (before and after taxes) does not indicate how a Fund will perform in the future. Both the bar chart and the table assume reinvestment of dividends and distributions and 27 reflect voluntary and contractual fee reductions. Without such fee reductions, the Fund’s performance would have been lower. (1) The Institutional Class had been previously designated as Service Class and subject to a front-end sales charge prior to February 28, 2002. These figures are for the year ended December 31 of each year. While the Institutional Class Shares have no sales charge, Service Class Shares did; and performance would have been lower if sales charges were included Best quarter: % Q4 2000 Worst quarter: )% Q2 1999 AVERAGE ANNUAL TOTAL RETURNS For the Period Ending December 31, 2009 1 Year 5 Years 10 Years Institutional Class Shares Return Before Taxes % % % Return After Taxes on Distributions % % % Return After Taxes on Distribution and sale of shares % % % Class A Shares % % % Class C Shares % % % Barclays Capital 7-Year Municipal Index % % % (1) For current performance information, including the Fund’s 30-day yield, call 1-888-266- 8787. (2) After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. (3) After-tax returns for Class A and Class C Shares, which are not shown, will vary from those shown for Institutional Class Shares. (4) The Index does not reflect the deduction for fees, expenses or taxes. Portfolio Management. Investment Adviser. The investment adviser for the Fund is American Independence Financial Services, LLC (“AIFS” or the “Adviser”). Managed the . Manager Name Primary Title Fund Since Robert Campbell Portfolio Manager 2000 28 For additional information about the Adviser, Sub-adviser and portfolio managers, please refer to the Fund Management section starting on page of this Prospectus. For more information regarding portfolio managers’ compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities of the Funds he manages, please consult the SAI. Purchase and Sale Information. Purchase minimums Institutional Class A Class C Class Shares Shares Shares Initial Purchase $ 3,000,000 $ 5,000 $ 5,000 Subsequent Purchases $ 5,000 $ 250 $ 250 How to purchase shares through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by completing an application and sending a check to the Fund at the address below (an application can be obtained through the Fund’s website at www.aifunds.com or by calling (888) 266-8787): American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Shares of the Fund may not be available for sale in all states. Consult your investment representative or institution for specific information. Orders received by your broker or Service Organization for the Fund in proper order prior to the determination of net asset value and transmitted to the Fund prior to the close of its business day which is currently 4:00 p.m. Eastern Time, will become effective that day. How to redeem shares In general, you may redeem shares on any business day: through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by calling (888) 266-8787 or by writing to the Fund at the address below: American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Tax Information. The Fund intends to make distributions that may be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan. Financial Intermediary Compensation. If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Web site for more information. 29 International Bond Fund FUND SUMMARY – INTERNATIONAL BOND FUND Investment Objectives/Goals. The Fund’s goal is to provide investors with as high a level of total return as may be consistent with the preservation of capital by principally investing directly or indirectly in fixed income securities and other financial instruments to gain exposure to issuers located outside the United States. Fees and Expenses of the Fund. This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Investing With The Fund” starting on page of the Fund’s Prospectus. The table does not reflect charges that may be imposed in connection with an account through which you hold Fund shares. A broker dealer or financial institution maintaining an account through which you hold fund shares may charge separate account, service or transaction fees on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown here. Institutional Class Class A Shares Shares Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None 4.25 % Maximum Deferred Sales Charge (Load) (as a percentage of the Net Asset Value purchase) None None (1 ) Redemption Fee None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fee 0.40 % 0.40 % Distribution (12b-1) and Service Fees None 0.25 % Other Expenses 0.49 % 0.49 % Acquired Fund Fees and Expenses 0.00 % 0.00 % Total Annual Fund Operating Expenses 0.89 % 1.14 % (1) Class A shares that are purchased in amounts of $1,000,000 or more will be assessed a 1.0% CDSC if they are redeemed within one year of the date of purchase and a 0.50% CDSC if redeemed after the first year and within the second year. (2) The Board approved a Rule 12-b1 plan with a 0.25% distribution fee for Class A. In addition, the Board approved a Shareholder Services Plan for Class A shares which would provide for a fee paid monthly at an annual rate of up to 0.25%. At the present time, the Fund is not assessing a 12B-1 fee. Should the Fund wish to impose this fee, the implementation must be approved by the Board and shareholders must be provided with 60 days’ prior notice. (3) Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year restated. (4) The Fund is required to disclose “Acquired Fund Fees and Expenses” in the above fee table. Acquired Fund Fees and Expenses are indirect fees that funds incur from investing in the shares of other mutual funds (“Acquired Fund(s)”). The indirect fee represents a pro rata portion of the cumulative expenses charged by the Acquired Fund. Acquired Fund Fees and Expenses are reflected in the Acquired Fund’s net asset value. Without Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would have been 0.89% and 1.14% for the Institutional Class Shares and Class A Shares, respectively. 30 (5) Pursuant to an operating expense limitation agreement between the Adviser and the Fund, the Adviser has agreed to waive its fees and/or absorb expenses of the Fund to ensure that Total Annual Operating Expenses do not exceed 0.89% of the Fund’s average net assets for the Institutional Class Shares until March 31, 2013 and 1.14% of the Fund’s average net assets for the Class A until March 1, 2011. The contractual expense limitation does not apply to “Acquired Fund Fees and Expenses.” The Adviser is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid in any fiscal year of the Fund over the following three fiscal years, as long as the reimbursement does not cause the Fund’s operating expenses to exceed the expense cap. Example Based on the costs above, this example helps you compare the expenses of each share class with those of other mutual funds. The example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvest all dividends and distributions. This is only an example; actual expenses may be different. Because this example is hypothetical and for comparison only, your actual costs will be different. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund's performance. As of October 31, 2009, the International Bond Fund’s portfolio turnover rate was 73%. Principal Investment Strategies, Risks and Performance. Principal Strategies. Under normal market conditions, the Fund intends to invest in the following manner: > At least 65% of the Fund's total assets will be invested in debt securities and their related instruments from jurisdictions outside the U.S., including emerging markets; > Debt securities and their related instruments of issuers from at least three different countries other than the United States; At least 80% of its net assets in foreign issues; Not more than 20% of net assets in developing countries or emerging market securities; Derivatives, such as options, futures, forward contracts and swap agreements, for hedging and non- hedging purposes, such as to manage the effective duration of the Fund or as a substitute for direct investment, including to increase exposure to the global markets; > More than 25% of its total assets in the Banking and Finance industry. For purposes of this limitation, the Banking and Finance industry is deemed to include securities of issuers engaged in banking or finance businesses, including issuers of asset- and mortgage-backed securities; and > Seek to maintain an average Fund Quality rating of A- (A3). Main types of securities the Fund may hold: Asset-Backed Securities and Mortgage-Backed Securities Bank Obligations Corporate Debt Securities 31 Derivative Securities, including futures, options and forward contracts Government Debt Instruments Short-Term Investments Principal Risks. Before investing in the Fund, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested and the amount of risk you are willing to take. The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations regarding particular securities or markets are not met. A summary of the principal risks of investing in the Fund can be found below. Interest Rate Risk . The Fund's share price and total return will vary in response to changes in interest rates. If rates increase, the value of the Fund's investments generally will decline, as will the value of your investment in the Fund. Credit Risk . The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the lower the credit rating of a security, the greater the risk that the issuer will default on its obligation, which could result in a loss to the Fund. Prepayment Risk. Prepayment occurs when the issuer of a security can repay principal prior to the security’s maturity. Securities subject to prepayment can offer less potential for gains during a declining interest rate environment and similar or greater potential for loss in a rising interest rate environment. In addition, the potential impact of prepayment features on the price of a debt security can be difficult to predict and result in greater volatility. This risk could affect the total return of the Fund. Foreign Securities Risk. To the extent the Fund invests in depositary receipts, such investments are subject to additional risks including political and economic risks, greater volatility, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, and less stringent investor protection and disclosure standards of foreign markets. Political Risk. A greater potential for revolts, and the taking of assets by governments exists when investing in securities of foreign countries. Duration risk. Duration is a measure of the sensitivity of a security's price to changes in interest rates. The longer a security's duration, the more sensitive it will be to changes in interest rates. Similarly, a fund with a longer average fund duration will be more sensitive to changes in interest rates than a fund with a shorter average Fund duration. Government Risk . The U.S. government’s guarantee of ultimate payment of principal and timely payment of interest on certain U. S. government securities owned by the Fund does not imply that the Fund’s shares are guaranteed or that the price of the Fund’s shares will not fluctuate. Foreign currency risk. Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time. Derivatives Risk. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the Fund’s original investment. Many derivatives create leverage thereby causing the Fund to be more volatile than it would be if it had not used derivatives. Non-Diversified Fund Risk . The Fund is “non-diversified” and therefore not required to meet certain diversification requirements under federal laws. The Fund may invest a greater percentage of its assets in the securities of an issuer. However, a decline in the value of a single investment could cause the Fund’s overall value to decline to a greater degree than if the Fund held a more diversified portfolio. Concentration risk. A Fund that invests more than 25% of its total assets in the securities of issuers in any one industry is exposed to the risk that factors affecting that industry will have a greater effect on the Fund than they would if the Fund invested in a diversified number of unrelated industries. The 32 International Bond Fund’s concentration risk is in the banking industry, which exposes the Fund to risks associated with the banking industry, such as interest rate and credit risks. The Fund is “non-diversified” under the 1940 Act, meaning that it may invest in a limited number of issuers. Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government agency. You could lose money if you sell when the Fund’s share price is lower than when you invested. More information about fund risks, including additional risk factors not discussed above, is included in Fund Details and the fund's Statement of Additional Information. Past Performance. The bar chart listed below shows how the International Bond Fund and its predecessor have performed from year to year. The table below it compares the Fund's performance over time to those of the Barclays Capital Global Aggregate Index (ex-USD). This table gives some indication of the risks of an investment in the Fund by comparing the Fund's performance with a broad measure of market performance. The Fund has been in existence since May 9, 1996, but until May 8, 2008, the Fund was organized as the International Portfolio of the former FFTW Funds, Inc. The returns for the Institutional Class and Class A will differ because of differences in the expenses of each class. Of course, past performance (before and after taxes) does not indicate how a Fund will perform in the future. Both the bar chart and the table assume reinvestment of dividends and distributions and reflect voluntary and contractual fee reductions. Without such fee reductions, the Fund’s performance would have been lower. (1) Institutional Class Shares were previously called Advisor Class. These figures are for the year ended December 31 of each year. Best quarter: % Q2 2002 Worst quarter: )% Q3 2008 33 AVERAGE ANNUAL TOTAL RETURNS For the Period Ending December 31, 2009 1 Year 5 Years 10 Years Institutional Class Shares Return Before Taxes % % % Return After Taxes on Distributions % % % Return After Taxes on Distribution and sale of shares % % % Class A Shares % % % Barclays Capital Global Aggregate Index (ex-USD) % % % (1) For current performance information, including the Fund’s 30-day yield, call 1-888-266- 8787. (2) After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. (3) After-tax returns for Class A Shares, which are not shown, will vary from those shown for Institutional Class Shares. (4) The Index does not reflect the deduction for fees, expenses or taxes. Portfolio Management. Investment Adviser. The investment adviser for the Fund is American Independence Financial Services, LLC (“AIFS” or the “Adviser”). Mr. Robert A. Campbell is responsible for the oversight of the sub-advisory relationship. Sub-Adviser. Fischer Francis Trees & Watts, Inc., and two of its affiliates, Fischer Francis Trees & Watts, Inc., a corporate partnership organized under the laws of the United Kingdom, and Fischer Francis Trees & Watts (Singapore) PTE. LTD., a Singapore corporation, serves as the Sub-Adviser to the Fund. Managed the . Manager Name Primary Title Fund Since David J. Marmon Portfolio Manager 2000 Robert Campbell Portfolio Manager 2008 For additional information about the Adviser, Sub-adviser and portfolio managers, please refer to the Fund Management section starting on page of this Prospectus. For more information regarding portfolio managers’ compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities of the Funds he manages, please consult the SAI. Purchase and Sale Information. Purchase minimums Institutional Class A Class Shares Shares Initial Purchase $ 3,000,000 $ 5,000 Subsequent Purchases $ 5,000 $ 250 How to purchase shares through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by completing an application and sending a check to the Fund at the address below (an application can be obtained through the Fund’s website at www.aifunds.com or by calling (888) 266-8787): American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 34 Shares of the Fund may not be available for sale in all states. Consult your investment representative or institution for specific information. Orders received by your broker or Service Organization for the Fund in proper order prior to the determination of net asset value and transmitted to the Fund prior to the close of its business day which is currently 4:00 p.m. Eastern Time, will become effective that day. How to redeem shares In general, you may redeem shares on any business day: through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by calling (888) 266-8787 or by writing to the Fund at the address below: American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Tax Information. The Fund intends to make distributions that may be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan. Financial Intermediary Compensation. If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Web site for more information. 35 U.S. Inflation-Indexed Fund FUND SUMMARY – U.S. INFLATION-INDEXED FUND Investment Objectives/Goals. The Fund’s goal is to provide investors with a high level of total return in excess of inflation as may be consistent with the preservation of capital. Fees and Expenses of the Fund. This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Investing With The Fund” starting on page of the Fund’s Prospectus. The table does not reflect charges that may be imposed in connection with an account through which you hold Fund shares. A broker dealer or financial institution maintaining an account through which you hold fund shares may charge separate account, service or transaction fees on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown here. Institutional Class Class A Class C Shares Shares Shares Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None 4.25 % None Maximum Deferred Sales Charge (Load) (as a percentage of the Net Asset Value purchase) None None (1 ) 1.00 % Redemption Fee None None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fee 0.40 % 0.40 % 0.40 % Distribution (12b-1) and Service Fees None 0.25 % 1.00 % Other Expenses 0.33 % 0.33 % 0.33 % Acquired Fund Fees and Expenses 0.00 % 0.00 % 0.00 % Total Annual Fund Operating Expenses 0.73 % 0.98 % 1.73 % Fee Waivers and Expense Reimbursements -0.41 % -0.41 % -0.41 % Net Expenses 0.32 % 0.57 % 1.32 % (1) Class A shares that are purchased in amounts of $1,000,000 or more will be assessed a 1.0% CDSC if they are redeemed within one year of the date of purchase and a 0.50% CDSC if redeemed after the first year and within the second year. (2) Class C shares will be assessed a 1.00% CDSC if redeemed within one year of date of purchase. (3) The Board approved a Rule 12-b1 plan with a 0.25% distribution fee for Class A. In addition, the Board approved a Shareholder Services Plan for Class A shares which would provide for a fee paid monthly at an annual rate of up to 0.25%. At the present time, the Fund is not assessing a 12b-1 fee. Should the Fund wish to impose this fee, the implementation must be approved by the Board and shareholders must be provided with 60 days’ prior notice. (4) Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year restated. (5) The Fund is required to disclose “Acquired Fund Fees and Expenses” in the above fee table. Acquired Fund Fees and Expenses are indirect fees that funds incur from investing in the shares of other mutual funds (“Acquired Fund(s)”). The indirect fee represents a pro rata portion of the cumulative expenses charged by the 36 Acquired Fund. Acquired Fund Fees and Expenses are reflected in the Acquired Fund’s net asset value. Without Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would have been 0.73%, 0.98% and 1.73% for the Institutional Class Shares, Class A Shares and Class C Shares, respectively. (6) Pursuant to an operating expense limitation agreement between the Adviser and the Fund, the Adviser has agreed to waive its fees and/or absorb expenses of the Fund to ensure that Total Annual Operating Expenses do not exceed 0.32% of the Fund’s average net assets for the Institutional Class Shares until March 31, 2013, 1.49% of the Fund’s average net assets for the Class A Shares until March 1, 2011 and 1.99% of the Fund’s average net assets for the Class C Shares until March 1, 2011. The contractual expense limitation does not apply to “Acquired Fund Fees and Expenses.” The Adviser is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid in any fiscal year of the Fund over the following three fiscal years, as long as the reimbursement does not cause the Fund’s operating expenses to exceed the expense cap. Example Based on the costs above, this example helps you compare the expenses of each share class with those of other mutual funds. The example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvest all dividends and distributions. This is only an example; actual expenses may be different. Because this example is hypothetical and for comparison only, your actual costs will be different. The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund's performance. As of October 31, 2009, the U.S. Inflation-Indexed Fund’s portfolio turnover rate was 189%. Principal Investment Strategies, Risks and Performance. Principal Strategies. Under normal market conditions, the Fund intends to invest in the following manner: > At least 80% of the Fund's net assets (including borrowings for investment purposes) in inflation-indexed securities that are denominated in U.S. dollars and derivative instruments denominated in U.S. dollars whose returns are linked to the inflation rate; Derivatives as a substitute for direct investment in inflation-indexed securities; and Up to 20% of the Fund’s net assets (including borrowings for investment purposes) in foreign inflation- indexed securities (sovereign issues only) whose returns may be hedged into U.S. dollars, U.S. government and agency securities that are not indexed to inflation, and corporate bonds denominated in U.S. dollars or foreign currencies. Main types of securities the Fund may hold: Inflation-Linked Securities Derivative Securities Foreign sovereign inflation-indexed securities Corporate Bonds Principal Risks. Before investing in the Fund, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested and the amount of risk you are willing to take. The Fund is subject to management risk and may not achieve its objective if the adviser’s 37 expectations regarding particular securities or markets are not met. A summary of the principal risks of investing in the Fund can be found below. Interest Rate Risk . The Fund's share price and total return will vary in response to changes in interest rates. If rates increase, the value of the Fund's investments generally will decline, as will the value of your investment in the Fund. Credit Risk . The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the lower the credit rating of a security, the greater the risk that the issuer will default on its obligation, which could result in a loss to the Fund. Prepayment Risk. Prepayment occurs when the issuer of a security can repay principal prior to the security’s maturity. Securities subject to prepayment can offer less potential for gains during a declining interest rate environment and similar or greater potential for loss in a rising interest rate environment. In addition, the potential impact of prepayment features on the price of a debt security can be difficult to predict and result in greater volatility. This risk could affect the total return of the Fund. Duration risk. Duration is a measure of the sensitivity of a security's price to changes in interest rates. The longer a security's duration, the more sensitive it will be to changes in interest rates. Similarly, a fund with a longer average fund duration will be more sensitive to changes in interest rates than a fund with a shorter average Fund duration. Government Risk . The U.S. government’s guarantee of ultimate payment of principal and timely payment of interest on certain U. S. government securities owned by the Fund does not imply that the Fund’s shares are guaranteed or that the price of the Fund’s shares will not fluctuate. Derivatives Risk. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the Fund’s original investment. Many derivatives create leverage thereby causing the Fund to be more volatile than it would be if it had not used derivatives. Non-Diversified Fund Risk . The Fund is “non-diversified” and therefore not required to meet certain diversification requirements under federal laws. The Fund may invest a greater percentage of its assets in the securities of an issuer. However, a decline in the value of a single investment could cause the Fund’s overall value to decline to a greater degree than if the Fund held a more diversified portfolio. The Fund is “non-diversified” under the 1940 Act, meaning that it may invest in a limited number of issuers. Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government agency. You could lose money if you sell when the Fund’s share price is lower than when you invested. More information about fund risks, including additional risk factors not discussed above, is included in Fund Details and the fund's Statement of Additional Information. Past Performance. The bar chart listed below shows how the U.S. Inflation-Indexed Fund and its predecessor have performed from year to year. The table below it compares the Fund's performance over time to those of the Barclays Capital U.S. Treasury Inflation Note Index. This table gives some indication of the risks of an investment in the Fund by comparing the Fund's performance with a broad measure of market performance. The Fund has been in existence since January 2, 2001, but until May 8, 2008, the Fund was organized as the U.S. Inflation-Indexed Portfolio of the former FFTW Funds, Inc. The returns for the Institutional Class, Class A and Class C will differ because of differences in the expenses of each class. Of course, past performance (before and after taxes) does not indicate how a Fund will perform in the future. Both the bar chart and the table assume reinvestment of dividends and distributions and 38 reflect voluntary and contractual fee reductions. Without such fee reductions, the Fund’s performance would have been lower. (1) Institutional Class Shares were previously called Advisor Class. These figures are for the year ended December 31 of each year. Best quarter: % Q3 2002 Worst quarter: )% Q3 2008 AVERAGE ANNUAL TOTAL RETURNS For the Period Ending December 31, 2009 Since 1 Year 5 Years Inception* Institutional Class Shares Return Before Taxes % % % Return After Taxes on Distributions % % % Return After Taxes on Distribution and sale of shares % % % Class A Shares % % % Class C Shares % % % Lehman Brothers 1-3 Aggregate Index % % % * Since inception of the Fund is January 2, 2001 (1) For current performance information, including the Fund’s 30-day yield, call 1-888-266- 8787. (2) After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. (3) After-tax returns for Class A and Class C Shares, which are not shown, will vary from those shown for Institutional Class Shares. (4) The Index does not reflect the deduction for fees, expenses or taxes. Portfolio Management. Investment Adviser. The investment adviser for the Fund is American Independence Financial Services, LLC (“AIFS” or the “Adviser”). Mr. Robert A. Campbell and Mr. Eric M. Rubin are responsible for the oversight of the sub-advisory relationship. Sub-Adviser. Fischer Francis Trees & Watts, Inc., located at 200 Park Street, New York, NY 10016, and two of its affiliates, Fischer Francis Trees & Watts, Inc., a corporate partnership organized under the laws of the United Kingdom, and Fischer Francis Trees & Watts (Singapore) PTE. LTD., a Singapore corporation, serves as the Sub-Adviser to the Fund. 39 Managed the . Manager Name Primary Title Fund Since Cedric Scholtes Portfolio Manager 2006 Robert Campbell Portfolio Manager 2008 For additional information about the Adviser, Sub-adviser and portfolio managers, please refer to the Fund Management section starting on page of this Prospectus. For more information regarding portfolio managers’ compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities of the Funds he manages, please consult the SAI. Purchase and Sale Information. Purchase minimums Institutional Class A Class C Class Shares Shares Shares Initial Purchase $ 250,000 $ 5,000 $ 5,000 Subsequent Purchases $ 5,000 $ 250 $ 250 How to purchase shares through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by completing an application and sending a check to the Fund at the address below (an application can be obtained through the Fund’s website at www.aifunds.com or by calling (888) 266-8787): American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Shares of the Fund may not be available for sale in all states. Consult your investment representative or institution for specific information. Orders received by your broker or Service Organization for the Fund in proper order prior to the determination of net asset value and transmitted to the Fund prior to the close of its business day which is currently 4:00 p.m. Eastern Time, will become effective that day. How to redeem shares In general, you may redeem shares on any business day: through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by calling (888) 266-8787 or by writing to the Fund at the address below: American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Tax Information. The Fund intends to make distributions that may be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan. Financial Intermediary Compensation. If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Web site for more information. 40 Fusion Fund FUND SUMMARY – FUSION FUND Investment Objectives/Goals. The Fund’s investment objective is long-term capital appreciation across a wide variety of market conditions, with the goal of providing longer term investors better returns with less volatility than the broad equity market averages across a full market cycle. Fees and Expenses of the Fund. This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $100,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Investing With The Fund” starting on page of the Fund’s Prospectus. The table does not reflect charges that may be imposed in connection with an account through which you hold Fund shares. A broker dealer or financial institution maintaining an account through which you hold fund shares may charge separate account, service or transaction fees on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown here. Institutional Class Class A Shares Shares Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None 2.25 % Maximum Deferred Sales Charge (Load) (as a percentage of the Net Asset Value purchase) None (1 ) None Redemption Fee None None Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fee 1.40 % 1.40 % Distribution (12b-1) and Service Fees None 0.50 % Other Expenses 2.55 % 2.55 % Acquired Fund Fees and Expenses 0.19 % 0.19 % Total Annual Fund Operating Expenses 4.14 % 4.64 % Fee Waivers and Expense Reimbursements -2.05 % -2.05 % Net Expenses 2.09 % 2.59 % (1) Class A shares that are purchased in amounts of $1,000,000 or more will be assessed a 1.00% CDSC if they are redeemed within one year of the date of purchase and a 0.50% CDSC if redeemed after the first year and within the second year. (2) The Board approved a Rule 12-b1 plan with a 0.25% distribution fee for Class A. In addition, the Board approved a Shareholder Services Plan for Class A shares which would provide for a fee paid monthly at an annual rate of up to 0.25%. (3) Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year restated. (4) The Fund is required to disclose “Acquired Fund Fees and Expenses” in the above fee table. Acquired Fund Fees and Expenses are indirect fees that funds incur from investing in the shares of other mutual funds (“Acquired Fund(s)”). The indirect fee represents a pro rata portion of the cumulative expenses charged by the Acquired Fund. Acquired Fund Fees and Expenses are reflected in the Acquired Fund’s net asset value. Without Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would have been 3.95% for the Institutional Class Shares and 4.45% for Class A Shares. (5) Pursuant to an operating expense limitation agreement between the Adviser and the Fund, the Adviser has agreed to waive its fees and/or absorb expenses of the Fund to ensure that Total Annual Operating Expenses do not exceed 1.90% of the Fund’s average net assets for the Institutional Class Shares and 2.40% of the Fund’s average net assets for the Class A Shares. The 41 contractual expense limitation does not apply to “Acquired Fund Fees and Expenses.” The Adviser is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid in any fiscal year of the Fund over the following three fiscal years, as long as the reimbursement does not cause the Fund’s operating expenses to exceed the expense cap. Example Based on the costs above, this example helps you compare the expenses of each share class with those of other mutual funds. The example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvest all dividends and distributions. This is only an example; actual expenses may be different. Because this example is hypothetical and for comparison only, your actual costs will be different. 1 Year 3 Year Institutional Class Shares $ 212 $ 1,031 Class A Shares $ 481 $ 1,374 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund's performance. The Fund has not yet commenced operations, and therefore, has no portfolio turnover rate to report. Principal Investment Strategies, Risks and Performance. Principal Strategies. Under normal market conditions, the Fund intends to invest in the following manner: > Equities and exchange-traded funds (“ETFs”) representing: both U.S. and overseas debt and equity securities; > Securities in both developed and emerging markets in Europe, the Far East, the Middle East, Africa, Australia, Latin America and North America; Up to 150% net long and 50% net short; Up to 30% of its net assets in U.S. Government zero-coupon bonds; and Other investment companies. Main types of securities the Fund may hold: Common stocks of companies traded on major stock exchanges Fixed income securities U.S. Government Zero Coupon Bonds Short term money market securities Exchange-traded funds (“ETFs”) and Other Investment Companies Foreign securities Futures Contracts, Swaps, Options and other types of derivative instruments Principal Risks. Before investing in the Fund, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested and the amount of risk you are willing to take. The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations regarding particular securities or markets are not met. A summary of the principal risks of investing in the Fund can be found below. 42 Equity Market Risk. The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. When the value of the Fund’s securities goes down, your investment in the Fund decreases in value. Interest Rate Risk . The Fund's share price and total return will vary in response to changes in interest rates. If rates increase, the value of the Fund's investments generally will decline, as will the value of your investment in the Fund. Credit Risk . The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the lower the credit rating of a security, the greater the risk that the issuer will default on its obligation, which could result in a loss to the Fund. Government Risk . The U.S. government’s guarantee of ultimate payment of principal and timely payment of interest on certain U. S. government securities owned by the Fund does not imply that the Fund’s shares are guaranteed or that the price of the Fund’s shares will not fluctuate. Zero-Coupon Bond Risk . Zero-coupon securities make no periodic interest payments, but are sold at a deep discount from their face value. The discount varies depending on the time remaining until maturity, as well as market interest rates, liquidity of the security, and the issuer’s perceived credit quality. If the issuer defaults, the holder may not receive any return on its investment. Because zero-coupon securities bear no interest and compound semiannually at the rate fixed at the time of issuance, their value generally is more volatile than the value of other fixed-income securities. ETF and Investment Company Risk. The Fund may invest in ETFs, closed-end funds and other investment companies ("Underlying Funds"). As a result, your cost of investing in the Fund may be higher than the cost of investing directly in Underlying Fund shares and may be higher than other mutual funds that invest directly in equities. You will indirectly bear fees and expenses charged by the underlying Funds in addition to the Fund’s direct fees and expenses. Foreign Securities Risk. To the extent the Fund invests in depositary receipts, such investments are subject to additional risks including political and economic risks, greater volatility, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, and less stringent investor protection and disclosure standards of foreign markets. Non-Diversified Fund Risk . The Fund is “non-diversified” and therefore not required to meet certain diversification requirements under federal laws. The Fund may invest a greater percentage of its assets in the securities of an issuer. However, a decline in the value of a single investment could cause the Fund’s overall value to decline to a greater degree than if the Fund held a more diversified portfolio. Short Selling Risk . The Fund will incur a loss as a result of a short sale if the price of the security sold short increases in value between the date of the short sale and the date on which the Fund purchases the security to replace the borrowed security. In addition, a lender may request, or market conditions may dictate, that securities sold short be returned to the lender on short notice, and the Fund may have to buy the securities sold short at an unfavorable price. The Fund’s losses are potentially unlimited in a short sale transaction. Short sales are speculative transactions and involve special risks, including greater reliance on the adviser’s ability to accurately anticipate the future value of a security. Furthermore, taking short positions in securities results in a form of leverage which may cause the Fund to be more volatile. Derivatives Risk. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the Fund’s original investment. Many derivatives create leverage thereby causing the Fund to be more volatile than it would be if it had not used derivatives. High Portfolio Turnover Rate Risk . High portfolio turnover rates could generate capital gains that must be distributed to shareholders as short-term capital gains taxed at ordinary income rates (currently as high as 35%) and could increase brokerage commission costs. The Fund is “non-diversified” under the 1940 Act, meaning that it may invest in a limited number of issuers. 43 Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government agency. You could lose money if you sell when the Fund’s share price is lower than when you invested. More information about fund risks, including additional risk factors not discussed above, is included in Fund Details and the fund's Statement of Additional Information. Past Performance. The Fund has not commenced operations as of the date of this prospectus, and, therefore, has no reportable performance history. Once the Fund has operated for at least one calendar year, a bar chart and performance table will be included in the prospectus to show the performance of the Fund. An appropriate broad-based index also will be included in the performance table. Although past performance of a Fund is no guarantee of how it will perform in the future, historical performance may give you some indication of the risks of investing in the Fund. The returns for Class A and Institutional Class will differ because of differences in expenses of each class. Portfolio Management. Investment Adviser. The investment adviser for the Fund is American Independence Financial Services, LLC (“AIFS” or the “Adviser”). Mr. T. Kirkham Barneby is responsible for the oversight of the sub-advisory relationship. Sub-Adviser. Holmgren Capital Management, LLC serves as the Sub-Adviser to the Fund. Managed the Manager Name Primary Title Fund Since John Holmgren Chief Investment Officer 2009 Michael Holmgren Portfolio Manager 2009 Frank Vallario Portfolio Manager 2009 For additional information about the Adviser, Sub-adviser and portfolio managers, please refer to the Fund Management section starting on page of this Prospectus. For more information regarding portfolio managers’ compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities of the Funds he manages, please consult the SAI. Purchase and Sale Information. Purchase minimums Institutional Class A Class Shares Shares Initial Purchase $ 3,000,000 $ 5,000 Subsequent Purchases $ 5,000 $ 250 How to purchase shares through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by completing an application and sending a check to the Fund at the address below (an application can be obtained through the Fund’s website at www.aifunds.com or by calling (888) 266-8787 American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Shares of the Fund may not be available for sale in all states. Consult your investment representative or institution for specific information. 44 Orders received by your broker or Service Organization for the Fund in proper order prior to the determination of net asset value and transmitted to the Fund prior to the close of its business day which is currently 4:00 p.m. Eastern Time, will become effective that day. How to redeem shares In general, you may redeem shares on any business day: through Foreside Distribution Services, LP (the “Distributor”) through banks, brokers and other investment representatives by calling (888) 266-8787 or by writing to the Fund at the address below American Independence Funds P.O. Box 8045 Boston, MA 02266-8045 Tax Information . The Fund intends to make distributions that may be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan. Financial Intermediary Compensation. If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Web site for more information. 45 MORE ABOUT THE FUNDS Additional Information About the Funds’ Investment Strategies. The investment objective, principal strategy and primary risks of each Fund are discussed individually above. Additional information on principal strategies can be found below and details on the various types of investments can be found in the SAIs. Investment Objective. Each Fund’s investment objective is “fundamental,” which means that it may be changed only with the approval of Fund shareholders. 80% Policy. Each Fund has a policy of investing at least 80% of its assets in securities that are consistent with the Fund’s name. If a Fund changes this policy, a notice will be sent to shareholders at least 60 days in advance of the change and this prospectus will be supplemented. Temporary Defensive Policy. Under adverse market conditions, each Fund may, for temporary defensive purposes, invest up to 100% of its assets in cash or cash equivalents, including investment grade short-term obligations. To the extent that a Fund invokes this strategy, its ability to achieve its investment objective may be affected adversely. Stock Fund . The Fund’s Sub Adviser uses a value oriented approach to selecting stocks by identifying stocks that it considers undervalued (i.e. priced less than its real worth). The Fund’s sub adviser also considers the company’s soundness and earnings prospects. If the Fund’s Sub Adviser determines a company may no longer benefit from the current market and economic environment and shows declining fundamentals, it will eliminate the Fund’s holding of the company’s stock. International Equity Fund . Most of the purchases and sales made by the Fund will be made in the primary trading market for the particular security. The primary market is usually in the country in which the issuer has its main office. The Fund generally follows a multi-capitalization approach focusing on mid to large-capitalization companies, but the Fund may also invest in smaller, emerging growth companies. Short-Term Bond Fund . The Fund invests primarily in high quality debt securities. The portfolio manager may use interest rate hedging as a stabilizing technique. The performance objective of the Fund is to outperform an index that the portfolio manager believes is an appropriate benchmark for the Fund. The current index is the Barclay’s Capital 1-3 Year Treasury Index. Although the value of the Fund’s shares will fluctuate, under normal market conditions the Fund’s adviser will seek to manage the magnitude of fluctuation by limiting the Fund’s duration to 2 years or less. Duration measures the price sensitivity of a fixed-income security to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. Similarly, a fund with longer average portfolio duration will be more sensitive to changes in interest rates than a fund with shorter average portfolio duration. By way of example, the price of a bond fund with duration of five years would be expected to fall approximately 5% if interest rates rose by one percentage point. Intermediate Bond Fund . The Fund’s overall investment philosophy emphasizes a fundamental approach to managing fixed income assets with a goal of delivering consistent investment returns. The strategies employ a top-down, macroeconomic approach to determine the portfolio’s positioning on the yield curve, duration, maturity, and sector allocation. The Fund then initiates a process of security analysis based on several factors including but not limited to economic trends, inflation, and fiscal policy. The strategy seeks to outperform the Barclays U.S. Aggregate fixed income index. Kansas Tax-Exempt Bond Fund . The Fund invests primarily in municipal bonds with maturities ranging from 1 to 20 years. It is the intent of the Adviser to maintain a dollar weighted average portfolio maturity between 7 and 12 years. The Fund will not purchase securities which are rated, at the time of purchase, below ‘‘Baa’’ by a Nationally Recognized Statistical Rating Organization (‘‘NRSRO’’).* The Fund is managed to provide an attractive yield from municipal bonds that have strong credit qualities. Municipalities with these strong credit qualities are more likely to offer a reliable stream of payments. The Fund’s adviser may sell a security if its fundamental qualities deteriorate or to take advantage of more attractive yield opportunities. 46 International Bond Fund. The Fund’s investment philosophy emphasizes a fundamental approach to managing fixed income assets with a goal of delivering consistent investment returns. The strategies employ a top-down, macroeconomic approach to determine the Fund’s positioning on the yield curve, duration, maturity, and sector allocation. The Fund then initiates a process of security analysis based on several factors including, but not limited to, economic trends, inflation, and fiscal policy. This strategy seeks to outperform the Barclays Global Aggregate Index (ex-USD) before deducting for Fund expenses. Although the value of the Fund’s shares will fluctuate, under normal market conditions, the Fund’s adviser will seek to manage the magnitude of fluctuation by limiting the Fund’s duration. As of February 28, 2010 the average weighted duration of the Barclays Global Aggregate Index was years. The Fund’s weighted average duration generally will not differ from the weighted average duration of the Barclays Global Aggregate Index (ex-USD) by more than 2 years. Duration measures the price sensitivity of a fixed-income security to changes in interest rates. U.S. Inflation-Indexed Fund. The Fund’s investment philosophy emphasizes a fundamental approach to managing fixed income assets with a goal of delivering consistent investment returns. The strategies employ a top-down, macroeconomic approach to determine the Fund’s positioning on the yield curve, duration, maturity, and sector allocation. The Fund then initiates a process of security analysis based on several factors including, but not limited to, economic trends, inflation, and fiscal policy. This strategy seeks to outperform the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index before deducting for fund expenses. Although the value of the Fund’s shares will fluctuate, under normal market conditions, the Fund’s adviser will seek to manage the magnitude of fluctuation by limiting the Fund’s duration. The Fund’s U.S. dollar-weighted average real duration generally will not differ from the weighted average duration of the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index by more than 2 years. As of February 28, 2010, the average weighted duration of the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index was years. Duration measures the price sensitivity of a fixed-income security to changes in interest rates. Fusion Fund . To achieve its investment objective, the Fund applies proprietary quantitative and trading methodologies to invest in equities and exchange-traded funds (“ETFs”) representing: both U.S. and overseas debt and equity securities. The Fund will only invest in debt securities of Government and Government secured bonds. ETFs typically are open-end investment companies which track securities indices or baskets of securities. The expenses associated with investing in ETFs are typically lower than the expenses associated with investing in all of the underlying securities which comprise the indices that the ETFs track. The Fund’s assets may be allocated among the different types of ETFs at the Adviser’s discretion. Management considers the primary benchmark of the Fund to be the Consumers Price Index * (CPI). As of October 2009, the CPI was -0.20% for the trailing 12 months. The S&P 500 is presented as a benchmark in compliance with SEC regulations. Related Risks. The main risks associated with investing in the Funds are summarized in “Principal Investment Strategies, Risks and Performance” section at the front of this prospectus under “Fund Summary” for each Fund. A summary matrix of risks by each fund is provided below. Following the risk matrix, you will find more detailed descriptions of these risks. Kansas Inter- Short- Inter- Inter- U.S. Description of Risk Stock national Term mediate Tax- national Inflation- Fusion Exempt Equity Bond Bond Bond Indexed Bond Banking Industry Risk X x Bond Market Risk x x x x x x x Concentration Risk x x x Credit Risk x x x x x Currency Risk x x x * The Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services purchased by households. The CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and other goods and services that people buy for day-to-day living. The CPI will be used as a secondary benchmark. 47 Derivatives Risk x x x x x Duration Risk x x Emerging Markets Risk x x x ETF and Regulated Investment x Company Risk Foreign Investment Risks x x x x High Portfolio Turnover Risk x x Interest Rate Risk x x x x x Leveraging Risk x x Liquidity Risk x x Management Risk x x x x x x x x Non-Diversification Risk x x x x Prepayment Risk x x x x x Quantitative Investment Strategy Risk x Recent Market Event Risk x x x x x x x x Repurchase Agreement Risk x x x x x x x x Securities Lending Risk x x x x x x x x Short-Sale Risk x Small- and Medium-Sized Companies x x Risk State Specific Risk x Stock Market Risk x x x Tax Risk x U.S. Government Obligations Risk x x x x Zero Coupon Bond Risk x Banking Industry Risk . Investing in bank obligations exposes a Fund to risks associated with the banking industry, such as interest rate and credit risks. Bond Market Risk . Some of the securities or other investment companies in which the Fund may invest are invested in a broad range of bonds or fixed-income securities. To the extent that a security or other investment company is so invested, the return on, and value of, an investment will fluctuate with changes in interest rates. Typically, when interest rates rise, the fixed-income security’s market value declines (interest-rate risk). Conversely, when interests rates decline, the market value of a fixed-income security rises. A fixed-income security’s value can also be affected by changes in the security’s credit quality rating or its issuer’s financial condition (credit quality risk). This means that the underlying company may experience unanticipated financial problems causing it to be unable to meet its payment obligations. Other factors may affect the market price and yield of fixed-income securities, including investor demand, changes in the financial condition of issuers of securities, government fiscal policy and domestic or worldwide economic conditions. Concentration risk. A Fund that invests more than 25% of its total assets in the securities of issuers in any one industry is exposed to the risk that factors affecting that industry will have a greater effect on the Fund than they would if the Fund invested in a diversified number of unrelated industries. Credit risk. Debt securities are subject to credit risk. Credit risk is the possibility that an issuer will fail to make timely payments of interest or principal, or go bankrupt. In addition, lower rated securities have higher risk characteristics and changes in economic conditions are more likely to cause issuers of these securities to be unable to make payments and thus default. The lower the ratings of such debt securities, the greater their credit risk. Currency Risk . Fluctuations in exchange rates between the U.S. dollar and foreign currencies may negatively affect an investment. When synthetic and cross -hedges are used, the net exposure of a Fund to any one currency may be different from that of its total assets denominated in such currency. Derivatives risk. Derivatives are subject to the risk of changes in the market price of the security, credit risk with respect to the counterparty to the derivative instrument, and the risk of loss due to changes in interest 48 rates. The use of certain derivatives, including futures contracts, may also have a leveraging effect, which may increase the volatility of the Fund. The use of derivatives may reduce returns for the Fund. Duration Risk : Duration is a measure of the sensitivity of a security's price to changes in interest rates. The longer a security's duration, the more sensitive it will be to changes in interest rates. Similarly, a fund with a longer average Fund duration will be more sensitive to changes in interest rates than a fund with a shorter average Fund duration. By way of example, the price of a bond fund with duration of five years would be expected to fall approximately 5% if interest rates rose by one percentage point. Emerging Markets Risk . The securities in which the Fund invests may invest in foreign securities that may include securities of companies located in developing or emerging markets, which entail additional risks, including: less social, political and economic stability; smaller securities markets and lower trading volume, which may result in less liquidity and greater price volatility; national policies that may restrict an securities investment opportunities, including restrictions on investments in issuers or industries, or expropriation or confiscation of assets or property; and less developed legal structures governing private or foreign investment. ETF and Investment Company Risk . The Fund may invest in shares of other investment companies. Shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company. The price movement of an ETF may not track the underlying index and may result in a loss. If the Fund invests in closed-end investment companies, it may incur added expenses such as additional management fees and trading costs. ETFs are intended to provide investment results that, before expenses, generally correspond to the price and yield performance of the corresponding market index, and the value of their shares should, under normal circumstances, closely track the value of the index’s underlying component stocks. ETFs generally do not buy or sell securities, except to the extent necessary to conform their portfolios to the corresponding index. Because an ETF has operating expenses and transaction costs, while a market index does not, ETFs that track particular indices typically will be unable to match the performance of the index exactly. Investment in the Fund should be made with the understanding that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track because the total return generated by the securities will be reduced by transaction costs incurred in adjusting the actual balance of the securities and other ETF expenses, whereas such transaction costs and expenses are not included in the calculation of the total returns of the indices. Certain securities comprising the indices tracked by the ETFs may, from time to time, temporarily be unavailable. Foreign Securities Risks . Investments in foreign securities involve certain inherent risks, including the following: Foreign Investment . A fund that invests in foreign securities is subject to risks such as fluctuation in currency exchange rates, market illiquidity, price volatility, high trading costs, difficulties in settlement, regulations on stock exchanges, limits on foreign ownership, less stringent accounting, reporting and disclosure requirements, limited legal recourse and other considerations. In the past, equity and debt instruments of foreign markets have had more frequent and larger price changes than those of U.S. markets. The willingness and ability of sovereign issuers to pay principal and interest on government securities depends on various economic factors, including the issuers’ balance of payments, overall debt level, and cash flow from tax or other revenues. Political and Economic Factors . Individual foreign economies of certain countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency, diversification and balance of payments position. The internal politics of certain foreign countries may not be as stable as those of the U.S. Governments in certain foreign countries also continue to participate to a significant degree, through ownership interest or regulation, in their respective economies. Action by these governments could include restrictions on foreign investment, nationalization, expropriation of goods or imposition of taxes, and could have a significant effect on market prices of securities and payment of interest. The economies of many foreign countries are heavily dependent upon international trade and are accordingly affected by the trade policies and economic conditions of their trading partners. Enactment by these trading partners of 49 protectionist trade legislation could have a significant adverse effect upon the securities markets of such countries. Currency Fluctuations . The Fund may invest in securities denominated in foreign currencies. Accordingly, a change in the value of any such currency against the U.S. dollar will result in a corresponding change in the U.S. dollar value of the securities’ assets denominated in that currency. Such changes will also affect the securities’ income. The value of the securities’ assets may also be affected significantly by currency restrictions and exchange control regulations enacted from time to time. High Portfolio Turnover Rate Risk . High portfolio turnover rates could generate capital gains that must be distributed to shareholders as short-term capital gains taxed at ordinary income rates (currently as high as 35%) and could increase brokerage commission costs. To the extent that the Fund experiences an increase in brokerage commissions due to a higher turnover rate, the performance of the Fund could be negatively impacted by the increased expenses incurred by the Fund. Rapid portfolio turnover also exposes shareholders to a higher current realization of short-term capital gains taxed at ordinary income rates. Interest Rate Risk . Debt securities are subject to the risk that the market value will decline because of rising interest rates. A rise in interest rates generally means a fall in bond prices and, in turn, a fall in the value of your investment. Debt securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than debt securities with shorter durations. Leveraging Risks . Leverage involves special risks. There is no assurance that a Fund will leverage its portfolio or, if it does, that a Fund’s leveraging strategy will be successful. The Fund may be more volatile than if the Fund had not been leveraged because the leverage tends to exaggerate any effect of the increase or decrease in the value of the Fund’s portfolio securities. The Fund cannot assure you that the use of leverage will result in a higher return on your investment, and using leverage could result in a net loss on your investment. Registered investment companies such as the Fund are limited in their ability to engage in short selling and derivative transactions and are required to identify and earmark assets to provide asset coverage for short positions and derivative transactions. The Fund’s transactions in futures contracts, swaps and other derivatives could also affect the amount, timing and character of distributions to shareholders which may result in the Fund realizing more short-term capital gain and ordinary income subject to tax at ordinary income tax rates than it would if it did not engage in such transactions, which may adversely impact the Fund’s after-tax returns. Liquidity Risk . Certain securities may be difficult or impossible to sell at favorable prices within the desired time frame. Management Risk . The ability of the Fund to meet its investment objective is directly related to the sub-adviser’s investment strategies for the Fund. The value of your investment in the Fund may vary with the effectiveness of the Adviser’s research, analysis and asset allocation among portfolio securities. If the Adviser’s investment strategies do not produce the expected results, your investment could be diminished or even lost. Non-Diversified Fund Risk . The Fund is “non-diversified” and therefore not required to meet certain diversification requirements under federal laws. The Fund may invest a greater percentage of its assets in the securities of an issuer. However, a decline in the value of a single investment could cause the Fund’s overall value to decline to a greater degree than if the Fund held a more diversified portfolio. Prepayment Risk . A Fund that invests in mortgage-backed and other asset-backed securities is exposed to the risk that such securities may repay principal either faster or slower than expected. A description of the Fund’s policies and procedures regarding the disclosure of the Fund’s portfolio holdings is available in the Fund’s Statement of Additional Information (“SAI”). Quantitative Investment Strategies Risk . Quantitative strategies, including statistical arbitrage, are highly complex, and, for their successful application, require relatively sophisticated mathematical calculations and relatively complex computer programs. Such strategies are dependent on various computer and telecommunications technologies and upon adequate liquidity in markets traded. The successful execution of these strategies could be severely compromised by, among other things, a diminution in the liquidity of the 50 markets traded, telecommunications failures, power loss and software-related “system crashes.” These strategies are also dependent on historical relationships that may not always be true and may result in losses. In addition, the “slippage” from entering and exiting positions (i.e., the market impact of trades identified by the quantitative strategies) may be significant and may result in losses. Recent Market Events. During 2008 and into 2009, U.S. and international markets experienced significant volatility. The fixed income markets have experienced substantially lower valuations, reduced liquidity, price volatility, credit downgrades, and increased likelihood of default and valuation difficulties. Concerns have spread to domestic and international equity markets. In some cases, the stock prices of individual companies have been negatively impacted even though there may be little or no apparent degradation in the financial conditions or prospects of that company. As a result of this significant volatility, many of the following risks associated with an investment in a Fund may be increased. The U.S. government has taken numerous steps to alleviate these market concerns. However, there is no assurance that such actions will be successful. Continuing market problems may have adverse effects on the Fund. Repurchase Agreement Risk. Repurchase Agreements carry the risk that the other party may not fulfill its obligations under the Agreement. This could cause the value of your investment in a fund to decline. Securities Lending Risk . To earn additional income, the Funds may lend their securities to qualified financial institutions. Although these loans are fully collateralized, a fund’s performance could be hurt if a borrower defaults or becomes insolvent, or if the Fund wishes to sell a security before its return can be arranged. Short Sale Risk . Short selling shares of securities may result in the Fund’s investment performance suffering if it is required to close out a short position earlier than it had intended. This would occur if the lender required the Fund to deliver the securities it borrowed at the commencement of the short sale and the Fund was unable to borrow the securities from other securities lenders. Furthermore, until the Fund replaces a security borrowed, or sold short, it must pay to the lender amounts equal to any dividends that accrue during the period of the short sale. In order to establish a short position in a security, the Fund must rst borrow the security from a lender, such as a broker or other institution. The Fund may not always be able to obtain the security at a particular time or at an acceptable price. Thus, there is risk that the Fund may be unable to implement its investment strategy due to the lack of available securities or for other reasons. After short selling a security, the Fund may subsequently seek to close this position by purchasing and returning the security to the lender on a later date. The Fund may not always be able to complete or “close out” the short position by replacing the borrowed securities at a particular time or at an acceptable price. In addition, the Fund may be prematurely forced to close out a short position if the lender demands the return of the borrowed security. The Fund incurs a loss as a result of a short sale if the market value of the borrowed security increases between the date of the short sale and the date when the Fund replaces the security. The Fund’s loss on a short sale is potentially unlimited because there is no upward limit on the price a borrowed security could attain. Further, if other short sellers of the same security want to close out their positions at the same time, a “short squeeze” can occur. A short squeeze occurs when demand exceeds the supply for the security sold short. A short squeeze makes it more likely that the Fund will need to replace the borrowed security at an unfavorable price, thereby increasing the likelihood that the Fund will lose some or all of the potential pro t from, or incur a loss on, the short sale. Furthermore, taking short positions in securities results in a form of leverage. Leverage involves special risks described under “ Derivatives Risk ”. The Board of Trustees (the “Board of Trustees”) has considered the Fund’s short sales strategy and its attendant risks and has determined that the strategy does not impair the Fund’s ability to meet redemptions or meet other regulatory requirements. The Board of Trustees has adopted policies and procedures, and regularly reviews the adequacy of those policies and procedures, to ensure that the Fund’s short positions are continuously monitored, comply with regulatory requirements and are in the best interests of the Fund’s shareholders Small- and Medium-Sized Companies Risk . Investing in securities of small- and medium-sized companies, even indirectly, may involve greater volatility than investing in larger and more established companies because they can be subject to more abrupt or erratic share price changes than larger, more established companies. Small companies may have limited product lines, markets or financial resources and their management may be dependent on a limited number of key individuals. Securities of those companies may have limited market liquidity and their prices may be more volatile. Although diminished in large-sized 51 companies, the risks of investing in all companies include business failure and reliance on erroneous reports. Small- and medium-sized companies often have narrower markets and limited managerial and financial resources compared to larger, more established companies. You should expect that the value of the Fund’s shares will be more volatile than a fund that invests exclusively in large-sized companies. State Specific Risk . State specific risk is the chance that a Fund, because it invests primarily in securities issued by a specific state and its municipalities, it is more vulnerable to unfavorable developments in that state than funds that invest in municipal bonds of many different states. Stock Market Risk . The market value of a security may move up or down, sometimes rapidly and unpredictably. These fluctuations may cause a security to be worth less than the price originally paid for it, or less than it was worth at an earlier time. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. Tax Risk . A Fund investing in short sales will be subject to special tax rules (including mark-to-market, constructive sale, wash sale and short sale rules) the effect of which may be to accelerate income to the Fund, defer losses to the Fund, cause adjustments in the holding periods of the Fund’s securities, convert long-term capital gains into short-term capital gains or convert short-term capital losses into long-term capital losses. These rules could, therefore, affect the amount, timing and character of distributions to the Fund’s shareholders. Due to the nature of a Fund’s investment strategies and expected high portfolio turnover rate, as discussed in this Prospectus, distributions of the Fund’s net investment income may likely be short-term capital gains that are taxable at ordinary income rates (currently as high as 35%). U.S. Government Obligations Risk . U.S. Government obligations include securities issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, such as the U.S. Treasury. Payment of principal and interest on U.S. Government obligations may be backed by the full faith and credit of the U.S. or may be backed solely by the issuing or guaranteeing agency or instrumentality itself. In the latter case, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment, which agency or instrumentality may be privately owned. There can be no assurance that the U.S. Government would provide financial support to its agencies or instrumentalities (including government-sponsored enterprises) where it is not obligated to do so. Zero-Coupon Bond Risk . The Fund may invest up to 30% of net assets in zero-coupon bonds. Zero-coupon securities make no periodic interest payments, but are sold at a deep discount from their face value. The buyer recognizes a rate of return determined by the gradual appreciation of the security, which is redeemed at face value on a specified maturity date. The discount varies depending on the time remaining until maturity, as well as market interest rates, liquidity of the security, and the issuer’s perceived credit quality. If the issuer defaults, the holder may not receive any return on its investment. Because zero-coupon securities bear no interest and compound semiannually at the rate fixed at the time of issuance, their value generally is more volatile than the value of other fixed-income securities. Since zero-coupon bondholders do not receive interest payments, when interest rates rise, zero-coupon securities fall more dramatically in value than bonds paying interest on a current basis. When interest rates fall, zero-coupon securities rise more rapidly in value because the bonds reflect a fixed rate of return. An investment in zero-coupon and delayed interest securities may cause the Fund to recognize income and make distributions to shareholders before it receives any cash payments on its investment. Fund Management The Investment Adviser The investment adviser for these Funds is American Independence Financial Services, LLC (‘‘AIFS’’ or the ‘‘Adviser’’). The Adviser is a Delaware limited liability company and is registered as an investment adviser under the Investment Advisers Act of 1940. AIFS is based at 335 Madison Avenue, Mezzanine, New York, NY 10017. Under the supervision of the Board of Trustees, the Adviser is responsible for managing each Fund’s portfolio in accordance with each Fund’s goal and policies. In exchange for providing these services, the Adviser receives a management fee from each fund. The management fee for each Fund will be as follows: 52 Stock Fund 1.00 % Kansas Tax-Exempt Bond Fund 0.30 % International Equity Fund 0.81 % International Bond Fund 0.40 % Short-Term Bond Fund 0.40 % U.S. Inflation-Indexed Fund 0.40 % Intermediate Bond Fund 0.40 % Fusion Fund 1.40 % A discussion regarding the basis for the Board's approval of the investment advisory agreements appears in the annual report to shareholders for the fiscal period ended October 31, 2009. Under a separate administration agreement, the Funds also pay the Adviser a fee of 0.125% for providing administrative services. Portfolio Managers Under the investment advisory agreement, AIFS is responsible for the investment management oversight in its role as adviser to all of the Funds. The fund’s portfolio manager is responsible for the day-to-day management of the fund. Mr. Robert A. Campbell and Mr. Eric M. Rubin are responsible for the oversight of the sub-advisory relationships for all the funds except the Fusion Fund. Mr. T. Kirkham Barneby is responsible for the oversight of the sub-advisory relationship for the Fusion Fund. Mr. Rubin, President of the Funds, is a founding member of AIFS and President of AIFS since February, 2005. Mr. Rubin is also co-manager of the NestEgg Target Date Funds. Prior to 2005, Mr. Rubin was Vice President of ING Financial Partners from June 2004 to January 2005, Senior Vice President of Mercantile Capital Advisers from April 2003 to April 2004, Senior Vice President of DST International from January 2002 to April 2003 and President of EMR Financial Services from June 2000 to February 2001. Robert A. Campbell, CFA, Vice President and Portfolio Manager joined American Independence Financial Services in March, 2006. He is responsible for the day to day operations of the Kansas Tax-Exempt Bond Fund, the Short-Term Bond Fund and Intermediate Bond Fund. Prior to joining AIFS, Mr. Campbell was a senior portfolio manager with Galliard Capital Management, Inc. (the previous sub-adviser to the Kansas Tax-Exempt Bond Fund) since August 2000, where he was the portfolio manager of the Kansas Tax-Exempt Bond Fund. Prior to his employment with Galliard, Mr. Campbell served as a municipal/fixed income portfolio manager with First Commerce Investors (1997-2000), U.S. Bank/First Bank (1996-1997) and Firstier Bank (1995-1996). While at First Commerce Investors, Mr. Campbell managed two (2) fixed income mutual funds. One was a state specific municipal bond fund and the other was an intermediate taxable bond fund. Mr. T. Kirkham Barneby joined AIFS in 2008 as Chief Strategist & Portfolio Manager, Taxable Fixed Income. At AIFS he utilizes a proprietary discipline, grounded in the economic theory of interest rate behavior, to manage interest rate exposure or risk. Prior to AIFS Mr. Barneby was a Managing Member of Old Iron Hill Capital Management, LLC employing quantitatively-oriented fixed income and multi-strategy investment approaches. Previously, he headed an investment group at UBS in New York that managed equity and bond portfolios with roughly $7 billion in assets. Earlier, in the 1980s, Mr. Barneby was part of a team at Continental Can that made asset allocation decisions for the company’s pension plan. He began his career in the Economics Department at First National City Bank (Citibank Jeffrey A. Miller, Chief Strategist & Portfolio Manager, Domestic Equities. Mr. Miller is responsible for the management of the Stock Fund and the equity analysts. Prior to joining AIFS in 2006, he co-founded Miller & Jacobs Capital, LLC in February 2003, and had been managing an affiliated Delaware company (also called Miller & Jacobs Capital, LLC) since 1997. He earned his Masters of Business Administration with Distinction from Cornell University. He also earned a Bachelor of Arts degree in History with Distinction from Cornell University. Prior to co-founding Miller & Jacobs Capital in 2003, and its affiliated entity in 1997, Mr. Miller was Vice President of Equity Research at Keefe, Bruyette & Woods, Inc. (“KB W”) where he worked from 1994 to 1997. Ariel Fromer, Vice President and Assistant Portfolio Manager, is responsible for research on the life insurance, asset management, and consumer sectors, having previously worked at the Firm as a trader. 53 Prior to joining AIFS in 2006, she wasa Vice President and Assisitant Portfolio for Miller & Jacobs Capital, LLC. Ms. Fromer was a Research Assistant at James River Capital Corporation. Ms. Fromer graduated Cum Laude with a BA in Economics and Environmental Studies from Tufts University. She is the Treasurer and member of the Board of Directors of the St. Croix Environmental Association. Tammy Dalton, Vice President of Research, is responsible for research on nonlife insurance, energy, and healthcare sectors. Prior to joining AIFS in 2006, she was Vice President of Research at Miller & Jacobs Capital, LLC. Ms. Dalton was a Vice President of Mizuho Corporate Bank. Employed by the bank for 10 years, she served as a Portfolio Manager for Mountain Capital Advisors, an asset management group which managed assets exceeding $1.5 billion. Previously, Ms. Dalton was Vice President & Team Leader of Mizuho’s Asset Recovery Group, with prior experience in Fuji Bank’s Leveraged Finance Group and the Americas Division overseeing credit and risk management functions of Heller Financial. Ms. Dalton received a BA in International Politics and Economics from Middlebury College and an MBA from Cornell University in 1994. For additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers and the portfolio managers’ ownership of securities of the Funds they manage, please consult the SAI. Sub-Advisers International Equity Fund Securities Global Investors, LLC (“SGI”) serves as the Sub-Advisor to the Fund. Under AIFS’ supervision, SGI is responsible for making the specific decisions about buying, selling and holding securities; selecting and negotiating with brokers and brokerage firms; and maintaining accurate records for the Fund. SGI is located at 801 Montgomery Street, 2nd Floor, San Francisco, California 94133. SGI managed more than $ in assets on December 31, 2009. SGI is a wholly owned subsidiary of Security Benefit Corporation. Security Benefit Corporation is a wholly owned subsidiary of Security Benefit Mutual Holding Company. SGI and Security Investors, LLC located at One Security Benefit Place, Topeka, Kansas 66636, operate as SGI, the investment advisory arm of Security Benefit Corporation. The SGI investment team of David Whittall, Scott Klimo and Yon Perullo are jointly and primarily responsible for the day-to-day management of the Fund. Portfolio Managers . David Whittall , Portfolio Manger, International Equities—Mr. Whittall joined SGI’s global equity team in 2004. Currently, Mr. Whittall has twenty years of professional and international investment experience. Prior to joining SGI, Mr. Whittall served as Senior Vice President and Senior International Equity Salesman for HSBC Securities. Prior to HSBC, he was a Vice President at JP Morgan and their senior European equity salesman in San Francisco. Before his work in international equity sales, Mr. Whittall spent seven years at Montgomery Asset Management where he was a Senior Analyst, Portfolio Manager and Principal. Mr. Whittall was the founder and portfolio manager for the Montgomery New Power fund, a utility/energy-focused sector fund. Mr. Whittall joined Montgomery after living in Hong Kong for five years where he was an Associate Director at Baring Securities and Head of China Equity Research. Mr. Whittall holds a B.A. in Asian Studies from the University of California at Berkley. He was the recipient of the UC Regent’s Scholarship for study abroad and attended Beijing University in the People’s Republic of China from 1987 to 1988. Mr. Whittall speaks Mandarin Chinese and French. Scott Klimo , CFA, Portfolio Manager, International Equities—Mr. Klimo joined SGI’s global equity team in 2002. Currently, Mr. Klimo has over 20 years of professional and international investment experience. Prior to joining SGI, Mr. Klimo worked as a Senior International Analyst for Founders Asset Management in Denver, focusing on consumer durables and non-durables, telecommunications and telecom equipment. Before joining Founders, Mr. Klimo was an Assistant Portfolio Manager for the State of Wisconsin 54 Investment Board, where he helped manage a $4 billion international portfolio with a value-oriented investment style. Scott began his career in 1987 as an analyst for Crosby Securities in Hong Kong before progressing to Thailand Research Director for Smith New Court Far East. Scott holds a B.A. in Asian Studies from Hamilton college in New York and has done post-graduate language study at the Chinese University of Hong Kong and the National Taiwan Normal University. In addition to speaking, reading and writing Mandarin Chinese, he also speaks Thai. Mr. Klimo is a Chartered Financial Analyst. Yon Perullo , CFA, Portfolio and Risk Manager—Mr. Perullo joined SGI in 2007, bringing over 9 years of quantitative product development and investment experience. Prior to joining SGI, Yon was a co-founder and portfolio manager at Nascent Strategies, LLC; a Connecticut based hedge fund that specialized in quantitative market-neutral investing, where he was directly responsible for building the quantitative screening and risk management models employed by the fund. Before Nascent, Mr. Perullo was a Vice President of Quantitative Analytics at FactSet Research Systems, where he directed the global sales and development of FactSet’s suite of quantitative products, including alpha modeling, portfolio simulation, and risk analysis. During his tenure at FactSet, Mr. Perullo was extensively involved in aiding clients in strategy creation, portfolio analysis, and execution. He earned his B.A. in Chemistry from the University of Rhode Island. He is a Chartered Financial Analyst. Short-Term Bond Fund, Intermediate Bond Fund, International Bond Fund and U.S. Inflation-Indexed Fund Fischer Francis Trees & Watts, Inc ("FFTW (NY)"), a New York corporation and two of its affiliates, Fischer Francis Trees & Watts, Inc ("FFTW (NY)"), a corporate partnership organized under the laws of the United Kingdom, and Fischer Francis Trees & Watts (Singapore) PTE. LTD. (“FFTW (Singapore)"), a Singapore corporation (collectively referred to as the "Sub-Adviser") serve as the Sub-Adviser to the Funds. The Sub-Adviser conducts investment research and is responsible for the purchase, sale or exchange of the Funds' assets. FFTW (NY) was organized in 1972. The Sub-Adviser is registered with the Commission and managed approximately $ in assets, as of December 31, 2009, for numerous fixed-income portfolios. The Sub-Adviser currently advises institutional clients including central banks and official institutions, corporations for management of cash and retirement fund assets, public employee retirement funds, insurance companies, non-profit institutions and commercial banks. The Sub-Adviser also serves as the adviser or the sub-adviser to domestic and international pooled investment vehicles. The Sub-Adviser's New York offices are located at 200 Park Avenue, New York, New York 10166. The Sub-Adviser is directly wholly-owned by Charter Atlantic Corporation (“CAC"), a New York corporation. CAC is owned by BNP Paribas, which is a publicly owned limited liability company banking corporation organized under the laws of the Republic of France. Portfolio Managers . Short-Term Bond Fund . Kenneth O’Donnell , CFA, Portfolio Manager, joined FFTW in 2002 in New York. He is responsible for the management of money market, short and short-intermediate Funds. Mr. O’Donnell was previously with Standish Mellon Asset Management in Boston as an asset-backed security specialist in the structured products group. Mr. O’Donnell holds a BS in mechanical engineering from Syracuse University and an MS in finance from Boston College. He is a member of the New York Society of Security Analysts. Intermediate Bond Fund and International Bond Fund. David J. Marmon , Managing Director, joined FFTW in 1990 in New York. Mr. Marmon manages global aggregate, global sovereign, international and core portfolios. Prior to his current role, he was responsible for managing FFTW’s Credit Team. Before joining FFTW, Mr. Marmon was head of futures and options research at Yamaichi International (America) and a financial analyst and strategist at the First Boston Corporation, where he developed hedging programs for financial institutions and industrial firms. Mr. Marmon earned an MA in economics from Duke University (1982), where he also pursued doctoral studies. He graduated summa cum laude with a BA in economics from Alma College (1980). 55 U.S. Inflation-Indexed Fund . Cedric Scholtes , Portfolio Manager, joined FFTW in June 2006 and is a portfolio manager in the Governments and Multi-Sector Team. He manages US and global inflation-linked portfolios and works with members of the Structured Securities and Short Duration Team on global short duration sovereign mandates. Mr. Scholtes came from Goldman Sachs where he was a vice president in the Inflation Trading Group, Fixed Income Commodities & Currencies Division. His responsibilities included formulating and implementing trading strategies, making markets in inflation-linked securities and building inflation-market analytical tools. Before Goldman Sachs, he spent six years as a trader/analyst at both the Bank of England, where he worked on the Foreign Exchange Reserves Management Staff, and the Federal Reserve Bank of New York on the Treasury Market Policy Staff. Mr. Scholtes holds a masters degree in finance and economics from Warwick Business School, a masters in economics from the London School of Economics, and an MA/BA in economics from the University of Cambridge. Fusion Fund Holmgren Capital Management, LLC (“HCM”), 335 Madison Avenue, Mezzanine, New York, NY 10017, is a registered investment adviser specializing in the management of global alternative and institutional strategies. HCM will serve as the Sub-Adviser to the Fund. The Sub-Adviser conducts investment research and is responsible for the purchase, sale or exchange of the Funds' assets. HCM currently has assets under management of $. Mr. John J. Holmgren, Mr. Frank A. Vallario and Mr. Michael Holmgren will act as the lead portfolio managers to the AI Fusion Fund. As such, they will have direct and primary responsibility for all investment decisions, subject to the overall supervision of the Adviser. In particular, Mr. Vallario will be responsible for the management of the portfolio supported by the HCM investment management team. Portfolio Managers. Mr. John Holmgren – President of Holmgren Capital Management, LLC (“HCM”). He joined AIFS in 2008 as Chief Investment Officer – Equities and founded HCM. He is responsible for the oversight, development and implementation of equity strategies. He was Chief Investment Officer and Chief Executive Officer of DSI International Management, Inc (DSI) from 2003-2007 which was acquired by UBS (Paine Webber) in 1999. Mr. Holmgren was a Managing Director at UBS and sat on the various UBS Global AM and O’Connor Investment and Management Committees. From 1999-2007as COO he was the COO of DSI and a Managing Director of UBS. He worked closely with the other senior members of UBS Global AM leadership to ensure investment and logistical priorities were met. He began his financial markets career as a registered representative with Ascher Decision, a broker dealer (1983 to 1986). From 1986 to 1988, he was a product developer and marketing representative for Decision Services, Inc., an independent economic and securities research firm. In 1987 he was one of the original founders of DSI International Management. From 1988 to 1997, he was the founder and President of DSC Data Services, Inc., an independent, quantitative research firm. From 1997 until 2000 he was the COO and a Portfolio Manager at DSI. Mr. Michael Holmgren – Vice President and Portfolio Manager of HCM. He joined AIFS and founded HCM in 2008 and is responsible for the development and implementation of quantitative investment product. He was Chief Operating Officer of DSI from 2005 -2007 and a member of the portfolio management team. Mike Holmgren was responsible for investment operations and portfolio implementation of the DSI business group within UBS Global AM. DSI was a key provider of global quantitative risk controlled and long/short equity products within UBS Global Asset Management. He joined DSI International Management, Inc. in 1988 as an analyst to develop, operate and enhance the global equity databases and portfolio simulation processes. Prior to joining DSI, he worked in product development at Decision Services, an independent economic and securities firm. Mr. Frank Vallario – Vice President and Portfolio Manager of HCM. He joined AIFS as a Portfolio Manager and founded HCM in 2008. Previously, he was a member of the portfolio management team for DSI, responsible for managing the group’s U.S. risk controlled and U.S. long/short equity products. His other responsibilities included stock selection research, alternative portfolio construction, product development and performance attribution for the group’s global risk controlled and long/short equity products. He began 56 his career in 1995 in the capital markets division of PaineWebber, Inc. In 1996, Mr. Vallario joined the asset management division’s Quantitative Investments Group as a portfolio manager For additional information about the portfolio managers’ compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities of the Funds managed, please consult the SAI. INVESTING WITH THE FUNDS In this section, you will find information on how to invest in the Fund, including how to buy, sell and exchange fund shares. It is also the place to look for information on transaction policies, dividends, taxes, and the many services and choices you have as an American Independence Funds’ shareholder. You can find out more about the topics covered here by contacting the American Independence Funds, speaking with your financial representative or a representative of your workplace retirement plan or other investment provider. Choosing a Class of Shares The Funds offer either two or three classes of shares (the International Equity Fund, the Intermediate Bond Fund, the International Bond and the Fusion Fund currently do not offer Class C Shares). The choice among share classes is largely a matter of preference. You should consider, among other things, the different fees and sales loads assessed on each share class and the length of time you anticipate holding your investment. If you prefer to pay sales charges up front, wish to avoid higher ongoing expenses, or, more importantly, you think you may qualify for volume discounts based on the amount of your investment, then Class A shares may be the choice for you. You may prefer instead to see “every dollar working” from the moment you invest. If so, then consider Class C shares, which do not have a front-end sales charge. After six years, Class C shares convert to Class A shares to avoid the higher ongoing expenses assessed against Class C shares. Please see the expenses listed for each Fund and the following sales charge schedules before making your decision. Generally, we offer more sales charge reductions or waivers for Class A shares than for Class C shares, particularly if you intend to invest greater amounts. You should consider whether you are eligible for any of the potential reductions or waivers when you are deciding which share class to buy. Please see “ Class A Shares Sales Charge Reductions ” section below for more information. You may wish to discuss this choice with your financial consultant. Institutional Class Shares . Institutional Class Shares of the Funds are offered at net asset value without a sales load. Purchases of Institutional Class shares may only be made by one of the following types of "Institutional Investors": (1) trusts, or investment management and other fiduciary accounts managed or administered by AIFS or its affiliates or correspondents pursuant to a written agreement, (2) any persons purchasing shares with the proceeds of a distribution from a trust, investment management and other fiduciary account managed or administered by AIFS or its affiliates or correspondents, pursuant to a written agreement, and (3) other persons or organizations authorized by the Distributor. The Trust and the Distributor reserve the right to waive or reduce the minimum initial investment amount with respect to certain accounts. All initial investments should be accompanied by a completed Purchase Application, a form of which accompanies this Prospectus. The minimum initial investment amount for the Institutional Class Shares is $3,000,000, except with respect to the Stock Fund and U.S. Inflation-Indexed Fund the minimum initial investment is $250,000. The Fund may waive its minimum purchase requirement or may reject a purchase order if it considers it in the best 57 interest of the Fund and its shareholders. See "Anti-Money Laundering Program" at the end of this section and the "Market Timing Policies" section. Class A Shares . Class A Shares of the Funds are offered with a front-end sales charge and volume reductions. For purchases of $1,000,000 or more a CDSC of 1.00% will be assessed if redeemed within one year of purchase and 0.50% CDSC will be assessed if redeemed after the first year and within the second year. The minimum investment for Class A Shares is $5,000. Subsequent investments are $250. Class A Share Sales Charge Schedule. If you choose to buy Class A shares, you will pay the Public Offering Price (“ POP ”) which is the Net Asset Value (“NAV”) plus the applicable sales charge. Since sales charges are reduced for Class A share purchases above certain dollar amounts, known as “breakpoint levels,” the POP is lower for these purchases. The dollar amount of the sales charge is the difference between the POP of the shares purchased (based on the applicable sales charge in the table below) and the net asset value of those shares. Because of rounding in the calculation of the POP , the actual sales charge you pay may be more or less than that calculated using the percentages shown below. At its discretion, the Distributor may provide the Broker-Dealer the full front-end sales charge. Stock Fund and International Equity Fund Front -End Front -End Broker- Sales Charge Sales Charge Dealer as % of Public as % of Net Amount of Offering Price Amount Sales Amount of Purchase Invested Concession Less than $50,000 5.75

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2010 or oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 333-159300 CELLDONATE INC. (Exact name of registrant as specified in its charter) Nevada None (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1111 Alberni Street, Suite 3606 Vancouver, British Columbia, CanadaV6E 4V2 (Address of principal executive offices, including zip code) (604) 899-2772 (Registrants telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.YesþNo o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes þNoo Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. Large accelerated filero Accelerated filero Non-accelerated filero Smaller reporting company þ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YesoNo þ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YesoNo o APPLICABLE ONLY TO CORPORATE ISSUERS As of August 13, 2010 the registrants outstanding common stock consisted of 2,291,000 shares. Table of Contents PART I FINANCIAL INFORMATION 2 Item 1. Financial Statements 2 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations 3 Item 3. Quantitative and Qualitative Disclosures About Market Risk 7 Item 4. Controls and Procedures 7 PART II OTHER INFORMATION 8 Item 1. Legal Proceedings 8 Item 2. Unregistered Sales of Equity Securities 8 Item 3. Defaults Upon Senior Securities 8 Item 4. (Removed and Reserved) 8 Item 5. Other Information 8 Item 6. Exhibits 8 1 PART I FINANCIAL INFORMATION Item 1.Financial Statements The unaudited interim financial statements of Celldonate Inc. (we, our, us, the Company) follow. All currency references in this report are to U.S. dollars unless otherwise noted. CELLDONATE INC. (A Development Stage Company) June 30, 2010 Financial Statements (Unaudited Expressed in US dollars) 2 CELLDONATE INC. (A Development Stage Company) Balance Sheets (Unaudited Expressed in US dollars) June 30, 2010 March 31, 2010 Assets Current Cash $ $ Liabilities Current Accounts payable $ $ Accrued liabilities (note 5) Due to related parties (note 7) Stockholders Deficiency Common stock (note 6) Authorized: 100,000,000 common shares, $0.001 par value 400,000 common shares, without par value vvsscsasdavavvaluevalue Issued and outstanding: 2,291,000 common shares, $0.001 par value (2,291,000 as at March 31, 2010) Additional paid-in capital Deficit accumulated during the development stage ) ) Total stockholders deficiency ) ) Total liabilities and stockholders deficiency $ $ Nature of operations and going concern (note 1) See accompanying notes to financial statements. F-1 CELLDONATE INC. (A Development Stage Company) Statements of Operations (Unaudited Expressed in US dollars) For the three months ended June 30, 2010 For the three months ended June 30, 2009 Period from August15, 2006 (inception) to June 30, 2010 Expenses Accounting and legal $ $ $ Licenses and fees Bank charges Consulting and development fees - - Office - - Amortization - 44 Net loss and comprehensive loss for period $ ) $ ) $ ) Basic and diluted loss per share $ ) $ ) Weighted average number of common shares outstanding See accompanying notes to financial statements. F-2 CELLDONATE INC. (A Development Stage Company) Statements of Cash Flows (Unaudited Expressed in US dollars) For the three months ended June 30, 2010 For the three months ended June 30, 2009 Period from August15, 2006 (inception) to June 30, 2010 Cash Flow from Operating Activities Net loss for the period $ ) $ ) $ ) Amortization of equipment - 44 Shares issued for services - - Changes in assets and liabilities Accounts payable Accrued liabilities ) - Cash Used in Operating Activities ) ) ) Cash Flow from Investing Activity Purchase of equipment - - ) Cash Flow from Financing Activities Net proceeds from issuance of common stock - - Proceeds from share subscriptions - - Advances from (repayments to) related parties ) Cash Provided by (Used in) Financing Activities ) Increase (Decrease) in Cash ) ) Cash, Beginning of Period - Cash, End of Period $ $ $ Supplemental information Shares issued for services $

Name: Commission Regulation (EC) No 2091/98 of 30 September 1998 concerning the segmentation of the Community fishing fleet and fishing effort in relation to the multiannual guidance programmes Type: Regulation Subject Matter: fisheries; information and information processing; environmental policy Date Published: nan Avis juridique important|31998R2091Commission Regulation (EC) No 2091/98 of 30 September 1998 concerning the segmentation of the Community fishing fleet and fishing effort in relation to the multiannual guidance programmes Official Journal L 266 , 01/10/1998 P. 0036 - 0046COMMISSION REGULATION (EC) No 2091/98 of 30 September 1998 concerning the segmentation of the Community fishing fleet and fishing effort in relation to the multiannual guidance programmesTHE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community,Having regard to Council Regulation (EEC) No 3760/92 of 20 December 1992, establishing a Community system of fisheries and aquaculture (1), as amended by Regulation (EC) No 1181/98 (2), and in particular Article 13 thereof,Whereas in accordance with Article 5 of Council Regulation (EC) No 3699/93 of 21 December 1993 laying down the criteria and arrangements regarding Community structural assistance in the fisheries and aquaculture sector and the processing and marketing of its products (3), as last amended by Council Regulation (EC) No 25/97 (4), multiannual guidance programmes for the period 1997/2001 were adopted by Commission Decisions 98/119/EC to 98/131/EC (5); whereas the data necessary in order to follow these programmes must be forwarded to the Commission, including fishing effort data for individual vessels or aggregated by segments of the fleet or by fisheries, depending on the particular cases;Whereas Commission Regulation (EC) No 2090/98 (6), establishes the basis for the transmission of data to the fishing vessel register of the Community;Whereas the communication of data on the segmentation of the fishing fleet and on the fishing effort by fishery should refer to the data contained in the fishing vessel register of the Community;Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Fisheries and Aquaculture,HAS ADOPTED THIS REGULATION:Article 1 The segment to which each vessel entering the fishing fleet belongs or any change to segment to which an existing vessel belongs must be communicated to the fishing vessel register of the Community by the Member State in accordance with the provisions of Regulation (EC) No 2090/98.The segment codes to be used are those shown in Annex I.The vessels concerned shall be identified by the internal number recorded in the Community register of fishing vessels, as referred to in Annex I of Regulation (EC) No 2090/98.Article 2 For each segment for which a Member State submits to the Commission a programme of fishing effort limitation, either by fishery in accordance with Article 6 of Council Decision 97/413/EC (7), or by segment in order to make up any backlog from the previous multiannual guidance programme partly by reductions in activity, the following procedures shall be adopted:- the Member State shall collect the individual data on the fishing effort of the vessels in the segment or fishery,- the processing of these data by a computer programme shall be effected by the Member State,- the transmission to the Commission of the individual data or data aggregated by segment or fishery shall be effected annually by 31 March at the latest for the preceding calendar year in accordance with tables A and B in Annex II to this Regulation.Article 3 For the segments using active gear not covered by the programmes referred to in Article 2, Member States shall collect and process the minimum data provided for in Annex II needed to ascertain that the level of activity for these do not increase, or, if they increase, to evaluate the increase. To this end, the following procedures shall be applied:- the minimum data provided for in Annex II permitting the evolution of fishing activity for the segments concerned to be monitored shall be collected and processed by the Member State. Details of the sampling methods selected for each segment of the fleet, together with the values of the statistical parameters describing the precision of the estimates of fishing effort, shall be communicated to the Commission at the time of their application. Any other procedure giving results of comparable precision shall be acceptable provided it has been approved by the Commission,- the results shall be forwarded to the Commission annually by 31 March at the latest for the preceding calendar year in accordance with table B in Annex II to this Regulation,- if a Member State establishes an increase in activity for a given segment, it shall calculate the effect of this increase on the fishing effort for this segment and shall inform the Commission of the results in accordance with Article 2.Article 4 Member States shall communicate to the Commission the data referred to in this regulation by digital transfer over a telecommunications network in accordance with the detailed rules and codes set out in Annexes I and II. The Commission shall acknowledge receipt of messages as soon as they have been validated in the data base.Article 5 Corrections to erroneous information shall be forwarded to the Commission within 30 days of the date on which the error is detected.Article 6 This Regulation shall enter into force on the seventh day following its publication in the Official Journal of the European Communities.This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 30 September 1998.For the CommissionEmma BONINOMember of the Commission(1) OJ L 389, 31. 12. 1992, p. 1.(2) OJ L 164, 9. 6. 1998, p. 1.(3) OJ L 346, 31. 12. 1993, p. 1.(4) OJ L 6, 10. 1. 1997, p. 7.(5) OJ L 39, 12. 2. 1998, p, 1, 9, 15, 21, 27, 34, 41, 47, 53, 59, 65, 73 and 79.(6) See page 27 of this Official Journal.(7) OJ L 175, 3. 7. 1997, p. 27.ANNEX I >TABLE>>TABLE>ANNEX II FISHING EFFORT DEFINITION OF DATA TO BE COMMUNICATED AND DESCRIPTION OF A RECORD >TABLE>>TABLE>>TABLE>

Title: Woman involved in crash who I strongly believe to be fabricating injuries is claiming against my insurance Question:I was at fault and now having to talk to my insurance about this. As I've just received a letter from Geico telling me she's hired a lawyer and have a bodily injury claim against me (I'm covered for 10,000). I've been burned in the past by going into things without a specific mindset so I'm reaching out to get a legal opinion on what I should be looking to do from this point on. Not looking for people to point out I have no proof she wasn't injured, I know that. Happening in Florida USA Answer #1: Your insurance company are experts in dealing with frivolous claims. They deal with it all the time. They represent you and will handle it. $10k bodily injury is incredible low, you should consider increasing your coverage. Answer #2: Let your insurance company handle it. They can spot fraudulent injuries. And for the love of Pete raise your liability. It doesn't cost much more. $10,000 might.... might be enough to cover a broken wrist if no complications. Do you realize you can be on the hook for anything your insurance won't pay due maxing out you incredibly low limits? Answer #3: Hey! Why do you think she's faking? If you provide a few more details then we can tell you if you're on to something or not. Here is something to keep in mind: pain can happen days after an accident, so on the off-shot, if your reasoning for her faking it is that she said she was okay during the accident and then later went to the hospital claiming pain and injuries then this could be totally legit. It's common for this to happen, and even happened to me once, where I didn't start feeling the pain until several days afterward, and needed chiropractic care to prevent future damage. It was an accident I caused, so my own insurance would have covered it. Anyway, do as the others have suggested. Get a higher limit on your insurance, because if you maim someone or kill someone you're going to be paying for the rest of your life if they have to sue you personally. Always get the highest amount you can afford, and this will give some leeway for your insurance to negotiate an amount on your behalf. How this works is, if, like most Americans, you're not swimming in money, then she might take the 10k since its guaranteed money, minus her lawyers fees, so she won't even get the full amount. If she settles with your insurance for 10k then she'll sign a document that releases you from future liability regarding this accident. If she rejects their 10k offer then she can sue you personally. If you're found liable for more than 10k then your insurance will pay the 10k policy limit and you'll be personally liable for the rest. Please, take the advice and get more coverage. Even if you're a great driver you still have to deal with the unpredictability of other, less skilled drivers, or that person pulling out in front of you and breaking hard and you hit from behind. No witnesses or dash cam and you're automatically at fault unless they admit what happened, and you pay for their broken ribs, concussion, and cosmetic surgery that's needed because of the accident, plus pain and suffering. You could be looking upwards of $100k in injuries.Answer #4: Let your insurance company handle this, and for god's sake, increase your coverage. If you are at fault in a serious accident, you will be ruined, because $10k doesn't cover one trip to the emergency room.

Title: Laid off & still being harassed from home by old coworkers Question:(California) My mom was laid off about 2 months ago from a healthcare management office. She was let go under the pretense that her position was no longer needed. She was the only person in the office to do this particular job. After being sent home, we found out that her position was actually given to somebody else, lets call her A. In fact, A's previous position is the one that had become obsolete. Instead of letting go of A, they let go of my mom and gave her job to A. A is related to the CEO. Before being laid off, my mom was not asked to train A or anybody else, even though my mom did offer. But since being sent home, she has been harassed with phone calls from A. A keeps calling to ask how to do the job, what the protocols are, etc. My mom gave her some tips but told A she needs to ask her managers for everything else. Turns out, managers also dont know how to do the job. So for the past 2 months my mom has been receiving incessant calls from A. I told her to stop answering as she was spending personal, unpaid time doing someone else's job. A few days after ignoring calls, she received a call from an unknown number. The person on the phone claimed to be a lawyer and demanded that my mom give over such and such information over the phone. My mom told him she would never do such a thing and hung up. My impression is the person wasnt a lawyer at all, just someone A recruited to give her a call and scare her into giving info. It is important to note that my mom isnt withholding any information. A and company are just so clueless, that it would take hours of training for them to do the job. My mom has advised A to go to her superiors and IT team for help with her issuss as after 2 months of being laid off, she has no obligation to be on call for training/tutoring an unqualified person who underservedly got her job. Legally, does my mom HAVE to take these calls? Does she have to answer their questions? And is it even legal to lay somebody off, only to give their position to another person? Answer #1: Your mom doesn't have an obligation to train someone at her former employer. She would be required to turn over company property or information that she had (like passwords, or company files), but that's about it, unless she had a severance agreement requiring it. I'd suggest she offer to train them as a consultant, with an exorbitant hourly rate, to be paid up front. Answer #2: Lay off is legal. But it sounds like she could find some profitable work as an independent contractor. Work out a billing program, have the old employer sign it and bill for the phone calls. Answer #3: Perhaps your Mom could offer to train A to do the job in exchange for an obscene amount of money. It sounds like the company might pay it. Answer #4: Did your mother have an employment contract that specified anything like this? Is this just general knowledge stuff? There's likely no duty for your mom to help them out. She should just ignore the calls. Answer #5: **IANAL** If I were your mom, here is what I would do. 1. **Offer her experience to train A and anyone else the company wants trained.** She will become an independent contractor if she goes this way. A good rule of thumb is the charge 3x what you got paid as an employee but she should also calculate a minimum payment she is willing to accept. 1. **Determine her base pay**, this is the easy part. She can start with her most recent pay stubs, hopefully she still has those. If she hasn't had a raise in a couple of years, she could give herself a raise (3% cost of living adjustment is generally acceptable). 2. **Add in the cost of insurance**. If she was under her husband's insurance when she was still employed by the company (I'm assuming she's married for this part), she could include the portion he paid to have her covered. If she/your family had her insurance with the old company and had to acquire new insurance when she was let go (this part I assume she's not married in this part) she could include the cost associated with insuring herself. 3. **Account for taxes**. With her being an independent contractor, she will be responsible for paying her income taxes. She's going to want to pass these cost back to her former employer. There are a couple gross pay calculators online she could use to determine her gross pay. She also should run these numbers by a tax professional just to make sure she hasn't overlooked anything. Finally, if she will be training more than one person, she might want to consider adding 5-10% per person extra she will be training. ***This number is the minimum she should be willing to accept to become an independent contractor***. 2. **Talk to a lawyer**. 1. If they choose to hire her as a consultant/independent contractor, she is going to want to get a contract drawn up to protect herself. She should probably look into someone experienced with employment law. You might want to contact the state bar association for lawyer recommendations. 2. If they don't want to hire her, your mom should contact a lawyer to see how she can stop the harassment. This will often be in the form of a cease and desist letter, but it could go as far as a restraining order. You're going to want a lawyer to make sure this is done correctly. 3. **Consider changing her phone number**, if the two things above don't work. This is probably the most extreme since it will cause your mom a lot of hassle with giving her phone number out to everyone she wants to have it again. * If she doesn't want to do this, block every number they use. If a lawyer (or "lawyer") contacts her again, have her get as much information as she can (Name of lawyer, name of firm, phone numbers, Bar ID number, etc.). This will help her if she needs to make a complaint with the California Bar.Answer #6: "These calls will be charged at a rate of xxx dollars per call, can you authorize that expense?"Answer #7: The layoff is legal. The rest of it probably isnt, but it depends. You mentioned contacting IT.... Did/does your mom have information for essential systems (administrative passwords, etc) that nobody else knows? If so, they would be considered company property and she could be compelled to turn them over. They cannot, however, force her to provide training and guidance to her replacement without paying her.

Exhibit 10.3 EXECUTION VERSION AGREEMENT This Agreement (the “Agreement”) is made and entered into as of July 14, 2013, by and among the persons and entities listed on Schedule A hereto (each, individually, an “Icahn Entity” and collectively, the “Icahn Entities”) and Navistar International Corporation, a Delaware corporation (the “Company”). WHEREAS, the Icahn Entities and their respective affiliates and associates may desire to acquire ownership of additional shares of common stock, par value $.01 per share, of the Company (“Common Stock”) without being subject to the restrictions under Section 203 of the General Corporation Law of the State of Delaware (“DGCL 203”) applicable to a “business combination” with an “interested stockholder” (each such term, as used in this Agreement, shall have the meaning given to it in DGCL 203, except as described in Section 4 hereof), so long as the Icahn Entities and their affiliates and associates do not own 20% or more of the voting power of the then issued and outstanding shares of voting stock of the Company; WHEREAS, as of the date hereof, the Company and the Icahn Entities have no current discussions or negotiations with each other regarding a business combination or other extraordinary transaction involving the Company; NOW THEREFORE, in consideration of the premises and the covenants of the parties set forth in this agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the undersigned hereby agree as follows: 1. The Company hereby represents and warrants to the Icahn Entities that the Board of Directors of the Company has duly approved (the “Board Approval”) this Agreement and the acquisition by the Icahn Entities and their respective affiliates and associates, whether in a single transaction or multiple transactions from time to time, of additional shares of Common Stock to the extent such acquisitions would result in the Icahn Entities and their affiliates and associates being the owner of 15% or more, but less than 20%, of the voting power of the shares of voting stock of the Company issued and outstanding from time to time, subject to the limitations provided for in Section 4 hereof and subject to the accuracy of the representations and warranties set forth in Section 2 hereof. 2. The Icahn Entities hereby represent and warrant that, as of the date of this Agreement and assuming the accuracy of the representations and warranties set forth in Section 3 hereof, the Icahn Entities and their affiliates and associates are, in the aggregate, owners of less than 15% of the shares of Common Stock issued and outstanding as of the date of this Agreement. 3. The Company hereby represents and warrants that, as of the date of this Agreement, there are 86,807,040 shares of Common Stock issued and outstanding which is the only class of “voting stock” (as defined herein) of the Company. 4. Each of the Icahn Entities agrees that if any Icahn Entity or any of its affiliates and associates becomes the owner of shares of voting stock of the Company such that the Icahn Entities would, together with their affiliates and associates, in the aggregate own 20% or more of the voting power of the issued and outstanding shares of voting stock of the Company under circumstances in which they would be an “interested stockholder” as defined in DGCL 203 (but, for this purpose, replacing 15% in such definition with 20%) (any event causing the Icahn Entities and their affiliates and associates to own in the aggregate 20% or more of the voting power of the then issued and outstanding shares of voting stock of the Company, an “Additional Acquisition”), then (i) notwithstanding the Board Approval referred to in Section 1 of this Agreement, the restrictions under DGCL 203 applicable to a “business combination” with an “interested stockholder” shall apply as a matter of contract pursuant to this Agreement (except as modified herein) to the Icahn Entities and their respective affiliates and associates as if such Board Approval had not been granted and as if the Additional Acquisition had caused each Icahn Entity and its affiliates and associates to become an interested stockholder for purposes of DGCL 203, except that wherever 15% is used in DGCL 203 it shall mean, for all purposes of this Agreement, 20%; and (ii) the Icahn Entities and their affiliates and associates will not engage in any business combination with the Company for a period of 3 years following the time that the Icahn Entities and their affiliates and associates became an owner of 20% or more of the voting power of the then issued and outstanding shares of voting stock of the Company, unless: (1) prior to such time the Board of Directors of the Company approved, including approval by a majority of the Non- Icahn Directors (as defined in Section 5), either the business combination or the Additional Acquisition; (2) upon consummation of the transaction which resulted in the Icahn Entities and their affiliates and associates becoming an owner of 20% or more of the voting power of the issued and outstanding shares of voting stock of the Company, the Icahn Entities and their affiliates and associates owned at least 85% of the voting power of the voting stock of the Company outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the Icahn Entities and their affiliates and associates) those shares owned (i) by persons who are directors and also officers of the Company and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (3) at or subsequent to such time the business combination is approved by the Board of Directors of the Company, including by a majority of the Non- Icahn Directors, and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the voting power of the outstanding voting stock which is not owned by the Icahn Entities and their affiliates and associates; provided, that, the restrictions set forth above shall not apply if any of the exceptions in DGCL Section 203(b)(4), (5) or (6) would be applicable at the time of such business combination. 5. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures were upon the same instrument. All representations, warranties, covenants and agreements made herein shall survive   2 the execution and delivery of this Agreement. This Agreement constitutes the entire agreement among the parties hereto in respect of the subject matter hereof. No provision of this Agreement may be: (a) amended except by an instrument in writing executed by the parties hereto; or (b) waived except by an instrument in writing executed by the party against whom the waiver is to be effective; provided that any such amendment or waiver has been approved by the Board of Directors of the Company, including, to the fullest extent permitted by law, by a majority of the Non- Icahn Directors. This Agreement shall not be terminated except by an instrument in writing executed by the parties hereto; provided that any such termination has been approved by the Board of Directors of the Company, including, to the fullest extent permitted by law, by a majority of the Non- Icahn Directors. For purposes of this Agreement, “Non- Icahn Directors” shall mean the members of the Board of Directors of the Company that are not affiliated with, and were not nominated by, any Icahn Entity or any affiliate or associate thereof or any other stockholder of the Company (including any affiliate or associate of any such stockholder) that is subject to an agreement similar to this Agreement. This Agreement: (i) shall not be assignable by any of the parties hereto; and (ii) shall be binding on successors of the parties hereto. 6. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without regard to choice of law principles that would compel the application of the laws of any other jurisdiction. Each of the parties hereto irrevocably agrees that any legal action or proceeding that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof, shall be brought and determined exclusively in the Chancery Court of the State of Delaware and any state appellate court therefrom located in the State of Delaware (or, only if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court located in the State of Delaware). 7. Each of the parties hereto hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or related to this Agreement. 8. The parties hereto agree that irreparable damage, for which monetary damages would not be an adequate remedy, would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached by the parties hereto. It is accordingly agreed that the parties hereto shall be entitled to an injunction or injunctions, or any other appropriate form of specific performance or equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction, this being in addition to any other remedy to which they are entitled under the terms of this Agreement at law or in equity. Each party hereto accordingly agrees not to raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of such party under this Agreement. 9. The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.   3 10. As used in this Agreement, the terms “affiliate,” “associate,” “owner,” including the terms “own” and “owned,” “stock” and “voting stock” have the meanings given to them in DGCL 203; provided, that (a) the Icahn Entities and their affiliates and associates shall not be deemed to be an “owner” of, or to “own” or have “owned,” any stock owned by any “Permitted Person” solely by virtue of engaging in a “Permitted Activity” with such Permitted Person, as such terms are currently defined in Amendment No. 1 to Rights Agreement, dated as of October 5, 2012, between the Company and Computershare Inc., a Delaware corporation, successor-in-interest to Computershare Shareowner Services LLC, a New Jersey limited liability company, as rights agent, as in effect on the date hereof, and (b) for the avoidance of doubt, the Company’s Nonconvertible Junior Preference Stock, Series B, par value $1.00 per share, and the Company’s Convertible Junior Preference Stock, Series D, par value $1.00 per share, each with the rights currently set forth in the Company’s certificate of incorporation in effect on the date hereof, shall not be deemed to be voting stock for purposes of this Agreement. 11. This Agreement is intended to benefit, and shall be enforceable by, each holder of outstanding shares of capital stock of the Company as a third-party beneficiary of this Agreement, such that such stockholders shall be entitled to enforce the Agreement if any of the provisions of this Agreement were not performed in accordance with their specific terms, as amended from time to time in accordance with Section 5 hereof, or were otherwise breached by the parties hereto, including, without limitation, in the event any business combination were consummated in violation of Section 4 hereof, as amended from time to time in accordance with Section 5 hereof, other than any consummation thereof pursuant to a waiver obtained in accordance with Section 5 hereof.   4 IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the   NAVISTAR INTERNATIONAL CORPORATION By:   /s/ Curt A. Kramer   Name:   Curt A. Kramer   Title:   Corporate Secretary ICAHN PARTNERS MASTER FUND LP ICAHN PARTNERS MASTER FUND II LP ICAHN PARTNERS MASTER FUND III LP ICAHN OFFSHORE LP ICAHN PARTNERS LP ICAHN ONSHORE LP BECKTON CORP. HOPPER INVESTMENTS LLC   By:   Barberry Corp., its sole member BARBERRY CORP. HIGH RIVER LIMITED PARTNERSHIP   By:   Hopper Investments LLC, general partner   By:   Barberry Corp., its sole member   By:   /s/ Edward E. Mattner   Name:   Edward E. Mattner   Title:   Authorized Signatory   5 ICAHN CAPITAL LP   By:   IPH GP LLC, its general partner   By:   Icahn Enterprises Holdings L.P., its sole member   By:   Icahn Enterprises G.P. Inc., its general partner IPH GP LLC   By:   Icahn Enterprises Holdings L.P., its sole member   By:   Icahn Enterprises G.P. Inc., its general partner ICAHN ENTERPRISES HOLDINGS L.P.   By:   Icahn Enterprises G.P. Inc., its general partner ICAHN ENTERPRISES G.P. INC. By:   /s/ SungHwan Cho Name:   SungHwan Cho Title:   Chief Financial Officer   /s/ Carl C. Icahn   Carl C. Icahn SCHEDULE A Barberry Corp. Beckton Corp. Carl C. Icahn Icahn Capital LP Icahn Enterprises Holdings L.P. Icahn Enterprises G.P. Inc. Icahn Offshore LP Icahn Onshore LP Icahn Partners LP Icahn Partners Master Fund LP Icahn Partners Master Fund II LP Icahn Partners Master Fund III LP IPH GP LLC High River Limited Partnership Hopper Investments LLC

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number 811-02864 Pioneer Bond Fund (Exact name of registrant as specified in charter) 60 State Street, Boston, MA 02109 (Address of principal executive offices) (ZIP code) Terrence J. Cullen, Pioneer Investment Management, Inc., 60 State Street, Boston, MA 02109 (Name and address of agent for service) Registrant's telephone number, including area code: (617) 742-7825 Date of fiscal year end: June 30 Date of reporting period: March 31, 2016 Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after close of the first and third fiscal quarters, pursuant to Rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. Schedule of Investments. File the schedules as of the close of the reporting period as set forth in ss. 210.12-12 12-14 of Regulation S-X [17 CFR 210.12-12 12-14]. The schedules need not be audited. Pioneer Bond Fund Schedule of Investments 3/31/16 (Unaudited) Principal Amount ($) Floating Rate (b) (unaudited) Value PREFERRED STOCKS - 0.0% † Banks - 0.0% † Diversified Banks - 0.0% † Citigroup Capital XIII, Floating Rate Note, 10/30/40 $ Total Banks $ TOTAL PREFERRED STOCKS (Cost $817,149) $ CONVERTIBLE PREFERRED STOCKS - 0.3% Banks - 0.3% Diversified Banks - 0.3% Wells Fargo & Co., 7.5% (Perpetual) $ Total Banks $ TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $9,486,742) $ ASSET BACKED SECURITIES - 4.5% Access Point Funding I 2015-A LLC, 2.61%, 4/15/20 (144A) $ American Credit Acceptance Receivables Trust 2014-1, 5.2%, 4/12/21 (144A) American Homes 4 Rent 2014-SFR1, Floating Rate Note, 6/17/31 American Homes 4 Rent 2014-SFR3 Trust, 4.596%, 12/18/36 (144A) American Homes 4 Rent 2014-SFR3 Trust, 5.04%, 12/18/36 (144A) American Homes 4 Rent 2015-SFR1, 4.11%, 4/18/52 (144A) Applebee's Funding LLC/ IHOP Funding LLC, 4.277%, 9/5/44 (144A) Ascentium Equipment Receivables 2015-1 LLC, 3.24%, 1/10/22 (144A) AXIS Equipment Finance Receivables II LLC, 4.94%, 7/20/18 (144A) Axis Equipment Finance Receivables III LLC, 3.41%, 4/20/20 (144A) B2R Mortgage Trust 2015-1, 2.524%, 5/15/48 (144A) Bayview Financial Mortgage Pass-Through Trust 2005-C, Floating Rate Note, 6/28/44 Bayview Financial Mortgage Pass-Through Trust 2006-A, 5.865%, 2/28/41 (Step) Bayview Financial Mortgage Pass-Through Trust Series 2005-B, Floating Rate Note, 4/28/39 BCC Funding Corp X, 3.622%, 11/20/20 (144A) Bear Stearns Asset Backed Securities I Trust 2005-FR1, Floating Rate Note, 6/25/35 Bear Stearns Asset Backed Securities Trust 2006-SD2, Floating Rate Note, 6/25/36 BXG Receivables Note Trust 2015-A, 2.88%, 5/2/30 (144A) Capital Automotive Real Estate Investment Trust, 3.66%, 10/17/44 (144A) Chesapeake Funding LLC, Floating Rate Note, 2/7/27 (144A) Chesapeake Funding LLC, Floating Rate Note, 3/9/26 (144A) CIT Equipment Collateral 2014-VT1, 2.65%, 10/20/22 (144A) Citigroup Mortgage Loan Trust, Inc., Floating Rate Note, 5/25/35 (144A) CKE Restaurant Holdings, Inc., 4.474%, 3/20/43 (144A) CNH Equipment Trust 2013-A, 0.69%, 6/15/18 Colony American Finance 2015-1, Ltd., 2.896%, 10/18/47 (144A) Colony American Homes 2014-1, Floating Rate Note, 5/19/31 (144A) Consumer Credit Origination Loan Trust 2015-1, 2.82%, 3/15/21 (144A) Countrywide Asset-Backed Certificates, Floating Rate Note, 12/25/35 Credit-Based Asset Servicing and Securitization LLC, Floating Rate Note, 7/25/36 CRG Issuer 2015-1, 4.07%, 7/11/22 (144A) CWABS Asset-Backed Certificates Trust 2004-7, Floating Rate Note, 12/25/34 DB Master Finance LLC 2015-1, 3.98%, 2/21/45 (144A) Diamond Resorts Owner Trust 2015-1, 3.17%, 7/20/27 (144A) Domino's Pizza Master Issuer LLC, 3.484%, 10/25/45 (144A) Domino's Pizza Master Issuer LLC, 5.216%, 1/27/42 (144A) Drug Royalty II LP 2, Floating Rate Note, 7/15/23 (144A) DT Auto Owner Trust 2015-1, 4.26%, 2/15/22 (144A) First Investors Auto Owner Trust 2013-1, 2.02%, 1/15/19 (144A) First Investors Auto Owner Trust 2014-3, 2.97%, 11/16/20 (144A) First Investors Auto Owner Trust 2015-1, 3.59%, 1/18/22 (144A) GMAT 2013-1 Trust, 3.9669%, 8/25/53 (Step) GSAMP Trust 2005-HE1, Floating Rate Note, 12/25/34 GSAMP Trust 2006-HE7, Floating Rate Note, 10/27/36 GSRPM Mortgage Loan Trust 2003-2, Floating Rate Note, 6/25/33 GSRPM Mortgage Loan Trust 2006-2, Floating Rate Note, 9/25/36 (144A) Hercules Capital Funding Trust 2014-1, 3.524%, 4/16/21 (144A) HOA Funding LLC, 4.846%, 8/22/44 (144A) Home Equity Asset Trust 2005-7, Floating Rate Note, 1/25/36 Home Equity Mortgage Loan Asset-Backed Trust Series INABS 2005-C, Floating Rate Note, 10/25/35 Horizon Funding Trust 2013-1, 3.0%, 5/15/18 (144A) Icon Brand Holdings LLC, 4.229%, 1/26/43 (144A) Icon Brand Holdings LLC, 4.352%, 1/25/43 (144A) Invitation Homes 2014-SFR3 Trust, Floating Rate Note, 12/18/31 (144A) Irwin Home Equity Loan Trust 2005-1, 5.32%, 6/25/35 (Step) Irwin Home Equity Loan Trust 2005-1, Floating Rate Note, 6/25/25 Irwin Whole Loan Home Equity Trust 2003-C, Floating Rate Note, 6/25/28 JG Wentworth XXII LLC, 3.82%, 12/15/48 (144A) Leaf Receivables Funding 10 LLC, 2.74%, 3/15/21 (144A) Lehman ABS Manufactured Housing Contract Trust 2001-B, 3.01%, 5/15/41 Lehman ABS Manufactured Housing Contract Trust 2001-B, 5.873%, 5/15/41 Mid-State Capital Trust 2010-1, 5.25%, 12/15/45 (144A) Nations Equipment Finance Funding II LLC, 3.276%, 1/22/19 (144A) Nationstar Home Equity Loan Trust 2007-A, Floating Rate Note, 3/25/37 New Century Home Equity Loan Trust 2005-1, Floating Rate Note, 3/25/35 NewStar Commercial Lease Funding 2015-1 LLC, 3.27%, 4/15/19 (144A) NextGear Floorplan Master Owner Trust, 1.92%, 10/15/19 (144A) NextGear Floorplan Master Owner Trust, 2.61%, 10/15/19 (144A) NovaStar Mortgage Funding Trust Series 2004-4, Floating Rate Note, 3/25/35 OneMain Financial Issuance Trust 2015-1, 3.19%, 3/18/26 (144A) Oxford Finance Funding Trust 2014-1, 3.475%, 12/15/22 (144A) PFS Financing Corp., Floating Rate Note, 10/15/19 (144A) Prestige Auto Receivables Trust 2013-1, 3.04%, 7/15/20 (144A) Progreso Receivables Funding III LLC, 3.625%, 1/30/25 (144A) Progreso Receivables Funding IV LLC, 3.0%, 7/8/20 (144A) Progress Residential 2014-SFR1 Trust, Floating Rate Note, 10/17/31 (144A) Progress Residential 2015-SFR1 Trust, Floating Rate Note, 2/20/32 (144A) RAAC Series 2006-RP2 Trust, Floating Rate Note, 2/25/37 (144A) Santander Drive Auto Receivables Trust 2012-5, 2.7%, 8/15/18 Sierra Timeshare 2012-2 Receivables Funding LLC, 2.38%, 3/20/29 (144A) Sierra Timeshare 2012-3 Receivables Funding LLC, 1.87%, 8/20/29 (144A) Silver Bay Realty 2014-1 Trust, Floating Rate Note, 9/18/31 (144A) Skopos Auto Receivables Trust 2015-1, 3.1%, 12/15/23 (144A) Small Business Administration Participation Certificates, 4.2%, 9/1/29 Small Business Administration Participation Certificates, 4.625%, 2/1/25 Small Business Administration Participation Certificates, 4.84%, 5/1/25 Small Business Administration Participation Certificates, 5.37%, 4/1/28 Small Business Administration Participation Certificates, 5.63%, 10/1/28 Small Business Administration Participation Certificates, 5.72%, 1/1/29 Small Business Administration Participation Certificates, 6.02%, 8/1/28 Small Business Administration Participation Certificates, 6.14%, 1/1/22 Small Business Administration Participation Certificates, 6.22%, 12/1/28 Small Business Administration Participation Certificates, Floating Rate Note, 10/15/49 (144A) Spirit Master Funding LLC, 4.6291%, 1/20/45 (144A) Spirit Master Funding LLC, 5.74%, 3/20/42 (144A) Spirit Master Funding VII LLC, 3.8868%, 12/21/43 (144A) SpringCastle America Funding LLC, 2.7%, 5/25/23 (144A) Springleaf Funding Trust 2014-A, 2.41%, 12/15/22 (144A) Store Master Funding I LLC, 3.75%, 4/20/45 (144A) STORE Master Funding LLC, 4.16%, 3/20/43 (144A) STORE Master Funding LLC, 5.77%, 8/20/42 (144A) Structured Asset Investment Loan Trust 2006-1, Floating Rate Note, 1/25/36 Structured Asset Securities Corp Mortgage Loan Trust 2006-GEL4, Floating Rate Note, 10/25/36 (144A) Structured Asset Securities Corp., 4.77%, 10/25/34 (Step) Sunset Mortgage Loan Co 2014-NPL2 LLC, 3.721%, 11/16/44 (Step) (144A) SVO 2012-A VOI Mortgage LLC, 2.0%, 9/20/29 (144A) Terwin Mortgage Trust Series TMTS 2003-8HE, Floating Rate Note, 12/25/34 Terwin Mortgage Trust Series TMTS 2005-12ALT, 4.924686%, 7/25/36 (Step) Terwin Mortgage Trust Series TMTS 2005-16HE, 4.309881%, 9/25/36 (Step) Trafigura Securitisation Finance Plc. 2014-1, Floating Rate Note, 4/16/18 (144A) United Auto Credit Securitization Trust 2015-1, 2.92%, 6/17/19 (144A) US Residential Opportunity Fund III Trust 2015-1, 3.7213%, 1/29/35 (144A) VOLT XXXI LLC, 3.375%, 2/25/55 (Step) (144A) VOLT XXXIII LLC, 3.5%, 3/25/55 (Step) (144A) VOLT XXXVI LLC, 3.625%, 7/25/45 (Step) (144A) VOLT XXXVII LLC, 3.625%, 7/25/45 (Step) (144A) Welk Resorts 2015-A LLC, 2.79%, 6/16/31 (144A) Westgate Resorts 2012-A LLC, 2.25%, 8/20/25 (144A) Westgate Resorts 2012-A LLC, 3.75%, 8/20/25 (144A) Westgate Resorts 2014-1 LLC, 2.15%, 12/20/26 (144A) Westgate Resorts 2015-1 LLC, 2.75%, 5/20/27 (144A) Westgate Resorts LLC, 2.5%, 3/20/25 (144A) Westlake Automobile Receivables Trust 2015-3, 3.05%, 5/17/21 (144A) Westlake Automobile Receivables Trust 2016-1, 3.29%, 9/15/21 (144A) WinWater Mortgage Loan Trust 2015-5, Floating Rate Note, 8/20/45 (144A) TOTAL ASSET BACKED SECURITIES (Cost $168,339,255) $ COLLATERALIZED MORTGAGE OBLIGATIONS - 16.6% A10 Securitization 2013-1 LLC, 2.4%, 11/17/25 (144A) $ A10 Term Asset Financing 2013-2 LLC, 2.62%, 11/15/27 (144A) Agate Bay Mortgage Trust 2013-1, Floating Rate Note, 7/25/43 (144A) Agate Bay Mortgage Trust 2015-1, Floating Rate Note, 1/25/45 (144A) Agate Bay Mortgage Trust 2015-2, Floating Rate Note, 3/27/45 (144A) Agate Bay Mortgage Trust 2015-5, Floating Rate Note, 7/25/45 (144A) Agate Bay Mortgage Trust 2016-1, Floating Rate Note, 12/25/45 (144A) Alternative Loan Trust 2003-14T1, Floating Rate Note, 8/25/18 Arbor Realty Collateralized Loan Obligation 2015-FL1, Ltd., Floating Rate Note, 3/17/25 (144A) BAMLL Commercial Mortgage Securities Trust 2014-FL1, Floating Rate Note, 12/17/31 (144A) BAMLL Commercial Mortgage Securities Trust 2014-INLD, Floating Rate Note, 12/17/29 (144A) BAMLL Commercial Mortgage Securities Trust 2015-ASHF, Floating Rate Note, 1/18/28 (144A) BAMLL Re-REMIC Trust 2014-FRR7, Floating Rate Note, 10/26/44 (144A) Banc of America Alternative Loan Trust 2003-2, 5.75%, 4/25/33 Banc of America Alternative Loan Trust 2004-6, 5.0%, 7/25/19 Banc of America Mortgage 2003-F Trust, Floating Rate Note, 7/25/33 Banc of America Mortgage Trust 2004-11, 5.75%, 1/25/35 Banc of America Mortgage Trust 2004-9, 5.5%, 11/25/34 Bayview Commercial Asset Trust 2007-2, 0.0%, 7/27/37 (Step) (144A) - Bear Stearns ALT-A Trust 2005-1, Floating Rate Note, 1/25/35 Bear Stearns ARM Trust 2003-6, Floating Rate Note, 8/25/33 Bear Stearns Commercial Mortgage Securities Trust 2005-PWR7, Floating Rate Note, 2/11/41 BLCP Hotel Trust, Floating Rate Note, 8/15/29 (144A) Carefree Portfolio Trust 2014-CARE, Floating Rate Note, 11/15/29 (144A) CDGJ Commercial Mortgage Trust 2014-BXCH, Floating Rate Note, 12/15/27 (144A) Chase Mortgage Trust 2016-1, 3.75%, 4/25/45 (144A) CHL Mortgage Pass-Through Trust 2003-56, Floating Rate Note, 12/25/33 Citigroup Commercial Mortgage Trust 2014-GC25 REMICS, 3.371%, 10/11/47 Citigroup Mortgage Loan Trust 2013-J1, Floating Rate Note, 10/25/43 (144A) Citigroup Mortgage Loan Trust 2015-PS1, Floating Rate Note, 9/25/42 (144A) Citigroup Mortgage Loan Trust, Inc. REMICS, Floating Rate Note, 8/25/34 Citigroup Mortgage Loan Trust, Inc., 5.5%, 9/25/34 City Center Trust 2011-CCHP, Floating Rate Note, 7/17/28 (144A) COMM 2012-CCRE2 Mortgage Trust REMICS, 3.791%, 8/17/45 COMM 2012-CCRE4 Mortgage Trust, 2.436%, 10/17/45 COMM 2012-LC4 Mortgage Trust, 4.063%, 12/12/44 COMM 2013-CCRE11 Mortgage Trust, Floating Rate Note, 8/12/50 (144A) COMM 2013-LC6 Mortgage Trust, 2.941%, 1/12/46 COMM 2014-FL5 Mortgage Trust, Floating Rate Note, 10/17/31 (144A) COMM 2014-SAVA Mortgage Trust, Floating Rate Note, 6/15/34 (144A) COMM 2014-UBS3 Mortgage Trust, Floating Rate Note, 6/10/47 COMM 2015-CCRE23 Mortgage Trust, Floating Rate Note, 5/12/48 (144A) COMM 2015-CCRE25 Mortgage Trust, Floating Rate Note, 8/12/48 COMM 2015-LC23 Mortgage Trust REMICS, 3.774%, 10/10/53 Commercial Mortgage Pass Through Certificates, 2.822%, 10/17/45 Credit Suisse Commercial Mortgage Trust Series 2007-C1, 5.361%, 2/15/40 Credit Suisse First Boston Mortgage Securities Corp., 5.5%, 6/25/33 CSMC 2015-TWNI Trust, Floating Rate Note, 3/15/28 (144A) CSMC Trust 2013-7, Floating Rate Note, 8/25/43 (144A) CSMC Trust 2013-IVR2, Floating Rate Note, 4/27/43 (144A) CSMC Trust 2013-IVR3, Floating Rate Note, 5/25/43 (144A) CSMC Trust 2013-IVR3, Floating Rate Note, 5/25/43 (144A) CSMC Trust 2013-IVR3, Floating Rate Note, 5/25/43 (144A) CSMC Trust 2013-IVR4, Floating Rate Note, 7/27/43 (144A) CSMC Trust 2013-IVR4, Floating Rate Note, 7/27/43 (144A) CSMC Trust 2014-WIN1, Floating Rate Note, 8/25/54 (144A) CSMC Trust 2015-2, 3.0%, 2/25/45 (144A) CSMC Trust 2015-2, 3.5%, 2/25/45 (144A) DBUBS 2011-LC3 Mortgage Trust, Floating Rate Note, 8/12/44 (144A) EverBank Mortgage Loan Trust REMICS, Floating Rate Note, 4/25/43 (144A) Federal Home Loan Mortgage Corp. REMICS, Floating Rate Note, 12/15/20 Federal National Mortgage Association 2004-T2, Floating Rate Note, 7/25/43 Federal National Mortgage Association REMICS, 10.3%, 4/25/19 Federal National Mortgage Association REMICS, 3.0%, 6/25/23 Federal National Mortgage Association REMICS, 4.5%, 6/25/29 Federal National Mortgage Association, 4.92%, 7/25/20 Freddie Mac Whole Loan Securities Trust 2015-SC01, 3.5%, 5/25/45 FREMF Mortgage Trust 2010-K7, Floating Rate Note, 5/25/29 (144A) FREMF Mortgage Trust 2010-K8, Floating Rate Note, 9/25/43 (144A) FREMF Mortgage Trust 2010-K9 REMICS, Floating Rate Note, 9/25/45 (144A) FREMF Mortgage Trust 2011-K702, Floating Rate Note, 4/25/44 (144A) FREMF Mortgage Trust 2011-K703, Floating Rate Note, 7/25/44 (144A) FREMF Mortgage Trust 2013-K502, Floating Rate Note, 3/27/45 (144A) FREMF Mortgage Trust 2013-K713, Floating Rate Note, 4/25/46 (144A) FREMF Mortgage Trust 2014-K503, Floating Rate Note, 10/25/47 (144A) FREMF Mortgage Trust 2014-KF05 REMICS, Floating Rate Note, 9/25/21 (144A) FREMF Mortgage Trust Class B, Floating Rate Note, 11/25/46 (144A) FREMF Mortgage Trust Class B, Floating Rate Note, 6/25/47 (144A) GAHR Commercial Mortgage Trust 2015-NRF, Floating Rate Note, 12/15/34 (144A) Global Mortgage Securitization, Ltd., 5.25%, 4/25/32 Global Mortgage Securitization, Ltd., Floating Rate Note, 4/25/32 Government National Mortgage Association REMICS, 3.25%, 4/16/27 Government National Mortgage Association, 3.0%, 4/20/41 Government National Mortgage Association, 5.25%, 8/16/35 Government National Mortgage Association, Floating Rate Note, 1/16/50 GS Mortgage Securities Corp Trust 2012-SHOP, 2.933%, 6/6/31 (144A) GS Mortgage Securities Corp. II, 3.377%, 5/10/45 GS Mortgage Securities Corp. II, 3.682%, 2/10/46 (144A) GS Mortgage Securities Corp. II, 5.56%, 11/10/39 GSR Mortgage Loan Trust 2005-AR1, Floating Rate Note, 1/25/35 Homestar Mortgage Acceptance Corp., Floating Rate Note, 1/25/35 Hyatt Hotel Portfolio Trust 2015-HYT, Floating Rate Note, 11/15/29 (144A) Impac CMB Trust Series 2004-6, Floating Rate Note, 10/25/34 Impac Secured Assets Trust 2006-5, Floating Rate Note, 12/25/36 JP Morgan Alternative Loan Trust, Floating Rate Note, 1/25/36 JP Morgan Chase Commercial Mortgage Securities Corp., 2.84%, 12/17/47 JP Morgan Chase Commercial Mortgage Securities Trust 2006-LDP6, Floating Rate Note, 4/15/43 JP Morgan Chase Commercial Mortgage Securities Trust 2006-LDP9, Floating Rate Note, 5/15/47 JP Morgan Chase Commercial Mortgage Securities Trust 2010-C2, 3.6159%, 11/15/43 (144A) JP Morgan Chase Commercial Mortgage Securities Trust 2011-C5, 4.1712%, 8/17/46 JP Morgan Chase Commercial Mortgage Securities Trust 2012-C8, Floating Rate Note, 10/17/45 (144A) JP Morgan Chase Commercial Mortgage Securities Trust 2014-CBM, Floating Rate Note, 10/15/29 (144A) JP Morgan Chase Commercial Mortgage Securities Trust 2014-FL4 REMICS, Floating Rate Note, 12/16/30 (144A) JP Morgan Chase Commercial Mortgage Securities Trust 2014-FL5 REMICS, Floating Rate Note, 7/15/31 (144A) JP Morgan Chase Commercial Mortgage Securities Trust 2014-FL5, Floating Rate Note, 7/15/31 (144A) JP Morgan Chase Commercial Mortgage Securities Trust 2015-COSMO, Floating Rate Note, 1/15/32 (144A) JP Morgan Chase Commercial Mortgage Securities Trust 2015-SGP, Floating Rate Note, 7/15/36 (144A) JP Morgan Mortgage Trust 2003-A1, Floating Rate Note, 10/25/33 JP Morgan Mortgage Trust 2004-A1, Floating Rate Note, 2/25/34 JP Morgan Mortgage Trust 2004-A1, Floating Rate Note, 2/25/34 JP Morgan Mortgage Trust 2004-S1, 5.0%, 9/25/34 JP Morgan Mortgage Trust 2013-1, Floating Rate Note, 3/25/43 (144A) JP Morgan Mortgage Trust 2013-1, Floating Rate Note, 3/25/43 (144A) JP Morgan Mortgage Trust 2013-1, Floating Rate Note, 3/25/43 (144A) JP Morgan Mortgage Trust 2013-1, Floating Rate Note, 3/25/43 (144A) JP Morgan Mortgage Trust 2013-2, Floating Rate Note, 5/25/43 (144A) JP Morgan Mortgage Trust 2014-1 REMICS, Floating Rate Note, 1/25/44 (144A) JP Morgan Mortgage Trust 2014-2, Floating Rate Note, 6/25/29 (144A) JP Morgan Mortgage Trust 2014-2, Floating Rate Note, 6/25/29 (144A) JP Morgan Mortgage Trust 2014-2, Floating Rate Note, 6/25/29 (144A) JP Morgan Mortgage Trust 2014-5, Floating Rate Note, 10/25/29 (144A) JP Morgan Mortgage Trust 2014-5, Floating Rate Note, 10/25/29 (144A) JP Morgan Mortgage Trust 2014-OAK4, Floating Rate Note, 9/25/44 (144A) JP Morgan Mortgage Trust 2015-4, Floating Rate Note, 6/26/45 (144A) JP Morgan Seasoned Mortgage Trust 2014-1, Floating Rate Note, 5/25/33 (144A) JP Morgan Trust 2015-3 REMICS, Floating Rate Note, 5/25/45 (144A) JP Morgan Trust 2015-3 REMICS, Floating Rate Note, 5/25/45 (144A) JP Morgan Trust 2015-6, Floating Rate Note, 10/25/45 (144A) La Hipotecaria Panamanian Mortgage Trust 2010-1, Floating Rate Note, 9/8/39 (144A) La Hipotecaria Panamanian Mortgage Trust 2014-1, Floating Rate Note, 11/24/42 (144A) LB-UBS Commercial Mortgage Trust 2004-C1, 4.568%, 1/15/31 Lehman Brothers Small Balance Commercial Mortgage Trust 2007-3 Class 1A4, Floating Rate Note, 10/25/37 (144A) LSTAR Commercial Mortgage Trust 2015-3, Floating Rate Note, 4/22/48 (144A) LSTAR Securities Investment 2016-1, Floating Rate Note, 1/1/21 (144A) LSTAR Securities Investment Trust 2015-3, Floating Rate Note, 3/2/20 (144A) LSTAR Securities Investment Trust 2015-4, Floating Rate Note, 4/1/20 (144A) LSTAR Securities Investment Trust 2015-5, Floating Rate Note, 4/1/20 (144A) Mellon Residential Funding Corp. Mortgage Pass-Through Trust Series 2000-TBC3, Floating Rate Note, 12/15/30 Merrill Lynch Mortgage Investors Trust Series MLCC 2004-G, Floating Rate Note, 1/25/30 Mill City Mortgage Trust 2015-2, Floating Rate Note, 9/25/57 (144A) Morgan Stanley Capital I Trust 2007-HQ13, 5.569%, 12/15/44 Morgan Stanley Mortgage Loan Trust 2005-6AR, Floating Rate Note, 11/25/35 New Residential Mortgage Loan Trust 2014-2, Floating Rate Note, 5/26/54 (144A) New Residential Mortgage Loan Trust 2014-3, Floating Rate Note, 11/25/54 (144A) New Residential Mortgage Loan Trust 2015-1, Floating Rate Note, 5/28/52 (144A) NRP Mortgage Trust 2013-1, Floating Rate Note, 7/25/43 (144A) NRP Mortgage Trust 2013-1, Floating Rate Note, 7/25/43 (144A) NRP Mortgage Trust 2013-1, Floating Rate Note, 7/25/43 (144A) NRP Mortgage Trust 2013-1, Floating Rate Note, 7/25/43 (144A) ORES 2014-LV3 LLC, 3.0%, 3/27/24 (144A) PMT Loan Trust 2013-J1, Floating Rate Note, 9/25/43 (144A) RAAC Series 2004-SP2 Trust, 6.0%, 1/25/32 RALI Series 2003-QS13 Trust, Floating Rate Note, 7/25/33 RALI Series 2003-QS14 Trust, 5.0%, 7/25/18 RALI Series 2004-QS3 Trust, 5.0%, 3/25/19 RESI Finance LP 2003-CB1, Floating Rate Note, 7/9/35 RREF 2015-LT7 LLC, 3.0%, 12/25/32 (144A) Sequoia Mortgage Trust 2012-6, Floating Rate Note, 12/26/42 Sequoia Mortgage Trust 2013-10, Floating Rate Note, 8/25/43 (144A) Sequoia Mortgage Trust 2013-2, Floating Rate Note, 2/25/43 Sequoia Mortgage Trust 2013-3, Floating Rate Note, 3/25/43 Sequoia Mortgage Trust 2013-4 REMICS, Floating Rate Note, 4/27/43 Sequoia Mortgage Trust 2013-4, Floating Rate Note, 4/27/43 Sequoia Mortgage Trust 2013-4, Floating Rate Note, 4/27/43 Sequoia Mortgage Trust 2013-5 REMICS, Floating Rate Note, 5/25/43 (144A) Sequoia Mortgage Trust 2013-5 REMICS, Floating Rate Note, 5/25/43 (144A) Sequoia Mortgage Trust 2013-6, Floating Rate Note, 5/26/43 Sequoia Mortgage Trust 2013-7, Floating Rate Note, 6/25/43 Sequoia Mortgage Trust 2013-7, Floating Rate Note, 6/25/43 Sequoia Mortgage Trust 2013-8, Floating Rate Note, 6/25/43 Sequoia Mortgage Trust 2013-8, Floating Rate Note, 6/25/43 Sequoia Mortgage Trust 2013-8, Floating Rate Note, 6/25/43 Sequoia Mortgage Trust 2013-9, 3.5%, 7/27/43 (144A) Sequoia Mortgage Trust 2015-1, Floating Rate Note, 1/25/45 (144A) Sequoia Mortgage Trust 2015-2, Floating Rate Note, 5/25/45 (144A) Sequoia Mortgage Trust 2015-4, Floating Rate Note, 11/25/30 (144A) Sequoia Mortgage Trust, Floating Rate Note, 9/25/42 Springleaf Mortgage Loan Trust 2013-1, Floating Rate Note, 6/25/58 (144A) Springleaf Mortgage Loan Trust 2013-1, Floating Rate Note, 6/25/58 (144A) Structured Asset Mortgage Investments Trust 2003-AR2, Floating Rate Note, 12/19/33 Structured Asset Securities Corp. Trust 2005-14, Floating Rate Note, 7/25/35 Thornburg Mortgage Securities Trust 2003-3, Floating Rate Note, 6/25/43 TimberStar Trust I REMICS, 5.668%, 10/15/36 (144A) TimberStar Trust I, 5.7467%, 10/15/36 (144A) Towd Point Mortgage Trust 2015-1, 2.75%, 11/25/60 (144A) Velocity Commercial Capital Loan Trust 2014-1, Floating Rate Note, 9/25/44 (144A) Velocity Commercial Capital Loan Trust 2015-1, Floating Rate Note, 6/25/45 (144A) Vendee Mortgage Trust 2008-1, 5.25%, 1/15/32 Vendee Mortgage Trust 2010-1, 4.25%, 2/15/35 VFC 2015-3 LLC, 2.75%, 12/20/31 (144A) VOLT XXX LLC, 3.625%, 10/25/57 (Step) (144A) WaMu Mortgage Pass-Through Certificates Series 2003-S10, 4.5%, 10/25/18 Wells Fargo Commercial Mortgage Trust 2010-C1, 3.349%, 11/18/43 (144A) Wells Fargo Commercial Mortgage Trust 2012-LC5 REMICS, 3.539%, 10/17/45 Wells Fargo Commercial Mortgage Trust 2014-LC16 REMICS, 3.477%, 8/17/50 Wells Fargo Commercial Mortgage Trust 2014-TISH REMICS, Floating Rate Note, 2/16/27 (144A) Wells Fargo Commercial Mortgage Trust 2015-NXS3, 3.617%, 9/17/57 Wells Fargo Credit Risk Transfer Securities Trust 2015, Floating Rate Note, 11/25/25 (144A) WF-RBS Commercial Mortgage Trust 2011-C2, Floating Rate Note, 2/15/44 (144A) WF-RBS Commercial Mortgage Trust 2011-C2, Floating Rate Note, 2/15/44 (144A) WFRBS Commercial Mortgage Trust 2013-C16, 4.136%, 9/17/46 WinWater Mortgage Loan Trust 2015-3 REMICS, Floating Rate Note, 3/20/45 (144A) WinWater Mortgage Loan Trust 2015-4, Floating Rate Note, 6/20/45 (144A) WinWater Mortgage Loan Trust 2015-5, Floating Rate Note, 8/20/45 (144A) WinWater Mortgage Loan Trust 2016-1, Floating Rate Note, 1/22/46 (144A) TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $611,119,481) $ CORPORATE BONDS - 39.4% Energy - 4.4% Oil & Gas Drilling - 0.3% Ensco Plc, 4.5%, 10/1/24 $ Pride International, Inc., 6.875%, 8/15/20 Rowan Companies, Inc., 4.75%, 1/15/24 Rowan Companies, Inc., 5.85%, 1/15/44 $ Oil & Gas Equipment & Services - 0.1% Halliburton Co., 7.6%, 8/15/96 (144A) $ Weatherford International, Ltd. Bermuda, 5.95%, 4/15/42 Weatherford International, Ltd. Bermuda, 9.625%, 3/1/19 $ Integrated Oil & Gas - 0.7% BP Capital Markets Plc, 3.062%, 3/17/22 $ Exxon Mobil Corp., 4.114%, 3/1/46 Sinopec Group Overseas Development 2014, Ltd., 4.375%, 4/10/24 (144A) Sinopec Group Overseas Development 2015, Ltd., 2.5%, 4/28/20 (144A) $ Oil & Gas Exploration & Production - 0.3% CNOOC Nexen Finance 2014 ULC, 4.25%, 4/30/24 $ Newfield Exploration Co., 5.375%, 1/1/26 Newfield Exploration Co., 5.625%, 7/1/24 Ras Laffan Liquefied Natural Gas Co., Ltd. III, 5.832%, 9/30/16 (144A) WPX Energy, Inc., 7.5%, 8/1/20 $ Oil & Gas Refining & Marketing - 0.4% EnLink Midstream Partners LP, 4.4%, 4/1/24 $ Motiva Enterprises LLC, 6.85%, 1/15/40 (144A) Valero Energy Corp., 6.625%, 6/15/37 Valero Energy Corp., 9.375%, 3/15/19 $ Oil & Gas Storage & Transportation - 2.6% Boardwalk Pipelines LP, 4.95%, 12/15/24 $ Buckeye Partners LP, 4.15%, 7/1/23 DCP Midstream LLC, 9.75%, 3/15/19 (144A) DCP Midstream LLC, Floating Rate Note, 5/21/43 (144A) Enbridge Energy Partners LP, 7.375%, 10/15/45 Enterprise Products Operating LLC, 3.7%, 2/15/26 Enterprise Products Operating LLC, 3.75%, 2/15/25 Enterprise Products Operating LLC, 3.9%, 2/15/24 Kinder Morgan Energy Partners LP, 4.25%, 9/1/24 Kinder Morgan, Inc. Delaware, 5.05%, 2/15/46 Kinder Morgan, Inc. Delaware, 5.55%, 6/1/45 Magellan Midstream Partners LP, 5.0%, 3/1/26 Plains All American Pipeline LP, 4.65%, 10/15/25 Plains All American Pipeline LP, 4.9%, 2/15/45 Spectra Energy Capital LLC, 6.2%, 4/15/18 Spectra Energy Capital LLC, 6.75%, 7/15/18 Sunoco Logistics Partners Operations LP, 6.1%, 2/15/42 The Williams Companies, Inc., 5.75%, 6/24/44 The Williams Companies, Inc., 7.75%, 6/15/31 TransCanada PipeLines, Ltd., 1.875%, 1/12/18 $ Total Energy $ Materials - 1.9% Commodity Chemicals - 0.0% † Methanex Corp., 4.25%, 12/1/24 $ NOVA Chemicals Corp., 5.0%, 5/1/25 (144A) $ Diversified Chemicals - 0.1% CF Industries, Inc., 5.15%, 3/15/34 $ Eastman Chemical Co., 4.8%, 9/1/42 $ Fertilizers & Agricultural Chemicals - 0.3% Agrium, Inc., 4.125%, 3/15/35 $ Agrium, Inc., 5.25%, 1/15/45 $ Specialty Chemicals - 0.1% The Valspar Corp., 3.3%, 2/1/25 $ Construction Materials - 0.4% CEMEX Espana SA, 9.875%, 4/30/19 (144A) $ CRH America, Inc., 3.875%, 5/18/25 (144A) Holcim US Finance Sarl & Cie SCS, 6.0%, 12/30/19 (144A) $ Metal & Glass Containers - 0.2% Ball Corp., 4.0%, 11/15/23 $ Ball Corp., 5.25%, 7/1/25 $ Paper Packaging - 0.3% International Paper Co., 3.65%, 6/15/24 $ International Paper Co., 3.8%, 1/15/26 International Paper Co., 6.0%, 11/15/41 $ Diversified Metals & Mining - 0.2% Freeport-McMoRan, Inc., 3.875%, 3/15/23 $ Freeport-McMoRan, Inc., 4.55%, 11/14/24 Gold Fields Orogen Holdings BVI, Ltd., 4.875%, 10/7/20 (144A) $ Steel - 0.3% Commercial Metals Co., 4.875%, 5/15/23 $ Glencore Funding LLC, 4.125%, 5/30/23 (144A) Reliance Steel & Aluminum Co., 4.5%, 4/15/23 Worthington Industries, Inc., 4.55%, 4/15/26 $ Paper Products - 0.0% † Clearwater Paper Corp., 4.5%, 2/1/23 $ Total Materials $ Capital Goods - 1.6% Aerospace & Defense - 0.4% DigitalGlobe, Inc., 5.25%, 2/1/21 (144A) $ Lockheed Martin Corp., 3.1%, 1/15/23 United Technologies Corp., 1.778%, 5/4/18 (Step) $ Building Products - 0.7% Fortune Brands Home & Security, Inc., 3.0%, 6/15/20 $ Masco Corp., 4.375%, 4/1/26 Masco Corp., 4.45%, 4/1/25 Masco Corp., 5.95%, 3/15/22 Owens Corning, 4.2%, 12/1/24 Stanley Black & Decker, Inc., Floating Rate Note, 12/15/53 $ Industrial Conglomerates - 0.1% Tyco Electronics Group SA, 6.55%, 10/1/17 $ Construction & Farm Machinery & Heavy Trucks - 0.1% Cummins, Inc., 5.65%, 3/1/98 $ Industrial Machinery - 0.0% † Valmont Industries, Inc., 6.625%, 4/20/20 $ Trading Companies & Distributors - 0.3% Aircastle, Ltd., 6.75%, 4/15/17 $ GATX Corp., 5.2%, 3/15/44 GATX Corp., 6.0%, 2/15/18 $ Total Capital Goods $ Commercial Services & Supplies - 0.1% Research & Consulting Services - 0.1% Verisk Analytics, Inc., 5.5%, 6/15/45 $ Total Commercial Services & Supplies $ Transportation - 2.3% Airlines - 0.6% Air Canada 2013-1 Class A Pass Through Trust, 4.125%, 11/15/26 (144A) $ Air Canada 2015-1 Class A Pass Through Trust, 3.6%, 9/15/28 (144A) American Airlines 2015-2 Class AA Pass Through Trust, 3.6%, 9/22/27 American Airlines 2015-2 Class B Pass Through Trust, 4.4%, 9/22/25 Southwest Airlines Co., 2.65%, 11/5/20 Southwest Airlines Co., 2.75%, 11/6/19 US Airways 2013-1 Class A Pass Through Trust, 3.95%, 5/15/27 $ Railroads - 1.2% Burlington Northern Santa Fe LLC, 4.15%, 4/1/45 $ CSX Corp., 3.35%, 11/1/25 TTX Co., 3.6%, 1/15/25 (144A) Union Pacific Corp., 3.375%, 2/1/35 $ Trucking - 0.3% Asciano Finance, Ltd., 4.625%, 9/23/20 (144A) $ Penske Truck Leasing Co Lp, 3.3%, 4/1/21 (144A) Penske Truck Leasing Co Lp, 3.375%, 2/1/22 (144A) $ Highways & Railtracks - 0.2% ERAC USA Finance LLC, 3.8%, 11/1/25 (144A) $ ERAC USA Finance LLC, 4.5%, 2/15/45 (144A) $ Total Transportation $ Automobiles & Components - 0.5% Automobile Manufacturers - 0.5% Ford Motor Credit Co LLC, 2.24%, 6/15/18 $ Ford Motor Credit Co LLC, 3.219%, 1/9/22 Toyota Motor Credit Corp., 2.125%, 7/18/19 $ Total Automobiles & Components $ Consumer Durables & Apparel - 0.1% Homebuilding - 0.1% Lennar Corp., 4.75%, 4/1/21 $ Total Consumer Durables & Apparel $ Consumer Services - 0.2% Education Services - 0.2% President and Fellows of Harvard College, 2.3%, 10/1/23 $ Tufts University, 5.017%, 4/15/12 $ Specialized Consumer Services - 0.0% † Sotheby's, 5.25%, 10/1/22 (144A) $ Total Consumer Services $ Media - 0.8% Cable & Satellite - 0.6% CCO Safari II LLC, 6.384%, 10/23/35 (144A) $ Comcast Corp., 5.65%, 6/15/35 Time Warner Cable, Inc., 6.55%, 5/1/37 $ Movies & Entertainment - 0.2% Time Warner, Inc., 4.7%, 1/15/21 $ Total Media $ Retailing - 0.9% Catalog Retail - 0.2% QVC, Inc., 4.45%, 2/15/25 $ Internet Retail - 0.5% Expedia, Inc., 4.5%, 8/15/24 $ Expedia, Inc., 5.0%, 2/15/26 (144A) Expedia, Inc., 5.95%, 8/15/20 The Priceline Group, Inc., 3.65%, 3/15/25 $ Home Improvement Retail - 0.1% The Home Depot, Inc., 2.625%, 6/1/22 $ Automotive Retail - 0.1% AutoZone, Inc., 2.5%, 4/15/21 $ Total Retailing $ Food & Staples Retailing - 0.3% Drug Retail - 0.1% CVS Health Corp., 2.25%, 8/12/19 $ CVS Pass-Through Trust, 5.298%, 1/11/27 (144A) CVS Pass-Through Trust, 5.773%, 1/10/33 (144A) $ Food Retail - 0.2% The Kroger Co., 2.95%, 11/1/21 $ Total Food & Staples Retailing $ Food, Beverage & Tobacco - 1.0% Brewers - 0.1% Anheuser-Busch InBev Finance, Inc., Floating Rate Note, 2/1/21 $ Distillers & Vintners - 0.0% † Constellation Brands, Inc., 3.75%, 5/1/21 $ Agricultural Products - 0.2% Viterra, Inc., 5.95%, 8/1/20 (144A) $ Packaged Foods & Meats - 0.5% Grupo Bimbo SAB de CV, 3.875%, 6/27/24 (144A) $ Kraft Heinz Foods Co., 3.5%, 6/6/22 $ Tobacco - 0.2% Reynolds American, Inc., 4.45%, 6/12/25 $ Total Food, Beverage & Tobacco $ Health Care Equipment & Services - 0.7% Health Care Equipment - 0.5% Becton Dickinson and Co., 3.734%, 12/15/24 $ Medtronic, Inc., 4.625%, 3/15/45 $ Health Care Supplies - 0.0% † Fresenius US Finance II, Inc., 4.5%, 1/15/23 (144A) $ Health Care Services - 0.1% Catholic Health Initiatives, 4.35%, 11/1/42 $ Health Care Facilities - 0.1% HCA, Inc., 5.25%, 6/15/26 $ NYU Hospitals Center, 4.428%, 7/1/42 $ Total Health Care Equipment & Services $ Pharmaceuticals, Biotechnology & Life Sciences - 1.2% Biotechnology - 1.0% AbbVie, Inc., 3.6%, 5/14/25 $ Baxalta, Inc., 3.6%, 6/23/22 (144A) Biogen, Inc., 3.625%, 9/15/22 Biogen, Inc., 4.05%, 9/15/25 Gilead Sciences, Inc., 4.5%, 2/1/45 $ Pharmaceuticals - 0.2% Johnson & Johnson, 4.375%, 12/5/33 $ Perrigo Finance Unlimited Co., 3.5%, 3/15/21 $ Life Sciences Tools & Services - 0.0% † Agilent Technologies, Inc., 6.5%, 11/1/17 $ Total Pharmaceuticals, Biotechnology & Life Sciences $ Banks - 5.8% Diversified Banks - 5.2% Australia & New Zealand Banking Group, Ltd., 4.5%, 3/19/24 (144A) $ Banco Bilbao Vizcaya Argentaria SA, Floating Rate Note (Perpetual) Bank of America Corp., 4.2%, 8/26/24 Bank of America Corp., Floating Rate Note (Perpetual) Bank of America Corp., Floating Rate Note (Perpetual) Bank of America Corp., Floating Rate Note, 10/23/49 Barclays Bank Plc, 6.05%, 12/4/17 (144A) Barclays Plc, 3.65%, 3/16/25 Barclays Plc, 4.375%, 1/12/26 BBVA Bancomer SA Texas, 4.375%, 4/10/24 (144A) BBVA Bancomer SA Texas, 6.5%, 3/10/21 (144A) BNP Paribas SA, 4.375%, 9/28/25 (144A) BNP Paribas SA, Floating Rate Note (Perpetual) (144A) BPCE SA, 4.875%, 4/1/26 (144A) Citigroup, Inc., Floating Rate Note (Perpetual) Citigroup, Inc., Floating Rate Note (Perpetual) Cooperatieve Rabobank UA, 3.875%, 2/8/22 Cooperatieve Rabobank UA, 3.95%, 11/9/22 Credit Agricole SA, Floating Rate Note (Perpetual) (144A) Credit Agricole SA, Floating Rate Note (Perpetual) (144A) Credit Agricole SA, Floating Rate Note (Perpetual) (144A) Credit Suisse Group Funding Guernsey, Ltd., 3.8%, 9/15/22 Export-Import Bank of Korea, 2.25%, 1/21/20 First Tennessee Bank NA, 2.95%, 12/1/19 HSBC Bank Plc, 7.65%, 5/1/25 HSBC Holdings Plc, 4.25%, 3/14/24 ING Groep NV, Floating Rate Note, 12/29/49 Intesa Sanpaolo S.p.A., 6.5%, 2/24/21 (144A) Intesa Sanpaolo S.p.A., Floating Rate Note (Perpetual) (144A) Macquarie Bank, Ltd., 4.875%, 6/10/25 (144A) Macquarie Bank, Ltd., 6.625%, 4/7/21 (144A) Nordea Bank AB, 4.25%, 9/21/22 (144A) Nordea Bank AB, Floating Rate Note (Perpetual) (144A) Royal Bank of Scotland Group Plc, 4.8%, 4/5/26 Royal Bank of Scotland Group Plc, Floating Rate Note (Perpetual) SBP DPR Finance Co., Floating Rate Note, 3/15/17 (144A) Scotiabank Peru SAA, Floating Rate Note, 12/13/27 (144A) Standard Chartered Plc, 3.95%, 1/11/23 (144A) Sumitomo Mitsui Banking Corp., 1.75%, 1/16/18 The Bank of Tokyo-Mitsubishi UFJ, Ltd., 2.3%, 3/5/20 (144A) Wells Fargo Bank NA, 6.0%, 11/15/17 $ Regional Banks - 0.5% CoBank ACB, 7.875%, 4/16/18 (144A) $ Credit Suisse AG New York NY, 1.75%, 1/29/18 KeyCorp, 5.1%, 3/24/21 PNC Bank NA, 6.0%, 12/7/17 SunTrust Banks, Inc., 3.5%, 1/20/17 The PNC Financial Services Group, Inc., Floating Rate Note (Perpetual) $ Thrifts & Mortgage Finance - 0.1% Astoria Financial Corp., 5.0%, 6/19/17 $ Total Banks $ Diversified Financials - 3.9% Other Diversified Financial Services - 0.4% Carlyle Holdings II Finance LLC, 5.625%, 3/30/43 (144A) $ General Electric Co., 5.3%, 2/11/21 Grain Spectrum Funding II LLC, 3.29%, 10/10/19 (144A) JPMorgan Chase & Co., Floating Rate Note, 8/29/49 Tiers Trust, Floating Rate Note, 10/15/97 (144A) (d) $ Specialized Finance - 0.8% Aviation Capital Group Corp., 6.75%, 4/6/21 (144A) $ BM&FBovespa SA - Bolsa de Valores Mercadorias e Futuros, 5.5%, 7/16/20 (144A) Cantor Fitzgerald LP, 7.875%, 10/15/19 (144A) National Rural Utilities Cooperative Finance Corp., 5.45%, 2/1/18 Nationstar Mortgage LLC, 6.5%, 6/1/22 USAA Capital Corp., 2.45%, 8/1/20 (144A) $ Consumer Finance - 1.1% Ally Financial, Inc., 3.6%, 5/21/18 $ Ally Financial, Inc., 4.625%, 3/30/25 Ally Financial, Inc., 5.125%, 9/30/24 Ally Financial, Inc., 5.75%, 11/20/25 American Honda Finance Corp., 1.2%, 7/14/17 Capital One Bank USA NA, 8.8%, 7/15/19 Capital One Financial Corp., 3.75%, 4/24/24 General Motors Financial Co, Inc., 3.7%, 11/24/20 General Motors Financial Co, Inc., 4.0%, 1/15/25 Hyundai Capital America, 1.45%, 2/6/17 (144A) Hyundai Capital America, 2.0%, 3/19/18 (144A) $ Asset Management & Custody Banks - 0.8% Affiliated Managers Group, Inc., 4.25%, 2/15/24 $ Blackstone Holdings Finance Co LLC, 5.0%, 6/15/44 (144A) Blackstone Holdings Finance Co. LLC, 6.25%, 8/15/42 (144A) Eaton Vance Corp., 6.5%, 10/2/17 KKR Group Finance Co. II LLC, 5.5%, 2/1/43 (144A) Legg Mason, Inc., 3.95%, 7/15/24 Legg Mason, Inc., 4.75%, 3/15/26 Legg Mason, Inc., 5.625%, 1/15/44 Neuberger Berman Group LLC, 4.875%, 4/15/45 (144A) $ Investment Banking & Brokerage - 0.5% KKR Group Finance Co III LLC, 5.125%, 6/1/44 (144A) $ Macquarie Group, Ltd., 6.0%, 1/14/20 (144A) Morgan Stanley, 4.1%, 5/22/23 Morgan Stanley, 4.875%, 11/1/22 Morgan Stanley, Floating Rate Note (Perpetual) North American Development Bank, 2.3%, 10/10/18 UBS AG, 7.625%, 8/17/22 $ Diversified Capital Markets - 0.3% GE Capital International Funding Co., 2.342%, 11/15/20 (144A) $ ICBCIL Finance Co, Ltd., Floating Rate Note, 11/13/18 (144A) $ Total Diversified Financials $ Insurance - 5.8% Insurance Brokers - 0.1% Brown & Brown, Inc., 4.2%, 9/15/24 $ Life & Health Insurance - 0.8% Aflac, Inc., 3.625%, 11/15/24 $ Protective Life Corp., 7.375%, 10/15/19 Prudential Financial, Inc., 4.5%, 11/16/21 Prudential Financial, Inc., Floating Rate Note, 6/15/43 Prudential Financial, Inc., Floating Rate Note, 6/15/68 Prudential Financial, Inc., Floating Rate Note, 9/15/42 Teachers Insurance & Annuity Association of America, 6.85%, 12/16/39 (144A) $ Multi-line Insurance - 0.4% AIG, 3.875%, 1/15/35 $ AXA SA, 8.6%, 12/15/30 Liberty Mutual Insurance Co., 7.697% (Perpetual) (144A) $ Property & Casualty Insurance - 0.7% CNA Financial Corp., 4.5%, 3/1/26 $ Delphi Financial Group, Inc., 7.875%, 1/31/20 OneBeacon US Holdings, Inc., 4.6%, 11/9/22 The Allstate Corp., 5.95%, 4/1/36 The Allstate Corp., Floating Rate Note, 5/15/57 The Hanover Insurance Group, Inc., 6.375%, 6/15/21 $ Reinsurance - 3.8% Acorn Re, Ltd., Floating Rate Note, 7/17/18 (Cat Bond) (144A) $ Alamo Re, Ltd., Floating Rate Note, 6/7/18 (Cat Bond) (144A) Altair Re, Variable Rate Notes, 6/30/16 (e) (f) Altair Re, Variable Rate Notes, 6/30/17 (e) (f) Aozora Re, Ltd., Floating Rate Note, 4/7/23 (Cat Bond) (144A) Arlington Segregated Account (Kane SAC Ltd.), Variable Rate Notes, 8/31/16 (e) (f) Atlas IX Capital DAC, Floating Rate Note, 1/17/19 (Cat Bond) (144A) Berwick 2016-1 Segregated Account (Kane SAC Ltd.), Variable Rate Notes, 2/1/18 (e) (f) Berwick Segregated Account (KANE SAC Ltd.), Variable Rate Note, 1/22/16 (e) (f) Blue Danube II, Ltd., Floating Rate Note, 5/23/16 (Cat Bond) (144A) Caelus Re IV, Ltd., Floating Rate Note, 3/6/20 (Cat Bond) (144A) (f) Caelus Re, Ltd., Floating Rate Note, 4/7/17 (Cat Bond) (144A) Carnosutie 2016-N,Segregated Account (Kane SAC Ltd.), Variance Rate Notes, 11/30/20 (e) (f) Carnoustie Segregated Account (Kane SAC Ltd.), Variable Rate Notes, 2/19/16 (e) (f) Citrus Re, Ltd., Floating Rate Note, 4/18/17 (Cat Bond) (144A) Citrus Re, Ltd., Floating Rate Note, 4/24/17 (Cat Bond) (144A) Clarendon Segregated Account (Kane SAC Ltd.), Variable Rate Notes, 6/15/16 (e) (f) Eden Re II, Ltd., 0.0%, 4/23/19 (144A) (e) (f) Eden Re II, Ltd., Variable Rate Notes, 4/19/18 (144A) (e) (f) Eden Re II, Variable Rate Notes, 4/23/19 (e) (f) Galileo Re, Ltd., Floating Rate Note, 1/9/17 (Cat Bond) (144A) Gleneagles Segregated Account (KANE SAC Ltd), Variable Rate Notes, 11/30/20 (e) (f) Golden State Re II, Ltd., Floating Rate Note, 1/8/19 (Cat Bond) (144A) Gullane Segregated Account (KANE SAC Ltd.), Variable Rate Note 11/30/20 (e) (f) Gullane Segregated Account (Kane SAC Ltd.), Variable Rate Notes, 1/22/17 (e) (f) Ibis Re II, Ltd., Floating Rate Note, 6/28/16 (Cat Bond) (144A) Ibis Re II, Ltd., Floating Rate Note, 6/28/16 (Cat Bond) (144A) Kilimanjaro Re, Ltd., Floating Rate Note, 11/25/19 (Cat Bond) (144A) Kilimanjaro Re, Ltd., Floating Rate Note, 12/6/19 (Cat Bond)(144A) Kilimanjaro Re, Ltd., Floating Rate Note, 12/6/19 (Cat Bond)(144A) Kilimanjaro Re, Ltd., Floating Rate Note, 4/30/18 (Cat Bond) (144A) Kilimanjaro Re, Ltd., Floating Rate Note, 4/30/18 (Cat Bond) (144A) Lahinch Re, Variable Rate Notes, 6/15/16 (e) (f) Loma Reinsurance, Ltd. Bermuda, Floating Rate Note, 1/8/18 (Cat Bond) (144A) Longpoint Re, Ltd. III, Floating Rate Note, 5/18/16 (Cat Bond) (144A) Longpoint Re, Ltd. III, Floating Rate Note, 5/23/18 (Cat Bond) (144A) Lorenz Re, Ltd., Variable Rate Notes, 3/31/18 (e) (f) Lorenz Re, Ltd., Variable Rate Notes, 3/31/19 (e) (f) Merna Re V, Ltd., Floating Rate Note, 4/7/17 (Cat Bond) (144A) Mythen Re, Ltd., Series 2012-2 Class A, Floating Rate Note, 1/5/17 (Cat Bond) (144A) Northshore Re, Ltd., Floating Rate Note, 7/5/16 (Cat Bond) (144A) Pangaea Re, Series 2015-1, Principal at Risk Notes, 2/1/19 (e) (f) Pangaea Re, Series 2015-2, Principal at Risk Notes, 11/30/19 (e) (f) Pangaea Re., Variable Rate Notes, 2/1/20 (e) (f) Pangaea Re., Variable Rate Notes, 7/1/18 (e) (f) PennUnion Re, Ltd., Floating Rate Note, 12/7/18 (Cat Bond) (144A) Prestwick Segregated Account (KANE SAC Ltd.), Variable Rate Notes, 7/1/16 (e) (f) Queen Street VII Re, Ltd., Floating Rate Note, 4/8/16 (Cat Bond) (144A) Queen Street XI Re Dac, Floating Rate Note, 6/7/19 (Cat Bond) (144A) Residential Reinsurance 2012, Ltd., Floating Rate Note, 12/6/16 (Cat Bond) (144A) Residential Reinsurance 2012, Ltd., Floating Rate Note, 12/6/16 (Cat Bond) (144A) Residential Reinsurance 2012, Ltd., Floating Rate Note, 6/6/16 (Cat Bond) (144A) Residential Reinsurance 2012, Ltd., Floating Rate Note, 6/6/16 (Cat Bond) (144A) Residential Reinsurance 2013, Ltd., Floating Rate Note, 6/6/17 (Cat Bond) (144A) Resilience Re, Ltd., Floating Rate Note, 1/9/17 (Cat Bond) Sanders Re, Ltd., Floating Rate Note, 5/25/18 (Cat Bond) (144A) Sanders Re, Ltd., Floating Rate Note, 5/5/17 (Cat Bond) (144A) Sanders Re, Ltd., Floating Rate Note, 5/5/17 (Cat Bond) (144A) Sanders Re, Ltd., Floating Rate Note, 6/7/17 (Cat Bond) (144A) Sector Re V, Ltd., Variable Rate Notes, 12/1/20 (144A) (e) (f) Sector Re V, Ltd., Variable Rate Notes, 3/1/20 (144A) (e) (f) Sector Re V, Ltd., Variable Rate Notes, 3/1/20 (144A) (e) (f) Silverton Re, Ltd., Variable Rate Notes, 9/16/16 (144A) (e) (f) Silverton Re, Ltd., Variable Rate Notes, 9/18/17 (144A) (e) (f) Silverton Re, Ltd., Variable Rate Notes, 9/18/18 (144A) (e) (f) St. Andrews Segregated Account (KANE SAC Ltd.), Variable Rate Notes, 1/22/16 (e) (f) St. Andrews Segregated Account (Kane SAC Ltd.), Variance Rate Notes, 2/1/18 (e) (f) Tar Heel Re, Ltd., Floating Rate Note, 5/9/16 (Cat Bond) (144A) Ursa Re, Ltd., Floating Rate Note, 9/21/18 (Cat Bond) (144A) Versutus 2016, Class A-1, Variable Rate Notes, 11/30/20 (e) (f) Versutus Ltd., Series 2015-A, Variable Rate Notes, 12/31/2017 (e) (f) Vita Capital V, Ltd., Floating Rate Note, 1/15/17 (Cat Bond) (144A) Vita Capital V, Ltd., Floating Rate Note, 1/15/17 (Cat Bond) (144A) Vitality Re IV, Ltd., Floating Rate Note, 1/9/17 (Cat Bond) (144A) Vitality Re V, Ltd., Floating Rate Note, 1/7/19 (Cat Bond) (144A) Vitality Re VII, Ltd., Floating Rate Note, 1/7/20 (Cat Bond) (144A) Vitality Re VII, Ltd., Floating Rate Note, 1/7/20 (Cat Bond) (144A) Wilton Re Finance LLC, Floating Rate Note, 3/30/33 (144A) $ Total Insurance $ Real Estate - 1.7% Diversified REIT - 0.9% Boston Properties LP, 3.65%, 2/1/26 $ Brixmor Operating Partnership LP, 3.85%, 2/1/25 Brixmor Operating Partnership LP, 3.875%, 8/15/22 DCT Industrial Operating Partnership LP, 4.5%, 10/15/23 Duke Realty LP, 3.625%, 4/15/23 Duke Realty LP, 3.75%, 12/1/24 Essex Portfolio LP, 3.5%, 4/1/25 $ Office REIT - 0.3% Alexandria Real Estate Equities, Inc., 2.75%, 1/15/20 $ Alexandria Real Estate Equities, Inc., 3.9%, 6/15/23 Alexandria Real Estate Equities, Inc., 4.6%, 4/1/22 Highwoods Realty LP, 3.2%, 6/15/21 Highwoods Realty LP, 3.625%, 1/15/23 Piedmont Operating Partnership LP, 3.4%, 6/1/23 $ Health Care REIT - 0.3% Healthcare Realty Trust, Inc., 3.875%, 5/1/25 $ Welltower, Inc., 4.25%, 4/1/26 $ Residential REIT - 0.2% UDR, Inc., 4.0%, 10/1/25 $ Specialized REIT - 0.0% † Equinix, Inc., 5.75%, 1/1/25 $ Total Real Estate $ Software & Services - 0.9% Data Processing & Outsourced Services - 0.3% Automatic Data Processing, Inc., 2.25%, 9/15/20 $ Cardtronics, Inc., 5.125%, 8/1/22 Visa, Inc., 2.2%, 12/14/20 $ Application Software - 0.3% Adobe Systems, Inc., 3.25%, 2/1/25 $ Systems Software - 0.3% Oracle Corp., 2.5%, 5/15/22 $ Home Entertainment Software - 0.0% † Activision Blizzard, Inc., 6.125%, 9/15/23 (144A) $ Total Software & Services $ Technology Hardware & Equipment - 0.4% Communications Equipment - 0.1% Brocade Communications Systems, Inc., 4.625%, 1/15/23 $ Technology Hardware, Storage & Peripherals - 0.1% NCR Corp., 4.625%, 2/15/21 $ NCR Corp., 6.375%, 12/15/23 $ Electronic Components - 0.1% Amphenol Corp., 3.125%, 9/15/21 $ Electronic Manufacturing Services - 0.1% Flextronics International, Ltd., 4.75%, 6/15/25 $ Total Technology Hardware & Equipment $ Semiconductors & Semiconductor Equipment - 0.4% Semiconductor Equipment - 0.1% Entegris, Inc., 6.0%, 4/1/22 (144A) $ Semiconductors - 0.3% Intel Corp., 4.8%, 10/1/41 $ Total Semiconductors & Semiconductor Equipment $ Telecommunication Services - 1.7% Integrated Telecommunication Services - 1.4% AT&T, Inc., 3.8%, 3/15/22 $ AT&T, Inc., 3.95%, 1/15/25 AT&T, Inc., 4.75%, 5/15/46 CenturyLink, Inc., 7.5%, 4/1/24 Frontier Communications Corp., 10.5%, 9/15/22 (144A) Frontier Communications Corp., 7.125%, 1/15/23 Frontier Communications Corp., 8.875%, 9/15/20 (144A) GTP Acquisition Partners I LLC, 2.35%, 6/15/45 (144A) GTP Cellular Sites LLC, 3.721%, 3/15/17 (144A) Telefonica Emisiones SAU, 6.221%, 7/3/17 Unison Ground Lease Funding LLC, 2.981%, 3/16/43 (144A) Verizon Communications, Inc., 5.012%, 8/21/54 Verizon Communications, Inc., 5.15%, 9/15/23 Verizon Communications, Inc., 6.55%, 9/15/43 $ Wireless Telecommunication Services - 0.3% Altice Financing SA, 7.875%, 12/15/19 (144A) $ Crown Castle Towers LLC, 4.883%, 8/15/20 (144A) Crown Castle Towers LLC, 6.113%, 1/15/20 (144A) Sprint Corp., 7.125%, 6/15/24 Sprint Corp., 7.25%, 9/15/21 $ Total Telecommunication Services $ Utilities - 2.8% Electric Utilities - 2.0% Commonwealth Edison Co., 6.15%, 9/15/17 $ Crockett Cogeneration LP, 5.869%, 3/30/25 (144A) Electricite de France SA, 6.0%, 1/22/14 (144A) Electricite de France SA, Floating Rate Note (Perpetual) (144A) Empresa Electrica Angamos SA, 4.875%, 5/25/29 (144A) Enel Finance International NV, 5.125%, 10/7/19 (144A) Enel S.p.A., Floating Rate Note, 9/24/73 (144A) Exelon Corp., 2.85%, 6/15/20 FPL Energy American Wind LLC, 6.639%, 6/20/23 (144A) FPL Energy Wind Funding LLC, 6.876%, 6/27/17 (144A) Iberdrola International BV, 6.75%, 7/15/36 Indiana Michigan Power Co., 4.55%, 3/15/46 Israel Electric Corp, Ltd., 5.0%, 11/12/24 Israel Electric Corp., Ltd., 7.25%, 1/15/19 (144A) Israel Electric Corp., Ltd., 9.375%, 1/28/20 (144A) Nevada Power Co., 6.5%, 8/1/18 NextEra Energy Capital Holdings, Inc., 2.3%, 4/1/19 OrCal Geothermal, Inc., 6.21%, 12/30/20 (144A) Public Service Co. of New Mexico, 7.95%, 5/15/18 Southern California Edison Co., 1.845%, 2/1/22 Southern California Edison Co., Floating Rate Note (Perpetual) Southwestern Electric Power Co., 3.9%, 4/1/45 Talen Energy Supply LLC, 6.5%, 6/1/25 $ Gas Utilities - 0.1% DCP Midstream Operating LP, 5.6%, 4/1/44 $ Nakilat, Inc., 6.267%, 12/31/33 (144A) $ Multi-Utilities - 0.4% Consolidated Edison Co. of New York, Inc., 4.625%, 12/1/54 $ New York State Electric & Gas Corp., 6.15%, 12/15/17 (144A) Ormat Funding Corp., 8.25%, 12/30/20 San Diego Gas & Electric Co., 1.914%, 2/1/22 $ Independent Power Producers & Energy Traders - 0.3% Alta Wind Holdings LLC, 7.0%, 6/30/35 (144A) $ Colbun SA, 4.5%, 7/10/24 (144A) Kiowa Power Partners LLC, 5.737%, 3/30/21 (144A) NRG Energy, Inc., 8.25%, 9/1/20 Panoche Energy Center LLC, 6.885%, 7/31/29 (144A) $ Total Utilities $ TOTAL CORPORATE BONDS (Cost $1,456,203,817) $ U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 31.1% Fannie Mae, 2.5%, 12/1/42 $ Fannie Mae, 2.5%, 2/1/43 Fannie Mae, 2.5%, 7/1/30 Fannie Mae, 2.5%, 7/1/30 Fannie Mae, 2.5%, 7/1/30 Fannie Mae, 3.0%, 12/1/42 Fannie Mae, 3.0%, 3/1/45 Fannie Mae, 3.0%, 4/18/16 (TBA) Fannie Mae, 3.0%, 5/1/43 Fannie Mae, 3.0%, 7/1/30 Fannie Mae, 3.0%, 7/1/43 Fannie Mae, 3.0%, 8/1/42 Fannie Mae, 3.0%, 9/1/28 Fannie Mae, 3.0%, 9/1/42 Fannie Mae, 3.0%, 9/1/43 Fannie Mae, 3.5%, 10/1/41 Fannie Mae, 3.5%, 10/1/45 Fannie Mae, 3.5%, 11/1/42 Fannie Mae, 3.5%, 11/1/45 Fannie Mae, 3.5%, 12/1/26 Fannie Mae, 3.5%, 12/1/42 Fannie Mae, 3.5%, 12/1/42 Fannie Mae, 3.5%, 12/1/45 Fannie Mae, 3.5%, 2/1/29 Fannie Mae, 3.5%, 2/1/44 Fannie Mae, 3.5%, 2/1/46 Fannie Mae, 3.5%, 2/1/46 Fannie Mae, 3.5%, 4/1/26 Fannie Mae, 3.5%, 4/1/45 Fannie Mae, 3.5%, 4/13/16 (TBA) Fannie Mae, 3.5%, 6/1/28 Fannie Mae, 3.5%, 7/1/45 Fannie Mae, 3.5%, 8/1/45 Fannie Mae, 3.5%, 8/1/45 Fannie Mae, 3.5%, 9/1/26 Fannie Mae, 3.5%, 9/1/44 Fannie Mae, 3.5%, 9/1/45 Fannie Mae, 3.5%, 9/1/45 Fannie Mae, 3.763%, 12/1/20 Fannie Mae, 4.0%, 1/1/42 Fannie Mae, 4.0%, 1/1/42 Fannie Mae, 4.0%, 1/1/42 Fannie Mae, 4.0%, 1/1/44 Fannie Mae, 4.0%, 1/1/45 Fannie Mae, 4.0%, 1/1/45 Fannie Mae, 4.0%, 1/1/45 Fannie Mae, 4.0%, 1/1/46 Fannie Mae, 4.0%, 10/1/41 Fannie Mae, 4.0%, 10/1/45 Fannie Mae, 4.0%, 11/1/44 Fannie Mae, 4.0%, 11/1/44 Fannie Mae, 4.0%, 11/1/44 Fannie Mae, 4.0%, 11/1/44 Fannie Mae, 4.0%, 11/1/44 Fannie Mae, 4.0%, 11/1/45 Fannie Mae, 4.0%, 11/1/45 Fannie Mae, 4.0%, 12/1/40 Fannie Mae, 4.0%, 12/1/41 Fannie Mae, 4.0%, 12/1/42 Fannie Mae, 4.0%, 12/1/43 Fannie Mae, 4.0%, 12/1/44 Fannie Mae, 4.0%, 12/1/44 Fannie Mae, 4.0%, 2/1/42 Fannie Mae, 4.0%, 2/1/44 Fannie Mae, 4.0%, 2/1/45 Fannie Mae, 4.0%, 2/1/45 Fannie Mae, 4.0%, 2/1/45 Fannie Mae, 4.0%, 2/1/46 Fannie Mae, 4.0%, 3/1/42 Fannie Mae, 4.0%, 4/1/25 Fannie Mae, 4.0%, 4/1/39 Fannie Mae, 4.0%, 4/1/41 Fannie Mae, 4.0%, 4/1/41 Fannie Mae, 4.0%, 4/1/42 Fannie Mae, 4.0%, 4/1/42 Fannie Mae, 4.0%, 4/1/42 Fannie Mae, 4.0%, 4/13/16 (TBA) Fannie Mae, 4.0%, 5/1/41 Fannie Mae, 4.0%, 5/1/44 Fannie Mae, 4.0%, 6/1/42 Fannie Mae, 4.0%, 6/1/44 Fannie Mae, 4.0%, 6/1/44 Fannie Mae, 4.0%, 7/1/18 Fannie Mae, 4.0%, 7/1/42 Fannie Mae, 4.0%, 7/1/42 Fannie Mae, 4.0%, 7/1/44 Fannie Mae, 4.0%, 7/1/44 Fannie Mae, 4.0%, 8/1/42 Fannie Mae, 4.0%, 8/1/44 Fannie Mae, 4.0%, 8/1/44 Fannie Mae, 4.0%, 8/1/44 Fannie Mae, 4.0%, 8/1/44 Fannie Mae, 4.0%, 9/1/20 Fannie Mae, 4.0%, 9/1/43 Fannie Mae, 4.0%, 9/1/44 Fannie Mae, 4.0%, 9/1/44 Fannie Mae, 4.0%, 9/1/44 Fannie Mae, 4.0%, 9/1/44 Fannie Mae, 4.5%, 1/1/42 Fannie Mae, 4.5%, 1/1/42 Fannie Mae, 4.5%, 1/1/44 Fannie Mae, 4.5%, 10/1/35 Fannie Mae, 4.5%, 10/1/35 Fannie Mae, 4.5%, 11/1/20 Fannie Mae, 4.5%, 11/1/20 Fannie Mae, 4.5%, 11/1/40 Fannie Mae, 4.5%, 11/1/43 Fannie Mae, 4.5%, 11/1/43 Fannie Mae, 4.5%, 12/1/41 Fannie Mae, 4.5%, 12/1/43 Fannie Mae, 4.5%, 12/1/43 Fannie Mae, 4.5%, 12/1/43 Fannie Mae, 4.5%, 2/1/41 Fannie Mae, 4.5%, 2/1/44 Fannie Mae, 4.5%, 4/1/41 Fannie Mae, 4.5%, 5/1/41 Fannie Mae, 4.5%, 5/1/41 Fannie Mae, 4.5%, 5/1/41 Fannie Mae, 4.5%, 7/1/41 Fannie Mae, 4.5%, 7/1/41 Fannie Mae, 4.5%, 7/1/41 Fannie Mae, 4.5%, 8/1/40 Fannie Mae, 4.5%, 8/1/40 Fannie Mae, 5.0%, 1/1/20 Fannie Mae, 5.0%, 1/1/20 Fannie Mae, 5.0%, 10/1/20 Fannie Mae, 5.0%, 10/1/34 Fannie Mae, 5.0%, 2/1/20 Fannie Mae, 5.0%, 2/1/22 Fannie Mae, 5.0%, 2/1/22 Fannie Mae, 5.0%, 2/1/39 Fannie Mae, 5.0%, 2/1/41 Fannie Mae, 5.0%, 2/1/45 Fannie Mae, 5.0%, 3/1/23 Fannie Mae, 5.0%, 5/1/23 Fannie Mae, 5.0%, 6/1/40 Fannie Mae, 5.0%, 6/1/40 Fannie Mae, 5.0%, 7/1/34 Fannie Mae, 5.0%, 7/1/40 Fannie Mae, 5.0%, 7/1/40 Fannie Mae, 5.0%, 7/1/40 Fannie Mae, 5.0%, 8/1/18 Fannie Mae, 5.5%, 12/1/17 Fannie Mae, 5.5%, 3/1/36 Fannie Mae, 5.5%, 5/1/36 Fannie Mae, 5.5%, 6/1/33 Fannie Mae, 5.5%, 6/1/36 Fannie Mae, 5.5%, 7/1/33 Fannie Mae, 5.5%, 7/1/34 Fannie Mae, 5.5%, 9/1/19 Fannie Mae, 5.72%, 11/1/28 Fannie Mae, 5.72%, 6/1/29 Fannie Mae, 5.75%, 3/1/33 Fannie Mae, 5.9%, 11/1/27 Fannie Mae, 5.9%, 2/1/28 Fannie Mae, 5.9%, 4/1/28 Fannie Mae, 6.0%, 1/1/32 Fannie Mae, 6.0%, 10/1/32 Fannie Mae, 6.0%, 10/1/34 Fannie Mae, 6.0%, 10/1/35 Fannie Mae, 6.0%, 11/1/33 Fannie Mae, 6.0%, 11/1/34 Fannie Mae, 6.0%, 11/1/34 Fannie Mae, 6.0%, 11/1/34 Fannie Mae, 6.0%, 12/1/35 Fannie Mae, 6.0%, 12/1/37 Fannie Mae, 6.0%, 2/1/32 Fannie Mae, 6.0%, 2/1/33 Fannie Mae, 6.0%, 2/1/35 Fannie Mae, 6.0%, 2/1/35 Fannie Mae, 6.0%, 3/1/32 Fannie Mae, 6.0%, 3/1/33 Fannie Mae, 6.0%, 4/1/33 Fannie Mae, 6.0%, 4/1/35 Fannie Mae, 6.0%, 5/1/35 Fannie Mae, 6.0%, 6/1/16 Fannie Mae, 6.0%, 6/1/38 Fannie Mae, 6.0%, 7/1/33 Fannie Mae, 6.0%, 7/1/33 Fannie Mae, 6.0%, 7/1/38 Fannie Mae, 6.0%, 8/1/32 Fannie Mae, 6.0%, 8/1/34 Fannie Mae, 6.0%, 9/1/29 Fannie Mae, 6.0%, 9/1/32 Fannie Mae, 6.0%, 9/1/34 Fannie Mae, 6.0%, 9/1/34 Fannie Mae, 6.0%, 9/1/34 Fannie Mae, 6.0%, 9/1/34 Fannie Mae, 6.5%, 1/1/31 Fannie Mae, 6.5%, 10/1/31 Fannie Mae, 6.5%, 10/1/32 Fannie Mae, 6.5%, 11/1/37 Fannie Mae, 6.5%, 11/1/47 Fannie Mae, 6.5%, 12/1/31 Fannie Mae, 6.5%, 2/1/32 Fannie Mae, 6.5%, 3/1/32 Fannie Mae, 6.5%, 4/1/31 Fannie Mae, 6.5%, 5/1/31 Fannie Mae, 6.5%, 6/1/31 Fannie Mae, 6.5%, 7/1/29 Fannie Mae, 6.5%, 7/1/32 Fannie Mae, 6.5%, 7/1/34 Fannie Mae, 6.5%, 8/1/31 Fannie Mae, 6.5%, 9/1/31 Fannie Mae, 6.5%, 9/1/31 Fannie Mae, 7.0%, 1/1/32 Fannie Mae, 7.0%, 12/1/30 Fannie Mae, 7.0%, 12/1/30 Fannie Mae, 7.0%, 12/1/31 Fannie Mae, 7.0%, 4/1/31 Fannie Mae, 7.0%, 9/1/31 Fannie Mae, 8.0%, 5/1/31 Federal Home Loan Mortgage Corp., 2.5%, 1/1/30 Federal Home Loan Mortgage Corp., 2.5%, 4/1/30 Federal Home Loan Mortgage Corp., 3.0%, 10/1/29 Federal Home Loan Mortgage Corp., 3.0%, 11/1/42 Federal Home Loan Mortgage Corp., 3.0%, 5/1/45 Federal Home Loan Mortgage Corp., 3.0%, 8/1/29 Federal Home Loan Mortgage Corp., 3.0%, 8/1/45 Federal Home Loan Mortgage Corp., 3.5%, 10/1/44 Federal Home Loan Mortgage Corp., 3.5%, 10/1/45 Federal Home Loan Mortgage Corp., 3.5%, 11/1/28 Federal Home Loan Mortgage Corp., 3.5%, 11/1/44 Federal Home Loan Mortgage Corp., 3.5%, 11/1/45 Federal Home Loan Mortgage Corp., 3.5%, 12/1/44 Federal Home Loan Mortgage Corp., 3.5%, 3/1/26 Federal Home Loan Mortgage Corp., 3.5%, 3/1/45 Federal Home Loan Mortgage Corp., 3.5%, 4/1/42 Federal Home Loan Mortgage Corp., 3.5%, 4/1/45 Federal Home Loan Mortgage Corp., 3.5%, 7/1/44 Federal Home Loan Mortgage Corp., 3.5%, 7/1/45 Federal Home Loan Mortgage Corp., 3.5%, 8/1/43 Federal Home Loan Mortgage Corp., 3.5%, 8/1/44 Federal Home Loan Mortgage Corp., 3.5%, 9/1/44 Federal Home Loan Mortgage Corp., 4.0%, 1/1/44 Federal Home Loan Mortgage Corp., 4.0%, 11/1/41 Federal Home Loan Mortgage Corp., 4.0%, 11/1/42 Federal Home Loan Mortgage Corp., 4.0%, 12/1/44 Federal Home Loan Mortgage Corp., 4.0%, 2/1/44 Federal Home Loan Mortgage Corp., 4.0%, 4/1/45 Federal Home Loan Mortgage Corp., 4.0%, 5/1/44 Federal Home Loan Mortgage Corp., 4.0%, 6/1/42 Federal Home Loan Mortgage Corp., 4.0%, 6/1/44 Federal Home Loan Mortgage Corp., 4.0%, 7/1/42 Federal Home Loan Mortgage Corp., 4.0%, 7/1/44 Federal Home Loan Mortgage Corp., 4.0%, 7/1/44 Federal Home Loan Mortgage Corp., 4.0%, 7/1/44 Federal Home Loan Mortgage Corp., 4.0%, 7/1/44 Federal Home Loan Mortgage Corp., 4.0%, 9/1/44 Federal Home Loan Mortgage Corp., 4.0%, 9/1/44 Federal Home Loan Mortgage Corp., 4.5%, 10/1/20 Federal Home Loan Mortgage Corp., 4.5%, 11/1/40 Federal Home Loan Mortgage Corp., 4.5%, 11/1/43 Federal Home Loan Mortgage Corp., 4.5%, 3/1/20 Federal Home Loan Mortgage Corp., 4.5%, 3/1/42 Federal Home Loan Mortgage Corp., 4.5%, 3/1/42 Federal Home Loan Mortgage Corp., 5.0%, 10/1/20 Federal Home Loan Mortgage Corp., 5.0%, 10/1/38 Federal Home Loan Mortgage Corp., 5.0%, 11/1/34 Federal Home Loan Mortgage Corp., 5.0%, 12/1/21 Federal Home Loan Mortgage Corp., 5.0%, 6/1/35 Federal Home Loan Mortgage Corp., 5.0%, 9/1/38 Federal Home Loan Mortgage Corp., 5.5%, 1/1/34 Federal Home Loan Mortgage Corp., 5.5%, 11/1/34 Federal Home Loan Mortgage Corp., 5.5%, 11/1/34 Federal Home Loan Mortgage Corp., 5.5%, 11/1/35 Federal Home Loan Mortgage Corp., 5.5%, 12/1/18 Federal Home Loan Mortgage Corp., 5.5%, 6/1/41 Federal Home Loan Mortgage Corp., 5.5%, 8/1/35 Federal Home Loan Mortgage Corp., 5.5%, 9/1/33 Federal Home Loan Mortgage Corp., 6.0%, 1/1/33 Federal Home Loan Mortgage Corp., 6.0%, 1/1/33 Federal Home Loan Mortgage Corp., 6.0%, 1/1/34 Federal Home Loan Mortgage Corp., 6.0%, 1/1/34 Federal Home Loan Mortgage Corp., 6.0%, 1/1/38 Federal Home Loan Mortgage Corp., 6.0%, 11/1/33 Federal Home Loan Mortgage Corp., 6.0%, 11/1/33 Federal Home Loan Mortgage Corp., 6.0%, 12/1/33 Federal Home Loan Mortgage Corp., 6.0%, 12/1/33 Federal Home Loan Mortgage Corp., 6.0%, 12/1/33 Federal Home Loan Mortgage Corp., 6.0%, 12/1/36 Federal Home Loan Mortgage Corp., 6.0%, 2/1/33 Federal Home Loan Mortgage Corp., 6.0%, 2/1/33 Federal Home Loan Mortgage Corp., 6.0%, 3/1/33 Federal Home Loan Mortgage Corp., 6.0%, 3/1/33 Federal Home Loan Mortgage Corp., 6.0%, 4/1/33 Federal Home Loan Mortgage Corp., 6.0%, 4/1/35 Federal Home Loan Mortgage Corp., 6.0%, 4/1/36 Federal Home Loan Mortgage Corp., 6.0%, 5/1/16 Federal Home Loan Mortgage Corp., 6.0%, 5/1/17 Federal Home Loan Mortgage Corp., 6.0%, 5/1/34 Federal Home Loan Mortgage Corp., 6.0%, 5/1/34 Federal Home Loan Mortgage Corp., 6.0%, 6/1/16 Federal Home Loan Mortgage Corp., 6.0%, 6/1/35 Federal Home Loan Mortgage Corp., 6.0%, 6/1/35 Federal Home Loan Mortgage Corp., 6.0%, 7/1/36 Federal Home Loan Mortgage Corp., 6.0%, 7/1/36 Federal Home Loan Mortgage Corp., 6.0%, 7/1/38 Federal Home Loan Mortgage Corp., 6.0%, 8/1/18 Federal Home Loan Mortgage Corp., 6.0%, 8/1/34 Federal Home Loan Mortgage Corp., 6.0%, 9/1/33 Federal Home Loan Mortgage Corp., 6.5%, 1/1/31 Federal Home Loan Mortgage Corp., 6.5%, 1/1/33 Federal Home Loan Mortgage Corp., 6.5%, 10/1/33 Federal Home Loan Mortgage Corp., 6.5%, 11/1/30 Federal Home Loan Mortgage Corp., 6.5%, 2/1/33 Federal Home Loan Mortgage Corp., 6.5%, 3/1/31 Federal Home Loan Mortgage Corp., 6.5%, 3/1/31 Federal Home Loan Mortgage Corp., 6.5%, 5/1/31 Federal Home Loan Mortgage Corp., 6.5%, 5/1/31 Federal Home Loan Mortgage Corp., 6.5%, 6/1/32 Federal Home Loan Mortgage Corp., 6.5%, 7/1/32 Federal Home Loan Mortgage Corp., 6.5%, 8/1/31 Federal Home Loan Mortgage Corp., 6.5%, 8/1/31 Federal Home Loan Mortgage Corp., 7.0%, 10/1/46 Federal Home Loan Mortgage Corp., 7.0%, 11/1/30 Federal Home Loan Mortgage Corp., 7.0%, 6/1/31 Federal Home Loan Mortgage Corp., 7.0%, 8/1/22 Federal Home Loan Mortgage Corp., 7.0%, 9/1/22 Federal National Mortgage Association, 3.0%, 12/1/21 Federal National Mortgage Association, 4.0%, 10/1/45 Federal National Mortgage Association, 4.0%, 11/1/34 Federal National Mortgage Association, 5.0%, 8/1/40 Government National Mortgage Association I, 3.5%, 1/15/44 Government National Mortgage Association I, 3.5%, 1/15/45 Government National Mortgage Association I, 3.5%, 4/20/16 (TBA) Government National Mortgage Association I, 3.5%, 7/15/42 Government National Mortgage Association I, 4.0%, 1/15/41 Government National Mortgage Association I, 4.0%, 1/15/41 Government National Mortgage Association I, 4.0%, 1/15/45 Government National Mortgage Association I, 4.0%, 1/15/45 Government National Mortgage Association I, 4.0%, 1/15/45 Government National Mortgage Association I, 4.0%, 1/15/45 Government National Mortgage Association I, 4.0%, 10/15/40 Government National Mortgage Association I, 4.0%, 10/15/41 Government National Mortgage Association I, 4.0%, 10/15/41 Government National Mortgage Association I, 4.0%, 10/15/41 Government National Mortgage Association I, 4.0%, 10/15/44 Government National Mortgage Association I, 4.0%, 11/15/40 Government National Mortgage Association I, 4.0%, 11/15/40 Government National Mortgage Association I, 4.0%, 11/15/41 Government National Mortgage Association I, 4.0%, 11/15/41 Government National Mortgage Association I, 4.0%, 11/15/43 Government National Mortgage Association I, 4.0%, 11/15/44 Government National Mortgage Association I, 4.0%, 12/15/41 Government National Mortgage Association I, 4.0%, 12/15/44 Government National Mortgage Association I, 4.0%, 2/15/41 Government National Mortgage Association I, 4.0%, 2/15/42 Government National Mortgage Association I, 4.0%, 2/15/42 Government National Mortgage Association I, 4.0%, 2/15/45 Government National Mortgage Association I, 4.0%, 2/15/45 Government National Mortgage Association I, 4.0%, 3/15/44 Government National Mortgage Association I, 4.0%, 3/15/44 Government National Mortgage Association I, 4.0%, 3/15/44 Government National Mortgage Association I, 4.0%, 3/15/44 Government National Mortgage Association I, 4.0%, 3/15/45 Government National Mortgage Association I, 4.0%, 3/15/45 Government National Mortgage Association I, 4.0%, 4/15/44 Government National Mortgage Association I, 4.0%, 4/15/44 Government National Mortgage Association I, 4.0%, 4/15/44 Government National Mortgage Association I, 4.0%, 5/15/39 Government National Mortgage Association I, 4.0%, 5/15/45 Government National Mortgage Association I, 4.0%, 6/15/39 Government National Mortgage Association I, 4.0%, 6/15/41 Government National Mortgage Association I, 4.0%, 7/15/41 Government National Mortgage Association I, 4.0%, 7/15/45 Government National Mortgage Association I, 4.0%, 8/15/40 Government National Mortgage Association I, 4.0%, 8/15/40 Government National Mortgage Association I, 4.0%, 8/15/43 Government National Mortgage Association I, 4.0%, 8/15/44 Government National Mortgage Association I, 4.0%, 8/15/45 Government National Mortgage Association I, 4.0%, 9/15/40 Government National Mortgage Association I, 4.0%, 9/15/40 Government National Mortgage Association I, 4.0%, 9/15/41 Government National Mortgage Association I, 4.0%, 9/15/41 Government National Mortgage Association I, 4.0%, 9/15/44 Government National Mortgage Association I, 4.0%, 9/15/44 Government National Mortgage Association I, 4.0%, 9/15/44 Government National Mortgage Association I, 4.0%, 9/15/44 Government National Mortgage Association I, 4.0%, 9/15/44 Government National Mortgage Association I, 4.5%, 1/15/40 Government National Mortgage Association I, 4.5%, 10/15/33 Government National Mortgage Association I, 4.5%, 10/15/33 Government National Mortgage Association I, 4.5%, 10/15/35 Government National Mortgage Association I, 4.5%, 12/15/19 Government National Mortgage Association I, 4.5%, 12/15/39 Government National Mortgage Association I, 4.5%, 2/15/34 Government National Mortgage Association I, 4.5%, 3/15/35 Government National Mortgage Association I, 4.5%, 3/15/35 Government National Mortgage Association I, 4.5%, 4/15/18 Government National Mortgage Association I, 4.5%, 4/15/20 Government National Mortgage Association I, 4.5%, 4/15/35 Government National Mortgage Association I, 4.5%, 4/15/35 Government National Mortgage Association I, 4.5%, 4/15/38 Government National Mortgage Association I, 4.5%, 4/15/41 Government National Mortgage Association I, 4.5%, 5/15/41 Government National Mortgage Association I, 4.5%, 6/15/19 Government National Mortgage Association I, 4.5%, 6/15/25 Government National Mortgage Association I, 4.5%, 6/15/41 Government National Mortgage Association I, 4.5%, 7/15/33 Government National Mortgage Association I, 4.5%, 7/15/41 Government National Mortgage Association I, 4.5%, 8/15/19 Government National Mortgage Association I, 4.5%, 8/15/41 Government National Mortgage Association I, 4.5%, 9/15/33 Government National Mortgage Association I, 4.5%, 9/15/35 Government National Mortgage Association I, 4.5%, 9/15/40 Government National Mortgage Association I, 5.0%, 10/15/18 Government National Mortgage Association I, 5.0%, 2/15/19 Government National Mortgage Association I, 5.0%, 4/15/34 Government National Mortgage Association I, 5.0%, 4/15/35 Government National Mortgage Association I, 5.0%, 7/15/19 Government National Mortgage Association I, 5.0%, 7/15/19 Government National Mortgage Association I, 5.0%, 7/15/33 Government National Mortgage Association I, 5.0%, 7/15/40 Government National Mortgage Association I, 5.0%, 9/15/33 Government National Mortgage Association I, 5.5%, 1/15/29 Government National Mortgage Association I, 5.5%, 1/15/35 Government National Mortgage Association I, 5.5%, 10/15/17 Government National Mortgage Association I, 5.5%, 10/15/17 Government National Mortgage Association I, 5.5%, 10/15/19 Government National Mortgage Association I, 5.5%, 10/15/33 Government National Mortgage Association I, 5.5%, 10/15/33 Government National Mortgage Association I, 5.5%, 10/15/34 Government National Mortgage Association I, 5.5%, 10/15/35 Government National Mortgage Association I, 5.5%, 10/15/35 Government National Mortgage Association I, 5.5%, 11/15/18 Government National Mortgage Association I, 5.5%, 11/15/19 Government National Mortgage Association I, 5.5%, 11/15/34 Government National Mortgage Association I, 5.5%, 12/15/18 Government National Mortgage Association I, 5.5%, 2/15/18 Government National Mortgage Association I, 5.5%, 2/15/18 Government National Mortgage Association I, 5.5%, 2/15/35 Government National Mortgage Association I, 5.5%, 2/15/35 Government National Mortgage Association I, 5.5%, 2/15/37 Government National Mortgage Association I, 5.5%, 4/15/19 Government National Mortgage Association I, 5.5%, 4/15/19 Government National Mortgage Association I, 5.5%, 4/15/31 Government National Mortgage Association I, 5.5%, 6/15/18 Government National Mortgage Association I, 5.5%, 6/15/33 Government National Mortgage Association I, 5.5%, 6/15/35 Government National Mortgage Association I, 5.5%, 7/15/33 Government National Mortgage Association I, 5.5%, 7/15/33 Government National Mortgage Association I, 5.5%, 7/15/34 Government National Mortgage Association I, 5.5%, 7/15/35 Government National Mortgage Association I, 5.5%, 8/15/19 Government National Mortgage Association I, 5.5%, 8/15/19 Government National Mortgage Association I, 5.5%, 8/15/33 Government National Mortgage Association I, 5.5%, 8/15/33 Government National Mortgage Association I, 5.5%, 8/15/33 Government National Mortgage Association I, 5.5%, 9/15/19 Government National Mortgage Association I, 5.5%, 9/15/33 Government National Mortgage Association I, 5.5%, 9/15/33 Government National Mortgage Association I, 5.72%, 4/15/29 Government National Mortgage Association I, 6.0%, 1/15/17 Government National Mortgage Association I, 6.0%, 1/15/19 Government National Mortgage Association I, 6.0%, 1/15/24 Government National Mortgage Association I, 6.0%, 1/15/33 Government National Mortgage Association I, 6.0%, 1/15/33 Government National Mortgage Association I, 6.0%, 1/15/33 Government National Mortgage Association I, 6.0%, 10/15/28 Government National Mortgage Association I, 6.0%, 10/15/32 Government National Mortgage Association I, 6.0%, 10/15/32 Government National Mortgage Association I, 6.0%, 10/15/32 Government National Mortgage Association I, 6.0%, 10/15/33 Government National Mortgage Association I, 6.0%, 10/15/34 Government National Mortgage Association I, 6.0%, 10/15/34 Government National Mortgage Association I, 6.0%, 10/15/34 Government National Mortgage Association I, 6.0%, 10/15/36 Government National Mortgage Association I, 6.0%, 11/15/31 Government National Mortgage Association I, 6.0%, 11/15/32 Government National Mortgage Association I, 6.0%, 11/15/32 Government National Mortgage Association I, 6.0%, 11/15/33 Government National Mortgage Association I, 6.0%, 11/15/34 Government National Mortgage Association I, 6.0%, 11/15/37 Government National Mortgage Association I, 6.0%, 12/15/23 Government National Mortgage Association I, 6.0%, 12/15/32 Government National Mortgage Association I, 6.0%, 12/15/32 Government National Mortgage Association I, 6.0%, 12/15/32 Government National Mortgage Association I, 6.0%, 12/15/32 Government National Mortgage Association I, 6.0%, 12/15/32 Government National Mortgage Association I, 6.0%, 12/15/32 Government National Mortgage Association I, 6.0%, 12/15/32 Government National Mortgage Association I, 6.0%, 2/15/29 Government National Mortgage Association I, 6.0%, 2/15/29 Government National Mortgage Association I, 6.0%, 2/15/33 Government National Mortgage Association I, 6.0%, 2/15/33 Government National Mortgage Association I, 6.0%, 2/15/33 Government National Mortgage Association I, 6.0%, 2/15/33 Government National Mortgage Association I, 6.0%, 2/15/33 Government National Mortgage Association I, 6.0%, 3/15/17 Government National Mortgage Association I, 6.0%, 3/15/17 Government National Mortgage Association I, 6.0%, 3/15/19 Government National Mortgage Association I, 6.0%, 3/15/32 Government National Mortgage Association I, 6.0%, 3/15/33 Government National Mortgage Association I, 6.0%, 3/15/33 Government National Mortgage Association I, 6.0%, 3/15/33 Government National Mortgage Association I, 6.0%, 3/15/33 Government National Mortgage Association I, 6.0%, 3/15/33 Government National Mortgage Association I, 6.0%, 3/15/33 Government National Mortgage Association I, 6.0%, 3/15/33 Government National Mortgage Association I, 6.0%, 3/15/33 Government National Mortgage Association I, 6.0%, 3/15/34 Government National Mortgage Association I, 6.0%, 4/15/18 Government National Mortgage Association I, 6.0%, 4/15/28 Government National Mortgage Association I, 6.0%, 4/15/33 Government National Mortgage Association I, 6.0%, 4/15/33 Government National Mortgage Association I, 6.0%, 4/15/33 Government National Mortgage Association I, 6.0%, 5/15/17 Government National Mortgage Association I, 6.0%, 5/15/17 Government National Mortgage Association I, 6.0%, 5/15/33 Government National Mortgage Association I, 6.0%, 5/15/33 Government National Mortgage Association I, 6.0%, 6/15/17 Government National Mortgage Association I, 6.0%, 6/15/31 Government National Mortgage Association I, 6.0%, 6/15/33 Government National Mortgage Association I, 6.0%, 6/15/34 Government National Mortgage Association I, 6.0%, 8/15/32 Government National Mortgage Association I, 6.0%, 8/15/34 Government National Mortgage Association I, 6.0%, 8/15/34 Government National Mortgage Association I, 6.0%, 8/15/36 Government National Mortgage Association I, 6.0%, 8/15/38 Government National Mortgage Association I, 6.0%, 9/15/19 Government National Mortgage Association I, 6.0%, 9/15/28 Government National Mortgage Association I, 6.0%, 9/15/32 Government National Mortgage Association I, 6.0%, 9/15/32 Government National Mortgage Association I, 6.0%, 9/15/32 Government National Mortgage Association I, 6.0%, 9/15/33 Government National Mortgage Association I, 6.0%, 9/15/33 Government National Mortgage Association I, 6.0%, 9/15/33 Government National Mortgage Association I, 6.0%, 9/15/34 Government National Mortgage Association I, 6.0%, 9/15/34 Government National Mortgage Association I, 6.0%, 9/15/34 Government National Mortgage Association I, 6.0%, 9/15/35 Government National Mortgage Association I, 6.5%, 1/15/29 Government National Mortgage Association I, 6.5%, 1/15/32 Government National Mortgage Association I, 6.5%, 1/15/32 Government National Mortgage Association I, 6.5%, 1/15/33 Government National Mortgage Association I, 6.5%, 1/15/33 Government National Mortgage Association I, 6.5%, 1/15/34 Government National Mortgage Association I, 6.5%, 1/15/35 Government National Mortgage Association I, 6.5%, 10/15/24 Government National Mortgage Association I, 6.5%, 10/15/28 Government National Mortgage Association I, 6.5%, 10/15/28 Government National Mortgage Association I, 6.5%, 10/15/31 Government National Mortgage Association I, 6.5%, 10/15/31 Government National Mortgage Association I, 6.5%, 10/15/31 Government National Mortgage Association I, 6.5%, 10/15/32 Government National Mortgage Association I, 6.5%, 10/15/33 Government National Mortgage Association I, 6.5%, 11/15/31 Government National Mortgage Association I, 6.5%, 11/15/31 Government National Mortgage Association I, 6.5%, 11/15/32 Government National Mortgage Association I, 6.5%, 12/15/32 Government National Mortgage Association I, 6.5%, 2/15/28 Government National Mortgage Association I, 6.5%, 2/15/29 Government National Mortgage Association I, 6.5%, 2/15/29 Government National Mortgage Association I, 6.5%, 2/15/29 Government National Mortgage Association I, 6.5%, 2/15/32 Government National Mortgage Association I, 6.5%, 2/15/32 Government National Mortgage Association I, 6.5%, 2/15/32 Government National Mortgage Association I, 6.5%, 2/15/32 Government National Mortgage Association I, 6.5%, 2/15/32 Government National Mortgage Association I, 6.5%, 2/15/34 Government National Mortgage Association I, 6.5%, 3/15/29 Government National Mortgage Association I, 6.5%, 3/15/29 Government National Mortgage Association I, 6.5%, 3/15/29 Government National Mortgage Association I, 6.5%, 3/15/29 Government National Mortgage Association I, 6.5%, 3/15/31 Government National Mortgage Association I, 6.5%, 3/15/32 Government National Mortgage Association I, 6.5%, 3/15/32 Government National Mortgage Association I, 6.5%, 4/15/17 Government National Mortgage Association I, 6.5%, 4/15/28 Government National Mortgage Association I, 6.5%, 4/15/28 Government National Mortgage Association I, 6.5%, 4/15/31 Government National Mortgage Association I, 6.5%, 4/15/32 Government National Mortgage Association I, 6.5%, 4/15/32 Government National Mortgage Association I, 6.5%, 4/15/32 Government National Mortgage Association I, 6.5%, 4/15/32 Government National Mortgage Association I, 6.5%, 4/15/33 Government National Mortgage Association I, 6.5%, 4/15/35 Government National Mortgage Association I, 6.5%, 5/15/29 Government National Mortgage Association I, 6.5%, 5/15/29 Government National Mortgage Association I, 6.5%, 5/15/29 Government National Mortgage Association I, 6.5%, 5/15/31 Government National Mortgage Association I, 6.5%, 5/15/31 Government National Mortgage Association I, 6.5%, 5/15/31 Government National Mortgage Association I, 6.5%, 5/15/32 Government National Mortgage Association I, 6.5%, 5/15/32 Government National Mortgage Association I, 6.5%, 5/15/32 Government National Mortgage Association I, 6.5%, 5/15/32 Government National Mortgage Association I, 6.5%, 5/15/33 Government National Mortgage Association I, 6.5%, 6/15/17 Government National Mortgage Association I, 6.5%, 6/15/28 Government National Mortgage Association I, 6.5%, 6/15/29 Government National Mortgage Association I, 6.5%, 6/15/31 Government National Mortgage Association I, 6.5%, 6/15/32 Government National Mortgage Association I, 6.5%, 6/15/32 Government National Mortgage Association I, 6.5%, 6/15/32 Government National Mortgage Association I, 6.5%, 6/15/34 Government National Mortgage Association I, 6.5%, 6/15/35 Government National Mortgage Association I, 6.5%, 7/15/31 Government National Mortgage Association I, 6.5%, 7/15/32 Government National Mortgage Association I, 6.5%, 7/15/32 Government National Mortgage Association I, 6.5%, 7/15/32 Government National Mortgage Association I, 6.5%, 7/15/32 Government National Mortgage Association I, 6.5%, 7/15/35 Government National Mortgage Association I, 6.5%, 7/15/35 Government National Mortgage Association I, 6.5%, 8/15/28 Government National Mortgage Association I, 6.5%, 8/15/31 Government National Mortgage Association I, 6.5%, 8/15/32 Government National Mortgage Association I, 6.5%, 8/15/32 Government National Mortgage Association I, 6.5%, 8/15/32 Government National Mortgage Association I, 6.5%, 9/15/31 Government National Mortgage Association I, 6.5%, 9/15/32 Government National Mortgage Association I, 6.5%, 9/15/32 Government National Mortgage Association I, 6.5%, 9/15/32 Government National Mortgage Association I, 6.5%, 9/15/34 Government National Mortgage Association I, 6.75%, 4/15/26 Government National Mortgage Association I, 7.0%, 1/15/28 Government National Mortgage Association I, 7.0%, 1/15/31 Government National Mortgage Association I, 7.0%, 10/15/16 Government National Mortgage Association I, 7.0%, 10/15/31 Government National Mortgage Association I, 7.0%, 11/15/26 Government National Mortgage Association I, 7.0%, 11/15/28 Government National Mortgage Association I, 7.0%, 11/15/28 Government National Mortgage Association I, 7.0%, 11/15/29 Government National Mortgage Association I, 7.0%, 11/15/31 Government National Mortgage Association I, 7.0%, 12/15/30 Government National Mortgage Association I, 7.0%, 12/15/30 Government National Mortgage Association I, 7.0%, 12/15/30 Government National Mortgage Association I, 7.0%, 12/15/30 Government National Mortgage Association I, 7.0%, 2/15/28 Government National Mortgage Association I, 7.0%, 3/15/28 Government National Mortgage Association I, 7.0%, 3/15/31 Government National Mortgage Association I, 7.0%, 3/15/32 Government National Mortgage Association I, 7.0%, 4/15/28 Government National Mortgage Association I, 7.0%, 4/15/29 Government National Mortgage Association I, 7.0%, 4/15/29 Government National Mortgage Association I, 7.0%, 4/15/31 Government National Mortgage Association I, 7.0%, 4/15/32 Government National Mortgage Association I, 7.0%, 5/15/29 Government National Mortgage Association I, 7.0%, 5/15/31 Government National Mortgage Association I, 7.0%, 5/15/32 Government National Mortgage Association I, 7.0%, 6/15/27 Government National Mortgage Association I, 7.0%, 6/15/29 Government National Mortgage Association I, 7.0%, 6/15/31 Government National Mortgage Association I, 7.0%, 7/15/25 Government National Mortgage Association I, 7.0%, 7/15/28 Government National Mortgage Association I, 7.0%, 7/15/28 Government National Mortgage Association I, 7.0%, 7/15/29 Government National Mortgage Association I, 7.0%, 7/15/31 Government National Mortgage Association I, 7.0%, 8/15/23 Government National Mortgage Association I, 7.0%, 8/15/28 Government National Mortgage Association I, 7.0%, 8/15/31 Government National Mortgage Association I, 7.0%, 9/15/24 Government National Mortgage Association I, 7.0%, 9/15/31 Government National Mortgage Association I, 7.0%, 9/15/31 Government National Mortgage Association I, 7.5%, 10/15/23 Government National Mortgage Association I, 7.5%, 10/15/27 Government National Mortgage Association I, 7.5%, 10/15/29 Government National Mortgage Association I, 7.5%, 10/15/29 Government National Mortgage Association I, 7.5%, 12/15/25 Government National Mortgage Association I, 7.5%, 12/15/31 Government National Mortgage Association I, 7.5%, 2/15/26 Government National Mortgage Association I, 7.5%, 2/15/27 Government National Mortgage Association I, 7.5%, 2/15/31 Government National Mortgage Association I, 7.5%, 2/15/31 Government National Mortgage Association I, 7.5%, 3/15/23 Government National Mortgage Association I, 7.5%, 3/15/27 Government National Mortgage Association I, 7.5%, 3/15/31 Government National Mortgage Association I, 7.5%, 6/15/24 Government National Mortgage Association I, 7.5%, 6/15/29 Government National Mortgage Association I, 7.5%, 8/15/25 Government National Mortgage Association I, 7.5%, 8/15/29 Government National Mortgage Association I, 7.5%, 8/15/29 Government National Mortgage Association I, 7.5%, 8/15/29 Government National Mortgage Association I, 7.5%, 9/15/25 Government National Mortgage Association I, 7.5%, 9/15/25 Government National Mortgage Association I, 7.5%, 9/15/29 Government National Mortgage Association I, 7.75%, 2/15/30 Government National Mortgage Association I, 8.25%, 5/15/20 Government National Mortgage Association I, 8.5%, 8/15/21 Government National Mortgage Association I, 9.0%, 1/15/20 Government National Mortgage Association I, 9.0%, 12/15/19 Government National Mortgage Association I, 9.0%, 6/15/22 Government National Mortgage Association I, 9.0%, 9/15/21 Government National Mortgage Association II, 3.5%, 1/20/46 Government National Mortgage Association II, 3.5%, 3/20/45 Government National Mortgage Association II, 3.5%, 3/20/46 Government National Mortgage Association II, 3.5%, 4/20/45 Government National Mortgage Association II, 3.5%, 4/20/45 Government National Mortgage Association II, 3.5%, 4/20/45 Government National Mortgage Association II, 3.5%, 8/20/45 Government National Mortgage Association II, 4.0%, 10/20/44 Government National Mortgage Association II, 4.0%, 7/20/44 Government National Mortgage Association II, 4.0%, 9/20/44 Government National Mortgage Association II, 4.5%, 1/20/35 Government National Mortgage Association II, 4.5%, 12/20/34 Government National Mortgage Association II, 4.5%, 3/20/35 Government National Mortgage Association II, 4.5%, 9/20/41 Government National Mortgage Association II, 5.0%, 1/20/20 Government National Mortgage Association II, 5.0%, 12/20/18 Government National Mortgage Association II, 5.0%, 2/20/19 Government National Mortgage Association II, 5.5%, 10/20/19 Government National Mortgage Association II, 5.5%, 10/20/37 Government National Mortgage Association II, 5.5%, 3/20/34 Government National Mortgage Association II, 5.5%, 4/20/34 Government National Mortgage Association II, 5.75%, 4/20/33 Government National Mortgage Association II, 5.75%, 6/20/33 Government National Mortgage Association II, 5.9%, 1/20/28 Government National Mortgage Association II, 5.9%, 11/20/27 Government National Mortgage Association II, 5.9%, 7/20/28 Government National Mortgage Association II, 6.0%, 1/20/33 Government National Mortgage Association II, 6.0%, 10/20/31 Government National Mortgage Association II, 6.0%, 10/20/33 Government National Mortgage Association II, 6.0%, 12/20/18 Government National Mortgage Association II, 6.0%, 6/20/34 Government National Mortgage Association II, 6.0%, 7/20/17 Government National Mortgage Association II, 6.0%, 7/20/19 Government National Mortgage Association II, 6.45%, 1/20/33 Government National Mortgage Association II, 6.45%, 11/20/32 Government National Mortgage Association II, 6.45%, 7/20/32 Government National Mortgage Association II, 6.5%, 1/20/24 Government National Mortgage Association II, 6.5%, 10/20/32 Government National Mortgage Association II, 6.5%, 2/20/29 Government National Mortgage Association II, 6.5%, 3/20/29 Government National Mortgage Association II, 6.5%, 3/20/34 Government National Mortgage Association II, 6.5%, 4/20/29 Government National Mortgage Association II, 6.5%, 4/20/31 Government National Mortgage Association II, 6.5%, 6/20/31 Government National Mortgage Association II, 6.5%, 8/20/28 Government National Mortgage Association II, 7.0%, 1/20/29 Government National Mortgage Association II, 7.0%, 1/20/31 Government National Mortgage Association II, 7.0%, 11/20/28 Government National Mortgage Association II, 7.0%, 11/20/31 Government National Mortgage Association II, 7.0%, 12/20/30 Government National Mortgage Association II, 7.0%, 2/20/29 Government National Mortgage Association II, 7.0%, 3/20/31 Government National Mortgage Association II, 7.0%, 5/20/26 Government National Mortgage Association II, 7.0%, 6/20/28 Government National Mortgage Association II, 7.0%, 7/20/31 Government National Mortgage Association II, 7.0%, 8/20/27 Government National Mortgage Association II, 7.5%, 12/20/30 Government National Mortgage Association II, 7.5%, 5/20/30 Government National Mortgage Association II, 7.5%, 6/20/30 Government National Mortgage Association II, 7.5%, 7/20/30 Government National Mortgage Association II, 7.5%, 8/20/30 52 Government National Mortgage Association II, 8.0%, 5/20/25 59 Government National Mortgage Association II, 9.0%, 11/20/24 Government National Mortgage Association II, 9.0%, 3/20/22 Government National Mortgage Association II, 9.0%, 4/20/22 Government National Mortgage Association II, 9.0%, 9/20/21 Government National Mortgage Association, 6.5%, 3/15/29 Tennessee Valley Authority, 4.929%, 1/15/21 U.S. Treasury Bills, 7/21/16 (c) U.S. Treasury Bonds, 3.0%, 5/15/42 U.S. Treasury Bonds, 4.25%, 5/15/39 U.S. Treasury Bonds, 4.375%, 11/15/39 U.S. Treasury Bonds, 4.375%, 5/15/40 U.S. Treasury Inflation Indexed Bonds, 0.75%, 2/15/45 U.S. Treasury Inflation Indexed Bonds, 1.0%, 2/15/46 U.S. Treasury Note, Floating Rate Note, 10/31/17 U.S. Treasury Note, Floating Rate Note, 4/30/17 U.S. Treasury Note, Floating Rate Note, 7/31/17 U.S. Treasury Notes, 0.625%, 5/31/17 U.S. Treasury Notes, 1.125%, 1/15/19 U.S. Treasury Notes, 1.875%, 8/31/17 U.S. Treasury Notes, 2.0%, 2/15/25 U.S. Treasury Notes, 2.0%, 8/15/25 U.S. Treasury Notes, 2.125%, 5/15/25 U.S. Treasury Notes, 2.625%, 11/15/20 TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS (Cost $1,127,909,402) $ FOREIGN GOVERNMENT BONDS - 0.1% Africa Finance Corp., 4.375%, 4/29/20 (144A) $ TOTAL FOREIGN GOVERNMENT BONDS (Cost $4,513,173) $ MUNICIPAL BONDS - 1.8% (g) Municipal Airport - 0.0% † Indianapolis Airport Authority, 5.1%, 1/15/17 $ Municipal Development - 0.3% Louisiana Local Government Environmental Facilities & Community Development Authority, 6.5%, 11/1/35 $ New Jersey Economic Development Authority, 2/15/18 (c) Parish of St. John the Baptist Louisiana, 5.125%, 6/1/37 Selma Industrial Development Board, 5.8%, 5/1/34 $ Municipal Education - 0.0% † Amherst College, 3.794%, 11/1/42 $ Municipal General - 0.5% JobsOhio Beverage System, 3.985%, 1/1/29 $ JobsOhio Beverage System, 4.532%, 1/1/35 New Jersey Transportation Trust Fund Authority, Transportation System-Series A, 5.5%, 6/15/41 Texas Municipal Gas Acquisition & Supply Corp. III, 5.0%, 12/15/30 Texas Municipal Gas Acquisition & Supply Corp. III, 5.0%, 12/15/31 Virginia Commonwealth Transportation Board, 4.0%, 5/15/31 Virginia Commonwealth Transportation Board, 4.0%, 5/15/32 $ Higher Municipal Education - 0.4% Baylor University, 4.313%, 3/1/42 $ Massachusetts Health & Educational Facilities Authority, Massachusetts Institute of Technology -Series K, 5.5%, 7/1/32 Massachusetts Institute of Technology, 5.6%, 7/1/11 President and Fellows of Harvard College, 6.3%, 10/1/37 The George Washington University, 1.827%, 9/15/17 University of California, 3.38%, 5/15/28 University of Virginia, Green Bond Series A, 5.0%, 4/1/45 $ Municipal Medical - 0.1% Massachusetts Development Finance Agency, Broad Institute -Series A, 5.375%, 4/1/41 $ Ohio Higher Educational Facility Commission, 5.0%, 1/1/42 $ Municipal Pollution - 0.1% Port Freeport Texas, 5.95%, 5/15/33 $ Municipal School District - 0.1% Frisco Independent School District, 4.0%, 8/15/40 (h) $ Frisco Independent School District, 4.0%, 8/15/45 (h) $ Municipal Transportation - 0.1% Port Authority of New York & New Jersey, 4.458%, 10/1/62 $ Texas Transportation Commission State Highway Fund, 5.0%, 4/1/33 $ Municipal Obligation - 0.2% State of Texas, 4.0%, 10/1/44 (h) $ State of Washington, 5.0%, 7/1/30 (h) $ TOTAL MUNICIPAL BONDS (Cost $61,171,143) $ SENIOR FLOATING RATE LOAN INTERESTS - 4.0% ** Energy - 0.0% † Integrated Oil & Gas - 0.0% † Glenn Pool Oil & Gas Trust, Term Loan, 5/2/16 $ Oil & Gas Refining & Marketing - 0.0% † Pilot Travel Centers LLC, Refinancing Tranche B Term Loan, 10/3/21 $ Total Energy $ Materials - 0.2% Commodity Chemicals - 0.1% Axiall Holdco, Inc., Initial Loan, 2/27/22 $ Eco Services Operations, Initial Term Loan, 10/8/21 Nexeo Solutions LLC, Term Loan B3, 9/9/17 Tronox Pigments Holland BV, New Term Loan, 3/19/20 $ Specialty Chemicals - 0.1% Chemtura Corp., New Term Loan, 8/29/16 $ Huntsman International LLC, 2015 Extended Term B Dollar Loan, 4/19/19 MacDermid, Inc., Tranche B Term Loan (First Lien), 6/7/20 OMNOVA Solutions, Inc., Term B-1 Loan, 5/31/18 WR Grace & Co-Conn, U.S. Term Loan, 1/23/21 $ Construction Materials - 0.0% † CeramTec Service GmbH, Initial Dollar Term B-1 Loan, 8/30/20 $ Metal & Glass Containers - 0.0% † BWay Intermediate, Initial Term Loan, 8/14/20 $ Aluminum - 0.0% † Novelis, Inc., Initial Term Loan, 5/28/22 $ Diversified Metals & Mining - 0.0% † Fortescue Metals Group Ltd., Bank Loan, 6/30/19 $ Total Materials $ Capital Goods - 0.5% Aerospace & Defense - 0.2% DigitalGlobe, Inc., Term Loan, 1/25/20 $ DynCorp International, Inc., Term Loan, 7/7/16 TASC, Inc. Virginia, New Term Loan (First Lien), 5/23/20 TASC, Inc., First Lien Term Loan, 2/28/17 The SI Organization, Inc., Term Loan (First Lien), 11/19/19 $ Building Products - 0.2% Builders FirstSource, Inc., Initial Term Loan, 7/24/22 $ NCI Building Systems, Inc., Tranche B Term Loan, 6/24/19 Nortek, Inc., Incremental-1 Loan, 10/30/20 Unifrax Corp., New Term B Loan, 12/31/19 $ Industrial Conglomerates - 0.0% † CeramTec Acquisition Corp., Initial Dollar Term B-2 Loan, 8/30/20 $ CeramTec GmbH, Dollar Term B-3 Loan, 8/30/20 $ Construction & Farm Machinery & Heavy Trucks - 0.0% † Navistar, Inc., Tranche B Term Loan, 8/17/17 $ Industrial Machinery - 0.1% NN, Inc., Initial Term Loan, 10/2/22 $ Xerium Technologies, Inc., Initial Term Loan, 5/17/19 $ Trading Companies & Distributors - 0.0% † WESCO Distribution, Inc., Tranche B-1 Loan, 12/12/19 $ Total Capital Goods $ Commercial Services & Supplies - 0.1% Diversified Support Services - 0.1% MTL Publishing LLC, Term B-3 Loan, 8/14/22 $ Security & Alarm Services - 0.0% † Garda World Security Corp., Term B Loan, 11/1/20 $ Garda World Security Corp., Term B Loan, 11/8/20 $ Total Commercial Services & Supplies $ Transportation - 0.0% † Airlines - 0.0% † Delta Air Lines Inc., Term Loan (First Lien), 8/24/22 $ Marine - 0.0% † Navios Maritime Partners LP, Term Loan, 6/27/18 $ Total Transportation $ Automobiles & Components - 0.5% Auto Parts & Equipment - 0.3% Allison Transmission, Inc., Term B-3 Loan, 8/23/19 $ Cooper Standard Intermediate Holdco 2 LLC, Term Loan, 3/28/21 Electrical Components International, Inc., Loan, 4/17/21 Federal-Mogul Corporation, Tranche C Term, 4/15/21 MPG Holdco I, Inc., Tranche B-1 Term Loan (2015), 10/20/21 Schaeffler AG, Facility B-USD, 5/15/20 TI Group Automotive Systems LLC, Initial US Term Loan, 6/25/22 $ Tires & Rubber - 0.1% The Goodyear Tire & Rubber Co., Term Loan (Second Lien), 3/27/19 $ Automobile Manufacturers - 0.1% Chrysler Group LLC, Term Loan B, 5/24/17 $ Total Automobiles & Components $ Consumer Durables & Apparel - 0.1% Home Furnishings - 0.1% Serta Simmons Bedding LLC, Term Loan, 10/1/19 $ Apparel, Accessories & Luxury Goods - 0.0% † Hanesbrands, Inc., New Term B Loan, 4/15/22 $ PVH Corp., Tranche B Term Loan, 12/19/19 $ Footwear - 0.0% † Regal Cinemas Corp., Term Loan, 3/17/22 $ Total Consumer Durables & Apparel $ Consumer Services - 0.2% Casinos & Gaming - 0.1% Pinnacle Entertainment, Inc., Tranche B-2 Term Loan, 8/13/20 $ Scientific Games, Initial Term B-2, 10/1/21 $ Leisure Facilities - 0.1% Six Flags Theme Parks, Inc., Tranche B Term Loan, 6/30/22 $ Restaurants - 0.0% † 1011, Term B-2 Loan, 12/12/21 $ Education Services - 0.0% † Bright Horizons Family Solutions, Inc., Term B Loan, 1/14/20 $ Specialized Consumer Services - 0.0% † GENEX Holdings, Inc., Term B Loan (First Lien), 5/22/21 $ Total Consumer Services $ Media - 0.3% Advertising - 0.0% † Affinion Group, Inc., Tranche B Term Loan, 4/30/18 $ Broadcasting - 0.1% Univision Communications, Inc., Replacement First-Lien Term Loan (C-4), 3/1/20 $ Cable & Satellite - 0.1% CCO Holdings, Bridge Loan, 5/26/16 $ Charter Communications Operating LLC, Term F Loan, 1/1/21 Charter Communications Operating, Ltd., 1st Lien Bridge Loan5/26/16 Intelsat Jackson Holdings SA, Tranche B-2 Term Loan, 6/30/19 $ Movies & Entertainment - 0.1% CDS US Intermediate Holdings, Inc., Initial Term Loan (First Lien), 6/25/22 $ Cinedigm Digital Funding 1 LLC, Term Loan, 2/28/18 Live Nation Entertainment, Inc., Term B-1 Loan, 8/17/20 Rovi Solutions Corp., Term B Loan, 7/2/21 $ Total Media $ Retailing - 0.1% General Merchandise Stores - 0.0% † Dollar Tree, Inc., Term B-1 Loan, 3/9/22 $ Specialty Stores - 0.1% PetSmart, Inc., Tranche B-1 Loan, 3/10/22 $ Staples Escrow LLC, Initial Loan, 1/29/22 $ Automotive Retail - 0.0% † CWGS Group LLC, Term Loan, 2/20/20 $ Total Retailing $ Food, Beverage & Tobacco - 0.2% Beverages - 0.1% JBS USA LLC, 2015 Incremental Term Loan, 9/18/22 $ Agricultural Products - 0.0% † Darling International, Inc., Term B USD Loan, 12/19/20 $ Packaged Foods & Meats - 0.1% Keurig Green Mountain, Inc., Term B USD Loan, 2/10/23 $ Pinnacle Foods Finance LLC, Tranche G Term Loan, 4/29/20 $ Total Food, Beverage & Tobacco $ Household & Personal Products - 0.1% Personal Products - 0.1% NBTY, Inc., Term B-2 Loan, 10/1/17 $ Revlon Consumer Products Corp., Acquisition Term Loan, 8/19/19 $ Total Household & Personal Products $ Health Care Equipment & Services - 0.4% Health Care Equipment - 0.1% Kinetic Concepts, Inc., TermDTL-E1 loan, 5/4/18 $ Health Care Supplies - 0.0% † Immucor, Inc., Term B-2 Loan, 8/19/18 $ Health Care Services - 0.0% † Alliance HealthCare Services, Inc., Initial Term Loan, 6/3/19 $ Ardent Legacy Acquisitions, Inc., Term Loan, 7/31/21 DaVita HealthCare Partners, Inc., Tranche B Loan (First Lien), 6/19/21 $ Health Care Facilities - 0.3% CHS, Incremental 2018 Term F Loan, 12/31/18 $ CHS, Incremental 2019 Term G Loan, 12/31/19 CHS, Incremental 2021 Term H Loan, 1/27/21 HCA, Inc., Tranche B-4 Term Loan, 5/1/18 HCA, Inc., Tranche B-6 Term Loan, 3/8/23 Kindred Healthcare, Inc., Tranche B Loan (First Lien), 4/10/21 Select Medical Corp., Series F Tranche B Term Loan, 3/4/21 Vizient, Inc., Initial Term Loan, 2/9/23 $ Health Care Technology - 0.0% † IMS Health, Inc., Term B Dollar Loan, 3/17/21 $ Total Health Care Equipment & Services $ Pharmaceuticals, Biotechnology & Life Sciences - 0.2% Biotechnology - 0.0% † Alkermes, Inc., 2019 Term Loan, 9/25/19 $ Pharmaceuticals - 0.2% Concordia Healthcare Corp., Initial Dollar Term Loan, 10/20/21 $ Grifols Worldwide Operations USA, Inc., U.S. Tranche B Term Loam, 4/1/21 Mallinckrodt International Finance SA, Initial Term B Loan, 3/6/21 RPI Finance Trust, Term B-4 Term Loan, 11/9/20 Valeant Pharmaceuticals International, Inc., Series C-2 Tranche B Term Loan, 12/11/19 Valeant Pharmaceuticals, Series F-1,3/11/22 $ Life Sciences Tools & Services - 0.0% † Catalent Pharma Solutions, Dollar Term Loan, 5/20/21 $ Total Pharmaceuticals, Biotechnology & Life Sciences $ Diversified Financials - 0.1% Other Diversified Financial Services - 0.1% Fly Funding II Sarl, Loan, 8/9/19 $ Nord Anglia Education, Initial Term Loan, 3/31/21 $ Specialized Finance - 0.0% † Trans Union LLC, 2015 Term B-2 Loan, 4/9/21 $ Total Diversified Financials $ Insurance - 0.2% Insurance Brokers - 0.2% National Financial Partners Corp., Tranche B Term Loan (First Lien), 7/1/20 $ USI Insurance Services LLC, Term B Loan, 12/30/19 $ Total Insurance $ Real Estate - 0.1% Specialized REIT - 0.1% Communications Sales & Leasing, Inc., Term Loan, 10/16/22 $ Total Real Estate $ Software & Services - 0.2% IT Consulting & Other Services - 0.0% † NXP BV, Tranche B Loan, 10/30/20 $ TaxACT, Inc., Initial Term Loan, 12/31/22 $ Data Processing & Outsourced Services - 0.1% First Data Corp., 2021 New Dollar Term Loan, 3/24/21 $ First Data Corp., New 2022B Dollar Term Loan, 7/10/22 $ Application Software - 0.1% Serena Software, Inc., Term Loan, 4/10/20 $ Systems Software - 0.0% † AVG Technologies N.V., Term Loan, 10/15/20 $ Home Entertainment Software - 0.0% † Activision Blizzard, Inc., Term Loan, 7/26/20 $ Total Software & Services $ Technology Hardware & Equipment - 0.0% † Communications Equipment - 0.0% † Commscope, Inc., Tranche 4 Term Loan, 1/14/18 $ Total Technology Hardware & Equipment $ Semiconductors & Semiconductor Equipment - 0.1% Semiconductor Equipment - 0.0% † Sensata Technologies BV, Sixth Amendment Term Loan, 10/14/21 $ Semiconductors - 0.1% ON Semiconductor Corp., Term Loan (First Lien), 3/31/23 $ Avago Technologies Finance, Term Loan (First Lien), 11/13/22 Microsemi Corp., Closing Date Term B Loan, 12/17/22 $ Total Semiconductors & Semiconductor Equipment $ Telecommunication Services - 0.2% Integrated Telecommunication Services - 0.1% Cincinnati Bell, Inc., Tranche B Term Loan, 9/10/20 $ GCI Holdings, Inc., New Term B Loan, 2/2/22 $ Wireless Telecommunication Services - 0.1% Altice US Finance I Corp., Initial Term Loan, 12/14/22 $ Syniverse Holdings, Inc., Initial Term Loan, 4/23/19 Syniverse Holdings, Inc., Tranche B Term Loan, 4/23/19 $ Total Telecommunication Services $ Utilities - 0.2% Electric Utilities - 0.1% Calpine Construction Finance Co. LP, Term B-1 Loan, 5/3/20 $ Texas Competitive Electric Holdings Co LLC, DIP Term Loan, 5/5/16 TPF II Power, LLC, Term Loan, 10/2/21 $ Independent Power Producers & Energy Traders - 0.1% Dynegy, Inc., Tranche B-2 Term Loan, 4/23/20 $ NRG Energy, Inc., Term Loan (2013), 7/1/18 NSG Holdings LLC, New Term Loan, 12/11/19 $ Total Utilities $ TOTAL SENIOR FLOATING RATE LOAN INTERESTS (Cost $145,546,879) $ TEMPORARY CASH INVESTMENTS - 3.0% Repurchase Agreements - 0.4% BNP Paribas, Commercial Papar, 4/1/16 (c) $ Prudential Funding LLC, Commercial Papar, 4/1/16 (c) $ Repurchase Agreements - 2.6% Bank of Nova Scotia, 0.32%, dated 3/31/16 plus accrued interest on 4/1/16 collateralized by the following: $10,606,468 Freddie Mac Giant, 3% -4.5%, 2/1/27 - 10/1/41 $64 Federal Home Loan Mortgage Corp, 2.956%, 11/1/37 $4,403,161 Federal National Mortgage Association (ARM), 3.24%-4.084%, 8/1/40 - 1/1/42 $2,850,665 Federal National Mortgage Association, 3.0% - 4.5%, 8/1/43 - 9/1/45 RBC Capital Markets LLC, 0.28%, dated 3/31/16 plus accrued interest on 4/1/16 collateralized by the following: $4,675,944 Freddie Mac Giant, 3%, 3/1/46 $13,019,225 Federal Home Loan Mortgage Corp, 2.208% - 3.384% , 1/1/37 - 5/1/45 $7,000,467 Federal National Mortgage Association (ARM), 2.022%-2.758%, 4/1/36 - 11/1/45 $43,756,565 Federal National Mortgage Association, 3.0% - 4.5%, 11/1/28 - 4/1/46 TD Securities USA LLC, 0.30%, dated 3/31/16 plus accrued interest on 4/1/16 collateralized by the following: $11,054,671 Federal National Mortgage Association, 4.0%, 10/1/45 $73,587 U.S. Treasury Notes, 2.625%, 11/15/20 $ TOTAL TEMPORARY CASH INVESTMENTS (Cost $109,160,000) $ TOTAL INVESTMENT IN SECURITIES - 100.8% (Cost $3,694,267,041) (a) $ OTHER ASSETS & LIABILITIES - (0.8)% $ TOTAL NET ASSETS - 100.0% $ † Amount rounds to less than 0.1%. REIT Real Estate Investment Trust. (Perpetual) Security with no stated maturity date. (Cat Bond) Catastrophe or event-linked bond. At March 31, 2016, the value of these securities amounted to $84,711,907 or 2.3% of total net assets. REMICS Real Estate Mortgage Investment Conduits. ARM Adjustable Rate Mortgage. (Step) Bond issued with an initial coupon rate which converts to a higher rate at a later date. (TBA) “To Be Announced” Securities. (144A) Security is exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold normally to qualified institutional buyers in a transaction exempt from registration. At March 31, 2016, the value of these securities amounted to $1,021,936,826 or 27.7% of total net assets. ** Senior floating rate loan interests in which the Fund invests generally pay interest at rates that are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the lending rate offered by one or more major European banks, such as LIBOR (London InterBank Offered Rate), (ii) the prime rate offered by one or more major U.S. banks, (iii) the certificate of deposit or (iv) other base lending rates used by commercial lenders. The rate shown is the coupon rate at period end. (a) At March 31, 2016, the net unrealized appreciation on investments based on cost for federal income tax purposes of $3,698,870,180 was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value Net unrealized appreciation $ (b) Debt obligation with a variable interest rate. Rate shown is rate at period end. (c) Security issued with a zero coupon. Income is earned through accretion of discount. (d) Security is valued using fair value methods (other than prices supplied by independent pricing services). (e) Structured reinsurance investment. At March 31, 2016, the value of these securities amounted to $47,781,192 or 1.3% of total net assets. (f) Rate to be determined. (g) Consists of Revenue Bonds unless otherwise indicated. (h) Represents a General Obligation Bond Various inputs are used in determining the value of the Fund's investments.These inputs are summarized in the three broad levels listed below. Level 1 – quoted prices in active markets for identical securities. Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Level 3 – significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments) The following is a summary of the inputs used as of March 31, 2016, in valuing the Fund's investments: Level 1 Level 2 Level 3 Total Preferred Stocks $ $

Exhibit 10.1   Employment Agreement   This Employment Agreement (“Agreement”) is entered into between Alaska Communications Systems Group, Inc., a Delaware corporation, its subsidiaries, affiliates and any business ventures in which they may participate (collectively “Alaska Communications” or “the Company”) and William H. Bishop (“Executive”). The Company and Executive are also referred to herein individually as a “Party” and collectively as the “Parties.”   WITNESSETH:   WHEREAS, Executive has served successfully in key leadership positions with the Company since 2004; and   WHEREAS, the Company has progressively expanded Executive’s role and responsibilities with the Company over time; and   WHEREAS, the Company desires to continue to employ and to promote Executive to serve as the President and Chief Executive Officer of the Company; and   WHEREAS, Executive agrees to provide such services to ACS upon the terms and conditions set forth herein;   AGREEMENT   NOW, THEREFORE, for and in consideration of the promises and other good and valuable consideration set forth in this Agreement, the sufficiency and receipt of which are hereby acknowledged, the Company and Executive hereby agree as follows:   1. Effective Date and Effect of Prior Agreement. The effective date (“Effective Date”) of this Agreement shall be October 14, 2019. Subject to the opportunity to vest previously granted awards, this Agreement rescinds and supersedes any prior employment agreement between the parties, except that Company’s prior award of a $100,000 bonus to Executive upon his appointment as interim President and Chief Executive Officer of the Company shall not be rescinded or superseded. Executive and the Company acknowledge that $50,000 of this $100,000 bonus has already been paid to Executive. Company shall pay the remaining $50,000 to Executive upon execution of this Agreement or no later than January 31, 2020.   2. Position Title and Location. Alaska Communications hereby employs Executive and Executive accepts employment by Alaska Communications as the President and Chief Executive Officer (“CEO”) of the Company. Executive shall also be appointed to serve as a director on the Company’s Board of Directors (“Board”) as of the Effective Date of this Agreement, and thereafter shall be nominated and recommended annually by the Board for re-election as a director for so long as he continues to serve as President and CEO of the Company. The location of the principal place of employment for the President and CEO position shall be at the Company’s headquarters offices in Anchorage, Alaska.   3. Responsibilities and Authority. Executive shall be fully responsible for the general oversight and management of Alaska Communications, including overall business strategy, all operating units, operating plans, and financial performance, and such business ventures as the Company may acquire or participate in. In accordance with the Company’s Articles of Incorporation, Bylaws and the Alaska Communications Corporate Governance Principles, Executive shall perform all duties incident to his office, as assigned or modified from time to time by the Board.   1 | Page     4. Reporting. Executive shall report directly to the Board, to each committee of the Board, as requested, and to the Chairman of the Board. All other members of executive management of the Company shall report to Executive.   5. Term. Unless otherwise terminated as provided in this Agreement, Executive’s term of employment (“Term”) shall commence on the Effective Date and shall continue for three years, until October 13, 2022; provided, that the Term shall be automatically extended for successive one-year periods thereafter, unless written Notice is given by either Party to the other Party at least 180 days prior to the last day of the then-existing initial or extended Term, of the Party’s intent to terminate the Agreement on the last day of that Term.   6. Loyalty and Effort. Executive agrees to abide by the Alaska Communications Articles of Incorporation, Bylaws, Corporate Governance Principles, policies and procedures and decisions of the Board, as those documents may be modified from time to time, and agrees to devote his full time, attention, abilities and efforts to the business of the Company during the Term of this Agreement, except for permitted vacation periods and reasonable periods of illness or incapacity. Executive understands and accepts that he owes the Company the highest duty of fidelity and loyalty. Executive will never make secret profits at Alaska Communications’ expense, will not accept favors from customers or suppliers, except in accordance with law and Alaska Communications policy, and will protect all of Alaska Communications’ property, tangible and intangible, as if it were Executive’s own. While an employee of Alaska Communications, Executive will not perform employment duties or provide services for remuneration for any other person or entity without the prior written consent of the Board. Executive may serve as a member of the boards of directors of such other business, community and charitable organizations as he may disclose to the Alaska Communications Board of Directors, subject to approval by the Board, which approval may be withheld or rescinded in the best interests of Alaska Communications’ business.   7. Compensation. During the Term of this Agreement, Alaska Communications agrees to pay Executive, and Executive agrees to accept in exchange for his services under this Agreement, the following compensation:     7.1. Annual Base Salary. Executive shall be paid an annual base salary of not less than $390,000.00 (the “Base Salary”), subject to payroll taxes and withholding, to be paid in substantially equal installments at the same intervals as other officers of Alaska Communications are paid. The annual Base Salary shall be prorated for the portions of the first and last calendar years of the Term of this Agreement based on the number of days Executive is employed in the position compared to the total number of days in the year. The Board shall periodically consider Executive’s Base Salary and make such increases as it deems appropriate. In the event that the Board increases Executive’s Base Salary, such increased Base Salary shall be deemed to be Executive’s Base Salary for purposes of this Agreement.     7.2. Annual Cash Incentive. In addition to the annual Base Salary, effective beginning in 2020, Executive is eligible for a target annual Cash Incentive (“CI”) payment, which shall not be less than 80% of the Base Salary, with the actual amount to be paid determined annually by the Compensation and Personnel Committee of the Board (“Committee”) based on his achievement of the annual performance objectives (“CI Objectives”). The Committee shall establish in writing both Executive’s CI Objectives and the metrics that will be used to determine if Executive met those CI Objectives within 90 days of the beginning of each performance year. Executive will be provided with a copy of the approved CI Objectives and metrics. Executive’s annual cash incentive for the 2019 performance year shall remain as awarded for his previous role. Except as otherwise specifically provided in this Agreement, to be eligible to receive CI in respect to performance in any performance year, Executive must be actively employed by Alaska Communications and in good standing on the day the annual CI amounts are paid for the relevant performance year. Payment of CI to Executive shall be made not later than the time such payments are made to any other Officers of Alaska Communications.   2 | Page       7.3. Long-Term Incentive and Retention Compensation.     7.3.1. Effective beginning in 2020 and during the Term of this Agreement, Executive shall be eligible to receive annual long-term awards (“LTAs”) in the form of time-vested Restricted Share Units, performance-based Performance Share Units or other equity or equity-based awards, or a combination thereof (“Equity”) and/or performance-based cash awards other than annual cash incentives. To align the interests of Executive with those of the Company shareholders, annual LTAs will be guided by the principle that annual LTAs will not be less than 125% of the value of the Base Salary. The specific quantity and type of LTAs (as well as the terms and conditions associated with and the grant date schedule for each LTA), however, shall be determined annually by the Compensation and Personnel Committee of the Board of Directors for each performance year. The annual LTAs shall vest only in the amounts and on the terms and schedule approved by the Board, including the accomplishment of any performance objectives set by the Board (the “LTA Objectives”). Each LTA shall be subject to the terms of an individual grant award agreement which must be executed by Executive within a reasonable amount of time following the grant as a condition of vesting the LTA and shall vest post separation only in compliance with the provisions of the Officer’s Severance Policy or this Agreement, including those restrictive covenants set forth in Section 12 of this Agreement.   7.3.2. Executive agrees to abide by Alaska Communications’ minimum executive equity holding policies, as those policies may be amended from time to time in the discretion of the Board. Currently, the minimum equity holding requirement for Executive’s position is to accumulate and hold a number of shares of Alaska Communications common stock, including both vested and unvested Equity grants having a value of at least three times Executive’s annual Base Salary, within five years of the Effective Date of this Agreement. Executive understands and accepts that the Board may modify these minimum holding requirements in the future and agrees that any such future modifications of holding requirements shall be binding on Executive.     7.4. Taxes and Withholding. All amounts paid to Executive or to Executive’s estate or beneficiaries, whether in cash or equity compensation, shall be subject to applicable payroll taxes and withholding as required by law, which shall be deducted from the cash payment(s) or shares of stock or stock units, as the case may be, before payment to Executive.     7.5. Notwithstanding anything to the contrary in this Agreement, in the event that a majority of the shareholders of the Company votes to disapprove: (i) any proposed employee stock incentive plan (“Plan”) or amendment to or extension of any such Plan which is necessary in order to continue awarding Equity grants to the Officers, Directors or employees of Alaska Communications; (ii) the authorization of additional shares of Company stock necessary to continue to provide Equity grants to the Officers, Directors or employees of Alaska Communications pursuant to any such Plan; or (iii) an advisory vote on Executive’s compensation package; the Parties shall promptly initiate good faith negotiations to amend this Agreement to take into account the results of any of the above shareholder votes. If the Parties are unable to reach agreement on an amendment that is satisfactory to both Parties within a reasonable period of time not to exceed 90 days, either Party may terminate this Agreement thereafter upon 30 days written Notice to the other Party, provided however, in the event that this Agreement is terminated under this section, the Parties shall promptly initiate good faith negotiations to resolve the amount, if any, of any severance payments due to Executive.   3 | Page     8. Additional Benefits.   During the Term of this Agreement, and in accordance with their normal eligibility requirements, Executive shall be entitled to participate in other Company benefit programs generally available to all or substantially all of Alaska Communications’ employees (excluding participation in Equity compensation and cash incentive programs other than as provided for in this Agreement) on no less favorable terms than are applicable to other Company executives, including health and welfare benefits, paid leave, retirement benefits and 401k plans, and the Alaska Communications employee stock purchase plan, all subject to the Board’s authority, from time to time, to add to, modify, replace or discontinue these generally applicable employee benefit programs in accordance with law. Executive shall be entitled to reimbursement of normal business expenses in accordance with the Company’s applicable expense reimbursement policies and procedures and shall be covered under Alaska Communications’ Directors and Officers insurance and corporate indemnification policies, as they may be amended from time to time, and subject to the terms and conditions of those respective plans and programs. Executive shall also receive an annual automobile allowance of no less than $750 per month, which shall be pro-rated in the first and last years of the Term. The Company agrees to reimburse Executive for his reasonable legal and other professional fees actually incurred with respect to the negotiation, and prior to the execution, of this Agreement, up to a maximum of twenty thousand dollars ($20,000.00), upon submission of adequate documentation of such payments by Executive. Reimbursement for legal expenses shall be made promptly, and no event later than March 15 of the year after the year in which this Agreement is executed by both Parties.   9. Insurance. At Alaska Communications’ request, Executive shall cooperate with Alaska Communications in obtaining, at Alaska Communications’ expense, key-man life insurance policies on Executive’s life, with Alaska Communications to be the beneficiary of any such policies. Alaska Communications’ inability to obtain such insurance due to the lack of insurability of Executive shall not be a   10. Termination of Employment. Upon termination of employment as President and CEO for any reason, Executive shall also cease serving as a director of the Company; in such event, Executive shall promptly execute and tender any documents that may be necessary to effectuate his resignation from the Board. Termination of Executive’s employment with Alaska Communications may be by any of the following means:     10.1. By Alaska Communications. Alaska Communications may terminate the employment of Executive at any time during the Term of this Agreement, with or without Cause (as defined in the Officer Severance Policy), upon the giving of written Notice to Executive of such termination in accordance with this Agreement. In the event of termination for Cause, the Company must specify the reasons for the termination in the written Notice provided to Executive.     10.2. By Executive. Executive may terminate his employment with Alaska Communications at any time during the Term of this Agreement, whether for Good Reason or otherwise, upon the giving of written Notice of his resignation in accordance with this Agreement.   4 | Page       10.3. Upon Retirement. Executive is eligible to terminate his employment by Retirement upon the giving of written Notice as provided in this Agreement, at any time he is eligible for Retirement as that term is defined in Section 11.11.5 of this Agreement.     10.4. Upon Death or Disability. This Agreement and Executive’s employment with Alaska Communications shall terminate immediately upon the Board’s determination of Death or Disability of Executive, as those terms are defined in this Agreement; provided, if Executive is disabled and unable to perform the normal duties of his position for any period longer than 60 days, the Board, in its discretion, may require Executive’s title, duties and responsibilities to be reassigned to and performed by another individual for any period of time during which Executive remains disabled, and such reassignment shall not be considered Good Reason for Executive to resign under the Officer Severance Policy or this Agreement.     10.5. Notice of Termination. All terminations of employment (other than termination for Death or Disability, which is provided for in Section 10.4 hereof), written Notice of the termination of employment shall be provided by Alaska Communications or the Executive, whichever initiates the termination. The Notice required by this section 10.5 shall be given at least 30 days in advance of the termination by the Party initiating the termination, during which period Executive’s employment and provision of services will continue; provided, however, that Alaska Communications may excuse Executive from any or all of his duties during the Notice period, without changing the date on which the Executive’s employment terminates or reducing the Executive’s compensation for the remainder of the Notice period.     10.6 Cooperation during transition. Upon Notice of the non-renewal or other termination of Executive’s employment or this Agreement for any reason, Executive shall provide transition assistance to the Company as is reasonably requested by the Board for a period not to exceed six months from the date of termination of his employment. Executive further agrees that, notwithstanding the termination of his employment, he will continue to reasonably cooperate with the Company in response to reasonable requests for information, affidavits, depositions, testimony or other assistance concerning matters involving the business, or in connection with any regulatory or other reviews or investigations, or the defense or prosecution or any claims, which relate to actions or events taking place while Executive was employed by the Company in which he was involved. Executive shall be reasonably compensated for his time (not to exceed $300 per hour) and receive reimbursement for expenses, including without limitation lost compensation and reasonable out-of-pocket travel, hotel and meal expenses incurred in connection with providing such transition assistance and cooperation at the Company’s request. Executive agrees that such cooperation shall be provided without the necessity of any subpoenas.   5 | Page     11. Severance Benefits.     11.1. Section 409A. For purposes of this Agreement, any installment payments or equity grants in installments shall constitute separate payments for purposes of Section 409A of the Internal Revenue Code (“Section 409A”). To the extent possible, payments under this Agreement are intended to qualify as short-term deferrals or as payments under a separation pay plan, as described in Treasury Regulation Sections 1.409A-1(b)(4) and -1(b)(9). To the extent Section 409A applies to any payment under this Agreement, this Agreement is intended to comply with Section 409A. Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted, applied, operated and administered in a manner consistent with such intentions, so as to avoid subjecting Executive to any additional tax or accelerated income recognition under Section 409A. Except with respect to any amounts that may qualify as short-term deferrals, no Severance Benefits that are payable under this Agreement on account of the Executive’s termination of employment shall be paid unless such termination constitutes a “separation from service,” as that term is defined in applicable Treasury regulations issued under Section 409A. Notwithstanding anything to the contrary in this Agreement, if at the time of the Executive’s termination of employment with the Company, Executive is a “Specified Employee,” as determined by the Company in accordance with Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in the payments or benefits ultimately paid or provided to the Executive) until the date that is at least six months following the Executive’s termination of employment with the Company (or the earliest date permitted under Section 409A of the Code), whereupon the Company will pay the Executive a lump-sum amount equal to the cumulative amounts that would have otherwise been previously paid to the Executive under this Agreement during the period in which such payments or benefits were deferred (without interest). Thereafter, any remaining payments will resume in accordance with this Agreement.     11.2. General. The severance payments and benefits (“Severance Benefits”) to be paid to Executive shall be governed by the Company’s Officer Severance Policy, except that, instead of the Severance Benefits provided for in Section 5.b. of the Officer Severance Policy, Executive shall receive, upon termination of his employment Without Cause or for Good Reason (as those terms are defined in the Officer Severance Policy), including when Section 7 of the Officer Severance Policy applies, all of the following:   (i)    the greater of either two years of Executive’s Base Salary or Executive’s Base Salary for the remaining Term of the Agreement;   (ii)   a pro-rated portion of the CI and LTA payment that Executive would have been entitled to for the performance year in which his employment was terminated based on the number of days actually worked during that performance year. This pro-rated potion of the CI will be paid to Executive at the same time as the other executives of the Company are paid their CI payment;   (iii)  any CI payment based on achievement of annual performance goals for the prior full performance year of Executive Officer’s employment, if unpaid as of the date of termination, with such CI payment to be paid if and when other executives are paid;   (iv)  any outstanding LTAs will continue to vest on the following basis:   (1) continued vesting of time vested awards that are scheduled to vest during subsequent periods; and   (2) continued vesting during subsequent periods, subject to the satisfaction of the applicable performance conditions established under the terms of the awards, of performance-based awards that vest in subsequent periods,   except that, if Section 7 of the Officer Severance Policy policies applies, all long-term incentive compensation, whether equity or cash or otherwise, will immediately vest and be released or paid, as appropriate; and   (v) up to one year after termination, reimbursement of any monthly federal medical COBRA premiums actually paid by the Executive for continuing medical insurance coverage for the Executive and family, less the standard employee contribution amount. Reimbursement will be provided no later than March 15 of the year after the year in which the expense was incurred.   6 | Page     Executive and Company acknowledge that this Agreement supersedes the Officer Severance Policy as described above, and that there is no intention for Employee to receive the Severance Benefits described in Section 5.b. of the Officer Severance Policy in addition to the Severance Benefits described above in Section 11.2(i) through (v). If the event of any conflict between the Officer Severance Policy and this Agreement, this Agreement shall control.   Executive understands and agrees that, except as set forth in Section 11.3 below, no Severance Benefits shall be paid if his employment terminates in accordance with Section 5 of this Agreement at the end of the Term or such later date to which the Term of his employment may be extended under Section 5 hereof. Upon termination of employment, Executive shall not be eligible for any Cash Incentive or other bonus compensation which has not been paid or, in the case of equity awards, have not vested or been exercised, as the case may be, prior to the date of termination of his employment, except as specifically provided in this Section 11 or the Officer Severance Policy. Except to the extent that it would cause a violation of Section 409A of the Code, Company may offset against any Severance Benefits which may be owing to Executive any amounts then owed by Executive to the Company. Executive acknowledges and agrees that his entitlement to any Severance Benefits is conditioned upon Executive’s execution, timely delivery and non-revocation of the Officer’s Release in favor of Company in the form set forth in Exhibit A to the Officer Severance Policy, except that the non-compete, non-solicitation, and non-disparagement provisions contained in the Release shall be identical to the such provisions in this Agreement. Company shall tender to Executive the Officer’s Release within ten days after termination of his employment. Severance Benefits shall be paid on the last day of the 60-day period following Executive’s termination of employment or, in the case of CI and LTA Severance Benefits, paid or vested as described in Section 11.2.     11.3. Termination in accordance with Section 5 of this Agreement. In the event Executive’s employment terminates at the end of the Term, including any extension thereof, Alaska Communications shall pay Executive all of the following:   (i)       a Cash Incentive payment for the prior full performance year of Executive’s employment, if Cash Incentive for such prior performance year is unpaid as of the date of termination of Executive’s employment in the subsequent year, with the amount to be based on the Committee’s determination of achievement of annual performance Objectives which were set by the Committee for such prior performance year;   (ii)      vesting of any outstanding LTAs on the following basis: (1) continued vesting of time vested awards that are scheduled to vest during subsequent periods; and (2) continued vesting during subsequent periods, subject to the satisfaction of the applicable performance conditions established under the terms of the awards, of performance-based awards that vest in subsequent periods; and   (iii)     for up to one year after termination, reimbursement of any monthly federal medical COBRA premiums actually paid by the Executive for continuing medical insurance coverage for the Executive and family, less the standard employee contribution amount. Reimbursement will be provided no later than March 15 of the year after the year in which the expense was incurred. To the extent Executive is eligible for medical benefits coverage under a subsequent employer’s medical plan and before the applicable time period has elapsed, Executive will no longer be eligible for reimbursement of COBRA premiums pursuant to this Section 11.3. Executive must notify the Company of the start date of the replacement coverage. Any payments for COBRA coverage or other benefits to which Executive was not entitled must be reimbursed to the Company. Adequate documentation of payment of COBRA premiums is required in order to qualify for reimbursement.   7 | Page       11.4 Limitation on Payments. If it is determined that any payment or benefit provided to or for the benefit of Executive (a "Payment"), whether paid or payable or otherwise, would be subject to the excise tax imposed by Code section 4999, or any interest or penalties with respect to such excise tax (such excise tax together with any such interest and penalties, shall be referred to as the "Excise Tax"), then the following provisions (Section 11.4.1 through 11.4.6, below) shall apply.     11.4.1 The Company shall calculate the following:   (i) Executive's Net After-Tax Benefit (as defined in 11.4.2 below) assuming that Payments to the Executive are reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax (the "4999 Limit").   (ii) Executive's Net After-Tax Benefit without application of the 4999 Limit.     11.4.2 "Net After-Tax Benefit" shall mean the sum of (i) all payments that Executive receives or is entitled to receive that are contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within the meaning of Code section 280G(b)(2), less (ii) the amount of federal, state, local, employment, and Excise Tax (if any) imposed with respect to such Payments.     11.4.3 In the event the amount in 11.4.1(i) is greater than the amount in 11.4.1(ii), Executive shall receive Payments only up to the 4999 Limit. Reductions in Payments shall be made in the following order:   (i) lump sum cash Severance Pay under the Officer Severance Policy;   (ii) COBRA Severance Benefits under the Officer Severance Policy, with the reduction made in the order such Payments are paid, starting with the first paid.     11.4.4 In the event the amount in 11.4.1(ii) is greater than the amount in 11.4.1(i), then Executive shall be entitled to receive all such Payments and shall be solely liable for any and all Excise Tax with respect to such Payments.     11.4.5 The determinations required to be made under this Section 11.4 shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Executive within 15 business days of the receipt of notice from the Company or Executive that Payments are due under this Agreement, or such earlier time as is requested by the Company. Notwithstanding the foregoing, in the event (i) the Board shall determine prior to the Change in Control that the Accounting Firm is precluded from performing such services under applicable auditor independence rules or (ii) the Audit Committee of the Board determines that it does not want the Accounting Firm to perform such services because of auditor independence concerns or (iii) the Accounting Firm is serving as accountant or auditor for the person(s) effecting the Change in Control, the Board shall appoint another nationally certified public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees, costs and expenses (including, but not limited to, the costs of retaining experts) of the Accounting Firm shall be borne by the Company. The determination by the Accounting Firm shall be binding upon the Company and Executive (except as provided in Section 11.4.6 below). If payments are reduced to the 4999 Limit or the Accounting Firm determines that no Excise Tax is payable by Executive without a reduction in Payments, the Company shall fulfill its withholding and reporting obligations in a manner consistent with a determination that the Executive is not required to report any Excise Tax on the Executive’s federal income tax return.     8 | Page       11.4.6 If it is established pursuant to a final determination of a court or an Internal Revenue Service (the “IRS”) proceeding which has been finally and conclusively resolved, that Payments have been made to, or provided for the benefit of, Executive by the Company, which are in excess of the limitations provided in this Section 11.4 (referred to hereinafter as an “Excess Payment”), Executive shall repay the Excess Payment to the Company on demand, together with interest on the Excess Payment at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of Executive’s receipt of such Excess Payment until the date of such repayment. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the determination, it is possible that Payments which will not have been made by the Company should have been made (an “Underpayment”), consistent with the calculations required to be made under this Section. In the event that it is determined (i) by the Accounting Firm, the Company (which shall include the position taken by the Company, or together with its consolidated group, on its federal income tax return) or the IRS or (ii) pursuant to a determination by a court, that an Underpayment has occurred, the Company shall pay an amount equal to such Underpayment to Executive within ten (10) days of such determination together with interest on such amount at the applicable federal rate from the date such amount would have been paid to Executive until the date of Payment, provided that any such Underpayment shall constitute a payment (within the meaning of Treasury Regulation Section 1.409A-2(b)(2)) separate and apart from the Payments; and provided, further, that any such Underpayment shall be deemed a disputed payment (within the meaning of Treasury Regulation Section 1.409A-3(g)). Executive shall cooperate, to the extent the Executive’s expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the IRS in connection with the Excise Tax or the determination of the Excess Payment. Notwithstanding the foregoing, in the event that amounts payable under this Agreement were reduced pursuant to this Section 11.8 and the value of the Payments is subsequently re-determined by the Accounting Firm within the context of Treasury Regulation §1.280G-1 Q/A 33 that reduces the value attributable to such Payments, the Company shall promptly pay to Executive any amounts Payable under this Agreement that were not previously paid solely as a result of this Section 11.4, subject to the 4999 Limit.     11.5 Retirement. Executive is not entitled to any Severance Benefits upon termination of his employment due to his retirement. Upon retirement, Executive may be entitled to retirement benefits as provided in any applicable Company retirement benefits plan, as such plan may be amended from time to time or replaced. Executive shall not be entitled to any Cash Incentive or other bonus compensation which is unpaid as of the date of his termination of employment due to retirement, nor to the vesting (or exercise, in the case of stock options or appreciation rights) of any LTAs, except as provided in the terms of the award agreements executed by Executive in regard to each LTA grant, or as otherwise expressly provided in this Agreement. If after retirement Executive accepts employment with or becomes “related to or connected with” a Competitor, as set forth in Section 12.1 hereof, any unvested or unexercised equity awards to which he would otherwise be entitled shall be forfeited as of the date of Executive’s acceptance of such employment or other relationship or connection to any such Competitor. Executive shall promptly notify Alaska Communications in writing of his acceptance of employment or other engagement by a Competitor which affects unvested or unexercised equity awards under this Section 11.5.   9 | Page     12. Restrictive Covenants.     12.1. Non-Competition. Executive agrees that he will not, directly or indirectly, during his employment with Alaska Communications, and for a period of two years after termination of his employment with Alaska Communications for any reason or for so long as Executive has outstanding unvested LTAs, whichever is longer, be an officer or director of, or be employed by, contract or consult with, or otherwise perform services for, own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be related to or connected with (as defined below), in any manner (collectively “engaged by”), any Competitor of Alaska Communications, as that term is defined herein. A “Competitor” shall include any person or entity which, directly or via partnership, affiliation, or similar business arrangement, competes with Alaska Communications or produces, markets, distributes or otherwise derives benefits from the production, marketing or distribution of products or services which compete with the products or services being marketed by Alaska Communications at the time of Executive’s termination of employment, or for new products or services that are marketed after Executive’s separation from the Company but which Executive was involved in preparing for the market, within the significant markets served by Alaska Communications at the time of termination of Executive’s employment. Executive shall be deemed to be “related to or connected with” a Competitor if such Competitor is (a) a partnership in which he is a general or limited partner or employee; (b) a corporation or association of which he is a member, employee, consultant or agent; provided, however, that nothing herein shall prevent Executive from the purchase or ownership of shares which constitute less than five percent of the outstanding equity of a publicly held corporation, if Executive has no other relationship with such corporation.     12.2. Non-Solicitation. Executive agrees that during his employment by Alaska Communications and for a period of one year after the date upon which his employment with Alaska Communications terminates for any reason or for so long as Executive has outstanding unvested LTAs, whichever is longer, he shall not, directly or indirectly, (i) solicit, influence or entice, or attempt to solicit, influence or entice, any officer, employee, agent, contractor, consultant, partner, joint venture, supplier or customer of Alaska Communications to terminate his or her employment with Alaska Communications or to cease its business relationship with Alaska Communications; or (ii) solicit, influence, entice or in any way divert any officer, employee, agent, contractor, customer, potential customer, distributor, partner, joint venture or supplier of Alaska Communications to do business or in any way become associated with any Competitor of Alaska Communications.     12.3. Non-Disparagement. Each party agrees that during Executive’s employment by Alaska Communications and for a period of two years after termination of Executive’s employment with Alaska Communications for any reason or for so long as Executive has outstanding unvested LTAs, whichever is longer, unless otherwise required by law, neither will make any statement, whether oral, written, or electronic, regarding the other or any aspect of Alaska Communications’ business, including but not limited to, its finances, business strategy or plans, customers or potential customers, directors, officers or employees (including Executive), that is unfavorable to or which disparages Executive or Alaska Communications or which adversely affects Executive’s or Company’s standing or reputation with the public or in the telecommunications industry.   10 | Page       12.4. Confidentiality and Non-Disclosure. Executive acknowledges that, in the course of employment with the Company, he has had and will continue to have access to and learn confidential information. Confidential information includes, but is customers, customer data, pricing and other terms and conditions under which the Company deals with customers or other companies, pricing and other information related to the purchase or sale of company stock, assets or products, financing and securitization arrangements, research materials, manuals, computer programs, systems, formulas, data, techniques, network maps, technical information, trade secrets, product development information, marketing plans and tactics, lists of suppliers and suppliers’ terms and pricing, the processes and practices of the Company and any competitor companies, financial information, information prepared for or generated by the Alaska Communications Board of Directors, wages and salary information, labor agreements, personnel information, and any other information designated by the Company as confidential or that Executive knows or should know is confidential information, including the confidential information of third parties, information subject to non-disclosure or confidentiality agreements, and all other proprietary information of the Company (collectively “Confidential Information”). Executive acknowledges and agrees that all Confidential Information is and shall continue to be the exclusive property of the Company, whether or not prepared in whole or in part by the Executive and whether or not disclosed to or entrusted to the Executive in connection with his employment with the Company, and it shall be returned to the Company upon termination of Executive’s employment for any reason. Executive agrees that during his employment with Alaska Communications and at all times thereafter, he shall keep secret all Confidential Information and shall not disclose Confidential Information, directly or indirectly, under any circumstances or by any means, to any third persons without the prior written consent of the Company. Executive agrees that he will not copy, transmit, reproduce, summarize, quote or make any commercial or other use whatsoever of Confidential Information, except as may be necessary to perform work done by Executive for the Company. Executive agrees to exercise the highest duty of care in safeguarding Confidential Information against loss, theft or other inadvertent disclosure and agrees generally to take all steps necessary or requested by the Company to ensure protection of the confidentiality of the Confidential Information. Executive further agrees, in addition to the specific covenants contained herein, to comply with all of the Company’s policies and procedures, as well as all applicable laws, for the protection of Confidential Information.     12.5. Clawback Requirement. Upon written Notice by the Board of Directors or any Committee of the Board to Executive describing a repayment obligation and amount owed under this Section 12.5, Executive shall be required to return to or reimburse the Company for any amount of Cash Incentive or bonus payment, any equity award made (or the value thereof), the profits realized from the sale of securities of the Corporation, or any Severance Benefit or payment, as the case may be, that was provided to Executive on the basis of financial results later found to require an accounting restatement as set forth in Section 304 of the Sarbanes-Oxley Act of 2002, as amended (15 U.S.C. 7243) or Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (15 U.S.C. 78j-4) or their implementing regulations (as the same may be adopted or amended in the future); provided, the reimbursement required by this Section 12.5 shall be for the time periods as set forth in each relevant statute, above, and, provided further, that any clawback policy adopted by the Company may be modified subsequently by the Company to the extent necessary to comply with any applicable law, regulation or exchange listing standard, without the necessity that this Agreement be amended or that Executive consent to the application of such policy. In addition, Executive shall be required to return to or reimburse the Company for any Severance Benefits received under this Agreement if the Company subsequently discovers within a period of two years after termination of Employee’s employment, or longer period if required by applicable law, any actions or omissions by Executive prior to termination of his employment which would have warranted his termination for Cause under this Agreement, or any action by Executive subsequent to the termination of his employment which constitutes a breach of the restrictive covenants in this Section 12. Executive agrees to promptly (within 30 days of written Notice from the Company) make any such repayment owed to Alaska Communications. This clawback requirement shall apply during Executive’s Term of employment and shall survive the termination of his employment and this Agreement, regardless of Executive’s employment status   11 | Page       12.6. Corporate Governance and Compliance. At all times during his employment with Alaska Communications, Executive agrees to abide and be bound by the provisions of the Alaska Communications Articles of Incorporation, its Bylaws, all resolutions and other decisions of the Board of Directors, its Chairman, and Committees of the Board, within the lawful scope of their authority, governing statutes, regulations, Corporate Governance Principles, as approved by the Board, and the Alaska Communications Corporate Compliance Program Manual (including its appendices). Executive acknowledges and accepts that these documents may be amended from time to time in the future, and that such documents and any such future amendments, shall be deemed to be specifically incorporated into this Agreement and shall be applicable to and binding on Executive at all times under this Agreement.   13. Equitable Relief. Executive acknowledges and agrees that the provisions of Section 12 of this Agreement are essential to Alaska Communications, that Alaska Communications would not enter into this Agreement if it did not include said Section 12, that a violation of Section 12 would constitute a material breach of this Agreement, and that the damages sustained by Alaska Communications as a result of Executive’s breach of Section 12 of this Agreement cannot be adequately remedied solely by an award of money damages. Therefore, Executive agrees that, in addition to any other remedy the Company may have under this Agreement or at law, Alaska Communications shall be entitled to injunctive and other equitable relief to prevent or halt any breach or threatened breach of Section 12 of the Agreement by Executive.   14. Effect of Violation. Executive and Alaska Communications acknowledge and agree that additional good and sufficient compensation has been provided to Executive in exchange for his agreement to the provisions of Section 12 of this Agreement. Therefore, in addition the Company’s remedies in equity and at law, Executive’s material violation of Section 12 of this Agreement shall relieve Alaska Communications of any obligation it may have to pay any Cash Incentive compensation, bonuses or Severance Benefits that may otherwise be owing but unpaid to Executive, and Alaska Communications may cancel any unvested rights to shares of Company stock, but these actions by Alaska Communications shall not relieve Executive of his obligations under this Agreement.   15. Intellectual Property. Any and all inventions, discoveries, ideas, improvements, creations, works of authorship, or other intellectual property, whether or not patentable or copyrightable (“Intellectual Property”), made or conceived by Executive during his employment with the Company, shall be and at all times remain exclusively the property of Alaska Communications. Executive hereby assigns to the Company all of his rights to any such Intellectual Property and agrees to promptly disclose any such Intellectual Property in writing to the Company. Executive further agrees to execute and assign any and all proper applications, assignments and other documents and to render all assistance reasonably necessary to obtain patent, copyright or trademark protection for any such Intellectual Property in Alaska Communications’ name.   16. Representations and Warranties. Executive represents and warrants that he is not a party to nor bound by any other agreement or arrangement that would in any manner conflict with or impede his execution or performance of this Agreement, or his performance of any duties imposed upon Executive by Alaska Communications’ Articles of Incorporation, its Bylaws, Corporate Governance Principles, Corporate Compliance Program, or any corporate or other statutory or common law.   12 | Page     17. Insurance and Indemnity. The Company shall, to the extent permitted by law, include Executive during the Term of this Agreement under any directors and officers’ liability insurance policies maintained for its directors and officers, with coverage at least as favorable to the Executive in amount and other material respects as the coverage provided other directors and officers covered thereby, as such insurance policies may be amended from time to time. The Company’s obligation to provide insurance and indemnify the Executive under the terms of such policies shall survive expiration or termination of this Agreement with respect to proceedings or threatened proceedings based on acts or omissions of the Executive occurring during the Executive’s employment with Alaska Communications.   18. Notice. Whenever Notice, demands and other communications to a Party are provided for in this Agreement, such Notice shall be given in writing, addressed to Executive or the Board, as the case may be, with a copy of each such Notice provided to the General Counsel of Alaska Communications. Notice under this Agreement shall be considered effective when actually delivered by hand, overnight courier service or first-class mail, return receipt requested to the addresses provided herein, or to such other address as any Party shall have furnished in writing to the other Party in the same manner as required by this Section 18.   Notice to the Board of Directors of Alaska Communications shall be provided to:   Board of Directors Alaska Communications Systems Group, Inc. 600 Telephone Avenue, MS 65 Anchorage, Alaska 99503   with a copy to the Alaska Communications General Counsel at the same address.   Notice to Executive shall be provided to the following address:   William H. Bishop 1510 H St. Anchorage AK 99501   Except as to notice for matters relating to termination of Executive’s employment, non-renewal of this Agreement, and claims for Severance Benefits under this Agreement or the Officer Severance Policy, the timing of which Notice is governed by the relevant Sections of this Agreement pertaining to each of them, as to all other matters, Notice describing a breach of this Agreement by either Party shall be provided to the other Party in writing, as provided in this Section 18, and shall provide a minimum of 30 days for the Party alleged to be in breach to correct the breach before taking further action in response to the breach. This 30-day notice period may be waived by the Board in the event of a material breach by Executive that causes or threatens to cause significant adverse effects on the Company or its shareholders.   19. Assignment. This Agreement is personal to Executive and shall not be assignable by Executive. No right or interest in any payments to Executive (including rights to stock awards) shall be assignable by Executive. Alaska Communications may assign its rights and obligations under this Agreement to (i) any entity resulting from any merger, consolidation or other reorganization or Business Consolidation to which Alaska Communications is a party; or (ii) any corporation, partnership, association or other person or entity to which Alaska Communications may transfer all or substantially all of the assets and business of the Company existing as the time of the assignment. In the event of a permitted assignment, all of the terms and conditions of this Agreement shall continue to be binding upon and shall inure to the benefit of and be enforceable by the Parties to this Agreement and their respective successors and permitted assigns. Assignments not permitted by this Agreement shall be deemed void.   13 | Page     20. No third-party beneficiaries. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person (other than the Parties hereto and, in the case of Executive, his estate, heirs or personal representatives), any rights or remedies under or by reason of this Agreement.   21. Waiver. No failure or delay by either party to this Agreement in exercising, protecting or enforcing any of it rights, interests or remedies hereunder, and no course of dealing or performance with respect thereto, shall constitute a waiver of any provision of this Agreement or the Agreement as a whole, either in one instance or any other instance or circumstance. All rights and remedies of the parties under this Agreement shall be cumulative and not exclusive any other rights or remedies.   22. Amendments. No amendment, modification, waiver, departure from or discharge of any provision of this Agreement shall be effective unless it is made in writing, specifically identifying the Agreement and the provision(s) to be amended and signed by both Alaska Communications and Executive. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other means not set forth in a written amendment in accordance with this Section 22 and signed by Alaska Communications and Executive.   23. Rules of Construction. This Agreement has been jointly drafted and freely and fully negotiated by the Parties, each of which has had ample opportunity to consult with its attorneys, and, consequently, the terms and conditions hereof shall not be subject to any rules of construction or presumptions in favor of or against either Party. When the context requires, the plural shall be deemed to include the singular, and the singular shall include the plural in this Agreement. Except as to words specifically defined in this Agreement, which definitions shall control, words in this Agreement shall be given their ordinary meanings. In the event of any inconsistency between this Agreement and any other plan, program, practice or agreement otherwise applicable to Executive or the Company, this Agreement shall control.   24. Arbitration; Applicable Law; Venue. Any dispute, controversy, or claim arising out of or related to this Agreement or any breach of this Agreement shall be submitted to and decided by binding arbitration. Arbitration shall be administered exclusively by JAMS and shall be conducted consistent with the rules, regulations, and requirements thereof as well as any requirements imposed by Alaska state law. Any arbitral award determination shall be final and binding upon the parties.   25. Attorney’s Fees. Each Party shall bear its own attorney’s fees and costs incurred in any action or dispute arising out of this Agreement.   26. Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable in any jurisdiction, for any reason, including, without limitation, the duration of such provision, its geographical scope or the extent of the activities prohibited or required by it, to the full extent permitted by law: (a) all other provisions of this Agreement shall remain in full force and effect and shall be liberally construed in order to carry out the intent of the Parties hereto as nearly as may be possible; (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement; and (c) any court having jurisdiction shall have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law.   27. Survival. Termination of Executive’s employment with the Company or termination or expiration of this Agreement shall not affect the continued effectiveness of provisions of this Agreement that, by their content, context, implication or effect, should survive in order to effectuate the intent of the Agreement.   14 | Page     28. Headings. All headings used in this Agreement are for convenience only and shall not in any way affect the construction of, or be taken into consideration in interpreting, this Agreement.   29. Counterparts. This Agreement, and any Amendment entered into pursuant to Section 22 of this Agreement, may be executed in counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same instrument.   30. Entire Agreement. This Agreement constitutes the entire agreement between Alaska Communications and Executive with respect to the subject matter hereof, and all prior or contemporaneous oral or written communications, representations, promises, understandings or agreements between Alaska Communications and Executive with respect to the employment relationship are hereby superseded and nullified in their entireties, and this Agreement shall control. No agreements or representations, oral or otherwise, with respect to the subject matter of this Agreement have been made by either Party which are not set forth in this Agreement.   IN WITNESS WHEREOF, Alaska Communications and Executive have executed and entered into this Agreement on the date set forth below.   EXECUTIVE:   By:   William H. Bishop (Signature)   Name: William H. Bishop Date:   October 14, 2019   ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.     By:   Leonard Steinberg (Signature)   Name: Leonard Steinberg   Its: Senior Vice President and Corporate Secretary     15 | Page

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-1 /A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 QUEENSRIDGE MINING RESOURCES, INC. (Exact name of Registrant as specified in its charter) Nevada 27-1830013 (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 912 Sir James Bridge Way Las Vegas, Nevada 89145 (Name and address of principal executive offices) Registrant's telephone number, including area code:(702) 596-5154 Valu-U-Corp Services, Inc 1802 North Carson St., Ste. 108 Carson City, NV 89701 (Name and address of agent for service of process) Telephone number of agent for service of process: (775) 887-8853 Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If any of the securities being registered on the Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|| If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|| If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|| If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.|| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer ||Accelerated filer || Non-accelerated filer ||Smaller reporting company |X| CALCULATION OF REGISTRATION FEE TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED AMOUNT TO BE REGISTERED PROPOSED MAXIMUM OFFERING PRICE PER SHARE PROPOSED MAXIMUM AGGREGATE OFFERING PRICE (1) AMOUNT OF REGISTRATION FEE Common Stock This price was arbitrarily determined by Queensridge Mining Resources, Inc. Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act. COPIES OF COMMUNICATIONS TO: Puoy K. Premsrirut, Esq. 520. S. Fourth Street, Second Floor Las Vegas, NV 89101 Ph: (702) 384-5563 Table of Contents THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE. SUBJECT TO COMPLETION, Dated August 11, 2010 PROSPECTUS QUEENSRIDGE MINING RESOURCES, INC. SHARES OF COMMON STOCK INITIAL PUBLIC OFFERING The selling shareholders named in this prospectus are offering up to 1,702,800 shares of common stock offered through this prospectus.We will not receive any proceeds from this offering and have not made any arrangements for the sale of these securities.We have, however, set an offering price for these securities of $0.25 per share.We will use our best efforts to maintain the effectiveness of the resale registration statement from the effective date through and until all securities registered under the registration statement have been sold or are otherwise able to be sold pursuant to Rule 144 promulgated under the Securities Act of 1933. Offering Price Underwriting Discounts and Commissions Proceeds to Selling Shareholders Per Share None Total None Our common stock is presently not traded on any market or securities exchange.The sales price to the public is fixed at $0.25 per share until such time as the shares of our common stock are traded on the Over-The-Counter Bulletin Board.Although we intend to apply for quotation of our common stock on the Over-The-Counter Bulletin Board, public trading of our common stock may never materialize.If our common stock becomes traded on the Over-The-Counter Bulletin Board, then the sale price to the public will vary according to prevailing market prices or privately negotiated prices by the selling shareholders. We intend to seek quotation of our common stock on the OTCBB immediately following the effectiveness of the Registration Statement of which this Prospectus is a part. Mr. Phillip Stromer, our sole officer, sole director, and controlling shareholder, does not have any prior mining experience or any technical training as a geologist or an engineer.Because our management does not have any training specific to the technicalities of mineral exploration, there is a higher risk our business will fail. The purchase of the securities offered through this prospectus involves a high degree of risk.See section of this Prospectus entitled "Risk Factors." Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The information in this prospectus is not complete and may be changed.We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.The prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. The Date of This Prospectus Is:August 11, 2010 2 Table of Contents Table of Contents Page Summary 5 Risk Factors 7 Risks Related To Our Financial Condition and Business Model 7 If we do not obtain additional financing, our business will fail 7 Because we will need additional financing to fund our extensive exploration activities, our auditors believe there is substantial doubt about our ability to continue as a going concern 7 Because we have only recently commenced business operations, we face a high risk of business failure 8 Because our executive officer does not have any training specific to the technicalities of mineral exploration, there is a higher risk our business will fail 8 Because the Cutwell Harbour property has not been physically examined by a professional geologist or mining engineer, we face a significant risk that the property will not contain commercially viable deposits of gold or other minerals. 8 Because we conduct our business through verbal agreements with consultants and arms-length third parties, there is a substantial risk that such persons may not be readily available to us and the implementation of our business plan could be impaired. 8 Because of the unique difficulties and uncertainties inherent in the mineral exploration business, we face a high risk of business failure 8 Because we anticipate our operating expenses will increase prior to our earning revenues, we may never achieve profitability 9 Because we will incur additional costs as the result of becoming a public company, our cash needs will increase and our ability to achieve net profitability may be delayed 9 Because our president has agreed to provide his services on a part-time basis, he may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail 9 Because our president, Mr. Phillip Stromer, owns 48.23% of our outstanding common stock and serves as our sole director, investors may find that corporate decisions influenced by Mr. Stromer are inconsistent with the best interests of other stockholders 10 Because our president, Mr. Phillip Stromer, owns 48.23% of our outstandingcommon stock the market price of our shares would most likely decline if he were to sell a substantial number of shares all at once or in large blocks. 10 If we are unable to successfully compete within the mineral exploration business, we will not be able to achieve profitable operations. 10 Because of factors beyond our control which could affect the marketability of any substances found, we may have difficulty selling any substances we discover. 11 Risks Related To Legal Uncertainty 11 Because we will be subject to compliance with government regulation which may change, the anticipated costs of our explorationprogram may increase 11 If Native land claims affect the title to our mineral claims, our ability to prospect the mineral claims may be lost. 11 3 Table of Contents Because the Province of Newfoundland and Labrador owns the land covered by the Cutwell Harbour mineral claims, our availability to conduct an exploratory program on the Cutwell Harbour mineral claims is subject to the consent of the Province of Newfoundland and Labrador and we can be ejected from the land and our interest in the land could be forfeit. 12 Because certain legislation, including the Sarbanes-Oxley Act of 2002, increases the cost of compliance with federal securities regulations as well as the risks of liability to officers and directors, we may find it more difficult for us to retain or attract officers and directors. 12 Risks Related To This Offering 13 If a market for our common stock does not develop, shareholders may be unable to sell their shares 13 If the selling shareholders sell a large number of shares all at once or in blocks, the market price of our shares would most likely decline 13 Because we will subject to the “Penny Stock” rules, the level of trading activity in our stock may be reduced. 13 If our shares are quoted on the over-the-counter bulletin board, we will be required to remain current in our filings with the SEC and our securities will not be eligible for quotation if we are not current in our filings with the SEC. 14 If we undertake future offerings of our common stock, purchasers in this offering will experience dilution of their ownership percentage 14 Forward-Looking Statements 14 Use of Proceeds 14 Determination of Offering Price 14 Dilution 15 Selling Shareholders 15 Plan of Distribution 18 Description of Securities 19 Interest of Named Experts and Counsel 20 Description of Business 21 Description of Property 26 Legal Proceedings 27 Market for Common Equity and Related Stockholder Matters 28 Financial Statements 30 Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Changes in and Disagreements with Accountants 33 Directors and Executive Officers 33 Executive Compensation 34 Security Ownership of Certain Beneficial Owners and Management 36 Disclosure of Commission Position on Indemnification for Securities Act Liabilities 37 Certain Relationships and Related Transactions 37 Available Information 38 Dealer Prospectus Delivery Obligation 38 Other Expenses of Issuance and Distribution 39 Indemnification of Directors and Officers 39 Recent Sales of Unregistered Securities 40 Exhibits 41 Undertakings 41 Signatures 42 4 Table of Contents Summary Queensridge Mining Resources, Inc. We are in the business of mineral exploration.We have acquired a 100% interest in the Cutwell Harbour block of minerals claim located in northern Newfoundland in Canada.Our ownership in the Cutwell Harbour claims was electronically staked and recorded under the electronic mineral claim staking and recording procedures of the Online Mineral Claims Staking System administered by the Department of Natural Resources, Government of Newfoundland and Labrador, Canada.A party is able to stake and record an interest in a particular mineral claim if no other party has an interest in the said claim that is in good standing and on record.There is no formal agreement between us and the Government of Newfoundland and Labrador. We have not commenced our planned exploration program. Our plan of operations is to conduct mineral exploration activities on the Cutwell Harbour mineral claims in order to assess whether these claims possess commercially exploitable mineral deposits. Our exploration program is designed to explore for commercially viable deposits of gold and other metallic minerals.We have not, nor to our knowledge has any predecessor, identified any commercially exploitable reserves of these minerals on the Cutwell Harbour mineral claims.We are an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on the Cutwell Harbour mineral claims. The mineral exploration program, consisting of geological mapping, sampling, and geochemical analyses is oriented toward identifying areas of vein or stockwork mineralization within the Cutwell Harbour mineral claims. Currently, we are uncertain of the number of mineral exploration phases we will conduct before concluding whether there are commercially viable minerals present on the Cutwell Harbour mineral claims.Further phases beyond the current exploration program will be dependent upon a number of factors such as a consulting geologist’s recommendations based upon ongoing exploration program results, and our available funds. Since we are in the exploration stage of our business plan, we have not yet earned any revenues from our planned operations. As of June 30, 2010, we had $35,065 cash on hand and current liabilities in the amount of $7,810. Accordingly, our working capital position as of June 30, 2010 was $27,255.Since our inception through June 30, 2010, we have incurred a net loss of $11,545.We attribute our net loss to having no revenues to offset our expenses and the professional fees related to the creation and operation of our business.Our management estimates that, until such time that we are able to identify a commercially viable mineral deposit and to generate revenue from the extraction of precious metals on our mineral claims, we will experience negative cash flow in the approximate average amount of $3,000 to $4,000 per month. This figure is an estimated average, and our actual expenditures any given month may be significantly higher or lower than this estimated range. Our fiscal year end is June 30.We were incorporated on January 29, 2010, under the laws of the state of Nevada. Our principal offices are located at 912 Sir James Bridge Way, Las Vegas, Nevada 89145.Our resident agent is Val-U-Corp Services, Inc., 1802 N. Carson St., #212, Carson City, NV 89701.Our phone number is (702) 596-5154. 5 Table of Contents The Offering Securities Being Offered Up to 1,702,800 shares of our common stock. Offering Price and Alternative Plan of Distribution The offering price of the common stock is $0.25 per share.We intend to apply to the over-the-counter bulletin board to allow the trading of our common stock upon our becoming a reporting entity under the Securities Exchange Act of 1934. If our common stock becomes so traded and a market for the stock develops, the actual price of stock will be determined by prevailing market prices at the time of sale or by private transactions negotiated by the selling shareholders.The offering price would thus be determined by market factors and the independent decisions of the selling shareholders. Minimum Number of Shares To Be Sold in This Offering None Securities Issued and to be Issued 6,427,800 shares of our common stock are issued and outstanding as of the date of this prospectus. All of the common stock to be sold under this prospectus will be sold by existing shareholders. There will be no increase in our issued and outstanding shares as a result of this offering. Use of Proceeds We will not receive any proceeds from the sale of the common stock by the selling shareholders. Summary Financial Information Balance Sheet Data From Inception on January 29, 2010 through June 30, 2010 (audited) Cash $ Total Assets $ Liabilities $ Total Stockholder’s Equity

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 9, 2012 MEDTOX SCIENTIFIC, INC. (Exact name of registrant as specified in its charter) Delaware 1-11394 95-3863205 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 402 West County Road D, St. Paul, Minnesota (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (651) 636-7466 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02.Results of Operations and Financial Condition On February 9, 2012, MEDTOX Scientific, Inc. announced results for the fourth quarter and year-ended December 31, 2011, as described in the press release attached as Exhibit 99.1. 2 Item 9.01.Financial Statements and Exhibits. (c) Exhibits. The following exhibit is filed as part of this report: ExhibitNo. Description MEDTOX Scientific, Inc. Press Release, dated February 9, 2012. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MEDTOX Scientific, Inc. Date:February 9, 2012By:/s/ Richard J. Braun Name:Richard J. Braun Title:Chief Executive Officer 4 INDEX TO EXHIBITS ExhibitNo. Description MEDTOX Scientific, Inc. Press Release, dated February 9, 2012. 5

Exhibit 10.1   SEPARATION AGREEMENT   This Separation Agreement (“Separation Agreement” or “Agreement”) is made between and Gary H. Rabin (“Executive”) and Advanced Cell Technology, Inc., a Delaware corporation (along with its parents, subsidiaries and affiliates, the “Company” and, together with the Executive, the “Parties”).   WHEREAS, the Parties entered into an Employment Agreement dated July 1, 2011 (the “Employment Agreement”) which expired on December 31, 2013, except that, by its terms, Section 11 of the Employment Agreement survives the expiration of the Agreement and remains in full force and effect;   WHEREAS, the Executive’s employment with the Company continued after the expiration of the Employment Agreement;   WHEREAS, the Executive and the Company have mutually agreed that Executive will separate from his employment with the Company, effective January 21, 2014 (the “Separation Date”);   WHEREAS, on the Separation Date, the Company shall pay the Executive: (i) all accrued and unpaid Base Salary through the Separation Date, and (ii) $123,461.53 for all of the Executive’s accrued but unused vacation through the Separation Date. In addition, the Company will reimburse Executive for all reasonable business expenses incurred by Executive on or before the Separation Date in accordance with the Company’s policies and practices, provided Executive has provided acceptable documentation within thirty (30) days of the Separation Date (the foregoing defined as the “Accrued Benefit”);   WHEREAS, in the interest of an amicable transition, the Company will provide certain payments and benefits (the “Separation Benefits”) to Executive, provided Executive enters into and complies with this Separation Agreement;   of which is hereby acknowledged, the Parties hereby agree as follows:   1. Resignation from Officer Positions; Board Service. The Executive hereby resigns as of the Separation Date as an officer and director of the Company as well as from any other officer and director positions he holds with the Company or with any of the Company’s subsidiaries. The Executive agrees to sign any other documents that the Company may reasonably request in order to effectuate such resignation(s), after such documentation is reviewed with Executive’s legal counsel and no good faith basis for withholding Executive’s signature is determined to exist. Effective from the Separation Date, the Executive shall have no authority to act on behalf of or to bind the Company.   2. Separation Benefits. In lieu of any severance benefits or enhanced equity rights that Executive may have been entitled to pursuant to the Employment Agreement or otherwise, and in exchange for, among other things, Executive signing, not revoking and complying with the terms of this Separation Agreement, the Company shall provide Executive with the following Separation Benefits:     1     (i) the Company shall continue to pay the Executive his base salary of $44,583.33 per month for seven (7) months from the Separation Date (the “Severance Period”), which shall commence upon the Company’s next regular payroll date after the Effective Date of this Agreement;   (ii) on the Company’s next regular payroll date after the last day of the Severance Period, the Company shall pay the Executive a lump sum payment equal to $15,000, less applicable deductions and withholdings.   (iii) the Company agrees that it will not oppose Executive’s application for unemployment compensation benefits. Employee acknowledges that eligibility determinations are made by the Employment Security Department and that Employer does not control such determination.   3. Equity. The Executive’s equity interests in the Company are set forth below and are governed by The Advanced Cell Technology 2005 Stock Option Plan and the associated Advanced Cell Technology, Inc. Employee Nonstatutory Option Agreements (collectively the “Equity Documents”):   Grant Date Type of Grant Number of Vested Shares Exercise Price per Share December 14, 2010 Nonqualified Stock Option 5,000,000 $0.14 July 1, 2011 Restricted Stock 6,000,001 N/A July 1, 2011 Nonqualified Stock Option 10,000,000 $0.185 July 1, 2011 Nonqualified Stock Option 5,000,000 $0.30 July 1, 2011 Nonqualified Stock Option 5,000,000 $0.45   The above-listed Nonqualified Options (each a “Stock Option”) are exercisable by Executive for the entire ten-year term of the Stock Option. Executive acknowledges and agrees that he does not have any equity interests other than those set forth in this Section 3.   2       4. General Release. Executive irrevocably and unconditionally releases and forever discharges the Company, all of its affiliated and related entities, its and their respective predecessors, successors and assigns, its and their respective employee benefit plans and the fiduciaries of such plans, and the current and former officers, directors, stockholders, executives, attorneys, accountants, and agents of each of the foregoing in their official and personal capacities (collectively referred to as the “Releasees”) generally from all claims, demands, debts, damages and liabilities of every name and nature, known or unknown (“Claims”) that, as of the date when Executive signs this Separation Agreement, he has, ever had, now claims to have or ever claimed to have had against any or all of the Releasees. This release includes, without implication of limitation, the complete waiver and release of all Claims of or arising in connection with or for: the Employment Agreement including Claims for breach of express or implied contract; wrongful termination of employment whether in contract or tort; intentional, reckless, or negligent infliction of emotional distress; breach of any express or implied covenant of employment, including the covenant of good faith and fair dealing; interference with contractual or advantageous relations, whether prospective or existing; deceit or misrepresentation; discrimination or retaliation under state, federal, or municipal law, including, without implication of limitation, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended, the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.; Massachusetts General Law Chapter 151B; the Massachusetts Wage Act; all Claims under the California Family Rights Act, the California Fair Employment and Housing Act, the California Labor Code Section 200 et seq., and any applicable California Industrial Welfare Commission order; defamation or damage to reputation; reinstatement; punitive or emotional distress damages; wages, severance pay, vacation pay, back or front pay or other forms of compensation; and attorney’s fees and costs. Executive understands that, except those expressly excluded from this release below, this general release of Claims extends to any and all Claims related to Executive’s employment by the Company, (including without limitation, any claims against the Company with respect to any stock-based awards of any kind) and the ending of his employment, and all Claims in his capacity as a Company stockholder arising up to and through the date that Executive enters into this Separation Agreement.   Executive understands that this general release does not extend to any rights or claims that may arise out of acts or events that occur after the date on which Executive signs this Separation Agreement. Executive represents that he has not assigned to any third party and has not filed with any agency or court any Claim released by this Separation Agreement.   This release does not affect Executive’s rights or obligations under this Separation Agreement or the Equity Documents nor shall this release affect the Executive’s rights to: indemnification pursuant to state law or as an officer of the Company under the Company’s articles of incorporation for Executive’s service prior to the Separation Date, subject to the Company’s rights under state law and the articles of incorporation with respect to such indemnification; claims to insurance coverage under any policy as to which he is a named insured or beneficiary; claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law; claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Releasees; claims to continued participation in certain group benefit plans pursuant to the terms and conditions of the federal law known as COBRA; and other obligation of the Releasees that cannot be waived as a matter of law.   3     Executive acknowledges that he is familiar with Section 1542 of the California Civil Code, which reads as follows:   A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.   Executive acknowledges that he is releasing unknown claims and waiving all rights he may have under Civil Code Section 1542 or under any other statute or common law principle of similar effect; provided that Executive is not waiving any rights or claims that may arise out of acts or events that occur after the date on which he signs this Agreement.   5. Return of Property. Executive commits to returning to the Company all Company property on or before the Separation Date including, without limitation, computer equipment, software, credit cards, files and any documents (including computerized data and any copies made of any computerized data or software) containing information concerning the Company, its business or its business relationships, provided, after Executive returns the laptop issued to him by the Company without any file or data deletions, the Company will work with Executive in good faith to identify Executive’s personal files on the laptop and shall provide copies of those personal files to the Executive. After returning all such property, Executive commits to deleting and finally purging any duplicates of files or documents that may contain Company or customer information from any non-Company computer or other device that remains Executive’s property after the Separation Date.   6. Covenants. Executive acknowledges and hereby reaffirms his continuing obligations to the Company pursuant to Section 11 of the Employment Agreement including, without limitation, with respect to Confidential Information, Right to Company Materials, Nondisparagement and Nonsolicitation (collectively the “Covenants”), all of which run in favor of the Company (including all parents, subsidiaries and affiliates) and the terms of which are incorporated by reference herein, provided the Company acknowledges that Executive’s covenant with respect to Noncompetition Section 11 of the Employment Agreement is no longer in effect.   7. Cooperation. Executive agrees to cooperate with the Company (including its outside counsel) in connection with the contemplation, prosecution and defense of all phases of existing, past and future litigation and/or in connection with any government investigation about which the Company believes that Executive may have knowledge or information. Executive further agrees to make himself available at mutually convenient times during and outside of regular business hours as reasonably deemed necessary by the Company’s counsel. Executive agrees to appear without the necessity of a subpoena to testify truthfully in any legal proceedings in which Executive is called as a witness.   8. Insider Trading and Disclosure. Executive reaffirms his obligations pursuant to the Company’s Statement of Company Policy on Insider Trading and Disclosure (the “Insider Trading Policy”) the terms of which continue to apply to Executive following the termination of employment with the Company until any material, nonpublic information possessed by such individual has become public or is no longer material. The same restrictions that apply to Executive pursuant to the Insider Trading Policy also apply to his spouse, significant other, child, parent or other family member, in each case, living in the same household, and to any investment fund, trust, retirement plan, partnership, corporation or other entity over which he has the ability to influence or direct investment decisions concerning securities.  Executive is responsible for ensuring compliance with the Insider Trading Policy by all such persons affiliated with Executive.   4     9. Termination of Separation Benefits; Injunctive Relief. In the event that any Party fails to comply with any of the provision of this Separation Agreement, including any of the Covenants that have been incorporated by reference, in addition to any other legal or equitable remedies it may have for such breach, the other party shall have the right to terminate the payments due and owing to the other party. Further, the Parties agree that it would be difficult to measure any harm caused to the other that might result from any breach by the other Party of any of the Agreement and that, in any event, money damages would be an inadequate remedy for any such breach. Accordingly, the Parties agree that if the other breaches, or there is an imminent threat of a breach of any portion of the Agreement, the non-breaching Party shall be entitled, in addition to all other remedies they may have, to an injunction or other appropriate equitable relief to restrain any such breach, without showing or proving any monetary damage to the Company and without the necessity of posting a bond.   10. Advice of Counsel. This Separation Agreement is a legally binding document and Executive’s signature will commit Executive to its terms. Executive acknowledges that he has been advised to discuss all aspects of this Separation Agreement with his attorney, that he has carefully read and fully understands all of the provisions of this Separation Agreement and that Executive is voluntarily entering into this Separation Agreement.   11. Effective Date. To accept this Agreement, Executive must return a signed original of this Agreement to Edward Myles, Chief Financial Officer. This Agreement shall become effective upon execution by both Parties (the “Effective Date”).   12. Enforceability. Executive acknowledges that, if any portion or provision of this Separation Agreement or the Covenants shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision   13. Exclusive Compensation. The payments, benefits and equity rights set forth in this Agreement are the exclusive payments, benefits and equity rights to Executive in connection with Executive’s employment and the ending of the employment relationship, provided nothing in this Agreement shall affect Executive’s or the Company’s rights and obligations with respect to indemnification. By entering into this Separation Agreement, Executive acknowledges and agrees that he is not entitled to any other pay, (including salary or bonus or vacation pay) benefits or equity rights including without limitation pursuant to any agreement, severance plan, program or arrangement.   14. Entire Agreement. This Separation Agreement along with the Covenants and Equity Documents and the Undertaking Pursuant to 8 Del. C. § 145(e) you entered into dated October 23, 2013, constitutes the entire agreement between Executive and the Company concerning Executive’s relationship with the Company, and supersedes and replaces any and all prior agreements and understandings between the Parties concerning the Executive’s relationship with the Company including, without limitation, the Employment Agreement.   5       15. Waiver. No waiver of any provision of this Separation Agreement, including the Covenants, shall be effective unless made in writing and signed by the waiving party. The failure of either Party to require the performance of any term or obligation of this Separation Agreement or the Covenants, or the waiver by either Party of any breach of this Separation Agreement or the Covenants, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.   16. Taxes. The Company shall undertake to make deductions, withholdings and tax reports with respect to payments and benefits under this Separation Agreement and in connection with other compensation matters to the extent that it reasonably and in good faith determines that it is required to make such deductions, withholdings and tax reports. Payments under this Separation Agreement shall be in amounts net of any such deductions or withholdings. Nothing in this Separation Agreement shall be construed to require the Company to make any payments to compensate Executive for any adverse tax effect associated with any payments or benefits made to Executive in connection with Executive’s employment with the Company.   17. Successors and Assigns. The Parties agree that their rights and obligations hereunder are binding upon and inure to the benefit of their respective successors and assigns, and in the case of Executive, to his heirs as well.   18. Governing Law; Consent to Jurisdiction; Interpretation. By signing below the Parties acknowledge and agree that the Parties’ rights and obligations to one another, including, without limitation, their rights and obligations under this Separation Agreement, the Covenants shall be interpreted and enforced under the laws of the Commonwealth of Massachusetts without regard to conflict of law principles. The Parties agree that any disputes between the Parties shall be resolved exclusively in the federal or state courts of the Commonwealth of Massachusetts. In the event of any dispute, this Separation Agreement is intended by the parties to be construed as a whole, to be interpreted in accordance with its fair meaning, and not to be construed strictly for or against either Party or the “drafter” of all or any portion of this Separation Agreement.   19. Counterparts. This Separation Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be document. Facsimile and pdf signatures shall be deemed to be of equal force and effect as originals.     [Remainder of Page Intentionally Left Blank]   6     IN WITNESS WHEREOF, the Parties, intending to be legally bound, have executed this Separation Agreement on the date(s) indicated below.   ADVANCED CELL TECHNOLOGY, INC.   By: /s/ Michael Heffernan   January 21, 2014   Michael Heffernan   Date   Chairman of the Board of Directors         I HAVE READ THIS AGREEMENT THOROUGHLY, UNDERSTAND ITS TERMS AND HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY. I UNDERSTAND THAT THIS AGREEMENT IS A LEGAL DOCUMENT.   /s/ Gary H. Rabin   January 21, 2014 Gary H. Rabin   Date    

  Exhibit 10.15   STOCK OPTION AGREEMENT (Non-Employee Director Stock Option) This Stock Option Agreement (this “Agreement”), effective as of _____________ (the “Grant Date”), is by and between Lexicon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and _______________ (“Optionee”). To carry out the purposes of the Lexicon Pharmaceuticals, Inc. Non-Employee Directors’ Stock Option Plan (the “Plan”), by providing Optionee the opportunity to purchase shares of Common Stock, par value $0.001 per share, of the Company (“Stock”), and in consideration of the mutual agreements and other matters set forth herein and in the Plan, the Company and Optionee hereby agree as follows:            1.           Grant of Option.  The Company hereby grants to Optionee the right and option (the “Option”) to purchase all or any part of an aggregate of [10,000 or 20,000 (for annual grant)] [30,000 (for initial grant)] shares of Stock, on the terms and conditions set forth in this Agreement and in the Plan.  The Option shall be treated as a non-statutory stock option and not as an “incentive stock option” within the meaning of section 422(b) of the Internal 2.           Exercise Price.  The price at which Optionee may purchase Stock upon exercise of the Option (the “Exercise Price”) shall be $_______ per share, which has been determined to be the Fair Market Value (as defined in the Plan) of the Stock on the Grant Date.  The Exercise Price is subject to adjustment under certain circumstances as provided in the Plan. 3.           Term.  The Option shall expire on the 10th anniversary of the Grant Date, subject to earlier termination under the circumstances specified in Section 8 of this Agreement. 4.           Exercisability and Vesting.  Subject to the terms and conditions set forth in this Agreement and the Plan, the Option may be exercised, in whole or in part, at any time and from time to time during the term of the Option, to purchase the number of shares of Stock that have vested and become exercisable in accordance with this Agreement.  The Option shall vest and become exercisable with respect to [1/12 of the total number of shares of Stock subject to the Option each month after grant for 12 months after the Grant Date (Use with annual grants)] [1/60 of the total number of shares of Stock subject to the Option each month after grant for five years after the Grant Date (Use with initial grants)]; provided that, such vesting schedule may be accelerated upon a change in control of the Company pursuant to the provisions of the Plan and; provided further, that, upon the termination of Optionee’s Continuous Service (as defined in the Plan), the Option shall cease to vest and shall terminate with respect to all shares of Stock that have not vested and become exercisable prior to such time. 5.           Procedures for Exercise.  Subject to the terms and conditions set forth in this Agreement and the Plan, the Option may be exercised by delivery to the Company at its principal executive office of (i) written notice addressed to the Secretary of the Company specifying the number of shares of Stock as to which the Option is being exercised and (ii) payment in full of the Exercise Price for such shares.  The Exercise Price shall be paid in cash or in such other manner as may be authorized by the administrator of the Plan in accordance with the terms of the Plan.  If the offering, sale and delivery of the shares of Stock issuable upon exercise of the Option have not been registered under the Securities Act of 1933 (the “Securities Act”), the Company may require Optionee, as a condition to Optionee’s exercise of the Option, to enter into a stock purchase agreement containing such representations and warranties as the Company may deem necessary to permit the issuance of the Stock purchased upon exercise of the Option in compliance with the Securities Act and applicable state securities laws.       6.           No Rights of Ownership in Stock Before Issuance.  No person shall be entitled to the rights and privileges of stock ownership with respect to any shares of Stock issuable upon exercise of the Option until such shares have been issued in accordance with the terms of this Agreement and the Plan. 7.           Non-Transferability.  The Option may not be transferred by Optionee otherwise than (i) by will or the laws of descent and distribution, by instrument to an inter vivos or testamentary trust or by gift to a member of Optionee’s immediate family, in each case in accordance with the terms of the Plan, or (ii) pursuant to a qualified domestic relations order (as defined in Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder). 8.           Termination of Option.  If Optionee’s Continuous Service is terminated for any reason other than the Disability (as defined in the Plan) or death of Optionee, the Option shall remain exercisable, with respect to the shares of Stock that had vested under the terms of this Agreement before the date of such termination, for a period of six months after the date of such termination (subject to extension as provided in the Plan, but in no event later than the expiration date of the Option specified in Section 3 of this Agreement), following which six-month period this Agreement and Optionee’s right to exercise the Option shall terminate.  If Optionee’s Continuous Service is terminated because of Disability of Optionee, the Option shall remain exercisable, with respect to the shares of Stock that had vested under the terms of this Agreement before the date of such termination, for a period of 12 months after the date of such termination (but in no event later than the expiration date of the Option specified in Section 3 of this Agreement), following which 12-month period this Agreement and Optionee’s right to exercise the Option shall terminate.  If (i) Optionee’s Continuous Service is terminated because of death of Optionee or (ii) Optionee dies within the three-month period after the termination of Optionee’s Continuous Service for a reason other than death, the Option shall remain exercisable, with respect to the shares of Stock that had vested under the terms of this Agreement before the date of death, for a period of 18 months after the date of such termination (but in no event later than the expiration date of the Option specified in Section 3 of this Agreement), following which 18-month period this Agreement and the right to exercise the Option shall terminate.  Notwithstanding the foregoing, if the Optionee is removed from the Company’s Board of Directors for cause in accordance with the Company’s Bylaws, this Agreement and Optionee’s right to exercise any portion of the Option, whether or not vested, shall terminate at the commencement of business on the date of such removal. 9.           Withholding of Tax.   To the extent that the Company is required under applicable federal or state income tax laws to withhold any amount on account of any present or future tax imposed as a result of the exercise of the Option, Optionee shall pay the Company, at the time of such exercise, funds in an amount sufficient to permit the Company to satisfy such withholding obligations in full.  If Optionee fails to pay such amount, the Company shall be authorized (i) to withhold from any cash remuneration then or thereafter payable to Optionee any tax required to be withheld or (ii) to refuse to issue or transfer any shares otherwise required to be issued pursuant to the terms of this Agreement. 10.           Status of Stock.  (a)  Unless the offering, sale and delivery of the shares of Stock issuable upon exercise of the Option have been registered under the Securities Act, Optionee agrees that any shares of Stock purchased upon exercise of the Option shall be acquired for investment without a view to distribution, within the meaning of the Securities Act, and shall not be sold, transferred, assigned, pledged or hypothecated in the absence of an effective registration statement under the Securities Act and applicable state securities laws or an applicable exemption from the registration requirements of the Act and any applicable state securities laws.  Optionee further agrees that the shares of Stock which Optionee may acquire by exercising the Option will not be sold or disposed of in any manner which would constitute a violation of any other applicable federal or state securities laws.  In addition, Optionee agrees (i) that the certificates representing the shares of Stock issued under this Agreement may bear such legend or legends as the administrator of the Plan deems appropriate in order to assure compliance with applicable securities laws, and (ii) that the Company may give instruction to its transfer agent, if any, to stop transfer of the shares of Stock issued under this Agreement on the stock transfer records of the Company, if such proposed transfer would, in the opinion of counsel to the Company, constitute a violation of any applicable securities law or any such agreements.   2   (b)           Optionee further agrees that the Option granted herein shall be subject to the requirement that if at any time the administrator of the Plan shall determine, in its discretion, that the listing, registration or qualification of the shares of Stock subject to such Option upon any securities exchange or market or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the purchase or issuance of shares of Stock hereunder, such Option may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the  administrator of the Plan. 11.           Stock Option Plan.  The Plan, a copy of which is available for inspection by Optionee or other persons entitled to exercise this Option at the Company’s principal executive office during business hours, is incorporated by reference in this Agreement.  The Option is subject to, and the Company and Optionee agree to be bound by, all of the terms and conditions of the Plan. In the event of a conflict between this Agreement and the Plan, the terms of the Plan shall control.  Subject to the terms of the Plan, the administrator of the Plan shall have authority to construe the terms of this Agreement, and the determinations of the administrator of the Plan shall be final and binding on Optionee and the Company. 12.           Binding Agreement.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Optionee. 13.           Governing Law.  This Agreement and all actions taken hereunder Delaware. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and Optionee has executed this Agreement as of the day and year first above written.   Lexicon Pharmaceuticals, Inc.               By:       Arthur T. Sands, M.D., Ph.D.             Optionee                   [Name]       3

  EXHIBIT 10.03   EMPLOYMENT AGREEMENT   THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of July 9, 2020 by and between LIXTE BIOTECHNOLOGY HOLDINGS INC., a Delaware corporation having its principal place of business located at 248 Route 25A, No. 2, East Setauket, NY 11733 (“Company”), and JAMES S. MISER, MD (“Employee”), an individual residing at 1200 North El Molino Avenue, Pasadena, CA 91104.   WHEREAS, Employer desires to employ Employee and Employee desires to enter into such employment upon the terms and conditions hereinafter set forth;   Agreement   In consideration of the mutual promises contained herein, the parties agree as follows:   1. Services and Compensation. Employee agrees to perform for the Company the services described in Exhibit A (the “Services”), and the Company agrees to pay Employee the compensation described in Exhibit A for Employee’s performance of the Services. If not specified on Exhibit A, the scope, timing, duration, and site of performance of said Services shall be mutually and reasonably agreed to by the Company and Employee and are subject to change upon the written agreement of both parties. Employee will make reasonable, good faith efforts to provide the Services in a timely and professional manner consistent with industry practices. Employee shall report to the Company’s Chief Executive Officer. Employee shall devote not less than 50% of his business time in the performance of the Services. Except as set forth on Exhibit A, the Company shall have no obligation to provide any compensation to Employee with respect to any Services rendered by Employee to the Company pursuant to this Agreement.   2. Confidentiality.   2.1 Definitions. “Confidential Information” means all data, studies, reports, information, technology, samples and specimens relating to the Company or its plans, products, product concepts, formulas, technologies, business, financial, marketing, research, non-clinical, clinical or regulatory affairs, manufacturing processes and procedures, or those of any other third party, from whom the Company receives information on a confidential basis, whether written, graphic or oral, furnished to Employee by or on behalf of the Company, either directly or indirectly, or obtained or observed by Employee while providing services hereunder, and the Services to be provided by Employee hereunder. Confidential Information does not include (i) information that is now in the public domain or subsequently enters the public domain and is generally available without fault on the part of Employee; (ii) information that is presently known by Employee from Employee’s own sources as evidenced by Employee’s prior written records; or (iii) information disclosed to Employee by a third party legally and contractually entitled to make such disclosures.         2.2 Nonuse and Nondisclosure. Employee will not, during or subsequent to the Term (as defined below), (i) use the Confidential Information for any purpose whatsoever other than the performance of the Services on behalf of the Company or (ii) disclose the Confidential Information to any third party. Employee agrees that, as between the Company and Employee, all Confidential Information will remain the sole property of the Company. Employee also agrees to take all necessary and reasonable precautions to prevent any unauthorized disclosure of such Confidential Information. Without the Company’s prior written approval, Employee may disclose the existence, but not the terms, of this Agreement to third parties. Anything to the contrary notwithstanding, Employee may also disclose Confidential Information to the extent such disclosure is required by a court of competent jurisdiction and provided that Employee promptly notifies the Company of such requirement. Employee acknowledges that the use or disclosure of Confidential Information without the Company’s express written permission will cause the Company irreparable harm and that any material breach or threatened material breach of this Agreement by Employee will entitle the Company to seek injunctive relief and reasonable attorneys’ fees, in addition to any other legal remedies available to it, in any court of competent jurisdiction.   2.3 Third Party Confidential Information. Employee recognizes that the Company has received and in the future may receive from third parties, their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees that, during the Term of this Agreement and thereafter, Employee will hold, and that Employee owes the Company and such third parties a duty to hold, all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or entity or to use it except as necessary in carrying out the Services for the Company consistent with the Company’s agreement with such third party, unless otherwise authorized by such third party.   2.4 Return of Materials. At any time upon the Company’s request, Employee will deliver to the Company all of the Company’s property, equipment and documents, together with all copies thereof, that were previously provided to Employee or created by Employee for the Company pursuant to the Services, including but not limited to all electronically stored confidential and/or nonpublic information, passwords to access such property, or Confidential Information that Employee may have in Employee’s possession or control, and Employee agrees to certify in writing that Employee has fully complied with this obligation.   2.5 No Improper Disclosure or Use of Materials. Employee will not improperly use or disclose to, or for the benefit of, the Company any confidential information or trade secrets of (i) any former, current or future employer, (ii) any person to whom Employee has previously provided, currently provides or may in the future provide services, or (iii) any other person to whom Employee owes an obligation of confidentiality. Employee will not bring onto the premises of the Company any unpublished documents or any property belonging to any person referred to in the foregoing clauses (i)-(iii) of this Section 2.5 unless consented to in writing by such person. Without limiting the generality of the foregoing, Employee will not disclose to the Company, and will not use for the benefit of the Company, any information relating to or arising out of Employee’s work conducted at his present employer, or utilizing the funds, personnel, facilities, materials or other resources of his present employer, until such information has been published.   2.6 Non-Exclusivity of Confidentiality Obligations. The obligations of Employee under this Section 2 are without prejudice, and are in addition to, any other obligations or duties of confidentiality, whether express or implied or imposed by applicable law, that are owed to the Company or any other person to whom the Company owes an obligation of confidentiality.   2 of 8     3. Ownership.   3.1 Assignment. Employee agrees that all copyrights and copyrightable material, notes, records, drawings, designs, inventions, ideas, discoveries, enhancements, modifications, know-how, improvements, developments, discoveries, trade secrets, data and information of every kind and description conceived, generated, made, discovered, developed or reduced to practice by Employee, solely or in collaboration with others, during the Term and in the course of performing Services under this Agreement (collectively, “Inventions”), are, as between the Company and Employee, the sole and exclusive property of the Company. Employee agrees to disclose such Inventions promptly to the Company and hereby assigns, and agrees to assign, all of Employee’s right, title and interest in and to any consideration and to execute all applications, assignments or other instruments reasonably requested by the Company in order for the Company to establish the Company’s ownership of such Inventions and to obtain whatever protection for such Inventions, including copyright and patent rights in any and all countries on such Inventions as the Company shall determine.   3.2 Further Assurances. Employee agrees to assist the Company, or its designee, in every reasonable way to secure the Company’s rights in Inventions and any copyrights, patents or other intellectual property rights relating to all Inventions (“Proprietary Rights”) in any and all countries, including the disclosure to the Company of all pertinent information and data with respect to all Inventions, the execution of all applications, specifications, oaths, assignments and all other instruments that the Company may deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns and nominees the sole and exclusive right, title and interest in and to all Inventions, and any copyrights, patents, or other intellectual property rights relating to all Inventions. Employee also agrees that Employee’s obligation to execute or cause to be executed any such instrument or papers shall continue after the termination of this Agreement.   3.3 Pre-Existing Materials. Subject to Section 3.1, Employee agrees that if, in the course of performing the Services, Employee incorporates into any Invention developed under this Agreement any pre-existing invention, improvement, development, concept, discovery or other proprietary information owned by Employee or in which Employee has an interest, (i) Employee will inform the Company, in writing before incorporating such invention, improvement, development, concept, discovery or other proprietary information into any Invention, and (ii) the Company is hereby granted a nonexclusive, royalty-free, perpetual, irrevocable, worldwide license to make, have made, modify, use and sell such item as part of or in connection with such Invention. Employee will not incorporate any invention, improvement, development, concept, discovery or other proprietary information owned by any third party into any Invention without the Company’s prior written permission.   3 of 8     3.4 Attorney-in-Fact. Employee agrees that, if the Company is unable because of Employee’s unavailability, dissolution, mental or physical incapacity, or for any other reason, to secure Employee’s signature for the purpose of applying for or pursuing any application for any United States or foreign patents, mask work or copyright registrations covering the Inventions assigned to the Company in Section 3.1, then Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agent and attorney-in-fact, to act for and on Employee’s behalf to execute and file any such applications and to do all other lawfully permitted acts only to further the prosecution and issuance of patents, copyright and mask work registrations with the same legal force and effect as if executed by Employee.   3.5 Waiver; Non-Exclusivity of Obligations. Employee hereby waives and quitclaims to the Company any and all claims of any nature whatsoever that Employee may now or hereafter have for infringement of any Inventions and Proprietary Rights assigned hereunder to the Company. Without the prior written consent of the Company, Employee will not, at any time, file any patent or copyright application with respect to, or claiming, any Inventions. The obligations of Employee under this Section 5 are without prejudice, and are in addition to, any other obligations or duties of Employee, whether express or implied or imposed by applicable law, to assign to the Company all Inventions and all Proprietary Rights.   4. Representations and Warranties. Employee represents and warrants to the Company that: Employee is legally able to enter into this Agreement and that Employee’s execution, delivery and performance of this Agreement will not and does not conflict with any agreement, arrangement or understanding, written or oral, to which Employee is a party or by which Employee is bound; Employee is under no physical or mental disability that would hinder his performance of the professional duties to be rendered by Employee under this Agreement; Employee is not a party to any civil, criminal or administrative suits or proceedings, or aware of any threatened actions of such a nature; Employee has never been convicted of a crime, is not now under indictment, and is unaware of any such threatened actions; and Employee has never been subjected to disciplinary proceedings or investigation by any State agency or other governmental agency.   5. Term and Termination.   5.1 Term. The term of this Agreement (the “Term”) shall commence on the August 1, 2020 (the “Effective Date”), and shall remain in full force and effect until the earlier of (i) one year from the Effective Date, automatically renewable for additional one year periods unless terminated by either party upon sixty (60) days written notice prior to the end of an applicable one year period, (ii) Employee’s death or (iii) termination as provided in Section 5.2.   5.2 Termination. The Company may terminate this Agreement immediately and without prior notice if Employee refuses to or is unable to perform the Services or is in breach of any material provision of this Agreement and fails to cure such breach (if such breach is curable) within thirty days of notice of such breach by the Company.   5.3 Survival. Upon termination of this Agreement, all rights and duties of the Company and Employee toward each other shall cease except:   (a) The Company will pay, within 30 days after the effective date of termination, all amounts owing to Employee for Services completed and accepted by the Company prior to the termination date and related expenses, if any, submitted in accordance with the Company’s policies and in accordance with the provisions of Section 1 of this Agreement; and   4 of 8     6. Benefits; Taxes.   6.1 Benefits. The Company and Employee agree that Employee will receive no Company-sponsored benefits from the Company, except those mandated by state or federal law.   6.2 Taxes and Withholdings. Employee’s compensation shall be payable in accordance with the general practice of the Employer for professional employees and shall be subject to all applicable withholding taxes.   7. Indemnification. The Company shall defend, indemnify and hold Employee harmless from and against any and all claims, demands, losses, damages, liabilities (including without limitation product liability), settlement amounts, costs and expenses whatsoever (including without limitation reasonable attorneys’ fees and costs and including, without limitation, product liability claims) arising from or relating to any claim, action or proceeding made or brought against Employee or the Company as a result of, or associated with, the development, use, manufacture, marketing or sale of products regarding which Employee has provided Services unless such liability arises from Employee’s or Employee’s assistants’, employees’ or agents’ negligence, intentional misconduct or breach of this Agreement.   8. Non-Compete; Nonsolicitation; Non-Disclosure.   8.1 Non-Compete. During the Term, Employee will not, without the Company’s prior written consent, become employed by or render services to any other person or entity engaged in the business of developing or marketing drug programs focusing on inhibitors of protein phosphatases (a “Competing Business”). Notwithstanding the foregoing, the Company consents to Employee being employed by the City of Hope Medical Group.   8.2 Nonsolicitation. During the Term and and for a period of six month thereafter (the “Restricted Period”), Employee will not, without the Company’s prior written consent, directly or indirectly, whether for Employee’s own account or for the account of any other person, firm, corporation or other business organization, solicit, entice, persuade, induce or otherwise attempt to influence any person or business who is, or during the period of Employee’s engagement by the Company was, an employee, Employee, contractor, partner, supplier, customer or client of the Company or its affiliates to leave or otherwise stop doing business with the Company.   8.3 Non-Disclosure. Employee agrees that without the prior written consent of the Company, Employee will not intentionally generate any publicity, news release or other announcement concerning the engagement of Employee hereunder or the services to be performed by Employee hereunder or otherwise utilize the name of the Company or any of its affiliates for any advertising or promotional purposes.   5 of 8     8.4 Reasonableness of Restrictions. Employee hereby acknowledges and agrees that the foregoing restrictions contained in this Section 8 are reasonable, proper and necessitated by the legitimate business interests of the Company and will not prevent Employee from earning a living or pursuing his or her career. In the event that a court finds this Section 8, or any of its restrictions, to be unenforceable or invalid, Employee and the Company hereby agree that (i) this Section 8 will be automatically modified to provide the Company with the maximum protection of its business interests allowed by law and (ii) Employee shall be bound, and such court shall enforce, this Section 8 as so modified.   9. Voluntary Nature of Agreement. Employee acknowledges and agrees that Employee is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else. Employee further acknowledges and agrees that Employee has carefully read this Agreement and has asked any questions needed to understand the terms, consequences and binding effect of this Agreement and fully understand it to his or her satisfaction. Finally, Employee agrees that Employee has been provided an opportunity to seek the advice of an attorney of its choice before signing this Agreement.   10. Remedies. Employee acknowledges and agrees that the agreements and restrictions contained in Sections 2, 3 and 8 are necessary for the protection of the business and goodwill of the Company and are reasonable for such purpose. Employee acknowledges and agrees that any breach of the provisions of Sections 2, 3 and 8 may cause the Company substantial and irreparable damage for which the Company cannot be adequately compensated by monetary damages alone, and, therefore, in the event of any such breach, in addition to such other remedies which may be available, the Company shall have the right to seek specific performance and injunctive relief without the necessity of proving actual damages. However, if the Company claims that Employee breached any of Sections 2, 3 and 8, nothing herein shall relieve the Company of the burden of proving that Employee failed to abide by Section 2, 3 or 8.   11. Miscellaneous.   11.1 Governing Law. This Agreement shall be governed by the laws of Delaware without regard to conflicts of law rules.   11.2 Assignability. Except as otherwise provided in this Agreement, Employee may not sell, assign or delegate any rights or obligations under this Agreement.   11.3 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior written and oral agreements between the parties regarding the subject matter of this Agreement.   11.4 Headings. Headings are used in this Agreement for reference only and shall not be considered when interpreting this Agreement.   11.5 Notices. Any notice or other communication required or permitted by this Agreement to be given to a party shall be in writing and shall be deemed given if delivered personally or by commercial messenger or courier service, or mailed by U.S. registered or certified mail (return receipt requested). If by mail, delivery shall be deemed effective 3 business days after mailing in accordance with this Section 11.5.   6 of 8       Lixte Biotechnology Holdings, Inc. Attention: John Kovach, MD 248 Route 25A, No. 2 East Setauket, NY 11733   If to Employee, to:   James Miser, MD 1200 North El Molino Avenue Pasadena, CA 91104   The address for notice on the signature page to this Agreement or, if no such address is provided, to the last address of Employee provided by Employee to the Company.   11.6 Amendments; Waiver. No modification of or amendment to this Agreement, or any waiver of any rights under this Agreement, will be effective unless in writing and signed by Employee and the Company.   11.7 Attorneys’ Fees. In any court action at law or equity that is brought by one of the parties to this Agreement to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys’ fees, in addition to any other relief to which that party may be entitled.   11.8 Further Assurances. Employee agrees, upon request, to execute and deliver any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.   11.9 Severability. If any provision of this Agreement is found to be illegal or unenforceable, the other provisions shall remain effective and enforceable to the greatest extent permitted by law.   11.10 Counterparts and Facsimiles. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Facsimile signatures shall be deemed original signatures for all purposes.   11.11 Acknowledgement. EMPLOYEE UNDERSTANDS THAT THIS AGREEMENT AFFECTS HIS RIGHTS TO CERTAIN INVENTIONS, AND RESTRICTS HIS RIGHTS TO DISCLOSE OR USE CONFIDENTIAL INFORMATION, AND TO COMPETE WITH THE COMPANY DURING, OR SUBSEQUENT TO, THE TERMINATION OF THIS AGREEMENT.     7 of 8     IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first written above.   EMPLOYEE   LIXTE BIOTECHNOLOGY     HOLDINGS, INC.         [ex10-3_001.jpg]   By: [ex10-3_002.jpg]  Name: James Miser, MD   Name: JOHN KOVACH, MD Address: 1200 North El Molino Avenue Pasadena, CA 91104   Title: President & CEO   8 of 8     EXHIBIT A   SERVICES AND COMPENSATION   1. Services. Employee shall plan a leadership role in the planning, implementation and oversight of clinical trials. Employee shall be responsible for assisting and the development of strategic clinical goals and the implementation and safety monitoring of investigational studies. Employee shall be the primary medical monitor for all clinical investigational studies, and for the oversight of third party CRO monitors. Employee shall work closely with the Company’s Chief Scientific Officer and Chief Executive Officer on the development of strategic goals needed to insure the timely implementation of appropriate clinical studies needed for successful registration of therapeutic products and new drug development.   2. Compensation.     A. Employee shall receive options to purchase up to five hundred thousand (500,000) shares of the Company’s Common Stock (the “Options”). The Options shall have a term of five years, and an exercise price equal to the closing price of the Company’s Common Stock on the Effective Date. The options shall vest as to twenty-five (25%) percent on the Effective Date and twenty-five percent on each of the 1st, 2nd, and 3rd anniversaries of the Effective Date.         B. The Company will pay Employee twelve thousand five hundred dollars ($12,500) per month. All amounts payable to Employee hereunder shall be net of any applicable withholding taxes.         C. The Company will reimburse Employee for all reasonable expenses incurred by Employee in performing the Services pursuant to this Agreement, provided that Employee receives written consent from the Company’s CEO prior to incurring such expenses and submits receipts for such expenses to the Company in accordance with Company policy.    

Title: [US, CA] Blackout uber ride Answer #1: You probably vommed in the car bro.Answer #2: The mere fact of your speaking with them or accepting their call almost certainly does you no harm. Only something you said that would bolster some case they have against you would do you harm. Don't say such a thing. Overall, you're likely better served to find out what they're calling about than to take some kind of hard line before you know.

Title: Food thief choked on my food. Am I liable? [CA, USA] Question:I usually pack my lunch and yesterday I brought in some homemade pinwheels. (For those who don't know what a pinwheel is, it's an appetizer consisting of a flour tortilla or soft flat bread layered with luncheon meat like ham and cheese, and other veggies/condiments and rolled up and sliced into rounds and secured with toothpicks.) I had leftover fixings from New Years Eve so made up one, cut it into pieces and put the pieces in a small bento box. The box was kind of shallow so in order to fit in all the pieces I snipped the toothpicks in half with my kitchen shears. When I got to work I put the box in the one of the communal work fridges. Late morning there was a huge commotion and sound of an ambulance and everyone was told to stay in their seats. My first thought was that someone had had a heart attack. Well, one of my colleagues, “Mark”, was taken away because of some sort of accident, with no details released from the bosses or the HR coordinator. I got out my lunch a while later and thought maybe someone had taken a pinwheel or two but wasn't sure as maybe the contents had settled and I couldn't recall how many pieces I put in the box. (Maybe it's an American thing but there have been instances of stolen food/lunches at every place I've ever worked.) Late yesterday afternoon before closing we were all called into a mandatory meeting and the bosses revealed that the colleague taken to the hospital had gotten a toothpick wedged in his throat and had to have it surgically removed. We were all questioned about how we might have thought it happened. I did not volunteer any information because I wasn't sure it was my food that caused the problem. Also, I was kind of freaked out and afraid that it was from my food. Today I heard from another co-worker that the toothpick removed from the roof of Mark's mouth was yellow (and the toothpicks I had used were red and yellow ones). I also heard that he wants to sue the person who had “hidden” toothpicks in food in our company fridge. I have not said anything to my supervisor or HR. Am I liable? Mark stole my food from what was clearly NOT his container (it has little decorative bears on it, so it's not like your run of the mill Tupperware. He had to have known that the food wasn't his. Can he sue me for damages? TL/dr: Food thief choked on some of my lunch and wants to sue me. Answer #1: I'd keep my answers intentionally vague. Statements along the lines of "I didn't give Mark any food, at all" would be what I'd limit myself to. You don't know that the toothpick came from your food, but we do know that it's common to use toothpicks to secure food. It's not a boobytrap and you didn't do it maliciously. You aren't legally to blame. That said, I wouldn't rush around blasting information because your employer may fire you and you may still be sued in a meritless suit. Playing defensive with the information is your best bet to head off problems down the road.Answer #2: I might think about getting another lunchbox if only because a frustrated Mark might try and somehow get back at you. I would not put it past him.Answer #3: In principle, no, you're not liable. In practice, there's a chance he could win a suit. Here's my theory: setting traps that have the capacity to cause bodily harm is illegal. Mark could try to argue before the court that you cut the toothpicks like that so that they'd be hard to see, making them a trap, knowing that someone was stealing lunches. That would, likely, make you liable for his medical expenses, even though he was stealing your lunch at the time. Your explanation as to why you cut the toothpicks is your defence. Personally, I think you'd have a good shot at defending the suit, but I'm not your lawyer and I'm not your judge. For the time being, keep your mouth shut. You have no obligation to anyone to come forward. Mark knows whose food he stole. If you are served, get a lawyer and respond: if he's suing for his surgical costs, he's not going to be suing in small claims.Answer #4: Yo can't say for certain that the toothpicks were yours, and you also can't say for certain how much food was in your lunchbox before or after he stole from some one's lunch, I'd follow the advice given and keep any answers very vague--you never gave him any of your food and know very little about what happened, except office scuttlebutt you've heard. That's all true, right? Yes, right, it is. Don't say a word and don't 'confess' to anything that MAY have happened. It could just as easily have been another person's lunch he stole from and that person may well be having the same paranoid thoughts about his/her lunch that you're having. I'd brown bag lunch for a while, no bento box, and let the whole matter go. What's this dick going to say, "*I was stealing an employee's food* and I am sure I was stealing from YOU..."? Jesus, what a tit of a guy.Answer #5: Don't say anything never volunteer anything . And act just as shocked as everyone else . Do change what you bring your food in . He's a thief have no sympathy for the food thief . What a scum sucker stealing food the thief knew what he was doing . Karma is a real butt kicker .

EXHIBIT 10.3   PROMISSORY NOTE Borrower: Earth Search Sciences, Inc. of #6 - 306 Stoner Loop Rd, Lakeside, MT, 59922, the "Borrower". Lender: Ronald McQueen, of PO Box 681-603, Park City, UT, 84068 Principal Amount: [$625,000 - Six Hundred and Twenty-Five Thousand Dollars]   1.   FOR VALUE RECEIVED, The Borrower promises to pay to Lender at such addresses as may be provided in writing to the Borrower, the principal sum of [amount] (the “Principal Amount”).     2.   This Note will be repaid in five (5) consecutive semi-annual installments of one fifth of the Principal Amount commencing on the first business day in February 2009 and continuing on the first business day of each sixth month thereafter until the entire Principal Amount has been paid.     3.   At the election of ESSI, each installment can be converted to shares of the Common Stock, $.001 par value per share, of the Borrower (the “ESSI Common Stock”), at a 40% discount to the volume weighted average trading price of ESSI Common Stock on the OTC BB market for the five (5) trading days prior to the date that payment of such installment is actually made.  Such conversion right may be exercised at any time prior to payment of any installment by delivering written notice of exercise to Lender.     4.   Notwithstanding anything to the contrary in this Note, if the Borrower defaults in the performance of any obligation under this Note, Lender may declare the principal amount owing due under this Note at that time to be immediately due and payable.     5.   This Note will be construed in accordance with and governed by the laws of the State of Montana.     6.   All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by Lender in enforcing this Note as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.     7.   This Note will endure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Borrower and Lender. The Borrower waives presentment for payment, notice of non-payment, protest and notice of protest.     8.   This Note is given as partial payment of the Aggregate Purchase Price under that certain Purchase and Sale of Business Agreement dated of even date herewith between Borrower and Lender (the “SPA”).  The Borrower hereby grants to Lender a security interest in any and all securities of General Synfuels International, Inc. transferred by Lender to Borrower in accordance with the SPA.        Initialed         IN WITNESS WHEREOF the parties have duly affixed their signatures:   SIGNED, SEALED AND DELIVERED this 15th day of August, 2008 in the presence of:        Earth Search Sciences, Inc.     /S/ LUIS F. LUGO    Per: Luis F. Lugo CEO              

EXHIBIT 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER OF CIVEO CORPORATION PURSUANT TO 18 U.S.C. § 1350, AS ADOPTED PURSUANT TO SECTION -OXLEY ACT OF 2002 In connection with the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 filed with the Securities and Exchange Commission (the “Report”), I, Bradley J. Dodson, President and Chief Executive Officer of Civeo Corporation (the “Company”), hereby certify, to the best of my knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Bradley J. Dodson Name: Bradley J. Dodson Date: April 30, 2015

Exhibit 23.2 CONSENT OF WRIGHT & COMPANY, INC. We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (File Nos. 333-197356 and 333-193787) of Gastar Exploration Inc. of information relating to Gastar Exploration Inc.’s estimated proved reserves as set forth in the Annual Report on Form 10-K of Gastar Exploration Inc. for the fiscal year ended December 31, 2016, as well as in the notes to the financial statements included therein, of our report titled Evaluation of Oil and Gas Reserves, To the Interests of Gastar Exploration Inc., In Certain Properties Located in Oklahoma & West Virginia, Pursuant to the Requirements of the Securities and Exchange Commission, Effective January 1, 2017, Job 16.1823, dated January 11, 2017, and all references to our firm, in the context in which they appear. Wright & Company, Inc.

Mewbourne Energy Partners 01-A, L.P., 10-Q EXHIBIT 31.2 CERTIFICATIONS I, J. Roe Buckley certify that: 1.I have reviewed this quarterly report on Form 10-Q of Mewbourne Energy Partners 01-A, L.P. 2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: May 15, 2013 /s/ J. Roe Buckley J. Roe Buckley Chairman of the Board Executive Vice President Chief Financial Officer Mewbourne Development Corporation, Managing General Partner of the Registrant

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2014 or ☐ TRANSITION REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-51367 OTTAWA SAVINGS BANCORP, INC. (Exact name of registrant as specified in its charter) United States (State or other jurisdiction of incorporation or organization) 20-3074627 (I.R.S. Employer Identification Number) 925 LaSalle Street Ottawa, Illinois (Address of principal executive offices) (Zip Code) (815) 433-2525 (Registrant’s telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer ☐ (Do not check if a smaller reporting company) Smaller Reporting Company ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐ No☒ Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Class Outstanding as of May 14, 2014 Common Stock, $0.01 par value OTTAWA SAVINGS BANCORP, INC. FORM 10-Q For the quarterly period ended March 31, 2014 INDEX Page Number PART I – FINANCIAL INFORMATION Item 1 Financial Statements 3 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 3 Quantitative and Qualitative Disclosures about Market Risk 28 Item 4 Controls and Procedures 29 PART II – OTHER INFORMATION Item 1 Legal Proceedings 29 Item 1A Risk Factors 29 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 29 Item 3 Defaults upon Senior Securities 29 Item 4 Mine Safety Disclosures 29 Item 5 Other Information 29 Item 6 Exhibits 30 SIGNATURES 31 2 Part I – Financial Information ITEM 1 – FINANCIAL STATEMENTS OTTAWA SAVINGS BANCORP, INC. Consolidated Balance Sheets March 31, 2014 and December 31, 2013 (Unaudited) March 31, December 31, Assets Cash and due from banks $ 1,599,416 $ 2,174,979 Interest bearing deposits 3,481,781 4,430,861 Total cash and cash equivalents 5,081,197 6,605,840 Federal funds sold 1,629,000 3,630,000 Securities available for sale 36,714,805 34,547,080 Non-marketable equity securities 1,233,536 1,233,536 Loans, net of allowance for loan losses of $2,976,272 and $2,910,580 at March 31, 2014 and December 31, 2013, respectively 109,974,580 110,672,618 Premises and equipment, net 6,408,744 6,451,409 Accrued interest receivable 624,874 652,693 Foreclosed real estate 467,810 584,786 Deferred tax assets 2,426,790 2,450,072 Cash value of life insurance 2,110,230 2,096,181 Other assets 1,558,091 1,686,107 Total assets $ 168,229,657 $ 170,610,322 Liabilities and Stockholders' Equity Liabilities Deposits: Non-interest bearing $ 4,934,542 $ 5,219,028 Interest bearing 138,004,054 140,549,623 Total deposits 142,938,596 145,768,651 Accrued interest payable 1,685 582 Other liabilities 3,156,828 3,035,707 Total liabilities 146,097,109 148,804,940 Commitments and contingencies Redeemable common stock held by ESOP plan 345,427 319,090 Stockholders' Equity Common stock, $.01 par value, 12,000,000 shares authorized; 2,224,911 shares issued 22,249 22,249 Additional paid-in-capital 8,707,758 8,706,921 Retained earnings 14,853,094 14,619,095 Unallocated ESOP shares ) ) Unearned management recognition plan shares ) ) Accumulated other comprehensive income (loss) 72,989 ) 23,344,666 23,017,500 Less: Treasury stock, at cost; 106,932 shares ) ) Maximum cash obligation related to ESOP shares ) ) Total stockholders' equity 21,787,121 21,486,292 Total liabilities and stockholders' equity $ 168,229,657 $ 170,610,322 See accompanying notes to these unaudited consolidated financial statements. 3 OTTAWA SAVINGS BANCORP, INC. Consolidated Statements of Operations Three Months Ended March 31, 2014 and 2013 (Unaudited) Three Months Ended March 31, Interest and dividend income: Interest and fees on loans $ 1,395,784 $ 1,659,748 Securities: Residential mortgage-backed and related securities 145,329 114,193 State and municipal securities 69,578 61,381 Dividends on non-marketable equity securities 791 865 Interest-bearing deposits 1,360 1,228 Total interest and dividend income 1,612,842 1,837,415 Interest expense: Deposits 261,828 423,633 Total interest expense 261,828 423,633 Net interest income 1,351,014 1,413,782 Provision for loan losses 225,000 330,000 Net interest income after provision for loan losses 1,126,014 1,083,782 Other income: Gain on sale of loans 2,021 18,525 Gain on sale of OREO 7,793 51,198 Origination of mortgage servicing rights, net of amortization ) 4,224 Customer service fees 69,758 71,276 Income on bank owned life insurance 14,049 7,415 Other 27,837 30,571 Total other income 119,303 183,209 Other expenses: Salaries and employee benefits 398,662 377,306 Directors fees 25,200 25,200 Occupancy 131,936 109,984 Deposit insurance premium 32,931 58,008 Legal and professional services 92,758 68,393 Data processing 67,821 75,996 Valuation adjustments and expenses on foreclosed real estate 22,821 104,730 Loss on sale of repossessed assets 2,920 - Other 125,523 149,406 Total other expenses 900,572 969,023 Income before income tax expense 344,745 297,968 Income tax expense 110,746 31,495 Net income $ 233,999 $ 266,473 Basic earnings per share $ 0.11 $ 0.13 Diluted earnings per share $ 0.11 $ 0.13 See accompanying notes to these unaudited consolidated financial statements. 4 OTTAWA SAVINGS BANCORP, INC. Consolidated Statements of Comprehensive Income Three Months Ended March 31, 2014 and 2013 (Unaudited) Three Months Ended March 31, Net income $ 233,999 $ 266,473 Other comprehensive income (loss), before tax: Securities available for sale: Unrealized holding gains (losses) arising during the period 117,385 ) Reclassification adjustment for (gains) included in net income - - Other comprehensive income (loss), before tax 117,385 ) Income tax expense (benefit) related to items of other comprehensive income (loss) 39,911 ) Other comprehensive income (loss), net of tax 77,474 ) Comprehensive income $ 311,473 $ 190,695 See accompanying notes to these unaudited consolidated financial statements. 5 OTTAWA SAVINGS BANCORP, INC. Consolidated Statements of Cash Flows Three Months Ended March 31, 2014 and 2013 (Unaudited) Cash Flows from Operating Activities Net income $ 233,999 $ 266,473 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 44,704 46,739 Provision for loan losses 225,000 330,000 Provision for deferred income taxes ) ) Net amortization of premiums and discounts on securities 141,825 136,777 Origination of mortgage loans held for sale ) ) Proceeds from sale of mortgage loans held for sale 195,821 1,388,838 Gain on sale of loans, net ) ) Origination of mortgage servicing rights, net of amortization 2,155 ) Gain on sale of foreclosed real estate ) ) Write down of foreclosed real estate - 21,822 Loss on sale of repossessed assets 2,920 - ESOP compensation expense 10,981 7,419 MRP compensation expense 2,137 3,206 Compensation expense on RRP options granted 2,575 3,577 Increase in cash surrender value of life insurance ) ) Change in assets and liabilities: Decrease in prepaid FDIC insurance premiums - 55,403 Decrease in accrued interest receivable 27,819 34,760 Decrease (increase) in other assets 131,800 ) Increase in accrued interest payable and other liabilities 122,224 234,049 Net cash provided by operating activities 900,960 1,092,891 Cash Flows from Investing Activities Securities available for sale: Purchases ) ) Paydowns 1,626,411 1,686,209 Securities held to maturity: Paydowns - 12 Net decrease in loans 497,728 766,709 Net decrease (increase) in federal funds sold 2,001,000 ) Proceeds from sale of foreclosed real estate 83,329 520,601 Proceeds from sale of repossessed assets 7,891 569 Purchase of premises and equipment ) ) Net cash provided by (used in) investing activities 404,452 ) Cash Flows from Financing Activities Net (decrease) increase in deposits ) 2,649,878 Net cash (used in) provided by financing activities ) 2,649,878 Net decrease in cash and cash equivalents ) ) Cash and cash equivalents: Beginning 6,605,840 10,787,989 Ending $ 5,081,197 $ 7,744,167 (Continued) See accompanying notes to these unaudited consolidated financial statements. 6 OTTAWA SAVINGS BANCORP, INC. Consolidated Statements of Cash Flows Three Months Ended March 31, 2014 and 2013 (Unaudited) Supplemental Disclosures of Cash Flow Information Cash payments for: Interest paid to depositors $ 260,725 $ 420,820 Supplemental Schedule of Noncash Investing and Financing Activities Real estate acquired through or in lieu of foreclosure 102,560 94,612 Other assets acquired in settlement of loans 16,750 3,500 Sale of foreclosed real estate through loan origination 144,000 - Transfer of non-mortgage loans to held for sale - 268,634 Increase (decrease) in ESOP put option liability 26,337 ) See accompanying notes to these unaudited consolidated financial statements. 7 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) NOTE 1 – NATURE OF BUSINESS Ottawa Savings Bancorp, Inc. (the “Company”) was incorporated under the laws of the United States on July 11, 2005, for the purpose of serving as the holding company of Ottawa Savings Bank (the “Bank”), as part of the Bank’s conversion from a mutual to a stock form of organization. The Company is a publicly traded savings and loan holding company with assets of $168.2 million at March 31, 2014 and is headquartered in Ottawa, Illinois. In 2005, the Board of Directors of the Bank unanimously adopted a plan of conversion providing for the conversion of the Bank from an Illinois chartered mutual savings bank to a federally chartered stock savings bank and the purchase of all of the common stock of the Bank by the Company. The depositors of the Bank approved the plan at a meeting held in 2005. In adopting the plan, the Board of Directors of the Bank determined that the conversion was advisable and in the best interests of its depositors and the Bank. The conversion was completed in 2005 when the Company issued 1,223,701 shares of common stock to Ottawa Savings Bancorp MHC (a mutual holding company), and 1,001,210 shares of common stock to the public. As of March 31, 2014, Ottawa Savings Bancorp MHC holds 1,223,701 shares of common stock, representing 57.8% of the Company’s common shares outstanding. The Bank’s business is to attract deposits from the general public and use those funds to originate and purchase one-to-four family, multi-family and non-residential real estate, construction, commercial and consumer loans, which the Bank primarily holds for investment. The Bank has continually diversified its products to meet the needs of the community. NOTE 2 – BASIS OF PRESENTATION The consolidated financial statements presented in this quarterly report include the accounts of the Company and the Bank. The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and predominant practices followed by the financial services industry, and are unaudited. In the opinion of the Company’s management, all adjustments, consisting of normal recurring adjustments, which the Company considers necessary to fairly state the Company’s financial position and the results of operations and cash flows have been recorded. The interim financial statements should be read in conjunction with the audited financial statements and accompanying notes of the Company for the year ended December 31, 2013. Certain amounts in the accompanying financial statements and footnotes for 2013 have been reclassified with no effect on net income or stockholders’ equity to be consistent with the 2014 classifications. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. NOTE 3 – USE OF ESTIMATES The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements. Changes in these estimates and assumptions are considered reasonably possible and may have a material impact on the consolidated financial statements and, thus, actual results could differ from the amounts reported and disclosed herein. At March 31, 2014, there were no material changes in the Company’s significant accounting policies from those disclosed in the Form 10-K filed with the Securities and Exchange Commission on March 25, 2014. NOTE 4 – CRITICAL ACCOUNTING POLICIES We consider accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. We consider the allowance for loan losses and deferred income taxes to be our critical accounting policies. 8 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) Allowance for Loan Losses . Our allowance for loan losses is maintained at a level necessary to absorb loan losses which are both probable and reasonably estimable. Management, in determining the allowance for loan losses, considers the losses inherent in its loan portfolio and changes in the nature and volume of loan activities, along with the general economic and real estate market conditions. We utilize a two-tier approach: (1) identification of impaired loans and establishment of specific loss allowances on such loans; and (2) establishment of general valuation allowances on the remainder of our loan portfolio. We maintain a loan review system, which allows for a periodic review of our loan portfolio and the early identification of potential impaired loans. Such system takes into consideration, among other things, delinquency status, size of loans, type and market value of collateral and financial condition of the borrowers. Specific loan loss allowances are established for identified losses based on a review of such information. A loan evaluated for impairment is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. All loans identified as impaired are evaluated independently. We do not aggregate such loans for evaluation purposes. Loan impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Should full collection of principal be expected, cash collected on nonaccrual loans can be recognized as interest income. General loan loss allowances consists of quantitative and qualitative factors and covers non-impaired loans. The quantitative factors are based on historical loss experience adjusted for qualitative factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company using the most recent twelve quarters with heavier weighting given to the most recent quarters. The weighting applies 40% to each of the most recent four quarters and 30% to each of the next eight quarters. The allowance is increased through provisions charged against current earnings, and offset by recoveries of previously charged-off loans. Loans which are determined to be uncollectible are charged against the allowance. Management uses available information to recognize probable and reasonably estimable loan losses, but future loss provisions may be necessary based on changing economic conditions. T he allowance for loan losses as of March 31, 2014 is maintained at a level that represents management’s best estimate of losses inherent in the loan portfolio, and such losses were both probable and reasonably estimable. In addition, the Office of the Comptroller of the Currency, as an integral part of its examination process, periodically reviews our allowance for loan losses. Deferred Income Taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are also recognized for operating loss and tax credit carry-forwards. Accounting guidance requires that companies assess whether a valuation allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. Per accounting guidance, the Company reviewed its deferred tax assets at March 31, 2014 and determined that no valuation allowance was necessary. Despite a continued challenging economic environment, the Company has a history of strong earnings, is well-capitalized, and has positive expectations regarding future taxable income. The deferred tax asset will be analyzed quarterly to determine if a valuation allowance is warranted. There can be no guarantee that a valuation allowance will not be necessary in future periods. In making such judgments, significant weight is given to evidence that can be objectively verified. In making decisions regarding any valuation allowance, the Company considers both positive and negative evidence and analyzes changes in near-term market conditions as well as other factors which may impact future operating results. 9 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) NOTE 5 – EARNINGS PER SHARE Basic earnings per share is based on net income divided by the weighted average number of shares outstanding during the period, including allocated and committed-to-be-released Employee Stock Ownership Plan (“ESOP”) shares and vested Management Recognition Plan (“MRP”) shares. Diluted earnings per share show the dilutive effect, if any, of additional common shares issuable under stock options and awards. Three Months Ended March 31, Net income available to common stockholders $ 233,999 $ 266,473 Basic potential common shares: Weighted average shares outstanding 2,117,979 2,117,979 Weighted average unallocated ESOP shares ) ) Weighted average unvested MRP shares ) ) Basic weighted average shares outstanding 2,083,352 2,076,085 Dilutive potential common shares: Weighted average unrecognized compensation on MRP shares 5,520 4,569 Weighted average RRP options outstanding * - - Dilutive weighted average shares outstanding 2,088,872 2,080,654 Basic earnings per share $ 0.11 $ 0.13 Diluted earnings per share $ 0.11 $ 0.13 * The effect of share options was not included in the calculation of diluted earnings per share because to do so would have been anti-dilutive. NOTE 6 – EMPLOYEE STOCK OWNERSHIP PLAN On July 11, 2005, the Company adopted an ESOP for the benefit of substantially all employees. Upon adoption of the ESOP, the ESOP borrowed $763,140 from the Company and used those funds to acquire 76,314 shares of the Company's stock in the initial public offering at a price of $10.00 per share. Shares purchased by the ESOP with the loan proceeds are held in a suspense account and are allocated to ESOP participants on a pro rata basis as principal and interest payments are made by the ESOP to the Company. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Company’s discretionary contributions to the ESOP and earnings on the ESOP assets. Annual principal and interest payments of approximately $77,000 are to be made by the ESOP. As shares are released from collateral, the Company will report compensation expense equal to the current market price of the shares, and the shares will become outstanding for earnings-per-share (“EPS”) computations. Dividends on allocated ESOP shares reduce retained earnings, and dividends on unallocated ESOP shares reduce accrued interest. A terminated participant or the beneficiary of a deceased participant who received a distribution of employer stock from the ESOP has the right to require the Company to purchase such shares at their fair market value any time within 60 days of the distribution date. If this right is not exercised, an additional 60 day exercise period is available in the year following the year in which the distribution is made and begins after a new valuation of the stock has been determined and communicated to the participant or beneficiary. At March 31, 2014, 38,812 shares at a fair value of $8.90 have been classified as mezzanine capital. The following table reflects the status of the shares held by the ESOP: March 31, December 31, Shares allocated 47,060 45,788 Shares withdrawn from the plan ) ) Unallocated shares 29,254 30,526 Total ESOP shares 68,065 68,065 Fair value of unallocated shares $ 260,361 $ 259,471 10 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) NOTE 7 – INVESTMENT SECURITIES The amortized cost and fair values of securities, with gross unrealized gains and losses, follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value March 31, 2014: Available for Sale State and municipal securities $ 9,220,383 $ 140,050 $ 191,225 $ 9,169,208 Residential mortgage-backed securities 27,375,124 359,327 188,854 27,545,597 $ 36,595,507 $ 499,377 $ 380,079 $ 36,714,805 December 31, 2013: Available for Sale State and municipal securities 8,676,586 80,152 312,219 8,444,519 Residential mortgage-backed securities 25,877,289 369,098 143,826 26,102,561 $ 34,553,875 $ 449,250 $ 456,045 $ 34,547,080 The amortized cost and fair value at March 31, 2014, by contractual maturity, are shown below. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be called or prepaid without penalties. Therefore, stated maturities of residential mortgage-backed securities are not disclosed. Securities Available for Sale Amortized Fair Cost Value Due after three months through one year $ - $ - Due after one year through five years - - Due after five years through ten years 4,390,877 4,407,225 Due after ten years 4,829,506 4,761,983 Residential mortgage-backed securities 27,375,124 27,545,597 $ 36,595,507 $ 36,714,805 The following table reflects securities with gross unrealized losses for less than 12 months and for 12 months or more at March 31, 2014 and December 31, 2013: Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses March 31, 2014 Securities Available for Sale State and municipal securities $ 4,472,890 $ 173,647 $ 263,768 $ 17,578 $ 4,736,658 $ 191,225 Residential mortgage-backed securities 10,976,462 139,256 2,658,968 49,598 13,635,430 188,854 $ 15,449,352 $ 312,903 $ 2,922,736 $ 67,176 $ 18,372,088 $ 380,079 December 31, 2013 Securities Available for Sale State and municipal securities $ 4,937,528 $ 288,364 $ 258,573 $ 23,855 $ 5,196,101 $ 312,219 Residential mortgage-backed securities 9,832,934 122,774 994,240 21,052 10,827,174 143,826 $ 14,770,462 $ 411,138 $ 1,252,813 $ 44,907 $ 16,023,275 $ 456,045 11 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability to retain and whether it is not more likely than not the Company will be required to sell its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports. At March 31, 2014, 29 securities had unrealized losses with an aggregate depreciation of 2.03% from the Company’s amortized cost basis. The Company does not consider these investments to be other than temporarily impaired at March 31, 2014 due to the following: ● Decline in value is attributable to interest rates. ● The value did not decline due to credit quality. ● The Company does not intend to sell these securities. ● The Company has adequate liquidity such that it will not more likely than not have to sell these securities before recovery of the amortized cost basis, which may be at maturity. There were no proceeds from the sales of securities for the three months ended March 31, 2014 and 2013, resulting in no realized gains or losses for the three months ended March 31, 2014 and 2013. NOTE 8 – LOANS AND ALLOWANCE FOR CREDIT LOSSES The components of loans, net of deferred loan costs (fees), are as follows: March 31, December 31, Mortgage loans: One-to-four family residential loans $ 76,307,689 $ 77,406,656 Multi-family residential loans 2,694,716 2,744,963 Total mortgage loans 79,002,405 80,151,619 Other loans: Non-residential real estate loans 17,507,747 17,016,805 Commercial loans 8,256,141 7,860,312 Consumer direct 439,334 392,273 Purchased auto 7,745,225 8,162,189 Total other loans 33,948,447 33,431,579 Gross loans 112,950,852 113,583,198 Less: Allowance for loan losses ) ) Loans, net $ 109,974,580 $ 110,672,618 Purchases of loans receivable, segregated by class of loans, for the periods indicated were as follows: Three Months Ended March 31, Purchased auto $ 500,972 $ 1,503,151 12 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) Net (charge-offs) / recoveries, segregated by class of loans, for the periods indicated were as follows: Three Months Ended March 31, One-to-four family $ ) $ ) Multi-family 4,376 - Non-residential ) - Commercial - - Consumer direct ) - Purchased auto ) ) Net (charge-offs)/recoveries $ ) $ ) 13 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2014 and 2013: March 31, 2014 One-to-Four Family Multi-family Non-residential Commercial Consumer Direct Purchased Auto Total Balance at beginning of period $ 2,277,325 $ 141,367 $ 388,215 $ 29,965 $ 1,698 $ 72,010 $ 2,910,580 Provision charged to income 80,844 528 130,753 1,620 1,531 9,724 225,000 Loans charged off ) - ) - ) ) ) Recoveries of loans previously charged off 4,451 4,376 - - - 3,409 12,236 Balance at end of period $ 2,251,220 $ 146,271 $ 473,214 $ 31,585 $ 2,282 $ 71,700 $ 2,976,272 March 31, 2013 One-to-Four Family Multi-family Non-residential Commercial Consumer Direct Purchased Auto Total Balance at beginning of period $ 2,057,336 $ 161,901 $ 1,012,119 $ 75,130 $ 1,465 $ 73,490 $ 3,381,441 Provision charged to income 703,850 ) 12,543 330,000 Loans charged off ) - ) ) Recoveries of loans previously charged off 2,500 - 1,470 3,970 Balance at end of period $ 2,648,601 $ 130,898 $ 676,883 $ 56,441 $ - $ 84,381 $ 3,597,204 The following table presents the recorded investment in loans and the related allowances allocated by portfolio segment and based on impairment method as of March 31, 2014 and December 31, 2013: March 31, 2014 One-to-four Family Multi-family Non-residential Commercial Consumer Direct Purchased Auto Total Loans individually evaluated for impairment $ 3,730,736 $ - $ 2,488,072 $ - $ - $ - $ 6,218,808 Loans collectively evaluated for impairment 72,576,953 2,694,716 15,019,675 8,256,141 439,334 7,745,225 106,732,044 Ending Balance $ 76,307,689 $ 2,694,716 $ 17,507,747 $ 8,256,141 $ 439,334 $ 7,745,225 $ 112,950,852 Period-end amount allocated to: Loans individually evaluated for impairment $ 306,569 $ - $ 90,668 $ - $ - $ - $ 397,237 Loans collectively evaluated for impairment 1,944,651 146,271 382,546 31,585 2,282 71,700 2,579,035 Balance at end of period $ 2,251,220 $ 146,271 $ 473,214 $ 31,585 $ 2,282 $ 71,700 $ 2,976,272 December 31, 2013 One-to-four Family Multi-family Non-residential Commercial Consumer Direct Purchased Auto Total Loans individually evaluated for impairment $ 3,455,604 $ - $ 2,332,243 $ - $ - $ - $ 5,787,847 Loans collectively evaluated for impairment 73,951,052 2,744,963 14,684,562 7,860,312 392,273 8,162,189 107,795,351 Ending Balance $ 77,406,656 $ 2,744,963 $ 17,016,805 $ 7,860,312 $ 392,273 $ 8,162,189 $ 113,583,198 Period-end amount allocated to: Loans individually evaluated for impairment $ 235,166 $ - $ 29,977 $ - $ - $ - $ 265,143 Loans collectively evaluated for impairment 2,042,159 141,367 358,238 29,965 1,698 72,010 2,645,437 Balance at end of year $ 2,277,325 $ 141,367 $ 388,215 $ 29,965 $ 1,698 $ 72,010 $ 2,910,580 14 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. The following table presents loans individually evaluated for impairment, by class of loans, as of March 31, 2014 and December 31, 2013: March 31, 2014 Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Average Recorded Investment One-to-four family $ 4,160,880 $ 2,351,989 $ 1,378,747 $ 3,730,736 $ 306,569 $ 3,559,238 Multi-family - Non-residential 2,833,375 2,070,518 417,554 2,488,072 90,668 2,371,455 Commercial - Consumer direct - Purchased auto - $ 6,994,255 $ 4,422,507 $ 1,796,301 $ 6,218,808 $ 397,237 $ 5,930,693 December 31, 2013 Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Average Recorded Investment One-to-four family $ 3,851,948 $ 2,729,178 $ 726,426 $ 3,455,604 $ 235,166 $ 3,480,595 Multi-family - 16,033 Non-residential 2,631,792 2,090,766 241,477 2,332,243 29,977 2,288,596 Commercial - Consumer direct - Purchased auto - $ 6,483,740 $ 4,819,944 $ 967,903 $ 5,787,847 $ 265,143 $ 5,785,224 15 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) For the three months ended March 31, 2014 and 2013, the Company recognized no accrued or cash basis interest income on impaired loans. At March 31, 2014, there were 43 impaired loans totaling approximately $6.2 million, compared to 38 impaired loans totaling approximately $5.8 million at December 31, 2013. The change in impaired loans was a result of adding seven loans totaling approximately $717,000 to the impaired loan list, offset by writing down and moving one impaired loan of approximately $148,000 to OREO, the charge-off of an impaired loan for $34,000, and payments of approximately $104,000. Our loan portfolio also includes certain loans that have been modified in a troubled debt restructuring (“TDR”), where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forbearance or other actions. TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six months. When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or use the current fair value of the collateral, less estimated selling costs, for collateral dependent loans. If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment and recognize impairment through the allowance. Impaired loans at March 31, 2014 included $3.3 million of loans whose terms have been modified in troubled debt restructurings compared to $3.1 million at December 31, 2013. The amount of TDR loans included in impaired loans increased as a result of the re-default of three TDRs totaling approximately $320,000, offset by payments. The restructured loans are being monitored as they have not attained per accounting guidelines the performance requirements for the set time period to achieve being returned to accrual status. There were no new loan restructures classified as troubled debt restructurings during the three months ended March 31, 2014 and 2013. Troubled debt restructured loans that were restructured during the twelve months prior to the dates indicated and had payment defaults (i.e., 60 days or more past due following a modification), during the three months ended March 31, 2014 and 2013, segregated by class are shown below. Three Months Ended Three Months Ended March 31, 2014 March 31, 2013 Number of Defaults Recorded Investment Number of Defaults Recorded Investment (as of period end) (as of period end) One-to-four family 1 $ 104,797 - $ - Multi-family - Non-residential - Commercial - Consumer direct - Purchased auto - 1 $ 104,797 - $ - All TDRs are evaluated for possible impairment and any impairment identified is recognized through the allowance. Additionally, the qualitative factors are updated quarterly for trends in economic and nonperforming factors, including consideration of TDRs. 16 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual status, by class of loans, as March 31, 2014 and December 31, 2013: March 31, 2014 Nonaccrual Loans Past Due Over 90 Days Still Accruing One-to-four family $ 3,824,130 $ 196,475 Multi-family - - Non-residential 2,488,072 - Commercial - - Consumer direct - - Purchased auto - - $ 6,312,202 $ 196,475 December 31, 2013 Nonaccrual Loans Past Due Over 90 Days Still Accruing One-to-four family $ 3,549,498 $ - Multi-family - - Non-residential 2,332,243 - Commercial - - Consumer direct - - Purchased auto - - $ 5,881,741 $ - The following table presents the aging of the recorded investment in loans, by class of loans, as of March 31, 2014 and December 31, 2013: March 31, 2014 Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Current Loans Total Loans One-to-four family $ 3,363,079 $ 758,838 $ 1,346,522 $ 5,468,439 $ 70,839,250 $ 76,307,689 Multi-family 261,267 - - 261,267 2,433,449 2,694,716 Non-residential 572,775 186,351 824,575 1,583,701 15,924,046 17,507,747 Commercial - 8,256,141 8,256,141 Consumer direct - 439,334 439,334 Purchased auto - 15,144 - 15,144 7,730,081 7,745,225 $ 4,197,121 $ 960,333 $ 2,171,097 $ 7,328,551 $ 105,622,301 $ 112,950,852 December 31, 2013 Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Current Loans Total Loans One-to-four family $ 2,550,329 $ 492,545 $ 1,613,697 $ 4,656,571 $ 72,750,085 $ 77,406,656 Multi-family 263,313 - - 263,313 2,481,650 2,744,963 Non-residential 289,111 428,645 318,475 1,036,231 15,980,574 17,016,805 Commercial 25,795 - - 25,795 7,834,517 7,860,312 Consumer direct 947 - - 947 391,326 392,273 Purchased auto 22,719 - - 22,719 8,139,470 8,162,189 $ 3,152,214 $ 921,190 $ 1,932,172 $ 6,005,576 $ 107,577,622 $ 113,583,198 17 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. For commercial and non-residential real estate loans, the Company’s credit quality indicator is internally assigned risk ratings. Each commercial and non-residential real estate loan is assigned a risk rating upon origination. The risk rating is reviewed annually, at a minimum, and on an as needed basis depending on the specific circumstances of the loan. For residential real estate loans, multi-family, consumer direct and purchased auto loans, the Company’s credit quality indicator is performance determined by delinquency status. Delinquency status is updated regularly by the Company’s loan system for real estate loans, multi-family and consumer direct loans. The Company receives monthly reports on the delinquency status of the purchased auto loan portfolio from the servicing company. The Company uses the following definitions for risk ratings: ● Pass – loans classified as pass are of a higher quality and do not fit any of the other “rated” categories below (e.g. special mention, substandard or doubtful). The likelihood of loss is considered remote. ● Special Mention – loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. ● Substandard – loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. ● Doubtful – loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. ● Not Rated – loans in this bucket are not evaluated on an individual basis. As of March 31, 2014 and December 31, 2013, the risk category of loans by class is as follows: March 31, 2014 Pass Special Mention Substandard Doubtful Not rated One-to-four family $ - $ 1,285,466 $ 3,730,736 $ - $ 71,291,487 Multi-family - 186,351 - - 2,508,365 Non-residential 13,564,495 1,455,181 2,488,071 - - Commercial 8,256,141 - Consumer direct - 439,334 Purchased auto - 7,745,225 Total $ 21,820,636 $ 2,926,998 $ 6,218,807 $ - $ 81,984,411 December 31, 2013 Pass Special Mention Substandard Doubtful Not rated One-to-four family $ - $ 1,242,347 $ 3,455,604 $ - $ 72,708,705 Multi-family - 2,744,963 Non-residential 12,565,850 2,118,712 2,332,243 - - Commercial 7,860,021 291 - - - Consumer direct - 392,273 Purchased auto - 8,162,189 Total $ 20,425,871 $ 3,361,350 $ 5,787,847 $ - $ 84,008,130 NOTE 9 – STOCK COMPENSATION Total stock-based compensation expense was approximately $5,000 and $7,000 for the three months ended March 31, 2014 and 2013, respectively. In accordance with FASB ASC 718, Compensation-Stock Compensation, compensation expense is recognized on a straight-line basis over the grantees’ vesting period or to the grantees’ retirement eligibility date, if earlier. During the three months ended March 31, 2014 and 2013, the Company did not grant additional options or shares under the MRP. 18 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) NOTE 10 – RECENT ACCOUNTING DEVELOPMENTS In January 2014, the FASB issued ASU No. 2014-04, Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40) : Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The update clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (i) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (ii) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar agreement. In addition, the update requires disclosure of both the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure in accordance with local requirements of the applicable jurisdiction. An entity can elect to adopt the amendments using either a modified retrospective method or a prospective transition method. The amendments are effective for annual and interim periods beginning after December 15, 2014, with early adoption permitted. The Company does not expect the adoption of this update to have a significant impact on its financial position, results of operation or cash flows. NOTE 11 – FAIR VALUE MEASUREMENT AND DISCLOSURE FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants and is not adjusted for transaction costs. This guidance also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement inputs) and the lowest priority to unobservable inputs (Level 3 measurement inputs). The three levels of the fair value hierarchy under FASB ASC 820 are described below: Basis of Fair Value Measurement: • Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets. • Level 2 - Significant other observable inputs other than Level 1 prices such as quoted prices in markets that are not active, quoted prices for similar assets, or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset. • Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Following is a description of valuation methodologies used for assets and liabilities recorded at fair value: Securities Available for Sale Securities classified as available for sale are recorded at fair value on a recurring basis using pricing obtained from an independent pricing service. Where quoted market prices are available in an active market, securities are classified within Level 1. The Company has no securities classified within Level 1. If quoted market prices are not available, the pricing service estimates the fair values by using pricing models or quoted prices of securities with similar characteristics. For these securities, the inputs used by the pricing service to determine fair value consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and bonds’ terms and conditions, among other things resulting in classification within Level 2. Level 2 securities include state and municipal securities, and residential mortgage-backed securities. In cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3. The Company has no securities classified within Level 3. Foreclosed Assets Foreclosed assets consisting of foreclosed real estate and repossessed assets, are adjusted to fair value less estimated costs to sell upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of cost or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the foreclosed asset as non-recurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as non-recurring Level 3. 19 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) Impaired Loans Impaired loans are evaluated and adjusted to the lower of carrying value or fair value less estimated costs to sell at the time the loan is identified as impaired. Impaired loans are carried at the lower of cost or fair value. Fair value is measured based on the value of the collateral securing these loans. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the impaired loan as non-recurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the impaired loan as non-recurring Level 3. The Company did not have any transfers of assets or liabilities between Levels 1 and 2 of the fair value hierarchy during the three months ended March 31, 2014 and the year ended December 31, 2013. The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and result in transfers between levels. The tables below present the recorded amount of assets measured at fair value on a recurring basis at March 31, 2014 and December 31, 2013. Total March 31, 2014 Level 1 Level 2 Level 3 Fair Value State and municipal securities available for sale $ - $ 9,169,208 $ - $ 9,169,208 Residential mortgage-backed securities available for sale - 27,545,597 - 27,545,597 $ - $ 36,714,805 $ - $ 36,714,805 Total December 31, 2013 Level 1 Level 2 Level 3 Fair Value State and municipal securities available for sale $ - $ 8,444,519 $ - $ 8,444,519 Residential mortgage-backed securities available for sale - 26,102,561 - 26,102,561 $ - $ 34,547,080 $ - $ 34,547,080 The tables below present the recorded amount of assets measured at fair value on a non-recurring basis at March 31, 2014 and December 31, 2013. Total March 31, 2014 Level 1 Level 2 Level 3 Fair Value Foreclosed assets $ - $ - $ 480,560 $ 480,560 Impaired loans, net - - 1,399,064 1,399,064 Total December 31, 2013 Level 1 Level 2 Level 3 Fair Value Foreclosed assets $ - $ - $ 597,493 $ 597,493 Impaired loans, net - - 702,760 702,760 20 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) In accordance with accounting pronouncements, the carrying value and estimated fair value of the Company’s financial instruments as of March 31, 2014 and December 31, 2013 are as follows: Fair Value Measurements at Carrying March 31, 2014 using: Amount Level 1 Level 2 Level 3 Total Financial Assets: Cash and cash equivalents $ 5,081,197 $ 5,081,197 $ - $ - $ 5,081,197 Federal funds sold 1,629,000 1,629,000 - - 1,629,000 Securities 37,948,341 - 37,948,341 - 37,948,341 Accrued interest receivable 624,874 624,874 - - 624,874 Net loans 109,974,580 - - 111,262,000 111,262,000 Mortgage servicing rights 155,876 - - 155,876 155,876 Financial Liabilities: Non-interest bearing deposits 4,934,542 4,934,542 - - 4,934,542 Interest bearing deposits 138,004,054 - - 137,259,458 137,259,458 Accrued interest payable 1,685 1,685 - - 1,685 Fair Value Measurements at Carrying December 31, 2013 using: Amount Level 1 Level 2 Level 3 Total Financial Assets: Cash and cash equivalents $ 6,605,840 $ 6,605,840 $ - $ - $ 6,605,840 Federal funds sold 3,630,000 3,630,000 - - 3,630,000 Securities 35,780,616 - 35,780,616 - 35,780,616 Accrued interest receivable 652,693 652,693 - - 652,693 Net loans 110,672,618 - - 112,991,000 112,991,000 Mortgage servicing rights 158,030 - - 158,030 158,030 Financial Liabilities: Non-interest bearing deposits 5,219,028 5,219,028 - - 5,219,028 Interest bearing deposits 140,549,623 - - 139,327,972 139,327,972 Accrued interest payable 582 582 - - 582 The following methods and assumptions were used by the Bank in estimating the fair value of financial instruments: Cash and Cash Equivalents: The carrying amounts reported in the balance sheets for cash and cash equivalents approximate fair values. Federal Funds Sold: The carrying amounts reported in the balance sheets for federal funds sold approximate fair values. Securities: The Company obtains fair value measurements of available for sale securities from an independent pricing service. See Note 11 - Fair Value Measurement and Disclosure for further detail on how fair values of securities available for sale are determined. The carrying value of non-marketable equity securities approximates fair value. Loans: For variable-rate loans that re-price frequently and with no significant change in credit risk, fair values are based on carrying amounts. The fair values for other loans (for example, fixed rate commercial real estate and rental property mortgage loans and commercial and industrial loans) are estimated using discounted cash flow analysis, based on market interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Loan fair value estimates include judgments regarding future expected loss experience and risk characteristics. Fair values for impaired loans are estimated using underlying collateral values, where applicable or discounted cash flows. 21 OTTAWA SAVINGS BANCORP, INC. Notes to Unaudited Consolidated Financial Statements (continued) Accrued Interest Receivable and Payable: The carrying amounts of accrued interest receivable and payable approximate fair values. Mortgage Servicing Rights: The carrying amounts of mortgage servicing rights approximate their fair values. Deposits: The fair values disclosed for demand deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The carrying amounts of variable-rate, fixed-term money market accounts and certificates of deposit approximate their fair values. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates currently offered on certificates to a schedule of aggregated expected monthly maturities on time deposits. Loan Commitments: Commitments to extend credit were evaluated and fair value was estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counter-parties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The Bank does not charge fees to enter into these agreements. As of March 31, 2014 and December 31, 2013, the fair values of the commitments are immaterial in nature. In addition, other assets and liabilities of the Bank that are not defined as financial instruments, such as property and equipment are not included in the above disclosures. Also, non-financial instruments typically not recognized in financial statements nevertheless may have value but are not included in the above disclosures. These include, among other items, the estimated earnings power of core deposit accounts, the trained work force, customer goodwill and similar items. ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management’s discussion and analysis of the financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the Unaudited Consolidated Financial Statements and footnotes appearing in Part I, Item 1 of this document. FORWARD-LOOKING INFORMATION Statements contained in this report that are not historical facts may constitute forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended), which involve significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of invoking these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by the use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “plan,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain and actual results may differ from those predicted. The Company undertakes no obligation to update these forward-looking statements in the future. The Company cautions readers of this report that a number of important factors could cause the Company’s actual results subsequent to March 31, 2014 to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from those predicted and could affect the future prospects of the Company include, but are not limited to, fluctuations in market rates of interest and loan and deposit pricing, changes in the securities or financial market, a deterioration of general economic conditions either nationally or locally, delays in obtaining the necessary regulatory approvals, our ability to consummate proposed transactions in a timely manner, legislative or regulatory changes that adversely affect our business, adverse developments or changes in the composition of our loan or investment portfolios, significant increases in competition, changes in real estate values, difficulties in identifying attractive acquisition opportunities or strategic partners to complement our Company’s approach and the products and services the Company offers, the possible dilutive effect of potential acquisitions or expansion, and our ability to raise new capital as needed and the timing, amount and type of such capital raises. These risks and uncertainties should be considered in evaluating forward-looking statements. Additionally, other risks and uncertainties may be described in the Company’s Annual Report on form 10-K as filed with the Securities and Exchange Commission on March 25, 2014. 22 GENERAL The Bank is a community and customer-oriented savings bank. The Bank's business has historically consisted of attracting deposits from the general public and using those funds to originate and purchase one-to-four family, multi-family and non-residential real estate, construction, commercial and consumer loans, which the Bank primarily holds for investment. The Bank has continually diversified its products to meet the needs of the community. The Bank completed its reorganization pursuant to its Plan of Conversion on July 11, 2005, upon which the Bank converted from an Illinois-chartered mutual savings bank to a federally-chartered mutual savings bank, and on that same date, converted from a federally-chartered mutual savings bank to a federally-chartered stock savings bank, all of the outstanding stock of which was issued to the Company. As part of the reorganization, the Company issued 1,001,210 shares to the public and 1,223,701 shares to Ottawa Savings Bancorp MHC, a mutual holding company. COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2, 2013 The Company's total assets decreased $2.4 million, or 1.4%, to $168.2 million at March 31, 2014, from $170.6 million at December 31, 2013. The decrease in assets was primarily due to a decrease in Federal funds sold of $2.0 million, a decrease in cash and cash equivalents of $1.5 million, and a decrease in net loans of $0.7 million. The decrease in assets was partially offset by an increase in securities available for sale of $2.2 million. Cash and cash equivalents decreased $1.5 million, or 23.1%, to $5.1 million at March 31, 2014 from $6.6 million at December 31, 2013, primarily as a result of cash used in investing and financing activities exceeding the cash provided by operating activities, and a decrease in deposits which resulted from management strategically pricing deposits based on market conditions. Federal funds sold decreased $2.0 million, or 55.1%, to $1.6 million at March 31, 2014 from $3.6 million at December 31, 2013, primarily as a result of cash used in investing and financing activities exceeding the cash provided by operating activities, and a decrease in deposits which resulted from management strategically pricing deposits based on market conditions. Securities available for sale increased $2.2 million, or 6.3%, to $36.7 million at March 31, 2014 from $34.5 million at December 31, 2013. The increase was primarily the result of $3.8 million in purchases offset by pay-downs of $1.6 million. Loans, net of the allowance for loan losses, decreased $0.7 million, or 0.6%, to $110.0 million at March 31, 2014 from $110.7 million at December 31, 2013. The decrease in loans, net of the allowance for loan losses, was primarily due to normal attrition and pay-downs and principal reductions exceeding the level of originations. The Company is focusing its lending efforts on customers based primarily in its local market and purchased auto loans from regulated financial institutions. Foreclosed real estate decreased approximately $0.1 million, or 20.0%, to $0.5 million at March 31, 2014 from $0.6 million at December 31, 2013. The decrease was primarily due to the sale of five properties for aggregate proceeds of $0.2 million offset by the addition of one property valued at $0.1 million acquired through loan foreclosures. Other assets comprised primarily of prepaid expenses, deferred director compensation accounts, and auto loan repossessions, decreased approximately $0.1 million, or 7.6%, to $1.6 million at March 31, 2014 from $1.7 million at December 31, 2013. Total deposits decreased $2.8 million, or 1.9%, to $142.9 million at March 31, 2014, from $145.8 million at December 31, 2013. The decrease is primarily due to a decrease in certificates of deposit of $3.4 million, or 3.9% and a decrease in money market accounts of $1.7 million, or 7.8%, from December 31, 2013 to March 31, 2014. The decrease was partially offset by an increase in savings accounts of $1.7 million, or 10.0%, and an increase in checking accounts of $0.7 million, or 3.5% from December 31, 2013 to March 31, 2014. The increase in savings and checking accounts is primarily due to customers moving funds into non-term products as they wait for a better rate environment. The reduction in certificate of deposit accounts is due to management’s strategic initiative to pay competitive rates, but not the highest rates in the market. The reduction in money market balances was due to a couple of large deposits that were invested by the customers in other non-banking investments. Other liabilities comprised of primarily deferred compensation expenses, accrued expenses and escrow payable, increased $0.1 million, or 4.0%, to $3.1 million at March 31, 2014, from $3.0 at December 31, 2013. Equity increased approximately $0.3 million, or 1.4%, to $21.8 million at March 31, 2014, from $21.5 million at December 31, 2013. The increase in equity is primarily a result of net income for the three months ended March 31, 2014 of approximately $0.2 million and an increase in other comprehensive income of almost $0.1 million. 23 The ongoing state of economic uncertainty continues to affect our asset quality. We continue to experience a decline in the market values of homes in our market area in general and also on specific properties held as collateral. In addition, higher unemployment locally continues to affect some of our borrowers’ ability to timely repay their obligations to the Company. These conditions have resulted in nonperforming loans totaling 5.7% of total loan receivables as of March 31, 2014, up from 5.1% at December 31, 2013. The Company’s nonperforming assets consist of non-accrual loans, loans past due greater than 90 days and still accruing and foreclosed real estate. Loans are generally placed on non-accrual status when it is apparent all of the contractual payments (i.e. principal and interest) will not be received; however, they may be placed on non-accrual status sooner if management has significant doubt as to the collection of all amounts due. Interest previously accrued but uncollected is reversed and charged against interest income. During the first three months of 2014, nonaccrual loans increased 7.4% to $6.3 million from $5.9 million as of December 31, 2013. The increase was the result of placing seven loans totaling approximately $717,000 on non-accrual status, offset by writing down and moving one loan of approximately $148,000 to OREO, the charge-off of an impaired loan for $34,000, and payments of approximately $104,000. The following table summarizes nonperforming assets for the prior five quarters. March 31, December 31, September 30, June 30, March 31, (In Thousands) Non-accrual: One-to-four family $ 3,824 $ 3,549 $ 3,385 $ 3,433 $ 4,153 Multi-family - Non-residential real estate 2,488 2,332 2,032 2,480 2,355 Commercial - Consumer direct - Purchased auto - Total non-accrual loans 6,312 5,881 5,417 5,913 6,508 Past due greater than 90 days and still accruing: One-to-four family 196 - - 15 15 Non-residential real estate - - - 51 - Commercial - - - 23 - Consumer direct - - - 1 1 Total nonperforming loans 6,508 5,881 5,417 6,003 6,524 Foreclosed real estate 468 585 907 763 900 Other repossessed assets 13 13 48 50 12 Total nonperforming assets $ 6,989 $ 6,479 $ 6,372 $ 6,816 $ 7,436 The table below presents selected asset quality ratios for the prior five quarters. March 31, December 31, September 30, June 30, March 31, Allowance for loan losses as a percent of gross loans receivable % Allowance for loan losses as a percent of total nonperforming loans % Nonperforming loans as a percent of gross loans receivable % Nonperforming loans as a percent of total assets % Nonperforming assets as a percent of total assets % COMPARISON OF RESULTS OF OPERATION FOR THE THREE MONTHS ENDED MARCH 31, 2 General . Net income for the three months ended March 31, 2014 was $234,000 compared to net income of $266,000 for the three months ended March 31, 2013. Net income decreased during the first quarter of 2014 primarily due to lower interest and dividend income, decreases in other income, and an increase in income tax expense. The decreases were partially offset by lower levels of provision for loan losses than in the 2013 period, lower funding costs, and lower operating costs. 24 Net Interest Income. The following table summarizes interest and dividend income and interest expense for the three months ended March 31, 2014 and 2013. Three Months Ended March 31, $ change % change (Dollars in thousands) Interest and dividend income: Interest and fees on loans $ 1,396 $ 1,660 $ ) )% Securities: Residential mortgage-backed securities 145 114 31 27.19 State and municipal securities 70 61 9 14.75 Dividends on non-marketable equity securities 1 1 - - Interest-bearing deposits 1 1 - - Total interest and dividend income 1,613 1,837 ) ) Interest expense: Deposits 262 424 ) ) Total interest expense 262 424 ) ) Net interest income $ 1,351 $ 1,413 $ ) )% The following table presents for the periods indicated the total dollar amount of interest income from average interest- earning assets and the resultant yields, as well as the interest expense on average interest bearing liabilities, expressed both in dollars and rates. No tax equivalent adjustments were made. All average balances are monthly average balances. Non-accruing loans have been included in the table as loans carrying a zero yield. The amortization of loan fees is included in computing interest income; however, such fees are not material. Three Months Ended March 31, AVERAGE AVERAGE AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST COST BALANCE INTEREST COST (Dollars in thousands) Interest-earning assets Loans receivable, net (1) $ 110,117 $ 1,396 % $ 121,290 $ 1,660 % Securities, net (2) 36,077 215 % 31,070 175 % Non-marketable equity securities 1,234 1 % 1,334 1 % Interest-bearing deposits 7,591 1 % 11,098 1 % Total interest-earning assets 155,019 1,613 % 164,792 1,837 % Interest-bearing liabilities Money Market accounts $ 21,441 $ 13 % $ 21,071 $ 14 % Passbook accounts 18,181 3 % 16,354 4 % Certificates of Deposit accounts 85,138 244 % 101,460 404 % Checking accounts 15,320 2 % 13,280 2 % Total interest-bearing liabilities 140,080 262 % 152,165 424 % NET INTEREST INCOME $ 1,351 $ 1,413 NET INTEREST RATE SPREAD % % NET INTEREST MARGIN % % RATIO OF AVERAGE INTEREST-EARNING ASSETS TO AVERAGE INTEREST-BEARING LIABILITIES % % Amount is net of deferred loan origination (costs) fees, undisbursed loan funds, unamortized discounts and allowance for loan losses and includes non-performing loans. Includes unamortized discounts and premiums. Net interest rate spread represents the difference between the yield on average interest-earning assets and the average cost of interest-bearing liabilities. Net interest margin represents net interest income divided by average interest-earning assets. 25 The following table summarizes the changes in net interest income due to rate and volume for the three months ended March 31, 2014 and 2013. The column “Net” is segmented into the changes attributable to variations in volume and the changes attributable to changes in interest rates. The variations attributable to simultaneous volume and rate changes have been proportionately allocated to rate and volume. Three Months Ended March 31, 2014 Compared to 2013 Increase (Decrease) Due to VOLUME RATE NET (Dollars in Thousands) Interest and dividends earned on Loans receivable, net $ ) $ ) $ ) Securities, net 31 9 40 Non-marketable equity securities - - - Interest-bearing deposits - - - Total interest-earning assets $ ) $ ) $ ) Interest expense on Money Market accounts $ - $ (1 ) $ (1 ) Passbook accounts - (1 ) (1 ) Certificates of Deposit accounts ) ) ) Checking - - - Total interest-bearing liabilities ) ) ) Change in net interest income $ ) $ 3 $ ) Net interest income decreased $62,000, or 4.4%, to $1.4 million for the three months ended March 31, 2014 compared to $1.4 million for the three months ended March 31, 2013. Interest and dividend income decreased $224,000 due to the decline in average interest earning assets of $9.8 million and the yield decreasing on interest earning assets from 4.5% to 4.2%. The decline in the loan portfolios contributed to a significant amount of the decline in earning assets. The yield on the loan portfolio declined as the low rate environment continued during the first quarter of 2014. This decline in interest income was offset by a $162,000, or 38.2%, reduction in interest expense. The cost of funds declined 36 basis points, or 32.4%, for the three months ended March 31, 2014 compared to the three months ended March 31, 2013, due to the continued low rate environment. Additionally, the average balance of interest bearing liabilities declined by $12.1 million, or 8.0%. Net interest margin improved during the three months ended March 31, 2014 to 3.5% compared to 3.4% at March 31, 2013. Provision for Loan Losses. Management recorded a loan loss provision of $225,000 for the three months ended March 31, 2014, compared to $330,000 for the three months ended March 31, 2013. The provision is primarily attributed to the reserves required for the one-to-four family segment as the economic conditions in the local market continue to negatively impact collateral values of real estate and the ability of borrowers to keep current per terms of their obligations. The slow payment activity and continued decline of property values are the result of local economic conditions continuing to lag national indicators, including higher levels of unemployment locally of 12.0%, versus 8.7% for the State of Illinois and the national level of 6.7%. Based on a review of the loans that were in the loan portfolio at March 31, 2014, management believes that the allowance is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable. Management uses available information to establish the appropriate level of the allowance for loan losses. Future additions or reductions to the allowance may be necessary based on estimates that are susceptible to change as a result of changes in economic conditions and other factors. As a result, our allowance for loan losses may not be sufficient to cover actual loan losses, and future provisions for loan losses could materially adversely affect the Company’s operating results. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination. 26 Other Income. The following table summarizes other income for the three months ended March 31, 2014 and 2013. Three months ended March 31, $ change % change (Dollars in thousands) Other income: Gain on sale of loans $ 2 $ 19 $ ) ) Gain on sale of OREO 8 51 ) ) Origination of mortgage servicing rights, net of amortization (2 ) 4 (6 ) ) Customer service fees 69 71 (2 ) ) Income on bank owned life insurance 14 7 7 100.00 Other 28 31 (3 ) ) Total other income $ 119 $ 183 $ ) )% The decrease in total other income was primarily due to decreases in the gains on the sale of OREO and decreases in the gains on the sale of loans. During the three months ended March 31, 2014, the Company sold five OREO properties for a net gain of $8,000, while during the same period in 2013 the Company sold six properties for a net gain of $51,000. The decrease in gain on sale of loans is a result of fewer loan originations and sales of loans during the first quarter of 2014 as compared to 2013. The decreases were slightly offset by an increase in income on bank owned life insurance. Other Expenses. The following table summarizes other expenses for the three months ended March 31, 2014 and 2013. Three months ended March 31, $ change % change (Dollars in thousands) Other expenses: Salaries and employee benefits $ 399 $ 377 $ 22 5.84 % Directors fees 25 25 - - Occupancy 132 110 22 20.00 Deposit insurance premium 33 58 ) ) Legal and professional services 93 69 24 34.78 Data processing 68 76 (8 ) ) Valuation adjustments and expenses on foreclosed real estate 23 105 ) ) Loss on sale of repossessed assets 3 - 3 100.00 Other 125 149 ) ) Total other expenses $ 901 $ 969 $ ) )% Efficiency ratio (1) % % (1) Computed as other expenses divided by the sum of net interest income and other income. The decrease in other expenses was primarily due to a decrease in valuation adjustments and expenses on foreclosed real estate and a decrease in deposit insurance premium. Valuation adjustments and expenses on foreclosed real estate were lower due to the significantly reduced number of OREO properties held during the first quarter of 2014 as compared to the first quarter of 2013. The decrease in deposit insurance premiums is primarily due to the decrease in deposit balances. The decreases were slightly offset by annual increases in salaries and employee benefits, increases in occupancy expense, and an increase in legal and professional services due to compliance related activities. The efficiency ratio increased due to lower revenue for the current period. Income Taxes. The Company recorded income tax expenses of $111,000 and $31,000 for the three months ended March 31, 2014 and 2013, respectively. 27 LIQUIDITY AND CAPITAL RESOURCES Liquidity . Liquidity management for the Bank is measured and monitored on both a short and long-term basis, allowing management to better understand and react to emerging balance sheet trends. After assessing actual and projected cash flow needs, management seeks to obtain funding at the most economical cost to the Bank. Our primary sources of funds are deposits, amortization, prepayments and maturities of outstanding loans and mortgage-backed and related securities, and other short-term investments, and funds provided from operations. While scheduled payments from amortization of loans and mortgage-backed related securities and maturing investment securities and short-term investments are relatively predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. We invest excess funds in short-term interest-earning assets, including federal funds sold, which enable us to meet lending requirements or long-term investments when loan demand is low. At March 31, 2014 the Bank had outstanding commitments to originate $1.7 million in loans, unfunded lines of credit of $8.1 million, a commitment to purchase $5.0 million in auto loans, and $1.3 million in commitments to fund construction loans. In addition, as of March 31, 2014, the total amount of certificates of deposit that were scheduled to mature in the next 12 months was $36.6 million. Based on prior experience, management believes that a majority of such deposits will remain with us, although there can be no assurance that this will be the case. In the event a significant portion of our deposits are not retained by us, we will have to utilize other funding sources, such as Federal Home Loan Bank of Chicago (“FHLBC”) advances, in order to maintain our level of assets. Alternatively, we could reduce our level of liquid assets, such as our cash and cash equivalents. As of March 31, 2014, the Bank had $51.1million of available credit from the FHLBC. There were no FHLBC advances outstanding at March 31, 2014. In addition, as of March 31, 2014, the Bank had $5.0 million of available credit from Bankers Bank of Wisconsin to purchase Federal Funds. The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company is responsible for paying any dividends declared to its shareholders and for any repurchased shares of its common stock. Whether dividends are declared, and the timing and amount of any dividends declared, is subject to the discretion of our Board of Directors and depends on various factors, including our net earnings, financial condition, cash requirements, future prospects and other factors that our Board of Directors deems relevant to its analysis and decision making. The Company’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company in any calendar year, without the receipt of prior approval from the regulatory agencies but with prior notice to the regulatory agencies, cannot exceed net income for that year to date plus retained net income (as defined) for the preceding two calendar years. At March 31, 2014, the Company had cash and cash equivalents of $299,000. Capital . The Bank is required to maintain regulatory capital sufficient to meet Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of at least 4.0%, 4.0% and 8.0%, respectively. The Bank exceeded each of its minimum capital requirements and was considered “well capitalized” within the meaning of federal regulatory requirements with ratios at March 31, 2014 of 11.80%, 19.37% and 20.64%, respectively, compared to ratios at December 31, 2013 of 11.32%, 19.52% and 20.79%, respectively. OFF-BALANCE SHEET ARRANGEMENTS For the three months ended March 31, 2014, we did not engage in any off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This Item is not applicable as the Company is a smaller reporting company. 28 ITEM 4. CONTROLS AND PROCEDURES Controls and Procedures As of the end of the period covered by this report, the Company carried out an evaluation under the supervision and with the participation of the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended, with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including, its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, there have been no changes in the Company’s internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Part II – Other Information ITEM 1 - LEGAL PROCEEDINGS The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business that, in the aggregate, are believed by management to be material to the financial condition and results of operations of the Company. ITEM 1A – RISK FACTORS In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part 1, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013, which could materially affect our business, financial condition or future results. As of March 31, 2014, the risk factors of the Company have not changed materially from those reported in the Company’s Annual Report on Form 10-K. However, the risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Not applicable. ITEM 3 - DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4 – MINE SAFETY DISCLOSURES Not applicable. ITEM 5 - OTHER INFORMATION Not applicable. 29 ITEM 6 - EXHIBITS Exhibit No. Description Certificate of Incorporation of Ottawa Savings Bancorp, Inc. (incorporated by reference to Exhibit 3.1 to Company’s Registration Statement on Form SB-2, No. 333-123455, filed on May 3, 2005, as amended) Bylaws of Ottawa Savings Bancorp, Inc. (incorporated by reference to Exhibit 3.2 to Company’s Registration Statement on Form SB-2, No. 333-123455, filed on May 3, 2005, as amended) Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certifications of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The following materials from the Ottawa Savings Bancorp, Inc. Quarterly Report on form 10-Q for thequarter ended March 31, 2014 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows and (v) related notes. 30 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. OTTAWA SAVINGS BANCORP, INC. Registrant Date: May 14, 2014 By: /s/Jon L. Kranov President and Chief Executive Officer (Principal Executive Officer) Date: May 14, 2014 By: /s/Marc N. Kingry Marc N. Kingry Chief Financial Officer (Principal Financial Officer) 31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month ofJuly 2011. Commission File Number: 000-53684 CSR plc (Translation of registrant's name into English) Churchill House Cambridge Business Park Cowley Road Cambridge CB4 0WZ United Kingdom Tel: +44 (0) 1223 692000 (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [_] Indicate by checkmark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(l): Indicate by checkmark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [_] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not Applicable Information furnished on this form: Regulatory announcement: Exercise of Restricted Award EXHIBITS Exhibit No. Description Regulatory announcement dated July 8, 2011 in relation to the exercise of recruitment award by an executive director. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: July 8, 2011 CSR plc (Registrant) By: /s/ Brett Gladden Brett Gladden Company Secretary Exhibit 1.1 Exercise of Restricted Award RNS Number : 0665K CSR plc 08 July 2011  8 July 2011 CSR plc Exercise of Recruitment Award by an Executive Director In accordance with the terms of a recruitment award made in June 2008 to Mr Will Gardiner, Chief Financial Officer, 20,000 ordinary shares par value £0.001 in CSR plc were today issued to Mr Gardiner, on payment by Mr Gardiner of the aggregate of the par value of the shares. Following the release of the shares, Mr Gardiner holds 148,409 ordinary shares in CSR plc. Ends This information is provided by RNS The company news service from the London Stock Exchange END RDSFVLFBFDFZBBB

Title: (california) Neighbor keeps turning off the gas to our heater. Question:We live in a 6 unit building and the gas furnace for our heater is located downstairs in their unit. We do not share gas or utilities with said neighbor and only run the heater during the day. They have turned our gas off for the umpteenth time and will not answer the door. Today, the gas company will not come out and turn it on (which they charge us for). It is 50 degrees in our house. What can we do aside from murder? Were not too keen on prison. Okay, so update- the landlord called us back, and they were apparently were really rude and "didnt know how to turn the gas on" (OH REALLY YOU FUCKING POTATO RAAAAGE) The landlord is suspicious that there is something going on. Also, police derpartments and the gas company dont care if you dont have heat until monday apparently. Theyre all closed, literally. Edit: wow this kinda blew up for me. Hah. Too bad its about by shitty goblin of a neighbor. And I apparently cant do anything about it until monday anyways. Oh well! Answer #1: Would the landlord be on the hook to pay if OP had to go to a hotel because it was too cold to sleep in the apartment? Answer #2: Are you renting are they renting?Answer #3: Where in California are you? If you arent in a "cold" area that may be why nobody is taking this seriouslyAnswer #4: Not legal advise, but you can buy a heater pretty cheap that you can use in emergencies like this. I used one in the past when the central heating broke and would wheel it round the house with me Answer #5: Step 1 - Make preparations to move. Your time here is limited. Step 2 - Send a notification that you plan to begin withholding rent. Document everything. Make a video showing a thermometer at 50 with the thermostat set in the 70's. http://www.nolo.com/legal-encyclopedia/how-rent-withholding-works.html I'm a landlord, and hitting me in the wallet is the most sure-fire way to get me to respond to an issue I'm actively ignoring. Step 3 - Retaliate. There are a bunch of lawyers in this sub that will recommend against this, and their reasons are valid. Fuck it. Blast music. Start hammering. Find a rough spot in the hardwood and take a belt sander to it at 3am. Inflict maximum punishment on the neighbors. You're already planning to move out, right? Who gives a shit if it makes your relationship with them worse. Step 4 - Move.

Exhibit 99.1 FIRST PACTRUST BANCORP, INC. ANNOUNCES 3rd QUARTER 2012 RESULTS IRVINE, CA, November 8, 2012 – First PacTrust Bancorp (NASDAQ: BANC) (“First PacTrust” or the “Company”), the holding company for Pacific Trust Bank and Beach Business Bank, today announced results for the quarter and the nine months ended September 30, 2012.For the quarter, the Company reported net income of $9.5 million and net income available to common shareholders of $9.2 million, or $0.79 per share.For the nine months ended September 30, 2012, the Company reported net income of $9.2 million and net income available to common shareholders of $8.1 million, or $0.70 per share. During the third quarter, the Company completed its acquisitions of Beach Business Bank and Gateway Business Bank. Transaction-related costs and severance payments related to executive management departures during the period resulted in approximately $4.2 million in expense recognized during the third quarter of 2012. The Company recognized a preliminary bargain purchase gain of $12.1 million related to the Gateway Business Bank acquisition and recorded goodwill of $7.1 million related to the Beach Business Bank acquisition during the third quarter of 2012. In conjunction with these acquisitions, the Company also recorded other intangible assets carried at $5.8 million at September 30, 2012, after third quarter 2012 amortization of $0.3 million. These other intangible assets included core deposit intangibles of $4.5 million for Beach and $0.7 million for Gateway and trade name intangibles of $1.0 million. Steven Sugarman, Chief Executive Officer, commented: “We are pleased to have closed the acquisitions of Beach Business Bank and Gateway Business Bank. This quarter demonstrates First PacTrust’s increased core earnings power as it passes $1.6 billion in assets. We seek to further enhance core earnings by closing on the acquisition of The Private Bank of California, targeted to occur in the second quarter of 2013, and by completing the integration of our current two banking subsidiaries into a single, fully integrated commercial bank.” The Company’s total assets increased by $555 million from $1.1 billion at June 30, 2012 to finish the third quarter of 2012 at $1.7 billion. The Company’s net interest margin for the third quarter of 2012 was 4.02% and its cost of interest-bearing deposits was 0.53%. Non-interest income for the quarter climbed to $19.5 million including the bargain purchase gain. Growth in non-interest income was enhanced by the acquisition of Mission Hills Mortgage Bankers on August 18, 2012, as a part of the Gateway acquisition.Mission Hills Mortgage originated approximately $110 million in single-family residential loans per month during the third quarter. After consolidation of the net deferred tax assets of Beach Business Bank and Gateway Business Bank, the Company has recorded a net deferred tax asset of $7.4 million, net of a valuation allowance of $7.0 million as of September 30, 2012. The Company will continue to evaluate this valuation allowance each quarter. During the third quarter of 2012, the Company announced the planned acquisition of The Private Bank of California, a $600 million (assets) bank headquartered in Century City, CA. During the third quarter of 2012, the Company also reported a quarterly dividend of $0.12 per common share, paid on October 1, 2012. The Company plans to discuss its third quarter earnings, among other items, at its Investor Day on November 9, 2012, from 9:00 a.m. to 1:00 p.m., Pacific Time. All interested parties are welcome to attend the event at the Riviera Country Club in Los Angeles, CA or via live audio at www.firstpactrust.com or conference call at 866-503-8728, event code 68806439. Excerpts from the Investor Day Presentation relating to third quarter earnings are available on the www.firstpactrust.com website. About First PacTrust Bancorp Based in Irvine, CA, First PacTrust Bancorp, Inc. is the $1.6-billion multi-bank holding company of Pacific Trust Bank and Beach Business Bank, which together operate 19 banking offices in Los Angeles, Orange, San Diego and Riverside counties, and 23 loan production offices in California, Arizona, Oregon and Washington. PacTrust Bank gives customers convenient account access choices through 30,000 surcharge-free ATM locations nationwide, as well as mobile, online and telephone banking. PacTrust Bank and Beach Business Bank provide a full range of deposit and loan services tailored to meet the needs of small-to-mid-sized businesses, professionals and individuals. Forward-Looking Statements This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by First PacTrust with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements and the Company undertakes no obligation to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made. Source: First PacTrust Bancorp, Inc. Investor Relations Inquiries: First PacTrust Bancorp, Inc. Richard Herrin, 949-236-5300 Media Inquiries: Sitrick And Company Thomas S. Mulligan, 212-573-6100 First PacTrust Bancorp, Inc. Consolidated Statements of Financial Condition (In thousands of dollars except share and per share data) (Unaudited) ASSETS September30, December31, Cash and due from banks $ $ Interest-bearing deposits Federal funds sold — Total cash and cash equivalents Time deposits in financial institutions — Securities available for sale Federal Home Loan Bank and Other Bank stock, at cost Loans receivable, net of allowance of $12,379 at September30, 2012 and $12,780 at December31, 2011 Loans held for sale — Servicing rights, net — Accrued interest receivable Other real estate owned (OREO), net Premises and equipment, net Bank owned life insurance investment Prepaid FDIC assessment Deferred income tax Goodwill — Other intangible assets, net — Other assets Total assets $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits Noninterest-bearing demand $ $ Interest-bearing demand Money market accounts Savings accounts Certificates of deposit Total deposits Advances from Federal Home Loan Bank Notes payable, net — Reserve for loss reimbursements on sold loans — Accrued expenses and other liabilities Total liabilities Commitments and contingent liabilities — — SHAREHOLDERS’ EQUITY Preferred stock, $.01 par value per share, $1,000 per share liquidation preference for a total of $32,000; 50,000,000 shares authorized, 32,000 shares issued and outstanding at September30, 2012 and December31, 2011 Common stock, $.01 par value per share, 196,863,844 shares authorized; 0 shares issued and 0 shares outstanding at September30, 2012; 11,756,636 shares issued and 10,581,704 shares outstanding at December31, 2011 Class B non-voting non-convertible Common stock, $.01 par value per share, 3,136,156 shares authorized; 0 shares issued and outstanding at September30, 2012 and 1,054,991 shares issued and outstanding at December31, 2011 11 11 Additional paid-in capital Retained earnings Treasury stock, at cost (September 30, 2012-0 shares, December31, 2011-1,174,932 shares) ) ) Accumulated other comprehensive income/(loss), net ) Total shareholders’ equity Total liabilities and shareholders’ equity $ $ First PacTrust Bancorp, Inc. Consolidated Statements of Income and Comprehensive Income/(Loss) (In thousands of dollars except share and per share data) (Unaudited) Threemonthsended September 30, Ninemonthsended September 30, Interest and dividend income Loans, including fees $ Securities Dividends and other interest-earning assets 86 49 Federal funds sold — Total interest and dividend income Interest expense Savings 95 NOW 18 50 Money market 62 Certificates of deposit Federal Home Loan Bank advances 74 92 Capital leases 2 — 4 — Notes payable — — Total interest expense Net interest income Provision for loan and lease losses Net interest income after provision for loan and lease losses Noninterest income Customer service fees Mortgage loan prepayment penalties 46 54 62 80 Loan servicing income — — Income from bank owned life insurance 69 77 Net gain/(loss) on sales of securities available for sale ) ) Net gains on mortgage banking activities — — Net gain on sales of loans 59 — — Bargain purchase gain — — Other 35 Total noninterest income Noninterest expense Salaries and employee benefits Occupancy and equipment Advertising 71 Professional fees Stationery paper, supplies, and postage Data processing ATM costs 93 81 FDIC assessments Provision for loss reimbursements on sold loans — — Loan servicingand foreclosure expense 83 Operating loss on equity investment 76 79 OREO valuation allowance 36 Net (gain)/loss on sales of other real estate owned 42 ) Amortization of intangible assets — — Other general and administrative Total noninterest expense Income before income taxes Income tax expense/(benefit) ) ) Net income $ Preferred stock dividends Net income available to common shareholders $ Basic earnings per common share $ Diluted earnings per common share $ Other comprehensive income, before tax: Change in net unrealized gains on securities: Net unrealized holding gains arising during the period ) ) Less: reclassification adjustment for (gains)/losses included in net income 12 ) 83 ) Net unrealized gains, net of reclassification adjustments ) ) Income tax expense/(benefit) related to items of other comprehensive income ) ) Total other comprehensive income/(loss), net of tax ) ) Comprehensive income/(loss) $ $ ) $ $ ) FIRST PACTRUST BANCORP, INC. SELECTED QUARTERLY FINANCIAL DATA (Amounts in thousands, except share and per share data) September June March December September June Balance sheet data, at quarter end: Total assets $ Total gross loans Allowance for loan losses ) Securities available for sale Noninterest-bearing deposits Total deposits FHLB advances and other borrowings Total shareholders’ equity Balance sheet data, quarterly averages: Total assets $ Total loans Securities available for sale Total interest earning assets Total deposits Advances from FHLB and other borrowings Total shareholders’ equity Statement of operations data, for the three months ended: Interest income $ Interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses Noninterest income Noninterest expense Income/(loss) before income taxes ) ) Income tax expense/(benefit) ) ) 93 ) Preferred stock dividends and discount accretion — Net income/(loss) available to common stockholders $ $ ) $ ) $ ) $ $ Profitability and other ratios: Return on avg. assets (1) % %) % %) % % Return on avg. equity (1) ) ) Net interest margin (1) Noninterest income to total revenue (2) Noninterest income to avg. assets (1) Noninterest exp. to avg. assets (1) Efficiency ratio (3) Avg. loans to average deposits Securities available for sale to total assets Average interest-earning assets to average interest-bearing liabilities % Asset quality information and ratios: Nonaccrual Loans $ 90+ delinquent loans and OREO (4): 90+ delinquent loans (5) Other real estate owned (OREO) Totals $ Net loan charge-offs $ Allowance for loan losses to nonaccrual loans, net % Allowance for loan losses to total loans 90+ delinquent loans and OREO to total loans and OREO 90+ delinquent loans and OREO to total assets % (1) Ratios are presented on an annualized basis (2) Total revenue is equal to the sum of net interest income before provision and noninterest expense (3) Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income before provision for loan losses and noninterest income

EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION -OXLEY ACT OF 2002 In connection with the Annual Report of Marine Growth Ventures, Inc. (the “Company”) on Form 10-K for the periodended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Craig Hodgkins, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. section1350 of the Sarbanes-Oxley Act of 2002, that: The Report fully complies with the requirements of section 13(a) or 15(d) of the SecuritiesExchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. section1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. Date:March 30, 2010 By: /s/Craig Hodgkins Craig Hodgkins President and Director (Principal Executive Officer)

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A* (Rule 13d-101) (Amendment No. 2) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Monarch Community Bancorp, Inc. (Name of Issuer) Common Stock (Title of Class of Securities) (CUSIP Number) Jeffrey L. Gendell 55 Railroad Avenue, Suite 103, Greenwich, Connecticut 06830 (203) 769-2000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 7, 2008 (Date of Event which Requires Filing of this Schedule) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. NOTE:Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 6 Pages) * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No.609045109 SCHEDULE 13D/A Page 2 of 6 Pages 1 NAME OF REPORTING PERSON Tontine Financial Partners, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP** (a) x (b) ¨ 3 SEC USE ONLY 4 SOURCE OF FUNDS** WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7 SOLE VOTING POWER -0- 8 SHARED VOTING POWER -0- 9 SOLE DISPOSITIVE POWER -0- 10 SHARED DISPOSITIVE POWER -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES** ¨ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 0% 14 TYPE OF REPORTING PERSON** PN ** SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No.609045109 SCHEDULE 13D/A Page 3 of 6Pages 1 NAME OF REPORTING PERSON Tontine Management, L.L.C. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP** (a) x (b) ¨ 3 SEC USE ONLY 4 SOURCE OF FUNDS** WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7 SOLE VOTING POWER -0- 8 SHARED VOTING POWER -0- 9 SOLE DISPOSITIVE POWER -0- 10 SHARED DISPOSITIVE POWER -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES** ¨ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 0% 14 TYPE OF REPORTING PERSON** OO ** SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No.609045109 SCHEDULE 13D/A Page 4 of 6 Pages 1 NAME OF REPORTING PERSON Jeffrey L. Gendell 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP** (a) x (b) ¨ 3 SEC USE ONLY 4 SOURCE OF FUNDS** OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨ 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7 SOLE VOTING POWER -0- 8 SHARED VOTING POWER -0- 9 SOLE DISPOSITIVE POWER -0- 10 SHARED DISPOSITIVE POWER -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES** ¨ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 0% 14 TYPE OF REPORTING PERSON** IN ** SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No.609045109 SCHEDULE 13D/A Page 5 of 6 Pages Item 1. SECURITY AND ISSUER This Schedule 13D/A (this "Amendment No. 2") amends the Schedule D originally filed on October 16, 2003 relating to the shares of common stock, $0.01 par value (the "Common Stock") of Monarch Community Bancorp, Inc. (the "Company") (the “Original Schedule 13D”) as previously amended by Amendment No. 1, filed on June 10, 2004.The Company's principal executive offices are located at 375 North Willowbrook Road, Coldwater, Michigan 49036.The Original Schedule 13D, as further amended by Amendment No. 1 and this Amendment No. 2, is hereinafter referred to as the "Schedule 13D".Capitalized terms used herein and not otherwise defined in this Amendment No. 2 have the meanings set forth in the Original Schedule 13D or Amendment No. 1.This Amendment No. 2 amends Item 5 of the Schedule 13D as set forth below.This is the final amendment to the Schedule 13D and constitutes an “exit filing” for the Reporting Persons. Item 5. INTEREST IN SECURITIES OF THE ISSUER. A. Tontine Financial Partners, L.P. (a) Aggregate number of shares beneficially owned: -0- Percentage:0% (b) 1. Sole power to vote or direct vote: -0- 2. Shared power to vote or direct vote: -0- 3. Sole power to dispose or direct the disposition: -0- 4. Shared power to dispose or direct the disposition: -0- (c) Not applicable. (d) TM, the general partner of TFP, has the power to direct the affairs of TFP, including decisions respecting the receipt of dividends from, and the disposition of the proceeds from the sale of, the shares. Mr. Gendell is the managing member of TM and in that capacity directs its operations. (e) January 30, 2009. B. Tontine Management, L.L.C. (a) Aggregate number of shares beneficially owned: -0- Percentage:0% (b) 1. Sole power to vote or direct vote: -0- 2. Shared power to vote or direct vote: -0- 3. Sole power to dispose or direct the disposition: -0- 4. Shared power to dispose or direct the disposition: -0- (c) Not applicable. (d) Mr. Gendell is the managing member of TM and in that capacity directs its operations. (e) January 30, 2009. C. Jeffrey L. Gendell (a) Aggregate number of shares beneficially owned: -0- Percentage:0% (b) 1. Sole power to vote or direct vote: -0- 2. Shared power to vote or direct vote: -0- 3. Sole power to dispose or direct the disposition: -0- 4. Shared power to dispose or direct the disposition: -0- (c) Not applicable. (d) Not applicable. (e) January 30, 2009. CUSIP No.609045109 SCHEDULE 13D/A Page 6 of 6 Pages SIGNATURES After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated:July 1, 2011 JEFFREY L. GENDELL /s/ Jeffrey L. Gendell TONTINE MANAGEMENT, L.L.C. By: Jeffrey L. Gendell, its managing member /s/ Jeffrey L. Gendell TONTINE FINANCIAL PARTNERS, L.P. By: Tontine Management, L.L.C., its general partner By: Jeffrey L. Gendell, its managing member /s/ Jeffrey L. Gendell

Name: 84/499/EEC: Commission Decision of 11 July 1984 on the proposal by the Netherlands Government to grant aid for the building of a petrol additive production plant in the Rotterdam Europoort area (Only the English text is authentic) Type: Decision_ENTSCHEID Subject Matter: chemistry; competition; Europe; building and public works; economic policy Date Published: 1984-10-19 Avis juridique important|31984D049984/499/EEC: Commission Decision of 11 July 1984 on the proposal by the Netherlands Government to grant aid for the building of a petrol additive production plant in the Rotterdam Europoort area (Only the English text is authentic) Official Journal L 276 , 19/10/1984 P. 0043 - 0046*****COMMISSION DECISION of 11 July 1984 on the proposal by the Netherlands Government to grant aid for the building of a petrol additive production plant in the Rotterdam Europoort area (Only the Dutch text is authentic) (84/499/EEC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular the first subparagraph of Article 93 (2) thereof, Having given notice to the parties concerned to submit their comments as provided for in the said Article 93, and having regard to those comments, Whereas: I Article 6 of the Netherlands Law of 29 June 1978 (Wet Investeringsrekening - WIR) (1) on the promotion and guidance of investment provides for an 'additional premium for major projects'. The premium is intended for investment projects exceeding Fl 30 million in value and depending on the number of jobs created, can amount to 4 % of the value of the investment concerned. When it examined the abovementioned law in its draft stage under the procedure provided for in Article 93 (3) of the Treaty, the Commission took the view that the 'additional premium for major projects' constituted a general aid scheme, since it did not comprise any sectoral or regional objective. Since the system was applicable to all investment projects without any distinction as between firms, regions or sectors, it was not eligible for the exceptions provided for in Article 92 (3) (a) or (c) of the Treaty. In the absence of such specific features, the Commission was unable to assess the effects of the scheme on intra-Community trade and on competition or, consequently, its compatibility with the common market. The Commission usually authorizes this type of general aid scheme if the Member State concerned can inform it either of a regional or sectoral implementation plan or, if that is not possible, of significant individual cases. In accordance with this position, the Commission requested that all individual cases in which the 'additional premium for major projects' was granted, taking account of the level of the investment concerned, should be notified to it in advance and in sufficient time, in accordance with Article 93 (3) of the Treaty. In the course of talks with the Netherlands authorities, the Commission indicated that it would assess each such case on its merits and in the light of the principles laid down in Articles 92 et seq. or developed in administering those provisions. The Netherlands Government was not entitled to assume that the Commission was generally sympathetic to the 'additional premium' system simply because it had asked for such systematic prior notification. The Netherlands Government complied with the Commission's request by making the abovementioned prior notification procedure the subject of Articles 6 (7) and 7 (3) of Chapter V of the abovementioned Netherlands Law of 29 June 1978. II By telex dated 25 August 1983, the Netherlands Government, acting in accordance with the prior notification procedure, informed the Commission of its intention to grant the 'additional premium for major projects' to an investment project to be carried out by a firm in the Rotterdam-Europoort area. The proposed aid is intended to allow the recipient firm to build a plant for the purification of tertiary butyl alcohol (TBA), which would be used as an additive to motor vehicle fuel (gasoline-grade TBA (GTBA)), and to secure improved raw material transport. The new GTBA production unit thus set up will have a capacity of 400 000 tonnes a year. A total of 41 % of output will be for the Dutch market and 56 % will be for export to other Community countries. The firm's production capacity in its other sectors of activity (propylene oxide and isobutanol), more than 90 % of which is for the Dutch market, will be maintained unchanged. Measures have already been adopted, or are in the process of being adopted, in the Community to reduce the lead content of petrol used in motor vehicles. These measures mean that non-metallic anti-knock agents must be produced in order to maintain the quality of petrol. TBA is one such agent. According to the Netherlands authorities, the market for lead substitutes could in the years ahead amount to five million tonnes a year, which is substantially in excess of the current capacity of European producers. The firm also plans to build a gas pipeline to pipe in its supplies of LPG. The total amount of investment is thus expected to be Fl 180 million, of which some Fl 10 million will be for the gas pipeline. The 'additional premium for major projects' which it is proposed to grant in this instance is Fl 1 350 000 equivalent to 0,75 % of the total investment. No other aid will be granted to the project. The investment will create an additional 55 skilled jobs. III After an initial examination, the Commission took the view that the proposed aid appeared liable to lead to distortions of competition contrary to the common interest, since other firms in the sector also had plans to enter the growing market for non-polluting petrol additives. Consequently, in accordance with Article 93 (2) of the Treaty, it gave formal notice to the Netherlands Government to submit its comments. In the comments which it submitted, the Netherlands Government emphasized the ecological value of building the gas pipeline to pipe in supplies to plants in the Rotterdam-Europoort area. When interested parties were consulted, the governments of three Member States pointed out that competition might be distorted if aid were granted to a project which, in view of the state of the market, appeared bound to be profitable, since other European firms were preparing to make comparable investments without the benefit of aid. These governments therefore opposed the granting of the aid proposed by the Netherlands Government. IV The Netherlands Government's aid plan is liable to affect trade between Member States and to distort or threaten to distort competition within the meaning of Article 92 (1) of the Treaty by favouring the firm in question or its output. Article 92 (1) of the Treaty lays down the principle that aid having the features there described is incompatible with the common market. The exceptions to this principle set out in Article 92 (3) specify objectives in the Community interest transcending the interests of the aid recipient. These exceptions must be construed narrowly when any regional or sectoral aid scheme or any individual award under a general aid scheme is scrutinized. In particular they may be applied only when the Commission is satisfied that the free plan of market forces alone, without the aid, would not induce the prospective aid recipient to adopt a course of action contributing to the attainment of one of the said objectives. To apply the exceptions to cases not contributing to such an objective would be to give unfair advantages to certain Member States and allow trading conditions between Member States to be affected and competition to be distorted without any justification on grounds of Community interest. In applying these principles in its scrutiny of individual aid awards under general aid schemes, the Commission must satisfy itself that the aid is justified by the contribution that the recipient is making to the attainment of one of the objectives set out in Article 92 (3), and is necessary to that end. Where this cannot be demonstrated, and especially where the proposed investment would take place in any case, it is clear that the aid does not contribute to the attainment of the objectives specified in the exceptions, but merely serves to increase the financial strength of the recipient firm. The recipient in the present case cannot be said to be making such a contribution in return for the aid. The Netherlands Government has been unable to give, or the Commission to discover, any justification for a finding that the planned aid falls within one of the categories of exceptions in Article 92 (3) of the EEC Treaty. With regard to the exceptions provided for by Article 92 (3) (a) and (c) for aids which promote or facilitate the development of certain areas, the Rotterdam area is not one where the standard of living is abnormally low or where there is serious underemployment within the meaning of Article 92 (3) (a). With regard to the exception provided for in Article 92 (3) (c), the Rotterdam area is not an area eligible for regional aid. As far as the exceptions in Article 92 (3) (b) are concerned, investments of this type will at all events be prompted by market forces, since the imbalance between the growing demand for products such as GTBA and the limited capacity as yet installed in Western Europe ensure that this type of investment will generate a sufficient rate of return, making the granting of aid unnecessary. In addition, the investment in question does not have any features which make it a 'project of common European interest' or one likely to remedy 'a serious disturbance in the economy of a Member State', the promotion of which justifies application of an exception under Article 92 (3) (b) to the rules on the incompatibility of aid laid down in Article 92 (1). In particular, as far as the building of the Vlissingen-Rotterdam gas pipeline is concerned, the information provided by the Netherlands Government does not show to what extent the raw materials thus transported will supply the new TBA unit rather than the firm's other operations. Neither the information provided nor, to the best of the Commission's knowledge, the experience of other producers within the Community indicate that transport by gas pipeline would confer any decisive advantage in terms of safety. In any case, the building of the gas pipeline, the cost of which presents only 5,5 % of the total cost of the investment planned, is intended primarily to provide the firm with cheaper supplies and is therefore a profitable investment. With regard to the exceptions provided for in Article 92 (3) (c) for 'aid to facilitate the development of certain economic activities . . ., where such aid does not adversely affect trading conditions to an extent contrary to the common interest', examination of the sector concerned shows, as indicated above, a sufficient rate of return to ensure the development of the activities without aid. Several Community firms are considering comparable investments. Consequently, granting aid to one of them would adversely affect trading conditions to an extent contrary to the common interest, especially since the bulk of its output is to be exported to other Member States and since the Dutch industry already enjoys a particularly strong position in the sector. Lastly, with regard to the exceptions provided for in Article 92 (3) (c) for 'aid to facilitate the development . . . of certain economic areas where such aid does not adversely affect trading conditions to an extent contrary to the common interest', the Commission stated, in its position on the WIR, that the Netherlands formed part of the Community's central regions, i.e. those which, in a Community context, are not faced with the most serious social and economic problems, while at the same time constituting regions in which the risk of escalation in aid is most real and in which, more than elsewhere, any aid would be liable to affect trade between Member States. Furthermore, the socio-economic information available on the Netherlands does not reveal any factors indicating that there is a serious disturbance in its economy such as is referred to in the Treaty. The 'additional premium for major projects' as granted in specific cases is not intended to deal with any such situation. To take any other position would be to allow the Netherlands, in the context of slower growth and high unemployment throughout the Community, to attract away for its own benefit investment which might be carried out in other Member States experiencing a less favourable situation. Recent social and economic developments in the Community justify the maintenance of this attitude both with regard to the premium itself and with regard to any specific instances in which it might be granted. Consequently, the proposed aid does not fulfil the conditions necessary to qualify for one of the exceptions provided for in Article 92 (3) of the EEC Treaty, HAS ADOPTED THIS DECISION: Article 1 The Netherlands may not implement its proposal, notified to the Commission by telex of 25 August 1983 from the Netherlands Minister for Foreign Affairs, to grant the 'additional premium for major projects' to the investment planned in the Rotterdam-Europoort area by a Dutch chemical firm. Article 2 The Netherlands shall inform the Commission within two months of the date of notification of this Decision of the measures taken to comply therewith. Article 3 This Decision is addressed to the Kingdom of the Netherlands. Done at Brussels, 11 July 1984. For the Commission Frans ANDRIESSEN Member of the Commission (1) Staatsblad 1978, No 368.

LIMITED LIABILITY INTEREST PURCHASE AGREEMENT   THIS LIMITED LIABILITY INTEREST PURCHASE AGREEMENT (this “Agreement”) is entered into as of this 5th day of May, 2008 by and among Artesian Water Maryland, Inc., a Delaware corporation (the “Buyer”), Mountain Hill Water Company, LLC, a Maryland limited liability company (the “Company”), and Sunrise Holdings L.P., a Pennsylvania limited partnership and the Company’s sole member (the “Member” and together with the Company, collectively the “Sellers”).  Artesian Resources Corporation, a Delaware corporation and the sole stockholder of the Buyer (“Artesian”), joins in this Agreement for the limited purposes herein set forth.   WHEREAS, the Company is a private water utility company that provides potable water and fire suppression service (the “Business”) in the areas known as Principio Business Park (current service) and Charlestown Crossing (future service) each in Cecil County, Maryland as more fully described in the map (the area in orange) attached to Schedule 1.1 (the “Existing Service Territory”), and has the ability, upon approval of the applicable governmental authorities and the purchase and installation of the necessary infrastructure, to provide water service to areas located outside of the Existing Service Territory and in Cecil County, Maryland as more fully described in the map (the area in red) attached to Schedule 1.1 (the “Potential Expansion Service Territory”), which together with the Existing Service Territory comprises a service territory located in Cecil County, Maryland of approximately 8,000 acres (the Existing Service Territory and the Potential Expansion Service Territory collectively comprise the “Service Territory”); and   WHEREAS, the Company contracted with the Buyer to install the Water Plant (as defined on Exhibit A hereto); and   WHEREAS, from the time that the Company first commenced operation of the Business on October 1, 2007, the Company has contracted with Buyer to perform both the day-to-day field operations of the Business (namely operation of the Water Plant, transmission lines and systems), as well as to handle certain administrative functions of the Business (namely billing of customers collections of accounts receivable, reporting to the PSC, and reporting to the applicable governmental sewer authorities); and   WHEREAS, the Buyer desires to purchase from the Member, and the Member desires to sell, assign, transfer and convey to the Buyer, all of the Company’s issued and outstanding LLC Interests (as hereinafter defined) (the “Acquired Interests”), free and clear of all Liens (as hereinafter defined), but excluding the Member Lien (as hereinafter defined), on the terms and conditions herein set forth.   NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements of the parties hereinafter set forth, as well as for other good and valuable consideration, the receipt and adequacy is hereby acknowledged, the Buyer, the Sellers and Artesian, intending to be legally bound hereby, do hereby agree as follows:   ARTICLE I                                                                                       DEFINITIONS   Section 1.1   Definitions.   Except as otherwise expressly provided in this Agreement, the capitalized terms used in this Agreement shall have the meanings specified in Exhibit A hereto and shall be equally applicable to both the singular and plural forms.   ARTICLE II                                                                                       SALE AND DELIVERY OF ACQUIRED INTERESTS   Section 2.1   Sale and Delivery of Acquired Interests.   Subject to the terms and conditions of this Agreement, at the Closing, the Member shall sell, assign, transfer, convey and deliver to the Buyer, free and clear of all Liens (excluding the Member Lien, as hereinafter defined), all of its right, title and interest in and to the Acquired Interests as of the Effective Date (as hereinafter defined).   Section 2.2   Purchase Price; Payment Thereof; Adjustment Thereto.   In consideration of the sale, assignment, transfer, conveyance and delivery of the Acquired Interests by the Member to the Buyer and in reliance on the representations, warranties, covenants and agreements made by the Member and the Company in this Agreement, at the Closing, the Buyer shall pay to the Member a sum equal to the following (the “Purchase Price”): (i) Five Million Nine Hundred Fifty-Three Thousand Five Hundred Thirty-Six and 67/100 Dollars ($5,953,536.67), representing the Total Asset Value as of 12/31/07, less (ii) an amount sufficient to pay the amounts set forth on Schedule 2.2, which shall include, without limitation all debt of the Company and/or Transaction Expenses that have not been paid by or on behalf of the Company at or prior to the Closing (collectively “Closing Debt”), plus (or minus, as applicable) (iii) an amount equal to the sum of the net change in the Total Asset Value from the Effective Date through the Closing Date (including but not limited to accrued interest on the aggregate Total Asset Value for the time period commencing on the Effective Date and ending on the Closing Date, and an administrative fee on any increase in the value of the Property, Plant and Equipment for the time period commencing on the Effective Date and ending on the Closing Date).  At the Closing, the Purchase Price shall be paid by the Buyer to the Company as follows:   (a) an amount equal to twenty percent (20%) of the Purchase Price (the “Down Payment”); and   (b)   the balance of the Purchase Price, if any, by a promissory note to be paid in four (4) equal annual installments of principal, plus interest accruing at a rate equal to the London Interbank Offering Rate (“LIBOR”) (determined as set forth in the Note, as such term is defined below) plus 150 basis points, compounded annually using the average outstanding and unpaid balance for the previous twelve (12) month period, on the terms and conditions of the promissory note in substantially the form attached hereto as Exhibit B (the “Note”).  Subject to the terms of this Agreement, the parties hereto agree that the obligations of the Buyer under the Note shall be secured by a first priority lien and security interest perfected by executing the Security Agreement (as hereinafter defined) and filing a Financing Statement on Form UCC-1 against the all of the assets of the Company (as defined on Exhibit A) in favor of the Member (“Member Lien”).  In addition, Artesian shall guarantee the obligations of the Buyer under the Note on the terms and conditions set forth in the guaranty substantially in the form attached hereto as Exhibit C (the “Guaranty”).   (c)   The Closing Debt amount shall be paid by the Buyer, at Buyer’s sole expense, at the Closing directly to the creditors set forth on Schedule 2.2 in accordance with the instructions set forth in the applicable payoff or release letters in respect of such amounts, by certified or cashier’s check or wire transfer of immediately available funds to an account or accounts designated in writing by the applicable creditor at Closing.  Buyer agrees and acknowledges that the full and complete satisfaction of the Closing Debt by the Buyer is a prerequisite to the Member being in a position to convey the Acquired Interests to the Buyer free and clear of all Liens (excluding the Member Lien).   ARTICLE III                                                                                       CLOSING   Section 3.1   Closing.   The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of DLA Piper US LLP, 6225 Smith Avenue, Baltimore, Maryland 21209, commencing at 10:00 a.m. local time on a date that is three (3) Business Days following the satisfaction or waiver of the conditions to Closing set forth in Articles VIII and IX of this Agreement, or such other date as the Buyer and the Company shall mutually agree upon in writing, but in no event later than August 1, 2008.  The date of the Closing is herein referred to as the “Closing Date.”Notwithstanding the Closing Date, the parties hereto agree that the transfer of the Acquired Interests from the Member to the Buyer shall have an effective transfer date as of 11:59 p.m. on December 31, 2007 (“Effective Date”)   Section 3.2   Closing Deliveries.   (a)   At the Closing, the Sellers shall deliver, or cause to be delivered, to the Buyer each of the following:   (i)   an instrument of assignment, duly endorsed by the Member, transferring the Acquired Interests to the Buyer as of the Effective Date;   (ii)   an easement agreement in substantially the form of Exhibit D attached hereto (the “Easement Agreement”), duly executed by the Sellers and their Affiliates party thereto;   (iii)   all Required Consents (as defined below in Section 8.4) listed on Schedule 4.4;   (iv)   the certificates required by Sections 9.1 and 9.2;   (v)   a certificate of an authorized officer or the managing member of the Company certifying the truth and correctness of attached copies of the articles of organization, operating agreement and resolutions of the managing member (both as managing member and in its capacity as the sole member of the Company) approving the execution and delivery of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby, in substantially the form of Exhibit E attached hereto;   (vi)   a certificate of an authorized officer of the general partner of the Member certifying the truth and correctness of attached copies of the articles or certificate of formation or organization, operating agreement and resolutions of the general partner of the Member approving the execution and delivery of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby, in substantially the form of Exhibit F attached hereto;   (vii)   a certificate, dated as of a date no earlier than three days prior to the Closing Date, duly issued by the applicable Governmental Authority in the State of Maryland, showing that the Company is in good standing and authorized to do business in such jurisdiction;   (viii)   Closing Date, duly issued by the applicable Governmental Authority in the Commonwealth of Pennsylvania, showing that the Member is in good standing and authorized to do business in such jurisdiction;   (ix)   duly executed payoff letters or release letters from the creditors set forth Schedule 2.2 and from any other lenders of the Company, all in form and substance reasonably acceptable to the Buyer (the “Payoff Letters”);   (x)   duly executed UCC-3 termination statements, lien releases or such other release and termination instruments (or copies thereof), as the Buyer shall reasonably request, including but not limited to, with respect to the Liens set forth on Schedule 2.2, in order to vest all right, title and interest in and to the Acquired Interests free and clear of all Liens; and   (xi)   such other documents and instruments as may be reasonably necessary to effect the intent of this Agreement and consummate the transactions contemplated hereby.   (b)   At the Closing, the Buyer shall deliver, or cause to be delivered, each of the following:   (i)   the Down Payment;   (ii)   the Note duly executed by the Buyer;   (iii)   the full payment of the Closing Debt;   (iv)   the Easement Agreement duly executed by the Buyer;   (v)   the certificates required by Sections 8.1 and 8.2;   (vi)   a certificate signed by the Secretary or Assistant Secretary of the Buyer certifying the truth and correctness of attached copies of the certificate of incorporation and bylaws, and that the board of directors of the Buyer has approved the execution, delivery of this Agreement, the Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby;   (vii)   of Delaware, showing that the Buyer is in good standing and authorized to do   (viii)   the “Security Agreement” duly executed by Buyer in substantially in a form attached hereto as Exhibit G  and UCC-1 financing statement duly executed by the Buyer representing a first lien security interest in all of the Company’s assets in favor of the Member.   (c)   At the Closing, Artesian shall deliver, or cause to be delivered, to the Company each of the following:   (i)   the Guaranty, duly executed by Artesian; and   (ii)   a certificate signed by the Secretary or Assistant Secretary of Artesian incorporation and bylaws, and that the board of directors of Artesian has hereby.   ARTICLE IV   REPRESENTATIONS AND WARRANTIES OF THE SELLERS   The Sellers hereby jointly and severally represent and warrant to the Buyer that the following representations and warranties are, as of the date hereof, and will be, as of the Closing Date, true and correct:   Section 4.1   Organization and Good Standing.   (a)   The Company is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Maryland, and is duly authorized and qualified to do business under all applicable Laws, regulations, ordinances and orders of public authorities with full corporate power and authority to carry on its business in the places and in the manner as now conducted, to own or hold under lease the properties and assets it now owns or holds under lease, and to perform all of its obligations under the Material Contracts.  The Company is not qualified to do business in any jurisdiction other than its state of organization.  The Company has not conducted business under any name other than “Mountain Hill Water Company, LLC” and “Principio Water Company, LLC” since its date of formation.   (b)   The Member is a limited partnership duly organized, validly existing and in good standing under the Laws of the Commonwealth of Pennsylvania.   Section 4.2   Capitalization; Title to Limited Liability Company Interests.   (a)   Schedule 4.2 sets forth the authorized Limited Liability Company Interests of the Company (the “LLC Interests”), the name of each Person holding any such LLC Interests (including any options, warrants or other rights to purchase any equity securities of the Company or LLC Interests) and any securities convertible into or exchangeable for LLC Interests and the amount and type of such securities held by such Person as of the date of this Agreement.  Immediately after the Closing, all of the issued and outstanding LLC Interests shall be held beneficially and of record by the Buyer, free and clear of all Liens (excluding the Member Lien and subject to the Buyer’s full and complete payment and satisfaction of the Closing Debt).  Except as set forth on Schedule 4.2, the Company has no issued and outstanding LLC Interests or securities convertible into or exchangeable for LLC Interests or any other ownership interest or containing any profit participation features, nor does the Company have outstanding any rights or options to subscribe or to purchase its LLC Interests or other ownership interest or any equity appreciation rights or phantom equity plans.  The Company is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any of its LLC Interests or other ownership interest or any warrants, options or other rights to acquire its LLC Interests.  All of the outstanding LLC Interests have been duly authorized and are validly issued, fully paid and nonassessable and were not issued in violation of any statutory or contractual or preemptive rights or similar restrictions.   (b)   The Company does not own as of the date hereof and will not own as of the Closing Date, of record or beneficially, or control, directly or indirectly, any capital stock, securities convertible into capital stock or any other equity interest in any corporation, limited association or other business entity.  The Company is not directly or indirectly, a participant in any joint venture, partnership or other non-corporate entity (including any limited liability company).   (c)   There are no statutory or contractual or preemptive rights, rights of first refusal or similar rights or restrictions with respect to the sale of any LLC Interests hereunder.  The Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its LLC Interests, and the offer and sale of the Acquired Interests hereunder does not require any registration under any applicable federal or state securities laws.  There are no agreements with respect to the voting or transfer of the LLC Interests.   (d)   The Company has no Indebtedness having the right to vote (or convertible into or exchangeable for, securities having the right to vote) on matters on which the holder(s) of the LLC Interests may vote.   (e)   The Member has good and marketable title to the Acquired Interests and, at the Closing, will transfer good and marketable title to the Acquired Interests, free and clear of all Liens (excluding the Member Lien and subject to the Buyer’s full and complete payment and satisfaction of the Closing Debt), to the Buyer.   Section 4.3   Authority and Validity.   The execution and delivery by each Seller, the performance by each Seller under, and the consummation by each Seller of the transactions contemplated by, this Agreement and each of the agreements, instruments and documents contemplated hereby (the “Transaction Documents”) to which such Seller is a party, has been duly and validly authorized by all required action by or on behalf of each Seller.  This Agreement and each of the Transaction Documents has been duly and validly executed and delivered by each Seller party thereto, and constitutes the valid and binding obligation of each Seller party thereto, enforceable against such Seller in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws now or hereafter in effect relating to the enforcement of creditors’ rights generally or by principles governing the availability of equitable remedies.   Section 4.4   No Conflict; Required Consents.   Except for, and subject to receipt of, the Required Consents (as defined in Section 8.4), all of which are listed on Schedule 4.4, neither the execution and delivery of this Agreement or any of the Transaction Documents, nor the carrying out of any of the transactions contemplated hereby, will (a) result in any violation, termination or modification of, or be in conflict with, the Company's articles of organization or operating agreement, each as amended to date, (b) result in any breach of or constitute a default (or with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation, or result in the creation of any lien upon any of its properties or assets pursuant to any Permit or any Contract  to which the Company is a party or by which it or any of the Acquired Interests are bound or affected, or (c) result in any violation of, or be in conflict with, any Law or Permit applicable to the Company or by which the Acquired Interests are bound or affected.   Section 4.5   Total Asset Value.   Attached to Schedule 4.5 is a true, complete and correct list of the aggregate value of all of the Company’s assets as of December 31, 2007, (collectively, “Total Asset Value”).   Section 4.6   Title to and Condition of Assets.   Schedule 4.5, Schedule 4.7, and Schedule 4.8, sets forth all of the assets, properties and rights (in each case whether real or personal or tangible or intangible) of the Company as of the date of this Agreement and as of the Closing Date.  The assets, properties and rights set forth on Schedule 4.5, Schedule 4.7, and Schedule 4.8 constitute all assets, properties and rights (in each case whether real or personal or tangible or intangible) necessary for the Company to conduct the Business after the Closing as it is presently being conducted.  Except as set forth on Schedule 4.5, no Affiliate of the Company owns or leases from or to the Company any of the assets, properties and rights set forth on Schedule 4.5, Schedule 4.7, and Schedule 4.8.  The Company has good and marketable title to, or a valid leasehold interest in, or a valid license to use, all of the assets, properties and rights (in each case whether real or personal or tangible or intangible) set forth on Schedule 4.5, Schedule 4.7, and Schedule 4.8 used by the Company in the Business or located on any property owned, leased or used by the Company, free and clear of all Liens and defects of title.  To the best of the Sellers’ Knowledge, all of the tangible assets of the Company (collectively,“Property, Plant and Equipment”) are in good condition and repair, ordinary wear and tear excepted, and has been maintained and repaired in a good and workmanlike manner in accordance with industry standards.   Section 4.7   Real Property.   The Company does not hold, and has never held, any real property in fee simple.  The Company does not lease any real property (“Leased Property”) or have a right to access or use any other real property (including by easement) (each, an “Easement”) except as described on Schedule 4.7.  The Company has valid and enforceable leasehold interest or easement in each Leased Property and Easement, respectively, listed on Schedule 4.7, free and clear of all Liens.  None of the Easements will terminate as a result of the execution and delivery of this Agreement or any of the Transaction Documents nor the carrying out of the transactions contemplated hereby.   Section 4.8   Contracts.   (a)   The Company is not a party to any instruments, documents, contracts, agreements, arrangements, commitments, bids, leases, licenses or any other contract rights (whether written or oral) (collectively, “Contracts”) other than the Contracts set forth on Schedule 4.8 (the “Material Contracts”).  True and complete copies, or, in the case of oral Contracts, written summaries of all Material Contracts have been delivered to the Buyer.  All Material Contracts are in full force and effect and constitute the valid, legal, binding and enforceable obligation of the Company, and, to the Sellers’ Knowledge, the counterparties thereto in accordance with their terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws now or hereafter in effect relating to the enforcement of creditors’ rights generally or by principles governing the availability of equitable remedies.  No act or omission has occurred which, through the passage of time or the giving of notice, or both, would with respect to any Material Contract set forth on Schedule 4.8: (a) constitute a material breach or default under any such Material Contract or cause the acceleration of any obligations of the Company thereunder, (b) result in the creation of any Lien on any of the Acquired Interests, or (c) give rise to or automatic termination thereof.  Except as set forth on Schedule 4.8), the Company has not been notified that any party to any Material Contract that it intends to cancel, terminate, not renew or exercise an option under any Material Contract, whether in connection with the transactions contemplated hereby or otherwise and no such action has been threatened or contemplated.   Section 4.9   Litigation.   There are no outstanding Orders of any Governmental Authority involving the Business or the Acquired Interests.  There is no Litigation and there are no other actions, suits, or legal, administrative or arbitral proceedings or investigations (collectively, “Claims”) (whether or not the defense thereof or Liabilities in respect thereof are covered by insurance), pending or, to the Sellers’s Knowledge, threatened against or involving the Business or the Acquired Interests, and no material Claims have been instituted or, to the Sellers’ Knowledge, threatened against or involving the Business or the Acquired Interests.   Section 4.10   Environmental.   (a)   To the best of Sellers’ Knowledge, no real property currently or formerly owned or leased or used by the Company or any of its Affiliates (collectively, “Real Property”) is or has been listed on the National Priorities List, the Comprehensive Environmental Response, Compensation, Liability Information System (“CERCLIS”) or any similar state list, or is or has been the subject of any “Superfund” evaluation or investigation, or any other investigation or proceeding of any Governmental Authority or unaffiliated third party (each, a “Third Party”) or of the Sellers evaluating whether any remedial action is necessary to respond to any release of any Hazardous Substance, pollutant or contaminant on or in connection with such Real Property.   (b)   To the best of Sellers’ Knowledge, the Business of the Company and its Affiliates are and at all times have been operated in compliance with all applicable Laws concerning the protection of the public health, public safety or the environment (“Environmental Laws”).  To the best of Sellers’ Knowledge, none of the Company’s assets or properties are required to be upgraded or modified in order to comply with applicable Environmental Laws.  Neither the Company nor any of its Affiliates has ever received any claims or notices, oral or written, (i) (A) alleging that the Company or any of its Affiliates is liable under any Environmental Law, or (B) ordering the Company or any of its Affiliates to remedy or recommending that the Company or any of its Affiliates remediate, any environmental damage to any Real Property or modify or upgrade its assets to comply with Environmental Laws, and (ii) to the Sellers’ Knowledge, no such claims or notices are threatened or pending and there are no facts or circumstances that would reasonably be expected to give rise to any such claim or notice.   (c)   Except in compliance with applicable Environmental Laws, to the Sellers’ Knowledge there has been no release or threatened release of any Hazardous Substance, pollutant or contaminant to any soil, groundwater, surface water, building component, wastewater, air or other media: (i) on or from any Real Property during the ownership, occupation or use of such Real Property by the Company or any of its Affiliates, or at or from any other location where the Company or any of its Affiliates arranged for the storage, treatment, disposal or handling of any Hazardous Substance, pollutant or contaminant, or (ii) by the Company or any of its Affiliates on any other real property.   (d)   Except as set forth on Schedule 4.10(d), there are no and have not been any underground storage tanks, above-ground storage tanks, underground piping (except for water or sewer), asbestos-containing materials, polychlorinated biphenyls or Hazardous Substances used, stored, treated or disposed of at any Real Property.   (e)   Schedule 4.10(f) lists all environmental audits, assessments or reports and any other written information concerning the Company’s actual or potential liability under any Environmental Law (collectively, “Environmental Reports”) in the possession or control of the Sellers or any of their Affiliates, including, without limitation, all Phase I, II and III environmental assessment reports with respect to the Real Property in the possession or control of the Sellers or any of their Affiliates.  A true and complete copy of each Environmental Report listed on Schedule 4.10(f) has previously been delivered by the Company to the Buyer.   Section 4.11   Taxes.   (a)   The Sellers have no unpaid liability for any Taxes in respect of any taxable period ending on or before the Effective Date.  As used in this Agreement, the term “Pre-Closing Tax Period” shall mean any taxable period ending on or before the Effective Date.   (b)   Each of the Sellers has filed or will cause to be timely filed all Tax Returns required to have been filed by it prior to or with respect to the Effective Date (subject to any timely extensions permitted by Law) with the appropriate taxing authority with respect to Taxes for any period ending on or before the Effective Date.  The Sellers have paid, or made provision for the payment of, all Taxes that have or may have become due for all periods covered by the Tax Returns or otherwise, or pursuant to any assessment received by the Sellers.  Schedule 4.11 sets forth all of the jurisdictions in which Tax Returns are filed by or on behalf of the Company and a description of such Tax Returns filed in each such jurisdiction is listed opposite the name of each jurisdiction listed on Schedule 4.11.   (c)   (i) No deficiency for any amount of Tax has been asserted or assessed by a taxing authority against the Sellers that remains unpaid, (ii) no notice of audit or possible assessment has been received from any taxing authority by the Sellers, and (iii) the Sellers have not agreed to any waiver or extension of the statute of limitations applicable to the assessment or collection of any Tax imposed in respect of a Pre-Closing Tax Period.   (d)   The Sellers have withheld or otherwise collected all Taxes or other amounts it was required to withhold or collect under any applicable federal, state or local Law, including, without limitation, any amounts required to be withheld or collected with respect to employee, state and federal income tax withholding, social security, unemployment compensation, sales or use taxes (excluding any sales or use taxes applicable to the transfer of the Acquired Interests as contemplated by this Agreement), workmen’s compensation or other similar Taxes, and all such amounts have been timely remitted to the proper authorities.   (e)   The Company has not been a member of an affiliated group that files or filed consolidated federal income Tax Returns. The Company is not a party to any tax allocation, tax sharing or other Contract pursuant to which it is obligated to pay the Taxes of another Person.   Section 4.12   Compliance with Laws; Permits.   (a)   The ownership and operation of the Company and its assets, properties and rights and the operation of the Business as it is currently conducted and operated do not violate or infringe any Law in any material respect.  The Sellers have not received written notice (or, to the Sellers’ Knowledge, oral notice) of any violation by the Company of any Law applicable to the operation of the Business as currently conducted or ownership and operation of the company and its assets, properties and rights as currently operated.  The Company has timely paid all applicable fees or other Taxes, including registration fees and maintenance fees, required by any Governmental Authority to maintain the Permits in good standing.   (b)   Schedule 4.12 lists all approvals, consents, licenses, permits, waiver or other authorizations issued, granted, given or otherwise made available by or under the authority of any Governmental Authority (collectively, “Permits”) that are used by the Company and its Affiliates in the ownership, maintenance or operation of the assets, properties or rights of the Company or the conduct of the Business, as presently conducted.  A true and complete copy of each Permit listed on Schedule 4.12 has previously been delivered by the Company or the Member to the Buyer.  All such Permits are in full force and effect, and the Company is not in default under any such Permit.  The Company and its Affiliates have taken all necessary actions to maintain the effectiveness of the Permits.  No written notice (or, to the Sellers’ Knowledge, any oral notice) of default, suspension, revocation, or cancellation of any Permit from any Governmental Authority has been received by the Company or any of its Affiliates and, to the Sellers’ Knowledge, there is no proposed or threatened issuance of any such notice or basis for any such action.  The Permits listed in Schedule 4.12 are all of the material Permits necessary for the Company to conduct the Business as currently conducted.   Section 4.13   Employees and Employee Benefits.   There are no, and have never been, any employees of the Company. There are no, and have never been any, employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended) or other plans, Contracts or policies established or maintained for the benefit of or affecting any employees, consultants, independent contractors, agents or other service providers for the Company (collectively, “Benefit Plans”) sponsored, maintained or contributed to by the Company or any ERISA Affiliate or to which the Company or any ERISA Affiliate is or was at any time obligated to make payments or contributions, or with respect to which the Company or any ERISA Affiliate has or may have any liability.   Section 4.14   Undisclosed Liabilities.   The Company has no liabilities or obligations of any type (whether accrued, contingent, unliquidated or otherwise and regardless of when asserted) arising out of or which could reasonably be expected to arise out of any acts or omissions relating to the Company, its predecessors or the conduct of the Business at or prior to the date hereof, or at or prior to the Closing Date, other than liabilities set forth in the Financial Statements or, as of the Closing Date, as will be set forth on Schedule 4.14.  The Company has no Indebtedness as of the date of this Agreement other than the Indebtedness described on Schedule 4.14 and will have no Indebtedness as of the Closing Date other than as set forth on Schedule 2.2.   Section 4.15   Service Territory   All of the Company’s approvals from Cecil County, Maryland and the PSC to operate a private water company are attached as Schedule 4.15. To the best of the Sellers’ Knowledge, the Company has: (a) valid and enforceable rights to use and access the Existing Service Territory and to use, access, operate and otherwise conduct its Business and own and operate its assets, properties and other rights in the Existing Service Territory, including the right to access and maintain and the assets, properties and rights of the Company located within the Existing Service Territory, and (b) to the best of Sellers’ Knowledge, the Company’s Business and the assets, properties and rights of the Company within the Existing Service Territory conform: (i) to all applicable Laws, including material zoning requirements, without reliance upon a variance issued by a Governmental Authority or a classification of the parcel in question as a nonconforming use, and (ii) to all restrictive covenants, if any, or other liens affecting all or part of the Existing Service Territory.  To the best of Sellers’ Knowledge, upon receipt of the applicable approvals and authorizations from Governmental Authorities, the Buyer will have valid and enforceable rights to use and access the Potential Expansion Service Territory and to use, access, operate and otherwise conduct the Business and own and operate the Company and the assets, properties and rights of the Company within the Potential Expansion Service Territory.  There is no pending or, to the Sellers’ Knowledge, threatened, Litigation by any Governmental Authority involving the Company’s ability to provide services or otherwise conduct its operations within the Service Territory, including any Claims by any Governmental Authority to annex all or any portion of the Company’s Business, assets or properties within the Existing Service Territory.   Section 4.16   Absence of Material Adverse Change.   Since January 1, 2008 there has been no Material Adverse Change or, to the Sellers’ Knowledge, any event or circumstance, or liability or obligation of any nature (whether accrued, contingent, absolute, determined, determinable or otherwise), that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Change.   Section 4.17   Transactions with Related Parties.   Except as set forth on Schedule 4.17, there is no Contract between the Company and (a) any current or former officer, member, general or limited partner, employee, independent contractor, agent of the Sellers (b) any parent, spouse, child, brother, sister or other family relation (by blood or marriage) of any such officer, member, general or limited partner, employee, independent contractor, agent of the Sellers; (c) any corporation, partnership or other entity of which any such officer, member, general or limited partner, employee, independent contractor, agent of the Sellers or any such family relation is an officer, director, manager, partner, trustee or greater than 10% equity owner or beneficiary; or (d) any Affiliate of the Sellers.  Each of the transactions set forth on Schedule 4.17 is on terms no less favorable to the Company than could reasonably be obtained by the Company from an unrelated third party in an arm’s length negotiation.   Section 4.18   Certain Payments.   The Company has not, nor has and officer, manager, member, general or limited partner, employee or agent of the Sellers, directly or indirectly on behalf of the Company, (a) made any payment in violation of any federal, state, local, municipal, foreign or other Law to any person or entity, private or public, regardless of form, whether in money, property, or services, or (b) established or maintained any fund or asset that has not been recorded in the Records.   Section 4.19   Customer and Supplier Relationships.   Schedule 4.19 lists all the customers of the Company as of the date hereof (the “Customers”) and all of the suppliers of the Company as of the date hereof (the “Suppliers”).  Except as set forth on Schedule 4.19, the Company has not received any written notice from any Customer regarding its intent to, or its attempt or threat to, cancel its Contract or its other relationship with the Company or to substantially reduce its purchases from the Company, whether as a result of the transactions contemplated by this Agreement or otherwise.  To the Sellers’ Knowledge, the Company is not engaged in any disputes with any Customer the outcome of which could result in a Material Adverse Change.   Section 4.20   Officers and Directors; Bank Accounts.   Schedule 4.20 lists all of the officers and managers of the Company and all bank accounts of the Company (designating each authorized signatory and the level of each signatory’s authorization).   Section 4.21   No Brokers.   No Seller nor any Person acting on behalf of any Seller or any Representative of the Sellers has agreed to pay a commission, finder’s or investment banking fee, or similar payment in connection with this Agreement or any matter related hereto to any Person, nor has any such Person taken any action on which a claim for any such payment could be based, other than payments for which the Buyer will have no liability or obligation.   Section 4.22   Disclosure.   All agreements, schedules, exhibits, certificates or reports furnished or to be furnished to the Buyer by or on behalf of the Sellers in connection with this Agreement or the transactions contemplated hereby are true, complete and accurate in all material respects.  None of the representations and warranties set forth in this Agreement (as modified by the disclosure schedules thereto), the schedules and certificates furnished by the Sellers to the Buyer pursuant hereto, taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein or therein not misleading.   Section 4.23   No Other Representations and Warranties.   Except for the representations and warranties contained in this Article IV, the Sellers make no other representations or warranty with respect to the Company, the Business or the Acquired Interests.   ARTICLE V                                                                                       REPRESENTATIONS AND WARRANTIES OF THE BUYER AND ARTESIAN   The Buyer and Artesian, jointly and severally, hereby represent and warrant to the Sellers that the following representations and warranties are, as of the date hereof, and will be, as of the Closing Date, true and correct:   Section 5.1     The Buyer and Artesian are each a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware.  The Buyer and Artesian each has full corporate power and authority to own its properties and carry on its business as it is now being conducted.   Section 5.2   Authority and Validity.   The execution and delivery by the Buyer and Artesian, the performance by the Buyer and Artesian under, and the consummation by the Buyer and Artesian of the transactions contemplated by, this Agreement and the Transaction Documents to which the Buyer and/or Artesian is a party, have been duly and validly authorized by all required corporate action by or on behalf of the Buyer and/or Artesian.  This Agreement and the Transaction Documents to which the Buyer and/or Artesian are a party have been, duly and validly executed and delivered by the Buyer and/or Artesian and constitute valid and binding obligations of the Buyer and/or Artesian, enforceable against the Buyer and/or Artesian in accordance with their respective terms, except as the same may be limited by   Section 5.3   No Violation.   There is no legal action, proceeding or investigation pending or, to the knowledge of the Buyer and/or Artesian, threatened against the Buyer and/or Artesian, nor is there any Judgment outstanding against the Buyer and/or Artesian or to or by which the Buyer and/or Artesian is subject or bound that materially adversely affects the ability of the Buyer to consummate any of the transactions contemplated hereby.   Section 5.4   Consents.   Except as set forth on Schedule 5.4, no consent, approval, permit, authorization of, declaration to or filing with any Governmental Authority or any other Person on the part of the Buyer and/or Artesian is required in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.   Section 5.5   No Brokers.   Neither the Buyer and/or Artesian nor any Person acting on behalf of the Buyer and/or Artesian has agreed to pay a commission, finder’s fee, investment banking fee or similar payment in connection with this Agreement or any matter related hereto nor has the Buyer and/or Artesian taken any action on which a claim for any such payment could be based.   Section 5.6   Environmental.   (a)   To the best of Buyer’s Knowledge, the Plant, Property and Equipment are being, and at all times during the Buyer’s operation have been, operated in compliance with all applicable Environmental Laws.  To the best of Buyer’s Knowledge, none of the Plant, Property and Equipment is required to be upgraded or modified in order to comply with existing applicable Environmental Laws.  Neither the Buyer nor Artesian has ever received any claims or notices, oral or written, (i) (A) alleging that the Buyer or any of its Affiliates is liable under any Environmental Law with respect to the operation of the Business, or (B) ordering the Buyer or any of its Affiliates to remedy or recommending that the Buyer or any of its Affiliates remediate, any environmental damage to any of the Plant, Property and Equipment or modify or upgrade the Plant, Property and Equipment to comply with Environmental Laws, and (ii) to the Buyer’s Knowledge, no such or notice.   (b)   Except in compliance with applicable Environmental Laws, there has been no release or threatened release of any Hazardous Substance, pollutant or contaminant to any soil, groundwater, surface water, building component, wastewater, air or other media on or from any Real Property during the Buyer’s operation of the Business.   Section 5.7   Disclosure.   None of the representations and warranties set forth in this Agreement (as modified by the disclosure schedules thereto), the schedules and certificates furnished by the Buyer and/or Artesian to the Company pursuant hereto, taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein or therein not misleading.   Section 5.8     Except for the representations and warranties contained in this Article V, neither the Buyer nor Artesian makes any other representations or warranty with respect to the Buyer, Artesian or the Company, the Business or the Acquired Interests.   ARTICLE VI                                                                                       PRE-CLOSING COVENANTS   During the period from the date of this Agreement through and including the Closing Date:   Section 6.1   Conduct of the Business of the Company Pending Closing.  Except as set forth in Schedule 6.1, as otherwise performed by Buyer pursuant to the operating agreement between Buyer and the Company, or as may be first consented to by Buyer in writing, during the period from the date of this Agreement through and including the Closing Date, the Company shall, and the Member shall cause the Company to, conduct the Business according to its ordinary and usual course of business and to preserve intact the Business, assets, properties and rights of the Company and will not sell, lease, transfer, assign, convey or make any dividend or distribution in respect of any LLC Interests (whether in cash, securities or in kind property) amend modify, cancel or terminate any Assumed Contract, will not amend any Tax Return and will otherwise maintain satisfactory relationships with respect to the Business and the assets, properties and rights of the Company with Governmental Authorities, Suppliers, agents, Customers, and others having business relationships with the Company.  In addition, the Company shall promptly notify the Buyer in writing of any notice or other communication that it receives (written or oral) respecting any Litigation or Audit involving or affecting the Company.  Without limiting the foregoing and except as set forth on Schedule 6.1 or as may be first consented to by Buyer in writing, the Company shall not, and the Member shall cause the Company not to:     (a)   enter into any Contract other than with Customers or Suppliers in the ordinary course of business substantially as conducted heretofore;   (b)   cause any Material Adverse Change or perform or not perform any action the performance or non-performance of which would reasonably be expected to result in a Material Adverse Change;   (c)   make any loan or advance to any Person other than for services provided to Customers on credit in the ordinary course of business consistent with past practice;   (d)   (i) incur any Indebtedness, except expenses and current liabilities incurred in connection with or for services rendered or goods supplied in the ordinary course of business or obligations or liabilities incurred by virtue of the execution of this Agreement, or (ii) create any Lien on any asset of the Company or the Acquired Interests;   (e)   issue or transfer the Acquired Interests or any other equity interests of the Company or securities or indebtedness convertible into or exchangeable for equity interests of the Company;   (f)   cancel, waive or release any debt, right or claim, except, in each case, in the   (g)   change the accounting principles, methods or practices (including, without limitation, any change in depreciation or amortization policies or rates) utilized by the Company;   (h)   make any capital expenditure or commitment therefor;   (i)   hire any employees or adopt any Benefit Plan; or   (j)   make, revoke or change any Tax election, or settle any matter relating to Taxes;   (k)   take any action that if taken after the date of this Agreement would constitute a variance from or breach of the representations and warranties set forth in Article 4 of this Agreement   Section 6.2   Supplements to Schedules.  The Sellers, on the one hand, and the Buyer, on the other, shall promptly give to the other notice with respect to any matter or change hereafter arising which, if existing or occurring on or before the date hereof, would have been required to be set forth or described in any of the Schedules hereto or which is necessary to correct or make the representations and warranties contained herein correct and complete as of the Closing Date and shall supplement or amend the Schedules hereto as appropriate with respect to such matters.  If pursuant to this Section 6.2 the Sellers disclose any such change that constitutes a Material Adverse Change, or relates to any material and adverse events, facts or circumstances, then the Buyer shall have the right and option, exercisable at any time prior to Closing, to terminate this Agreement upon giving written notice to the Seller.   Section 6.3   Access; Cooperation.  The Sellers shall provide the Buyer and its Representatives with all information that the Buyer may reasonably request in auditable form.  Upon reasonable prior written notice, the Sellers shall provide the Buyer and its Representatives with access during regular business hours to the assets and properties, Records and Customers and Suppliers of the Company.  The Sellers and their Representatives will also cooperate with the Buyer and its Representatives, including the Buyer’s auditors and counsel, in the preparation of any documents or other materials required in connection with the transactions contemplated by this Agreement.  In addition, the Sellers and the Buyer shall use their respective reasonable good faith efforts to satisfy all conditions to Closing and all other matters relating to the consummation of the transactions contemplated by this Agreement and the Transaction Documents.  The Sellers and the Buyer shall cooperate with each other in connection with any filings with any Governmental Authority and shall use their reasonable good faith efforts to furnish to each other all information required for any such filing to be made with any Governmental Authority in connection with the transactions contemplated by this Agreement.   Section 6.4   Due Diligence/Exclusive Dealing; Confidentiality Prior to Closing.     The confidentiality provisions under the caption “Due Diligence” and the provisions of the first paragraph under the caption “Non-Solicitation” of the Basic Terms of letter of intent, dated January 28, 2008, between the Buyer and the Company (as may be subsequently amended or modified from time to time in accordance with its terms, the “Letter of Intent”) shall continue in full force and effect until Closing, at which time such agreement shall terminate and be of no further force or effect.  In addition, the parties will not disclose, and will take reasonable steps to prevent the disclosure to others, of the terms and existence of this Agreement and the Transaction Documents (including drafts thereof) and all negotiations leading thereto, unless (i) compelled to do so by Law or valid legal process, or (ii) the other parties to this Agreement shall have consented to such disclosure.  No party, however, shall be prohibited from disclosing any such information to its legal and financial advisors.   Section 6.5   Cooperation Obtaining Approvals from Governmental Authorities.   On or before May 10, 2008, the Buyer shall, at Buyer’s sole cost, prepare any and all necessary applications to be filed with the PSC to approve the transfer of the Acquired Interests from the Member to the Buyer, and Buyer shall cause said application(s) (together with any filing fees) to be delivered to the Member on or before May 15, 2008.  The Member’s counsel shall be responsible for filing these PSC application(s) and generally interfacing with the PSC on the approval of said applications.  From the date of this Agreement through the Closing Date, upon request by the Buyer, the Sellers shall support in writing and otherwise reasonably cooperate with the Buyer to assist the Buyer in the obtaining of, any other authorizations or other Permits, excluding any franchise, from any Governmental Authority, sought by the Buyer in the Existing Service Territory or the Potential Expansion Service Territory.  Reasonable costs incurred by Sellers, except for costs or expenses of any legal counsel engaged by Sellers, shall be borne by the Buyer.   ARTICLE VII                                                                                       POST-CLOSING COVENANTS   Section 7.1   Payment of Taxes; Tax Returns.   (a)   The Buyer shall pay in a timely manner any transfer, stamp, sales and use, and recordation Taxes resulting from or payable in connection with the sale of the Acquired Interests pursuant to this Agreement.   (b)   From and after the Closing through and including the date that is the seventh (7th) anniversary of the Closing Date, the Member, on the one hand, and the Company and the Buyer, on the other, shall cooperate fully with each other and make available or cause to be made available to each other in a timely fashion such data relating to Taxes, prior Tax Returns and filings and other information as may be reasonably requested for the preparation by the Buyer or the Company, on the one hand, or the Member, on the other, of any Tax Returns, elections, consents or certificates required to be prepared and filed by the Buyer, the Company or the Member and any audit or other examination by any Governmental Authority, or judicial or administrative proceeding relating to liability for Taxes.  The Buyer, the Company and the Member will each retain, and cause their respective Affiliates to retain, and provide to the other party all records and other information which may be relevant to any such Tax Return, audit or examination, proceeding or determination, and will each provide the other party with any final determination of any such audit or examination, proceeding or determination that affects any amount required to be shown on any Tax Return of the other party for any period.  Without limiting the generality of the foregoing, each of the Buyer and the Company, on the one hand, and the Member, on the other, shall retain copies of all Tax Returns, supporting work schedules and other records relating to tax periods or portions thereof ending prior to or on the Closing Date.   (c)   With respect to any Pre-Closing Tax Period for which Tax Returns are required to be filed by or on behalf of the Company after the Closing Date, the Member shall timely prepare and file (or cause to be prepared and filed) all Tax Returns for such Pre-Closing Tax Period, and will pay when due all Taxes for all Pre-Closing Tax Periods (whether or not shown on such Tax Returns).  The Member shall be liable for all Taxes arising from any Tax imposed with respect to any Pre-Closing Tax Period, whether or not shown on a Tax Return with respect to such period.  The Member shall provide the Buyer with photocopies of the Tax Returns relating to a Pre-Closing Tax Period.   (d)   The Buyer shall timely prepare and file (or cause to be so prepared and filed) all Tax Returns that are required to be filed by the Company after the Effective Date other than any Tax Return the Member is required to file pursuant to Section 7.1(c) of this Agreement (the “Buyer’s Tax Returns”) and will pay the Taxes for the periods covered by the Buyer’s Tax Returns, when due.   (e)   Any Tax refunds that are actually received by the Buyer or the Company and relate to a Pre-Closing Tax Period or portions thereof in respect of Taxes actually paid by the Company or the Member at or prior to the Closing shall be for the account of the Member and the Buyer shall promptly pay any such refunds (or portions thereof) to the Member.   Section 7.2   Audits.   (a)   The Buyer shall notify the Member in writing within ten (10) Business Days after receipt by the Buyer or the Company of any written notice of examination, audit or proceeding (an “Audit”) regarding any Tax Return relating to any Pre-Closing Tax Period or other period with respect to which the Member may have an indemnification obligation under Section 10.  Upon written notice to the Buyer within five (5) Business Days after the Buyer gives the Member notice of any Audit and at the Member’s expense, the Member shall have the right to exercise control over the handling, disposition and/or settlement of any issue raised in any Audit regarding any Tax Return relating to any Pre-Closing Tax Period, and shall consult and notify the Buyer on any positions taken during such Audit and any proposed or resulting settlement (subject to the terms of this Section 7.2(a)).  If the Member shall not timely assume the defense of any Audit or diligently defend against any Audit (as determined by the Buyer in its sole discretion) or the Buyer or the Member shall otherwise mutually agree, then the Buyer shall have the right to exercise control at any time over the handling, disposition and/or settlement of any issue raised in any Audit regarding any Tax Return of the Company relating to any Pre-Closing Tax Period (including the right to settle or otherwise terminate any contest with respect thereto).  The right of the Buyer, the Company or any Subsidiary to be indemnified hereunder will not, however, be adversely affected by their failure to give notice hereunder, except to the extent that the Member is materially adversely affected from such failure.  The Member shall not settle any issue or claim or otherwise terminate any contest with respect to any such Audit without the prior written consent of the Buyer.   (b)   The Buyer shall have the right to exercise control at any time over the handling, disposition and/or settlement of any issue raised in any official inquiry or Audit regarding any Tax Return of the Company (including the right to settle or otherwise terminate any contest with respect thereto) without any adverse effect on the Buyer’s right to indemnification under this Agreement, except as otherwise set forth in Section 7.2(a).   Section 7.3   Access to Water Services by the Member and its Affiliates.   (a)   From and after the Closing Date and through and including the twentieth (20th) anniversary of the Closing Date, the Member and its Affiliates, all of which are identified on the attached Schedule 7.3 (collectively, the “Member’s Affiliates”) will provide the Company and its Affiliates  with a right of first refusal to provide water capacity (potable water and fire suppression) at rates based upon standard cost of services principles and approved by the Maryland Public Service Commission (the “PSC”) and any other applicable Governmental Authority to any user to which any of Member’s Affiliates reasonably requests in any territory within Cecil County, Maryland that is now being or is hereafter serviced with water by the Company or its Affiliates, which territory shall include the Service Territory and the land currently owned by one or more of the Member’s Affiliates within Cecil County as identified on the map attached to Schedule 7.3.  In addition, the Company, together with its Affiliates, hereby agrees that for the period of time that Company or its Affiliates (and/or their successors and assigns) own water infrastructure within Cecil County, Maryland, the Company (or its Affiliates) will, at the election of the Member’s Affiliates (subject to the right of first refusal terms of this Section 7.3(a)), provide water capacity (potable water and fire suppression) at rates based upon standard cost of services principles and approved by the PSC and any other applicable Governmental Authority to any user to which any of the Member’s Affiliates reasonably requests in any territory within Cecil County, Maryland that is now being or is hereafter serviced with water by the Company or its Affiliates, which territory shall include but not be limited to the Existing Service Territory and the land currently owned by one or more of Member’s Affiliates within Cecil County as identified on the map attached to Schedule 7.3.  Following the Closing Date, the Member’s Affiliates will reasonably cooperate with the Company and its Affiliates, pursuant to the provisions of Section 7.7 of this Agreement in obtaining all franchises or other Permits from any Governmental Authority required for the Company to comply with the provisions of this Section 7.3.  The Company's agreement to serve any user reasonably requesting service under this subsection may not apply: (i) if the Company cannot obtain authority for necessary real property, rights-of-way or other physical access to users, (ii) in developments or buildings that are subject to exclusive arrangements with other providers, or (iii) when the water service cannot be reasonably provided in a manner to assure acceptable water quality, or in a manner that the PSC finds not to be economically feasible so that the cost of such service cannot be recovered in rates as approved by the PSC.   (b)   From and after the Closing Date, the Company will construct any future transmission mains (or spine lines), pumping stations or storage tanks for fire suppression to be constructed within the Service Territory at its own cost.   (c)   On or before the commencement of site work on the 252+ acre residential/commercial development known as Charlestown Crossing, LLC, the Company shall install, at the Company’s own cost, the connector line to Charlestown Crossing (the “Charlestown Connector”).   (d)   From and after the Closing Date, with the exception of the Charlestown Connector (which shall be installed by the Company, at its own cost), the construction of distribution or service lines within the Service Territory for specific users shall be the sole and exclusive responsibility of the developer or applicable end user for such distribution or service line(s) and shall not in any manner be the responsibility or at the cost of the Company or its Affiliates.   (e)   Notwithstanding anything to the contrary in this Section 7.3, the Company or its Affiliates shall be entitled at all times (including, without limitation, with respect to the Company’s obligations under Section 7.3(c)) to assess customer or developers connecting to any transmission main a proportionate share (per EDU upon connection) of the cost to install such transmission mains (or spine lines), pumping stations or storage tanks for fire suppression based upon principles and approved by the PSC and any other applicable Governmental Authority.  For purposes of this Section 7.3, costs to install a transmission main shall consist solely of materials, labor and reasonable overhead to construct and shall specifically exclude profit accruing to the benefit of the Company or its Affiliate in respect of such construction.   (f)   Artesian shall guarantee the obligations of the Company under this Section 7.3 on the terms and conditions set forth in the Guaranty.   (g)   The rights and benefits of the Company and its Affiliates under this Section 7.3 and the Company’s obligations under this Section 7.3 shall, in each case, inure to and be binding upon their respective successors or assigns (including third party purchasers of the Company’s of its Affiliates’ equity or assets).  In this regard, the Company (or its Affiliates) hereby agrees, represents and covenants that in the event that the Company (or its Affiliates) contracts to sell its assets to a third party purchaser that would necessitate the sale, license and/or lease of all or substantially all of the assets of the Company (or any other presently owned or future acquired water infrastructure by the Company or its Affiliates within Cecil County, Maryland) to a third party, the Company (or its Affiliates) shall include an affirmative covenant in the asset purchase agreement, lease agreement or license agreement with the third party purchaser, lessee and/or licensee, whereby this third party shall be required to assume the Company’s (or its Affiliates’) contractual liabilities, duties and obligations under Section 7.3 of this Agreement.   Section 7.4   Buyer Permits.   (a)   Between the Closing Date and December 31, 2008, the Company will, and the Buyer will cause the Company to, prepare and submit application(s) to the Maryland Department of the Environment (“MDE”) and the PSC (as well as any other necessary Governmental Authority) to authorize the expansion of the Water Plant to a production capacity of Six Hundred Thousand (600,000) gallons per day.  Following the submittal of the application(s), the Company will, and the Buyer will cause the Company to, use commercially reasonable efforts to pursue the approval of the application(s), said efforts to include, without limitation: (i) the Company responding to any requests for information by any Governmental Authority within the time period required by the requesting Governmental Authority, and (ii) in the event that any Governmental Authority has not formally approved the Company’s application (as may be amended based on comments and feedback from any other Governmental Authority) before the first anniversary of the Company submitting its application(s) to each respective Governmental Authority, the Company exercising its due process rights to have its application reviewed, appealed or otherwise decided.   (b)   Between January 1, 2009 and December 31, 2010, the Company will, and the Buyer will cause the Company to, prepare and submit an application to the MDE and the PSC (as well as any other necessary Governmental Authority) to authorize the expansion of the Water Plant to a production capacity of One Million (1,000,000) gallons per day.  Following the submittal of the application(s), the Company will, and the Buyer will cause the Company to, use commercially reasonable efforts to pursue the approval of the application(s), said efforts to include, without limitation: (i) the Company responding to any requests for information by any Governmental Authority within the time period required by the requesting Governmental Authority, and (ii) in the event that any Governmental Authority has not formally approved the Company’s application (as may be amended based on comments and feedback from any other Governmental Authority) before the first anniversary of the Company submitting its application(s) to each respective Governmental Authority, the Buyer exercising its due process rights to have its application reviewed, appealed or otherwise decided.   (c)   The Member shall, and shall cause its Affiliates to, reasonably cooperate with the Company and the Buyer, at the Company’s expense, in connection with the application(s) pursuant to this Section 7.3 (such costs of preparing and filing the application(s) to be borne by the Company) and will furnish to the Company and the Buyer any information in the possession of the Member or its Affiliates required for such applications to be made with the Governmental Authority.  Nothing set forth in this Agreement shall require Company or its Affiliates to defend against any governmental challenges or denials of any application made by the Company pursuant to this Section 7.4; provided, however, that in the event that any such application is met with any governmental challenges and/or denials, the Company will, and the Buyer will cause the Company to, work in good faith with the Member to amend any such application(s) in an effort to address any issues raised in the governmental challenges and/or denials.   (d)   The rights and benefits of the Company and its Affiliates under this Section 7.4 and the obligations of the Company and the Buyer under this Section 7.4 shall, in each case, inure to and be binding upon their respective successors or assigns (including third party purchasers of the Company’s of its Affiliates’ equity or assets).  In this regard, the Company (or its Affiliates) hereby agrees, represents and covenants that in the event that the Company (or its Affiliates) contracts to sell its assets to a third party purchaser that would necessitate the sale, license and/or lease of all or substantially all of the assets of the Company (or any other presently owned or future acquired water infrastructure by the Company or its Affiliates within Cecil County, Maryland) to a third party at or prior to the termination or expiration of the Company’s and the Buyer’s covenants under this Section 7.4, the Company (or its Affiliates) shall include an affirmative covenant in the asset purchase under Section 7.4 of this Agreement.   Section 7.5   Mandatory Partial Prepayment of the Note.   If at any time after the Closing Date and prior to the satisfaction and discharge in full of all of the Buyer’s obligations to the Member under the Note, the Buyer shall directly or indirectly through the Company actually collect connection fees or contributions in aid of construction for new customers within the Service Territory (collectively “Connection Fees”) that in the aggregate equal the Purchase Price, then thereafter the Buyer shall remit to the Member in partial prepayment of the Note (without incurring any penalties or premiums or requiring advance notice) all Connection Fees actually paid to the Buyer directly or indirectly through the Company until the satisfaction and Note, which Connection Fees shall be remitted by the Buyer to the Member within thirty (30) days of the Buyer’s or the Company’s receipt of payment.  Any such prepayments shall be applied to the last payments due under the Note.   Section 7.6   Further Assurances.   At any time and from time to time after the Closing, at the reasonable request of the Buyer or the Company and without further consideration (but at the Company’s or the Buyer’s cost of preparation and filing), the Member promptly shall execute and deliver such confirmatory instruments of sale, transfer, conveyance, assignment and confirmation, and take such other reasonable action, as the Buyer may reasonably request to transfer, convey and assign to the Buyer, and to confirm the Buyer’s right, title and interest in and to, all of the Acquired Interests or any assets, properties or rights of the Company and otherwise to carry out the purposes and intent of this Agreement.   Section 7.7     Subsequent to the Closing Date, upon request by the Buyer or the Company, the Member shall support in writing and otherwise reasonably cooperate with the Buyer, at the Company’s expense, to assist the Buyer or the Company, as the case may be, in the obtaining of, any authorizations or other Permits, including a franchise, from any Governmental Authority sought by the Buyer in the Existing costs incurred by Member, except for costs or expenses of any legal counsel engaged by the Member, shall be borne by the Buyer or the Company.   ARTICLE VIII                                                                                       CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS   The obligations of the Sellers with respect to actions to be taken on the Closing Date are subject to the satisfaction or waiver on or prior to the Closing Date of each of the conditions set forth in this Article VIII.   Section 8.1   Representations and Warranties.   All representations and warranties of the Buyer contained in this Agreement shall be true and correct as of the Closing Date with the same effect as though such representations and warranties had been made on and as of such date; and a certificate to the foregoing effect dated the Closing Date and signed by an authorized officer of the Buyer shall have been delivered to the Sellers.   Section 8.2   Performance of Obligations.   Each and all of the agreements of the Buyer to be performed on or before the Closing Date pursuant to the terms of this Agreement shall have been duly performed in all material respects, each of the documents, agreements, consents and other items to be delivered to the Sellers pursuant to Section 3.2(b)shall have been delivered, and the Buyer shall have delivered to the Sellers a certificate, dated as of the Closing Date, to such effect.   Section 8.3   No Litigation   No Litigation before a court or any other Governmental Authority shall have been instituted or threatened seeking to restrain or prohibit the transactions contemplated by this Agreement, and no Governmental Authority shall have taken any other action prohibiting the Sellers from proceeding with the transactions hereunder.   Section 8.4   Consents and Approvals.   All necessary consents of and filings required to be obtained or made with any Person or any Governmental Authority relating to the consummation of the transactions contemplated herein (collectively, “Required Consents”) by the Buyer shall have been obtained and made, including those described on Schedule 5.4.   Section 8.5   Satisfaction of Indebtedness; Release of Liens.   The Buyer shall have paid and satisfied in full all obligations of the Company for the Closing Debt, and fully and finally released and terminated all Liens in respect thereof and provided the Seller with evidence of such satisfaction and discharge and release and termination, as requested by the Seller, including, without limitation, the Payoff Letters and UCC-3s or other releases to be delivered pursuant to Section 3.2(a)(xi).       ARTICLE IX                                                                                       CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER   The obligations of the Buyer with respect to actions to be taken on the Closing Date are subject to the satisfaction or waiver on or prior to the Closing Date of all of the conditions set forth in this Article IX.   Section 9.1   Representations and Warranties.   All the representations and warranties of the Sellers contained in this Agreement shall be true and correct as of the Closing Date with the same effect as though such representations and warranties had been made on and as of such date; and Sellers shall have each delivered to the Buyer a certificate to such effect, dated as of the Closing Date, that, with respect to the Company, shall have been signed by the Managing Member of the Company and, with respect to the Member, shall have been signed by the General Partner of the Member.   Section 9.2   Performance of Obligations.   Each and all of the agreements of the Sellers to be performed on or before the and other items to be delivered to the Sellers pursuant to Section 3.2(a)shall have been delivered, and the Sellers shall have each delivered to the Buyer a certificate to such effect, dated as of the Closing Date, that, with respect to the Company, shall have been signed by the Managing Member of the Company and, with respect to the Member, shall have been signed by the General Partner of the Member.   Section 9.3   No Litigation.   any other action prohibiting the Buyer or Artesian from proceeding with the transactions hereunder.   Section 9.4   Consents and Approvals.   All Required Consents to have been obtained or made by the Sellers shall have been obtained and made, including those described on Schedule 4.4.  All necessary approvals of the PSC shall have been obtained and shall be in full force and effect.   Section 9.5   Absence of Certain Changes.   No change that constitutes or results in a Material Adverse Change shall have occurred or arisen.   ARTICLE X                                                                                       INDEMNIFICATION   Section 10.1   Obligations of the Seller and the Member.   (a)   As consideration for the commitment of the Buyer hereunder, the Member shall indemnify and hold harmless the Buyer, its successors and assigns, and each of its Affiliates, equity owners, directors, officers, agents, Representatives and employees and each other Person, if any, controlling such person (each a “Buyer Indemnified Person”), from and against all Liabilities to which such Buyer Indemnified Person may become subject as a result of, or based upon or arising out of, directly or indirectly, (i) any material inaccuracy in, or breach or nonperformance of, any of the representations, warranties, covenants or agreements made by the Sellers in or pursuant to this Agreement (regardless of any notification pursuant to Section 6.2 that corrects any representation or warranty of the Sellers that was incorrect or inaccurate as of the date hereof and reading out any materiality qualifications), (ii) acts or omissions of the Company or its predecessors prior to the Closing, (iii) Liability under any Environmental Laws arising from any activity of the Sellers or any of their predecessors prior to the Closing, (iv) the Company’s ownership or operation of the Company, the Business or the assets, properties or rights of the Company prior to the Closing Date (excluding any negligent acts or omissions of the Buyer or its Affiliates as the contracted operator of the Business), (v) Liability with respect to any Lien on or in respect of any of the assets, properties or rights of the Company that is not released by the Closing Date (excluding the Member’s Lien or any lien associated with the Closing Debt), (vii) Liability arising out of or relating to any Litigation by the Town of North East, Maryland, against the Company, or (viii) the matters disclosed on Schedule 4.14; and (in each case) will reimburse any Buyer Indemnified Person for all reasonable expenses (including the reasonable fees of counsel) as they are incurred by any such Buyer Indemnified Person in connection with investigating, preparing or defending any such action or claim pending or threatened, whether or not such Buyer Indemnified Person is a party hereto.   (b)   The Member and its Affiliates hereby release and discharge the Company of all Liabilities and obligations of the Member and its Affiliates arising from or relating to the period prior to the Closing, excluding any Liabilities arising from the negligent acts or omissions of the Buyer or its Affiliates, whether pursuant to this Agreement or otherwise.  Neither the Member nor any of its Affiliates shall seek or otherwise be entitled to seek contribution or any other payments from the Company for any or all Liabilities that the Member or its Affiliates is or shall be obligated to pay arising from or relating to the period prior to the Closing, excluding any Liabilities arising from the negligent acts or omissions of the Buyer or its Affiliates, whether pursuant to this Agreement or otherwise.   Section 10.2   Obligations of the Buyer and Artesian.   As consideration for the commitment of the Sellers hereunder, the Buyer and Artesian shall, jointly and severally, release, waive claims against, indemnify and hold harmless the Member and its Affiliates, equity owners, directors, officers, agents and employees and each other Person, if any, controlling the Member or any of its Affiliates (each a “Seller Indemnified Person”) from and against any Liability to which such Seller Indemnified Person may become subject as a result of, or based upon or arising out of, directly or indirectly: (a) any material inaccuracy in, or breach or nonperformance of, any of the representations, warranties, covenants or agreements made by the Buyer and/or Artesian in or pursuant to this Agreement, (b) all Liabilities directly resulting from the Buyer’s installation of the Water Plant or the Buyer’s operation of the assets of the Company prior to the Closing, (c) any sales and use and/or transfer Tax related to the transfer of the Acquired Interests from the Company to Buyer, or (d) the Buyer’s ownership or operation of the Company, Business or assets, properties or rights of the Company following the Closing Date, and (in each case) will reimburse any Seller Indemnified Person for all reasonable expenses (including the reasonable fees of counsel) as they are incurred by any such Seller Indemnified Person in connection with investigating, preparing or defending any such action or claim pending or threatened, whether or not such Seller Indemnified Person is a party hereto.   Section 10.3   Tax Indemnification.   The Member and its Affiliates shall be responsible for, and the Member and its Affiliates, jointly and severally, shall indemnify and hold harmless each Buyer Indemnified Person in respect of, any Liability, (or actions or claims in respect thereof) attributable to any breach by the Member or its Affiliates of the covenants set forth in Sections 7.1 or 7.2 or any and all Taxes relating to any Pre-Closing Tax Period, including any Tax that is or results in a Lien upon the Acquired Interests, but excluding any sales and use tax, any bulk sales or transfer Tax arising from the transfer of the Acquired Interests.  The Member and its Affiliates shall not enter into any settlement or agreement in compromise of any claim relating to Taxes with any Governmental Authority which purports to bind the Company or its Affiliates with respect to any tax period without the Buyer’s prior written consent.   Section 10.4   Procedure.   (a)            Each Buyer Indemnified Person and Seller Indemnified Person shall be referred to collectively herein as an “Indemnified Person.”  Any Indemnified Person seeking indemnification with respect to any actual or alleged Liability shall give notice to the Person from whom indemnification is sought (each, an “Indemnifying Person”) on or before the date specified in Section 10.5.  Failure to provide the specified notice, however, will not affect the Indemnified Person’s rights to indemnity hereunder from the Indemnifying Person, unless the Indemnifying Person can show actual material prejudice resulting from such failure and then only to the extent of such actual material prejudice.   (b)            If any Liability is asserted by any third party against any Indemnified Person, the Indemnifying Person shall have the right, unless otherwise precluded by applicable Law, to conduct and control the defense, compromise or settlement of any action or threatened action brought against the Indemnified Person in respect of matters addressed by the indemnity set forth in this Article X  (an “Action”).   (c)            The Indemnified Person shall have the right to employ counsel separate from counsel employed by the Indemnifying Person in connection with any such Action or threatened Action and to participate in the defense thereof, but the fees and expenses of such counsel employed by the Indemnified Person shall be at the sole expense of the Indemnified Person, unless(i) the Indemnifying Person shall have elected not, or, after reasonable written notice of any such Action or threatened Action, shall have failed (within ten (10) days after the Indemnifying Persons’ receipt of such written notice), to assume or participate in the defense thereof, (ii) the employment thereof has been specifically authorized by the Indemnifying Person in writing, or (iii) the parties to any such Action or threatened Action (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and the Indemnifying Person shall have been advised in writing by counsel for the Indemnified Person that there may be one or more defenses available to the Indemnified Person that are not available to the Indemnifying Person or legal conflicts of interest pursuant to applicable rules of professional conduct between the Indemnifying Person and the Indemnified Person (in which case, the Indemnifying Person shall not have the right to assume the defense of such Action on behalf of the Indemnified Person), in any of which events referred to in clauses (i), (ii) and (iii) the fees and expenses of one such separate counsel employed by the Indemnified Person shall be at the expense of the Indemnifying Person.   (d)            The Indemnifying Person shall not, without the written consent of the Indemnified Person, settle or compromise any such Action or threatened Action or consent to the entry of any judgment which does not include as an unconditional term thereof the giving by all other participants to the Indemnified Person a release from all liability in respect of such Action or threatened Action.  In addition, the Indemnifying Person shall not, without the prior written consent of the Indemnified Person, settle or compromise any such Action or threatened Action or consent to the entry of any judgment which provides for injunctive or equitable relief with respect to any Indemnified Person.  Unless the Indemnifying Person shall have elected not, or shall have after reasonable written notice of any such Action or threatened Action failed, to assume or participate in the defense thereof, the Indemnified Person may not settle or compromise any Action or threatened Action without the written consent of the Indemnifying Person, such consent not to be unreasonably withheld, conditioned, or delayed.   (e)            If, after reasonable written notice of any such Action or threatened Action, the Indemnifying Person does not affirmatively undertake to defend the Indemnified Person, a recovery against the Indemnified Person for damages suffered by it in good faith, is conclusive in its favor against the Indemnifying Person; provided, however, that no such conclusive presumption shall be made if the Indemnifying Person has not received reasonable written notice of the Action against the Indemnified Person.   Section 10.5   Survival of Certain Provisions.   (a)   The representations and warranties and indemnification and other obligations of the Sellers and the Buyer and Artesian set forth set forth in Article IV, Article V and Sections 10.1, 10.2 and 10.3, as the case the may be, shall survive the Closing and shall continue in full force and effect without limitation after the Closing for a period of twenty-four (24) months following the Closing Date, except that: (a) claims related to fraud or willful misconduct shall survive until the expiration of ten (10) Business Days following the date on which the statute of limitations otherwise applicable to such claim has expired, (b) claims for indemnification arising from the breach of the representations and warranties contained in Sections 4.11 (Taxes) or the breach of the covenants contained in Sections 7.1, 7.2, 10.2(b) or 10.3, shall survive until the expiration of ten (10) Business Days following the date on which the statute of limitations otherwise applicable to such claim has expired, and (c) claims for indemnification arising from the breach of the representations and warranties contained in Section 4.10 (Environmental Matters) and Section 5.6 (Environmental Matters) or under Sections 10.1(a)(iii) or 10.2(c) shall survive until the fifth (5th) anniversary of the Closing Date; and (e) claims for indemnification arising from the breach of the representations and warranties contained in Sections 4.1 (Organization and Good Standing), 4.2 (Capitalization; Title to Limited Liability Company Interests), 4.20 (No Brokers), 4.3 (Authority and Validity), 4.6 (Title to Assets), 5.1 (Organization and Good Standing), 5.2 (Authority and Validity) and 5.5 (No Brokers) or arising under Sections 10.1(a)(iv), (v), (vi), (vii) or (viii) or Section 10.2(b) shall survive indefinitely.   (b)   Except as otherwise set forth in Section 10.5(a), each of the covenants, agreements and obligations of the parties contained in this Agreement will survive the Closing and will continue in full force and effect in accordance with its terms, or, if not specific as to duration, for a period of ten (10) Business Days after the expiration of the applicable statutes of limitations relating thereto.   (c)   Each period of survival of the representations and warranties, covenants and agreements prescribed by Section 10.5(a) and (b) above is referred to as a “Survival Period.”  The liabilities of each party under its respective representations and warranties, covenants and agreements will expire as of the expiration of the applicable Survival Period; provided, however, that such expiration will not include, extend or apply to any representation or warranty or covenant the breach of which has been asserted by a party in a written notice to the other party before such expiration.   Section 10.6   Limitations on Indemnification   (a)   No Indemnified Person shall be permitted to seek indemnification from the Indemnifying Person for any Liabilities of or to the Indemnifying Person or any other Person entitled to indemnification from the Indemnified Person (the “Indemnifiable Liabilities”) arising out of or resulting from any breach of any Basket-Eligible Representations and Warranties (as hereinafter defined) unless Person, but for the provisions of this Section 10.6, would exceed Ten Thousand Dollars ($10,000) in the aggregate (the “Basket”).  If the amount of Indemnifiable Liabilities for which an Indemnifying Person would be entitled to seek indemnification against the Indemnified Person arising out of or resulting from breaches of the Basket-Eligible Representations and Warranties exceeds the Basket, the Indemnifying Person will be liable to the Indemnified Person, as the case may be, for the full amount of such Indemnifiable Liabilities arising out of or resulting from breaches of Basket-Eligible Representations and Warranties, dollar for dollar from the first dollar of such Indemnifiable Liabilities.  The Basket shall apply to all claims for indemnification for Indemnifiable Liabilities arising out of or resulting from any breach of any representation or warranty (“Basket-Eligible Representations and Warranties”) other than (i) any breach by the Sellers of any representation or warranty contained in Sections 4.1, 4.2, 4.4, 4.5, 4.10 or 4.19; (ii) any breach by the Buyer or Artesian of any representation or warranty contained in Sections 5.1, 5.2 or 5.5; (iii) any claims for Indemnifiable Liabilities by any Buyer Indemnified Person arising out of or resulting under Sections 10.1(d), (e), (f), (g) or (h) or Section 10.3; (iv) any claims for Indemnifiable Liabilities by any Seller Indemnified Person arising out of or resulting under Sections 10.2(b) or (d); or (v) claims related to fraud or willful misconduct.   (b)   The maximum liability of any Indemnifying Person pursuant to this Article X shall be Six Hundred Thousand Dollars ($600,000) (the “Cap”), except that claims for Indemnifiable Liabilities arising out of or resulting from the following shall not be subject to the Cap: (i) the breach by the Sellers of any representation or warranty contained in Sections 4.1, 4.2, 4.3, 4.5, 4.6, 4.11 or 4.20, (ii) the breach by the Buyer or Artesian of any representation or warranty contained in Sections 5.1, 5.2 or 5.5, (iii) any claims for Indemnifiable Liabilities by any Buyer Indemnified Person arising out of or resulting under Sections 7.1, 7.2, 10.1(a)(iv), (v), (vi), (vii) or (viii) or Section 10.3; (iv) any claims for Indemnifiable Liabilities by any Seller Indemnified Person arising out of or resulting under Sections 10.2(b) or (d); (v) any Liabilities of any Buyer Indemnified Person arising out of or relating to any breach of any covenant, agreement or obligation (other than a representation or warranty) contained in this Agreement to be performed by the Company on or prior to Closing; (iv) any Liabilities of any Buyer Indemnified Person arising out of or relating to any breach of any covenant, agreement or obligation (other than a representation or warranty) contained in this Agreement to be performed by the Member prior to, at or after Closing; (v) any Liabilities of any Seller Indemnified Person relating to the Buyer’s of its Affiliates’ negligent operation of the Business prior to Closing or the Company’s negligent operation of the Business subsequent to the Closing or (vi) any claim related to fraud or willful misconduct.  All indemnities provided for in the Agreement shall apply even in the event of joint and/or concurrent negligence, strict liability, or other fault of the party whose liability is indemnified.   Section 10.7   Remedies.   (a)            Each party hereto acknowledges that irreparable damage would result if this Agreement is not specifically enforced.  Therefore, the rights and obligations of the parties under the Agreement, including, without limitation, their respective rights and obligations to sell and purchase the Acquired Interests and comply with the covenants set forth in this Agreement, shall be enforceable by a decree of specific performance issued by any court of competent jurisdiction, and/or appropriate injunctive relief may be applied for and granted in connection therewith.  Each party hereto agrees that monetary breach by it of the provisions of this Agreement relating to the Closing and hereby agrees to waive the defense that a remedy at law would be adequate in any action for specific performance or injunctive relief hereunder.  Each party hereto agrees to waive any rights to require the other party hereto to prove actual damages or post a bond or other security as a condition to the granting of any equitable relief under this Section 10.7.   (a)   Except as otherwise provided herein, no delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.  All rights and remedies of any party described in this Agreement are cumulative of each other and of every right or remedy such party may otherwise have.   Section 10.8   Right of Set Off.   The Buyer shall have the rights of recoupment, set-off, defense and counterclaim with respect to all or any part of any obligation of a Seller Indemnified Person to make a payment under this Article X.  The Buyer may exercise the foregoing rights by notifying the Member that the Buyer is reducing the amount of any present or future payments under the Note.  Prior to any such recoupment, set-off, defense or counterclaim, the Buyer shall submit a notice to the Member of any claim for which it is entitled to payment, specifying in reasonable detail (i) the nature of the claim and (ii) the amount of the claimed liability in respect of each such claim.  If within ten (10) days after receipt of such claim no notice of objection has been filed by the Member, the Buyer may offset the amount of such claimed liability against any present or future payments under the Note.  In the event of any objection notice with respect to such claim, the amount of such claim shall be withheld by the Buyer from any payments otherwise required under the Note and the amount of such payment shall be deposited into escrow with an escrow agent mutually acceptable to the parties until such claim is resolved by the parties.   ARTICLE XI                                                                                       TERMINATION   Section 11.1   Termination.   This Agreement may be terminated at any time prior to the Closing upon the occurrence of any of the following:   (a)   at any time, by mutual written consent of the Buyer and the Sellers;   (b)   by either the Buyer or the Sellers at any time (if such party itself is not then in material breach of any of its representations and warranties, covenants, agreements or other obligations contained in this Agreement), if the other party is in material breach or default of any of its representations and warranties, covenants, agreements or other obligations herein, which breach or default remains uncured for a period of ten (10) days after such other party’s receipt of written notice of such breach or default;   (c)   by the Buyer at any time pursuant to Section 6.2 of this Agreement;   (d)   by either the Buyer, on the one hand, or the Sellers, on the other, (if such party itself is not then in material breach of any of its representations and warranties, covenants, agreements or other obligations contained in this Agreement) upon written notice to the other, if the transactions contemplated by this Agreement shall not have closed by August 1, 2008.   Section 11.2   Consequences of Termination; Regulatory Terminations.   (a)   In the event that this Agreement shall be terminated pursuant to this Article XI, (a) each party will redeliver all documents, work papers and other material of any other party relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the party furnishing the same, and (b) all further obligations of the parties under this Agreement shall terminate without further liability of any party to any other party, except that (i) the provisions of this Section 11.2 and the expenses provision contained in Section 12.1 shall survive such termination and continue in full force and effect, (ii) nothing herein shall relieve any party from Liability for any material breach of any covenant or any willful breach of any other provision of this Agreement prior to such termination.   (b)   Notwithstanding anything to the contrary in Section 11.2(a), in the event that this Agreement shall be terminated pursuant to this Article XI, the Buyer shall not be liable for any failure to perform its respective obligations hereunder due to any request or demand by, or requirement of, or any failure to obtain any necessary approval of, the PSC, including without limitation the Buyer’s obligation to secure its obligations under the Note and Security Agreement by a first priority lien and security interest against all of the Company’s assets.   ARTICLE XII                                                                                       GENERAL PROVISIONS   Section 12.1   Expenses.   Except as provided in Sections 10.1 and 10.2 or as otherwise specifically provided in this Agreement, the parties shall bear their respective expenses incurred in connection with the preparation, execution and performance of this Agreement and the consummation of the transactions contemplated hereby, including, without limitation, all fees and expenses of their respective Representatives and all fees, expenses and costs for obtaining any Required Consent of such party.   Section 12.2   Confidentiality.   (a)   The Member recognizes and acknowledges that it and its Affiliates have in the past, currently have, and in the future may have, access to certain non-public confidential information of the Buyer, regarding the Buyer, the Company or the Business (collectively, “Confidential Information”), such as operational policies and pricing and cost policies, which are valuable, special and unique assets.  The Member agrees that it will not, and will cause its Affiliates not to, disclose any Confidential Information to any Person for any purpose or reason whatsoever, except (i) to the authorized Representatives of the Buyer who need to know information in connection with the transactions contemplated hereby and (ii) to its own Representatives, counsel and other advisors who first agree to the confidentiality provisions of this Section 12.2, unless (A) such information becomes known to the public generally through no fault of the Member, or (B) disclosure is required by Law or valid legal process, provided, that prior to disclosing any information pursuant to this clause (B), the Member shall, to the extent permitted by Law or valid legal process, give prior written notice thereof to the Buyer and provide the Buyer with the opportunity to contest such disclosure.  In the event of a breach or threatened breach of the provisions of this Section 12.2 by the Member, the Buyer and the Company shall be entitled to an injunction restraining the other party from disclosing, in whole or in part, such confidential information.  Nothing herein shall be construed as prohibiting the Buyer or the Company from pursuing any other available remedy for such breach or threatened breach, including the recovery of damages.   (b)   Because of the difficulty of measuring economic losses as a result of the breach of the foregoing covenants in this Section 12.2, and because of the immediate and irreparable damage that would be caused for which they would have no other adequate remedy, the Member agrees that, in the event of a breach by it or any of its Affiliates of the foregoing covenants, the covenant may be enforced by the Buyer or the Company against the Member and its Affiliates by any equitable remedy, including, without limitation, injunction, specific performance, and restraining order, without the necessity of proving actual damages or posting a bond or other security.   (c)   This Section 12.2 shall survive the termination of, or Closing under, this Agreement for a period of five (5) years.   Section 12.3   Amendments and Waivers.   Any term of this Agreement may be amended, supplemented or modified only with the written consent of the Buyer and the Sellers and the observance of any term party against whom the waiver is sought to be enforced.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.   Section 12.4   Successors and Assigns.   This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors, heirs, executors and assigns; provided, however, that this Agreement and all rights and obligations hereunder may not be assigned or transferred without the prior written consent of the other parties hereto, except that the Buyer may assign its rights hereunder to a direct or indirect wholly-owned subsidiary of the Buyer, so long as the Buyer remains liable for its obligations hereunder.   Section 12.5   Third Party Beneficiaries.   The rights created by this Agreement are solely for the benefit of the parties hereto and the respective successors or permitted assigns, and no other Person shall have or be construed to have any legal or equity right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained; provided, however, that the provisions of Sections 7.3, 7.4, 7.5, 7.6 and 7.7 and Article X above are intended for the benefit and burden of the parties specified therein, and their respective legal representatives, successors, heirs, executors and assigns.  Notwithstanding the foregoing, Sellers’Affiliates specified on the attached Schedule 7.3 shall be third party beneficiaries of this Agreement.   Section 12.6   Choice of Law; Venue.   This Agreement shall be governed by and construed under, and the rights of the parties determined, in accordance with the Laws of the State of Maryland (without reference to the choice of Law provisions of the State of Maryland).  Each of the parties hereto irrevocably consents to the service of any process, pleading, notices or other papers by the mailing of copies thereof by registered, certified or first class mail, postage prepaid, to such party at such party’s address set forth herein, or by any other method provided or permitted under the Laws of the State of Maryland. Each party hereby irrevocably submits to the jurisdiction of any federal or state court located in State of Maryland (and any appellate court therefrom) over any action or proceeding arising out of or relating to this Agreement.  Each party hereby irrevocably and unconditionally waives and agrees not to plead, to the fullest extent provided by Law, any objection it may have to venue and the defense of an inconvenient forum to the maintenance of such action or proceeding in such courts.   Section 12.7   Waiver of Jury Trial.   EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION OR AGREEMENT CONTEMPLATED HEREBY OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.   Section 12.8   Notices.   Unless otherwise provided in this Agreement, any notice required or permitted given upon the earlier of (a) personal delivery to the party to be notified or (b) the next Business Day after dispatch via nationally recognized overnight courier, all addressed to the party to be notified at the address indicated for such party below, or at such other address as such party may designate by 10 Business Days’ advance written notice to the other parties.  Notices should be provided in accordance with this Section 12.8 at the following addresses:   If to the Buyer, or post-Closing, the Company to:                                                With a copy to:   Artesian Resources Corporation                                                                             DLA Piper US LLP 664 Churchmans Road                                                                                               6225 Smith Ave Newark, Delaware 19702                                                                                            Baltimore, Maryland 21209 Attn:                                                                                                                              David Spacht                                Attn:  Carville B. Collins, Esq. Telephone: 302-454-6912                                                                                           Telephone: 410-580-4125 Telecopier 302-453-6980                                                                                            Telecopier: 410-580-3001 Email:                                            DSpacht@artesianwater.com                            Email:  carville.collins@dlapiper.com If to the Member, or pre-Closing, the Company to:                                                                                                            Mountain Hill Water Company LLC                                          The Stewart Companies Attn:  Dale C. Voorheis                                                               Attn:  Joseph P. Clark II 950 Smile Way                                                                             950 Smile Way York PA 17404                                                                             York PA 17404 Tel:  (717) 771-3530                                                                       Tel: (717) 771-3505 FAX:  (717) 854-6288                                                                     FAX:  (717) 854-6288 EMail:  dcv@stewartcompanies.com                                         EMail:  jpc@stewartcompanies.com   Section 12.9   Severability.   If one or more provisions of this Agreement shall be held invalid, illegal or unenforceable, such provision shall, to the extent possible, be modified in such manner as to be valid, legal and enforceable but so as to most nearly retain the intent of the parties, and if such modification is not possible, such provision shall be severed from this Agreement.  In either case, the balance of this Agreement shall be interpreted as if such provision were so modified or excluded, as the case may be, and shall be enforceable in accordance with its terms.   Section 12.10   Entire Agreement.   This Agreement, together with the exhibits and schedules hereto (which are hereby made a part hereof and specifically incorporated by reference herein), constitutes the entire agreement among the parties with respect to the subject matter hereof and, except as provided in the following sentence, supersedes all prior understandings and agreements, whether written or oral.   Section 12.11   Construction.   The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any provision of this Agreement.  The titles to be considered in construing or interpreting this Agreement.   Section 12.12   Counterparts.   This Agreement may be executed in two or more counterparts, including by means of telefaxed signature pages, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.   Section 12.13  Time is of the Essence.   The parties hereto hereby agree that time is of the essence with respect to the performance of each party’s respective obligations and commitments under this Agreement.   [ SIGNATURES APPEAR ON THE FOLLOWING PAGE. ] IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement as   BUYER:   ARTESIAN WATER MARYLAND, INC.   By:                                                                       Name: Title: ARTESIAN: For the limited purposes set forth in Sections 2.2, 3.2(c)and 7.3 of the Agreement   ARTESIAN RESOURCES CORPORATION   By:                                                                       Name: Title: COMPANY:   MOUNTAIN HILL WATER COMPANY, LLC   By:                                                                       Name: Title: MEMBER:   SUNRISE HOLDINGS, L.P.   By:                                                                       Name: Title:

  CREDIT FACILITY AGREEMENT   This CREDIT FACILITY AGREEMENT (“Agreement”) is made as of the 30th day of May, 2008 by and among IEC ELECTRONICS CORP., a corporation formed under the laws of the State of Delaware (“Borrower”) and MANUFACTURERS AND TRADERS TRUST COMPANY (“Lender”), a New York banking corporation, with offices at 255 East Avenue, Rochester, New York 14604.   ARTICLE I - DEFINITIONS   1.1 The following terms shall have the following meanings unless otherwise expressly stated herein:   “Affiliate” means any Person which directly or indirectly, or through one or more intermediaries, Controls or is Controlled By or is Under Common Control with Borrower.   “Agreement” means this Credit Facility Agreement, as further amended, extended or restated from time to time.   “Applicable Margin” means, with respect to the Revolving Line Facility, the Term Loan, and the Equipment Line Facility, the per annum rates shown in the applicable column of the table below based on the applicable Debt to EBITDARS Ratio, calculated for Borrower on a consolidated basis and without duplication in accordance with GAAP:   Level   Debt to EBITDARS   Revolving Line Facility*   Term Loan/Equipment Line  Facility           Base Rate  Margin   LIBOR  Margin   Base Rate  Margin   LIBOR  Margin                           I   ≥ 3.50 to 1   0.50%   2.75%   0.75%   3.00%                           II   ≥ 3.00 and < 3.50 to 1   0.25%   2.50%   0.50%   2.75%                           III   ≥ 2.50 and < 3.00 to 1   0.00%   2.25%   0.25%   2.50%                           IV   ≥ 2.00 and < 2.50 to 1   0.00%   2.00%   0.00%   2.25%                           V   < 2.00   0.00%   1.50%   0.00%   1.75%         * For amounts outstanding as an Overline Advance, the Applicable Margin        will be the applicable level shown in the above table plus 0.50%.   The Applicable Margin shall be fixed at Level III on the date of this Agreement. Effective on the first annual anniversary of the date of this Agreement, the Level applicable to Loans will be established based upon the Debt to EBITDARS Ratio as of the last day of the measurement period ending on March 31, 2009. Thereafter, changes, if any, in the Level applicable to Loans will be effective on the tenth (10th) day following each date on which the Borrower’s Quarterly Covenant Compliance Sheet (“QCC Sheet”) is required to be delivered to the Lender pursuant to Section 11.4, based upon the Debt to EBITDARS ratio shown therein. In the event that any QCC Sheet is not delivered by the date required, pricing will revert to Level I until the tenth (10th) day following the date of delivery of the delayed QCC Sheet, on which tenth day pricing will be adjusted to the applicable level shown by the QCC Sheet.     “Applicable Unused Fee” means the per annum rate (calculated based upon days elapsed over a 360 day year) shown in the table below based on the applicable Debt to EBITDARS Ratio, calculated for Borrower on a consolidated basis and without duplication in accordance with GAAP:   Level   Debt to EBITDARS   Unused  Commitment  Fee               I   ≥ 3.50 to 1   0.500%               II     0.375%               III     0.250%               IV     0.250%               V   < 2.00   0.125%     The Applicable Unused Fee shall be fixed at Level III on the date of this Agreement. Effective on the first annual anniversary of the date of this Agreement, the Level applicable to Unused Fees will be established based upon the Debt to EBITDARS ratio as of the last day of the measurement period ending on March 31, 2009. Thereafter, changes, if any, in the Level applicable to Unused Fees will be effective on the tenth (10th) day following each date on which the Borrower’s Quarterly Covenant Compliance Sheet (“QCC Sheet”) is required to be delivered to the Lender pursuant to Section 11.4, based upon the Debt to EBITDARS Ratio shown therein. In the event that any QCC Sheet is not delivered by the date required, pricing will revert to Level I until the tenth (10th) day following the date of delivery of the delayed QCC Sheet, on which tenth day pricing will be adjusted to the applicable level shown by the QCC Sheet.   “Asset Disposition” shall mean any sale, assignment, transfer, lease, or other disposition by a Person to any other Person, whether in one transaction or in a series of related transactions, of any of its assets, business units or other properties (including (i) any interest in property, whether tangible or intangible, (ii) Capital Securities of Subsidiaries, and (iii) any sale-leaseback transaction), provided, however, that “Asset Disposition” shall not include (a) the sale of inventory in the ordinary course of business, and (b) the disposition of any obsolete or retired property not used or useful in the business of any of the Credit Parties in return for a fair market value.   “Base Rate” means the higher of (i) the Prime Rate, and (ii) the Federal Funds Rate plus one-half percentage point (.5%).   “Base Rate Loan” means any Loan when and to the extent that the interest rate for such Loan is determined by reference to the Base Rate.   2   “Borrower” means IEC Electronics Corp. and its successors, legal representatives and assigns.   “Borrowing Base” means the sum of the following:   (a) 85% of the Eligible Accounts of the Credit Parties; plus   (b) plus 35% of the Eligible Inventories of the Credit Parties up to a maximum of $2,000,000, or if the Inventory Overline Advance Rate has been elected pursuant to Section 2.2, 70% of the Borrower’s Eligible Inventories up to a maximum of $4,000,000.   “Borrowing Base Report” means a report described in Section 9.1 of this Agreement.   “Business Day” means any day other than a Saturday, Sunday, or other day on which commercial banks in New York are authorized or required to close under the laws of such State and, if the applicable day relates to LIBOR Loan, LIBOR Interest Period, or notice with respect to a LIBOR Loan, a day on which dealings in Dollar deposits are also carried on in the London interbank market and banks are open for business in London.   “Capital Security” means, (a) with respect to any Person that is a corporation, any and all shares, interests or equivalents in capital stock (without limitation whether voting or nonvoting, and whether common or preferred) of such corporation, and (b) with respect to any Person that is not a corporation, any and all partnership, membership, limited liability company or other equity interests of such Person; and (c) in each case, any and all warrants, rights or options to purchase any of the foregoing with respect to any Person, any security convertible into any of the foregoing, participations, and any other equity interests or equity equivalents with respect to such Person.   “Casualty Event” shall mean, with respect to any property (including any interest in property) of any Credit Party, any loss of, theft of, damage to, or condemnation or other taking of, such property for which any of the Credit Parties receives insurance proceeds, proceeds of a condemnation award, or other compensation, which proceeds are not used to replace or restore such property.   “Change in Control” means the acquisition of ownership, directly or indirectly, beneficially or of record, by any person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of shares representing more than twenty-five percent (25%) of the aggregate ordinary voting power in the election of Borrower’s directors represented by the issued and outstanding capital stock of Borrower.   “Closing Date” means the date of this Agreement.   “Commitment” means the Revolving Line Commitment and the agreement to make the Term Loan.   “Controls” (including the terms “Controlled By” or “Under Common Control”) means, but not be limited to, the ownership of ten percent (10%) or more of the outstanding shares of capital stock of any corporation having voting power for the election of directors, whether or not at the same time stock of any other class or classes has or might have voting power by reason of the happening of any contingency, or ownership of ten percent (10%) or more of any interest in any Person or any other interest by reason of which a controlling influence over the affairs of the Person may be exercised.   3   “Copyright Security Agreements” means the Copyright Security Agreement listed on Schedule 1.1(a), and any similar document delivered by any Credit Party, and, as amended, modified or restated from time to time.   “Credit Party(ies)” means the Borrower and each Guarantor.   “Debt” means, as of the measurement date, without duplication, on a consolidated basis, Borrower’s and its Subsidiaries’:   (a) indebtedness or liability for borrowed money, including without limitation Obligations under the Loan Documents, Val-U-Tech Subordinated Debt, the M&T Sale-Leaseback, synthetic leases and any other off-balance sheet financing (but except for the M&T Sale-Leaseback not including true operating leases);   (b) obligations evidenced by bonds, debentures, notes, or other similar instruments;   (c) obligations for the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business);   (d) obligations as lessee under capital leases;   (e) current liabilities in respect of unfunded vested benefits under Plans covered by ERISA;   (f) obligations as an account party under letters of credit and letters of guaranty;   (g) obligations under acceptance facilities;   (h) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person, or otherwise to assure a creditor against loss;   (i) obligations secured by (or for which the holder of the obligations has an existing right, contingent or otherwise to be secured by) any Liens on property owned or acquired, whether or not the obligations secured thereby have been assumed; and   (j) all purchase money mortgages, and obligations under asset securitization vehicles, conditional sales contracts and similar title retention debt instruments.   4   “Debt to EBITDARS Ratio” means as of the applicable measurement date, the Debt as of such date divided by EBITDARS for the twelve (12) Fiscal Month period ended as of such date.   “Default” means any event, action, inaction, occurrence or condition that with notice or passage of time, or both, would constitute an Event of Default.   “Distributions” means (i) dividends, payments, or distributions of any kind (including without limitation cash or property or the setting aside for payment of either) in respect of Capital Securities of the applicable Person except distributions in the form of such Capital Securities, and (ii) repurchases, redemptions, or acquisitions of Capital Securities.   “EBITDARS” means, for the applicable period, Net Income plus interest expense, cash Taxes paid, depreciation and amortization of intangible assets, payments due under the M&T Sale-Leaseback, and non-cash stock option expense, all on a consolidated basis and determined in accordance with GAAP on a consistent basis.   “Eligible Accounts” means and includes only accounts receivable of a Credit Party (“Accounts”), the records and accounts of which are located in all places at which Borrower maintains, or will maintain, records relating to the Accounts, are acceptable to Lender in Lender’s reasonable discretion, arise out of sales in the ordinary course of the business of a Credit Party made by a Credit Party to a Person which is not an Affiliate nor an employee of a Credit Party nor controlled by an Affiliate, which are not in dispute and which do not then violate any warranty with respect to Accounts set forth in any security agreement made by any Credit Party in favor of Lender (“Lender Security Agreement”). No Account shall be an Eligible Receivable if more than 90 days have passed since the original invoice date and the inventory covered by such Account was shipped to the customer on or prior to the invoice date, or the services described in such invoice were provided on or prior to the invoice date. Accounts must not be owing by an Account debtor or a group of affiliated Account debtors whose then existing Accounts owing to the Credit Parties individually exceed in aggregate face amount twenty percent (20)%) of the Credit Parties’ total Eligible Receivables and are not owing by an Account debtor or a group of affiliated Account debtors whose then existing Accounts to any or all of the Credit Parties collectively exceed in aggregate face amount twenty percent (20%) of the total Eligible Receivables of all the Credit Parties; provided that the Lender may from time to time, in the exercise of its sole and absolute discretion, consent to a higher concentration limit and provided further that any such Account shall be a non-Eligible Receivable only to the extent of such excess. Lender may treat any Account as ineligible if: (a) any warranty contained in this Agreement or in any Lender Security Agreement with respect to Accounts has been breached; or (b) the Account debtor or any affiliate of the Account debtor has disputed the liability, or made any claim with respect to such Account or with respect to any other Account due from such customer or account debtor to any Credit Party; provided, however, only such portion of the Account which is disputed or subject to a claim shall be treated as ineligible unless Lender reasonably determines in its discretion that there is a material risk of nonpayment (or Lender is unable to assess the risk of nonpayment) of the entire Account or any other Account pending resolution of such dispute or claim, in which case Lender may treat the entire Account or such other Account as ineligible; or (c) the Account debtor or an affiliate of the Account debtor has filed a case for bankruptcy or reorganization under the Bankruptcy Code, or if any case under the Bankruptcy Code has been filed against the Account debtor or any affiliate of the Account debtor, or if the Account debtor or any Affiliate of the account debtor has assigned for the benefit of creditors, or if the Account debtor or any affiliate of the Account debtor has failed, suspended business operations, become insolvent, or had or suffered a receiver or a trustee to be appointed for all or a significant portion of its assets or affairs; or (d) if the Account debtor is also a supplier to or creditor of a Credit Party or if the Account debtor has or asserts any right of offset with respect to any Account or asserts any claim or counterclaim against any Credit Party with respect to any Account or otherwise (the Accounts due from the Account debtor will only be reduced to the extent of the claim or counter claim); or (e) the sale is to an Account debtor outside the United States or Canada, unless the sale is on letter of credit, acceptance or other terms acceptable to Lender; or (f) 50% or more of the Accounts of any Account debtor and its affiliates is ineligible, then all the Accounts of such Account debtor and its affiliates may be deemed ineligible by Lender; (g) it relates to a sale of goods or services to the United States, or any agency or department thereof, unless the applicable Credit Party assigns its right to payment of such Account to Lender in form and substance satisfactory to Lender, so as to comply with the Assignment of Claims Act of 1940, as amended; or (h) it relates to sale of goods or services to a state or local governmental authority or an agency or department thereof; or (i) it relates to intercompany sales, employee sales or is due from an Affiliate; or (j) it consists of a sale to an Account debtor on consignment, bill and hold, guaranteed sale, sale or return, sale on approval, payment plan, scheduled installment plan, extended payment terms or any other repurchase or return basis; or (k) the Account debtor is located in a state in which the applicable Credit Party is deemed to be doing business under the laws of such state and which denies creditors access to its courts in the absence of qualification to transact business in such state or of the filing of any reports with such state, unless the applicable Credit Party has qualified as a foreign corporation authorized to do business in such state or has filed all required reports; or (l) the Account is evidenced by chattel paper or an instrument of any kind, or has been reduced to judgment; or (m) the Account arises from a sale of goods or services to an individual who is purchasing such goods primarily for personal, family or household purposes; or (n) if Lender believes, in its reasonable discretion, that collection of such Account is insecure or that such Account may not be paid by reason of the Account debtor’s financial inability to pay (should availability under the Revolving Line Facility be an issue, the Lender will allow the Borrower thirty (30) days prior to the removal from the Borrowing Base, provided that the Accounts from such Account debtor do not collectively exceed ten percent (10%) of the total Eligible Receivables).   5   “Eligible Inventories” means inventory owned by a Credit Party (“Inventory”) which has been identified and described to the Lender’s reasonable satisfaction, and is represented by the Borrower as meeting all of the following criteria on the date any Revolving Credit Loan based thereon is outstanding: (a) a Credit Party is the sole owner of the Inventory, none of the Inventory is being held or shipped by such Credit Party on a consignment or approval basis, such Credit Party has not sold, assigned or otherwise transferred all or any portion thereof, and none of the Inventory is subject to any claim, lien, or security interest other than in favor of Lender; (b) if any of the Inventory is represented or covered by any document of title, instrument or chattel paper, a Credit Party is the sole owner of all such documents, instruments, and chattel paper, all of which are in the possession of such Credit Party, none thereof has been sold, assigned, or otherwise transferred, and none thereof is subject to any claim, lien or security interest other than in favor of Lender; and (c) the Inventory consists of saleable non-obsolete, commodity type raw materials that are earmarked for specific orders and is not excess as shown on the Borrower’s Excess Stock Report or determined by the Lender’s collateral audits, and finished goods manufactured or acquired by a Credit Party in the ordinary course of such Credit Party’s business, as conducted on the date hereof, subject to its contract or sole possession and located in places where Credit Parties maintain, or will maintain, Inventory, and at locations for which landlord or bailee waivers in form and substance acceptable to Lender have been executed and delivered by such landlord or bailee to Lender; and any Inventory which the Lender in the good faith exercise of its sole discretion from time to time has deemed to be ineligible because the Lender otherwise considers the collateral value to the Lender to be impaired or its ability to realize such value to be insecure.   6   “Energy Loan” means the term loan made by the Lender to fund energy-related expenditures, referenced in Article IV hereof.   “Energy Loan Maturity Date” means April 2, 2013.   “Energy Loan Note” means the Energy Loan Note evidencing the Energy Loan, as such note may be amended, modified or restated from time to time.   “Environment” means any water, including, but not limited to, surface water and ground water or water vapor: any land, including land surface or subsurface; stream sediments; air; fish; wildlife; plants; and all other natural resources or environmental media.   “Environmental Laws” means all present and future federal, state and local environmental, land use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances, regulations, codes and rules relating to the protection of the Environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the regulations, rules, ordinances, bylaws, policies, guidelines, procedures, interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto.   “Environmental Permits” means all licenses, permits, approvals, authorizations, consents or registrations required by any applicable Environmental Laws and all applicable judicial and administrative orders in connection with ownership, lease, purchase, transfer, closure, use and/or operation of the Improvements and/or as may be required for the storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances.   “Environmental Report” means written reports, if any, prepared for the Lender by an environmental consulting or environmental engineering firm.   “Equipment Line Facility” means the equipment line facility established pursuant to Section 5.1 of this Agreement.   “Equipment Line Loan(s)” means a loan or loans made by the Lender to Borrower under the Equipment Line Facility.   “Equipment Line Maturity Date” means the first annual anniversary date of the Closing Date.   7   “Equipment Line Notes” means the Equipment Line Notes made from time to time by Borrower in favor of Lender pursuant to Section 5.4 of this Agreement, as such notes may be amended, modified or restated from time to time.   “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.   “ERISA Affiliate” means any trade or business (whether incorporated or unincorporated) which together with the Borrower is treated as a single employer under Section 414(b), (c), (m) or (o) of the Internal Revenue Code.   “Eurocurrency Reserve Requirement” means, for any Interest Period for a LIBOR Loan, the daily average of the stated maximum rate (expressed as a decimal) at which reserves (including any marginal, supplemental, or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the Federal Reserve System in New York City with deposits exceeding one billion dollars against “Eurocurrency Liabilities” (as such term is used in Regulation D) but without benefit or credit of proration, exemptions, or offsets that might otherwise be available from time to time under Regulation D. Without limiting the effect of the foregoing, the Eurocurrency Reserve Requirement shall reflect any other reserves required to be maintained against (i) any category of liabilities that includes deposits by reference to which the LIBOR Interest Rate for LIBOR Loans is to be determined; or (ii) any category of extension of credit or other assets that include LIBOR Loans.   “Event of Default” means the occurrence of any event described in Section 13.1.   “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period determined by the Lender to equal the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. for such day on such transactions received by the Lender from three Federal funds brokers of recognized standing selected by it.   “Financial Statements” means Borrower’s audited consolidated financial statements for the Fiscal Year ending September 30, 2007 described in Section 7.7.   “Fiscal Month” means a period that constitutes Borrower’s monthly accounting period.   “Fiscal Quarter” means any of the quarterly accounting periods of Borrower ending on December 31, March 31, June 30, and September 30 of any Fiscal Year.   “Fiscal Year” means the annual accounting period of Borrower ending on September 30 of each year.   “Fixed Charge Coverage Ratio” means, as of the applicable measurement date, the ratio of (i) EBITDARS minus Unfinanced Capital Expenditures minus cash Taxes paid for the four Fiscal Quarters just ended, to (ii) the sum of Interest Expense plus principal payments due or paid with respect to Debt (including payments under the M&T Sale-Leaseback) during the four Fiscal Quarters just ended.   8   “Fixed Rate” means, with respect to any particular Loan, the then Applicable LIBOR Margin for Term Loan/Equipment Line Facility, plus the Cost of Funds for two, three, four, or five years (the “Base Term”), as applicable. “Cost of Funds’ means the most recent yield on United States Treasury Obligations adjusted to a constant maturity to match the Base Term in effect two (2) Business Days prior to the date on which the Fixed Rate will first be applicable to the respective Loan, as published by the Board of Governors of the Federal Reserve System in the Federal Reserve Statistical Release H.15(519), or by such other quoting service, index, or commonly available source utilized by the Lender, plus the “ask” side of the like term swap spread.   “Fixed Rate Loan” means any Loan when and to the extent that the interest rate for such Loan is determined by reference to a Fixed Rate.   “Fixed Rate Period” means the period selected by the Borrower during which a particular Fixed Rate shall be applicable.   “Forfeiture Action” means any action, including investigations, hearings, and other legal proceedings, before any court, tribunal, commission, or governmental authority, agency, or instrumentality, whether domestic or foreign, that may result in seizure of any property or asset.   “GAAP” and “Generally Accepted Accounting Principles” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession in the United States of America, which are applicable to the circumstances as of the date of determination.   “Guarantor(s)” means each Subsidiary which becomes a Guarantor pursuant to Section 9.12.   “Guaranties” means, collectively, the continuing guaranties executed and delivered to Lender by each Guarantor which guaranty payment of the Obligations, as amended, modified or restated from time to time, and “Guaranty” means any of the Guaranties.   “Hazardous Substances” means, without limitation, any explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, hazardous wastes, hazardous or toxic substances and any other material defined as a hazardous substance in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et. seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections 1801, et. seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Sections 6901, et. seq.; Articles 15 and 27 of the New York State Environmental Conservation Law or any other federal, state, or local law, regulation, rule, ordinance, by-law, policy, guideline, procedure, interpretation, decision, order, or directive, whether existing as of the date hereof, previously enforced or subsequently enacted.   9   “Improvements” means any and all real property and improvements owned or used by any of the Credit Parties.   “Interest Expense” means, for the applicable period, all interest paid, capitalized, or accrued, and amortization of debt discount with respect to all Debt determined after giving effect to the net cost associated with Rate Management Transactions.   “Interest Period” means with respect to any LIBOR Loan, the period commencing on the date such Loan is made, converted or renewed, as applicable, and ending, as a Borrower may select, on the numerically corresponding day in the first, second, third, or sixth calendar month thereafter, subject however, to the following limitations:   (a) Each Interest Period that commences on the last Business Day of the calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month;   (b) No Interest Period may extend beyond the Termination Date; and   (c) If an Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended to the next Business Day unless, such Business Day would fall in the next calendar month, in which event such Interest Period shall end on the immediately preceding Business Day.   “Inventory Overline Advance Rate” means 70% of Borrower’s Eligible Inventory.   “Investment” of any Person means (a) acquisition of any Capital Security, evidence of Debt or other security or instrument issued by any other Person, (b) any loan, advance or extension of credit to (including guaranties of liabilities of), or any contribution to the capital of, any other Person, (c) any acquisition of assets or business from or Capital Security of any other Person and (d) any other investment in any other Person. An Investment shall be deemed to be “outstanding”, except to the extent that it has been paid or otherwise satisfied in cash or the Person making such Investment has received cash in consideration for the sale thereof, notwithstanding the fact that such Investment may otherwise have been forgiven, released, canceled or otherwise nullified.   “Lender” means Manufacturers and Traders Trust Company, and its successors, legal representatives, and assigns   “LIBOR Interest Rate” means, for each LIBOR Loan, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) determined by the Lender to be equal to the quotient of (i) the London Interbank Offered Rate for such LIBOR Loan for such Interest Period divided by (ii) one minus the Eurocurrency Reserve Requirement for such Interest Period.   10   “LIBOR Loan” means any Loan when and to the extent that the interest rate for such Loan is determined by reference to the LIBOR Interest Rate.   “Lien” means any mortgage, pledge, security interest, encumbrance, lien, assignment or charge of any kind or description and shall include, without limitation, any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof including any lease or similar arrangement with a public authority executed in connection with the issuance of industrial development revenue bonds or pollution control revenue bonds, and the filing of or agreement to give any financing statement under the Uniform Commercial Code (or comparable law) of any jurisdiction naming the owner of the asset to which such lien applies as a debtor (other than a filing which does not evidence an outstanding secured obligation, or a commitment to make advances or to incur any other obligation of any kind).   “Linked Deposit Program” shall mean the Empire State Development Linked Deposit Program, in which the Lender is, as of the date hereof, a participant.   “Loan(s)” means, collectively, the Revolving Credit Loans, the Term Loan, and Equipment Line Loans as the context requires.   “Loan Documents” means the Agreement, the Notes, the Security Documents, and all other agreements, documents and certificates executed with or in favor of the Lender in connection with the Agreement or any amendment to the Agreement or to any other Loan Document.   “London Interbank Offered Rate” applicable to any Interest Period for a LIBOR Loan means the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) at which dollar deposits are offered on page 3750 of the Dow Jones Markets Screen for a period and in an amount comparable to the Interest Period and the principal amount of such LIBOR Loan, at approximately 11:00 a.m. London time, or if such rate is not available, the rate as determined by the Lender from any broker, quoting service or commonly available source utilized by the Lender.   “M&T Sale-Leaseback” means the sale-leaseback arrangement between the Lender and the Borrower evidenced in part by the Master Equipment Lease dated on or about even date herewith.   “Material Adverse Effect” means a material adverse effect on the financial condition, performance, business, operations or prospects of the Credit Parties, taken as a whole.   “Money Market Investments” means (a) any security issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof or having a remaining maturity of not more than 270 days, (b) any certificate of deposit, eurodollar time deposit and banker’s acceptance with remaining maturity of not more than 270 days, any overnight bank deposit, any demand deposit account, in each case with Lender or with any United State commercial bank having capital and surplus in excess of $500,000,000 and rated B or better by Thomson Bankwatch Inc., (c) any repurchase obligation with a term of not more than seven days for underlying securities of the types described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (b) above, and (d) any commercial paper issued by Lender and any other commercial paper rated A-1 by Standard & Poor’s Rating Group of Prime-1 by Moody’s Investors Service, Inc. and in any case having a remaining maturity of not more than 270 days.   11   “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA as to which any of the Credit Parties or any ERISA Affiliate is obligated to make, has made, or will be obligated to make contributions on   “Net Cash Proceeds” shall mean (a) in the case of any Casualty Event, the aggregate cash proceeds of insurance, condemnation awards and other compensation received by any Person in respect of such Casualty Event less (i) reasonable fees and expenses incurred by such Person in connection therewith, and (ii) contractually required payments of Debt to the extent secured by Liens on the property subject to such Casualty Event and any income or transfer Taxes paid or reasonably estimated by such Person to be payable by such Person as a result of such Casualty Event, and (b) in the case of any Asset Disposition, the aggregate amount of all cash payments and proceeds (including any cash payments made from time to time in respect to the principal amount of any note or similar instrument or agreement providing for or evidencing debt as the deferred purchase price owing from the purchaser of such asset to the applicable Person) received by any Person in connection therewith less (i) reasonable fees and expenses incurred by such Person in connection therewith, (ii) Debt to the extent the amount thereof is secured by a Lien on the property that is the subject of such Asset Disposition and the transferee (or holder of the Lien on) such property requires that such Debt be repaid as a condition of such Asset Disposition, and (iii) any income or transfer Taxes paid or reasonably estimated by the Person to be payable by such Person as a result of such Asset Disposition.   “Net Income” means for the applicable period, the net earnings of the Borrower on a consolidated basis, determined in accordance with GAAP on a consistent basis, but excluding:   (a) any gain or loss arising from the sale of capital assets;   (b) any gain arising from any write-up of assets;   (c) net earnings or losses of any Subsidiary of Borrower accrued prior to the date it became a Subsidiary;   (d) net earnings or losses of any Person, substantially all the assets of which have been acquired in any manner by Borrower, realized by such Person prior to the date of such acquisition;   (e) net earnings or losses of any Person in which Borrower has an ownership interest, except any such net earnings which have actually been received by Borrower in the form of cash distributions and except the net earnings or losses of any Guarantor;   (f) any portion of the net earnings of any Subsidiary of Borrower which for any reason is unavailable for payment of dividends to Borrower;   12   (g) the net earnings or losses of any Person to which any assets of Borrower shall have been sold, transferred or disposed of after the date of such transaction,   (h) the net earnings or losses of any Person into which Borrower shall have merged, or been a party to any consolidation or other form of reorganization, prior to the date of such transaction;   (h) any gain arising from the acquisition of any securities of Borrower; and   (i) any gain or loss arising from extraordinary items.   “Note(s)” means the Revolving Credit Note, the Term Loan Note, the Energy Loan Note, and the Equipment Line Notes.   “Obligations” means and shall include all of the Credit Parties’ obligations to the Lender and/or to any of Lender’s affiliates of any kind or nature, arising now or in the future under or related to this Agreement and/or the Loan Documents including obligations related to the Revolving Credit Note, the Term Loan Note, the Energy Loan Note, the Equipment Line Notes, overdrafts, obligations related to Rate Management Transactions, automated transfer transactions, electronic funds transfers, other transactions related to the Credit Parties’ dealings with the Lender, interest accruing after the filing of any petition or assignment in bankruptcy or for reorganization by or against the Credit Parties (whether or not such a claim for such post-petition interest is allowed in the proceedings), fees, charges, expenses, and amount payable with respect to guaranties.   “Overline Advance” means any portion of a Loan under the Revolving Line Facility that is available under the Borrowing Base only if the Inventory Overline Advance Rate is in effect.   “PBGC” means the Pension Benefit Guarantee Corporation and any successor thereto.   “Permitted Debt” means Debt described in Section 10.1.   “Permitted Liens” means the Liens set forth on Schedule 1.1(b) and the following Liens:   (a) liens imposed by any governmental authority for Taxes or charges not yet due or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Borrower subject to such lien in accordance with GAAP on a consistent basis;   (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like liens arising in the ordinary course of business which are not overdue for a period of more than thirty (30) days, or which are being contested in good faith and by appropriate proceedings;   (c) pledges or deposits under workers’ compensation, unemployment insurance and other social security legislation;   13   (d) deposits to secure the performance of bids, trade contracts (other than borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; and   (e) Liens in favor of Lender.   “Person” means any individual, sole proprietorship, or other entity of any kind or nature including any corporation, partnership, trust, unincorporated organization, limited liability company, unlimited liability company, mutual company, joint stock company, estate, union, employee organization, government or any agency or political subdivision thereof.   “Plan” means any employee benefit plan, program, arrangement, practice or contract, maintained by or on behalf of a Borrower or an ERISA Affiliate, which provides benefits or compensation to or on behalf of employees or former employees, whether formal or informal, whether or not written, including but not limited to the following types of plans:   (a) Executive Arrangements - any bonus, incentive compensation, stock option, deferred compensation, commission, severance, “golden parachute”, “rabbi trust”, or other executive compensation plan, program, contract, arrangement or practice;   (b) ERISA Plans - any “employee benefit plan” as defined in ERISA, including, but not limited to, any defined benefit pension plan, profit sharing plan, money purchase pension plan, savings or thrift plan, stock bonus plan, employee stock ownership plan, Multiemployer Plan, or any plan, fund, program, arrangement or practice providing for medical (including post-retirement medical), hospitalization, accident, sickness, disability, or life insurance benefits; and   (c) Other Employee Fringe Benefits - any stock purchase, vacation, scholarship, day care, prepaid legal services, severance pay or other fringe benefit plan, program, arrangement, contract or practice.   “Prepayment Premium” means a payment by the Borrower with respect to any prepayment in whole or in part of the Term Loan or an Equipment Line Loan which is a Fixed Rate Loan equal to the greater of (a) one percent (1%) of the principal sum prepaid, or (b) an amount equal to the present value of the difference between (i) the amount of interest that would have accrued on the principal sum from the date of the prepayment to the end of the applicable Fixed Rate Period, at the interest rate set forth in the Term Loan Note or Equipment Line Note, as the case may be, in effect on the date of prepayment and (ii) the amount of interest that would have accrued on the principal sum from the date of the prepayment to the end of the applicable Fixed Rate Period of the applicable Note at the Current Market Rate. “Current Market Rate” shall mean the most recent yield on United States Treasury Obligations adjusted to a constant maturity having a term most nearly corresponding to Fixed Rate Period remaining from the date of prepayment to the last day of the applicable Fixed Rate Period, in effect two (2) Business Days prior to the prepayment date as published by the Board of Governors of the Federal Reserve System in the Federal reserve Statistical Release H.15 (519), or by such other quoting service, index, or commonly available source utilized by the Lender. The “present value” calculation shall use the Current Market Rate as the discount rate and shall be calculated as if each installment of the principal sum had been made when due during the remainder of the applicable Fixed Rate Period.   14   “Prime Rate” means the rate of interest announced by the Lender from time to time at its Principal Office as its prime commercial lending rate, which rate is not intended to be the lowest rate of interest charged by Lender to its borrowers.   “Principal Office” means the Lender’s office at 255 East Avenue, Rochester, New York 14604.   “Quarterly Covenant Compliance Sheet” means the covenant compliance sheet delivered on a quarterly basis by Borrower to Lender, in substantially the form of Exhibit A attached hereto, including a certificate of the Chief Financial Officer of Borrower certifying that no Event of Default or Default has occurred and certifying to the accuracy of an attached schedule showing computation of financial covenants contained in Article XI hereof.   “Rate Management Transaction” means any transaction (including an agreement with respect thereto) now existing or hereafter entered into by any Credit Party which is a rate swap, basis swap, forward rate transaction, commodity swap, these transactions) or any combination thereof, whether linked to one or more financial measures.   “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as amended or supplemented from time to time.   “Release” has the same meaning as given to that term in Section 101(22) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601(22), and the regulations promulgated thereunder.   “Revolving Credit Commitment” means the Commitment of the Lender related to the Revolving Credit Facility.   “Revolving Credit Facility” means the revolving credit facility established pursuant to Section 2.1 of this Agreement.   “Revolving Credit Loan(s)” means a loan or loans made by the Lender to Borrower under the Revolving Credit Facility.   “Revolving Credit Note” means the Revolving Credit Note in the amount of the Revolving Credit Commitment, as such note may be amended, modified or restated   “Security Agreement” means the General Security Agreement made by each Credit Party in favor of Lender.   15   “Security Documents” means those documents set forth on Schedule 1.1(e).   “Subsidiary” means any Person, the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements in accordance with GAAP (including among others consolidated subsidiaries of consolidated subsidiaries).   “Tax” means any federal, state, provincial, or foreign tax (including withholding tax), assessment, or other governmental charge (including penalties and interest) upon a Person or upon its assets, revenues, income, or profits.   “Termination Date” means May 30, 2013.   “Term Loan” means the $1,700,000 aggregate original outstanding principal balance term loan made by the Lender pursuant to Article III hereof.   “Term Loan Maturity Date” means May 30, 2013.   “Term Loan Note” means the Term Loan Note evidencing the Term Loan, as such note may be amended, modified or restated from time to time.   “Trademark Security Agreements” means the Trademark Collateral Security and Pledge Agreement listed on Schedule 1.1(e), and any similar document delivered by any Credit Party, and, as amended, modified or restated from time to time.   “Type of Loan” means a Base Rate Loan, LIBOR Loan, or Fixed Rate Loan, as the case may be.   “Unfinanced Capital Expenditures” means all capital expenditures other than (i) capital expenditures financed by the Lender (but excluding for this definition any capital expenditures financed with the proceeds of a Revolving Credit Loan), and (ii) capital expenditures financed with Debt (other than the Loans) permitted under this Agreement or Debt to which the Lender consents in writing.   “Val-U-Tech Subordinated Debt” means Debt incurred to the Shareholder of Val-U-Tech, Inc. in connection with the closing of the Val-U-Tech Transaction, which Debt must be subordinated to the Obligations in form and substance satisfactory to the Lender.   “Val-U-Tech Transaction” means the acquisition by the Borrower of the stock of Val-U-Tech Corp. pursuant to the Agreement and Plan of Merger among Borrower, VUT Merger Corp., Val-U-Tech, Inc. and the Shareholders of Val-U-Tech, Inc. dated May 23, 2008.   1.2 Interpretation. This Agreement has been prepared in cooperation of counsel for each of the parties, and shall not be construed as against any particular party as drafter. Unless otherwise expressly provided in this Agreement, the following interpretations shall apply:   (a) references in this Agreement to statutes shall include any amendments of the same and any rules and regulations promulgated thereunder,   16   (b) references to Persons include their permitted successors and assigns, and in the case of any governmental authority, any Person succeeding to its functions and capacities,   (c) references to agreements (including exhibits and schedules thereto) include amendments, assignments, and restatements provided that such amendments, assignments, and restatements are not prohibited by the Loan Documents,   (d) references to specific sections, articles, annexes, schedules, and exhibits are to this Agreement,   (e) words importing gender include the other gender,   (f) the singular includes the plural and the plural includes the singular,   (g) the words, “including”, “include”, and “includes” shall be deemed to be followed by the words “without limitation”,   (h) each authorization herein shall be deemed irrevocable and coupled with an interest,   (i) obligations or liabilities of the Credit Parties, or any of them, to which this Agreement makes reference shall be joint and several,   (j) accounting terms shall be interpreted, and all determinations relating thereto shall be made, in accordance with GAAP, and   (k) captions and headings are for ease of reference only and shall not affect the construction hereof.   ARTICLE II - REVOLVING CREDIT FACILITY   2.1 Revolving Credit Commitment. The Lender agrees, subject to Section 2.2 and the other terms and conditions hereinafter set forth, to make Revolving Credit Loans to the Borrower from time to time during the period from the Closing Date up to but not including the Termination Date in an aggregate principal amount not to exceed at any time outstanding the amount of $9,000,000. During the period from the Closing Date to the Termination Date, within the limits of the Revolving Credit Commitment and subject to Section 2.2, the Borrower may borrow, prepay pursuant to Section 2.6, and reborrow under this Section 2.1. On such terms and conditions, the Revolving Credit Loans may be outstanding as Base Rate Loans or LIBOR Loans.   2.2 Borrowing Base; Overline Advances. Notwithstanding the provisions of Section 2.1, the aggregate principal amount of all outstanding Revolving Credit Loans shall not exceed the lesser of the Borrowing Base and the Revolving Credit Commitment.   Upon Borrower’s request the Inventory Overline Advance Rate shall apply and the Lender will make Overline Advances from time to time; provided, however no new Overline Advance shall be available unless no Overline Advances have been outstanding in the immediately prior thirty (30) consecutive days and no Default then exists.   17   At any time that the aggregate principal amount of all outstanding Revolving Credit Loans exceeds the lesser of the Borrowing Base and the Revolving Credit Commitment, the Borrower shall immediate prepay a portion of the Revolving Credit Loans that is at least the amount of such excess pursuant to Section 2.6 hereof.   2.3 Notice and Manner of Borrowing. Borrower agrees to give the Lender notice of any Revolving Credit Loan on or before the Business Day of each Base Rate Loan, and at least three (3) Business Days before each LIBOR Loan, specifying: (a) the date of such Loan; (b) the amount of such Loan; (c) the Type of Loan; and (d) in the case of a LIBOR Loan, the duration of the Interest Period applicable thereto. Subject to the terms of this Agreement, and upon fulfillment of the applicable conditions set forth in VIII, the Lender shall credit the amount of such advance, in immediately available funds, to the account of the Borrower maintained with the Lender for that purpose. By mutual agreement, the Lender and Borrower may agree to sweep arrangements under mutually acceptable terms from time to time.   2.4 Interest. Borrower shall pay interest to the Lender on the outstanding and unpaid principal amount of the Revolving Credit Loans made under this Agreement at either the Base Rate or the LIBOR Interest Rate as the case may be, in each case plus the Applicable Margin. Any change in the interest rate resulting from a change in the Base Rate shall be effective as of the opening of business on the day on which such change in the Base Rate becomes effective. Each LIBOR Rate shall be effective for the applicable Interest Period. Interest on each Loan shall be calculated on the basis of a year of 360 days for the actual number of days elapsed.   2.5 Revolving Credit Note. Borrower’s obligation to repay the Revolving Credit Loans shall be evidenced by a Revolving Credit Note in substantially the form of Exhibit B to this Agreement, in favor of Lender in the aggregate principal amount of Lender’s Revolving Credit Commitment.   2.6 Payments.   (a) Interest shall be paid in immediately available funds to the Lender, in the case of LIBOR Loans on the last day of the applicable Interest Period but no less often than every three months, and in the case of Base Rate Loans, on the first day of each month. All accrued and unpaid interest shall be due and payable on the Termination Date.   (b) Each Overline Advance shall be repaid in full no later than the sixtieth (60th) day after the making of such Overline Advance.   (c) All Revolving Credit Loans shall be repaid in full on the Termination Date.   (d) At any time that the Borrower becomes aware or receives notice (oral or written) that the outstanding principal amount of all Revolving Credit Loans exceeds the Borrowing Base, Borrower shall immediately prepay that portion of the Revolving Credit Loans that is necessary to comply with the provisions of Section 2.2.   18   2.7 Unused Commitment Fee. Borrower agrees to pay to the Lender the Applicable Unused Fee on the average amount of the Revolving Credit Commitment unused during each Fiscal Quarter. Such fee shall be payable quarterly and the Lender is hereby authorized to charge Borrower’s account with Lender for the amount of such fee. The Lender will send Borrower an invoice setting forth the amount of such fee and the basis upon which it was calculated, and will send such invoice within two (2) Business Days after such fee is so charged..   2.8 Use of Proceeds. Proceeds of the Revolving Credit Loans shall be used on the date of this Agreement first for repayment in full of obligations to Keltic Financial. Thereafter the Revolving Credit Loans will be available for the Borrower’s general corporate purposes including purchase of the stock of Val-U-Tech Corp..   ARTICLE III - TERM LOAN   3.1 Term Loan. On the Closing Date the Lender will make a term loan (the “Term Loan”) to Borrower on the terms and conditions hereinafter set forth, in the aggregate principal amount of One Million Seven Hundred Thousand Dollars ($1,700,000).   3.2 Term Loan Note. Borrower’s obligation to repay the Term Loan shall be evidenced by its promissory note in substantially the form of Exhibit C to this Agreement, with blanks appropriately completed.   3.3 Principal Payments on Term Loan. Borrower agrees to pay the principal amount of the Term Loans in consecutive installments on the first day of each month in the amount of $28,334 each. The entire unpaid principal amount of the Term Loan shall be due and payable on the Term Loan Maturity Date.   3.4 Interest.   (a) Borrower shall pay interest on the outstanding principal amount of the Term Loan at the rate of six and seven-tenths percent (6.7%) per annum. Interest on the Term Loan shall be calculated on the basis of a year of 360 days for the actual number of days elapsed.   (b) Interest on the Term Loan shall be paid in immediately available funds to the Lender on the first day of each month. All remaining accrued interest shall be due and payable on the Term Loan Maturity Date.   3.5 Use of Proceeds. Proceeds of the Term Loan shall be used on the date of this Agreement first for repayment in full of obligations to Keltic Financial. Thereafter the Term Loan proceeds will be available for the Borrower’s general corporate purposes including purchase of the stock of Val-U-Tech Corp..   ARTICLE IV - ENERGY LOAN   4.1 Energy Loan. The existing Energy Loan made by Lender to Borrower in the original aggregate outstanding principal amount of $203,306.15 shall remain outstanding.   19   4.2 Energy Loan Note. Borrower’s obligation to repay the Energy Loan is evidenced by its promissory note with attached rider in substantially the form of Exhibit D to this Agreement.   4.3 Energy Loan Payments. Borrower shall make payments of principal and interest as provided in the Energy Loan Note. All remaining unpaid principal and accrued interest on the Energy Loan shall be due and payable in full on the Energy Loan Maturity Date.   4.4 Interest. Borrower shall pay interest on the outstanding principal amount of the Energy Loan as provided in the Energy Loan Note.   4.5 Energy Loan Documents. The provisions of this Agreement supersede and replace the Agreement (Affirmative Agreements) containing financial covenants executed by and between the Borrower and Lender in connection with closing of the Energy Loan.   ARTICLE V - EQUIPMENT LINE OF CREDIT FACILITY   5.1 Equipment Line of Credit. Subject to Section 5.2 and the other terms and conditions hereinafter set forth, the Lender has established the Equipment Line Facility, available in the discretion of the Lender to the Borrower from time to time during the period from the Closing Date up to but not including the Equipment Line Maturity Date, in an aggregate principal amount of $1,500,000. No reborrowing is available under the Equipment Line Facility. The Lender will consider Borrower’s requests for Equipment Line Loans, but shall have the sole and absolute discretion whether to make any Loan (or any portion of any Loan) requested by Borrower, regardless of any general availability under the Equipment Line Facility.   5.2 Notice and Manner of Borrowing. Borrower may make requests for Equipment Line Loans, in minimum amounts of $100,000, to the Lender specifying: (a) the date of such Loan; (b) the amount of such Loan; (c) the Type of Loan; (d) in the case of a LIBOR Loan, the duration of the Interest Period applicable thereto, and (e) the purpose of the Loan including copies of invoices for equipment being purchased and other supporting documentation reasonably requested by Lender. Subject to the terms of this Agreement including Section 5.1, and upon fulfillment of the applicable conditions set forth in Article VIII, the Lender shall credit the amount of such Equipment Line Loan, in immediately available funds, to the account of the Borrower maintained with the Lender for that purpose.   5.3 Interest.   (a) The Equipment Line Loans may be outstanding as Base Rate Loans, LIBOR Loans, or Fixed Rate Loans (in which case the rate shall be fixed for the duration of the term of the Equipment Line Loan), as elected with respect to each Equipment Line Loan at least three (3) Business Days before the date on which such Equipment Line Loan is made. Borrower shall pay interest to the Lender on the outstanding and unpaid principal amount of the each Equipment Line Loan at the Base Rate plus the Applicable Margin, the LIBOR Interest Rate plus the Applicable Margin, or the Fixed Rate, whichever may have been elected by the Borrower. Any change in the interest rate resulting from a change in the Base Rate shall be effective as of the opening of business on the day on which such change in the Base Rate becomes effective. Each LIBOR Rate shall be effective for the applicable Interest Period. Interest on each Loan shall be calculated on the basis of a year of 360 days for the actual number of days elapsed.   20   (b) Provided that the Lender remains a participant in the Linked Deposit Program and approval is received from New York Empire State Development for Borrower’s participation in such program, the Lender will provide the Borrower with the interest rate benefit under the Linked Deposit Program for up to an aggregate of $500,000 in Equipment Line Loans. Borrower must elect a Fixed Rate for any Equipment Line Loan for the period in which Linked Deposit Program benefits are received, which period may not exceed forty-eight month, and the other terms and conditions of general application to the Linked Deposit Program must be satisfied.   5.4 Equipment Line Notes. Borrower’s obligation to repay each Equipment Line Loan shall be evidenced by an Equipment Line Note in substantially the form of Exhibit E to this Agreement, with blanks appropriately completed, in favor of Lender in the principal amount of such Equipment Line Loan. In addition, for any Equipment Line Note to which the Linked Deposit Program will apply, the Borrower will execute and deliver to Lender a Linked Deposit Program Equipment Line Note Rider in substantially the form of Exhibit F to this Agreement, with blanks appropriately completed.   5.5 Payments.   (a) Interest on outstanding Equipment Line Loans shall be paid in immediately available funds to the Lender, in the case of LIBOR Loans on the last day of the applicable Interest Period but no less often than every three months, and in the case of Base Rate Loans or Fixed Rate Loans, on the first day of each month. All accrued and unpaid interest shall be due and payable on the Termination Date.   (b) The principal of each Equipment Line Loan shall be repaid in consecutive monthly installments on the first day of each month, each equal to one-sixtieth of the original principal amount of the particular Equipment Line Loan. All Equipment Line Loans shall be repaid in full on the Termination Date.   5.6 Use of Proceeds. Proceeds of the Equipment Line Loans shall be used to finance the purchase price of capital equipment.   ARTICLE VI - CERTAIN GENERAL PROVISIONS   6.1 Conversions and Renewals. Borrower may elect from time to time to convert all or a part of one type of Loan into another type of Loan or to renew all or part of a Loan by giving the Lender notice at least one (1) Business Day before conversion into a Base Rate Loan and at least three (3) Business Days before the conversion into or renewal of a LIBOR Loan, specifying: (a) the renewal or conversion date; (b) the amount of the Loan to be converted or renewed; (c) in the case of conversions, the type of Loan to be converted into; and (d) in the case of renewals of or a conversion into LIBOR Loans, the duration of the Interest Period applicable thereto; provided that LIBOR Loans can be converted only on the last day of the Interest Period for such Loan. All notices given under this Section 6.1 shall be irrevocable and shall be given not later than 11:00A.M. (New York time) on the day which is not less than the number of Business Days specified above for such notice. If the Borrower shall fail to give the Lender the notice as specified above for the renewal or conversion of a LIBOR Loan prior to the end of the Interest Period with respect thereto or a Fixed Rate Loan prior to the expiration of the period for which such rate is fixed, such LIBOR Loan or Fixed Rate Loan shall automatically be converted into a Base Rate Loan on the last day of the Interest-Period for such Loan. Each LIBOR Loan shall be in an amount not less than $1,000,000 and in $500,000 increments except LIBOR Loans made under the Equipment Line Facility which shall be in amounts not less than $100,000 and in $100,000 increments. No more than five (5) LIBOR Loans may be outstanding at any one time.   21   6.2 Notices. All notices given under Section 2.3 and Section 6.1 shall be irrevocable and shall be given not later than 10:00 a.m. (New York time) on the day which is not less than the number of Business Days specified above for such notice. Notices given pursuant to Section 2.3 and Section 6.1 shall be in writing or by confirmed facsimile transmission or by email actually received by the Lender, and shall be given to the Lender at the Lender Office. Notices shall be effective on the date received by the Lender if received on or before 10:00 a.m. (New York time) on a Business Day, and shall be effective on the next Business Day if received after 10:00 a.m. (New York time) on a Business Day.   6.3 Method of Payment. Borrower shall make each payment under this Agreement and the Notes not later than 12:00 noon (New York time) on the date when due in lawful money of the United States to the Lender at its Principal Office in immediately available funds. Borrower hereby authorizes the Lender, if and to the extent payment is not made when due under this Agreement and the Notes, to charge from time to time against any account of Borrower with the Lender any amount as due.   6.4 Illegality. Notwithstanding any other provision in this Agreement, if any applicable law, rule, or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank, or comparable agency charged with the interpretation or administration thereof, or compliance by the Lender with any request or directive (whether or not having the force of law) of any such authority, central bank, or comparable agency shall make it unlawful or impossible, or impractical as a result of a contingency occurring after the date of this Agreement that materially affects the interbank market for the Lender to maintain or fund LIBOR Loans, then upon notice to the Borrower, the outstanding principal amount of all LIBOR Loans, together with interest accrued thereon, and any other amounts payable to the Lender under this Agreement shall (a) at the election of Borrower, be Converted into Base Rate Loans of the same principal amount or, if no such election is made, be repaid (b) immediately upon demand of the Lender if such change or compliance with such request, in the judgment of the Lender, requires immediate repayment, or (c) at the expiration of the last Interest Period to expire before the effective date of any such change or request.   6.5 Disaster. Notwithstanding anything to the contrary herein, if the Lender determines (which determination shall be conclusive) that:   (a) quotations of interest rates for the relevant deposits referred to in the definition of LIBOR Interest Rate are not being provided in the relevant amounts or for the relative maturities for purposes of determining the rate of interest on a LIBOR Loan as provided in this Agreement; or   22   (b) the relevant rates of interest referred to in the definition of LIBOR Interest Rate upon the basis of which the rate for any such type of Loan is to be determined do not accurately cover the cost to the Lender of making or maintaining LIBOR Loans;   then the Lender shall forthwith give notice thereof to the Borrower, whereupon (a) at the election of Borrower, the LIBOR Loans shall be Converted into Base Rate Loans of the same principal amount or, if no such election is made, and (b) (i) the obligation of the Lender to make LIBOR Loans shall be suspended until the Lender notifies the Borrower that the circumstances giving rise to such suspension no longer exist, and (ii) the Borrower shall repay in full the then outstanding principal amount of each LIBOR Loan together with accrued interest thereon, on the last day of the then current Interest Period applicable to such Loan.   6.6 Increased Cost. From time to time upon notice to the Borrower from the Lender, the Borrower shall pay to the Lender such amounts as the Lender may determine to be necessary to compensate the Lender for any costs incurred by the Lender which the Lender determines are attributable to its making or maintaining any LIBOR Loans hereunder or its obligation to make any such Loans hereunder, or any reduction in any amount receivable by the Lender under this Agreement or the Notes in respect of any such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called “Additional Costs”), resulting from any change after the date of this Agreement in U.S. federal, state, municipal, or foreign laws or regulations (including Regulation D), or the adoption or making after such date of any interpretations, directives, or requirements applying to a class of banks including the Lender of or under U.S. federal, state, municipal, or foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof (“Regulatory Change”), which: (a) changes the basis of taxation of any amounts payable to the Lender under this Agreement or the Notes in respect of any such Loans (other than Taxes imposed on the overall net income of the Lender for any of such Loans by the jurisdiction where the Lender Principal Office is located); or (b) imposes or modifies any reserve, special deposit, compulsory loan, or similar requirements relating to any extensions or credit or other assets of, or any deposits with or other liabilities of, the Lender (including any of such Loans or any deposits referred to in the definition of LIBOR Interest Rate); or (c) imposes any other condition affecting this Agreement or the Notes (or any such extensions of credit or liabilities). The Lender will notify the Borrower of any event occurring after the date of this Agreement which will entitle the Lender to compensation pursuant to this Section 6.6 as promptly as practicable after it obtains knowledge thereof and determines to request such compensation, but in no event will Borrower be liable for Additional Costs arising from any Regulatory Change which occurred more than six (6) months before the date of such notice.   Determinations by the Lender for purposes of this Section 6.6 of the effect of any Regulatory Change on its costs of making or maintaining Loans or on amounts receivable by it in respect of Loans, and of the additional amounts required compensate any the Lender in respect of any Additional Costs, shall be conclusive, provided that such determinations are made on a reasonable basis.   23   6.7 Risk-Based Capital. In the event that the Lender determines that with respect to any LIBOR Loans hereunder (a) compliance with any judicial, administrative, or other governmental interpretation of any law or regulation or (b) compliance by the Lender or any corporation that Controls Lender with any guideline or request from any central bank or other governmental authority (whether or not having the force of law) has the effect of requiring an increase in the amount of capital required or expected to be maintained by the Lender or any corporation that Controls the Lender, and the Lender determines that such increase is based upon its obligations hereunder, and other similar obligations, the Borrower shall pay to the Lender, such additional amount as shall be certified by the Lender to be the amount allocable to the Lender’s obligations to the Borrower hereunder. The Lender will notify the Borrower of any event occurring after the date of this Agreement that will entitle the Lender to compensation pursuant to this Section 6.7 as promptly as practicable after it event will the Borrower be liable for any compensation hereunder based on any event which occurred more than six (6) months before the date of such notice.   Determinations by the Lender for purposes of this Section 6.7 of the effect of any increase in the amount of capital required to be maintained by the Lender and of the amount allocable to the Lender’s obligations to the Borrower hereunder shall be determined by the Lender acting reasonably and in good faith using averaging and attribution methods that are reasonable, provided, however, absent manifest error, the Lender’s computation shall be final, conclusive, and binding.   6.8 Funding Loss Indemnification. Upon notice to Borrower from the Lender, Borrower shall pay to the Lender such amount or amounts as shall be sufficient (in the reasonable opinion of the Lender) to compensate it for any loss, cost, liability, funding loss, or expense (in each case whether by reason of any reduction in yield, the liquidation or reemployment of any deposit or other funds acquired by the Lender, the fixing of any interest rate payable on LIBOR Loans, or otherwise) incurred directly or indirectly as a result of:   (a) any payment of a LIBOR Loan on a date other than the last day of the Interest Period for such Loan including, but not limited to acceleration of the Loans; or   (b) any failure by Borrower to borrow or convert a LIBOR Loan on the date for borrowing or conversion specified in the relevant notice under Section 2.3, 5.2, or 6.1, as the case may be, or   (c) any failure by Borrower to pay a LIBOR Loan on any date for payment specified in Borrower’s written notice of intention to pay such LIBOR Loan, or   (d) other event pursuant to which a LIBOR Loan is converted to a Base Rate Loan.   6.9 Administrative Expenses. Borrower shall pay any reasonable fees, expenses and disbursements, including reasonable legal fees, of the Lender related to this Agreement, the Obligations, the perfection and protection of any collateral security required hereunder, the transactions contemplated by this Agreement, and the administration of this Agreement and the Obligations. Such payments shall be due at Closing and thereafter as incurred by the Lender.   24   6.10 Collection Costs. At the request of the Lender, Borrower shall promptly pay any reasonable fees, expenses and disbursements, including reasonable legal fees, of the Lender in connection with collection of any of the Obligations or enforcement of any of the Lender’s rights hereunder or under the Loan Documents. This obligation shall survive the payment of any Notes executed hereunder. The Lender may apply any payments of any nature received by it first to the payment of Obligations under this Section 6.10, notwithstanding any conflicting provision contained in this Agreement or any other agreement with the Borrower.   6.11 Default Interest Rate. Upon the occurrence of an Event of Default, notwithstanding anything else herein, the rate of interest on each of the Obligations shall be automatically increased to a rate at all times equal to three percentage points (3%) above the rate of interest which would be in effect absent such failure of compliance, such increased rate and fees to remain in effect through and including the satisfaction and payment in full of all of the Obligations and the termination of the Commitment, or written waiver of such Event of Default by the Lender.   6.12 Late Payment Fees. Payments of principal and/or interest not made in full before the date five (5) Business Days after the date due shall be subject to a processing charge of five percent (5%) of the payment due.   6.13 Payment of Fees. Borrower hereby authorizes the Lender to withdraw an amount equal to the fees which are due and payable hereunder from any of its accounts with the Lender if not paid on the due date for such fees. The Lender shall advise the Borrower of any such withdrawals, provided, however, that failure by the Lender to give the Borrower such advice shall not prevent the Lender from making any such withdrawals under this Section 6.13.   6.14 Prepayments.   (a) LIBOR Loans are prepayable only at the end of the respective applicable Interest Periods, and breakage costs pursuant to Section 6.8 will apply to any payment of principal for any reason during an applicable Interest Period, including without limitation by reason of acceleration. Prepayments of Fixed Rate Loans are subject to payment of the Prepayment Premium. Prepayments of Base Rate Loans may be made without premium or penalty.   (b) The Lender reserves the right to require advance notice for all prepayments of Loans.   (c) Voluntary principal prepayments of the Term Loan must be in minimum amounts of $500,000 each.   (d) Mandatory principal prepayments of first the Term Loan and then any Equipment Line Loans shall be made within five Business Days after the date received by any Credit Party of and in an amount equal to (i) one hundred percent (100%) of Net Cash Proceeds of any Asset Disposition outside of the ordinary course of business if the aggregate Net Cash Proceeds exceed $100,000 (cumulatively and in the aggregate), and (ii) one hundred percent (100%) of the Net Cash Proceeds from any Casualty Event. In the event of a mandatory prepayment, the Lender will waive any Prepayment Premium related to such prepayment of any Fixed Rate Loan.   25   (e) Prepayments of the Term Loan and Equipment Line Notes shall be applied to the principal installments in the inverse order of their maturities.   (f) If by reason of an Event of Default the Lender elects to declare the Obligations to be immediately due and payable and/or to reduce or terminate the Commitment, then any indemnities pursuant to Section 6.8 and the Prepayment Premium shall become due and payable in the same manner as though the Borrower had voluntarily prepaid the Notes.   6.16 Commitment Fee. On the Closing Date, in consideration of the Commitment the Borrower shall pay the Lender a commitment fee of $25,000.   6.17 Obligations Related to Rate Management Transactions. In the event that the Borrower enters into any Rate Management Transaction with the Lender, any costs incurred by the Lender or its affiliates in connection therewith, including any interest, expenses, fees, premiums, penalties or other charges associated with any obligations undertaken by the Lender or its Affiliates to hedge or offset the Lender’s or its affiliates obligations pursuant to such agreement, or the termination of any such obligations, shall be deemed additional interest and/or a related expense (to be determined in the sole discretion of the Lender) and due as part of the Obligations and secured by all collateral for and covered by all guarantees of the Obligations to the full extent thereof, and included in any judgment in any proceeding instituted by the Lender.   6.18 Payments Due on Non-Business Days. Whenever any payment to be made under this Agreement or under the Notes shall be stated to be due on a day other than a Business Day, such payments shall be made on the next succeeding Business Day, and such extension of time shall be included in the computation of the payment of interest and the commitment fee, as the case may be, except, in the case of a LIBOR Loan, if the result of such extension would be to extend such payment into another calendar month, such payment shall be made on the immediately preceding Business Day   ARTICLE VII - REPRESENTATIONS OF BORROWER   The Borrower represents and warrants to the Lender as follows:   7.1 Organization and Power.   (a) Each of the Credit Parties is duly organized, validly existing and in good standing under the laws of its state of incorporation and is duly qualified to transact business and in good standing in all other states and jurisdictions in which it is required to qualify or in which failure to qualify could have a material adverse impact on its business. The jurisdictions of formation and qualification for each of the Credit Parties are described in Schedule 7.1.   (b) Each of the Credit Parties has full power and authority to own its properties, to carry on its business as now being conducted, to execute, deliver and perform the Agreement and all related documents and instruments, and to consummate the transactions contemplated hereby.   26   7.2 Proceedings of Borrower.   (a) All necessary action on the part of the Credit Parties relating to authorization of the execution and delivery of this Agreement and all related documents and instruments, and the performance of the Obligations of the Credit Parties, hereunder and thereunder has been taken. This Agreement and all related documents and instruments constitute legal, valid and binding obligations of the Credit Parties, as applicable, enforceable in accordance with their respective terms.   (b) The execution and delivery by the Borrower of this Agreement and all related documents and agreements, and the performance by each of the Credit Parties of their respective obligations under this Agreement, the Security Documents and all related documents and agreements will not violate any provision of law or their respective Certificates of Incorporation or By-Laws. The execution, delivery and performance of this Agreement, the Security Documents and all related documents and agreements, and the consummation of the transactions contemplated hereby will not violate, be in conflict with, result in a breach of, or constitute a default under any agreement to which any of the Credit Parties is a party or by which any of its properties is bound, or any order, writ, injunction, or decree of any court or governmental instrumentality, and upon any of its properties, and do not require the consent or approval of any governmental authority.   7.4 Proceedings of Borrower.   terms.   will not (except as provided in the Security Documents) result in the creation or imposition of any lien, charge or encumbrance upon any of its properties, and do not require the consent or approval of any governmental authority.   27   7.5 Capitalization. All of the outstanding Capital Securities of Borrower are duly authorized, validly issued and fully paid. All of the Capital Securities of each of Borrower’s Subsidiaries are owned by Borrower or a Subsidiary of Borrower.   7.6 Litigation. Except as set forth on Schedule 7.6, as of the date hereof there is no action, suit or proceeding at law or in equity by or before any court or any federal, state, municipal or other governmental department, commission, board, bureau, instrumentality or other agency, domestic or foreign, pending or, to the knowledge of the Credit Parties, threatened against or affecting the Credit Parties that brings into question the legality, validity or enforceability of this Agreement or the transactions contemplated hereby or that, if adversely determined, is not adequately covered by insurance and would have a Material Adverse Effect.   7.7 Financial Statements. The audited consolidated balance sheets of Borrower as of the Fiscal Year ended September 30, 2007, and the related statements of operation, stockholders equity and cash flows (including supporting footnote disclosures) for the fiscal years then ended, with the opinion of Rotenberg & Co., LLP (collectively, the “Financial Statements”), all heretofore furnished to the Lender, have been prepared in accordance with GAAP consistently applied throughout the periods indicated are all true and correct in all material respects and present fairly the financial condition at the date of said financial statements and the results of operations for the fiscal period then ending. The Credit Parties as of such date did not have any significant liabilities, contingent or otherwise, including liabilities for taxes or any unusual forward or long-term commitments which were not disclosed by or reserved against in the Financial Statements, and at the present time there are no material unrealized or anticipated losses from any unfavorable commitments of the Credit Parties. All such Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved.   7.8 Material Adverse Changes. As of the date of this Agreement, since September 30, 2007 there has been no material adverse change in the operations, business, property, assets or condition, financial or otherwise of the Credit Parties, taken as a whole, except for changes disclosed prior to the date of this Agreement by the Borrower either (i) in writing to the Lender or (ii) in the Borrower’s filings with the Securities and Exchange Commission.   7.9 Taxes. Each of the Credit Parties have filed or caused to be filed when due all federal tax returns or extensions and all state and local tax returns or extensions that are required to be filed, and have paid or caused to be paid all Taxes as shown on said returns or any assessment received. The filed returns accurately reflect in all material respects all liability for Taxes of the Credit Parties, as applicable, for the periods covered thereby. Each of the Credit Parties has paid all material Taxes payable by it which have become due, other than those that are being contested in good faith and adequately disclosed and fully provided for on the consolidated financial statements of the Credit Parties in accordance with GAAP. None of the Credit Parties’ tax returns are being audited on the date of this Agreement and none of the Credit Parties have been notified of any intention by any taxing authority to conduct such an audit.   7.10 Properties; Liens. Except as would not have a Material Adverse Effect, (a) the Credit Parties have good and marketable title to all of their properties and assets, including without limitation, the properties and assets reflected in the Financial Statements free and clear of all Liens, except for Permitted Liens, and (b) the Credit Parties have a valid leasehold estate and undisturbed peaceable possession under all leases under which they are operating, all of which are in full force and effect and none of which contain unusual or burdensome provisions that may materially adversely affect the operations of the Credit Parties.   28   7.11 Debt. Except for Permitted Debt, the Credit Parties have no outstanding Debt.   7.12 Franchises; Permits. Each of the Credit Parties has obtained and is in compliance with all licenses, permits, franchises, and governmental authorizations necessary for the ownership of its properties and the conduct of its business, for which failure to comply could reasonably be expected to have a Material Adverse Effect.   7.13 Compliance With Law.   (a) None of the Credit Parties is in violation of any laws, ordinances, governmental rules, requirements, or regulations, or any order, writ, injunction or decree of any court or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, to which it is subject which violation could reasonably be expected to   (b) To the extent applicable, each of the Credit Parties is in compliance with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the Patriot Act, except in each case such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.   (c) Neither the Borrower nor any of the Credit Parties, nor, to the knowledge of the Borrower, any director, officer, agent, employee (whether full time or contract), representative or other person acting on behalf of the Credit Parties has, in the course of its actions for, or on behalf of, the Credit Parties, (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government Person or employee (whether full time or contract) from corporate funds, (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government Person or employee (whether full time or contract).   7.14 Patents; Trademarks; and Authorizations. The Credit Parties own, possess or have licenses for all of the patents, trademarks, service marks, trade names, copyrights, licenses, authorizations, trade secrets, proprietary information and know-how, and all rights with respect to the foregoing (collectively, the “Intellectual Property”), necessary to the conduct of their business as now conducted. A complete list of all such Intellectual Property with respect to which registrations have been issued by the U.S. Patent and Trademark Office, the U.S. Copyright Office, or any comparable foregoing governmental authority is set forth on the Schedule 7.14. Except as disclosed in Schedule 7.6, to the knowledge of the Credit Parties, no product, process, method, substance, part or other material presently contemplated to be sold by or employed by any of the Credit Parties in connection with its business infringes or may infringe any patent, trademark, service mark, trade name, copyright, license or other right owned by any other person. Except as disclosed in Schedule 7.6, there is no pending or threatened claim or litigation against or affecting any of the Credit Parties contesting its right to sell or use any such product, process, method, substance, part or other material. There is no pending or proposed any patent, invention, device application or principle or any statute, law, rule, regulation, standard or code which would prevent, inhibit or render obsolete the production or sale of any products of, or substantially reduce the projected revenues of or otherwise have a Material Adverse Effect.   29   7.15 Contracts and Agreements. None of the Credit Parties is a party to any contract or agreement that materially adversely affects its business, property, assets, or condition financial or otherwise, and each the Credit Parties is in compliance in all material respects with all material contracts and agreements to which it is a party.   7.16 Subsidiaries and Affiliates. Except Affiliates and Subsidiaries listed on Schedule 7.16 and Subsidiaries permitted by Section 10.10 below, Borrower has no Subsidiaries or Affiliates. The jurisdiction of formation and ownership of each of the Subsidiaries listed on Schedule 7.16 is set forth on such Schedule.   7.17 Governmental Contracts.   (a) None of the Credit Parties has knowledge of (i) an existing Organizational Conflict of Interest, as defined by the Federal Acquisition Regulation (“FAR”) 2.101, that has not been resolved through an appropriate mitigation plan or (ii) circumstances that could be reasonably likely to negatively affect in any material respects the Credit Parties’ ability to be awarded government contracts similar to those which the any of the Credit Parties is currently performing.   (b) None of the Credit Parties has knowledge of any payment by any Credit Parties to any Person in connection with any material government contract made in violation of applicable procurement statutes, regulations or the provisions of any of the Credit Parties’ material government contracts.   (c) With respect to each government contract to which any of the Credit Parties is a party or bound, (i) neither the United States Government nor any prime contractor, subcontractor or other Person has notified any of the Credit Parties, in writing or otherwise, that any of the Credit Parties has breached or violated any requirement of law, or material certificate or representation, or any clause which has resulted in a cure notice which in each case, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and (ii) solely with respect to material government contracts, no termination for default is currently in effect pertaining to any such material government contract.   (d) (i) Neither any of the Credit Parties or any of their respective directors or officers is (or during the last five (5) years has been) under civil investigation by the United States Department of Justice or a state attorney general or under criminal investigation by any Governmental Authority, or is under indictment by any Governmental Authority with respect to any irregularity, misstatement or omission arising under or relating to any activities of the Credit Parties under a government contract and (ii) during the last five (5) years, none of the Credit Parties has made a voluntary disclosure to the United States Government with respect to any irregularity, misstatement or omission arising under or relating to a government contract, except, in each case, for any such investigation, indictment, voluntary disclosure, irregularity, misstatement or omission which, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.   30   (e) There exist (i) no outstanding material claims against the Credit Parties, either by the United States Government or by any prime contractors, subcontractor, vendor or other third party, arising under or relating to any government contract and (ii) no disputes between the any of the Credit Parties and the United States Government under the Contract Disputes Act or any other Federal statute or between any of the Credit Parties and any prime contractor, subcontractor or vendor arising under or relating to any government contract, which, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.   (f) None of the Credit Parties or any of their respective directors, officers, owners, partners, or to the knowledge of the foregoing, employees, is (or during the last five (5) years has been) suspended or debarred from doing business with the United States Government or is (or during such period was) the subject of a finding of non-responsibility or ineligibility for United States Government contracting.   (g) No notice of suspension, debarment, cure notice, show cause notice or notice of termination for default is in effect which, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect has been issued by the United States Government to any of the Credit Parties and none of the Credit Parties is a party to any pending, or to the Borrower’s knowledge threatened, suspension, debarment, termination for default issued by the United States Government or other adverse United States Government action or proceeding in connection with any contract with the United States Government   (h) No cost incurred pertaining to any government contract of any of the Credit Parties has been disallowed by the United States Government or any of its agencies or, to the knowledge of any of the Credit Parties, is the subject of any investigation or which, either individually or in the aggregate, could   (i) On the date hereof the cost accounting systems and government property management systems with respect to the material government contracts of the Credit Parties comply in all material respects with the applicable cost accounting standards set forth in FAR Sections 30 and 45 respectively.   31   7.18 ERISA. Except as set forth on the Schedule 7.18:   (a) Identification of Plans. (i) Neither any Credit Party, nor any ERISA Affiliate, maintains or contributes to, or has maintained or contributed to, any Plan that is an ERISA Plan, and (ii) none of the Credit Parties and their ERISA Affiliates maintains or contributes to, or have maintained or contributed to, any Plan that is an Executive Arrangement.   (b) Compliance. Each Plan has at all times been maintained, by its terms and in operation, in accordance with all applicable laws, except such noncompliance (when taken as a whole) that will not have a Material Adverse Effect.   (c) Liabilities. Neither any of the Credit Parties, nor any ERISA Affiliate, is currently, and has not been obligated in the last six (6) years to make contributions (directly or indirectly) to a Multiemployer Plan, and nor is currently subject to any liability (including withdrawal liability), tax or penalty whatsoever to any person whomsoever with respect to any Plan including, but not limited to, any tax, penalty or liability arising under Title I or Title IV or ERISA or Chapter 43 of the Internal Revenue Code, except such liabilities (when taken as a whole) as will not have a Material Adverse Effect.   (d) Funding. Each Credit Party and each ERISA Affiliate have made full and timely payment of all amounts (i) required to be contributed under the terms of each Plan and applicable law and (ii) required to be paid as expenses of each Plan. No Plan has an “amount of unfunded benefit liabilities” (as defined in Section 4001(a)(18) of ERISA).   7.19 Employment and Labor Relations. None of the Credit Parties is engaged in any unfair labor practice that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against and of the Credit Parties or, to the knowledge of the Borrower, threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against any of the Credit Parties or, to the knowledge of the Borrower, threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against any of the Credit Parties or, to the knowledge of the Borrower, threatened against any of the Credit Parties, (iii) no union representation question exists with respect to the employees of any of the Credit Parties, (iv) no equal employment opportunity charges or other claims of employment discrimination are pending or, to the Borrower’s knowledge, threatened against any of the Credit Parties, (v) no wage and hour department investigation has been made of any of the Credit Parties, except (with respect to any matter specified in clauses (i) through (v) above, either individually or in the aggregate) such as could not reasonably be expected to have a Material Adverse Effect, and (vi) the Credit Parties have in place all current affirmative action plans applicable to their respective business operations and are in material compliance with all laws and regulations governing such affirmative action plans, including, without limitation, compliance with the terms set forth in such plans.   7.20 Disclosure. Neither this Agreement, any Loan Document nor any other document, certificate or statement furnished to the Lender by or on behalf of any Credit Party in connection herewith contains any untrue statement of a statements contained herein and therein not misleading, if, in either case, such fact is material to an understanding of the financial condition, performance or prospects of the Credit Parties, taken as a whole or their business or operations, taken as a whole, or the ability of the Credit Parties to fulfill their obligations under this Agreement or by any Loan Documents to which they are parties.   32   ARTICLE VIII - CONDITIONS OF LENDING   8.1 Loans. The following conditions must be satisfied before the Lender shall have any obligation to make Loans on the Closing Date under this Agreement:   (a) Performance. Borrower shall have performed and complied with all agreements and conditions required to be performed or complied with by it prior to or at the time each Loan is made.   (b) Opinion of Counsel. As of the Closing Date, the Credit Parties shall have delivered a favorable opinion of their counsel, in form and substance   (c) Documents to be Delivered. Borrower shall have executed and delivered or have caused to be executed and delivered to the Lender all Loan Documents in form and substance satisfactory to Lender, and all Loan Documents shall be in   (d) Certified Resolutions. As of the Closing Date the Borrower and Guarantors shall have delivered a certificate of their respective corporate secretaries certifying (i) resolutions duly adopted by their respective Boards of Directors authorizing the execution, delivery and performance of the Loan Documents to which each is a party and the consummation of the transactions contemplated hereby and thereby, as applicable, which resolutions shall remain in full force and effect so long as any of the Obligations are outstanding or the Commitment has not been terminated, (ii) true and complete copies of their respective Certificates of Incorporation and By-Laws and (iii) the incumbency of their respective officers authorized to execute, deliver and perform this Agreement or the Loan Documents, as applicable.   (e) Fees and Taxes. Borrower shall have paid all filing fees, taxes, and assessments related to the borrowings and the perfection of any interests in collateral security required hereunder.   (f) Insurance. Borrower shall have delivered evidence satisfactory to the Lender of the existence of insurance required hereby.   (g) Other Documents and Agreements. On or before the date of this Agreement, the Borrower shall have executed and/or delivered such other documents, instruments, and agreements as the Lender and its legal counsel may reasonably require in connection with the transactions contemplated hereby.   (h) Certificates of Good Standing; Searches. As of the Closing Date, Borrower shall have delivered to the Lender (a) certificates of good standing from appropriate state officials to the effect that Borrower and each Guarantor is in good standing in the respective states of their incorporation as well as in all other states in which qualification is necessary to carry on their businesses as presently conducted and (b) UCC, judgment, bankruptcy and tax searches covering Borrower and each Guarantor in all jurisdictions deemed necessary by the Lender, the results of all of which shall be satisfactory to the Lender in all respects.   33   (i) Representations. The representations and warranties of the Credit Parties contained herein shall be true and correct in all material respects.   (j) Consents and Approvals. The Lender shall have received evidence of receipt of all governmental, shareholder and other, if any, consents and approvals necessary in connection with the related financings and other transactions contemplated under this Agreement, except where the failure to obtain such consents or approvals would not, individually or in the aggregate, have a Material Adverse Effect.   (k) Litigation. The Lender shall have been informed of any suit, investigation or proceeding pending in any court or before any arbitrator or governmental authority that would reasonably be expected either to have a Material Adverse Effect or to materially adversely affect the ability of any of the Credit Parties to perform its respective obligations under this Agreement, and no such suits, investigations, or proceedings shall be pending.   (l) Patriot Act. To the extent applicable, each Credit Party is in compliance, in all material respects, with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001). To the knowledge of the Borrower, no part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.   (m) Minimum Borrowing Capacity. The Lender shall have received evidence satisfactory to it that Borrower has at least $2,000,000 of remaining availability under the Borrowing Base after the Revolving Credit Loans to be made on the Closing Date.   (n) Landlord Waivers. The Lender shall have received a waiver in form and substance satisfactory to Lender from each landlord of premises on which the Lender’s collateral is located and that is not owned by a Credit Party.   (o) Val-U-Tech, Inc.. On or before the Closing Date, the Lender shall have received final audited financial statements for Val-U-Tech Corp. for the fiscal year ended December 31, 2007, showing no material changes from Val-U-Tech Corp. internally prepared financial statements previously delivered to Lender. The Lender shall have reviewed and approved the final form, substance, terms, and conditions of the Val-U-Tech Transaction, including the Lender’s review and satisfaction with the proposed organizational and legal structure, tax assumptions, final projections, purchase allocation, accounting, due diligence, legal opinions, and other related matters. The Lender shall have received evidence satisfactory to it that (i) a minimum of $1,000,000 in value of Borrower stock shall have been delivered to fund purchase price in the Val-U-Tech Transaction, and (ii) the Val-U-Tech Subordinated Debt as of the Closing Date does not exceed a maximum principal amount of $3,500,000, and has been subordinated to the Obligations in form satisfactory to the Lender.   34   (p) Field Audit. On or before the Closing Date, the Lender shall have received the results of a field audit of the Credit Parties’ assets and operations performed at Borrower’s expense, the results of which must be satisfactory to Lender.   8.2 Subsequent Loans and Letters of Credit. The obligation of the Lender to make any Revolving Credit Loans or Equipment Line Loans shall at all times be subject to the following continuing conditions:   (a) Representations and Warranties. The representations and warranties of the Credit Parties contained herein shall be true and correct in all material respects as of the date of making of each such advance (except those which are specific as to a date certain), with the same effect as if made on and as of such date.   (b) No Material Adverse Effect. Since the date of this Agreement, there has been no Material Adverse Effect.   (c) No Defaults. There shall exist no Default or Event of Default at the time each Loan is to be made.   8.3 Notice of Borrowing Representation. Each Notice of Borrowing given by a Borrower in accordance with Section 2.3 and 5.2 hereof and the acceptance by Borrower of the proceeds of a Revolving Credit Loan and/or Equipment Line Loan shall constitute a representation and warranty by the Borrower, made as of the time of the making of such Loan, that the conditions specified in Sections 8.1 and 8.2 have been fulfilled as of such time.   ARTICLE IX - AFFIRMATIVE COVENANTS OF BORROWER   So long as any Obligations shall be outstanding or this Agreement remains in effect, unless the Lender otherwise consents in writing, the Credit Parties shall:   9.1 Financial Statements; Other Information.   (a) Furnish to the Lender as soon as available, but in no event later than ninety (90) days after the close of each Fiscal Year in which this Agreement remains in effect, copies of annual consolidated financial statements of the Borrower in reasonable detail satisfactory to the Lender prepared in accordance with GAAP on a consistent basis audited by and with an unqualified opinion from an independent certified public accountant satisfactory to the Lender. Said financial statements shall include at least a consolidated and consolidating balance sheet and consolidated and consolidating statements of operations, stockholder’s equity and cash flow, and shall be accompanied by a copy of any management letter prepared by such accountants. Such financial statements shall be accompanied by a certificate of the Chief Financial Officer of Borrower to the effect that no Event of Default or Default has occurred.   35     (b) Furnish to the Lender unaudited financial statements not more than forty-five (45) days after the close of each Fiscal Quarter. Said statements shall be in reasonable detail satisfactory to the Lender, shall be prepared in accordance with GAAP, shall include at least a consolidated and consolidating balance sheet and a consolidated and consolidating statements of operations, stockholder’s equity and cash flow. Said financial statements shall be certified to be true and correct to the best knowledge of the Chief Financial Officer of Borrower. Such financial statements shall be accompanied by a certificate of the Chief Financial Officer of Borrower to the effect that no Event of Default or Default has occurred.   (c) Furnish to the Lender unaudited financial statements not more than forty-five (45) days after the close of each Fiscal Month. Said statements shall Default has occurred.   (d) Provide to the Lender weekly borrowing base reports (“Borrowing Base Reports”), in substantially the form of Exhibit G attached hereto, each accompanied by an accounts receivable aging, accounts payable aging, and inventory report. After giving thirty (30) days prior notice to Lender, Borrower may provide Borrowing Base Reports on a monthly rather than weekly basis; provided, however, at any time the unused availability under the Borrowing Base is less than $1,000,000, weekly Borrowing Base Reports must be provided.   (e) Provide to the Lender an annual operating budget with assumptions, in detail reasonably satisfactory to Lender, within thirty (30) days after the end of each Fiscal Year of Borrower.   (f) Permit the Lender to perform full field audits of the Credit Parties’ accounts receivable and inventories at Borrower’s expense; provided, however, prior to an Event of Default (i) any additional audit after one such audit during each of Borrower’s Fiscal Years shall be at the Lender’s expense, and (ii) Borrower’s expense shall not to exceed $7,000 per audit, plus disbursements and out-of-pocket expenses.    (g) Furnish to the Lender such additional information, reports, or financial statements as the Lender may, from time to time, reasonably request, including, without limitation, lists of vendors and suppliers and information necessary to monitor Revolving Loans.   (h) Permit any Person designated by the Lender to inspect the property, assets and books of the Credit Parties at reasonable times and, prior to an Event of Default, upon reasonable notice, and shall discuss their affairs, finances and accounts at reasonable times with the Lender from time to time as often as may be reasonably requested.   (i) Notify the Lender promptly upon addition of any new location at which it conducts business or maintains assets, and of any new warehousing or distributorship agreement.   36   (j) Report immediately to the Lender in writing upon becoming aware of any noncompliance with any covenant in this Agreement or any Default, including without limitation becoming aware of any noncompliance with Article XI in advance of the date on which the corresponding quarterly financial statements are due to be delivered to the Lender.   9.2 SEC Reports. Furnish to the Lender, as applicable, copies of all proxy statements, financial statements and reports which Borrower sends to its stockholders, and copies of all regular, periodic and current reports, and all comment letters and responses thereto, which Borrower files with the Securities and Exchange Commission (“SEC”) or any governmental authority which may be substituted therefore, or with any national securities exchange; provided, however, in lieu of such copies Borrower may advise Lender in writing (including by fax of email) that any such proxy statement, financial statement and report, as the case may be, is available on the SEC’s Edgar database.   9.3 Taxes. Pay and discharge all taxes, assessments, levies and governmental charges upon the Credit Parties, their income and property, prior to the date on which penalties are attached thereto; provided, however, that the Credit Parties may in good faith contest any such taxes, assessments, levies or charges so long as such contest is diligently pursued and no lien or execution exists or is levied against any of the Credit Parties’ assets related to the contested items.   9.4 Insurance. Maintain or cause to be maintained insurance, of kinds and in amounts reasonably satisfactory to the Lender, with responsible insurance companies on all of the Credit Parties’ real and personal properties in such amounts and against such risks as are prudent, including, but not limited to, full-risk extended coverage hazard insurance to the full insurable value of real property (co-insurance not being permitted without the prior written consent of the Lender), all-risk coverage for personal property, business interruption or loss of rents coverage, worker’s compensation insurance, and comprehensive general liability and products liability insurance. The Credit Parties also shall maintain flood insurance covering any real properties located in flood zones. The Credit Parties shall provide to the Lender, no less often than annually and upon its request, a detailed list and evidence satisfactory to the Lender of their insurance carriers and coverage and shall obtain such additional insurance as the Lender may reasonably request. Insurance policies shall name the Lender as additional insured, as its interests may appear, and all policies shall provide for at least thirty (30) days prior notice of cancellation to the Lender.   9.5 Maintenance of Business Assets. At all times maintain, preserve, protect, and keep the Credit Parties’ assets in good repair, working order, and condition and, from time to time, make all needful and proper repairs, renewals, replacements, betterments and improvements thereto, so that the business of the Credit Parties may be properly and advantageously conducted at all times and the value of the Lender’s collateral shall be preserved.   9.6 Material Changes, Judgments. Notify the Lender promptly of any material adverse change in the financial condition of any of the Credit Parties, and of any event, circumstance, or condition that has had or could reasonably be expected to have a Material Adverse Effect, including the filing of any suits, judgments or liens which, if adversely determined, could reasonably be expected   37   9.7 ERISA Compliance. Comply in all material respects with the provisions of ERISA and regulations and interpretations related thereto with respect to all of the Credit Parties’ Plans.   9.8 Franchises; Permits; Laws. Preserve and keep in full force and effect the existence of the Credit Parties and all franchises, permits, licenses and other authority as are necessary to enable them to conduct their businesses as being conducted on the date of this Agreement, and comply in all material respects with all laws, regulations and requirements now in effect or hereafter promulgated by any properly constituted governmental authority having jurisdiction over them.   9.9 Performance of Obligations. The Borrower will, and will cause each of the Credit Parties to, perform all of its obligations under the terms of each mortgage, indenture, security agreement, loan agreement or credit agreement and each other agreement, contract or instrument by which it is bound (taking into account any grace, notice, or cure periods applicable thereto), except in each case such non-performances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.   9.10 Deposits; Bank Services. Maintain at the Lender all of the Credit Parties’ primary depository accounts, with exceptions permitted for accounts maintained for convenience in other geographical locations for the temporary deposit of receipts.   9.11 Amendments. Give the Lender prompt written notice of an amendment or modification to any of the Credit Parties’ Certificates of Incorporation or By-Laws other governing documents or agreements.   9.12 Additional Guarantors. Notify the Lender of the acquisition or creation of any new Subsidiary and cause each domestic Subsidiary created or acquired after the Closing Date to execute and deliver to the Lender a continuing guaranty, general security agreement, and other agreements in form and substance satisfactory to Lender subjecting all of the assets of the Subsidiary to the Lien held by the Lender, together with approvals and legal opinions in form and substance satisfactory to the Lender opining to the authorization, validity and enforceability of such Guaranty, and to such other matters at the Lender may reasonably request.   9.13 Further Assurances. Cooperate with the Lender and execute such further instruments and documents as the Lender shall reasonably request to carry out the transactions contemplated by this Agreement and the other Loan Documents.   ARTICLE X - NEGATIVE COVENANTS OF BORROWER   So long as any Obligations shall be outstanding, or this Agreement shall remain in effect, unless the Lender otherwise consents in writing, none of the Credit Parties shall, directly or indirectly, jointly or severally:   10.1 Debt, Mortgages and Liens. Create, incur, assume or allow to exist, voluntarily or involuntarily, any Debt or Liens, excluding only (a) Debt to and interests held by the Lender under this Agreement, (b) Debt described in Schedule 10.1 attached hereto and made a part hereof, which Debt may not be renewed, extended, amended or modified, (c) Permitted Liens, (d) Debt and interests to which the Lender consents in writing, (e) Debt of Borrower to any Guarantor or of any Guarantor to Borrower, and (f) amounts payable under or related to the Val-U-Tech Transaction.   38   10.2 Loans and Investments. Make any Investment in any Person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, except for (i) Investments in any Person that is already a Credit Party, (ii) Money Market Investments, and (iii) Investments received in connection with the bankruptcy or reorganization of suppliers and customers and in good faith settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business.   10.3 Mergers, Dissolutions; Sales and Acquisitions; Change in Ownership Interests. Except for the Val-U-Tech Transaction, enter into any partnership, joint venture, merger or consolidation, or wind up, liquidate, or dissolve its affairs, or enter into a sale-leaseback except with Lender or its affiliates, or acquire all or substantially all the Capital Securities or assets of any Person, or sell, lease, transfer, or otherwise dispose of any its assets, except, for (a) (i) dispositions of inventory in the ordinary course of business or (ii) the disposition of any asset not material to the respective Credit Party or its business and not exceeding $100,000 in value, and (b) the merger of Borrower into any Guarantor or of any Guarantor into Borrower after giving written notice to the Lender of the intended merger, so long as any security interests granted to the Lender in the assets so transferred shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such transfer) and all actions required to maintain said perfected status have been taken.   10.4 Amendments. Allow the amendment or modification of its Certificate of Incorporation, By-Laws or other governing documents and agreements in any material respect without the prior written consent of the Lender.   10.5 Distributions. Make any Distributions without the prior consent of Lender.   10.6 Material Changes. Permit any material change to be made in the character of the business of any of the Credit Parties, or in the nature of their operations as carried on at the date hereof.   10.7 Compensation. Compensate any Person, including, without limitation, salaries, bonuses, consulting fees, or otherwise, in excess of amounts reasonably related to services rendered to the Credit Parties.   10.8 Judgments. Allow to exist any judgment against any of the Credit Parties in excess of $250,000 which are not fully covered by insurance or for which an appeal or other proceeding for the review thereof shall not have been taken and for which a stay of execution pending such appeal shall not have been obtained.   10.9 Margin Securities. Not, directly or indirectly, use any part of the proceeds of the Obligations for the purpose of purchasing or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or to extend credit to any person for the purpose of purchasing or carrying any such margin stock, or for any purpose which violates, or is inconsistent with, Regulation X of such Board of Governors.   39   10.10 Subsidiaries.   (a) Form, or permit to be formed, any Subsidiary unless such Subsidiary guarantees all Obligations to the Lender, which guarantee must be secured by all of its assets pursuant to a guaranty and a security agreement in form and substance acceptable to the Lender in its sole discretion.   (b) Directly or indirectly, and will not permit any of its Subsidiaries to directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (i) make Distributions on its Capital Securities owned by the Borrower or any of its Subsidiaries, or pay any Indebtedness owed to the Borrower or any of its Subsidiaries, (ii) make loans or advances to the Borrower or any of its Subsidiaries or (iii) transfer any of its properties or assets to the Borrower or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (A) applicable law, (B) this Agreement and the other Loan Documents, (C) customary provisions restricting subletting or assignment of any lease governing any leasehold interest of the Borrower or any of its Subsidiaries, (D) customary provisions restricting assignment of any licensing agreement (in which the Borrower or any of its Subsidiaries is the licensee) or other contract entered into by the Borrower or any of its Subsidiaries in the ordinary course of business, and (E) restrictions on the transfer of any asset pending the close of the sale of such asset.   10.11 Transactions with Credit Parties. Not, and will not permit any of the Credit Parties to, enter into any transaction or series of related transactions with any Affiliate of any of the Credit Parties, other than in the ordinary course of business and on terms and conditions substantially as favorable to the Credit Party as would reasonably be obtained by the Credit Party at that time in a comparable arm’s-length transaction with a Person other than an Affiliate.   ARTICLE XI - FINANCIAL COVENANTS   effect, unless the Lender otherwise consents in writing, the Borrower shall:   11.1 Debt to EBITDARS. Maintain at all times a Debt to EBITDARS Ratio, on a consolidated basis, no greater than 3.75 to 1.00, reported at the end of each Fiscal Quarter commencing with the Fiscal Quarter ending June 30, 2008.   11.2 Minimum EBITDARS. Maintain minimum quarterly EBITDARS, on a consolidated basis, equal to or greater than $350,000, measured at the end of each Fiscal Quarter commencing with the Fiscal Quarter ending on June 30, 2009.   11.3 Fixed Charge Coverage Ratio. Maintain at all times a Fixed Charge Coverage Ratio, on a consolidated basis, equal to or greater than 1.10 to 1.00, reported at the end of each Fiscal Quarter commencing with the Fiscal Quarter ending June 30, 2008.   40   11.4 Quarterly Covenant Compliance Sheet. Provide the Quarterly Covenant Compliance Sheet to the Lender within thirty (30) days after the close of each of its Fiscal Quarters.   ARTICLE XII - ENVIRONMENTAL MATTERS; INDEMNIFICATION   12.1 Environmental Representations. Borrower represents and warrants that:   (a) Neither the Improvements nor any property adjacent to the Improvements is being or has been used for the storage, treatment, generation, transportation, processing, handling, production or disposal of any Hazardous Substance or as a landfill or other waste disposal site or for the storage of petroleum or petroleum based products except in compliance with all Environmental Laws.   (b) Underground storage tanks are not and have not been located on the Improvements except in compliance with all Environmental Laws   (c) The soil, subsoil, bedrock, surface water and groundwater of the Improvements are free of any Hazardous Substances, except as permitted by Environmental Laws.   (d) There has been no Release, nor is there the threat of a Release of any Hazardous Substance on, at or from the Improvements or any property adjacent to or within the immediate vicinity of the Improvements which through soil, subsoil, bedrock, surface water or groundwater migration could come to be located on the Improvements, and the Credit Parties have not received any form of notice or inquiry from any federal, state or local governmental agency or authority, any operator, tenant, subtenant, licensee or occupant of the Improvements or any property adjacent to or within the immediate vicinity of the Improvements or any other person with regard to a Release or the threat of a Release of any Hazardous Substance on, at or from the Improvements or any property adjacent to the Improvements.   (e) All Environmental Permits relating to the Credit Parties and the Improvements have been obtained and are in full force and effect.   (f) No event has occurred with respect to the Improvements which, with the passage of time or the giving of notice, or both, would constitute a violation of any applicable Environmental Law or non-compliance with any Environmental Permit.   (g) There are no agreements, consent orders, decrees, judgments, license or permit conditions or other orders or directives of any federal, state or local court, governmental agency or authority relating to the past, present or future ownership, use, operation, sale, transfer or conveyance of the Improvements which require any change in the present condition of the Improvements or any work, repairs, construction, containment, clean up, investigations, studies, removal or other remedial action or capital expenditures with respect to the Improvements.   (h) There are no actions, suits, claims or proceedings, pending or threatened, which could cause the incurrence of expenses or costs of any name or description or which seek money damages, injunctive relief, remedial action or any other remedy that arise out of, relate to or result from (i) a violation or alleged violation of any applicable Environmental Law or noncompliance or alleged non-compliance with any Environmental Permit, (ii) the presence of any Hazardous Substance or a Release or the threat of a Release of any Hazardous Substance on, at or from the Improvements or any property adjacent to or within the immediate vicinity of the Improvements or (iii) human exposure to any Hazardous Substance, noises, vibrations or nuisances of whatever kind to the extent the same arise from the condition of the Improvements or the ownership, use, operation, sale, transfer or conveyance thereof.   41   12.2 Environmental Covenants. Borrower covenants and agrees with the Lender that, until the Obligations have been fully satisfied and paid and the Commitment has been terminated, the Borrower shall:   (a) Comply with, and shall cause all operators, tenants, subtenants, licensees and occupants of the Improvements to comply with all applicable Environmental Laws and shall obtain and comply with, and shall cause all operators, tenants, subtenants, licensees and occupants of the Improvements to obtain and comply with, all Environmental Permits.   (b) Not cause or permit any change to be made in the present or intended use of the Improvements which would (i) violate any applicable Environmental Law, (ii) constitute non-compliance with any Environmental Permit or (iii) materially increase the risk of a Release of any Hazardous Substance.   (c) Promptly provide the Lender with a copy of all notifications which it gives or receives with respect to any past or present Release or the threat of a Release of any Hazardous Substance on, at or from the improvements or any   (d) Undertake and complete all investigations, studies, sampling and testing and all removal and other remedial actions required by law to contain, remove and clean up all Hazardous Substances that are determined to be present at the Improvements in accordance with all applicable Environmental Laws and all Environmental Permits.   (e) At all times upon prior notice, allow the Lender and its officers, employees, agents, representatives, contractors and subcontractors access to the Improvements for the purposes of ascertaining site conditions, including, but not limited to, subsurface conditions.   (f) Deliver promptly to the Lender: (i) copies of any documents received from the United States Environmental Protection Agency, or any state, county or municipal environmental or health agency concerning a Credit Parties’ operations or the Improvements; and (ii) copies of any documents submitted by any of the Credit Parties to the United States Environmental Protection Agency or any state, county or municipal environmental or health agency concerning its operations or the Improvements.   (g) If at any time the Lender obtains any reasonable evidence or information which suggests that a material potential environmental problem may exist at the improvements, the Lender may require that a kill or supplemental environmental inspection and audit report with respect to the Improvements of a scope and level of detail satisfactory to the Lender be prepared by an environmental engineer or other qualified person acceptable to the Lender at the Borrower’s expense. Such audit may include a physical inspection of the Improvements, a visual inspection of any property adjacent to or within the immediate vicinity of the Improvements, personnel interviews and a review of all Environmental Permits. If the Lender requires, such inspection shall also include a records search and/or subsurface testing for the presence of Hazardous Substances in the soil, subsoil, bedrock, surface water and/or groundwater. If such audit report indicates the presence of any Hazardous Substance or a Release or the threat of a Release of any Hazardous Substance on, at or from the Improvements, the Credit Parties shall promptly undertake and diligently pursue to completion all necessary, appropriate and legally authorized investigative, containment, removal, clean up and other remedial actions, using methods recommended by the engineer or other person who prepared said audit report and acceptable to the appropriate federal, state and local agencies or authorities.   42 12.3 Indemnity. Borrower agrees to indemnify, defend and hold harmless the Lender from and against any and all liabilities, claims, damages, penalties, expenditures, losses or charges, including, but not limited to, all costs of investigation, monitoring, legal representation, remedial response, removal, restoration or permit acquisition of any kind whatsoever, which may now or in the future be undertaken, suffered, paid, awarded, assessed, or otherwise incurred by the Lender (or any other Person affiliated with the Lender or representing or acting for the Lender or at the Lender’s behest, or with a claim on the Lender or to whom the Lender has liability or responsibility of any sort related to this Section 12.3) relating to, resulting from or arising out of (a) the use of the Improvements for the storage, treatment, generation, transportation, processing, handling, production or disposal of any Hazardous Substance or as a landfill or other waste disposal site, (b) the presence of any Hazardous Substance or a Release or the threat of a Release of any Hazardous Substance on, at or from the Improvements, (c) the failure to promptly undertake and diligently pursue to completion all necessary, appropriate and legally authorized investigative, containment, removal, clean up and other remedial actions with respect to a Release or the threat of a Release of any Hazardous Substance on, at or from the Improvements, (d) human exposure to any Hazardous Substance, noises, vibrations or nuisances of whatever kind to the extent the same arise from the condition of the Improvements or the ownership, use, operation, sale, transfer or conveyance thereof, (e) a violation of any applicable Environmental Law, (f) non-compliance with any Environmental Permit or (g) a material misrepresentation or inaccuracy in any representation or warranty or a material breach of or failure to perform any covenant made by Borrower in this Agreement. Such costs or other liabilities incurred by the Lender, or other Person described in this Section 12.3 shall be deemed to include, without limitation, any sums which the Lender deems it necessary or desirable to expend to protect the Lender’s security interests and liens.   12.4 No Limitation. The liability of the Borrower under this Article XII shall in no way be limited, abridged, impaired or otherwise affected by (a) any amendment or modification of this Agreement or any other document relating to the Obligations by or for the benefit of the Credit Parties or any subsequent owner of the Improvements except for an amendment or modification which expressly refers to this Article XII, (b) any extensions of time for payment or performance required by this Agreement or any other document relating to the Obligations, (c) the release of any of the Credit Parties or any other person from the performance or observance of any of the agreements, covenants, terms or conditions contained in this Agreement or any other document relating to the Obligations by operation of law, or the Lender’s voluntary act or otherwise, (d) the invalidity or unenforceability of any of the terms or provisions of this Agreement or any other document relating to the Obligations, (e) any exculpatory provision contained in this Agreement or any other document relating to the Obligations limiting the Lender’s recourse, to property encumbered by any mortgage or to any other security or limiting the Lender’s rights to a deficiency judgment against the Borrower, (f) any applicable statute of limitations, (g) any investigation or inquiry conducted by or on behalf of the Lender or any information which the Lender may have or obtain with respect to the environmental or ecological condition of the Improvements, (h) the sale, assignment or foreclosure of any interest in collateral for the Obligations, (i) the sale, transfer or conveyance of all or part of the Improvements, (j) the dissolution and liquidation of Borrower, (k) the death or legal incapacity of any individual, (l) the release or discharge, in whole or in part, of Borrower in any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or similar proceeding, or (m) any other circumstances which might otherwise constitute a legal or equitable release or discharge of Borrower, in whole or in part.   43   12.5 Survival. Notwithstanding anything to the contrary contained herein, the liability and obligations of the Borrower under Section 12.3 shall survive the discharge, satisfaction or assignment of this Agreement and the payment in full of all of the Obligations, unless such liability and obligations are terminated with express reference to this Section 12.5.   12.6 Investigations. If Borrower defaults on any of its Obligations pursuant to this Agreement or any other Loan Document, the Lender or its designee shall have the right, upon reasonable notice to the Borrower, to enter upon the Improvements and conduct such tests, investigation and sampling, including, but not limited to, installation of monitoring wells, as shall be reasonably necessary for the Lender to determine whether any disposal of Hazardous Substances has occurred on, at or near the Improvements. The costs of all such tests, investigations and samplings shall be considered as additional Debt secured by all collateral for the Obligations and shall become immediately due and payable without notice and with interest thereon at the highest rate then borne by any of the Obligations.   12.7 No Warranty Regarding Information. Borrower agrees that the Lender shall not be liable in any way for the completeness or accuracy of any Environmental Report or the information contained therein. The Borrower further agrees that the Lender has no duty to warn any of the Credit Parties or any other Person about any actual or potential environmental contamination or other problem that may have become apparent or will become apparent to the Lender.   ARTICLE XIII - DEFAULTS   13.1 Defaults. The following events (hereinafter called “Events of Default”) shall constitute defaults under this Agreement:   (a) Nonpayment. Failure of Borrower to make any payment of any type under the terms of this Agreement, any of the Notes, or of any of the Loan Documents, within ten (10) days after the same becomes due and payable, except that there shall be no ten (10) day grace period for the Borrower’s obligation to reduce the principal balance of the Revolving Credit Facility if the outstanding principal balance of the Revolving Credit Facility exceeds the Revolving Credit Commitment or the Borrowing Base under Sections 2.1 and 2.2 of this Agreement.   44   (b) Performance. Failure of any of the Credit Parties to observe or perform, as applicable,    (i) any of the financial covenants in Article XI of this Agreement,    (ii) Sections 9.1(a), 9.1(b), 9.1(c), 9.1(d), and 9.4,   (iii) Sections 9.1(f), 9.1(j) 9.6, and 9.12 within ten days after the date on which performance was required, or   (iv) any condition, covenant or term of this Agreement or any Loan Document not covered by Section 13.1(a), Section 13.1(b)(i), Section 13.1(b)(ii), or Section (iii) which is not cured within thirty (30) days after notice of such failure is sent by the Lender, and provided that during such thirty (30) day period the Credit Parties are diligently and in good faith curing such failure.   (c) Other Obligations to Lender. Failure of any Credit Party to observe or perform any condition or covenant of any other agreement or instrument with the Lender, or any of its affiliates not covered by Section 13.1(a) or Section 13.1(b) after any applicable cure or grace period related thereto.   (d) Obligations to Third Parties. Default by any Credit Party under:   (i) any agreement or instrument involving Debt in excess of $100,000 (except as covered by Section 13.1(a), Section 13.1(b), or Section 13.1(c)) unless and so long as such default is being contested reasonably diligently and in good faith and no judgment has been taken against the respective Credit Party or restraint, levy, or similar action with respect to any assets of the Credit Party has occurred, or   (ii) any other agreement with any third Person, which is not terminable on thirty (30) days or less notice, or provides for payment of consideration of more than $100,000 by any party thereafter unless and so long as such default is being contested reasonably diligently and in good faith.   (e) Representations. Failure of any representation or warranty made by any Credit Party in connection with the execution and performance of any Loan Document or any certificate of officers pursuant thereto, to be truthful, accurate or correct in all material respects; provided such failure in the case of representations and warranties specific as to a date certain must be as of such date certain.   (f) Financial Difficulties. Financial difficulties of any Credit Party as evidenced by:   (i) any admission in writing of inability to pay debts as they become due; or   45   (ii) immediately upon the filing of a voluntary, or sixty (60) days after a filing of an involuntary, petition in bankruptcy, or under any chapters of the Bankruptcy Code, or under any federal or state statute providing for the relief of debtors unless, in the case of the filing of an involuntary petition, it is dismissed within such sixty (60) day period; or   (iii) making an assignment for the benefit of creditors; or   (iv) consenting to the appointment of a trustee or receiver for all or a major part of any of its property; or   (v) the entry of a court order appointing a receiver or a trustee for all or a major part of its property which is not bonded, discharged or stayed within sixty (60) days;   (vi) the occurrence of any event, action, or transaction that could give rise to a lien or encumbrance on the assets of any Credit Party as a result of application of relevant provisions of ERISA; or   (vii) the occurrence of any Forfeiture Action.   (g) The occurrence of a Change in Control.   (h) Security Documents. Any Credit Party, as signatory under any of the Security Documents, shall cause at any time or if for any reason the Security Documents to: (i) cease to create a valid and perfected Lien in and to the property purported to be subject to the same for any reason other than the failure of the secured parties thereunder to continue any UCC financing statement, or (ii) cease to be in full force and effect or shall be declared null and void, or (iii) the validity or enforceability of any Security Document shall be contested by any party thereto or any party thereto shall deny it has any further liability or obligations to the secured parties thereunder.   (i) ERISA. Any event occurs or condition exists which, with notice or lapse of time or both, would make any Plan of any Credit Party subject to termination under subsections (1), (2) and (3) of Section 4042(a) of ERISA, or any Credit Party or any of their respective plan administrators shall have received notice from the PBGC indicating that it has made a determination that any Plan of any Credit Party is subject to termination under Section 4042(a)(4) of ERISA, or any Credit Party is subject to employer’s liability under Section 4062, 4063, or 4064 of ERISA, in each case under ERISA as now or hereafter amended.   (j) Government Contracts. Any notice of debarment, notice of suspension or termination for default shall have been issued under any government contract, or (ii) any of the Credit Parties is debarred or suspended from contracting with any part of the United States Government or any state, local or foreign government, or (iii) a United States Government or any state, local or foreign government investigation shall have resulted in criminal or civil liability, suspension, debarment or any other adverse administrative action arising by reason of alleged fraud, willful misconduct, neglect, default or other wrongdoing, or (iv) the actual termination of any government contract due to alleged fraud, willful misconduct, neglect, default or any other wrongdoing and the effect of any of the foregoing events, either individually or in the aggregate, has had, or could reasonably be expected to have, a Material Adverse Effect.   46   13.2 Remedies.   (a) If any one or more Events of Default listed in Section 13.1(f)(i)-(vi) occur, (a) the Commitment and any further commitments or obligations of the Lender shall be deemed to be automatically and without need for further action terminated, and (b) all Obligations of the Borrower to the Lender, automatically and without need for further action, shall become forthwith due and payable without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived. If any one or more Events of Default other than those listed in Section 13.1(f)(i)-(vi) occur, the Lender may, at its option, take either or both of the following actions at the same or different times: (i) terminate the Commitment and any further commitments or obligations of the Lender, and (ii) declare all Obligations of the Borrower to the Lender, automatically and without need for further action, to be forthwith due and payable without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived.   (b) In case any such Events of Default shall occur, the Lender shall be entitled to recover judgment against the Borrower for all Obligations of the Borrower to the Lender either before, or after, or during the pendency of any proceedings for the enforcement, of any Security Document and, in the event of realization of any funds from any security or guarantee and application thereof to the payment of the Obligations due, the Lender shall be entitled to enforce payment of and recover judgment for all amounts remaining due and unpaid on such Obligations.   (c) The Lender shall be entitled to exercise any other legal or equitable right which it may have, and may proceed to protect and enforce its rights by any other appropriate proceedings, including action for the specific performance of any covenant or agreement contained in this Agreement and the Loan Documents.   ARTICLE XIV - MISCELLANEOUS   14.1 Waiver. No delay or failure of the Lender to exercise any right, remedy, power or privilege hereunder shall impair the same or be construed to be a waiver of the same or of any Event of Default or an acquiescence therein. No single or partial exercise of any right, remedy, power or privilege shall preclude other or further exercise thereof by the Lender. All rights, remedies, powers, and privileges herein conferred upon the Lender shall be deemed cumulative and not exclusive of any others available.   14.2 Survival of Representations. All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the execution and delivery of other agreements hereunder.   14.3 Additional Security; Setoff. The Lender shall have a security interest in and right of setoff with respect to all deposits or other sums credited by or due from the Lender to Borrower and a security interest in all securities or other property of Borrower in any of the Lender’s possession for safekeeping or otherwise. The Lender’s security interest shall secure payment of the Obligations. In the event of any Event of Default under this Agreement, regardless of the adequacy of collateral, without any demand or notice, except as required by applicable law, any Lender may apply or setoff such deposits or other sums and may sell or dispose of any or all of such securities or other property and may exercise any and all rights it may have under the New York Uniform Commercial Code, as in effect from time to time. The rights of the Lender under this Agreement are in addition to, and not exclusive of, any other rights it may have with respect to such deposits, sums, securities, or other property under other agreements or applicable principles of law. The Lender shall have no duty to take steps to preserve rights against prior parties as to such securities or other property.   47   14.4 Notices. Any notice or demand upon any party hereto shall be deemed to have been sufficiently given or served for all purposes hereof when delivered in person, the Business Day after delivery to a nationally recognized overnight courier marked for next Business Day delivery, or three (3) Business Days after it is mailed certified mail postage prepaid, return receipt requested, addressed as follows:   If to Lender:   Manufacturers and Traders Trust Company 255 East Avenue Rochester, New York 14604 Attention: J. Theodore Smith/Brett Rawlings Facsimile: (585) 325-5105     Harris Beach PLLC 99 Garnsey Road Pittsford, New York 14534 Attention: Beth Ela Wilkens, Esq. Facsimile: (585) 419-8818 If to Borrower:   IEC Electronics Corp. 105 Norton Street Newark, New York 14513 Attention: W. Barry Gilbert, CEO                   Michael Schlehr, CFO   Boylan Brown Code Vigdor & Wilson 2400 Chase Square Attention: Robert F. Mechur, Esq. Facsimile: (585) 232-3528 48   Any party may change, by notice in writing to the other parties, the address to which notices to it shall be sent.   14.5 Entire Agreement. This Agreement and the Loan Documents embody the entire agreement and understanding among the parties and supersede all prior agreements and understandings relating to the subject mailer hereof. This Agreement shall not be changed or amended without the written agreement of all parties hereto. This Agreement embodies all commitments to lend between the Lender and the Borrower and supersedes any prior commitments.   14.6 Parties in Interest.   (a) All the terms and provisions of this Agreement shall inure to the benefit of and be binding upon and be enforceable by the parties and their respective successors and assigns and shall inure to the benefit of and be enforceable by any holder of any of the Notes. Upon any transfer of any Obligation or any interest therein any Lender may deliver or otherwise transfer or assign to the holder any collateral or guarantees for the Obligation, which holder shall thereupon have all the rights of the Lender.   (b) The rights, remedies, and benefits of and in favor of the Lender under this Agreement shall inure to the benefit of, and be enforceable by, any or all of the Lender and each of its affiliates.   14.7 Indemnity. Nothing in this Section 14.7 shall be deemed or shall be construed to relieve or release the Lender from any liability for breach of contract arising from any failure by the Lender to perform its contractual obligations hereunder. The Borrower shall indemnify and hold harmless the Lender and its affiliates, directors, officers, employees, agents, and representatives from and against any and all claims, damages, liabilities, and expenses that may be incurred by or asserted against such indemnified party in connection with the Loan Documents and the transactions contemplated thereby including in connection with the investigation of, preparation for, or defense of any pending or threatened claim, action, or proceeding; provided, however, that the Borrower shall not be liable to any indemnified party for such claims, damages, liabilities, and expenses resulting from such indemnified party’s own gross negligence or willful misconduct.   14.8 Usury. The Loan Documents are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration or maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to Lender for the use or the forbearance of the indebtedness evidenced hereby exceed the maximum permissible under applicable law. As used in this Section 14.8, the term “applicable law” shall mean the law in effect as of the date hereof, provided, however that in the event there is a change in the law which results in a higher permissible rate of interest, then the Loan Documents shall be governed by such new law as of its effective date. If, under or from any circumstances whatsoever, fulfillment of any provision hereof or of any of the Loan Documents at the time performance of such provision shall be due, shall involve transcending the limit of such validity prescribed by applicable law, then the obligation to be fulfilled shall automatically be reduced to the limits of such validity, and if under or from any circumstances whatsoever the Lender should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the principal balance evidenced hereby and not to the payment of interest. This provision shall control every other provision of all Loan Documents.   49   14.9 Severability. In the event that anyone or more of the provisions contained in this Agreement or any other Loan Document shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or such other Loan Document.   14.10 Governing Law. This Agreement and the Loan Documents, together with all of the rights and obligations of the parties hereto, shall be construed, governed and enforced in accordance with the laws of the State of New York, without giving effect to the principles of conflict of laws thereof.   14.11 Electronic Communications. Borrowing base and compliance certificates submitted to the Lender electronically by a representative of the Borrower shall be deemed to have been submitted and signed by the representative sending the electronic communication.   14.12 Patriot Act. The Lender hereby notifies the Credit Parties that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 signed into law October 26, 2001 and for purposes of this Section 14.12 called the “Act”), it is required to obtain, verify, and record information that identifies the Credit Parties, which information includes the name and address of the Credit Parties and other information that will allow the Lender to identify the Credit Parties in accordance with the Act.   14.13 Counterparts. This Agreement may be executed in any number of agreement, and any party hereto may execute this Agreement by signing any such counterpart.   14.14 Survival. All indemnities set forth herein shall survive the execution, delivery, and termination of this Agreement and the Loan Documents and the making and repayment of the Obligations.   14.15 Jurisdiction. Borrower hereby irrevocably and unconditionally consents to jurisdiction and service of process, which may be effected by certified mail in accordance with the certified mail provisions contained in Section 14.4, in the Supreme Court of the State of New York sifting in Monroe County, or of the United States District Court for the Western District of New York. Borrower hereby irrevocably and unconditionally waives any objection it may have to the laying of venue of any such action, suit or proceeding in any such court referred to in this Section 14.15. Borrower hereby irrevocably waives the defense of an inconvenient forum to the maintenance of any such action, suit or proceeding in any such court.   14.16 Waiver of Trial by Jury. BORROWER WAIVES TRIAL BY JURY OF ANY CLAIMS OR PROCEEDINGS WITH RESPECT TO THIS AGREEMENT, THE LOAN DOCUMENTS, THE OBLIGATIONS AND ALL MATTERS RELATED HERETO TO THE FULLEST EXTENT ALLOWED BY LAW.   50   IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives by their signatures below.     51   MANUFACTURERS AND TRADERS TRUST COMPANY,   By:      Brett W. Rawlings   Assistant Vice President   52   IEC ELECTRONICS CORP.     By:     W. Barry Gilbert   Chief Executive Officer   53   EXHIBIT A FORM OF MONTHLY COVENANT COMPLIANCE CERTIFICATE   IEC ELECTRONICS CORP. FINANCIAL COVENANT CALCULATION   As of ______________:   Credit Agreement Section   Covenant   Calculation as of Above Date   Compliance (Yes/No)   Requirement                   Section 11.1   Debt to EBITDARS   _____ to 1.0       No greater than 3.75:1.00                   Section 11.2   Minimum Quarterly EBITDARS   $___________       At least $350,000                   Section 11.3   Fixed Charge Coverage Ratio   _____ to 1.0       At least 1.10:1.00   I hereby certify that (i) the above calculations are correct and accurately reflect the consolidated financial condition of the Borrower as of the date shown above, and (ii) No Default or Event of Default has occurred under the Credit Facility Agreement dated as of May 30, 2008 (if and as the same has been amended).          As Chief Financial Officer of IEC ELECTRONICS CORP.   54 EXHIBIT B FORM OF REVOLVING CREDIT NOTE   REVOLVING CREDIT NOTE   $9,000,000 May 30, 2008   IEC ELECTRONICS CORP. (“Borrower”), a corporation organized under the laws of Delaware, for value received, hereby promises to pay to the order of MANUFACTURERS AND TRADERS TRUST COMPANY (“Lender”) the principal sum of Nine Million Dollars ($9,000,000) or, if less, the amount of the Revolving Credit Loans loaned by the Lender to Borrower pursuant to the Agreement referred to below, in lawful money of the United States of America and in immediately available funds on the date(s) and in the manner provided in said Agreement and with a final payment on the Termination Date. Borrower also promises to pay interest on the unpaid principal balance hereof, for the period such balance is outstanding, in like money, at the rates of interest as provided in the Agreement described below, on the date(s) and in the manner provided in said Agreement.   The date and amount of each Revolving Credit Loan made by the Lender to the Borrower under the Agreement referred to below, maturity date and each payment of principal thereof, shall be recorded by the Lender on its books. The Lender’s records shall be presumed to be accurate absent manifest error.   This is the Revolving Credit Note referred to in that certain Credit Facility Agreement (as amended from time to time, the “Agreement”) dated as of May 30, 2008, made among Borrower and Lender, and evidences the Revolving Credit Loans made thereunder. All capitalized terms not defined herein shall have the meanings given to them in the Agreement.   Borrower waives presentment, notice of dishonor, protest and any other notice or formality with respect to this Revolving Credit Note.   This Revolving Credit Note shall be governed by the laws of the State of New York.   IEC ELECTRONICS CORP.     By:     Title:     55 EXHIBIT C FORM OF TERM LOAN NOTE   TERM LOAN NOTE   $1,700,000 May 30, 2008   MANUFACTURERS AND TRADERS TRUST COMPANY (“Lender”) the principal sum of One Million Seven Hundred Thousand Dollars ($1,700,000), in lawful money of the United States of America and in immediately available funds in consecutive installments of principal on the first day of each month in the amount of $28,334 each. The entire unpaid principal amount of this Term Loan Note shall be due and payable on the Term Loan Maturity Date. Borrower also promises to pay Agreement.   This is the Term Loan Note referred to in that certain Credit Facility Agreement (as amended from time to time, the “Agreement”) dated as of May 30, 2008, made among Borrower and Lender, and evidences the Term Loan made thereunder. All capitalized terms not defined herein shall have the meanings given to them in the Agreement.   formality with respect to this Term Loan Note.   This Term Loan Note shall be governed by the laws of the State of New York.   IEC ELECTRONICS CORP.     By:     Title:     56 EXHIBIT D FORM OF ENERGY LOAN NOTE WITH RIDER   See attached   57 EXHIBIT E FORM OF EQUIPMENT LINE NOTE   EQUIPMENT LINE NOTE   $________________   _________________, 20__   __________________ Dollars ($_____________), in lawful money of the United States of America and in immediately available funds in consecutive installments of principal on the first day of each month in the amount of $__________ each. The entire unpaid principal amount of the Equipment Line Loan evidenced hereby shall be due and payable on the Termination Date. Borrower also promises to pay Agreement. The initial interest rate hereunder shall be [the Base Rate plus Applicable Margin/the LIBOR Rate for a LIBOR Interest Period of _______ months plus Applicable Margin/the Fixed Rate of ________% per annum for a period of _________.   This is an Equipment Line Note referred to in that certain Credit Facility 2008, made among Borrower and Lender, and evidences an Equipment Line Loan made thereunder. All capitalized terms not defined herein shall have the meanings given to them in the Agreement.       [The Linked Deposit Program Rider attached to this Equipment Line Note is incorporated herein by reference.]   IEC ELECTRONICS CORP.     By:     Title:     58 EXHIBIT F FORM OF LINKED DEPOSIT PROGRAM RIDER   LINKED DEPOSIT PROGRAM RIDER   THIS RIDER is made as _______________, 20___ by IEC ELECTRONICS CORP. (“Borrower”) in favor of Manufacturers and Traders Trust Company (“Lender”) in connection with and as an addendum to the Equipment Line Note dated on even date herewith in the original principal amount of $_____________ (‘Note”). Unless otherwise defined herein, all capitalized terms used herein shall have the meanings as set forth in the Note and the Agreement referenced therein. To the extent that the terms of this Rider are inconsistent with other terms in the Note, the terms of this Rider shall control.   Definitions.   “Adjusted Rate” shall mean on any given day the rate selected by the Borrower pursuant to Section 5.1 of the Agreement as in effect on the Closing Date, or any successor section thereto.   “Program Rate” shall mean the rate equal to _____ percentage points below the initial Fixed Rate applicable to the Note.   “Reset Date” shall mean:   o Not Applicable (the Note is to mature without a Reset Date.)   o the date _____ months from the date of the Note (which under no circumstances shall be more than forty-eight (48) months from the date of this Note).   Interest.   The unpaid principal of this Note shall earn interest from and including the date the proceeds of this Note are disbursed, to, but not including, the earlier of the Reset Date (if applicable) or the final maturity date of the Note, at a rate per year (“Interest Rate”) which shall on each day be the Program Rate; provided, however, the applicable Interest Rate prior to the earlier of the Reset Date (if applicable) or the final maturity date of the Note shall automatically and immediately (without further notice to Borrower) be adjusted to the Base Rate plus Applicable Margin if (i) the Lender terminates its participation in the Linked Deposit Program, (ii) the Linked Deposit Program is canceled or otherwise terminated, (iii) Borrower’s right to participate in the Linked Deposit Program is canceled, revoked or is otherwise not authorized, or (iv) all requirements of the Linked Deposit Program have not been satisfied (as determined by the Lender in its discretion) with respect to the Loan evidenced by the Note. Under any of the above scenarios, the Lender reserves the right to charge Borrower for the amount of any interest that would have accrued, or other amounts that would otherwise have been due to the Lender, if the Base Rate had been in effect from the date the proceeds of the Note were disbursed, and the Lender will waive any applicable Prepayment Premium.   59 [From and including the Reset Date (if applicable), to, but not including the date all amounts hereunder are paid in full, the applicable Interest Rate shall be the Adjusted Rate.]   Recalculation of Principal and Interest Installments.   To the extent (if at all) that the Note contemplates repayment by Borrower in consecutive level installments of principal and interest over the term of the Note until the Maturity Date, the amount of each installment of principal and interest due and payable under the Note may be adjusted by the Lender at any time to account for any change in the applicable Interest Rate as described herein. Absent manifest error, the Lender’s calculation of the adjustment and determination of the ongoing installment amounts shall be conclusive of the amounts due and payable by Borrower. Any such adjustment may affect the amount of the final installment of principal due at the final maturity date of the Note.   IEC ELECTRONICS CORP.     By:     Title:     60 EXHIBIT G FORM OF BORROWING BASE REPORT   See attached   61 SCHEDULE 1.1(a) PERMITTED LIENS   None   62   SCHEDULE 1.1(b) SECURITY DOCUMENTS   General Security Agreement   Negative Pledge Agreement   Pledge Agreement   Trademark Security Agreement   Copyright Security Agreement   63 SCHEDULE 7.1 CREDIT PARTIES; JURISDICTIONS   Credit Party Name   Jurisdiction of Formation   Jurisdictions of Qualification           IEC Electronics Corp.   Delaware   New York           Val-U-Tech Corp.   New York   None   64   SCHEDULE 7.6 LITIGATION   On August 13, 2003 General Electric Company (“GE”) commenced an action in the State of Connecticut against IEC and Vishay Intertechnology, Inc. (“Vishay”). The action alleges cause of action for breach of a manufacturing services contract, which had an initial value of $4.4 million, breach of express warranty, breach of implied warranty, and a violation of the Connecticut unfair trade practices act. Vishay supplied a component that IEC used to assemble printed circuit boards for GE that GE contends failed to function properly requiring a product recall. GE claims damages “in excess of $15,000” plus interest and attorney’s fees. IEC and Vishay are proceeding to defend GE’s Connecticut action on the merits and IEC is proceeding with a cross claim against Vishay. IEC filed a motion for summary judgment directed to all counts. On January 11, 2007, the Court granted the motion in part, dismissing the claim for violation of the Connecticut unfair trade practices act, but determined that factual issues were disputed on the contract and warranty claims. On September 17, 2007, at a status conference, the parties agreed to a schedule for the case and it was set forth as an order of the Court. The scheduling order contemplates a trial to begin on January 5, 2010. IEC intends to vigorously defend the claims and prosecute the cross claim, and is proceeding with the discovery process in accordance with the scheduling order.   65 SCHEDULE 7.14 INTELLECTUAL PROPERTY   Registered Trademarks:   1. “IEC”   Registration Number: 1646272   2. IEC Logo   Registration Number: 1650337   Registered Copyrights:   1. Type of Work: Text   Registration Number: TXu000800909   Application Title: The IEC UCW Menu System.   66 SCHEDULE 7.16 SUBSIDIARIES AND AFFILIATES   Subsidiary Name   Jurisdiction of Formation   Jurisdictions of Qualification           VUT Merger Corp.   New York   None             New York   None   67 SCHEDULE 7.18 ERISA MATTERS   IEC Electronics Corp.:   IEC Electronics Corp. 401k Plan   Employee Profit Sharing Plan   2001 Stock Option and Incentive Plan   Management Incentive Plan   Cafeteria Plan (Medical/Dental/Flex Spending)   Long Term Disability Plan   Life Insurance Plan   Val-U-Tech Corp.:   Val-U-Tech Corp. 401k Profit Sharing Plan and Trust   Val-U-Tech Corp. Section 125 Plan (Health/Dental)   68 SCHEDULE 10.1 DEBT   None   69  

Title: Is there any legal obligation to buy this vehicle after verbal agreement? Question:Car was posted on craigslist by owner. I offered $500 less than posted and she said she would get back to me. She texted back that she would accept my offer. I called her and she said that she is still waiting for the title to come in from the bank. It's been a week and the title is now en route via the USPS from Cali. The thing is, I just found a better deal. Is there a legal reason for me to buy car from her? I live in KS. Answer #1: Legally, verbal agreements are just as enforceable as written. You offered, she accepted, that's a contract. In theory, she could take you to court. Will she actually do this? No. She'll probably be frustrated and will repost it on craigslist. Answer #2: You might just have a contract. Kansas uses the Uniform Commercial Code, where a contract for goods sold for more than $500 must be in writing. Emails and text messages are writings for this purpose.

Exhibit 10.1   Published CUSIP Number:                                Dated as of March 14, 2005   among   MEDIA GENERAL, INC., as the Borrower,   as Administrative Agent, Swing Line Lender and L/C Issuer,   SUNTRUST BANK and THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH as Co-Syndication Agents,   THE BANK OF NOVA SCOTIA and THE ROYAL BANK OF SCOTLAND, PLC as Co-Documentation Agents   and   The Other Lenders Party Hereto   with   SUNTRUST BANK and BANC OF AMERICA SECURITIES LLC, as Joint Lead Arrangers   and   as Sole Book Manager   TABLE OF CONTENTS   Section         Page ARTICLE I    DEFINITIONS AND ACCOUNTING TERMS    1 1.01    Defined Terms    1 1.02    Other Interpretive Provisions    22 1.03    Accounting Terms    23 1.04    Rounding    24 1.05    Times of Day    24 1.06    Letter of Credit Amounts    24 ARTICLE II    THE COMMITMENTS AND CREDIT EXTENSIONS    24 2.01    Committed Loans    24 2.02    Borrowings, Conversions and Continuations of Committed Loans.    25 2.03    Bid Loans.    26 2.04    Letters of Credit.    29 2.05    Swing Line Loans.    37 2.06    Prepayments.    40 2.07    Termination or Reduction of Commitments    41 2.08    Repayment of Loans.    41 2.09    Interest.    41 2.10    Fees    42 2.11    Computation of Interest and Fees    43 2.12    Evidence of Debt.    43 2.13    Payments Generally; Administrative Agent’s Clawback.    44 2.14    Sharing of Payments by Lenders    45 2.15    Increase in Commitments.    46 ARTICLE III    TAXES, YIELD PROTECTION AND ILLEGALITY    48 3.01    Taxes.    48 3.02    Illegality    50 3.03    Inability to Determine Rates    50 3.04    Increased Costs; Reserves on Eurodollar Rate Loans.    50 3.05    Compensation for Losses    52 3.06    Mitigation Obligations; Replacement of Lenders.    52 3.07    Survival    53 ARTICLE IV    CONDITIONS PRECEDENT TO CREDIT EXTENSIONS    53 4.01    Conditions of Effectiveness and of Initial Credit Extension    53 4.02    Conditions to all Credit Extensions    55 ARTICLE V    REPRESENTATIONS AND WARRANTIES    55 5.01    Existence, Qualification and Power    55 5.02    Authorization; No Contravention    56 5.03    Governmental Authorization; Other Consents    56 5.04    Binding Effect    56 5.05    Financial Statements; No Material Adverse Effect; No Internal Control Event.    56 5.06    Litigation    57 5.07    No Default    57 5.08    Ownership of Property; Liens    57 5.09    Environmental Compliance    58 5.10    Insurance    58 5.11    Taxes    58 5.12    ERISA Compliance.    58 5.13    Subsidiaries; Equity Interests    59 5.14    Margin Regulations; Investment Company Act; Public Utility Holding Company Act.    59 5.15    Disclosure    59 5.16    Compliance with Laws    59 5.17    Intellectual Property; Licenses, Etc    60 5.18    Solvency    60 5.19    Labor Matters    60 ARTICLE VI    AFFIRMATIVE COVENANTS    61 6.01    Financial Statements    61 6.02    Certificates; Other Information    62 6.03    Notices    64 6.04    Payment of Obligations    65 6.05    Preservation of Existence, Etc    65 6.06    Maintenance of Properties    65 6.07    Maintenance of Insurance    65 6.08    Compliance with Laws    66 6.09    Books and Records    66 6.10    Inspection Rights    66 6.11    Use of Proceeds    66 6.12    Subsidiary Guaranty; Subsidiaries.    66 ARTICLE VII    NEGATIVE COVENANTS    67 7.01    Liens    67 7.02    Investments    68 7.03    Indebtedness    69 7.04    Fundamental Changes    70 7.05    Dispositions    71 7.06    Restricted Payments    71 7.07    Change in Nature of Business    72 7.08    Transactions with Affiliates    72 7.09    Burdensome Agreements    72 7.10    Use of Proceeds    72 7.11    Financial Covenants.    73 7.12    Sale and Leaseback    73 ARTICLE VIII    EVENTS OF DEFAULT AND REMEDIES    73 8.01    Events of Default    73 8.02    Remedies Upon Event of Default    75 8.03    Application of Funds    76 ARTICLE IX    ADMINISTRATIVE AGENT    77 9.01    Appointment and Authority.    77 9.02    Rights as a Lender    77 9.03    Exculpatory Provisions    77 9.04    Reliance by Administrative Agent    78 9.05    Delegation of Duties    78 9.06    Resignation of Administrative Agent    78 9.07    Non-Reliance on Administrative Agent and Other Lenders    79 9.08    No Other Duties, Etc    80 9.09    Administrative Agent May File Proofs of Claim    80 9.10    Guaranty Matters    80 ARTICLE X    MISCELLANEOUS    81 10.01    Amendments, Etc    81 10.02    Notices; Effectiveness; Electronic Communication.    82 10.03    No Waiver; Cumulative Remedies    84 10.04    Expenses; Indemnity; Damage Waiver.    84 10.05    Payments Set Aside    86 10.06    Successors and Assigns.    86 10.07    Treatment of Certain Information; Confidentiality    90 10.08    Right of Setoff    91 10.09    Interest Rate Limitation    92 10.10    Counterparts; Integration; Effectiveness    92 10.11    Survival of Representations and Warranties    92 10.12    Severability    92 10.13    Replacement of Lenders    92 10.14    Governing Law; Jurisdiction; Etc.    93 10.15    Waiver of Jury Trial    94 10.16    USA PATRIOT Act Notice    94 10.17    Release of Guaranty.    95 10.18    Amendment, Restatement, Extension, Renewal and Increase in Uncommitted Option    95 10.19    ENTIRE AGREEMENT    95 SIGNATURES    S-1 SCHEDULES   1.01    Existing Letters of Credit 2.01    Commitments and Applicable Percentages 5.11    Tax Sharing Agreements 5.13    Subsidiaries; Other Equity Investments 7.01    Existing Liens 7.02    Existing Investments 7.03    Existing Indebtedness 10.02    Administrative Agent’s Office; Certain Addresses for Notices 10.06    Processing and Recordation Fees   EXHIBITS        Form of A    Committed Loan Notice B-1    Bid Request B-2    Competitive Bid C    Swing Line Loan Notice D    Note E    Compliance Certificate F    Assignment and Assumption G    Guaranty H    Opinion Matters MEDIA GENERAL, INC.   $1,000,000,000 (with an Uncommitted Increase Option to $1,500,000,000)     This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of March 14, 2005, among MEDIA GENERAL, INC., a Virginia corporation, each lender from time to time party hereto, SUNTRUST BANK and THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH, as Co-Syndication Agents, THE BANK OF NOVA SCOTIA and THE ROYAL BANK OF SCOTLAND, PLC, as Co-Documentation Agents and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.   The Borrower is a party to that certain Credit Agreement dated as of June 29, 2001 among SunTrust Bank, as the documentation agent, Fleet Securities, Inc., Wachovia Bank, N.A., The Bank of Nova Scotia, and Mizuho Financial Group as the co-syndication agents and Bank of America, N.A., as the administrative agent (as amended through the date hereof, the “Existing Credit Agreement”). The Borrower has requested that the Lenders amend and restate the Existing Credit Agreement and the Lenders are willing to do so on the terms and conditions set forth herein.   In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree that when the conditions set forth in Section 4.01 hereof are satisfied, the Existing Credit Agreement shall be amended and restated to read in full as hereinbefore set forth and follows:   ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS   1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:   “Absolute Rate” means a fixed rate of interest expressed in multiples of 1/100th of one basis point.   “Absolute Rate Loan” means a Bid Loan that bears interest at a rate determined with reference to an Absolute Rate.   “Acquisition” means the acquisition by any Person of (a) a majority of the Equity Interests of another Person, (b) all or substantially all of the assets of another Person or (c) all or substantially all of a line of business of another Person, in each case (i) whether or not involving a merger or consolidation with such other Person and (ii) whether in one transaction or a series of related transactions.   “Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent. “Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.     “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.   “Agents” means the Administrative Agent, the Co-Syndication Agents and the Co-Documentation Agents.   “Aggregate Commitments” means the Commitments of all the Lenders.   “Agreement” means this Amended and Restated Credit Agreement.   “Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s Commitment at such time. If the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.   “Applicable Rate” means the following percentages per annum, based upon the Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):   Applicable Rate   Pricing Level   Leverage Ratio   Facility Fee     Eurodollar Rate + Letters of Credit     Base Rate +   7   >4.75:1   0.275 %   1.100 %   0.100 % 6   <4.75:1 but >4.25:1   0.225 %   1.025 %   0.025 % 5   <4.25:1 but >3.75:1   0.200 %   0.925 %   0.000 % 4   <3.75:1 but >3.25:1   0.175 %   0.825 %   0.000 % 3   <3.25:1 but >2.75:1   0.150 %   0.725 %   0.000 % 2   <2.75:1 but >2.25:1   0.125 %   0.625 %   0.000 % 1   <2.25:1   0.100 %   0.525 %   0.000 %   2 Any increase or decrease in the Applicable Rate resulting from a change in the Leverage Ratio shall become effective as of the first Business Day immediately 6.02(b); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level 7 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered, until the first Business Day after the date on which such Compliance Certificate is delivered. The Applicable Rate in effect from the Closing Date through March 31, 2005 shall be determined based upon Pricing Level 2.   “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.   “Arrangers” means Banc of America Securities LLC and SunTrust Bank, in their capacity as joint lead arrangers.   “Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.   Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit F or any other form approved by the Administrative Agent.   “Attributable Indebtedness” means, on any date, (a) in respect of any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.   “Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 26, 2004, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes and schedules thereto.   “Authorizations” means all filings, recordings and registrations with, and all validations or exemptions, approvals, orders, authorizations, consents, Licenses, certificates and permits from, the FCC, applicable public utilities and other Governmental Authorities.   “Availability Period” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.07, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.   3 “Bank of America” means Bank of America, N.A. and its successors.   “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.   “Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.   “Base Rate Loan” means a Loan that bears interest based on the Base Rate.   “Bid Borrowing” means a borrowing consisting of simultaneous Bid Loans of the same Type from each of the Lenders whose offer to make one or more Bid Loans as part of such borrowing has been accepted under the auction bidding procedures described in Section 2.03.   “Bid Loan” has the meaning specified in Section 2.03(a).   “Bid Loan Lender” means, in respect of any Bid Loan, the Lender making such Bid Loan to the Borrower.   “Bid Loan Sublimit” means an amount equal to $50,000,000. The Bid Loan Sublimit is part of, and not in addition to, the Aggregate Commitments.   “Bid Request” means a written request for one or more Bid Loans substantially in the form of Exhibit B-1.   “Borrower” means Media General, Inc., a Virginia corporation.   “Borrower Materials” has the meaning specified in Section 6.02.   “Borrowing” means a Committed Borrowing, a Bid Borrowing or a Swing Line Borrowing, as the context may require.   “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.   “Capital Lease Obligations” means as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP.   4 “Cash Collateralize” has the meaning specified in Section 2.04(g).   “Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.   “Change of Control” means an event or series of events by which:   (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding (i) any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan and (ii) the descendents of D. Tennant Bryan and their respective estates, lineal descendants, adoptive children, heirs, executors, personal representatives, administrators and trusts for any of their benefit or the benefit of their respective spouses, estates, lineal descendants, adoptive children or heirs) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, 50% or more of the outstanding shares of the Class B voting stock of the Borrower; or   (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors).   “Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.   “Code” means the Internal Revenue Code of 1986.   “Co-Documentation Agents” means The Bank of Nova Scotia and The Royal Bank of Scotland, PLC.   “Commitment” means, as to each Lender, its obligation to (a) make Committed Loans to the Borrower pursuant to Section 2.01, (b) purchase participations in L/C Obligations, and (c)   5 purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.   “Committed Borrowing” means a borrowing consisting of simultaneous Committed Loans of the same Type and, in the case of Eurodollar Rate Committed Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.   “Committed Loan” has the meaning specified in Section 2.01.   “Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Committed Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.   “Competitive Bid” means a written offer by a Lender to make one or more Bid Loans, substantially in the form of Exhibit B-2, duly completed and signed by a Lender.   “Compliance Certificate” means a certificate substantially in the form of Exhibit E.   “Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.     “Co-Syndication Agents” means SunTrust Bank and The Bank of Tokyo-Mitsubishi, Ltd., New York Branch.   “Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.   “Cross Ownership Rules” means the rules of the FCC regarding multiple ownership of media assets within a market area set forth in Amendment of Sections 73.34, 73.240 and 73.636 of the Commissions Rules Relating to Multiple Ownership of Standard, FM, and Televisions Broadcast Stations, 50 F.C.C. 1046 (1975) or any successor FCC rules.   “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.   6 “Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.   “Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.   “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Committed Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.   “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.   “Dollar” and “$” mean lawful money of the United States.   any political subdivision of the United States.   “EBITDA” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Net Income for such period plus (a) the following to the extent deducted in calculating such Net Income: (i) Interest Expense for such period, (ii) the provision for Federal, state, local and foreign income taxes payable by the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization expense, (iv) all film amortization cash charges, less any film cash payments and (iv) other non-recurring expenses of the Borrower and its Subsidiaries reducing such Net Income which do not represent a cash item in such period or any future period and minus (b) the following to the extent included in calculating such Net Income: (i) Federal, state, local and foreign income tax credits of the Borrower and its Subsidiaries for such period and (ii) all non-cash items increasing Net Income for such period; provided that for the purposes of determination of the Leverage Ratio and the Interest Coverage Ratio, EBITDA shall be determined as if any Subsidiary that has become or ceased to be a Subsidiary during the fiscal quarter then ending or the immediately preceding three fiscal quarters, was (or, in the case of a Subsidiary that has ceased to be a Subsidiary, was not) a Subsidiary at all times during such period.   “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative   7 Agent, the L/C Issuer and the Swing Line Lender, and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.   “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.   “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.   “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.   “ERISA” means the Employee Retirement Income Security Act of 1974.   “ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).   “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which   8 constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.   “Eurodollar Bid Margin” means the margin above or below the Eurodollar Rate to be added to or subtracted from the Eurodollar Rate, which margin shall be expressed in multiples of 1/100th of one basis point.   “Eurodollar Margin Bid Loan” means a Bid Loan that bears interest at a rate based upon the Eurodollar Rate.   “Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.   “Eurodollar Rate Committed Loan” means a Committed Loan that bears interest at a rate based on the Eurodollar Rate.   “Eurodollar Rate Loan” means a Eurodollar Rate Committed Loan or a Eurodollar Margin Bid Loan.   “Event of Default” has the meaning specified in Section 8.01.   the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 10.13), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in   9 Law) to comply with Section 3.01(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a).   “Existing Credit Agreement” has the meaning specified in the opening paragraphs of this Agreement.   “Existing Letters of Credit” means those letters of credit listed on Schedule 1.01.   “Existing Synthetic Leases” means that certain Amended and Restated Lease Agreement dated as of March 18, 2002 between Wells Fargo Bank Northwest, National Association, not individually, but solely as the Certificate Trustee under the MGI Real Estate Trust 1997-1, as lessor and Media General, Inc. as lessee, and that certain Amended and Restated Lease Agreement dated as of March 18, 2002 between Wells Fargo Bank Northwest, National Association, not individually, but solely as the Certificate Trustee under the MGI Real Estate Trust 1998-1, as lessor and Media General, Inc. as lessee, and all related documentation and agreements executed in connection therewith, as each has been amended through the date hereof and as each may hereafter be amended in accordance with Section 16.6 of the Participation Agreement related thereto.   “FCC” means the Federal Communications Commission and any successor thereto.   “FCC Cross Ownership Issues” means (i) the Cross Ownership Rules are in effect and (ii) the Borrower and its Subsidiaries’ ownership of media assets is Permitted Cross Ownership.   “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.   “Fee Letters” means (a) the letter agreement, dated January 12, 2005, among the Borrower, the Administrative Agent and Banc of America Securities LLC and (b) any other fee letter entered into by the Borrower and the Administrative Agent, any Arranger or any Lender in connection with this Agreement.   jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.   10 “FRB” means the Board of Governors of the Federal Reserve System of the United States.   “Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.   “GAAP” means generally accepted accounting principles in the United States in effect from time to time.   “Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).   “Granting Lender” has the meaning specified in Section 10.06(h).   “Guarantee” means, as to any Person, any (a) obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien) limited to the lesser of such Indebtedness or the value of the assets securing such Lien; provided, however, that the term Guarantee shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. For the purposes of Section 7.03, Guarantee Obligations by the Borrower or any of its Subsidiaries in respect of Indebtedness shall be calculated without duplication of any other Indebtedness. The term “Guarantee” as a verb has a corresponding meaning.   11 “Guarantors” means, collectively, each Subsidiary which executes and delivers to the Administrative Agent the Guaranty or a Guaranty Supplement, for so long as such Subsidiary is obligated under such Guaranty or Guaranty Supplement.   “Guaranty” means the Conditional Guarantee Agreement made by the Guarantors in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit G and all Guaranty Supplements executed and delivered by a Subsidiary.   “Guaranty Supplement” means each Supplement to Guarantee Agreement in the form of Exhibit A attached to the Guaranty, to be executed and delivered by each Subsidiary acquired or created after the date hereof, if required by Section 6.12.   “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.   “Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:   (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;   (b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;   (c) net obligations of such Person under any Swap Contract;   (d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);   (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse (provided that, if such Indebtedness is non-recourse, the amount of such Indebtedness for purposes hereof shall be limited to the lesser of the principal amount of such Indebtedness and the fair market value of the property subject to such Lien);   (f) Capital Lease Obligations and Synthetic Lease Obligations;   (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and   12 (h) all Guarantees of such Person in respect of any of the foregoing determined in accordance with GAAP.   For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person (provided that, if such Indebtedness is partially recourse and partially non-recourse, only the amount of such recourse Indebtedness shall be included). The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capital Lease Obligation or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.     “Indemnitees” has the meaning specified in Section 10.04(b).   “Information” has the meaning specified in Section 10.07.   “Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) EBITDA for the period of the four fiscal quarters ending on such date to (b) Interest Expense for such period.   “Interest Expense” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP.   “Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date.   “Interest Period” means (a) as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of any Eurodollar Rate Committed Loan) converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Committed Loan Notice or Bid Request, as the case may be, or, in the case of Eurodollar Rate Committed Loans, such other period that is twelve months or less requested by the Borrower and consented to by all the Lenders; and (b) as to each Absolute Rate Loan, a period of not less than 14 days and not more than 180 days as selected by the Borrower in its Bid Request; provided that:   13 (i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;   (ii) any Interest Period pertaining to a Eurodollar Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and   (iii) no Interest Period shall extend beyond the Maturity Date.   “Internal Control Event” means a material weakness in, or fraud that involves management or other employees who have a significant role in, the Borrower’s internal controls over financial reporting, in each case as described in the Securities Laws.   “Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.   “IP Rights” has the meaning specified in Section 5.17.   “IRS” means the United States Internal Revenue Service.   “ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).   “Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor the L/C Issuer and relating to any such Letter of Credit.   “Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.   14 “L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage.   “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Committed Borrowing.   “L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.   “L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.   “L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.   “Lender” means each lender from time to time party hereto and, as the context requires, includes the Swing Line Lender.   “Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.   “Letter of Credit” means any letter of credit issued hereunder and shall include the Existing Letters of Credit.   “Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.   “Letter of Credit Expiration Date” means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).   “Letter of Credit Fee” has the meaning specified in Section 2.04(i).   “Letter of Credit Sublimit” means an amount equal to $100,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.   “Leverage Ratio” means the ratio of (a) Indebtedness of the Borrower and its Subsidiaries on a consolidated basis as of the last day of the most recently ended fiscal quarter to (b) EBITDA for the period of the four fiscal quarters most recently ended.   15 “License” means, as to any Person, any license, permit, certificate of need, authorization, certification, accreditation, franchise, approval, or grant of rights by any Governmental Authority or other Person necessary or appropriate for such Person to own, maintain, or operate its business or property, including FCC Licenses.   “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).   “Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Committed Loan, a Bid Loan or a Swing Line Loan.   “Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee Letters, the Guaranty, each Guaranty Supplement, each Compliance Certificate delivered to the Administrative Agent and signed by a Responsible Officer of the Borrower, and each other document or agreement executed by any Loan Party in connection with this Agreement from time to time, except Swap Contracts.   “Loan Parties” means, collectively, the Borrower and each Subsidiary that enters into a Letter of Credit Application or is a party at any time to the Guaranty or a Guaranty Supplement; and “Loan Party” means any of them, as applicable in the   assets, operations or condition (financial or otherwise) of the Borrower or the Borrower and its Subsidiaries taken as a whole; (b) the ability of the Borrower or the Borrower and the other Loan Parties, taken as a whole, to perform its or their obligations under the Loan Documents; or (c) the rights or remedies of the Administrative Agent or the Lenders under this Agreement or any of the other Loan Documents.   “Maturity Date” means September 14, 2010.   “Maximum Rate” has the meaning specified in Section 10.09.   “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.   “Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.   “Net Income” means as applied to the Borrower and its Subsidiaries on a consolidated basis for any period, the aggregate amount of net income of such Person, after taxes (but before extraordinary items), for such period, as determined in accordance with GAAP.   16 “Note” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit D.   “Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document, or otherwise with respect to any Loan or Letter of Credit, or with respect to a Swap Contract of the Borrower or any Subsidiary to which the Lender or any Affiliate of any Lender is a party, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees with respect to any of the foregoing that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.   “Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.   “Other Taxes” means all present or future stamp or documentary taxes or any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.   “Outstanding Amount” means (i) with respect to Committed Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Committed Loans and Swing Line Loans, as the case may be, occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts.   “Participant” has the meaning specified in Section 10.06(d).   “Participation Agreement” means that certain (i) Amended and Restated Participation Agreement dated as of March 18, 2002 between Wells Fargo Bank Northwest, National Association, not individually, but solely as the Certificate Trustee, Wells Fargo Bank Nevada, National Association, not individually, but solely as Collateral Agent, the Certificate Holders, the Liquidity Banks, the CP Lenders, The Bank of Nova Scotia, as Liquidity Agent and Credit Lyonnais New York Branch, as Liquidity Agent and as Agent (MGI Real Estate Trust 1997-1) and (ii) Amended and Restated Participation Agreement dated as of March 18, 2002 between   17 Wells Fargo Bank Northwest, National Association, not individually, but solely as the Certificate Trustee, Wells Fargo Bank Nevada, National Association, not individually, but solely as Collateral Agent, the Certificate Holders, the Liquidity Banks, the CP Lenders, The Bank of Nova Scotia, as Liquidity Agent and Credit Lyonnais New York Branch, as Liquidity Agent and as Agent (MGI Real Estate Trust 1998-1), as each may hereafter be amended in accordance with Section 16.6 thereof.   “PBGC” means the Pension Benefit Guaranty Corporation.   “Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.   “Permitted Cross Ownership” means the common ownership by the Borrower and its Subsidiaries of a television station and a daily newspaper in the same market where (i) the ownership of such media assets is permitted by or grandfathered under the Cross Ownership Rules (the Borrower’s Tampa operations are grandfathered under the Cross Ownership Rules), (ii) the Borrower and its Subsidiaries have a waiver in respect of their ownership of such media assets under the Cross Ownership Rules, or (iii) if the ownership of such media assets does not satisfy either clause (i) or (ii), (A) the only consequence the FCC imposes on the Borrower or its Subsidiaries is the divestiture of such assets and (B) the Borrower (x) is in the process of complying with any FCC order or ruling regarding the divestiture of such assets or (y) is contesting such FCC order or ruling regarding divestiture in good faith by appropriate proceedings diligently conducted; provided that, with respect to the activities described in (x) and (y), such FCC order or ruling regarding divestiture does not constitute a final non-appealable order or ruling to divest all or substantially all of the assets of the Borrower.   “Permitted Lines of Business” means any business related to those currently conducted by the Borrower and its Subsidiaries or businesses related to the communications or media businesses.   “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.   “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.   “Platform” has the meaning specified in Section 6.02.   “Register” has the meaning specified in Section 10.06(c).   “Registered Public Accounting Firm” has the meaning specified in the Securities Laws and shall be independent of the Borrower as prescribed by the Securities Laws.   18 “Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.   “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.   “Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to a Bid Loan, a Bid Request, (c) with respect to an L/C Credit Extension, a Letter of Credit Application, and (d) with respect to a Swing Line Loan, a Swing Line Loan Notice.   “Required Lenders” means, as of any date of determination, Lenders having more than 50% of the Aggregate Commitments or, if the commitment of each Lender to have been terminated pursuant to Section 8.02, Lenders holding in the aggregate more than 50% of the Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition); provided that the Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.   “Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.   “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Borrower’s stockholders, partners or members (or the equivalent Person thereof).   “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.   “Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.   “SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.   “Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or, to the extent approved by the SEC, the Public Company Accounting Oversight Board (United States), as each of the foregoing may be amended and in effect on any applicable date hereunder.   19 “Senior Note Agreement” means the Senior Debt Securities Indenture dated August 1, 2001 among the Borrower, Media General Financial Services, Inc., a Virginia corporation, Media General Communications, Inc., a Delaware corporation, MG Broadcasting of Birmingham Holdings, LLC, an Alabama limited liability company, Media General Operations, Inc., a Delaware corporation, The Tribune Company Holdings, Inc., a Delaware corporation, Media General Broadcasting of South Carolina Holdings, Inc., a Delaware corporation, MG Broadcasting of Birmingham II, LLC, an Alabama limited liability company, Professional Communications Systems, Inc., a Florida corporation, NES II, Inc., a Virginia corporation, and Virginia Paper Manufacturing Corp., a Georgia corporation, and SunTrust Bank, a Georgia banking corporation, as trustee, as supplemented by the First Supplemental Indenture dated January 1, 2002, among the Borrower, MG Broadcasting of Birmingham Holdings, LLC, a Delaware limited liability company and the trustee, as the same may be further supplemented in connection with the issuance of additional Senior Notes or Guarantees.   “Senior Note Documents” means the Senior Notes and the Senior Note Agreement, together with all related instruments, agreements and other documents executed and delivered in connection therewith.   “Senior Notes” means the 6.95% senior notes due September 1, 2006 in the aggregate principal amount of $200,000,000 issued by the Borrower pursuant to the Senior Note Agreement, and any additional senior notes issued under the Senior Note Agreement.   “Senior Unsecured Debt Rating” means the Borrower’s senior unsecured debt rating as announced by both S&P and Moody’s.   “Significant Subsidiary” means any Subsidiary of the Borrower whose TTM EBITDA was greater than ten percent of the TTM EBITDA of the Borrower and its Subsidiaries, on a consolidated basis, for the period of four fiscal quarters ended on the last day of the fiscal quarter most recently ended, or whose assets comprised more than ten percent of the total assets of the Borrower and its Subsidiaries, on a consolidated basis, as of the last day of the fiscal quarter most recently ended.   “Solvent” when used with respect to any Person, means that, as of any date of determination, (a) the amount of the “fair value” or “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the fair value or present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,   20 undisputed, legal, equitable, secured or unsecured or (y) right to an equitable judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured and (iii) unliquidated, contingent, disputed and unmatured claims shall be valued at the amount that can be reasonably expected to be actual and matured.   “SPC” has the meaning specified in Section 10.06(h).   “Stockholders’ Equity” means, as of any date of determination, consolidated stockholders’ equity of the Borrower and its Subsidiaries as of that date   “Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.   “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.   “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).   “Swing Line” means the revolving credit facility made available by the Swing Line Lender pursuant to Section 2.05.   21 “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.05.   “Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.   “Swing Line Loan” has the meaning specified in Section 2.05(a).   “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.05(b), which, if in writing, shall be substantially in the form of Exhibit C.   “Swing Line Sublimit” means an amount equal to the lesser of (a) $50,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitments.   “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).   “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.   “Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.   “TTM EBITDA” means, at any date of determination, EBITDA for the most recently completed twelve month period.   “Type” means (a) with respect to a Committed Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan, and (b) with respect to a Bid Loan, its character as an Absolute Rate Loan or a Eurodollar Margin Bid Loan.   “United States” and “U.S.” mean the United States of America.   “Unreimbursed Amount” has the meaning specified in Section 2.04(c)(i).   “Wholly-Owned Subsidiary” means, as to any Person, any other Person 100% of the Equity Interests of which (other than directors’ qualifying shares required by law) is owned by such Person directly or indirectly through one or more other Wholly-Owned Subsidiaries.   1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:   (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the   22 corresponding masculine, feminine and neuter forms. The words “include,” limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.   (b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”   (c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.   (d) References in this Agreement or any other Loan Document to knowledge by the Borrower or any Subsidiary of events or circumstances shall be deemed to refer to events or circumstances of which any Responsible Officer of any Loan Party has actual knowledge or reasonably should have knowledge.   1.03 Accounting Terms. (a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.   (b) Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be   23 computed in accordance with GAAP prior to such change therein and (ii) upon the request of the Administrative Agent, the Borrower shall assist the Administrative Agent and the Lenders in reconciling the financial statements of the Borrower and the calculations of such ratios or requirements made before and after giving effect to such change in GAAP.   (c) Consolidation of Variable Interest Entities. All references herein to consolidated financial statements of the Borrower and its Subsidiaries or to the determination of any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Borrower is required to consolidate pursuant to FASB Interpretation No. 46 – Consolidation of Variable Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such variable interest entity were a Subsidiary as defined herein, but each such variable interest entity shall not be considered a Subsidiary for any other purpose hereunder.   (d) Financial Statements. References in this Agreement or any other Loan Document to financial statements shall be deemed to include all related schedules and notes thereto.   1.04 Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).   1.05 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Central time (daylight or standard, as applicable).   1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.   ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS   2.01 Committed Loans. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “Committed Loan”) to the Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided, however, that after giving effect to any Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment. Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the   24 Borrower may borrow under this Section 2.01, prepay under Section 2.06, and reborrow under this Section 2.01. Committed Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.   2.02 Borrowings, Conversions and Continuations of Committed Loans.   (a) Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Eurodollar Rate Committed Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans or of any conversion of Eurodollar Rate Committed Loans to Base Rate Committed Loans, and (ii) on the requested date of any Borrowing of Base Rate Committed Loans; provided, however, that if the Borrower wishes to request Eurodollar Rate Committed Loans having an Interest Period more than six months in duration, the applicable notice must be received by the Administrative Agent not later than 11:00 a.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.04(c) and 2.05(c), each Borrowing of or conversion to Base Rate Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Eurodollar Rate Committed Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Committed Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Committed Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.   (b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable   25 Committed Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a Committed Borrowing, each Lender shall make the amount of its Committed Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided, however, that if, on the date the Committed Loan Notice with respect to such Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the Borrower as provided above.   (c) Except as otherwise provided herein, a Eurodollar Rate Committed Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Committed Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Committed Loans without the consent of the Required Lenders.   (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Committed Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.   (e) After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than ten Interest Periods in effect with respect to Committed Loans.   2.03 Bid Loans.   (a) General. Subject to the terms and conditions set forth herein, each Lender agrees that the Borrower may from time to time request the Lenders to submit offers to make loans (each such loan, a “Bid Loan”) to the Borrower prior to the Maturity Date pursuant to this Section 2.03; provided, however, that after giving effect to any Bid Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of all Bid Loans shall not exceed the Bid Loan Sublimit. There shall not be more than five different Interest Periods in effect with respect to Bid Loans at any time.   (b) Requesting Competitive Bids. The Borrower may request the submission of Competitive Bids by delivering a Bid Request to the Administrative Agent not later than 12:00 noon (i) one Business Day prior to the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, or (ii) four Business Days prior to the requested date of any Bid Borrowing   26 that is to consist of Eurodollar Margin Bid Loans. Each Bid Request shall specify (i) the requested date of the Bid Borrowing (which shall be a Business Day), (ii) the aggregate principal amount of Bid Loans requested (which must be $10,000,000 or a whole multiple of $1,000,000 in excess thereof), (iii) the Type of Bid Loans requested, and (iv) the duration of the Interest Period with respect thereto, and shall be signed by a Responsible Officer of the Borrower. No Bid Request shall contain a request for (i) more than one Type of Bid Loan or (ii) Bid Loans having more than three different Interest Periods. Unless the Administrative Agent otherwise agrees in its sole and absolute discretion, the Borrower may not submit a Bid Request if it has submitted another Bid Request within the prior five Business Days.   (c) Submitting Competitive Bids.   (i) The Administrative Agent shall promptly notify each Lender of each Bid Request received by it from the Borrower and the contents of such Bid Request.   (ii) Each Lender may (but shall have no obligation to) submit a Competitive Bid containing an offer to make one or more Bid Loans in response to such Bid Request. Such Competitive Bid must be delivered to the Administrative Agent not later than 10:30 a.m. (A) on the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, and (B) three Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid Loans; provided, however, that any Competitive Bid submitted by Bank of America in its capacity as a Lender in response to any Bid Request must be submitted to the Administrative Agent not later than 10:15 a.m. on the date on which Competitive Bids are required to be delivered by the other Lenders in response to such Bid Request. Each Competitive Bid shall specify (A) the proposed date of the Bid Borrowing; (B) the principal amount of each Bid Loan for which such Competitive Bid is being made, which principal amount (x) may be equal to, greater than or less than the Commitment of the bidding Lender, (y) must be $10,000,000 or a whole multiple of $1,000,000 in excess thereof, and (z) may not exceed the principal amount of Bid Loans for which Competitive Bids were requested; (C) if the proposed Bid Borrowing is to consist of Absolute Rate Bid Loans, the Absolute Rate offered for each such Bid Loan and the Interest Period applicable thereto; (D) if the proposed Bid Borrowing is to consist of Eurodollar Margin Bid Loans, the Eurodollar Bid Margin with respect to each such Eurodollar Margin Bid Loan and the Interest Period applicable thereto; and (E) the identity of the bidding Lender.   (iii) Any Competitive Bid shall be disregarded if it (A) is received after the applicable time specified in clause (ii) above, (B) is not substantially in the form of a Competitive Bid as specified herein, (C) contains qualifying, conditional or similar language, (D) proposes terms other than or in addition to those set forth in the applicable Bid Request, or (E) is otherwise not responsive to such Bid Request. Any Lender may correct a Competitive Bid containing a manifest error by submitting a corrected Competitive Bid (identified as such) not later than the applicable time required for submission of Competitive Bids. Any such submission of a corrected Competitive Bid shall constitute a revocation of the Competitive Bid that contained the manifest error. The Administrative Agent may, but shall not be required to, notify any Lender of any manifest error it detects in such Lender’s Competitive Bid.   27 (iv) Subject only to the provisions of Sections 3.02, 3.03 and 4.02 and clause (iii) above, each Competitive Bid shall be irrevocable.   (d) Notice to Borrower of Competitive Bids. Not later than 11:00 a.m. (i) on the requested date of any Bid Borrowing that is to consist of Absolute Rate Loans, or (ii) three Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid Loans, the Administrative Agent shall notify the Borrower of the identity of each Lender that has submitted a Competitive Bid that complies with Section 2.03(c) and of the terms of the offers contained in each such Competitive Bid.   (e) Acceptance of Competitive Bids. Not later than 11:30 a.m. (i) on the and (ii) three Business Days prior to the requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid Loans, the Borrower shall notify the Administrative Agent of its acceptance or rejection of the offers notified to it pursuant to Section 2.03(d). The Borrower shall be under no obligation to accept any Competitive Bid and may choose to reject all Competitive Bids. In the case of acceptance, such notice shall specify the aggregate principal amount of Competitive Bids for each Interest Period that is accepted. The Borrower may accept any Competitive Bid in whole or in part; provided that:   (i) the aggregate principal amount of each Bid Borrowing may not exceed the applicable amount set forth in the related Bid Request;   (ii) the principal amount of each Bid Loan must be $10,000,000 or a whole multiple of $1,000,000 in excess thereof;   (iii) the acceptance of offers may be made only on the basis of ascending Absolute Rates or Eurodollar Bid Margins within each Interest Period; and   (iv) the Borrower may not accept any offer that is described in Section 2.03(c)(iii) or that otherwise fails to comply with the requirements hereof.   (f) Procedure for Identical Bids. If two or more Lenders have submitted Competitive Bids at the same Absolute Rate or Eurodollar Bid Margin, as the case may be, for the same Interest Period, and the result of accepting all of such Competitive Bids in whole (together with any other Competitive Bids at lower Absolute Rates or Eurodollar Bid Margins, as the case may be, accepted for such Interest Period in conformity with the requirements of Section 2.03(e)(iii)) would be to cause the aggregate outstanding principal amount of the applicable Bid Borrowing to exceed the amount specified therefor in the related Bid Request, then, unless otherwise agreed by the Borrower, the Administrative Agent and such Lenders, such Competitive Bids shall be accepted as nearly as possible in proportion to the amount offered by each such Lender in respect of such Interest Period, with such accepted amounts being rounded to the nearest whole multiple of $1,000,000.   (g) Notice to Lenders of Acceptance or Rejection of Bids. The Administrative Agent shall promptly notify each Lender having submitted a Competitive Bid whether or not its offer has been accepted and, if its offer has been accepted, of the amount of the Bid Loan or Bid Loans to be made by it on the date of the applicable Bid Borrowing. Any Competitive Bid or portion thereof that is not accepted by the Borrower by the applicable time specified in Section 2.03(e) shall be deemed rejected.   28 (h) Notice of Eurodollar Rate. If any Bid Borrowing is to consist of Eurodollar Margin Loans, the Administrative Agent shall determine the Eurodollar Rate for the relevant Interest Period, and promptly after making such determination, shall notify the Borrower and the Lenders that will be participating in such Bid Borrowing of such Eurodollar Rate.   (i) Funding of Bid Loans. Each Lender that has received notice pursuant to Section 2.03(g) that all or a portion of its Competitive Bid has been accepted by the Borrower shall make the amount of its Bid Loan(s) available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the date of the requested Bid Borrowing. Upon satisfaction of the applicable conditions set forth in Section 4.02, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent.   (j) Notice of Range of Bids. After each Competitive Bid auction pursuant to this Section 2.03, the Administrative Agent shall notify each Lender that submitted a Competitive Bid in such auction of the ranges of bids submitted (without the bidder’s name) and accepted for each Bid Loan and the aggregate amount of each Bid Borrowing.   2.04 Letters of Credit.   (a) The Letter of Credit Commitment.   (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.04, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.   29 (ii) The L/C Issuer shall not issue any Letter of Credit, if:   (A) subject to Section 2.04(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or   (B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.   (iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:   (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;   (B) the issuance of such Letter of Credit would violate one or more generally applicable policies of the L/C Issuer not implemented in contemplation of such proposed Letter of Credit;   (C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than $100,000;   (D) such Letter of Credit is to be denominated in a currency other than Dollars;   (E) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or   (F) a default of any Lender’s obligations to fund under Section 2.04(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.   30 (iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.   (v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.   (vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.   (b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.   (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.   31 (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Letter of Credit.   (iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.04(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.   (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.   32 (c) Drawings and Reimbursements; Funding of Participations.   (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender’s Applicable Percentage thereof. In such event, the Borrower shall be deemed to have requested a Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.04(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.   (ii) Each Lender shall upon any notice pursuant to Section 2.04(c)(i) make funds available to the Administrative Agent for the account of the L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.04(c)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer.   (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.04(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.04.   (iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.04(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.   (v) Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.04(c), shall be absolute and unconditional and shall not be affected by any   33 circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Committed Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrower of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.   (vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(ii), the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking industry rules on interbank compensation. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.   (d) Repayment of Participations.   (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.04(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.   (ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.04(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.   34 (e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:   (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;   (ii) the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;   (iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;   (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or   (v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any Subsidiary.   The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will immediately notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.   (f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders,   35 as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.04(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.   (g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Borrower shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations. Sections 2.06 and 8.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this Section 2.04, Section 2.06 and Section 8.02(c), “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America.   (h) Applicability of ISP. Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), the rules of the ISP shall apply to each Letter of Credit.   (i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate times the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily   36 amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. Letter of Credit Fees shall be (i) computed on a quarterly basis in arrears and (ii) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.   (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a fronting fee with respect to each Letter of Credit, at the rate per annum specified in the Fee Letters, computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the 1.06. In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.   (k) Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.   (l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.   2.05 Swing Line Loans.   (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.05, to make loans (each such loan, a “Swing Line Loan”) to the Borrower from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of Committed Loans and L/C Obligations of the Lender acting as Swing Line Lender, may   37 exceed the amount of such Lender’s Commitment; provided, however, that after giving effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and provided, further, that the Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.05, prepay under Section 2.06, and reborrow under this Section 2.05. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Swing Line Loan.   (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $1,000,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.05(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower at its office by crediting the account of the Borrower on the books of the Swing Line Lender in immediately available funds.   (c) Refinancing of Swing Line Loans.   (i) The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Lender make a Base Rate Committed Loan in an amount equal to such Lender’s Applicable Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized   38 4.02. The Swing Line Lender shall furnish the Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.05(c)(ii), each Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.   (ii) If for any reason any Swing Line Loan cannot be refinanced by such a Committed Borrowing in accordance with Section 2.05(c)(i), the request for Base Rate Committed Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.05(c)(i) shall be deemed payment in respect of such participation.   (iii) If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.05(c) by the time specified in Section 2.05(c)(i), the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender n accordance with banking industry rules on interbank compensation. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.   (iv) Each Lender’s obligation to make Committed Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.05(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a to any of the foregoing; provided, however, that each Lender’s obligation to make Committed Loans pursuant to this Section 2.05(c) is subject to the conditions set forth in Section 4.02. No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein.     (i) At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such   39 Swing Line Loan, the Swing Line Lender will distribute to such Lender its Applicable Percentage of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s risk participation was funded) in the same funds as those received by the Swing Line Lender.   (ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay to the Swing Line Lender its Applicable from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the   (e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Lender funds its Base Rate Committed Loan or risk participation pursuant to this Section 2.05 to refinance such Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.   (f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.   2.06 Prepayments.   (a) The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Committed Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Committed Loans and (B) on the date of prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar Rate Committed Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Committed Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Each such prepayment shall be applied to the Committed Loans of the Lenders in accordance with their respective Applicable Percentages.   40 (b) No Bid Loan may be prepaid without the prior consent of the applicable Bid Loan Lender.   (c) The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.   (d) If for any reason the Total Outstandings at any time exceed the Aggregate Commitments then in effect, the Borrower shall immediately prepay Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided, however, that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.06(d) unless after the prepayment in full of the Committed Loans and Swing Line Loans the Total Outstandings exceed the Aggregate Commitments then in effect.   2.07 Termination or Reduction of Commitments. The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving effect to any reduction of the Aggregate Commitments, the Bid Loan Sublimit, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate Commitments, such Sublimit shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Applicable Percentage. All fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.   2.08 Repayment of Loans.   (a) The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of Committed Loans outstanding on such date.   (b) The Borrower shall repay each Bid Loan on the last day of the Interest Period in respect thereof.   (c) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date ten Business Days after such Loan is made and (ii) the Maturity Date.   41 2.09 Interest.   (a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Committed Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; (iii) each Bid Loan shall bear interest on the outstanding principal amount thereof for the Interest Period therefor at a rate per annum equal to the Eurodollar Rate for such Interest Period plus (or minus) the Eurodollar Bid Margin, or at the Absolute Rate for such Interest Period, as the case may be; and (iv) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.   (b) (i) If any amount of principal of any Loan is not paid when due (after expiration of any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.   (ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (after expiration of any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.   (iii) Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.   (iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.   (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.   2.10 Fees. In addition to certain fees described in subsections (i) and (j) of Section 2.04:   (a) Facility Fee. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage, a facility fee equal to the Applicable Rate times the actual daily amount of the Aggregate Commitments (or, if the Aggregate Commitments have terminated, on the Outstanding Amount of all Committed Loans, Swing Line Loans and L/C Obligations), regardless of usage. The facility fee shall accrue at all times during the Availability Period (and thereafter so long as any Committed Loans, Swing   42 Line Loans or L/C Obligations remain outstanding), including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December commencing with the first such date to occur after the Closing Date, and on the Maturity Date (and, if applicable, thereafter on demand). The facility fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount   (b) Other Fees. (i) The Borrower shall pay to the Arrangers and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letters. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.   (ii) The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.   2.11 Computation of Interest and Fees. All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.13(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.   2.12 Evidence of Debt.   (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.   43 (b) In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.   2.13 Payments Generally; Administrative Agent’s Clawback.   (a) General. All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.   (b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Committed Borrowing of Eurodollar Rate Loans (or, in the case of any Committed Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Committed Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Committed Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Committed Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Committed Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Committed Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Committed Loan included in such Committed Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.   44 (ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the the Lenders or the L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the then each of the Lenders or the L/C Issuer, as the case may be, severally agrees distributed to such Lender or the L/C Issuer, in immediately available funds distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the compensation.   A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.   (c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.   (d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Committed Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Committed Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Committed Loan, to purchase its participation or to make its payment under Section 10.04(c).   (e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.   2.14 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Committed Loans made by it, or the participations in L/C Obligations or in Swing   45 Line Loans held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Committed Loans or participations and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Committed Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Committed Loans and other amounts owing them, provided that:   (i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and   (ii) the provisions of this Section shall not be construed to apply to (x) any terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Committed Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).   Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.   2.15 Increase in Commitments.   (a) Request for Increase. Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may from time to time, request an increase in the Aggregate Commitments to an amount not exceeding $1,500,000,000; provided that (i) any such request for an increase shall be in a minimum amount of $50,000,000, and (ii) the Borrower may make a maximum of two such requests per fiscal year. At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders).   (b) Lender Elections to Increase. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment.   46 (c) Notification by Administrative Agent; Additional Lenders. The Administrative Agent shall notify the Borrower and each Lender of the Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase and subject to the approval of the Administrative Agent and the L/C Issuer (which approvals shall not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.   (d) Effective Date and Allocations. If the Aggregate Commitments are increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date.   (e) Conditions to Effectiveness of Increase. As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent (i) financial projections in form and substance reasonably acceptable to the Administrative Agent and each Lender participating in such increase and demonstrating compliance with the financial covenants set forth in Section 7.11 after giving effect to any Borrowing hereunder on the Increase Effective Date and (ii) a certificate of each Loan Party dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) in the case of the Borrower, certifying that, before and after giving effect to such increase, (x) the representations and warranties contained in Article V and the other Loan Documents are true and correct on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Section 2.15, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (y) no Default shall have occurred and be continuing or be caused by any such increase in the Aggregate Commitments or any Borrowing hereunder on the Increase Effective Date. The Borrower shall prepay any Committed Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to keep the outstanding Committed Loans ratable with any revised Applicable Percentages arising from any nonratable increase in the Commitments under this Section.   (f) Increase Documentation. In connection with any increase in the Aggregate Commitments, each existing Lender (regardless of whether such lender is participating in such increase), each new creditor and the Borrower agree to execute any and all amendments and agreements reasonably requested by the Administrative Agent and the Borrower to effectuate the intent of this Section 2.15.   (g) Conflicting Provisions. This Section shall supersede any provisions in Sections 2.14 or 10.01 to the contrary.   47 ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY   3.01 Taxes.   obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.   (b) Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.   Administrative Agent, each Lender and the L/C Issuer, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error.     (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the   48 Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.   Without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:   (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,   (ii) duly completed copies of Internal Revenue Service Form W-8ECI,   (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or   (iv) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.   (f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or the L/C Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the L/C Issuer in the event the Administrative Agent, such Lender or the L/C Issuer is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent, any Lender or the L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.   49 3.02 Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate Committed Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.   3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Committed Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Committed Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Base Rate Loans in the amount specified therein.   3.04 Increased Costs; Reserves on Eurodollar Rate Loans.   (a) Increased Costs Generally. If any Change in Law shall:   (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e)) or the L/C Issuer;   (ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit   50 or any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the L/C Issuer); or   (iii) impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein;   Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the L/C Issuer, the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.   (b) Capital Requirements. If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction suffered.   (c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 Business Days after receipt thereof.   (d) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies   51 the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).   (e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10 days from receipt of such notice.   3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:   (a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);   (b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; or   (c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;   including any loss of actual profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.   For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Committed Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Committed Loan was in fact so funded.   3.06 Mitigation Obligations; Replacement of Lenders.   (a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any any Lender pursuant to Section 3.01, or if any   52 Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.   (b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in accordance with Section 10.13.   3.07 Survival. All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.   ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS   4.01 Conditions of Effectiveness and of Initial Credit Extension. This Agreement will become effective upon, and the obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder is subject to, satisfaction of the following conditions precedent:   (a) The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:   (i) executed counterparts of this Agreement, sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower;   (ii) a Note executed by the Borrower in favor of each Lender requesting a Note;   (iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party;   (iv) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each of the Borrower and each other Loan Party is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;   53 (v) a favorable opinion of Christian & Barton, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit H and such other matters concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably request and such other opinions from FCC counsel or other counsel as deemed advisable by the Administrative Agent;   (vi) a certificate of a Responsible Officer of each Loan Party either (A) attaching copies of all consents, Licenses and approvals required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, Licenses and approvals shall be in full force and effect, or (B) stating that no such consents, Licenses or approvals are so required;   (vii) a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied, and (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect;   (viii) a duly completed Compliance Certificate as of the last day of the fiscal quarter of the Borrower ended on December 26, 2004, signed by a Responsible Officer of the Borrower; and   (ix) such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders reasonably may require.   (b) The Borrower shall either (i) provide evidence to the Administrative Agent that the Existing Synthetic Leases shall have been paid in full and terminated and all related documents and instruments and all liens relating thereto shall have been terminated, in each case concurrently with the making of the initial extensions of credit hereunder, or (ii) provide the Administrative Agent with evidence of the amendments to the Existing Synthetic Leases, in form and substance reasonably satisfactory to the Administrative Agent.   (c) Any fees required to be paid on or before the Closing Date shall have been paid.   (d) Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).   (e) There shall not have occurred a material adverse change since December 26, 2004 in the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole or the facts and information regarding such entities as represented to date.   54 Without limiting the generality of the provisions of Section 9.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.   4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type, or a continuation of Eurodollar Rate Committed Loans) is subject to the following conditions precedent:   (a) The representations and warranties of the Borrower and each other Loan Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct on and as of the date of such Credit Extension, except that (i) the Borrower shall not be required to make a representation that there were no changes in the Borrower’s financial condition not shown on its financial statements which could have a Material Adverse Effect, (ii) to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and (iii) for purposes of this Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.   (b) No Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof.   (c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.   Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type or a continuation of Eurodollar Rate Committed Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.   ARTICLE V. REPRESENTATIONS AND WARRANTIES   The Borrower represents and warrants to the Administrative Agent and the Lenders that:   5.01 Existence, Qualification and Power. Each Loan Party and each Subsidiary thereof (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority to   55 (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires governmental qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.   5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law. Each Loan Party and each Subsidiary thereof is in compliance with all Contractual Obligations referred to in clause (b)(i), except to the extent that failure to be so could not reasonably be expected to have a Material Adverse Effect.   5.03 Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, other than such as have been obtained or made and are in full force and effect or are being obtained concurrently herewith, except to the extent that enforceability hereof and thereof may be limited by bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally. Each Loan Party and each Subsidiary thereof has all requisite governmental licenses, authorizations, consents and approvals to (a) except with respect to FCC Cross Ownership Issues, own or lease its assets and carry on its business except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect and (b) execute, deliver and perform its obligations under the Loan Documents to which it is a party.   5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally.   5.05 Financial Statements; No Material Adverse Effect; No Internal Control Event.   (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the   56 date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) to the extent required by GAAP, show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.   (b) The most recent unaudited consolidated balance sheet of the Borrower and its Subsidiaries (except for the consolidated balance sheet of the Borrower and its Subsidiaries dated September 30, 2004), and the related consolidated statements of income or operations, stockholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP expressly noted therein, and (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments. Other than draws on disclosed revolving credit facilities, there have been no material and adverse variations in the Indebtedness and other liabilities, direct or contingent, of the Borrower and its consolidated Subsidiaries (including liabilities for taxes, material commitments and Indebtedness) as of the Closing Date from the Indebtedness and other liabilities, direct or contingent, of the Borrower and its consolidated Subsidiaries (including liabilities for taxes, material commitments and Indebtedness) disclosed on the Audited Financial Statements dated December 26, 2004.   (c) Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could   (d) Since the date of the Audited Financial Statements, no Internal Control Event has occurred that has had or could reasonably be expected to have a Material Adverse Effect.   5.06 Litigation. Except with respect to FCC Cross Ownership Issues, there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) expressly purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect.   5.07 No Default. Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.   5.08 Ownership of Property; Liens. Each of the Borrower and each Subsidiary has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could   57 Adverse Effect. The property of the Borrower and its Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.   5.09 Environmental Compliance. The Borrower and its Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that such Environmental Laws and claims could not, individually or in the aggregate,   5.10 Insurance. The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts (after giving effect to any self-insurance compatible with the following standards), with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates.   5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. To the Borrower’s knowledge, there is no proposed tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is party to any tax sharing agreement other than as set forth on Schedule 5.11.   5.12 ERISA Compliance.   (a) The Borrower and its Subsidiaries are in compliance in all material respects with the applicable provisions of ERISA. Each Plan (i) is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws, and (ii) that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification, except in each case of (i) and (ii) preceding, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. The Borrower and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan. Neither the Borrower nor any Subsidiary, taken individually or in the aggregate, is obligated to pay any material accumulated funding deficiency within the meaning of ERISA or Section 4971 of the Code, or is obligated to pay any material liability to the PBGC, or any successor thereto under ERISA (other than the payment of premiums to the PBGC as required by ERISA), in connection with any Plan.   58 (b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could   5.13 Subsidiaries; Equity Interests. The Borrower has no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Borrower or its Subsidiaries in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens. The Borrower has no equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13. All of the outstanding Equity Interests in the Borrower have been validly issued and are fully paid and nonassessable.   5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act.   (a) The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.   (b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary (i) is a “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is required to be registered as an “investment company” under the Investment Company Act of 1940.   5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished) contains any material when read in conjunction with the Audited Financial Statements, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.   59 5.16 Compliance with Laws. Except as could not reasonably be expected to result in a Material Adverse Effect and except with respect to FCC Cross Ownership Issues:   (a) Each of the Borrower and each Subsidiary is in compliance with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted.   (b) Neither the Borrower nor any of its Subsidiaries is in violation of any duty or obligation required by the Communications Act of 1934, as amended, or any FCC rule or regulation applicable to it.   (c) There is not pending or, to the knowledge of the Borrower, threatened, any action by the FCC to revoke, cancel, suspend or refuse to renew any FCC License held by the Borrower or any of its Subsidiaries, provided that the ownership of any FCC licensed radio station or television station following public notice of an initial decision by the FCC (as opposed to a FCC final order) to grant all or part of an application or request (i) to consent to the transfer of control or assignment of any FCC License, (ii) to grant a temporary waiver of any applicable FCC rule or regulation, and/or (iii) otherwise to permit such ownership by valid temporary action, shall not be a breach of this representation.   (d) There is not pending or, to the knowledge of the Borrower, threatened, any action by the FCC to modify adversely, revoke, cancel, suspend or refuse to renew any other Authorization.   (e) There is not issued or outstanding or, to the knowledge of the Borrower, threatened, any notice of any hearing, violation or complaint against the Borrower or any of its Subsidiaries with respect to the operation of their businesses.   5.17 Intellectual Property; Licenses, Etc. The Borrower and its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person. To the knowledge of the Borrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Borrower or any Subsidiary infringes upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrower, threatened, which, either individually or in the aggregate, could   5.18 Solvency. As of the date on which this representation and warranty is made or deemed made, each of the Borrower and its Significant Subsidiaries is Solvent, both before and after giving effect to the transactions contemplated hereby consummated on such date and to the incurrence of all Indebtedness and other obligations incurred on such date in connection herewith and therewith.   5.19 Labor Matters. There are no actual or, to the Borrower’s knowledge, overtly threatened strikes, labor disputes, slow downs, walkouts, or other concerted interruptions of operations by the employees of any Loan Party which could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of the Loan Parties   60 have not been in violation of the Fair Labor Standards Act or any other applicable law dealing with such matters, other than any such violations, individually or collectively, which could not reasonably be expected to have a Material Adverse Effect. All payments due from any Loan Party on account of employee health and welfare insurance have been paid or accrued as a liability on its books, other than any such nonpayments which could not, individually or collectively, reasonably be expected to have a Material Adverse Effect.   ARTICLE VI. AFFIRMATIVE COVENANTS   So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each Subsidiary to:   6.01 Financial Statements. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:   (a) as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by (i) a report and opinion of a Registered Public Accounting Firm of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with and applicable Securities Laws and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit and (ii) beginning with the fiscal year ended December 26, 2004, an attestation report of such Registered Public Accounting Firm as to the Borrower’s internal controls pursuant to Section 404 of Sarbanes-Oxley showing no Internal Control Event or Events, that, in the aggregate (1) could reasonably be expected to have a Material Adverse Effect, or (2) could reasonably be expected to permit the occurrence of a Material Adverse Effect if left unremedied; and   (b) as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, (i) a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, (ii) the related consolidated cash flow statement for the portion of the Borrower’s fiscal year then ended, setting forth in comparative form the figures for the corresponding portion of the previous fiscal year and the corresponding portion of the previous fiscal year with the cumulative results for the most recent fiscal quarters, all in reasonable detail, certified by a Responsible Officer of the Borrower as fairly presenting the financial condition, results of operations, and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes.   61 As to any information contained in materials furnished pursuant to Section 6.02(d), the Borrower shall not be separately required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in clauses (a) and (b) above at the times specified therein.   6.02 Certificates; Other Information. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:   (a) concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of its Registered Public Accounting Firm certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default under the financial covenants set forth herein or, if any such Default shall exist, stating the nature and status of such event;   (b) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower;   (c) promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by its Registered Public Accounting Firm in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them;   (d) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;   (e) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or any Subsidiary thereof pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;   (f) promptly, and in any event within five Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof; and   (g) promptly, such additional information regarding the business, financial or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from   62 Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet Administrative Agent); provided that: (i) the Borrower shall, upon request, deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(b) to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.   The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrower or its securities) (each, a “Public Lender”). The Borrower hereby agrees that (w) all Borrower Materials that it in its discretion determine are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof (provided, however, that all Borrower Materials in the form of press releases and SEC filings shall be deemed to be “PUBLIC” information and shall not be required to be marked “PUBLIC”); (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arrangers, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” or deemed to be “PUBLIC” pursuant to the proviso in clause (w) of this paragraph are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” or deemed to be “PUBLIC” pursuant to the proviso in clause (w) of this paragraph as being suitable only for   63 posting on a portion of the Platform not designated “Public Investor.” Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials “PUBLIC.”   6.03 Notices. Notify the Administrative Agent and each Lender:   (a) promptly of the occurrence of any Default;   (b) promptly of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect (other than an Internal Control Event which shall be reported in accordance with subparagraph (e) below);   (c) promptly of (i) any breach or non-performance of, or any default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any development in, any litigation or proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws, which in any case could reasonably be expected to have a Material Adverse Effect;   (d) promptly of the occurrence of any ERISA Event;   (e) (i) promptly notify the Agents and (ii) within 30 Business Days notify the Lenders of the occurrence of any of the following events numbered (1) through (3) below; provided however, to the extent not previously disclosed to the Lenders, the Borrower shall notify the Agents and the Lenders of the occurrence of any of the following events numbered (1) through (3) below not less than one Business Day (or such lesser notice prior to public disclosure as is reasonable under the circumstances) prior to (A) the public announcement thereof by a representative of the Borrower, (B) the filing with the SEC or any other Governmental Authority of any report or communication related thereto or (C) the submission of a Request for Credit Extension:   (1) any Internal Control Event (I) which is required to be publicly disclosed of which a Responsible Officer (other than a Responsible Officer committing the fraud constituting such Internal Control Event) has knowledge, (II) which the Borrower intends to disclose or (III) which has otherwise become known to the public (other than an Internal Control Event concerning allegations of fraud that involve an amount less than $500,000),   (2) any Internal Control Event of which a Responsible Officer (other than a Responsible Officer committing the fraud constituting such Internal Control Event) has knowledge which could reasonably be expected to have a Material Adverse Effect, or   (3) any Internal Control Event of which a Responsible Officer (other than a Event) has knowledge which includes a fraud allegation that could reasonably be expected to involve an amount in excess of $15,000,000;   64 (f) promptly of any litigation or proceeding affecting the Borrower or any of its Subsidiaries (i) which could reasonably be expected to result in an adverse judgment of $15,000,000 or more and not covered by insurance or (ii) in which injunctive or similar relief is sought which in the case of this clause (ii) could reasonably be expected to materially interfere with the ordinary conduct of business of the Borrower or its Subsidiaries; and   (g) promptly of any announcement by Moody’s or S&P of any change or possible change in a Senior Unsecured Debt Ratings.   Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.   6.04 Payment of Obligations. Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property which would not be permitted under Section 7.01; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.   6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05; (b) except with respect to FCC Cross Ownership Issues, take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.   6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.   6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of the Borrower, insurance with respect to its properties and   65 business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance compatible with the following standards) as are customarily carried under similar circumstances by such other Persons.   6.08 Compliance with Laws. Except with respect to FCC Cross Ownership Issues, comply with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be   6.09 Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.   6.10 Inspection Rights. Permit representatives and independent contractors of the Administrative Agent and each Lender acting on behalf of the Administrative Agent and the Lenders to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its officers, and its Registered Public Accounting Firm (provided that representatives of the Borrower designated by a Responsible Officer of the Borrower may be present at any such meeting with accountants), all at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors acting on behalf of the Administrative Agent and the Lenders) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.   6.11 Use of Proceeds. Use the proceeds of the Credit Extensions to refinance the indebtedness under the Existing Credit Agreement and for general corporate purposes not in contravention of any Law or of any Loan Document.   6.12 Subsidiary Guaranty; Subsidiaries.   (a) On the Closing Date, the Subsidiaries shall not be required to deliver a Guaranty. If, however, at any time, (a) the Borrower has received Senior Unsecured Debt Ratings that are not BBB-/Ba1 or BB+/Baa3 or better from S&P or Moody’s, respectively, or (b) any Subsidiary grants any Person a guarantee (or permits any such guarantee to exist) of Indebtedness (other than the Existing Synthetic Leases), then each of the Domestic Subsidiaries of the Borrower shall guarantee the Obligations on a pari passu basis and shall execute and deliver to the Administrative Agent the Guaranty or a Guaranty Supplement for the benefit of the Administrative Agent and the Lenders.   66 (b) After the creation or acquisition of a Subsidiary, the Borrower shall (i) promptly notify the Administrative Agent of the existence thereof by delivery to the Administrative Agent of a revised Schedule 5.13 together with the required Compliance Certificate for the fiscal quarter then ended updating the information reflected on Schedule 5.13 and (ii) promptly, if applicable pursuant subsection (a), cause each such new Subsidiary to execute and deliver to the Administrative Agent, a Guaranty Supplement, pursuant to which, inter alia, each such new Subsidiary shall guarantee the Obligations, provided that if the Guaranty has been released and terminated in accordance with Section 10.17 then no such requirement for such new Subsidiary to enter into a Guaranty shall exist under this subsection (b).   ARTICLE VII. NEGATIVE COVENANTS   shall remain outstanding, the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:   7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:   (a) Liens pursuant to any Loan Document;   (b) Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or extensions thereof, provided that (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased, (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.03(b);   (c) Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;   (d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;   (e) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA, and contractual, common law or statutory rights of set off against deposits or other amounts owing any depository institution, provided that such pledges or deposits made were not made in connection with the borrowing of money or the obtaining of advances or credit and do not, in the aggregate, materially detract from the value of the property or assets or impair the use thereof in the operation of the business of the Borrower or its Subsidiaries;   67 (f) deposits to secure the performance of bids, trade contracts and leases (other than contracts for the payment of money), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;   (g) easements, rights-of-way, servitudes, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;   (h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);   (i) Liens securing Indebtedness of the Borrower permitted under Section 7.03(e) for (i) Capital Lease Obligations incurred after the Closing Date and created contemporaneously with such Capital Lease Obligations to secure the same and (ii) purchase money Indebtedness on property acquired after the Closing Date and provide for the payment or financing of the purchase price thereof; provided that (x) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (y) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition;   (j) Liens securing Indebtedness of the Borrower permitted under Section 7.03(e) that are (i) existing on any asset of any Person at the time such Person becomes a Subsidiary and not created in contemplation of such event, (ii) on any asset of any Person existing at the time such Person is merged or consolidated with or into the Borrower or a Subsidiary and not created in contemplation of such event, or (iii) existing on any asset prior to the acquisition thereof by the Borrower or a Subsidiary and not created in contemplation of such acquisition on the property being acquired on the date of the acquisition (collectively, “Acquisition Liens”); provided that the amount of Indebtedness secured by any such Lien does not exceed the acquisition price; and   (k) Liens (i) created by lease agreements, licenses or similar interests, or by statute or common law to secure the payments of rental, license amounts or similar amounts and other sums not yet due thereunder or (ii) on leasehold interests, licenses or similar interests created by the lessor, licensee or grantor thereunder in favor of any mortgagee of the leased premises.   7.02 Investments. Make any Investments, except:   (a) Investments held by the Borrower or such Subsidiary in the form of cash equivalents;   (b) Investments in existence on the date hereof and listed on Schedule 7.02;   (c) Investments not constituting Acquisitions of the Borrower or its Subsidiaries in any (x) Wholly-Owned Subsidiary or (z) any other Person, so long as such Person is engaged in a Permitted Line of Business and no Default exists or would result therefrom;   68 (d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;   (e) Guarantees permitted by Section 7.03;   (f) Investments by the Borrower or any Subsidiary in any Person to the extent that such investments are deemed to be investments under GAAP due to the reinvestment by such Person of existing funds or earnings in such Person (and not new value contributed by the Borrower or its Subsidiaries), provided that, if the Borrower or any Subsidiary of the Borrower makes any cash or other investment of value in such Person, such cash or other investment of value shall not be permitted by this subsection (f);   (g) Investments constituting Acquisitions, if each of the following conditions has been satisfied: (i) immediately before and after giving effect to the proposed Acquisition, no Default shall have occurred and be continuing, (ii) prior to any Acquisition in excess of $50,000,000, the Borrower provides evidence to the Administrative Agent of pro forma compliance with all terms and conditions of this Agreement, and (iii) such Acquisition shall be in Permitted Lines of Business; and   (h) the Borrower or any Subsidiary may acquire and own stock, obligations or securities received in settlement of debts (created in the ordinary course of business) owing to the Borrower or any such Subsidiary.   7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:   (a) Indebtedness under the Loan Documents;   (b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and any refinancings, refundings, renewals or extensions thereof; provided that (i) the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to fees and expenses reasonably incurred in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Loan Parties or the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does not exceed the greater of the existing interest rate or the then applicable market interest rate;   (c) Guarantees of the Borrower or any Subsidiary in respect of Indebtedness otherwise permitted hereunder of the Borrower, any Wholly-Owned Subsidiary or any Guarantor;   69 (d) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;   (e) so long as there exists no Default both before and after giving effect to each and every incurrence of such Indebtedness, Indebtedness of the Borrower in respect of Capital Lease Obligations, acquisition Indebtedness, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets, and secured only to the extent permitted by Sections 7.01(i) and (j);   (f) so long as there exists no Default both before and after giving effect to each and every incurrence of such Indebtedness, up to $50,000,000 of Indebtedness of the Subsidiaries of the Borrower at any one time outstanding;   (g) so long as there exists no Default both before and after giving effect to each and every incurrence of such Indebtedness, Indebtedness among the Borrower and its Subsidiaries, provided that such Indebtedness is fully subordinated to the Obligations on terms acceptable to the Administrative Agent and the Lenders; and   (h) so long as there exists no Default both before and after giving effect to each and every incurrence of such Indebtedness, unsecured Indebtedness of the Borrower, which such Indebtedness must be pari passu with the Obligations hereunder.   7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:   (a) any Subsidiary may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries, provided that when any Wholly-Owned Subsidiary or Guarantor is merging with another Subsidiary, such Wholly-Owned Subsidiary or Guarantor shall be the continuing or surviving Person;   (b) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another Subsidiary; provided that if the transferor in such a transaction is a Wholly-Owned Subsidiary or a Guarantor, then the transferee must either be the Borrower or a Wholly-Owned Subsidiary or a Guarantor;   (c) the Borrower may merge with another Person, provided that (i) such Person is organized under the laws of the United States of America or one of its states, (ii) the Borrower is the corporation surviving such merger, (iii) both immediately before and after giving effect to such merger, no Material Adverse Effect or Default shall have occurred or result therefrom and (iv) 60 days before such merger, the Borrower shall provide the Administrative Agent evidence of pro forma compliance with all of the terms and conditions of this Agreement; and   70 (d) Dispositions permitted by Section 7.05.   7.05 Dispositions. Make any Disposition or enter into any agreement to make any Disposition, except:   (a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;   (b) Dispositions of inventory in the ordinary course of business;   (c) Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;   (d) Dispositions of property by any Subsidiary to the Borrower or to a Wholly-Owned Subsidiary; provided that if the transferor of such property is a Guarantor, the transferee thereof must either be the Borrower or a Guarantor;   (e) Dispositions permitted by Section 7.04;   (f) Dispositions by the Borrower and its Subsidiaries of property pursuant to sale-leaseback transactions permitted by Section 7.12;   (g) non-exclusive licenses of IP Rights in the ordinary course of business and substantially consistent with past practice; and   (h) other Dispositions not constituting all or substantially all of the assets of the Borrower, so long as (i) no Material Adverse Effect or Default shall have occurred or would result therefrom both immediately before and after giving effect to such Disposition and (ii) such Disposition shall be for fair market value. Upon any Disposition of a Subsidiary that is a Guarantor in compliance with this clause (h), the Administrative Agent will, if applicable, terminate and release such Guarantor Subsidiary from the Guaranty or Guaranty Supplement.   7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:   (a) each Subsidiary may make Restricted Payments to the Borrower, the Guarantors and any other Person that owns an Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;   71 (b) the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;   (c) the Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity Interests issued by it with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests; and   (d) the Borrower may declare or pay cash dividends to its stockholders and purchase, redeem or otherwise acquire for cash Equity Interests issued by it not to exceed in the aggregate for any fiscal year, an amount equal to 10% of Stockholders’ Equity.   7.07 Change in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the date hereof or any business substantially related or incidental thereto or any Permitted Line of Business.   7.08 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate, provided that the foregoing restriction shall not apply to transactions between or among the Borrower and any of its Wholly-Owned Subsidiaries or Guarantors or between and among any Wholly-Owned Subsidiaries or Guarantors.   7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to the Borrower or any Guarantor or to otherwise transfer property to the Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower (except any restriction requiring pari passu guarantees set forth in the Senior Note Documents or in any refinancing of such Senior Notes in accordance with Section 7.03(b)), (iii) of the Borrower or any Subsidiary to enter into an amendment of, or accept a waiver or consent with respect to, any term or provision of this Agreement or any of the Loan Documents or (iv) of the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that this clause (iv) shall not prohibit any negative pledge incurred or provided (x) in favor of any holder of Indebtedness permitted under Section 7.03(e) solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness or (y) in connection with the Senior Note Documents; or (b) except in connection with the Senior Note Documents, requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.   7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.   72 7.11 Financial Covenants.   (a) Maximum Leverage Ratio. Permit the Leverage Ratio at the end of any fiscal quarter of the Borrower occurring during any period set forth below to be greater than the ratio set forth below opposite such period:   Four Fiscal Quarters Ending    Maximum Leverage Ratio Closing Date through April 1, 2007    5.25 to 1.00 April 2, 2007 and each fiscal quarter thereafter    5.00 to 1.00   (b) Minimum Interest Coverage Ratio. Permit the Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than 3.00 to 1.00.   7.12 Sale and Leaseback. Enter into any arrangement whereby it sells or transfers any of its assets, and thereafter rents or leases such assets, provided that, so long as there exists no Default both before and after giving effect to any such sale and leaseback, the Borrower and its Subsidiaries may enter into sale and leasebacks in an aggregate amount not to exceed 20% of Stockholders’ Equity during the term of this Agreement.   ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES   8.01 Events of Default. Any of the following shall constitute an Event of Default:   (a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) as of the due date thereof, any amount of principal of any Loan or any L/C Obligation, provided that, to the extent such failure is caused by an error or omission of an administrative or operational nature and funds are available on such date to enable the Borrower to such Loan Party to make such payment, then such failure shall not constitute an Event of Default unless such failure continues for one Business Day after such due date or such failure occurs on the Maturity Date or (ii) within five days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or any other amount payable hereunder or under any other Loan Document; or   (b) Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.03(a), 6.05, 6.10, 6.11 or 6.12 or Article VII; or   (c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days after the earlier of (i) actual knowledge thereof by a Responsible Officer of the Borrower and (ii) the date that Administrative Agent shall have given the Borrower notice thereof; or   (d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or   73 (e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $20,000,000, after the giving of any required notice and the expiration of any applicable grace period or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, after the expiration of any applicable notice or cure period, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than $20,000,000; or   (f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or   (g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, stayed, vacated or fully bonded within 30 days after its issue or levy; or   (h) Judgments. There is entered against the Borrower or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount exceeding $15,000,000 (to the extent not covered by independent third-party insurance as to which the insurer does not   74 dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 60 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or   (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan; and in each case in clauses (i) or (ii) above, such event or condition could reasonably be expected to have a Material Adverse Effect; or   (j) Invalidity of Loan Documents. Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any material provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any material provision of any Loan Document; or   (k) Change of Control. There occurs any Change of Control; or   (l) FCC and Communications Act. The Borrower or any Subsidiary shall fail to comply with the Communications Act, or any rule or regulation promulgated by the FCC (except with respect to FCC Cross Ownership Issues), and such failure could   8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:   (a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;   (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;   (c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and   (d) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents;   75 provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.   8.03 Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:   indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;   indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;   Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations, except Obligations relating to Swap Contracts, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;   Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings and Obligations in respect of Swap Contracts, ratably among the Lenders (and any Affiliate of a Lender that may be owed Obligations in respect of Swap Contracts) and the L/C Issuer in proportion to the respective amounts described in this clause Fourth held by them;   Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit;   Sixth, to payment of remaining portion of the Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Sixth held by them; and   Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full in cash, to the Borrower or as otherwise required by Law.   Subject to Section 2.04(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such   76 Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.   ARTICLE IX. ADMINISTRATIVE AGENT   9.01 Appointment and Authority.   Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.   9.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.   9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:   (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;   (b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and   (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.   77 The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender or the L/C Issuer.   The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.   9.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.   9.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective for herein as well as activities as Administrative Agent.   9.06 Resignation of Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Borrower. Upon receipt   78 of any such notice of resignation, the Required Lenders shall have the right (in consultation with the Borrower so long as there exists no Event of Default), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.   Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer and Swing Line Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.   9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.   79 9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Sole Book Manager, Arrangers, Co-Syndication Agents or Co-Documentation Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.   9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise   (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.04(i) and (j), 2.10 and 10.04) allowed in such judicial proceeding; and   (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;   and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.10 and 10.04.   Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.   9.10 Guaranty Matters. The Lenders and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion, to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.   80 ARTICLE X. MISCELLANEOUS   10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:   (a) waive any condition set forth in Section 4.01(a) without the written consent of each Lender;   (b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;   (c) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;   (d) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (v) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document, without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest or Letter of Credit Fees at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;   (e) change Section 2.13(a), Section 2.14 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender;   (f) change any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; or   (g) release all or substantially all of the value of the Guaranty without the written consent of each Lender except in accordance with the terms thereof or pursuant to Section 10.17;   and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of   81 the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iv) Section 10.06(h) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; (v) the Fee Letters may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto and (v) notwithstanding anything in this Section 10.01 or elsewhere in this Agreement to the contrary except to the extent there shall exist a Default, any waiver, consent or other amendment to any term or provision of this Agreement necessary or advisable to effectuate the intent of Section 2.15 to provide an increase in the Aggregate Commitments shall be effective when executed by the Borrower, the Administrative Agent and each Lender or other approved financial institution making such increase in the Aggregate Commitments. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.   10.02 Notices; Effectiveness; Electronic Communication.   (a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:   (i) if to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and   (ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.   Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).   (b) Electronic Communications. Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the   82 Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.   Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.   (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).   (d) Change of Address, Etc. Each of the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.   83 (e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.   10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.   10.04 Expenses; Indemnity; Damage Waiver.   (a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C Issuer), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred Letters of Credit.   (b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities   84 and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.   (c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.13(d).   (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the   85 transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.   (e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.   (f) Survival. The agreements in this Section shall survive the resignation of the Administrative Agent and the L/C Issuer, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.   10.05 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.   10.06 Successors and Assigns.   (a) Successors and Assigns Generally. The provisions of this Agreement shall be successors and assigns permitted hereby, except that neither the Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC in accordance with the provisions of subsection (h) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in   86 subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.   (b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that   (i) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;   (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not apply to rights in respect of Bid Loans or Swing Line Loans;   (iii) any assignment of a Commitment must be approved by the Administrative Agent, the L/C Issuer and the Swing Line Lender unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and   (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount, if any, required as set forth in Schedule 10.06, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.   Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and   87 obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.   (c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by each of the Borrower and the L/C Issuer at any reasonable time and from time to time upon reasonable prior notice. In addition, at any time that a request for a consent for a material or substantive change to the Loan Documents is pending, any Lender may request and receive from the Administrative Agent a copy of the Register.   (d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and   Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender.   88 (e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as though it were a Lender.   (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.   (g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.   (h) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to provide all or any part of any Committed Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Committed Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Committed Loan, the Granting Lender shall be obligated to make such Committed Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.12(b)(ii). Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrower under this Agreement (including its obligations under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder. The making of a Committed Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Committed Loan were made by such Granting Lender. In furtherance of the foregoing, each party hereto hereby   89 agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Borrower and the Administrative Agent and with the payment of a processing fee in the amount of $2,500, assign all or any portion of its right to receive payment with respect to any Committed Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Committed Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.   (i) Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon 30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrower, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Committed Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.   10.07 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in   90 connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.   For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.   Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including Federal and state securities Laws.   10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or the L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.   91 10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.   10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually   10.11 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.   10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.   10.13 Replacement of Lenders. If any Lender requests compensation under Section or any   92 Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:   (a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);   (b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);   (c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and   (d) such assignment does not conflict with applicable Laws.   A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.   10.14 Governing Law; Jurisdiction; Etc.   (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.   (b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN   93 DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.   (c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.   (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY AGREES THAT SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH ON SCHEDULE 10.02 OR ON ITS ADMINISTRATIVE QUESTIONNAIRE, AS APPLICABLE, OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT TO SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.   10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.   10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act.   94 10.17 Release of Guaranty.   (a) On the Closing Date, as long as the Senior Unsecured Debt Ratings are at least BBB-/Ba1 or BB+/Baa3 from S&P or Moody’s, respectively, and there exists no Subsidiary guarantees of any Indebtedness of the Borrower (and no then current contractual obligation to guarantee any such Indebtedness) other than (i) the Existing Synthetic Leases and (ii) the Senior Notes, the Conditional Early Release Guarantees (as defined in the Existing Credit Agreement) are released.   (b) Thereafter, if any Guaranty is then in effect, at such time as (i) there exists no Default, (ii) the Borrower has received Senior Unsecured Debt Ratings that are BBB-/Ba1 or BB+/Baa3 or better from S&P or Moody’s, respectively, and (iii) there exist no Subsidiary guarantees of any Indebtedness of the Borrower (other than the Existing Synthetic Leases) (and no then current contractual obligation to guarantee any such Indebtedness), then the Guaranty shall be released and the Administrative Agent shall take all such action as is necessary or advisable to accomplish such release, and each Lender hereby authorizes and directs the Administrative Agent to do so. If the Guaranty shall have once been released by this Section 10.17, and new guarantees of the Obligations have been entered into by any or all of the Subsidiaries at any time thereafter in accordance with the provisions of Section 6.12 or otherwise, this Section shall not operate to release any such new guarantees.   10.18 Amendment, Restatement, Extension, Renewal and Increase in Uncommitted Option. This Agreement is an amendment, restatement, extension, renewal and increase of the Existing Credit Agreement, and, as such, except for the “Obligations” as defined in the Existing Credit Agreement (which shall survive, be renewed and restated by the terms of this Agreement), all other terms and provisions supersede in their entirety the Existing Credit Agreement.   10.19 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.   95   By:     Name:   Marshall N. Morton Title:   Vice Chairman and Chief Financial Officer   S-1 as Administrative Agent By:     Name:     Title:       S-2 As a Lender, L/C Issuer and Swing Line Lender By:     Name:     Title:       S-3 SUNTRUST BANK, As a Co-Syndication Agent and a Lender By:     Name:     Title:       S-4 THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH By:     Name:     Title:       S-5 THE BANK OF NOVA SCOTIA, As a Co-Documentation Agent and a Lender By:     Name:     Title:       S-6 SCOTIABANC INC., As a Lender By:     Name:     Title:       S-7 THE ROYAL BANK OF SCOTLAND, PLC By:     Name:     Title:       S-8 REGIONS BANK, As a Lender By:     Name:     Title:       S-9 MIZUHO CORPORATE BANK, LTD. As a Lender By:     Name:     Title:       S-10 SUMITOMO MITSUI BANKING CORP., NEW YORK As a Lender By:     Name:     Title:       S-11 WACHOVIA BANK NATIONAL ASSOCIATION, As a Lender By:     Name:     Title:       S-12 UFJ BANK LIMITED, NEW YORK BRANCH As a Lender By:     Name:     Title:       S-13 SCHEDULES OMITTED   1 EXHIBIT A   FORM OF COMMITTED LOAN NOTICE   Date:                     ,                To: Bank of America, N.A., as Administrative Agent   Ladies and Gentlemen:   Reference is made to that certain Amended and Restated Credit Agreement, dated as of March 14, 2005 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Media General, Inc., a Virginia corporation (the “Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.   The undersigned hereby requests (select one or both):   ¨  A Borrowing of Committed Loans             ¨  A conversion or continuation of Loans     1. On                                                               (a Business Day).     2. In the amount of $                     .     3. Comprised of                                                              . [Type of Committed Loan requested]     4. For Eurodollar Rate Loans: with an Interest Period of              months or              days.   The Committed Borrowing, if any, requested herein complies with the provisos to the first sentence of Section 2.01 of the Agreement.   MEDIA GENERAL, INC. By:     Name:     Title:       A-1 - 1 Form of Committed Loan Notice EXHIBIT B-1   FORM OF BID REQUEST     Ladies and Gentlemen:   Swing Line Lender.   The Lenders are invited to make Bid Loans:   1. On (a Business Day).   2. In an aggregate amount not exceeding $             (with any sublimits set forth below).   3. Comprised of (select one):   ¨ Bid Loans based on an Absolute Rate         ¨ Bid Loans based on Eurodollar Rate   Bid Loan No.    Interest Period requested    Maximum principal amount requested 1                 days/mos    $                      2                 days/mos    $                      3                 days/mos    $                        The Bid Borrowing requested herein complies with the requirements of the proviso to the first sentence of Section 2.03(a) of the Agreement.   B-1 - 1 Form of Bid Request The Borrower authorizes the Administrative Agent to deliver this Bid Request to the Lenders. Responses by the Lenders must be in substantially the form of Exhibit B-2 to the Agreement and must be received by the Administrative Agent by the time specified in Section 2.03 of the Agreement for submitting Competitive Bids.     Name:     Title:       B-1 - 2 Form of Bid Request EXHIBIT B-2   FORM OF COMPETITIVE BID   ,                  Ladies and Gentlemen:   Swing Line Lender.   In response to the Bid Request dated ,             , the undersigned offers to make the following Bid Loan(s):     1. Borrowing date:            (a Business Day).   forth below).     3. Comprised of:   Bid Loan No.   Interest Period offered   Bid Maximum   Absolute Rate Bid or Eurodollar Margin Bid* 1                days/mos   $                        (- +)             % 2 3 * Expressed in multiples of 1/100th of a basis point.   B-2 - 1 Form of Competive Bid Contact Person:              Telephone:   [LENDER] By:     Name:     Title:         THIS SECTION IS TO BE COMPLETED BY THE BORROWER IF IT WISHES TO ACCEPT ANY OFFERS CONTAINED IN THIS COMPETITIVE BID:   The offers made above are hereby accepted in the amounts set forth below:   Bid Loan No.   Principal Amount Accepted     $     $     $   By:     Name:     Title:     Date:       B-2 - 2 Form of Competitive Bid   EXHIBIT C   FORM OF SWING LINE LOAN NOTICE   Date:                 ,                To: Bank of America, N.A., as Swing Line Lender Bank of America, N.A., as Administrative Agent   Ladies and Gentlemen:   Swing Line Lender.   The undersigned hereby requests a Swing Line Loan:       The Swing Line Borrowing requested herein complies with the requirements of the provisos to the first sentence of Section 2.05(a) of the Agreement.   By:     Name:     Title:       C-1 Form of Swing Line Loan Notice EXHIBIT D   FORM OF NOTE   FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to                                  or registered assigns (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Loan from time to time made by the Lender to the Borrower under that certain Amended and Restated Credit Agreement, dated as of therein being used herein as therein defined), among the Borrower, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.   The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. Except as otherwise provided in Section 2.05(f) of the Agreement with respect to Swing Line Loans, all payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.   This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. This Note is also entitled to the benefits of the Guaranty. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.   The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.   D-1 Form of Note THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE     Name:     Title:       D-2 Form of Note LOANS AND PAYMENTS WITH RESPECT THERETO   Date   Type of Loan Made   Amount of Loan Made    End of Interest Period    Amount of Principal or Interest Paid This Date    Outstanding Principal Balance This Date    Notation Made By ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________ ________________   ________________   ________________    ________________    ________________    ________________    ________________   D-3 Form of Note EXHIBIT E   FORM OF COMPLIANCE CERTIFICATE   Financial Statement Date:                 ,                  Ladies and Gentlemen:   Swing Line Lender.   The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                                                                       of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:   [Use following paragraph 1 for fiscal year-end financial statements]   1. Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.   [Use following paragraph 1 for fiscal quarter-end financial statements]   1. Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date. Such financial statements fairly present the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.   2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by the attached financial statements.   3. A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and   [select one:]   E –1 Form of Compliance Certificate [to the knowledge of the undersigned during such fiscal period, (a) the Borrower performed and observed in all material respects each covenant and condition of the Loan Documents applicable to it, and (b) the undersigned has no knowledge that any Default has occurred and is continuing.]   —or—   [the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]   4. The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the date of this Certificate.   [If, applicable:]   5. Attached is a revised Schedule 5.13 of Subsidiaries; Other Equity Investments   IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                         ,                      Name:     Title:       E –2 Form of Compliance Certificate For the Quarter/Year ended              (“Statement Date”)   SCHEDULE 2 to the Compliance Certificate ($ in 000’s)   I.    Section 7.11 (a) – Maximum Leverage Ratio.             A. Indebtedness at Statement Date:    $                   B. EBITDA for four consecutive fiscal quarters ending on above date (“Subject Period”):    $                   1. Net Income for Subject Period:    $                   2. To the extent deducted in calculating such Net Income, Interest Expense for Subject Period:    $                   3. To the extent deducted in calculating such Net Income, provision for income taxes for Subject Period:    $                   4. To the extent deducted in calculating such Net Income, depreciation expenses for Subject Period:    $                   5. To the extent deducted in calculating such Net Income, amortization expenses for Subject Period:    $                   6. To the extent deducted in calculating such Net Income, all film amortization charges, less any film cash payments:    $                   7. To the extent deducted in calculating such Net Income, non-recurring non-cash reductions of Net Income for Subject Period:    $                   8. To the extent included in calculating such Net Income, income tax credits for Subject Period:    $                   9. To the extent included in calculating such Net Income, Non-cash additions to Net Income for Subject Period:    $                   10. Consolidated EBITDA (Lines I.B1 + 2 + 3 + 4 + 5 + 6 + 7 – 8 – 9):    $                   C. Leverage Ratio (Line I.A ÷ Line I.B):               to 1   E –3 Form of Compliance Certificate      Maximum permitted:        Four Fiscal Quarters Ending    Maximum Leverage Ratio           5.25 to 1.00           5.00 to 1.00 II.    Section 7.11 (b) – Minimum Interest Coverage Ratio.             A. Interest Expense for Subject Period:    $                   B. EBITDA for Subject Period (Line I.A.10 above):    $                   C. Interest Coverage Ratio (Line I.A.10 ÷ Line II.B):                   to 1      Minimum required:      3.00 to 1.00   E –4 Form of Compliance Certificate   SCHEDULE 3 to the Compliance Certificate   EBITDA (in accordance with the definition of EBITDA as set forth in the Agreement)   EBITDA    Quarter Ended    Quarter Ended    Quarter Ended    Quarter Ended    Twelve Months Ended Net Income                          + Interest Expense                          + income taxes                          + depreciation expense                          + amortization expense                          + all film amortization charges, less any film cash payments                          + non-recurring non-cash expenses                          - income tax credits                          - non-cash income                          = EBITDA                            E –5 Form of Compliance Certificate   EXHIBIT F   ASSIGNMENT AND ASSUMPTION   This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.   For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including, without limitation, the Letters of Credit and the Swing Line Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.   1. Assignor:                                2. Assignee:                              [and is an Affiliate/Approved Fund of [identify Lender]1]   3. Borrower(s): Media General, Inc.   4. Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement   1 Select as applicable   F–1   5. Credit Agreement: Amended and Restated Credit Agreement, dated as of March 14, 2005, among Media General, Inc., the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer, and Swing Line Lender   6. Assigned Interest:   Facility Assigned2   Aggregate Amount of Commitment/Loans for all Lenders*   Amount of Commitment/Loans Assigned*   Percentage Assigned of Commitment/Loans3   CUSIP Number ______   $                $                            %     ______   $                $                            %     ______   $                $                            %       [7. Trade Date:                 ]4   Effective Date:                     , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]   The terms set forth in this Assignment and Assumption are hereby agreed to:   ASSIGNOR [NAME OF ASSIGNOR] By:     Title:     ASSIGNEE [NAME OF ASSIGNEE] By:     Title:       2 Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “Revolving Credit Commitment”, “Term Loan Commitment”, etc.). 3 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. 4 To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.   F-2   [Consented to and]5 Accepted:   as Administrative Agent By:     Title:       [Consented to:]6   By:     Title:       5 To be added only if the consent of the Administrative Agent is required by the 6 To be added only if the consent of the Borrower and/or other parties (e.g. Swing Line Lender, L/C Issuer) is required by the terms of the Credit Agreement.   F-3 ANNEX 1 TO ASSIGNMENT AND ASSUMPTION     ASSIGNMENT AND ASSUMPTION     1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.   1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section              thereof, as applicable, and such other documents and information as it has deemed Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.   2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest,   F-4 fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.   3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.   F-5 EXHIBIT G   FORM OF GUARANTY   THIS GUARANTY AGREEMENT, dated as of                     ,             , made by each of the corporations and limited liability companies that are signatories hereto (the “Guarantors”) in favor of Bank of America, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”) for the lenders (the “Lenders”) from time to time parties to the Amended and Restated Credit Agreement dated as of March 14, 2005 among Media General, Inc., a Virginia corporation (the “Borrower”), such Lenders and the Co-Syndication Agents and Co-Documentation Agents named therein and the Administrative Agent (as amended, supplemented and otherwise modified from time to time, including, without limitation, all extensions, renewals, restatements, rearrangements and refundings thereof, the “Credit Agreement”).     WHEREAS, the Lenders have severally agreed to make Loans under the Credit Agreement to the Borrower and the L/C Issuer has agreed to issue Letters of Credit under the Credit Agreement for the account of the Borrower, in each case, for such purposes and upon the terms and subject to the conditions set forth therein;   WHEREAS, the Borrower is a member of an affiliated group of corporations and limited liability companies that includes each Guarantor:   WHEREAS, the Borrower and the Guarantors are engaged in related businesses, and each Guarantor will derive substantial direct and indirect benefit from the making of the Loans and the issuances of the Letters of Credit;   WHEREAS, the proceeds of the Loans may be used in part to enable the Borrower to make valuable transfers to the Guarantors in connection with the operation of their respective businesses and the Letters of Credit may be used in part to provide substantial benefits to the Guarantors;   WHEREAS, the Lenders, the Administrative Agent and any Affiliate of any Lender which is a party to a Swap Contract with the Borrower or any Affiliate of the Borrower are herein referred to as the “Guarantied Parties”;   WHEREAS, pursuant to Section 6.12 of the Credit Agreement, each of the Guarantors is required to execute and deliver this Guaranty Agreement to the Administrative Agent for the benefit of the Guarantied Parties. NOW, THEREFORE, in consideration of the premises and to induce the Lenders to make their respective Loans to the Borrower and the L/C Issuer to issue Letters of Credit for the account of the Borrower, the Guarantors hereby agree with the Administrative Agent, for the benefit of the Guarantied Parties, as follows:   1. Defined Terms.   (a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.   (b) As used herein, “Guaranty Agreement” means this Guaranty Agreement, as amended, supplemented and otherwise modified from time to time.   (c) As used herein, “Guarantied Obligations” means (a) the Obligations (as defined in the Credit Agreement), and all renewals, refundings, restructurings and other refinancings thereof, including increases in the amount thereof and (b) all present and future amounts that would become due but for the operation of any provision of Debtor Relief Laws, and all present and future accrued and unpaid interest, including, without limitation, all post-petition interest if the Borrower or any Guarantor voluntarily becomes subject to any Debtor Relief Laws.   (d) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Guaranty Agreement shall refer to this Guaranty Agreement as a whole and not to any particular provision of this Guaranty Agreement, and section and paragraph references are to this Guaranty Agreement unless otherwise specified.   (e) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.   2. Guarantee.   (a) Subject to the provisions of Section 3, each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the benefit of the Guarantied Parties and their respective successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations.   (b) Each Guarantor further agrees to pay or reimburse each of the Guarantied Parties for all their respective costs and expenses (including, without limitation, the reasonable fees and disbursements of any counsel to any of the Guarantied Parties) which may be paid or incurred by any of such Persons in enforcing or preserving any rights under this Guaranty Agreement, including, without limitation, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, such Guarantor under this Guaranty Agreement. This Guaranty Agreement shall remain in full force and effect until the earlier to occur of (i) the latest to occur of (A) the Loans are paid in full, (B) the Commitments are terminated, (C) no Letters of Credit are outstanding and (D) no other Obligations shall be due and payable and (ii) release of this Guaranty Agreement in accordance with Subsection (f) (the “Guaranty Termination Date”).   G-1- 2 Form of Guaranty (c) Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing this Guaranty Agreement or affecting the rights and remedies of any Guarantied Party hereunder.   (d) No payment or payments made by any Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by any Guarantied Party from any Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment or payments, other than payments made by such Guarantor in respect of the Obligations or payments received or collected from such Guarantor in respect of the Obligations, remain liable for the Obligations until the Guaranty Termination Date, subject to Section 3 below.   (e) Each Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to any Guarantied Party on account of its liability hereunder, it will notify the Administrative Agent in writing that such payment is made under this Guaranty Agreement for such purpose.   (f) The Guaranty Agreement shall be released in accordance with the terms of Section 10.17 of the Credit Agreement.   3. Fraudulent Transfer Limitation. Anything contained in this Guaranty Agreement to the contrary notwithstanding, the obligations of each Guarantor hereunder shall be limited to a maximum aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any applicable provisions of comparable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of such Guarantor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of such Guarantor in respect of intercompany indebtedness to the Borrower or other Affiliates of the Borrower to the extent that such indebtedness would be discharged in an amount equal to the amount paid by such Guarantor hereunder) and after giving effect as assets to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation or contribution of such Guarantor pursuant to (i) applicable Law or (ii) any agreement providing for an equitable allocation among such Guarantor and other Affiliates of the Borrower of obligations arising under guaranties by such parties.   4. Right of Contribution. The Guarantors desire to allocate among themselves, in a fair and equitable manner, their obligations arising under this Guaranty Agreement. Accordingly, in the event any payment or distribution is made by any   G-1- 3 Form of Guaranty Guarantor under this Guarantee (a “Funding Guarantor”) that exceeds its Fair Share (as defined below), that Funding Guarantor shall be entitled to a contribution from each of the other Guarantors in the amount of such other Guarantor’s Fair Share Shortfall (as defined below), with the result that all such contributions will cause each Guarantor’s Aggregate Payments (as defined below) to equal its Fair Share. “Fair Share” means, with respect to a Guarantor as of any date of determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined below) with respect to such Guarantor to (y) the aggregate of the Adjusted Maximum Amounts with respect to all Guarantors, multiplied by (ii) the aggregate amount paid or distributed on or before such date by all Funding Guarantors under this Guarantee in respect of the obligations guaranteed. “Fair Share Shortfall” means, with respect to a Guarantor as of any date of determination, the excess, if any, of the Fair Share of such Guarantor over the Aggregate Payments of such Guarantor. “Adjusted Maximum Amount” means, with respect to a Guarantor, the maximum aggregate amount of the obligations of such Guarantor under this Guaranty Agreement, determined in accordance with the immediately preceding paragraph above; provided that, solely for purposes of calculating the “Adjusted Maximum Amount” with respect to any Guarantor for purposes of this paragraph, the assets or liabilities arising by virtue of any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Guarantor. “Aggregate Payments” means, with respect to a Guarantor as of any date of determination, the aggregate amount of all payments and distributions made on or before such date by such Guarantor in respect of this Guaranty Agreement (including, without limitation, in respect of this Section 4). The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Funding Guarantor. The allocation among Guarantors of their obligations as set forth in this paragraph shall not be construed in any way to limit the liability of any Guarantor hereunder.   5. Right of Set-off. In addition to any rights and remedies of the Guarantied Parties provided by law (including, without limitation, other rights of set-off), each Guarantor hereby irrevocably authorizes each Guarantied Party at any time and from time to time without prior notice to such Guarantor or any other Guarantor, any such notice being expressly waived by each Guarantor to the extent permitted by applicable law, upon any amount becoming due and payable by such Guarantor hereunder (whether at the stated maturity of the Obligations, by acceleration or otherwise) to set off and appropriate and apply against such amount, to the extent permitted by applicable law any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured at any time held or owing by such Guarantied Party (or any branch or agency thereof) to or for the credit or the account of such Guarantor, whether or not such Guarantied Party has made any demand for payment. Each Guarantied Party shall notify such Guarantor promptly of any such set-off and the application made by such Guarantied Party, provided that, to the extend permitted by applicable law, the failure to give such notice shall not affect the validity of such set-off and application.   6. No Subrogation, Contribution, Reimbursement or Indemnity. Notwithstanding anything to the contrary in this Guaranty Agreement, each Guarantor   G-1- 4 Form of Guaranty hereby irrevocably waives all rights which may have arisen in connection with the guarantees contained in this Guaranty Agreement to be subrogated to any of the rights (whether contractual, under the United States Bankruptcy Code (or similar action under any successor law or under any comparable law), including Section 509 thereof, under common law or otherwise) of any of the Guarantied Parties against the Borrower or against any Guarantied Party for the payment of the Obligations until the date which is 91 days after the Guaranty Termination Date. Each Guarantor hereby further irrevocably waives all contractual, common law, statutory and other rights of reimbursement, contribution, exoneration or indemnity (or any similar right) from or against the Borrower or any other Person which may have arisen in connection with the guarantees contained in this Guaranty Agreement until the date which is 91 days after the Guaranty Termination Date. Until the date which is 91 days after the Guaranty Termination Date, if any amount shall be paid by or on behalf of the Borrower to any Guarantor on account of any of the rights waived in this Section 6, such amount shall be held by the such Guarantor in trust, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine. The provisions of this Section 6 shall survive the term of the guarantees contained in this Guaranty Agreement.   7. Amendments, etc. with Respect to the Obligations: Waiver of Rights. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Obligations made by any Guarantied Party may be rescinded by such party and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released, and the Credit Agreement, any other Loan Documents or any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminate, in whole or part, from time to time, and any collateral security, guarantee or right of offset at any time existing for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Each Guarantor hereby knowingly, intentionally and specifically waives any rights it may have at law or in equity to repudiate or abrogate or otherwise disclaim or limit its obligations hereunder as a result of any of the foregoing. No Guarantied Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for this Guaranty Agreement or any property subject thereto, and each Guarantor hereby knowingly, intentionally and specifically waives any rights it otherwise may have at law or in equity in the event of any failure by any Guarantied Party to so protect, secure, perfect or insure any such Lien. When making any demand hereunder against any of the Guarantors, any Guarantied Party may, but shall be under no obligation to, make a similar demand on the Borrower or any other Guarantor or guarantor, and any failure by any Guarantied Party to make any such demand or to collect any payments from the Borrower or any such other Guarantor or guarantor or any release of the Borrower or such other Guarantor or guarantor shall not   G-1- 5 Form of Guaranty relieve any of the Guarantors in respect of which a demand or collection is not made or any of the Guarantors not so released of their several obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of any Guarantied Party against any of the Guarantors. For the purposes hereof, “demand” shall include the commencement and continuance of any legal proceedings.   8. Guaranty Agreement Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by any Guarantied Party upon this Guaranty Agreement or acceptance of this Guaranty Agreement, and the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guaranty Agreement; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Guarantied Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guaranty Agreement. Each Guarantor knowingly, intentionally and specifically waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Guarantors with respect to the Obligations. Each Guarantor understands and agrees that this Guaranty Agreement shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to, and hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, the following: (a) the validity, regularity or enforceability of the Credit Agreement, any Note, any other Loan Document, any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any Guarantied Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower against Guarantied Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Obligations, or of such Guarantor under this Guaranty Agreement, in bankruptcy or in any other instance, including, without limitation, any diminution in value, for whatever reason, of any of the collateral security for the Obligations. When pursuing its rights and remedies hereunder against any Guarantor, the Guarantied Party may, but shall be under no obligation to, pursue such rights and remedies as it may have against the Borrower or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto (and each Guarantor hereby knowingly, intentionally and specifically waives any right it may have to require the Guarantied Party to do so), and any failure by the any Guarantied Party to pursue such other rights or remedies or to collect any payments from the Borrower or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve such Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Guarantied Parties against such Guarantor. This Guaranty Agreement shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon each Guarantor and the successors and assigns thereof, and shall inure to the benefit of the Guarantied Parties, and their respective successors, endorsees, transferees and assigns, until the Guaranty Termination Date.   G-1- 6 Form of Guaranty 9. Reinstatement. This Guaranty Agreement shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by any Guarantied Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.   10. Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars and immediately available funds at the office of the Administrative Agent located at 901 Main Street, Dallas, Texas 75202.   11. Representations and Warranties. Each Guarantor hereby represents and warrants that:   (a) such Guarantor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the power and authority and the legal right to own and operate its property, to lease the property such Guarantor operates and to conduct the business in which such Guarantor is currently engaged;   (b) such Guarantor has the power and authority and the legal right to execute and deliver, and to perform its obligations under, this Guaranty Agreement and the other Loan Documents to which it is a party, and has taken all necessary action to authorize the execution, delivery and performance of this Guaranty Agreement and each of the other Loan Documents to which it is a party;   (c) this Guaranty Agreement and each of the other Loan Documents to which it is a party has been duly executed and delivered by such Guarantor and constitutes such Guarantor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer or conveyance, moratorium and other similar laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law);   (d) the execution, delivery and performance of this Guaranty Agreement and the other Loan Documents to which it is a party will not (i) contravene the terms of such Guarantor’s Organization Documents, (ii) violate any Law, (iii) be in conflict with, result in a breach of, constitute (alone or with notice or lapse of time or both) a default under or give rise to any right to accelerate any material obligation under any Contractual Obligation of such Guarantor or (iv) will not result in, or require, the creation or imposition of any Lien on any of the properties of such Guarantor, or any   G-1- 7 Form of Guaranty revenues, income or profits therefrom, whether now owned or hereafter acquired, pursuant to any order, injunction, writ or decree of an Governmental Authority or any arbitral award to which such Guarantor is subject or Contractual Obligation of the Guarantor;   (e) no action, consent or authorization of, registration or filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person (including, without limitation, any shareholder or any Affiliate of such Guarantor) is required to be obtained or made by such Guarantor in connection with the execution, delivery, performance, validity or enforceability of this Guaranty Agreement or any other Loan Document to which it is a party other than such as have been obtained or made and are in full force and effect;   (f) except as set forth on Schedule 11(f), no litigation is pending or, to the knowledge of such Guarantor, threatened by or against such Guarantor or against any of such Guarantor’s properties, revenues, income or profits therefrom with respect to this Guaranty Agreement or any other Loan Document to which it is a party or any of the transactions contemplated hereby or thereby;   (g) except as set forth on Schedule 11(g), such Guarantor has good record and indefeasible title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, or a legal right to use, all its other property and assets which are material to the operations of its business, and none of such property is subject to any Lien of any nature whatsoever except for Liens permitted under Section 7.01 of the Credit Agreement.   (h) as of the date on which this representation and warranty is made or deemed made, each of the Guarantors that is a Significant Subsidiary is Solvent, both before and after giving effect to the transactions contemplated by the Loan Documents consummated on such date and to the incurrence of all Indebtedness and other obligations incurred on such date in connection with the Loan Documents; and   (i) except as set forth on Schedule 11(i), each of the other representations and warranties contained in Article V of the Credit Agreement, insofar as such representations and warranties are applicable to such Guarantor, is true and correct in all material respects.   Each Guarantor agrees that the foregoing representations and warranties shall be deemed to have been made by such Guarantor on the date of each borrowing by the Borrower under the Credit Agreement and on the date of each issuance of a Letter of Credit under the Credit Agreement, in each such case, on and as of such date of borrowing or issuance as though made hereunder on and as of such date.   All representations and warranties made hereunder, in any other Loan Document to which any Guarantor is a party and in any certificate or other written statement delivered by any Guarantor pursuant hereto or in connection herewith, shall survive the execution and delivery of this Guaranty Agreement and the extension of any or all of the credit to the Borrower provided for under the Credit Agreement.   G-1- 8 Form of Guaranty 12. Covenants. Each Guarantor hereby covenants and agrees with each Guarantied Party that, from and after the date of this Guaranty Agreement, so long as any Commitment remains in effect, any Loan or Letter of Credit shall be outstanding or any other Obligation is due and payable to any Guarantied Party under this Guaranty Agreement, the Credit Agreement or any other Loan Document, such Guarantor shall not take, and shall refrain from taking, any action that would result in a breach or violation of any of the covenants of the Borrower contained in the Credit Agreement.   13. Authority of Administrative Agent. Each Guarantor acknowledges that the rights and responsibilities of the Administrative Agent under the Guaranty Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Guaranty Agreement shall, as among the Administrative Agent and the other Guarantied Parties be governed by the Credit Agreement and by such other agreements with respect thereto as may exist form time to time among them, but, as between the Administrative Agent and such Guarantor, the Administrative Agent shall be conclusively presumed to be acting as agent for the other Guarantied Parties with full and valid authority so to act or refrain from acting, and Guarantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.   14. Notices. All notices and other communications provided for hereunder shall be effectuated in the manner provided for in Section 10.02 of the Credit Agreement; provided that if a notice or communication hereunder is sent to a Guarantor, said notice shall be addressed to such Guarantor, in care of the Borrower.   15. Counterparts. This Guaranty Agreement may be executed by one or more of the Guarantors on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the counterparts of this Guaranty Agreement signed by all the Guarantors shall be lodged with Administrative Agent.   16. Severability. Any provision of the Guaranty Agreement which is prohibited or to the extent of such prohibition or unenforceability without invalidating the reaming provisions hereof, and any such prohibition or unenforceability in any other jurisdiction.   17. Integration. This Guaranty Agreement represents the agreement of each Guarantor with respect to the subject matter hereof and there are no promises or representations by any Guarantied Party relative to the subject matter hereof not reflected herein.   G-1- 9 Form of Guaranty 18. Amendments in Writing; No Waiver; Cumulative Remedies.     (a) None of the terms or provisions of this Guaranty Agreement may be waived, amended, supplemented or otherwise modified except in accordance with the provisions of Section 10.01 of the Credit Agreement.     (b) No Guarantied Party shall by any act (except by a written instrument pursuant to this Section 18), delay indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor delay in exercising, on the part of any Guarantied Party, any right, power of privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power of privilege. A waiver by any Guarantied Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which such Guarantied Party would otherwise have on any future occasion.     (c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.   19. Section Headings. The section headings used in this Guaranty Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.   20. Successors and Assigns. This Guaranty Agreement shall be binding upon the successors and assigns each Guarantor and shall inure to the benefit of the Guarantied Parties and their successors and assigns, provided that no Guarantor may assign any of its rights or obligations under this Guaranty Agreement without the prior written consent of each Lender and any such purported assignment shall be null and void.   21. SUBMISSION TO JURISDICTION; WAIVERS.   (a) EACH PARTY HERETO, IN EACH CASE FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, HEREBY IRREVOCABLY AND UNCONDITIONALLY:   (i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURT THEREOF;   G-1- 10 Form of Guaranty (ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;   (iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 14, OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT TO SECTION 14; AND   (iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.   (b) EACH GUARANTOR WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.   22. WAIVERS OF JURY TRIAL. EACH GUARANTOR AND EACH GUARANTIED PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AGREEMENT OR ANY OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY AND FOR ANY COUNTERCLAIM THEREIN.   23. GOVERNING LAW. THIS GUARANTY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN   24. Additional Guarantors. Any Person that becomes a Subsidiary subsequent to the date hereof and was not a “Guarantor” under this Guaranty Agreement at the time of the initial execution hereof shall become a “Guarantor” hereunder if required by Section 6.12(b) of the Credit Agreement by executing and delivering to the Administrative Agent a Guaranty Supplement in the form attached hereto as Exhibit A. Any such Subsidiary shall thereafter be deemed a “Guarantor” for all purposes under this Guaranty Agreement.   G-1- 11 Form of Guaranty   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]   G-1- 12 Form of Guaranty   IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first written above.   [INSERT NAME OF GUARANTOR] By:     Name:     Title:       G-1- 13 Form of Guaranty Exhibit A   FORM OF GUARANTY SUPPLEMENT   THIS GUARANTY SUPPLEMENT dated                     , to the Guaranty Agreement, dated as of                     , 2005 (as amended, supplemented and otherwise modified, the “Guaranty Agreement”), made by certain Subsidiaries of Media General, Inc., a Virginia corporation (the “Borrower”), from time to time parties thereto (collectively, the “Guarantors”) in favor of Bank of America, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”) for the lenders (the “Lenders”) from time to time parties to the Amended and Restated Credit Agreement dated as of March 14, 2005, among the Borrower, such Lenders, the Administrative Agent (as amended, supplemented and otherwise modified from time to time, including, without limitation, all extensions, renewals, restatements, rearrangements and refundings thereof, the “Credit Agreement”).     WHEREAS, the Guaranty Agreement provides that any Subsidiary of the Borrower, although not a Guarantor thereunder at the time of the initial execution thereof, may become a Guarantor under the Guaranty Agreement upon the delivery to the Administrative Agent of a supplement in substantially the form of this Supplement to Guaranty Agreement; and   WHEREAS, the undersigned was not a Subsidiary as of the effective date of the Guaranty Agreement and, therefore, was not a party to the Guaranty Agreement but now desires to become a Guarantor thereunder;   NOW, THEREFORE, the undersigned hereby agrees as follows:   The undersigned hereby ratifies and agrees to be bound by all of the provisions of the Guaranty Agreement applicable to a Guarantor thereunder and agrees that it shall, on the date this Guaranty Supplement is accepted by the Administrative Agent, become a Guarantor, for all purposes of the Guaranty Agreement to the same extent as if originally a party thereto, with the representations and warranties contained therein being deemed to be made by the undersigned as of the date hereof and which representations and warranties are true and correct in all material respects.   Unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as so defined.   G-1- 1 Form of Guaranty Supplement IN WITNESS WHEREOF, the undersigned has caused this Guaranty Supplement to be executed and delivered by a duly authorized officer on the date first above written.   [NAME OF SUBSIDIARY] By:     Name:     Title:       Form of Guaranty Supplement EXHIBIT H   OPINION MATTERS   The matters contained in the following Sections of the Credit Agreement should be covered by the legal opinion:     •   Section 5.01(a), (b) and (c)     •   Section 5.02     •   Section 5.03     •   Section 5.04     •   Section 5.06     •   Section 5.14(b)   1

Exhibit 10.4   BERKSHIRE HILLS BANCORP, INC. THREE YEAR CHANGE IN CONTROL AGREEMENT This AGREEMENT is made effective as of October 31, 2006, by and between Berkshire Hills Bancorp, Inc. (the "Holding Company"), a corporation organized under the laws of the state of Delaware, with its principal administrative offices at 24 North Street, Pittsfield, Massachusetts 01201, and John J. Howard ("Executive"). Any reference to the “Institution” herein shall mean Berkshire Bank or any successor to Berkshire Bank. WHEREAS, the Holding Company recognizes the substantial contributions Executive has made to the Holding Company and wishes to protect Executive's position with the Holding Company for the period provided in this Agreement; and WHEREAS, Executive has agreed to serve in the employ of the Holding Company. NOW, THEREFORE, in consideration of the contributions and responsibilities of Executive, and upon the other terms and conditions hereinafter provided, the parties hereto agree as follows: 1. TERM OF AGREEMENT. The period of this Agreement shall be deemed to have commenced as of the date first above written and shall continue for a period of thirty-six (36) full calendar months thereafter. Commencing on the first anniversary date of this Agreement, and continuing on each anniversary thereafter, the Board of Directors (the “Board”) may act to extend the term of this Agreement for an additional year, such that the remaining term of this Agreement would be three years, unless Executive elects not to extend the term of this Agreement by giving written notice to the Holding Company, in which case the term of this Agreement will expire on the third anniversary of this Agreement. 2. CHANGE IN CONTROL. (a) Upon the occurrence of a Change in Control of the Institution or the Holding Company (as herein defined) followed at any time during the term of this Agreement by the involuntary termination of Executive’s employment or the voluntary termination of Executive’s employment in accordance with the terms of this Agreement, other than for Cause, as defined in Section 2(c) of this Agreement, the provisions of Section 3 of this Agreement shall apply.   (i) Upon the occurrence of a Change in Control, Executive shall have the right to elect to voluntarily terminate his employment at any time during the term of this Agreement following any demotion, loss of title, office or significant authority, reduction in annual compensation or benefits, or relocation of his principal place of employment by more than twenty-five (25) miles from its location immediately prior to the Change in Control.   (ii) Notwithstanding the foregoing clause (i), in the event, however, that the Chief Executive Officer of the Institution immediately prior to the Change in Control is the Chief Executive Officer of the resulting entity with similar responsibilities and duties and Executive’s position with the resulting entity does not result in: (A) a reduction in annual compensation or benefits, (B) a material change in work schedule, or (C) relocation of his principal place of employment by more than fifty (50) miles, then Executive may not voluntarily terminate his employment during the one-year period following the Change in Control and receive any payments or benefits under this Agreement. For the avoidance of doubt, with respect to the immediately foregoing limitation on voluntary termination, Executive may voluntarily terminate employment in accordance with this Section 2(a) effective upon the expiration of said one-year period, and for a period of 30 days thereafter, if one of the events set forth in clause (i) has occurred, either at the time of the Change in Control or during the one-year period following the time of the Change in Control. If one of the events described in clause (i) occurs more than one year following the date of the Change in Control, but during the remaining term of the Agreement, then Executive may terminate his employment in accordance with the provisions of this Agreement, notwithstanding this clause (ii).   (iii) Notwithstanding any other provision of this Agreement to the contrary, Executive may consent in writing to any demotion, loss, reduction or relocation and waive his ability to voluntarily terminate his employment under the terms of this Agreement. The effect of any written consent of Executive under this Section 2(a) shall be strictly limited to the terms specified in such written consent. (b) For purposes of this Agreement, a "Change in Control" of the Institution or Holding Company shall mean an event of a nature that: (i) would be required to be reported in response to Item 1(a) of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Institution or the Holding Company within the meaning of the Bank Change in Control Act and the Rules and Regulations promulgated by the Federal Deposit Insurance Corporation (“FDIC”) at 12 C.F.R. § 303.4(a) with respect to the Bank and the Board of Governors of the Federal Reserve System (“FRB”) at 12 C.F.R. § 225.41(b) with respect to the Holding Company, as in effect on the date hereof; or (iii) results in a transaction requiring prior FRB approval under the Bank Holding Company Act of 1956 and the regulations promulgated thereunder by the FRB at 12 C.F.R. § 225.11, as in effect on the date hereof except for the Holding Company’s acquisition of the Institution; or (iv) without limitation such a Change in Control shall be deemed to have occurred at such time as (A) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Institution or the Holding Company representing 20% or more of the Institution’s or the Holding Company’s outstanding securities except for any securities of the Institution purchased by the Holding Company in connection with the conversion of the Institution to the stock form and any securities purchased by any tax-qualified employee benefit plan of the Institution; or (B) individuals who constitute the Board of Directors on the date hereof (the “Incumbent Board”) 2 cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three quarters (3/4) of the directors comprising the Incumbent Board, or whose nomination for election by the Holding Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (B), considered as though he were a member of the Incumbent Board; or (C) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Institution or the Holding Company or similar transaction occurs in which the Institution or Holding Company is not the resulting entity; or (D) solicitations of shareholders of the Holding Company, by someone other than the current management of the Holding Company, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Holding Company or Institution or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan or transaction are exchanged for or converted into cash or property or securities not issued by the Institution or the Holding Company shall be distributed; or (E) a tender offer is made for 20% or more of the voting securities of the Institution or the Holding Company. (c) Executive shall not have the right to receive termination benefits pursuant to Section 3 of this Agreement upon Termination for Cause. The term "Termination for Cause" shall mean termination because of: (i) Executive's personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, regulation (other than traffic violations or similar offenses), final cease and desist order or material breach of any provision of this Agreement which results in a material loss to the Institution or the Holding Company, or (ii) Executive's conviction of a crime or act involving moral turpitude or a final judgement rendered against Executive based upon actions of Executive which involve moral turpitude. For the purposes of this Section, no act, or the failure to act, on Executive's part shall be "willful" unless done, or omitted to be done, not in good faith and without reasonable belief that the action or omission was in the best interests of the Holding Company or its affiliates. Notwithstanding the foregoing, Executive shall not be deemed to have been Terminated for Cause unless and until there shall have been delivered to him a Notice of Termination which shall include a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the members of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to Executive and an opportunity for him, together with counsel, to be heard before the Board), finding that in the good faith opinion of the Board, Executive was guilty of conduct justifying Termination for Cause and specifying the particulars thereof in detail. Executive shall not have the right to receive compensation or other benefits for any period after Termination for Cause. During the period beginning on the date of the Notice of Termination for Cause pursuant to Section 5 of this Agreement through the Date of Termination, stock options granted to Executive under any stock option plan shall not be exercisable nor shall any unvested stock awards granted to Executive under any stock-based incentive plan of the Institution, the Holding Company or any subsidiary or affiliate thereof vest. At the Date of Termination, such stock options and such unvested stock awards shall become null and void and shall not be exercisable by or delivered to Executive at any time subsequent to such Date of Termination for Cause. 3 3. TERMINATION BENEFITS. (a) Upon the occurrence of a Change in Control, followed at any time during the term of this Agreement by the involuntary termination of Executive's employment (other than for Termination for Cause), or voluntary termination during the term of this Agreement as provided by Section 2(a) of this Agreement, the Holding Company shall be obligated to pay Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, a sum equal to three (3) times Executive's average annual compensation for the five most recent taxable years that Executive has been employed by the Holding Company or such lesser number of years in the event that Executive shall have been employed by the Holding Company for less than five years. For this purpose, such annual compensation shall include base salary and any other taxable income, including, but not limited to, amounts related to the granting, vesting or exercise of restricted stock or stock option awards, commissions, bonuses, pension and profit sharing plan contributions or benefits (whether or not taxable), severance payments, retirement benefits, and fringe benefits paid or to be paid to Executive or paid for Executive's benefit during any such year. At the election of Executive, which election is to be made prior to a Change in Control, such payment shall be made in a lump sum or on an annual basis in approximately equal installments over a three (3) year period. (b) Upon the occurrence of a Change in Control of the Institution or the Holding Company followed at any time during the term of this Agreement by Executive's voluntary or involuntary termination of employment in accordance with paragraph (a) of this Section 3, other than for Termination for Cause, the Holding Company shall cause to be continued life, medical and disability coverage substantially identical to the coverage maintained by the Institution or Holding Company for Executive prior to his severance, except to the extent such coverage may be changed in its application to all Institution or Holding Company employees on a nondiscriminatory basis. Such coverage and payments shall cease upon the expiration of thirty-six (36) full calendar months from the Date of Termination. 4. CHANGE IN CONTROL-RELATED PROVISIONS. (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment, benefit or distribution made or provided by the Holding Company or the Institution to or for the benefit of Executive (whether made or provided pursuant to the terms of this Agreement or otherwise) (each referred to herein as a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (the excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that, after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. 4 (b) Determination of Gross-Up Payment. Subject to the provisions of Section 4(c), all determinations required to be made under this Section 4, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a certified public accounting firm reasonably acceptable to the Holding Company as may be designated by Executive (the “Accounting Firm”) which shall provide detailed supporting calculations to the Holding Company and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Holding Company. All fees and expenses of the Accounting Firm shall be borne solely by the Holding Company. Any Gross-Up Payment, as determined pursuant to this Section 4, shall be paid by the Holding Company to Executive within five business days of the later of (i) the due date for the payment of any Excise Tax, or (ii) the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Holding Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code, at the time of the initial determination by the Accounting Firm hereunder, it is possible that a Gross-Up Payment will not have been made by the Holding Company which should have been made (an “Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Holding Company exhausts its remedies pursuant to Section 4(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Holding Company to or for the benefit of Executive. (c) Treatment of Claims. Executive shall notify the Holding Company in writing of any claim by the Internal Revenue Service that, if successful, would require a Gross-Up Payment to be made. Such notification shall be given as soon as practicable, but no later than ten business days, after Executive is informed in writing of such claim and shall apprise the Holding Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which it gives such notice to the Holding Company (or any shorter period ending on the date that payment of taxes with respect to such claim is due). If the Holding Company notifies Executive in writing prior to the expiration of this period that it desires to contest such claim, Executive shall:   (i) give the Holding Company any information reasonably requested by the Holding Company relating to such claim;   (ii) take such action in connection with contesting such claim as the Holding Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Holding Company;   (iii) cooperate with the Holding Company in good faith in order to effectively contest such claim; and   (iv) permit the Holding Company to participate in any proceedings relating to such claim; provided, however, that the Holding Company shall bear and pay directly 5 all costs and expenses (including additional interest and penalties) incurred in connection with such contest and indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or related taxes, interest or penalties imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 4(c), the Holding Company shall control all proceedings taken in connection with such contest and, at its option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority with respect to such claim and may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner. Further, Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Holding Company shall determine; provided, however, that if the Holding Company directs Executive to pay such claim and sue for a refund, the Holding Company shall advance the amount of such payment to Executive, on an interest-free basis (including interest or penalties with respect thereto). Furthermore, the Holding Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issues raised by the Internal Revenue Service or any other taxing authority. (d) Adjustments to the Gross-Up Payment. If, after the receipt by Executive of an amount advanced by the Holding Company pursuant to Section 4(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Holding Company’s compliance with the requirements of Section 4(c)) promptly pay to the Holding Company the amount of such refund (together with any interest paid or credited thereon after applicable taxes). If, after the receipt by Executive of an amount advanced by the Holding Company pursuant to Section 4(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and such denial of refund occurs prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of the Gross-Up Payment required to be paid. 5. NOTICE OF TERMINATION. (a) Any purported termination by the Holding Company or by Executive in connection with a Change in Control shall be communicated by a Notice of Termination to the other party. For purposes of this Agreement, a "Notice of Termination" shall mean a written notice which indicates the specific termination provision in this Agreement relied upon and shall set forth in termination of Executive's employment under the provision so indicated. (b) "Date of Termination" shall mean the date specified in the Notice of Termination (which, in the instance of Termination for Cause, shall not be less than thirty (30) days from the date such Notice of Termination is given); provided, however, that if a dispute regarding the 6 Executive's termination exists, the "Date of Termination" shall be determined in accordance with Section 5(c) of this Agreement. (c) If, within thirty (30) days after any Notice of Termination is given, the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding arbitration award, or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected) and provided further that the Date of Termination shall be extended by a notice of dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such dispute with reasonable diligence. Notwithstanding the pendency of any such dispute in connection with a Change in Control, in the event that the Executive is terminated for reasons other than Termination for Cause, the Holding Company will continue to pay Executive the payments and benefits due under this Agreement in effect when the notice giving rise to the dispute was given (including, but not limited to his annual salary) until the earlier of: (i) the resolution of the dispute in accordance with this Agreement; or (ii) the expiration of the remaining term of this Agreement as determined as of the Date of Termination. 6. SOURCE OF PAYMENTS. It is intended by the parties hereto that all payments provided in this Agreement shall be paid in cash or check from the general funds of the Holding Company. 7. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS. This Agreement contains the entire understanding between the parties hereto and supersedes any prior agreement between the Holding Company or the Institution and Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to Executive of a kind elsewhere provided. No provision of this Agreement shall be interpreted to mean that Executive is subject to receiving fewer benefits than those available to him without reference to this Agreement. Nothing in this Agreement shall confer upon Executive the right to continue in the employ of the Holding Company or shall impose on the Holding Company any obligation to employ or retain Executive in its employ for any period. 8. NON-COMPETITION AND NON-DISCLOSURE. (a) For a period of one (1) year following the payment of termination benefits to Executive under this agreement, Executive agrees not to compete with the Holding Company or its subsidiaries in any city, town or county in which Executive's normal business office is located and the Holding Company or its subsidiaries has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of such termination, except as agreed to pursuant to a resolution duly adopted by the Board of Directors. Executive agrees that during such one (1) year period and within said cities, towns and counties, Executive 7 shall not work for or advise, consult or otherwise serve with, directly or indirectly, any entity whose business materially competes with the depository, lending or other business activities of the Holding Company or its subsidiaries. The parties hereto, recognizing that irreparable injury will result to the Holding Company, its business and property in the event of Executive's breach of this Section 8(a), agree that in the event of any such breach by Executive, the Holding Company will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive, Executive's partners, agents, servants, employees and all persons acting for or under the direction of Executive. Executive represents and admits that in the event of the termination of his employment following a Change in Control, Executive's experience and capabilities are such that Executive can obtain employment in a business engaged in other lines and/or of a different nature than the Holding Company or its subsidiaries, and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. Nothing herein will be construed as prohibiting the Holding Company from pursuing any other remedies available for such breach or threatened breach, including the recovery of damages from Executive. (b) Executive recognizes and acknowledges that the knowledge of the business activities and plans for business activities of the Holding Company or its subsidiaries, as it may exist from time to time, is a valuable, special and unique asset of the business of the Holding Company. Executive will not, during or after the term of his employment, disclose any knowledge of the past, present, planned or considered business activities of the Holding Company or its subsidiaries to any person, firm, corporation, or other entity for any reason or purpose whatsoever, unless expressly authorized by the Board of Directors or required by law. Notwithstanding the foregoing, Executive may disclose any knowledge of banking, financial and/or economic principles, concepts or ideas which are not solely and exclusively derived from the business plans and activities of the Holding Company or its subsidiaries. In the event of a breach or threatened breach by Executive of the provisions of this Section 8, the Holding Company will be entitled to an injunction restraining Executive from disclosing, in whole or in part, the knowledge of the past, present, planned or considered business activities of the Holding Company or its subsidiaries or from rendering any services to any person, firm, corporation or other entity to whom such knowledge, in whole or in part, has been disclosed or is threatened to be disclosed. Nothing herein will be construed as prohibiting the Holding Company from pursuing other remedies available for such breach or threatened breach, including the recovery of damages from Executive. 9. NO ATTACHMENT. (a) Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect. (b) This Agreement shall be binding upon, and inure to the benefit of, Executive, the Holding Company and their respective successors and assigns. 8 10. MODIFICATION AND WAIVER. (a) This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. (b) No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 11. REQUIRED REGULATORY PROVISIONS. Any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon compliance with 12 U.S.C. §1828(k) and any rules and regulations promulgated thereunder, including 12 C.F.R. Part 359. 12. SEVERABILITY. If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall, to the full extent consistent with law, continue in full force and effect. 13. HEADINGS FOR REFERENCE ONLY. The headings of sections and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement. 14. GOVERNING LAW. The validity, interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the state of Delaware. 15. ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the location of the Holding Company's main office, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that Executive shall be entitled to seek specific performance of his right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 9 16. PAYMENT OF COSTS AND LEGAL FEES. All reasonable costs and legal fees paid or incurred by Executive pursuant to any dispute or question of interpretation relating to this Agreement shall be paid or reimbursed by the Holding Company if Executive is successful with respect to such dispute or question of interpretation pursuant to a legal judgment, arbitration or settlement. 17. INDEMNIFICATION. The Holding Company shall provide Executive (including his heirs, executors and administrators) with coverage under a standard directors' and officers' liability insurance policy at its expense and shall indemnify Executive (and his heirs, executors and administrators) to the fullest extent permitted under Delaware law against all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit or proceeding in which he may be involved by reason of his having been a director or officer of the Holding Company (whether or not he continues to be a director or officer at the time of incurring such expenses or liabilities); such expenses and liabilities to include, but not to be limited to, judgments, court costs and attorneys' fees and the costs of reasonable settlements. 18. SUCCESSOR TO THE HOLDING COMPANY. The Holding Company shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Holding Company, to expressly and unconditionally assume and agree to perform the Holding Company's obligations under this Agreement in the same manner and to the same extent that the Holding Company would be required to perform such obligations if no such succession or assignment had taken place. 10 SIGNATURES IN WITNESS WHEREOF, Berkshire Hills Bancorp, Inc. has caused this Agreement to be executed by its duly authorized officer, and Executive has signed this Agreement, on the 31st day of October, 2006.         ATTEST:                            /s/ Sally J. Chavary   By:  /s/ Michael P. Daly       Michael P. Daly, President and CEO                 SEAL                               WITNESS:   EXECUTIVE                          /s/ Nicole M. Knight    /s/ John J. Howard     John J. Howard     11

  Exhibit 10.1   PROMISSORY NOTE   $50,000.00   Norwood, Massachusetts     April 1, 2008   FOR VALUE RECEIVED, Apogee Technology, Inc., a Delaware corporation (the “Borrower”‘), hereby promises to pay to David Spiegel (“Lender”), at such place as the holder of this Note may from time to time designate in writing, the principal sum of:   Fifty thousand AND 00/100 DOLLARS ($50,000.00)   with interest on the outstanding balance thereof from the date hereof at an annual rate which is equal to eight percent (8%) per annum, (such interest to be paid monthly in arrears).   The outstanding principal balance and any accrued and unpaid interest thereon shall be due and payable on September 28, 2008.   Interest shall be calculated on the basis of a three hundred sixty (360) day year, but interest shall accrue and be payable on the actual number of days in each month. Interest after maturity shall be payable on demand at an annual rate (the “Default Rate”) which shall be equal to four (4) percentage points above the rate of interest payable during the term of this Note, compounded monthly and otherwise payable in the manner hereinabove set forth.   This Note may be prepaid in whole or in part without premium or penalty.   The Borrower agrees to pay all costs of suit and other expenses of collection, including reasonable fees and expenses of attorneys, in the event that this Note is placed in the hands of any attorney for collection or suit is brought thereon.   The Borrower hereby waives presentment, protest and demand, notice of protest, demand and dishonor and non-payment of this Note, and to the extent permitted by law, waives and releases all rights of redemption, valuation, appraisement, notice of election to mature or to declare due the whole of the indebtedness evidenced hereby, and to the extent permitted by law, errors, defects and imperfections in any proceedings instituted by the holder under the terms of this Note, or providing for any stay of execution, exemption from civil process, or extension of time for payment. Further, Borrower agrees that its liability hereunder shall remain unimpaired, notwithstanding any extension of the time of payment or other indulgence granted by the holder, or the release of all or any part of such security for the liability of any party which may assume the obligation to make payment of the indebtedness evidenced hereby, or the performance and the obligations of the Borrower hereof under this Note. In no event shall the holder, by any act of omission or commission, be deemed to waive any of its rights or remedies hereunder unless such waiver shall be in writing and signed by the holder, and then only to the extent specifically set forth therein; and a waiver of anyone event shall not be construed as continuing or as a bar to or waiver of such right or remedy on a subsequent event. The Borrower further acknowledges that this Note represents an independent obligation and shall not be subject to setoff, reduction or deduction on account of any claims, liabilities, obligations or debts of the holder to the Borrower.       If any provisions hereof or the application thereof to any person or circumstances shall to any extent be invalid or unenforceable, the remainder hereof, or the application of such provision to persons, or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be valid and enforced to the fullest extent permitted by law. If at any time during the term of this Note or after maturity the effective interest rate hereunder is greater than the maximum interest rate permitted by applicable law, the interest rate hereunder shall automatically be such maximum interest rate permitted by applicable law. This Note is unsecured.   As used herein, the word “holder” shall mean Lender as payee of the Note, or any endorsee of this Note in possession hereof, or the bearer hereof if this Note is at the time payable to the bearer.   This Note, being executed and delivered in Norwood, Massachusetts, is to be construed according to and governed by the law of The Commonwealth of Massachusetts.   Borrower represents that this note as well as the execution and delivery thereof has been authorized by all necessary actions of the borrower.   EXECUTED as a sealed instrument, as of the day and year first above written.       APOGEE TECHNOLOGY, INC.               By:  /s/ Paul J. Murphy     Paul J. Murphy     Chief Financial Officer     and Vice President Finance  

Exhibit 10.3     AMENDMENT TO LEASE THIS AMENDMENT TO LEASE (“Amendment”) is entered into this 8th day of February, 2011, by and between Motor City Drive, LLC (“Landlord”) and Technest Holdings, Inc. and Genex Technologies, Inc. (collectively referred to as “Tenant”).   WHEREAS, the parties have previously entered into an Office Lease Agreement dated December 26, 2005, dealing with property located at 10411 Motor City Drive, Suite 650, Bethesda, MD 20817 (the “Lease”),   NOW, THEREFORE, in consideration of the promises and mutual covenants and understandings of each of the parties, the parties hereby covenant and agree as follows, all as of the effective date hereof.   1.  Section 2A.of the Lease is hereby amended so that the Term shall end on December 31, 2011. The monthly installment of the Base Rental for the remainder of the Term is $16,052.52.   2.  All other provisions of the Lease are hereby restated and incorporated in this Amendment.       IN WITNESS WHEREOF, the respective parties have hereunto set their hands and seals or caused these presents to be duly signed and sealed on their behalf the     LANDLORD:     Motor City Drive, LLC     /s/ Arvin Malkani                             Vice President     Date: February 8, 2011       TENANTS:     Technest Holdings, Inc.     /s/ Gino M. Pereira                          By: Gino M. Pereira   Chief Executive Officer           Genex Technologies, Inc.           Chief Executive Officer  

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 November 23, 2011 HADERA PAPER LTD. (Translation of Registrant’s Name into English) P.O. Box 142, Hadera, Israel (Address of Principal Corporate Offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F xForm 40-F o Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: Yes oNo x If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- Hadera Paper Ltd. (the “Company”) (NYSE-AMEX:AIP) announced that on November 15, 2011, the Company’s Board of Directors (the “Board”) resolved to convene a Special General Meeting of the shareholders of the Company (the “Meeting”), to be held on Monday, January 2, 2012. The agenda for the meeting will include: (i) approval of an amendment to certain provisions of the Company's Articles of Association, other than to those provisions dealing with Company officers' exemption from liability, indemnification and insurance; (ii) approval of an amendment to certain provisions of the Company's Articles of Association dealing with Company officers' exemption from liability, indemnification and insurance; (iii) subject to the approval of item (ii), above, approval of an amendment to indemnification letters and grant thereof to the members of the Company's board of directors, other than those members who may be considered as controlling shareholders of the Company and/or relatives, officers or service providers of a controlling shareholder and/or any other persons to whom a controlling shareholder has a personal interest in the grant of the aforesaid indemnification letters; (iv) subject to the approval of item (ii), above, approval of an amendment to indemnification letters and grant thereof to officers of the Company (including board members) who may be considered as controlling shareholders of the Company and/or relatives, officers or service providers of a controlling shareholder and/or any other persons to whom a controlling shareholder has a personal interest in the grant of the aforesaid indemnification letters; and (v) approval of the Company's engagement with Clal Insurance Company Ltd., a company controlled by the controlling shareholder of the Company, for the purchase of a directors and officers insurance policy. Only the shareholders of the Company of record at the close of business on Monday, December 5, 2011, will be entitled to notice of, and to vote at, the Meeting and any adjournments thereof. The proxy statement will be furnished on Form 6-K once it is made available. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HADERA PAPER LTD. (Registrant) By: /S/ Yael Nevo Yael Nevo Corporate Secretary Dated: November 23, 2011 3

Name: Commission Regulation (EEC) No 3202/84 of 16 November 1984 suspending advance fixing of export refunds for certain cereal products Type: Regulation Date Published: nan No L 299/26 Official Journal of the European Communities 17. 11 . 84 COMMISSION REGULATION (EEC) No 3202/84 of 16 November 1984 suspending advance fixing of export refunds for certain cereal products Whereas the situation as described calls for the tempo ­ rary suspension of the arrangements regarding the advance fixing of refunds for the products in question , HAS ADOPTED THIS REGULATION : THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 2727/75 of 29 October 1975 on the common organi ­ zation of the market in cereals ('), as last amended by Regulation (EEC) No 1018 /84 (2), and in particular the second subparagraph of Article 16 (7) thereof, Whereas Article 16 (7) of Regulation (EEC) No 2727/75 makes provision for the suspension of arrangements relating to the advance fixing of export refunds if the market situation indicates that the said arrangements are causing difficulties or if such diffi ­ culties are in danger of arising ; Whereas there is a danger that the envisaged change in the method of calculating the refunds for processed products exported in unmanufactured state or in the form of manufactured cereal-based goods will give rise to speculative short-term advance fixing of refunds for quantities considerably greater than those to be expected under more normal conditions ; Article 1 The advance fixing of export refunds for certain products of the cereals sector exported in unmanufac ­ tured form listed in Annex A to Regulation (EEC) No 2727/75 or in the form of goods listed in Annex B to the said Regulation , as also for the cereal meals falling within subheading 1 1 .02 A of the Common Customs Tariff, is hereby suspended from 17 November until 21 November 1984 . Article 2 This Regulation shall enter into force on 17 November 1984. This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels , 16 November 1984. For the Commission Poul DALSAGER Member of the Commission (') OJ No L 281 , 1 . 11 . 1 975, p . 1 . ( 2) OJ No L 107, 19 . 4 . 1984, p . 1 .

United States Securities and Exchange Commission Washington, D.C. 20549 Form N-Q Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company Investment Company Act file number: 811-05807 Eagle Capital Growth Fund, Inc. (Exact name of registrant as specified in charter) 205 E. Wisconsin Ave, Suite 120, Milwaukee, WI 53202 (Address of principal executive offices) (zip code) Luke E. Sims, President Eagle Capital Growth Fund, Inc. 205 E. Wisconsin Ave Suite 120 Milwaukee, WI 53202 (414) 765-1107 (Name and address of agent for service) Registrant's telephone number, including area code: (414) 765-1107 Date of fiscal year end: December 31, 2011 Date of reporting period: March 31, 2011 ITEM 1. SCHEDULE OF INVESTMENTS Eagle Capital Growth Fund, Inc. Portfolio of Investments (as of March 31, 2011) (unaudited) Industry Common Stock (96.0% of total investments) Consumer Shares Cost Market Value % Total Inv. Alcon Inc.* $ $ Colgate-Palmolive Co. $ $ PepsiCo Inc. $ $ Procter & Gamble Co. $ $ $ %) Data Processing Automatic Data Processing, Inc. $ $ Paychex Inc. $ $ $ %) Drug/Medical Device Abbott Laboratories Inc. $ $ Baxter International $ $ Johnson & Johnson $ $ Medtronic, Inc. $ $ Pfizer Inc. $ $ Stryker Corp. $ $ $ %) Industrial General Electric Co. $ $ Graco Inc. $ $ Hillenbrand, Inc. $ $ Sigma-Aldrich Corp. $ $ Waters Corp.* $ $ $ %) Mutual Fund Managers Eaton Vance Corp. $ $ Federated Investors, Inc. $ $ $ %) Insurance The Chubb Corporation $ $ $ %) Retail/Distribution Best Buy Co. Inc. $ $ The Home Depot, Inc. $ $ Lowe's Companies Inc. $ $ Sysco Corp. $ $ $ %) Closed-End Funds Claymore Dividend & Income Fund $ $ Diamond Hill Financial Trends Fund, Inc. $ $ $ %) Total common stock investments $ Cash and cash equivalents (4.0% of total investments) $ Total investments $ All other assets less liabilities $ Total net assets $ *Non-dividend paying security Footnote: The following information is based upon federal income tax cost of portfolio investments as of March 31, 2011: Gross unrealized appreciation $ Gross unrealized depreciation ) Net unrealized appreciation $ Federal income tax basis $ ITEM 2. Controls and Procedures (a) As of April 1, 2011, an evaluation of the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) was performed by management with the participation of the registrant's President and Chief Executive Officer (who is the principal executive officer of the registrant) and the registrant’s Chief Financial Officer (who is the principal financial officer of the registrant). Based on that evaluation, the registrant's President and Chief Executive Officer and Chief Financial Officer concluded that the registrant's disclosure controls and procedures are effectively designed to ensure that information required to be disclosed by the registrant is recorded, processed, summarized and reported within the time periods specified by the Commission's rules and forms, and that information required to be disclosed by the registrant has been accumulated and communicated to the registrant's management, including its principal executive officer and principal financial officer, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure. (b) Fair Value Accounting—Accounting standards require certain assets and liabilities be reported at fair value in the financial statements and provides a framework for establishing that fair value. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value. In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset. These level 3 fair value measurements are based primarily on management’s own estimates using pricing models, discounted cash flow methodologies, or similar techniques taking into account the characteristics of the asset.

Exhibit 10.18 Covenant Group of China Inc. 2010 Long-Term Incentive Plan Restricted Stock Award Agreement (the “Agreement”) Covenant Group of China Inc. (the “Company”) has established its 2010 Long-Term Incentive Plan (the “Plan”) to advance the interests of the Company and its stockholders by providing incentives to certain eligible persons who contribute significantly to the strategic and long-term performance objectives and growth of the Company and any parent, subsidiary or affiliate of the Company.All capitalized terms not otherwise defined in this Agreement have the same meaning given such capitalized terms in the Plan. Pursuant to the provisions of the Plan, the Board of Directors of the Company (the “Board”) has full power and authority to direct the execution and delivery of this Agreement in the name and on behalf of the Company, and has authorized the execution and delivery of this Agreement. Grantee’s Name:Justin Csik The undersigned individual (the “Grantee”) has been granted a Restricted Stock Award, subject to the terms and conditions of the Plan and this Agreement, as follows: 1. Date of Grant:November 15, 2010 2. Number of Shares:50,000 shares (the “Shares”) 3. Type of Shares:Common Stock, par value $0.0001 per share 4. Vesting:The Shares shall vest in accordance with the schedule below: a) 20% of the Shares shall vest as of the first (1st) anniversary of the Date of Grant; b) 25% of the Shares shall vest as of the first (2nd) anniversary of the Date of Grant; and c) 55% of the Shares shall vest as of the first (3rd) anniversary of the Date of Grant. 5.Forfeiture Restrictions:Grantee shall have all of the rights and privileges of a stockholder of the Company with regard to the Shares, except that the following restrictions shall apply: a)The Shares may not be sold, assigned, pledged, exchanged, hypothecated, gifted or otherwise transferred, and Grantee represents and warrants to Company that he/she shall not sell, assign, pledge, exchange, hypothecate, gift or otherwise transfer the Shares in violation of applicable securities laws or the provisions of this Agreement. 1 b)Generally, the Shares, to the extent then subject to these Forfeiture Restrictions, shall be automatically forfeited to the Company upon Grantee’s termination of employment for any reason, without any action by the Company or payment therefore. c)If all or any portion of the Shares are forfeited under this Agreement, all rights of a stockholder with respect to such Shares, including the right to vote and receive dividends with respect thereto, shall cease immediately on the date of the forfeiture. 6.Taxes and Section 83(b) Election:Grantee shall be solely responsible for any taxes payable on the transfer of the Shares.Grantee shall promptly pay to the Company, or make arrangements satisfactory to the Company regarding payment of any federal, state or local taxes of any kind required by law to be withheld with respect to the receipt of the Shares (including in cases where he or she has made an election in accordance with Section 83(b) of the Internal Revenue Code (the “Election”)), and any tax obligation of Grantee arising in connection with the Election and Grantee shall indemnify and hold harmless the Company and its affiliates for any taxes payable on the transfer of the Shares hereunder.Grantee acknowledges that:(a) Grantee has been informed of the availability of making an Election; (b) that the Election must be filed with the Internal Revenue Service within thirty (30) days of the Date of Grant; and (c) that Grantee is solely responsible for making such Election. Grantees who do not make the Election acknowledge that dividends, if any, on the Shares will be treated as compensation and subject to tax withholding in accordance with the Company’s practices and policies.Grantee shall send a copy of the Election to the Chief Financial Officer of the Company and the Chairman of the Board at 700 South Henderson Road, Suite 202, King of Prussia, Pennsylvania 19406. 7.Entire Agreement; Amendment or Modification; Governing Law:The Plan is incorporated herein by reference.The Plan and this Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Grantee with respect to the subject matter hereof.The Agreement may only be amended or terminated at any time by written agreement of both of the parties hereto.This agreement is governed by the internal substantive laws but not the choice of law rules of the Commonwealth of Pennsylvania. 2 8.No Guarantee of Continued Service:GRANTEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BE CONTINUING TO BE ENGAGED BY THE COMPANY OR ITS AFFILIATES IN HIS OR HER CAPACITY AS AN EMPLOYEE OR DIRECTOR, UNLESS THE BOARD OTHERWISE PROVIDES.GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH GRANTEE’S RIGHT OR THE COMPANY’S RIGHTTO TERMINATE GRANTEE’S ENGAGEMENT WITH THE COMPANY OR ITS AFFILIATES AT ANY TIME. 9.Interpretation and Construction.Whenever possible, each provision in this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement will be held to be prohibited by or invalid under applicable law, then (a) such provisions will be deemed amended to accomplish the objectives of the provisions as originally written to the fullest extent permitted by law and (b) all other provisions of this Agreement will remain in full force and effect.If any benefit provided under this Agreement is subject to the provisions of Section 409A of the Internal Revenue Code and the regulations issued thereunder, the provisions of this Agreement shall be administered, interpreted and construed in a manner necessary to comply with Section 409A and the regulations issued thereunder (or disregarded to the extent such provision cannot be so administered, interpreted or construed). No rule of strict construction will be implied against the Company or any other person in the interpretation of any of the terms of this Agreement or any rule or procedure established by the Board. 10.Power of Attorney:Grantee hereby grants to the Company a power of attorney and declares that the Company shall be the attorney-in-fact to act on behalf of the Grantee, to act in his/her name, place and stead, in connection with any and all transfers of Shares, whether or not vested, to the Company pursuant to this Agreement, including in the event of termination of the Grantee’s engagement by the Company or its affiliates. 11.Assurances:Grantee agrees, upon demand of the Company, to do all acts and execute, deliver and perform all additional documents, instruments and agreements that may be required by the Company to implement the provisions and purposes of this Agreement. All other terms and conditions applicable to this Award shall be as set forth in the Plan. [signature page follows] 3 GRANTEE:COVENANT GROUP OF CHINA INC. By: /s/ Justin CsikBy: /s/ Kenneth Wong Name:Justin Csik Name:Kenneth Wong President March 18, 2011 Date 4

Exhibit 10.1 SHARE PURCHASE AGREEMENT THIS AGREEMENT made as of the 27th day of September, 2010. BETWEEN: Albus Holdings S.A. of Panama City, Panama (hereinafter called the “Purchaser”) OF THE FIRST PART -and- Gryphon Resources, Inc. of the State of Nevada (hereinafter called the “Vendor”) OF THE SECOND PART THIS AGREEMENT WITNESSETH that in consideration of the covenants, agreements, warranties and payments herein set forth and provided for, the parties hereto respectively covenant and agree as follows: SECTION 1 Interpretation Definitions In this Agreement, unless there is something in the subject matter or context inconsistent therewith: (a)“Agreement” means this Agreement to, inter alia, purchase and sell 99% of the issued and outstanding capital stock of, APM Madencilik Sanayi Ve Ticaret Limited Sirketi a Turkish corporation (hereinafter called “APM”), that is an operating subsidiary of the Vendor (hereinafter called the “Corporation”); (b)“Closing Date” means the date of this Agreement; (c)“Valuation Date” means September 27th, 2010; (d)“Common Shares” means all the issued and outstanding shares without par value in the capital of the Corporation; (e)“Purchased Shares” means 99% of the issued and outstanding Common Shares of the Corporation, which is represented by the Vendor to be 99 (ninety nine) shares; (f)“Time of Closing” means the time on the Closing Date when the closing of the purchase and sale herein provided for shall be completed. Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 1 - 1.3Extended Meaning In this Agreement, words importing the singular number include the plural and vice-versa and words importing the masculine gender include the feminine and neuter genders. Entire Agreement This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof, except as specifically set forth herein. No supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the party to be bound thereby. SECTION 2 Representations, Warranties and Covenants of the Vendor Representations, Warranties and Covenants To induce the Purchaser to enter into this Agreement, the Vendor represents, warrants and covenants to and in favor of the Purchaser now and as at the Closing Date as provided in this Section 2 in respect of the Corporation. Purchased Shares The Vendor beneficially owns the Purchased Shares and at the Time of Closing such shares shall be free of all mortgages, charges, liens and other encumbrances (“Liens”) and no person, firm or corporation has or shall have any agreement or option or right capable of becoming an agreement for the purchase from the Vendor of any of the Purchased Shares except as provided herein, and the Vendor is and will be entitled to sell and assign the Purchased Shares as provided in this Agreement. 2.3Representations and Warranties True on Closing Date All representations and warranties contained in this Section 2 shall be true on and as of the Closing Date with the same effect as if made on and as of such date except due to changes in circumstances between the date hereof and the Time of Closing of which the Vendor shall have advised the Purchaser in writing at or before the Time of Closing. Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 2 - 2.4Forgiveness of Intercompany Debt Between Vendor and APM The Vendor warrantees herein to the Purchaser that an intercompany balance owing from APM to the Vendor in the amount of US$15,338.14 will be forgiven by the Vendor on Closing Date and removed for the books of the Vendor and that the Purchaser will in noway be responsible for payment of this amount to the Vendor. 2.4Representations, Warranties and Covenants Surviving Closing Date The representations, warranties and covenants of the Vendor contained in this Section 2 shall survive the Closing Date. SECTION 3 Purchaser’s Representations, Warranties and Covenants Representations, Warranties and Covenants To induce the Purchaser to enter into this Agreement, the Purchaser represents, warrants and covenants to and in favor of the Purchaser now and as at the Closing Date as provided in this Section 3. 3.2Execution and Delivery of Agreement; Enforceability The execution and delivery of this Agreement by the Purchaser and the consummation of the transactions contemplated hereby (a) do not constitute a breach or a default under the terms of any agreement, license or other instrument or document to which the Purchaser is a party or by which he is bound, (b) will not violate any judgment, decree, order, writ, law, rule, statute, or regulation applicable to Purchaser or his properties and (c) will not result in the creation of any Lien on or with respect to the Purchased Shares.This Agreement has been duly and validly authorized by all necessary action of the Purchaser and is legally binding upon the Purchaser in accordance with its terms. Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 3 - 3.3Valuation Date for Balance Sheet The Vendor and the Purchaser each agree that September 27th, 2010 will be accepted as the effective cut-off date (the ‘Valuation Date’) for the valuation on which this transaction is based. The Vendor also warrants and covenants that the financial status of APM is fairly and truly represented at Valuation Date by the balance sheet attached as Schedule One to this Agreement. The Purchaser warrants and covenants that it has reviewed this balance sheet and acknowledges that the financial status of APM is fairly and truly represented at Valuation Date by the balance sheet attached to this Agreement. The Purchaser also warrants and covenants that it acknowledges that by executing this Agreement it has fully acquired from the Vendor all assets and liabilities of APM and has acquired all benefits and responsibilities related to such. The Vendor also warrants and covenants that it acknowledges that by executing this Agreement the Vendor has sold and divested itself of all assets and liabilities of APM and that the Vendor has no claim on the current or future assets of APM including any mineral exploration claim rights held by APM. 3.4Documents and Information Until immediately after the Time of Closing, all documents and information received by the Purchaser from the Vendor and the Corporation, and their respective auditors and solicitors, shall be treated by the Purchaser as confidential information and will not be disclosed to others by the Purchaser, except to its solicitors, auditors and bankers or as required by applicable law. 3.5Consents and Approvals. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and the performance by Purchaser of this Agreement, in accordance with its terms and conditions will not require the approval or consent of any governmentalor regulatory body or the approval or consent of any other person or entity. 3.6Further Representation and Warranty by Purchaser Purchaser has been an officer and director of the Corporation, and on that basis acknowledges that he has evaluated the business operations and prospects of the Corporation without reliance on Vendor.Purchaser hereby waives the opportunity to review the Corporation’s books and records or any other information that may otherwise assist him in evaluating the within transaction and he is not relying upon Vendor or any other person for (i) knowledge or information about any other matters relating to the operation of the business conducted by the Corporation, (ii) any representations or warranties of Vendor (other than those specifically set forth in this Agreement), (iii) the future prospects of the Corporation or (iv) the value of the Purchased Shares being conveyed by Vendor. Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 4 - 3.7Representations and Warranties True on Closing Date All representations and warranties contained in this Section 3 shall be true on and as of the Closing Date with the same effect as if made on and as of such date except due to changes in circumstances between the date hereof and the Time of Closing of which the Purchaser shall have advised the Vendor in writing at or before the Time of Closing. 3.8Representations, Warranties and Covenants Surviving Closing Date The representations, warranties and covenants of the Purchaser contained in this Section 3 shall survive the Closing Date. SECTION 4 Purchase of Shares 4.1Purchase Price for Purchased Shares Based upon the representations, warranties, undertakings and covenants set forth in Sections 2 and 3, the Purchaser shall purchase, and the Vendor shall sell to the Purchaser, the Purchased Shares in return for the Purchaser assuming all liabilities of APM, which total US$97,920.04 as shown in Schedule One, such amount excluding the intercompany debt balance between the Vendor and APM, and other good and valuable consideration representing the Corporation’s fair market value. 4.2Release Regarding Outstanding Amount The Purchaser hereby acknowledges and agrees that the Outstanding Amount represents all sums due, payable or owing to the Purchaser by the Vendor up to the date of this Agreement, and upon delivery of the Purchased Shares by the Vendor in accordance with the provisions of this Agreement, the Outstanding Amount will be fully satisfied and extinguished, and the Purchaser will remise, release and forever discharge the Vendor and its respective directors, officers, employees, successors, solicitors, agents and assigns from any and all obligations relating to the Outstanding Amount. Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 5 - 4.2 Delivery of Shares Subject to the fulfillment of all the terms and conditions hereof (unless waived as herein provided), within 90 days of the Time of Closing, the Vendor shall cooperate with the Purchaser to have caused the Purchased Shares, which are acknowledged herein by the Purchaser to presently be in his possession, to be registered in the name of the Purchaser or as otherwise directed and instructed by the Purchaser, and/or will cause the transfer of such shares to be duly and regularly recorded on the books of the Corporation in the name of the Purchaser and/or cause a new certificate issued in the Purchaser’s name to be delivered within such 90 days of Closing. SECTION 5 Indemnification 5.1Indemnity by Vendor. Vendor agrees to indemnify and hold harmless the Purchaser and his affiliates (collectively, the “Purchaser Indemnified Parties”), from and against, and to reimburse the Purchaser Indemnified Parties with respect to, any and all loss, damage, liability, claims, cost and expense, including reasonable attorneys’ and accountants’ fees, (each, a “Loss”, or collectively, “Losses”) incurred by the Purchaser Indemnified Parties by reason of or arising out of or in connection with (i) the breach of any representation or warranty contained in Section 2 hereof or (ii) the failure of the Vendor to perform any agreement required by this Agreement to be performed by it.The Purchaser agrees to give prompt written notice to Vendor of the allegation by any third party of the existence of any liability, obligation, contract, other commitment or state of facts referred to in this Section 5.1.Vendor shall be entitled to control the contest, defense, settlement or compromise of any such claim (including engagement of counsel in connection therewith), at its own cost and expense, including the cost and expense of reasonable attorneys’ fees in connection with such contest, defense, settlement or compromise, and the Purchaser shall have the right to participate in the contest, defense, settlement or compromise of any such claim at its own cost and expense, including the cost and expense of attorneys’ fees in connection with such participation.Notwithstanding the foregoing, Vendor shall not settle or compromise any such claim without the prior written consent of the Purchaser, which consent shall not be unreasonably withheld, provided, that such consent shall not be required in the event that the settlement or compromise includes an unconditional and complete release of the Purchaser Indemnified Parties and does not provide for any ongoing obligations of the Purchaser. Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 6 - 5.2Indemnity by the Purchaser. The Purchaser agrees to indemnify and hold harmless Vendor and its affiliates, officers, directors and employees (collectively, the “Vendor Indemnified Parties”), from and against, and to reimburse the Vendor Indemnified Parties on demand with respect to, any and all Losses incurred by the Vendor Indemnified Parties by reason of or arising out of or in connection with (i) the breach of any representation or warranty contained in Section 3 hereof, (ii) the failure of the Purchaser to perform any agreement required by this Agreement to be performed by him, or (iii) any and all monetary and non-monetary obligations and liabilities of any kind or nature whatsoever accruing after the Time of Closing in respect of the Corporation.Vendor agrees to give prompt written notice to the Purchaser of the allegation by any third party of the existence of any liability, obligation, contract, other commitment or state of facts referred to in this Section 5.2.The Purchaser shall be entitled to control the contest, defense, settlement or compromise of any such claim (including the engagement of counsel in connection therewith), at his own cost and expense, including the cost and expense of reasonable attorneys’ fees in connection with such contest, defense, settlement or compromise, and Vendor shall have the right to participate in the contest, defense, settlement or compromise of any such claim at its own cost and expense, including the cost and expense of reasonable attorneys’ fees in connection with such participation.Notwithstanding the foregoing, the Purchaser shall not settle or compromise any such claim without the prior written consent of Vendor, which consent shall not be unreasonably withheld, provided, that such consent shall not be required in the event that the settlement or compromise includes an unconditional and complete release of the Vendor Indemnified Parties and does not provide for any ongoing obligations of Vendor. 5.3Purchaser’s Knowledge. The Purchaser hereby agrees that to the extent any representation or warranty of Vendor made herein is, to the actual knowledge of Purchaser prior to the Closing, untrue or incorrect, (i) the Purchaser shall have no rights thereunder by reason of such untruth or inaccuracy and (ii) any such representation or warranty by Vendor shall be deemed to be amended to the extent necessary to render it consistent with such knowledge of the Purchaser. Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 7 - SECTION 6 General 6.1Governing Law This Agreement shall be construed in accordance with the laws of the State of Nevada and each of the parties agrees that all actions shall be commenced and defended in the State of Nevada, without reference to the choice of law principles thereof. Each party hereby irrevocably submits to the jurisdiction of the courts of the State of Nevada.Each party irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court, any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum and the right to object, with respect to any such suit, action or proceeding brought in any such court, that such court does not have jurisdiction over such party.In any such suit, action or proceeding, each party waives, to the fullest extent it may effectively do so, personal service of any summons, complaint or other process and agrees that the service thereof may be made by certified or registered mail, addressed to such party at its address set forth in Section 6.3.Each party agrees that a final non-appealable judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding. 6.2Counterparts The Agreement may be executed in several counterparts bearing original or facsimile signatures, each of which so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument and notwithstanding their date of execution shall be deemed to bear date as of the date above written. Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 8 - 6.3Notices Any notice of other instrument required or permitted to be given under the provisions of this Agreement shall be in writing and may be given via certified mail, return receipt requested,postage prepaid or via prepaid overnight courier, or personally delivering the same addressed in the case of the Vendor to: Gryphon Resources, Inc. Attn: Mr. Alan Muller Gryphon Resources, Inc. 1313 East Maple Street, Suite 201-462 Spokane, Washington USA 98225 and in the case of the Purchaser, to: Albus Holdings S.A. Mr. Andres M. Sanchez East 53rd Street, Marbella Swiss Bank Bldg., 2nd Floor Panama City Republic of Panama Such notices, demands, claims and other communications shall be deemed given when actually received or (a) in the case of delivery by overnight courier with guaranteed next day delivery, the next day or the day designated for delivery, (b) in the case of certified mail, five days after deposit in the mail or (c) in the case of personal delivery, when actually delivered. 6.4.Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the respective parties hereto and their respective heirs, executors, administrators, successors and/or assigns, as the case may be. 6.5Further Assurances. From and after the Time of Closing, each party shall, at any time and from time to time, make, execute and deliver, or cause to be made, executed and delivered, for no additional consideration but at the cost and expense of the requesting party (excluding any internal costs incurred, such as having any of the following reviewed by counsel) such assignments, deeds, drafts, checks, stock certificates, returns, filings and other instruments, agreements, consents and assurances and take or cause to be taken all such actions as the other party or its counsel may reasonably request for the effectual consummation and confirmation of this Agreement and the transactions contemplated hereby. Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 9 - 6.6No Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person or entity other than the parties hereto and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement. IN WITNESS WHEREOF this Agreement has been executed by the parties. Gryphon Resources, Inc. Per: /s/ Alan Muller Alan Muller, Director, President /s/ Didiana Tapia /s/ Andres Sanchez (Witness signature) Andres M. Sanchez, President Albus Holdings S.A. Didiana Tapia (please print witness name) - 10 - SCHEDULE ONE: APM Madencilik Ltd. Balance Sheet As of September 27, 2010 Jun 30, 10 ASSETS LIABILITIES & EQUITY Liabilities Current Liabilities Other Current Liabilities 2300 · Intercompany loans 2660 · loans Total Other Current Liabilities Total Current Liabilities Total Liabilities Equity 3000 · Common Shares 3500 · Retained Earnings -112,600.30 Net Income -16,577.04 Total Equity -113,258.04 TOTAL LIABILITIES & EQUITY Initials Albus Holdings S.A.: /s/ AS Initials Alan Muller: /s/ AM - 11 -

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): March 13, 2014 LEAP WIRELESS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 001-34865 33-0811062 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 5887 Copley Drive, San Diego, CA (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (858)882-6000 Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below): o Written communications pursuant to Rule425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Introduction Pursuant to the Agreement and Plan of Merger, dated as of July 12, 2013 (the “Merger Agreement”), by and among Leap Wireless International, Inc., a Delaware corporation (the “Company”), AT&T Inc., a Delaware corporation (“AT&T”), Laser, Inc., a Delaware corporation (the “Stockholders’ Representative”), and Mariner Acquisition Sub Inc., a Delaware corporation and a wholly owned subsidiary of AT&T (“Merger Sub”), on March 13, 2014, Merger Sub merged with and into the Company with the Company surviving as a wholly owned subsidiary of AT&T (the “Merger”). Pursuant to the Merger Agreement, on March 13, 2014, each share of common stock of the Company issued and outstandingimmediately prior to the effective time of the Merger (other than any shares owned by the Company, AT&T, Merger Sub or any other direct or indirect subsidiary of the Company or AT&T, restricted stock and dissenting shares (collectively, the “Excluded Shares”)), was cancelled and converted automatically into the right to receive $15.00 in cash (the “Per Share Cash Merger Consideration”) and one non-transferable contingent value right (a “CVR” and together with the Per Share Cash Merger Consideration, the “Per Share Merger Consideration”), without interest.Each CVR will provide the holder with the right to a pro rata share of the proceeds, if any, resulting from the sale of the license granted to the Company by the Federal Communications Commission having the call sign WQJQ707 (the “License”). In connection with the closing of the Merger, each outstanding option, whether vested or unvested, that was granted under one of the Company'sstock plans and that has an exercise price equal to or below the Per Share Cash Merger Consideration was cancelled and converted into the right to receive (1) cash equal to the product of the total number of shares underlying the option multiplied by the difference, if any, of the Per Share Cash Merger Consideration and the exercise price per share underlying each option, less any applicable withholding taxes and (2) one CVR for each share underlying the option. Holders of any outstanding option, whether vested or unvested, with an exercise price greater than the Per Share Cash Merger Consideration, had the opportunity to exercise such option prior to the effective time of the Merger by providing the Company with a notice of exercise and, for each share underlying the option, a cash amount equal to the difference of the exercise price underlying the option less the Per Share Cash Merger Consideration. Each option that was so exercised was settled at the effective time of the Merger in exchange for one CVR in respect of each share underlying the option and, to the extent the option is not exercised prior to the effective time of the Merger, the option was cancelled at the effective time of the Merger for no consideration to the holder. Each outstanding share of restricted stock granted under the Company’s stock plans was cancelled and converted automatically into the right to receive the Per Share Cash Merger Consideration, less any applicable withholding taxes, plus one CVR in respect of such share of restricted stock. Each outstanding stock unit granted under the Company’s stock plans (including performance stock units, deferred stock units and deferred cash units, but excluding any cash award with a value that is not determined based on the price of the Company common stock), whether vested or unvested, was cancelled and converted into the right to receive an amount in cash equal to the product of the number of shares covered by the unit (assuming target level of performance for any incomplete performance periods) multiplied by the Per Share Cash Merger Consideration, less any applicable withholding taxes, plus one CVR in respect of such unit. The description of the Merger contained in this Introduction does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is incorporated herein by reference to Exhibit2.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 15, 2013. Item1.01. Entry into a Material Definitive Agreement Contingent Value Rights Agreement On March 13, 2014, the Company entered into a Contingent Value Rights Agreement (the “CVR Agreement”) with AT&T, the Stockholders’ Representative, Computershare Inc, as payments processor and Computershare Trust Company, N.A., as rights agent providing for the terms of the CVRs.Pursuant to the CVR Agreement, a CVR will entitle each Leap stockholder to a pro rata share of the net proceeds, if any, from the future sale of the License. The foregoing summary of the CVR Agreement is subject to, and qualified in its entirety by the full text of such agreement, which is included as Exhibit 10.1 hereto. Cricket Notes Supplemental Indenture On March 13, 2014, AT&T, Cricket Communications, Inc., a Delaware corporationand wholly owned subsidiary of the Company (“Cricket”), the Company,Cricket License Company, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, and Wells Fargo Bank, National Association, as trustee (the “Cricket Trustee”), entered into a 2020 Notes Supplemental Indenture dated as of March 13, 2014 (the “Cricket Supplemental Indenture”) to the Indenture dated November 19, 2010 (as amended and supplemented to date, including by the Supplemental Indenture, the “Cricket Indenture”), among Cricket, the guarantors party thereto and the Cricket Trustee, relating to Cricket’s outstanding 7.75% Senior Notes due 2020 (the “Cricket Notes”). Pursuant to the Cricket Supplemental Indenture, AT&T agreed to fully and unconditionally guarantee all of Cricket’s obligations under the Cricket Notes and Cricket Indenture and to assume the Company’s and Cricket’s previous reporting obligations under the Cricket Indenture.The foregoing description of the Cricket Supplemental Indenture does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Cricket Supplemental Indenture, which is included as Exhibit 4.1 hereto and incorporated by reference herein. Convertible Notes Supplemental Indenture In connection with the closing of the Merger, AT&T, the Company and Wells Fargo Bank, N.A., as trustee (the “Convertibles Trustee”), entered into a Convertible Notes Supplemental Indenture dated as of March 13, 2014 (the “Convertibles Supplemental Indenture”) to the Indenture dated as of June 25, 2008 (the “Convertible Notes Indenture”),between the Company and the Convertibles Trustee, relating to the Company’s outstanding 4.50% Convertible Senior Notes due 2014 (the “Convertible Notes”). The Convertibles Supplemental Indenture amends the Convertible Notes Indenture to provide that, upon consummation of the Merger, the right to convert the Convertible Notes into the Company’s common stock was changed to a right to convert such Convertible Notes into the consideration that holders of the Convertible Notes would have been entitled to receive in the Merger, by reference to that number of shares of the Company’s common stock equal to the Conversion Rate (as defined in the Convertible Notes Indenture), calculated as provided in Section 12.01 of the Convertible Notes Indenture with references to Common Stock (as defined in the Convertible Notes Indenture) replaced by references to the Reference Property (as defined in the Convertible Notes Indenture), that such holder would have owned had such holder converted its Convertible Notes immediately prior to the Merger, in accordance with the terms and conditions of the Convertible Notes Indenture and the Convertible Notes. The foregoing description of the Convertibles Supplemental Indenture does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Convertibles Supplemental Indenture, which is included as Exhibit 4.2 hereto and incorporated by reference herein. Item1.02. Termination of a Material Definitive Agreement On March 13, 2014, in connection with the Merger, all fees and other amounts outstanding under the Credit Agreement, dated as of October 10, 2012 (as amended, restated, modified and/or supplemented through the date hereof, the “Credit Agreement”), among the Company, Cricket, the lenders party thereto, and Deutsche Bank Trust Company Americas, as Administrative Agent, were paid, and the Credit Agreement was terminated. Neither the Company nor Cricket incurred any penalties in connection with the termination of the Credit Agreement. In connection with the consummation of the Merger, on March 13, 2014, the Company also entered into an amendment (the “Amendment”) to the Tax Benefit Preservation Plan, dated as ofAugust 30, 2011 (the “Rights Plan”), by and between the Company and Computershare Inc., successor-in-interest to Computershare Shareowners Services LLC (f/k/a Mellon Investor Services LLC), as Rights Agent (the “Rights Agent”) to change the “Final Expiration Date” of the Rights Plan from August 31, 2014 to March 13, 2014.The Amendment had the effect of terminating the Rights Plan as of March 13, 2014.Former stockholders of the Company do not have to take any action as a result of this action.The foregoing description of the Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Amendment, which is included as Exhibit 4.3 hereto and incorporated by reference herein. Finally, in connection with consummation of the Merger, on March 13, 2014, the Company terminated The Leap Wireless International, Inc. Employee Stock Purchase Plan, effective as of May 25, 2005, as amended. Item2.01. Completion of Acquisition or Disposition of Assets The information set forth in the Introduction above and Item5.01 of this Current Report on Form 8-K is incorporated herein by reference. Item3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing As a result of the Merger, all shares of the Company’s common stock were cancelled and, other than the Excluded Shares, were converted into the right to receive the Per Share Merger Consideration. Accordingly, on March 13, 2014, the Company notified the NASDAQ Global Select Market (“NASDAQ”) of its intent to remove the Company’s common stock from listing on NASDAQ and requested that NASDAQ file with the SEC an application on Form25 to report the delisting of the Company’s common stock from NASDAQ. NASDAQ informed the Company on March 14, 2014,thatin accordance with the Company’s request, NASDAQ had filed the Form25 with the SEC in order to provide notification of such delisting and to effect the deregistration of the Company’s common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends to file with the SEC a Form 15 with respect to the Cricket Notes and a Form 15 with respect to the Company’s common stock, requesting the deregistration of the Cricket Notes and the Company’s common stock under Section 12(g) of the Exchange Act and the suspension of the Company’s reporting obligations under Sections 13 and 15(d) of the Exchange Act. Item3.03. Material Modifications to Rights of Security Holders The disclosure set forth in the Introduction, Item 1.02 and Item 3.01 of this Current Report on Form 8-K is incorporated herein by reference. Item 5.01. Changes in Control of Registrant As a result of the Merger, a change in control of the Company occurred, and the Company is now a wholly-owned subsidiary of AT&T. The disclosure set forth in the Introduction is incorporated herein by reference. The aggregate merger consideration was funded with AT&T’s cash on hand, proceeds from debt financing and other funds available to it. The disclosure set forth in the Introduction and Item 5.02 of this Current Report on Form 8-K is incorporated herein by reference. Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers In connection with the consummation of the Merger, all of the directors of the Company resigned from their positions as directors of the Company, effective immediately after the effective time of the Merger.Also, with effect immediately after the effective time of the Merger, Nick W. Jones was appointed as the sole director of the Company. Item 8.01. Other Events On March 13, 2014, the Company issued a press release to provide holders of its Convertible Notes notice of a Make-Whole Fundamental Change as a result of the Merger. A copy of the press release is attached hereto as Exhibit 99.1. Item9.01. Financial Statements and Exhibits (d) Exhibits ExhibitNo. Description Agreement and Plan of Merger, dated as of July 12, 2013, by and among Leap Wireless International, Inc., AT&T Inc., Laser, Inc. and Mariner Acquisition Sub Inc. (incorporated by reference to Exhibit2.1 to the Company’s Current Report on Form8-K filed with the Securities and Exchange Commission on July 15, 2013) 2020 Notes Supplemental Indenture, dated as of March 13, 2014, among AT&T Inc., Cricket Communications, Inc., Leap Wireless International, Inc., as Guarantor, Cricket License Company, LLC, as Guarantor, and Wells Fargo Bank, N.A., as trustee (incorporated by reference to Exhibit 4.2 to AT&T’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2014) Convertible Notes Supplemental Indenture, dated as of March 13, 2014, among Leap Wireless International, Inc., AT&T Inc. and Wells Fargo Bank, N.A., as trustee (incorporated by reference to Exhibit 4.3 to AT&T’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2014) Second Amendment to the Tax Benefit Preservation Plan, dated as of March 13, 2014, by and between Leap Wireless International, Inc. and Computershare Inc., a successor-in-interest to Computershare Shareowners Services LLC (f/k/a Mellon Investor Services LLC), as Rights Agent Contingent Value Rights Agreement, dated March 13, 2014, by and among AT&T Inc., Leap Wireless International, Inc., Laser, Inc., Computershare Inc., a Delaware corporation, and Computershare Trust Company, N.A. Press Release Giving Notice of Make-Whole Fundamental Change to Holders of Its 4.50% Convertible Senior Notes due 2014, dated March 13, 2014 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the co-registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized. LEAP WIRELESS INTERNATIONAL, INC. BY: /s/Robert J. Irving, Jr. Robert J. Irving, Jr. Chief Legal and Administrative Officer Date: March 14, 2014

  EXHIBIT 10.1   NEITHER THE ISSUANCE OR SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.    Principal Amount: $46,000 Date: June 3, 2015   CONVERTIBLE PROMISSORY NOTE    National Automation Services, Inc., (hereinafter called the “Borrower”), hereby promises to pay to the order of Crown Bridge Partners, LLC, a New York Limited Liability Company, or its registered assigns (the “Holder”) the sum of $46,000 (with an Original Issuance Discount of $6,000 resulting in a payment of $40,000 to Borrower), together with any interest as set forth herein, on June 3, 2016 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of six percent (6%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or otherwise.   This Note may be prepaid in accordance with Section 1.9 of this Note. Interest after the date of issuance shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock) shall be made in lawful money of the United States of America.    All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in the supporting documents of same date (attached hereto).    This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.         The following terms shall apply to this Note:   ARTICLE I. CONVERSION RIGHTS   1.1 Conversion Right. The Holder shall have the right on or after 180 days from the date of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with the Sections below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”).   The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Borrower’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Borrower’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder.         1.2 Conversion Price.   (a) Calculation of Conversion Price. (The shares to be issued pursuant to conversions are subject to the legal opinion letter, customary and satisfactory to parties hereto as provided by the Holder.) The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 53% multiplied by the Market Price (as defined herein) (representing a discount rate of 47%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. In addition, if the Issuer is not DWAC eligible at the time of conversion, the Variable Conversion Price shall mean 38% multiplied by the Market Price (representing a discount rate of 62%). “Trading Price” means, for any security as of any date, the lowest trading price on the Over-the-Counter Bulletin Board, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the lowest trading price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no lowest trading price of such security is available in any of the foregoing manners, the average of the lowest trading prices of any market makers for such security that are listed in the “pink sheets”. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the stock exchange on which the Borrower’s Common Stock is traded.    (b) Conversion Price During Major Announcements. Notwithstanding anything contained in the preceding section to the contrary, in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section. For purposes hereof, “Adjusted Conversion Price Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.    1.3 Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower is required at all times to have authorized and reserved 10 times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”). In addition, if the Borrower’s per share price decreases to a price where the Reserved Shares are less than 10 times the amount of shares that the note may be converted into, Borrower shall immediately increase the Reserved Shares by written request to the Borrower’s transfer agent, to an amount equal to 10 times the conversion amount of the Note at the decreased conversion price.         The Borrower represents that upon issuance after conversion, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.    The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, subject to Borrower agreement on conversion calculation and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.   If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default as defined in this Note. In addition, if Borrower does not increase the Reserved Share amount pursuant to Section 1.3, it shall be considered an Event of Default as defined in this Note.    1.4 Method of Conversion.    Mechanics of Conversion. The Holder shall have the right at any time on or after the day that is six months from the date of this Note to convert all or any part of the outstanding and unpaid principal amount, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) calculation metrics with trading market data source information.    (a) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.         (b) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.    (c) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Securities Purchase Agreement.    (d) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.    (e) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.          (f) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section), or due to circumstances beyond the control of the Borrower, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section are justified.    1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor. Except as otherwise provided herein (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:    SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.    The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any be immediately sold. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to this note.         1.6 Effect of Certain Events.   (a) Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.   (b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.         (c) Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.   (d) Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.   (e) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder of a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.   (f) Exceptions. Notwithstanding the forgoing in this Section 1.6, no adjustments shall be required or made for conversions of any convertible notes outstanding at the time of funding of this Note, nor for the sale of restricted common stock at a discount to the market or the issuances of S-8 registered shares for services subsequent to the funding of this Note.   1.7 Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the “Maximum Share Amount”), which shall be 4.99% of the total shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.         1.8 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the third (3rd) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower’s failure to convert this Note.   1.9 Prepayment. This Note may be prepaid pursuant to the following schedule: 1) Payment on Day 1-30 will result in 115% of the face value being owed, 2) Payment on Day 31-60 will result in 120% of the face value being owed, 3) Payment on Day 61-90 will result in 125% of the face value being owed, 4) payment on Day 91-120 will result in 130% of the face value being owed, 5) payment on Day 121-150 will result in 135% of the face value being owed and 6) payment on Day 151-180 will result in 140% of the face value being owed. Interest after the date of issuance shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock) shall be made in lawful money of the United States of America.   ARTICLE II. CERTAIN COVENANTS   2.1 Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.   2.2 Restriction on Stock Repurchases. So long as the Borrower shall have any consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.         2.3 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.   2.4 Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’ s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.   ARTICLE III. EVENTS OF DEFAULT   If any of the following events of default (each, an “Event of Default”) shall occur:   3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of Eighteen percent (18%) per annum from the due date thereof until the same is paid (“Default Interest”).   3.2 Conversion and the Shares. Except for circumstances beyond the control of the Borrower, the Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent n ot to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph). It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the Holder.   3.3 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement.         3.4 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.   3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.   3.6 Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $100,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.   3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.   3.8 Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange, or if the Depository Trust Company shall place a chill on the common stock, which does not allow for the electronic deposit of such stock.   3.9 Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act, which shall include any filing extension period; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.   3.10 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.   3.11 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.   3.12 Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).   3.13 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the original financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or supporting documents.         3.14 Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without at least twenty (20) days prior written notice to the Holder.   3.15 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.   3.16 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Borrower, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.   Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.         If the Borrower fails to pay the Default Amount within ten (10) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.   ARTICLE IV. MISCELLANEOUS   4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.    4.2 Notices. All notices, demands, requests, consents, approvals, and other transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:   National Automation Services, Inc. 8965 S. Eastern Avenue Suite 120E Las Vegas, NV 89123 Attn: Robert Chance, CEO         If to the Holder:   Crown Bridge Partners, LLC 1173a 2nd Avenue, Suite 126 New York, NY 10065   4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.   4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in   4.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.   4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state of New York. T he parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.   4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.         4.8 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.8.   4.9 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing   IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer:     Signed: /s/ Robert Chance By: Robert Chance Title: Chief Executive Officer    

Title: Tenant threatened me saying he knows where I live and where my kid goes to school Question:I hired a contractor in February to do some work in an apartment building I own in NY. The contractor's uncle is a tenant in the same building. The work was completed (with hiccups and for more money than originally specified, but this was without a signed contract). I hired him for another project which he started but told me he couldn't finish due to issues he's having with his uncle. Contractor came back after a few weeks demanding money for the job he said he could no longer complete, to which I said if he finishes it he will receive the agreed amount. Contractor threatened to take pictures of the building to bring to city to grant him a mechanics lien on the property. The city had already cleared and provided rental certificates. I haven't heard back from contractor since. Fast forward to yesterday, the uncle who is still a tenant started demanding the money the contractor claims I owe via text. The uncle then googled me and found out where I live. He called and threatened to f*** me, saying he knows where I live and knows where my kid goes to school. I know he isn't capable of doing harm but I'm still unsettled about the threats he made against me and my family. A police report was filed against him but then police cannot take action until he escalates to more than threatening text messages and phone calls. I have to go to the property next week to collect rent. Answer #1: If he does anything contact the police again. Do you have a clause in your lease agreement that allows him to be evicted by making threats? If so start the eviction process on him.

[smartsheet-2019cashincen001.jpg] Smartsheet Inc. 2019 Annual Incentive Plan (Amended and Restated) Purpose. The purpose of this 2019 Annual Incentive Plan (this “Plan”) is to motivate and reward eligible employees by making a portion of their annual incentive compensation dependent on the achievement of certain performance goals related to the performance of Smartsheet Inc. (the “Company”) and time-based vesting conditions, if applicable. The Plan is administered by the Committee, which shall have the discretionary authority to interpret and administer the Plan, including all terms defined herein and to adopt rules and regulations to implement the Plan as it deems necessary, and its determinations shall be final and binding on all participants. The “Committee” shall mean the Compensation Committee of the Board of Directors. Participants. The participants in this Plan shall be the executive officers of the Company and such other employees of the Company as determined by the Chief Executive Officer (each a “Participant”). Those executive officers and other employees of the Company who are compensated under a sales incentive plan may be eligible to participate in this Plan as determined by the Committee with respect to executive officers and the Chief Executive Officer with respect to other employees. Plan Period. This Plan shall cover the applicable 12-month or shorter period during each fiscal year specified by the Committee for a Participant (the “Plan Period”). Performance Measure. The Committee shall select the performance measure or measures to be applied each Plan Period which may be selected from any one or more of the following performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit, region, or business segment, either individually, alternatively or in any combination, and measured either on an absolute basis or relative to a pre-established target, to a previous period’s results or to a designated comparison group, in each case as specified by the Committee:1 ● cash flow (including operating cash flows or free cash flow), ● revenue (on an absolute basis or adjusted for currency effects), ● net revenue ● bookings, ● billings, ● sales, ● cost of revenue, ● gross margin, ● operating expenses or operating expenses as a percentage of revenue, ● earnings (which may include earnings before interest and taxes, earnings before taxes, earnings before interest, taxes, depreciation and amortization and net earnings, and may 1   [smartsheet-2019cashincen002.jpg] be determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) or adjusted to exclude any or all non-GAAP items), ● earnings per share (on a GAAP or non-GAAP basis), ● return on capital, ● return on assets or net assets, ● return on investment, ● economic value added, ● operating income, ● operating profit, ● controllable operating profit, ● net operating profit, ● net profit, ● net income, ● operating margin, ● cash conversion cycle, ● stock price, ● return on equity or average stockholders’ equity, ● working capital targets and changes in working capital, ● balance of cash, cash equivalents, and marketable securities, ● total stockholder return, ● growth in stockholder value relative to the moving average of the S&P 500 Index or another index, ● account value, ● customer wins, ● license amounts, ● user counts, ● return on capital, ● return on assets or net assets, ● return on investment, ● economic value added, ● operating income, ● operating profit, ● controllable operating profit, ● net operating profit, ● net profit, ● net income, ● operating margin, ● cash conversion cycle, ● market share, 2   [smartsheet-2019cashincen003.jpg] ● credit rating, ● contract awards or backlog, ● overhead or other expense reduction, ● strategic plan development and implementation, ● succession plan development and implementation, ● improvement in workforce diversity, ● customer indicators, ● new product invention or innovation, ● attainment of research and development milestones, ● improvements in productivity, ● attainment of objective operating goals and employee weighting factors, ● completion of an identified special project, ● competition of a joint venture or other corporate transaction, ● customer or employee satisfaction and/or retention, ● research and development milestones expenses, ● individual confidential business objectives, ● growth in any of the foregoing measures, and ● any other metric that is capable of measurement as determined by the Committee. The Committee may appropriately adjust any evaluation of achievement of performance measures to exclude any of the following events that occur during a Plan Period: (A) the effects of currency fluctuations, (B) any or all items that are excluded from the calculation of non-GAAP earnings as reflected in any Company press release and Form 8-K filing relating to an earnings announcement, (C) asset write-downs, (D) litigation or claim judgments or settlements, (E) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (F) accruals for reorganization and restructuring programs, (G) any other unusual, extraordinary or non-recurring items to preserve the Committee’s original intent regarding the performance goals at the time of the initial award grant. Establishment of Individual Performance Goals. The performance goals and target bonus amount during the Plan Period for each Participant who is an executive officer shall be specified by the Committee as of the beginning of the Plan Period. The performance goals and target bonus amount during the Plan Period for each Participant who is not an executive officer shall be specified by the Chief Executive Officer as of the beginning of the Plan Period. The Committee may apply weighting factors that will be used to determine the annual award payment to each Participant such as (i) a Company performance multiplier based on the performance measures selected by the Committee for the Plan Period, and/or (ii) an individual performance multiplier based upon performance versus individual objectives for the Participant. The weighting factors shall be established by the Committee. The individual performance of each Participant shall be determined by the Company’s Chief Executive Officer, provided that the Chief Executive Officer’s performance shall be determined by the Committee. 3   [smartsheet-2019cashincen004.jpg] Award Calculation. After the Plan Period, the Committee will determine the extent to which performance goal(s) for each Participant are achieved and the actual award (if any) for each Participant based on the level of actual performance achieved. The Committee, in its discretion, may modify, reduce, increase or eliminate a Participant’s award at any time before it is paid, whether or not calculated on the basis of pre-established performance goals or formulas. The Committee may establish minimum thresholds for the performance measures during the Plan Period that must be exceeded before an award is earned. After the end of each Plan Period, the Committee shall certify in writing (to the extent required under Code Section 162(m)) the extent to which the targeted goals for the performance measures applicable to each Participant for the Plan Period were achieved or exceeded. Award Payments. The applicable award payment under this Plan for a Participant, if any, may be made in cash and/or equity awards, as determined by the Committee, with such equity awards to be granted and such cash to be paid within 65 days after the end of the Plan Period, subject to the terms and conditions of this Plan or as otherwise determined by the Company’s Chief Executive Officer (except with respect to his payment or that of his direct reports which shall be determined by the Committee). Notwithstanding anything to the contrary herein, the Committee shall approve the equity grants, as well as the terms and conditions of any equity grants, awarded pursuant this Plan. Any equity awards granted pursuant to the Plan as payment of an award may be subject to such time-based vesting condition as the Committee may determine and shall be granted under the Company’s 2018 Equity Incentive Plan. The Company shall withhold all applicable federal, state, local and foreign taxes required by law to be paid or withheld relating to the receipt or payment of any award. Unless otherwise determined by the Committee, a Participant must be employed on the date the applicable cash award payment is to be paid or equity award is granted (and likewise remain employed through any required service-based vesting schedule, if applicable). The Committee may make exceptions to this requirement in the case of retirement, death or disability or under other circumstances, as determined by the Committee in its sole discretion. General Provisions. The Committee reserves the right to terminate or modify this Plan for any reason at any time prior to the date of payment (including at any time prior to the grant of any equity awards made in payment of an award), and any future incentive plan shall be at the discretion of the Committee or the Board of Directors. Participating in this Plan does not guarantee participation in future incentive plans. This Plan supersedes in its entirety any previous incentive or bonus plan that may have been in existence with respect to the Plan Period, and any such plans shall be null and void with respect to the Plan Period. Any rule, decision or interpretation by the Committee shall be conclusive and binding on the Company and on all Participants and shall be given the maximum deference permitted by law. Award payments represent unfunded and unsecured obligations of the Company and a holder of any right hereunder in respect of any award payment shall have no rights other than those of a general unsecured creditor to the Company. Participation in this Plan does not constitute an agreement to employ the Participant for any length of time and shall not restrict the Company’s right to terminate the employment of the Participant for any reason and at any time. 4   [smartsheet-2019cashincen005.jpg] The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any award payment shall be determined in accordance with the laws of the State of Washington (without giving effect to principles of conflicts of laws thereof) and applicable Federal law. No award payment made under the Plan shall be intended to be deferred compensation under Section 409A of the Code and will be interpreted accordingly. Awards under this Plan will be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board of Directors or required by law during the term of Participant’s employment or other service with the Company that is applicable to officers, employees, directors or other service providers of the Company, and in addition to any other remedies available under such policy and applicable law, may require the cancellation of outstanding awards under this Plan and the recoupment of any gains realized with respect to awards. It is the intent that this Plan comply with the requirements of Code Section 409A so that none of the payments to be provided hereunder will be subject to the additional tax imposed under Code Section 409A, and any ambiguities herein will be interpreted to so comply. To the extent (i) any payments to which a Participant becomes entitled under this Plan in connection with termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code and (ii) a Participant is deemed at the time of such termination of employment to be a key employee under Section 416(i) of the Code, then such payment or payments shall not be made or commence until the earlier of (i) the expiration of the six (6)-month period measured from the date of the Participant’s “separation from service” (as such term is defined in Treasury Regulations under Section 409A of the Code) with the Company or (ii) the date of Participant’s death following such separation from service. Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period in the absence of this paragraph shall be paid to Participant in one lump sum. Any payment, grant of an equity award or vesting of any such equity award pursuant to this Plan shall constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations under Section 409A of the Code. For all purposes under this Plan, “Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder. 5  

EXHIBIT 10.1   Confidential Treatment Requested as to certain information contained in this Exhibit and filed separately with the Securities and Exchange Commission.   CONTRACT MANUFACTURING AGREEMENT   by and between   PERFECT GALAXY INTERNATIONAL LIMITED   and   SATCON TECHNOLOGY CORPORATION   Dated:  February 6, 2012     TABLE OF CONTENTS     Page     RECITALS 2     ARTICLE I DEFINITIONS 2     ARTICLE II SCOPE OF AGREEMENT 6     ARTICLE III MANUFACTURING AND ASSEMBLY OF PRODUCTS 6     ARTICLE IV PRODUCT PRICES 11     ARTICLE V PURCHASE OF PRODUCTS 15     ARTICLE VI DELIVERY AND SHIPMENT 18     ARTICLE VII WARRANTIES AND REMEDIES 20     ARTICLE VIII ADDITIONAL COVENANTS 22     ARTICLE IX INTELLECTUAL PROPERTY 23     ARTICLE X TERM AND TERMINATION 25     ARTICLE XI CONFIDENTIALITY 26     ARTICLE XII INDEMNIFICATION 27     ARTICLE XIII GENERAL TERMS 29   i   CONTRACT MANUFACTURING AGREEMENT   This Contract Manufacturing Agreement (this “Agreement”), is made and entered into as of February 6, 2012 (the “Effective Date”), by and between Perfect Galaxy International Limited, a company registered under the laws of the British Virgin Islands, having a principal mailing address at 4/F., Block C, Sea View Estate, 2 — 8 Watson Road, North Point, Hong Kong SAR, (hereinafter referred to as “Perfect Galaxy”) and Satcon Technology Corporation, a company registered under the laws of the state of Delaware of the United States of America, having a principal place of business at 25 Drydock Avenue, Boston, MA 02210, U.S.A. (“Satcon”).  Perfect Galaxy and Satcon are sometimes hereinafter referred to collectively as the “Parties” or individually as a “Party.”   RECITALS   WHEREAS, Perfect Galaxy is in the business of contract manufacturing;   WHEREAS, Satcon possesses the right to certain designs, data, ideas, and processes in connection with Products (as defined herein);   WHEREAS, the Parties are in possession of information regarding their respective supply chains and would like to share such information with the other Party for their mutual benefit; and   WHEREAS, Satcon desires to contract Perfect Galaxy to manufacture Products for Satcon and its Affiliates and Perfect Galaxy desires to manufacture and supply such Products for Satcon and its Affiliates pursuant to the terms and conditions of this Agreement.   WHEREAS, the Parties executed a Manufacturing and Purchase Agreement dated December 18, 2008 and a Renewal Agreement dated October, 2011 to extend such Manufacturing and Purchase Agreement to December 17, 2012 (collectively, the “Previous Agreement”).   WHEREAS, the Parties desire to execute a new contract manufacturing agreement to amend, restate and replace the Previous Agreement.   NOW, THEREFORE, in consideration of the mutual promises, covenants and obligations contained herein, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:   ARTICLE I DEFINITIONS   Certain capitalized terms used in this Agreement shall have the specific meanings set forth below:   Affiliate.  The term “Affiliate” means all entities of a Party that control, are controlled by, or are under common control with, that Party.  An entity “controls” another entity when it     owns more than fifty percent of the voting stock or other ownership interest of that entity or has the ability to direct its management.   Approved Facility.  The term “Approved Facility” means the facilities of Perfect Galaxy located in Shenzhen, P.R.C. or any additional Perfect Galaxy facilities or the facilities of an Perfect Galaxy Affiliate approved in writing by Satcon for the manufacturing of Products under this Agreement.   AVL.  The term “AVL” means a listing of vendors, in addition to part descriptions and part numbers, approved by Satcon for the manufacturing of Products.   Business Day.  The term “Business Day” means any day other than Saturday, Sunday or a day on which banks in the U.S., P.R.C. or the Hong Kong SAR are authorized or required by law or other governmental action to close.   Change in Control.  The term “Change in Control” means (i) a sale or other assignment of all or substantially all of the assets or a merger or consolidation with or into any other party by which the shareholders immediately prior to the transaction or series of related transactions cease to own a majority of the voting interests of the surviving or acquiring party following the transaction or series of related transactions; or (ii) any issuance of new securities and/or secondary sale of securities pursuant to which a party becomes the beneficial owner of a majority of the voting power of the outstanding equity securities.   Confidential Information.  The term “Confidential Information” means any confidential information of a Person relating to any designs, know-how, inventions, technical data, ideas, uses, processes, methods, formulae, compositions, compounds, manuals, instructions specifications, research and development activities, work in process, any information owned, licensed or used by a Party or any scientific, engineering, manufacturing, marketing, business plan, financial or personnel matter relating to such Person, its present or future products, sales, suppliers, customers, employees, investors or business, whether in oral, written, graphic or electronic form (which is marked confidential or acknowledged as being confidential prior to disclosure).  If the Confidential Information is disclosed orally or visually, it shall be identified as such at the time of disclosure and confirmed in writing by the disclosing Person within thirty (30) calendar days of disclosure.  Notwithstanding the foregoing, confidential Information shall also include any other information in oral, written, graphic or electronic form, which given the circumstances surrounding such disclosure a reasonable person would considered confidential.   Consigned Inventory.  The term “Consigned Inventory” means any parts, components, Semi Assemblies and Products that are in the custody of Perfect Galaxy but to which Satcon has full title and ownership.   End of Life Products.  The term “End of Life Products” means any Products, including its components and Sub Assemblies incorporated into the Products that will no longer be available for purchase under this Agreement.  Components that will no longer be available for purchase shall be referred to as “End of Life Components”.   3   Engineering Change Order.  The term “Engineering Change Order” means an engineering change order submitted by Satcon to Perfect Galaxy for the purpose of making an engineering change to the Products under this Agreement.   Epidemic Warranty Conditions.  The term “Epidemic Warranty Conditions” shall mean those conditions listed in Schedule 2 attached hereto.   Perfect Galaxy Technology Rights.  The term “Perfect Galaxy Technology Rights” means any Perfect Galaxy Intellectual Property Rights, Perfect Galaxy’s manufacturing processes and such production designs not acquired by Satcon pursuant to this Agreement and any rights licensed to Perfect Galaxy by any other Person (other than Satcon) to use any Intellectual Property of such Person.   Forecast.  The term “Forecast” means an up to nine (9) months rolling forecast estimating the amount of the Products that anticipates purchasing per month, as issued by Satcon once a month.   Intellectual Property Rights.  The term “Intellectual Property Rights” means all trademarks, service marks, trade dress, logos, copyrights, rights of authorship, inventions, patents, rights of inventorship, moral rights, rights of publicity and privacy, trade secrets, rights under unfair competition and unfair trade practices laws, and all other intellectual and industrial property rights related thereto, worldwide.   MW.  The abbreviation “MW” means megawatts.   NRE.  The term “NRE” means any non-recurring engineering, design, documentation, supplier and part qualification, training, scheduling, and other relevant charges incurred by Perfect Galaxy in connection with the development, preparation for manufacturing or modification of a part or Product to achieve certain specifications or characteristics, as requested by Satcon from time to time.  The Parties agree and acknowledge that Perfect Galaxy’s labor cost for factory assembly and test overhead items such as supervision, supply chain management and logistics, shall not be included in the NRE.   Person.  The term “Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.   P.R.C.  The term “P.R.C.” means the People’s Republic of China, and for purpose of this Agreement, does not include the Hong Kong or Macau Special Administrative Regions of the People’s Republic of China.   Product(s).  The term “Product(s)” means those certain products and their components and Sub Assemblies, as agreed by the Parties from time to time, to be manufactured by Perfect Galaxy in accordance with a Production Design, pursuant to Purchase Orders issued by Satcon from time to time under this Agreement.   4   Product Engineering.  The term “Product Engineering” means any research, development and engineering conducted by Perfect Galaxy, whether or not at the request of Satcon, to substantially improve or modify the Production Design of any Product.   Product Engineering Results.  The term “Product Engineering Results” means the results of Perfect Galaxy’s Product Engineering rendered in a written format, including, without limitation, the NRE and the Production BOM for such Product.   Product Prices.  The term “Product Prices” means the prices of Products determined in accordance with the Pricing and Rates mutually agreed to quarterly.   Production BOM.  The term “Production BOM” means a Bill of Materials provided to Perfect Galaxy from Satcon, which lists all components necessary to manufacture a Product   Production Design.  The term “Production Design” means product design information provided to Perfect Galaxy in order to allow Perfect Galaxy to manufacture a Product, as amended, modified, supplemented or restated from time to time in accordance herewith, that is approved by Satcon for manufacturing.  As used herein, Production Design includes, without limitation, product design schematics, Specifications and Production BOM.   Purchase Order.  The term “Purchase Order” means an order for Products or components, which shall specify at least the following, for Products or components:  (i) model number; (ii) quantity; (iii) Purchase Order Delivery Date; (iv) unitary prices, and (v) other order terms and conditions mutually agreed upon by the Parties.  Purchase Orders may additionally identify the specific Product configuration and other matters specific to each separate sale by Satcon or its Affiliate to a customer.  If the terms and conditions of a Purchase Order conflict with this Agreement, this Agreement will control as to the conflicting term(s) unless the conflicting terms have been mutually agreed upon by the Parties.  If the terms and conditions of a Purchase Order add to this Agreement, the applicable Purchase Order, if accepted by Perfect Galaxy, will control as to the additional term(s).   Purchase Order Delivery Date.  The term “Purchase Order Delivery Date” means the delivery date(s) specified by Satcon in any Purchase Order.   Quarterly Business Review.  The term “Quarterly Business Review” means the quarterly business review meetings between Satcon and Perfect Galaxy held within fifteen (15) days after the beginning of each quarter during the Term.  The venue of the Quarterly Business Review shall be agreed upon by the Parties from time to time   RMB.  The term “RMB” means the lawful currency of the PRC.   Satcon Technology Rights.  The term “Satcon Technology Rights” means any (i) Satcon Intellectual Property and (ii) any rights licensed to Satcon by any other Person to use any Intellectual Property of such Person.   Specifications.  The term “Specifications” means a detailed listing of the components, functionality, features, physical specifications and performance, security and standard compliance information, available support, ordering and pricing procedures and/or information   5   and acceptance criteria for each Product, including, without limitation, the Production Design for such Product.   Statement of Work.  The term “Statement of Work” means a written statement from Satcon to Perfect Galaxy requesting Perfect Galaxy’s Product Engineering services and setting forth certain objectives, improvements, changes or modifications to a Production Design or Product.   Sub Assemblies.  The term “Sub Assemblies” means combinations of parts and labor into a semi finished goods, which can then be combined into a final Product.   U.S.  The term “U.S.” means the United States of America.   US$.  The term “US$” means the lawful currency of the U.S.   ARTICLE II SCOPE OF AGREEMENT   2.1                               Scope.  Perfect Galaxy shall, at Satcon’s request, (a) manufacture and supply Products, 2.1.1. provide Product Engineering services, and (c) assist Satcon with the development and management of a common supply chain, under which Satcon may purchase directly from the suppliers that Perfect Galaxy solely develops or helps Satcon develop.  Perfect Galaxy shall disclose to Satcon information in connection with the pricing for contract manufacturing and supply chain services, including, but not limited to, various costs and each component of manufacturing value add, the names and addresses of Perfect Galaxy’s suppliers and vendors, and information regarding best business practices at the locations where Perfect Galaxy and its Affiliates conduct business.   ARTICLE III MANUFACTURING AND ASSEMBLY OF PRODUCTS   3.1                               Delivery of a Production Design.  Satcon shall deliver a Production Design to Perfect Galaxy and Perfect Galaxy shall notify Satcon within twenty (20) Business Days of receipt of such Production Design whether Perfect Galaxy is capable of manufacturing a product in accordance with such Production Design and whether Perfect Galaxy agrees to manufacture such product.  Any rejection of a Production Design by Perfect Galaxy shall include an explanation of the basis for the rejection; provided that Perfect Galaxy may not reject any version of a Production Design for a Product which Perfect Galaxy has previously manufactured for Satcon unless (i) the Production Design utilizes parts, components or subassemblies no longer available, (ii) a third party has asserted that the Production Design conflicts with or infringes on its intellectual property rights, or (iii) some other cause beyond the reasonable control of Perfect Galaxy makes the use of that Production Design commercially impractical, or (iv) the Parties cannot agree to Purchase Price and/or NRE despite of the Parties’ good faith discussions.   3.2                               Development Phase.   3.2.1                        Product Engineering.   6   (a)                                  Satcon may request the Product Engineering services of Perfect Galaxy by submitting to Perfect Galaxy a Statement of Work for the development of a new Product or the modification of a Production Design.  Within fifteen (15) Business Days of Perfect Galaxy’s receipt of such Statement of Work, Perfect Galaxy shall provide Satcon with a statement of NRE with detailed information on each component of the NRE for such Product Engineering services.  Satcon shall notify Perfect Galaxy whether it agrees to the amount of the NRE and the right, title and interest which it shall own in and to the results of such Product Engineering set forth in the Statement of Work within ten (10) Business Days of Satcon’s receipt of Perfect Galaxy’s NRE statement.   (b)                                 Satcon shall have the right, title and interest in and to the tangible deliverable results of any Product Engineering upon payment for such Product Engineering; provided, that Satcon’s rights to any Intellectual Property Rights arising from such Product Engineering shall be in accordance with the terms and conditions set forth in Section 9.1 hereof, and Satcon shall not receive any Intellectual Property Rights in the Perfect Galaxy Technology Rights including by way of illustration and not of limitation, Perfect Galaxy’s manufacturing processes, background materials and intellectual property not related to or developed for Satcon.   3.2.2                        Production Design.  At the conclusion of any Product Engineering, Perfect Galaxy shall deliver to Satcon within ten (10) Business Days the Product Engineering Results, if any.  Satcon, in its reasonable discretion, may accept or reject the Product Engineering Results, if any, within five (5) Business Days after receipt of Perfect Galaxy’s Product Engineering Results.  Upon receipt of authorization to undertake a Production Engineering, Perfect Galaxy shall provide Satcon with the Production Engineering Results and Production BOM for such Product according to milestones agreed upon in the applicable SOW, and a datasheet for such Product, which datasheet shall include, among other things, the Specifications, Product plans, sketches and the entire documentation required for manufacturing such Product with the same features, capabilities and performance.   3.2.3                        Change to the Products.  Perfect Galaxy shall not make any changes to the Products or changes to the processes, Production BOM, materials, Production Design, tools, or locations used to manufacture, assemble, or package the Products without Satcon’s prior written approval in the form of an Engineering Change Order.  Perfect Galaxy shall provide Satcon with prior written notice of any intent to make any change covered by this Paragraph and request Satcon’s approval.  Perfect Galaxy shall provide Satcon with a minimum of one (1) month notice prior to any intended change to:  (i) the Production Engineering, content, form, fit, or function of any Products; or (ii) the location of manufacture, assembly, or packaging of the Products.  Any deviation from the Production Design, including, without limitation, product design schematics, Specifications and Production BOM shall be tracked and approved prior to shipment through Satcon’s deviation approval process.   Satcon may request changes to the Products by issuing an Engineering Change Order to Perfect Galaxy from time to time.  Prior to Satcon’s approval of an Engineering Change Order, Satcon will notify Perfect Galaxy in writing of the contemplated Engineering Change Order, and Perfect Galaxy will notify Satcon in writing of the amount and cost of inventory which will be rendered excess and obsolete by the Engineering Change Order.  Subject to this Paragraph 3.2.3, Perfect Galaxy shall immediately implement the changes and all applicable   7   Purchase Orders will be deemed amended to incorporate the changes.  Upon receipt of an Engineering Change Order from Satcon, Perfect Galaxy shall acknowledge such receipt within two (2) Business Days and, within five (5) Business Days, shall provide a written report detailing Perfect Galaxy’s responsive action to such Engineering Change Order including, without limitation, Perfect Galaxy’s proposed implementation plan, and any pricing or scheduling impact on outstanding Purchase Orders or Forecasts.  Perfect Galaxy agrees to make commercially reasonable efforts to comply with Satcon’s requested changes.  If the changes result in a significant change to Perfect Galaxy’s cost or in the time for performance or exposes Perfect Galaxy to the risk a third party will assert a violation of its intellectual property rights, however, Perfect Galaxy shall advise Satcon in writing with details of the change to the cost or time or the risk of adverse claims by a third party, and Perfect Galaxy shall not implement the changes until Satcon gives Perfect Galaxy written authorization to do so.  Changes to the Products are a normal occurrence of continuous improvements, and as such, Perfect Galaxy shall not charge any additional expense to Satcon related to overhead in processing the changes.  If the changes covered by the Engineering Change Order are implemented, Satcon shall promptly reimburse Perfect Galaxy for the cost of inventory which is rendered excess and obsolete by such Engineering Change Order, and the obligation to make such reimbursement shall be acknowledged and confirmed by Satcon in the Engineering Change Order.  The Engineering Change Order shall specify the disposition of the excess and obsolete inventory.   3.2.4                        Evaluation and Upgrades of Products.  Perfect Galaxy shall share suggestions for improvement of Production Designs and/or Products that arise from time to time.   3.2.5                        Certification.  Perfect Galaxy shall obtain an initial UL certification for the Approved Facility.  All costs arising and relating to obtaining the initial UL certification for the Approved Facility shall be borne by Perfect Galaxy.  Satcon shall bear all expenses arising and related to the Approved Facility’s UL re-certification should re-certification be necessary and caused by a Satcon initiated change in Production Design.   3.3                               Production Phase.   3.3.1                        Manufacturing of Products.   (a)                                  Perfect Galaxy shall manufacture and sell to Satcon Products ordered by Satcon pursuant to Purchase Orders submitted by Satcon to Perfect Galaxy in accordance with Article V hereof.  Further, Perfect Galaxy shall manufacture and deliver such Products to Satcon on or prior to the Purchase Order Delivery Date in accordance with Article VI hereof.   (b)                                 Perfect Galaxy shall manufacture and assemble the Products in strict compliance with the Production Design and Specifications for such Product at the Approved Facility.   (c)                                  Perfect Galaxy agrees that all parts and components used to manufacture the Products shall be sourced from vendors contained in the AVL to be provided by Satcon.  Parts and components from vendors not contained in the AVL shall not be used without   8   Satcon’s prior written approval, which shall include signatures from Satcon’s supply chain, engineering, and quality assurance at a minimum.   (d)                                 Perfect Galaxy agrees to maintain a vendor management quality program that manages vendors not contained in the AVL (Example — distributor of off the shelf components) which actively provide approved materials (as defined by Satcon officially released documentation) for manufacturing the Products for Satcon.  The vendor management quality program shall includes, without limitation, annual validation of quality management system, communication of critical parts or characteristics, development and or implementation of process control plans at vendors for critical parts or characteristics, first article inspection, on-going inspection, management on non-conforming material, initiating and management of vendor corrective actions, maintenance of quality, delivery, lead time, cost, and continual improvement metrics as part of vendor performance management, and periodic reviews and feedback to vendors driving continual improvement.   (e)                                  Perfect Galaxy agrees that no independent contractors or subcontractors shall be used to manufacture the Products without Satcon’s prior written approval.   (f)                                    Perfect Galaxy shall have the right to use its Affiliates for manufacturing the Products, with written notice and subject to the Approved Facility definition above.   (g)                                 Perfect Galaxy agrees to permit Satcon to audit its manufacturing process at the Approved Facility upon five (5) business days advance notice to Perfect Galaxy, and shall provide such assistance which is reasonably necessary for Satcon to evaluate the quality of the Products.  All Satcon personnel shall comply with Perfect Galaxy’s reasonable requirements while at the Approved Facility.   3.4                               Quality.  Perfect Galaxy covenants that it shall manufacture and assemble all Products from entirely new materials, free from any counterfeit parts, materials or components, in accordance with the Specifications.  If the Specifications require so, Perfect Galaxy must use materials certified by UL, CSA, CE or other governing agency certifications as required.  Perfect Galaxy further covenants to perform all manufacturing, testing and other quality assurance procedures according to the ISO 9001:2008 Standards.  Perfect Galaxy shall serialize the Products and provide lot or serial number information for critical materials, components and Sub Assemblies that comprise each particular Product.  This information shall be recorded and stored in a manner as to be easily searchable and retrievable without degradation of quality over time.  Perfect Galaxy shall make available to Satcon production quality and supplier quality information in regular monthly intervals and any other time upon two business (2) days prior written notice.  Perfect Galaxy shall designate an individual as a Quality Representative to be responsible for Satcon’s quality inquires and communications.  If deemed necessary by both Perfect Galaxy and Satcon, Perfect Galaxy shall send appropriate employees for quality trainings at Satcon’s location during normal business hours.  Perfect Galaxy shall bear all travel and accommodation costs and expenses for such employees attending the trainings unless otherwise agreed in writing by the Parties.   9   3.4.1                        Quality Control.  All Products shall be manufactured and packaged in accordance with the Specifications (packaging procedure — ES00001).  Perfect Galaxy shall at all times maintain quality assurance processes capable of audit by Satcon and sufficient to ensure compliance with the intent of the actual requirements listed within said Specifications.  Perfect Galaxy agrees to utilize only components and materials obtained in accordance with the AVL for manufacture of the Products, and to ensure that such components and materials comply with all applicable specifications of Satcon.   3.4.2                        Inspection Criteria.  Perfect Galaxy shall utilize Satcon developed workmanship criteria (communicated in the form of specifications or standards referenced on engineering drawings, work instructions, test procedures, or through an industry recognized workmanship standard).  Where a conflict exists among such criteria, the Satcon developed specifications and standards shall supersede the industry recognized workmanship standard.  Satcon shall work with Perfect Galaxy to develop a mutually agreed workmanship standards specific to the processes utilized to manufacture the Products, which shall be the primary reference for the workmanship inspection criteria.   3.4.3                        Quality Improvement.  Perfect Galaxy agrees to participate in such continual improvements plans and programs as may be implemented from time to time between Satcon and Perfect Galaxy.  As part of its participation in Satcon’s quality improvement programs, Perfect Galaxy agrees that it will, without limitation and to the extent applicable and reasonable:   (a)                                  Lead Quarterly Business Review programs with the top 15~20% qualified vendors Satcon identifies as well as corrective actions if such vendors score less than 95% in Satcon’s rating system.   (b)                                 Allow for inspection and audit of Perfect Galaxy’s facilities and operations when requested by Satcon;   (c)                                  Respond to Satcon’s corrective action requests within five (5) Business Days or sooner if requested by Satcon and agreed to by Perfect Galaxy;   (d)                                 Provide failure analysis on the Products as requested by Satcon including a response in the 8D format as specified by Satcon;   (e)                                  Cooperate in identifying the source of non-conformances and implementation of corrective actions;   (f)                                    Lead initiatives which require engineering involvement with vendors which supply parts and components to Perfect Galaxy for manufacturing the Products; and   (g)                                 Maintain quality and efficiency metrics in the manufacturing and test areas of the Approved Facility and report on progress towards targets at least once a month.  Detailed root cause analysis and corrective actions will be reviewed quarterly.  Satcon will assign personnel to monitor and facilitate Perfect Galaxy’s understanding of Satcon’s quality requirements.  In order to promote cooperative resolution of any disputes arising under this   10   Section 3.4, the Parties agree to exhaust the issue escalation hierarchy of Schedule 5 before seeking other relief or remedies under this Agreement.   3.4.4                        Quality Reporting.  Perfect Galaxy shall provide monthly reports to Satcon of Perfect Galaxy’s process quality performance, including the Product yields, defect pareto, root cause, and proposed corrective actions (the agreed format is Trend-Pareto-Action (TPA) charts for each location).  In the event that corrective action is deemed necessary by either Party in order for Perfect Galaxy to comply with Satcon’s quality or on-time-delivery requirements, Perfect Galaxy shall use its best efforts to furnish a quality improvement plan promptly to Satcon detailing the steps necessary to meet Satcon’s stated goals.   3.5                               Consignment of Equipment and Materials.  Certain equipment and tooling, which is required for manufacturing the Products will be consigned by Satcon to Perfect Galaxy for use (the “Satcon Tooling”) at no expense to Perfect Galaxy.  The Satcon Tooling and all drawings, plans, specifications, or other materials furnished by Satcon to Perfect Galaxy relating to Satcon Tooling shall be and remain the property of Satcon, and shall be used by Perfect Galaxy only for the purposes of effectuating Perfect Galaxy’s performance of this Agreement.  Satcon tooling shall be returned to Satcon at Satcon’s expense, upon request, to a destination specified by Satcon, in operative condition, except for normal wear and tear.   ARTICLE IV PRODUCT PRICES   4.1                               Payment and Pricing.   4.1.1                        Product Prices.  The Product Prices shall be determined by the Pricing and Rates as set forth in section 4.2.1.  Product Prices are FCA (INCOTERMS 2010) Hong Kong SAR unless otherwise provided by a Purchase Order.   4.1.2                        Payment.  Perfect Galaxy shall invoice Satcon or its Affiliate placing the Purchase Order for all Products manufactured under this Agreement at or after the time that such Products are placed with the forwarder for shipment or the Purchase Order Delivery Date, whichever is later.  All invoices shall be due and payable sixty (60) days after Perfect Galaxy delivers the Products to the forwarder in Hong Kong and sends the invoices.  In the event of nonpayment pursuant to the terms herein, Perfect Galaxy, after providing thirty (30) days written notice to Satcon or its applicable Affiliate, shall be entitled to full payment of all amounts due, together with one percent (1%) per month interest thereon up to a cap of twelve percent (12%) of the amounts.   4.1.3                        Currency.  All payments and quotations for materials under this Agreement shall be made in lawful currency of the U.S.   4.1.4                        Taxes.  Satcon or its Affiliate will be responsible for and only for any and all sales, use, VAT, or similar taxes, or any other such assessment however designated imposed on sales of the Products incurred after the Products are delivered by Perfect Galaxy to the freight forwarder in Hong Kong (FCA Hong Kong SAR).  Perfect Galaxy shall separately state on each applicable invoice (and not include them in the Product Prices), any export duties or sales, use,   11   VAT, excise or similar tax.  Perfect Galaxy shall not charge taxes if Satcon is exempt from such taxes and furnishes Perfect Galaxy with a certificate of exemption in a form reasonably acceptable to Perfect Galaxy.  The Parties will pay for applicable income taxes on their own.   4.1.5                        Price Adjustment for Exchange Rate.  At each Quarterly Business Review, subject to the Parties’ written agreement, value add adjustments shall be made if the foreign exchange rate between RMB and USD has fluctuated by more than five percent (5%) in the preceding twelve (12) months, using an initial baseline exchange rate as of the Effective Date.   4.1.6                        NRE.  The Parties shall mutually agree in writing reasonable NRE charges incurred by Perfect Galaxy.  Satcon will reimburse Perfect Galaxy for such charges within sixty (60) day after the invoice date.   4.2                               Price Adjustments.   4.2.1                        Product price will be determined based on the actual materials cost to Perfect Galaxy with a value add multiplier that consists of predefined rates for labor, overhead, and profit.  Satcon and Perfect Galaxy have jointly agree on the value add multiplier at the effective date of this agreement as well as the scale for reduced rates to account for volume increases, both of which are reflected in the chart set forth below in this Section 4.2.1.  Once it is determined in accordance with the Pricing and Rates, the Value add multiplier shall not be increased for the first twelve (12) months of this agreement, unless the Parties agree upon in writing adjustments at the Quarterly Business Review, provided that such increases shall only be effective on Purchase Orders issued after such adjustments.  The Parties shall not agree upon a value add increase that takes effect sooner than twelve (12) months after the date the then-current rate was set.  The currently agreed value add multiplier will be derived from the following table:   Quarterly Material Consumption Cost (US$ ***)   <***   <***   <***   <***   <***   >*** VA% Multiplier   ***   ***   ***   ***   ***   ***   *** Represents text omitted pursuant to a request for confidential treatment.  The omitted material has been filed separately with the Securities and Exchange Commission.   12   NOTE:                   If the Quarterly Material Consumption Cost is between US$ *** and US$ ***, the value add multiplier shall be determined based on a linear interpolation between the dollar thresholds in the table above.  For example, if the Quarterly Material Consumption Cost is US$ ***, the value add multiplier would be ***   4.2.2                        Perfect Galaxy shall provide Satcon with an updated BOM with costs for each material, component and Sub Assemblies for each Product in an electronic format at least quarterly or in exceptional circumstances, within three (3) business days after any request by Satcon.   4.2.3                        During the Term, the Parties shall meet within fifteen (15) days after the beginning of each quarter to review, among other things, the Product Prices (the “Quarterly   4.2.4                        Business Review”).  At the Quarterly Business Review, subject to the Parties’ agreement, price adjustments shall be made for:   (i)                                     Extraordinary circumstances beyond the control of Perfect Galaxy, as indicated in Article 4.2.1 hereinabove   (ii)                                  Cost Reduction Program as provided in Paragraph 4.2.5 herein.   (iii)                               Volume increases resulting in a lower value add multiplier calculation.   4.2.5                        Cost Reduction Program.   (i)                                     By entering into this Agreement and the arrangements contemplated herein, the parties agree to the below targeted annual cost reductions.   Year   targeted average cost reduction   Targeted average product cost reduction   1   ***   ***   2   ***   ***   3   ***   ***   4   ***   ***   5   ***   ***     Commission.   13   Cost reduction is measured against the baseline PO Price set forth at the beginning of the contract and reset every year.   (ii)                                  The Parties shall formally develop a cost reduction plan to explore and effect cost reductions in each aspect of the manufacture and supply of the Products including, but not limited to, supply chain, local sourcing, labor efficiency, design improvements, freight, packaging, logistics, quality and business processes (“Cost Reduction Program”).  Satcon will receive *** benefit of a Cost Reduction Program immediately after the existing inventory and relevant supplier liability of the relevant Products is exhausted and any of Perfect Galaxy’s additional costs incurred by the Cost Reduction Program are recovered.     Satcon’s deliverables in the Cost Reduction Program are the following:   ·                  review and approve cost reduction projects;   ·                  assign resources to support each initiative;   ·                  approve preliminary information on vendor capability;   ·                  provide written qualification requirements; and   ·                  approve ECO qualification results.   (iii)                               Notwithstanding anything to the contrary contained herein, any adjustments to the Product Costs under this Paragraph 4.2.5 shall not be effective unless they are agreed upon by the Parties in writing at the Quarterly Business Review.  The new Product Cost shall include without limitation the applicable and corresponding cost reductions in material overhead, direct labor and profit.   In the event that Satcon negotiates for purchase of a component material from a vendor of such material on terms more favorable than those available to Perfect Galaxy, Perfect Galaxy agrees to purchase such components from said vendor on Satcon’s negotiated terms, provided that the Parties agree that Perfect Galaxy’s obligations under this Agreement are not otherwise impaired, to the extent that such vendor agrees that the existing materials purchase agreement between Perfect Galaxy and such vendor applies to such purchase.   Commission.   14   ARTICLE V PURCHASE OF PRODUCTS   5.1                               Purchase Order.  Subject to the terms and conditions of this Agreement, Perfect Galaxy agrees to offer for sale to Satcon during the Term of this Agreement, those Products specified in each Purchase Order submitted by Satcon to Perfect Galaxy.  Purchase Orders must be placed either be in writing (fax or registered mail) or electronically via a system generated format.  No verbal communication or simple, plain text email will be accepted as a binding Purchase Order.  All Purchase Orders, whether accepted, conditionally accepted, or not accepted, shall be acknowledged by Perfect Galaxy within two (2) Business Days of receipt.   5.1.1                        Purchase Order Confirmation.  Perfect Galaxy shall promptly notify Satcon in writing (a “Purchase Order Confirmation”) but in any event within two (2) Business Days of receipt of a Purchase Order, whether it accepts or rejects such Purchase Order.  Any rejection of a Purchase Order by Perfect Galaxy shall include an explanation of the basis for the rejection.  If, for any reason, Perfect Galaxy fails to deliver a Purchase Order Confirmation to Satcon within the timeframe specified above, Perfect Galaxy shall be deemed to automatically accept such Purchase Order.   5.1.2                        Rejection of a Purchase Order.  A Purchase Order may only be rejected if:   (a)                                  The Purchase Order, as defined herein, does not contain all required information;   (b)                                 The Product set forth in the Purchase Order does not comply with the terms and conditions hereof;   (c)                                  Any Product Prices, fees, costs or expenses not contested by Satcon in good faith are due and payable by Satcon to Perfect Galaxy and such Product Prices, fees, costs or expenses exceeds Satcon’s credit limit as established by Perfect Galaxy and published to Satcon, if any or have remained outstanding for more than sixty (60) days;   (d)                                 The Purchase Order contains terms that conflict with or add to the terms of this Agreement that are not mutually agreed upon;   (e)                                  The Product set forth in the Purchase Order has a Production Design or Specifications different from previously provided Product;   (f)                                    The Production Design requires the use of parts, components or sub assemblies that are no longer in production or otherwise available;   (g)                                 A third party has asserted that the Production Design conflicts with or infringes on its intellectual property rights; or   (h)                                 Some other cause beyond the reasonable control of Perfect Galaxy makes the use of that Production Design specified in the Purchase Order commercially impractical.   15   5.2                               Forecasts.   5.2.1                        Once every month, Satcon will provide Perfect Galaxy with a six (6) month weekly rolling Forecast of Products to be purchased.  Additionally, Satcon will provide Perfect Galaxy with market and macroeconomic trends for up to an additional six (6) months solely intended to assist Perfect Galaxy in planning its capacity levels.  As changes may occur more frequently than once a month, Satcon and Perfect Galaxy will joint chair a weekly supply/demand meeting to review net changes in the Forecast and changes in delivery requirements and commitments.   5.2.2                        The Forecasts submitted by Satcon to Perfect Galaxy are non-binding and solely intended to assist Perfect Galaxy in ensuring that it has the ability to meet the Purchase Orders quantities that may be submitted by Satcon.  This Forecast will also serve as the guideline for setting stocking levels of Critical Component Inventory.  The delivered Forecasts shall not be modified without the parties’ consent.   5.2.3                        Unless Perfect Galaxy notifies Satcon in writing within five (5) calendar days after receipt of a Forecast that it will not be able to supply the quantity of Products specified in a Forecast, Perfect Galaxy shall use its best efforts to provide the quantity of Products specified in such Forecast upon receipt of corresponding Purchase Orders from Satcon.   5.3                               Inventory and Cancellation of Purchase Orders.   5.3.1                        Material Inventory Management.  Perfect Galaxy shall purchase parts to manufacture the Products according to the quantity and delivery schedules set forth in the Forecasts and the Purchase Orders during the Term of this Agreement.  Only with Satcon’s prior written consent, Perfect Galaxy may purchase parts in excess of Purchase Order requirements, such as long lead time components or components which can be purchased in volume at a lower price (“Long Lead Time Materials”).  All parts will be consumed on a first-in, first-out basis (i.e. the oldest parts will be completed first and applied to fulfill the quantity requested in the next scheduled delivery of the Products).  Fluctuations upward in the Forecasts will be applied to offset fluctuations downward in the Forecasts.  Satcon and Perfect Galaxy shall jointly review changes in supply/demand weekly.   5.3.2                        Forecast responsibility.  On a quarterly basis Perfect Galaxy shall provide Satcon a list of any material that is excess inventory because Satcon failed to fulfill a Forecast, and the most recent Forecast does not show such excess material inventory will be used in the next six (6) months.  Perfect Galaxy shall also provide Satcon evidence and history of materials purchased for purposes of fulfilling a Forecast at the request of Satcon.  So long as Perfect Galaxy is not in breach of its obligations, Satcon shall, at its own option, either (a) reimburse Perfect Galaxy for Perfect Galaxy’s carrying costs in the amount of one percent (1%) per month of the verified cost of the excess materials inventory not projected to be used in the next six (6) months under the current Forecast, or (b) purchase from Perfect Galaxy the excess materials inventory not projected to be used in the next six (6) months under the current Forecast, at Perfect Galaxy’s cost, to the extent that Perfect Galaxy complies with the material inventory management as described in Paragraph 5.3.1 herein, provided:  i) Perfect Galaxy’s order was reasonably necessary to support the unfulfilled Forecast; and ii) Perfect Galaxy uses   16   best efforts to mitigate Satcon’s liability including but not limited to attempting to cancel or return its orders for a refund, and using the material or work-in-progress in question for other products.  If any material remains excess inventory because Satcon failed to fulfill Forecasts for more than twelve (12) months, and Perfect Galaxy complied with the material inventory management as described in Paragraph 5.3.1 herein and clauses i) and ii) of the preceding sentence, then Satcon shall, at Perfect Galaxy’s request, immediately purchase from Perfect Galaxy such excess materials inventory at Perfect Galaxy’s cost, provided:  i) Perfect Galaxy’s order was reasonably necessary to support the unfulfilled Forecast; and ii) Perfect Galaxy uses best efforts to mitigate Satcon’s liability including but not limited to attempting to cancel or return its orders for a refund, and using the material or work-in-progress in question for other products.  For any such excess inventory so purchased by Satcon under this Paragraph 5.3.2, Satcon shall issue and Perfect Galaxy shall accept a purchase order for such inventory at Perfect Galaxy’s actual purchase cost and subject to the terms and conditions otherwise governing Satcon’s Purchase Orders under this Agreement.  Satcon may, at its sole option, elect to forego receipt of excess inventory materials by authorizing Perfect Galaxy in writing to dispose of such materials.   5.3.3                        Critical Component Inventory.  Perfect Galaxy shall maintain at all times during the Term of this Agreement an inventory of specific component materials as set forth in Schedule 5 (“Critical Component Inventory”), as it may be amended from time to time by mutual agreement of the Parties.  Critical Component Inventory shall be maintained by Perfect Galaxy on a first-in, first-out basis and continually maintained and replenished as needed in support of Satcon’s Forecasts.  Perfect Galaxy shall provide a quarterly aging report of Critical Component Inventory by part number, and shall permit Satcon reasonable access to Perfect Galaxy’s facilities in order to audit and inspect periodically Perfect Galaxy’s maintenance of such inventory.  Perfect Galaxy will recommend stocking levels to Satcon in writing at least once per quarter.  Satcon shall be liable for materials purchased to support agreed upon safety stock, buffer stock, and volume purchase buys.  Such inventory will be excluded from excess inventory calculations.  These levels shall be reviewed by both Parties monthly and re-set if necessary.   5.3.4                        Efforts; Inventory Reporting.  Perfect Galaxy will use its best efforts to keep obsolete and excess inventory as low as possible in light of Perfect Galaxy’s obligations under this Agreement.  On at least a quarterly basis, Perfect Galaxy shall provide to Satcon a report of any obsolete or excess inventory held by Perfect Galaxy.  The report will contain at a minimum the part number, quantity on hand, inventory age, quantity on order, Perfect Galaxy’s cost and, if component inventory, the Products for which the component was procured, the forecasted amount(s) of such Products or component, and any relevant information related to the reason for obsolescence.  In connection with its report, Perfect Galaxy shall further detail the efforts Perfect Galaxy has made or intends to make to mitigate any quantities of obsolete or excess inventory held by Perfect Galaxy, including but not limited to (a) utilizing the subject materials for other products or activities within Perfect Galaxy’s operations; (b) issuing cancellation notices on outstanding material orders with Perfect Galaxy’s suppliers; and (c) returning such materials for credit to Perfect Galaxy’s suppliers.   5.3.5                        Obsolete Inventory.  Satcon shall reimburse Perfect Galaxy, at Perfect Galaxy’s verified costs, those parts purchased by Perfect Galaxy for purposes of fulfilling a Forecast or Purchase Order which are at the material’s end of life cycle and unfit for   17   incorporation into Products or any other products for other customers (“Obsolete Inventory”).  Satcon reimbursement of Obsolete Inventory shall be due and payable sixty (60) days after receipt of notice that materials have become Obsolete Inventory, provided that Perfect Galaxy can provide Satcon evidence and history of the initial purchase of the Obsolete Inventory.   5.3.6                        Cancelled Purchase Orders.  Notwithstanding any other provisions herein, Satcon shall in no event be liable for purchase of any quantity of Products in excess of Purchase Orders generated.  In the event that Satcon cancels a Purchase Order, Satcon’s sole liability will be for the purchase costs of parts, work-in-progress, and finished goods that Perfect Galaxy has ordered or completed to support the cancelled Purchase Order to the extent that Perfect Galaxy complies with the material inventory management as described in Section 5.3 herein, provided:  i) Perfect Galaxy’s work or order was reasonably necessary to support the cancelled Purchase Order or the order for the Long Lead Time Materials was approved by Satcon in writing; and ii) Perfect Galaxy uses best efforts to mitigate Satcon’s liability, including, but not limited to attempting to cancel or return its orders for a refund, and using the parts, work-in-progress and finished goods in question for other products.   ARTICLE VI DELIVERY AND SHIPMENT   6.1                               Production Lead Times.  Perfect Galaxy’s delivery commitments and pricing under this Agreement are based upon Perfect Galaxy’s ability to supply Products to Satcon within lead times as agreed to by the Parties.  Production Lead times shall be initially set at two (2) weeks and to be reviewed and adjusted, if necessary, by the Parties on a quarterly basis.  Lead times shall only be valid if the amount of Products purchased by Satcon, as evidenced in the Purchase Order, is no greater than the Applicable Forecast.  If Satcon submits a Purchase Order for an amount of Products greater than the applicable Forecast, Perfect Galaxy shall use best efforts to commit to Satcon’s requested lead times.   Satcon and Perfect Galaxy shall conduct a monthly forecast review in order to assess the sufficiency of Perfect Galaxy’s labor capacity, equipment capacity, and raw materials positioning, both short and long term.  Perfect Galaxy shall in turn provide a consolidated forecast of component materials used in Perfect Galaxy’s manufacture of the Products to all appropriate suppliers of Perfect Galaxy within five (5) Business Days of receipt of the Forecast from Satcon.   Manufacturing Factory Capacity Model   No. Of Weeks   < 2   < 4   < 8   < 12   < 16   < 20   < 26   Capacity +/-       30 % 50 % 100 % 125 % 150 % 200 %   Perfect Galaxy shall maintain a ramp readiness plan.  The ramp readiness plan must address staffing, training, equipment, and materials readiness to increase its existing capacity to incremental levels.  This plan is to be reviewed by both Parties at least once a quarter.   6.2                               Delivery.  Perfect Galaxy represents and warrants that it shall deliver the Products to Satcon’s freight forwarder in the Hong Kong Special Administrative Region on or within three (3) calendar days prior to the applicable Purchase Order Delivery Date unless otherwise   18   agreed upon in writing by the Parties.  If Perfect Galaxy is unable to deliver such Products on or within (3) calendar days on such Purchase Order Delivery Date, Perfect Galaxy shall immediately notify Satcon in writing of the reason for the delay or premature delivery and the date by which such Products will be or was delivered, as the case may be.   6.2.1                        Late or Premature Delivery.  If Perfect Galaxy fails to deliver Products by the applicable Purchase Order Delivery Date in any Purchase Order, Perfect Galaxy shall use its best efforts to deliver the delayed Products so that the delayed Products are delivered as soon as practicable.  If Perfect Galaxy is unable to deliver the delayed Products within five (5) days of the applicable Purchase Order Delivery Date, Perfect Galaxy shall provide a rescheduled delivery date.  If the Products are delayed more than fourteen (14) calendar days from the Purchase Order Delivery Date, Perfect Galaxy shall use expedited delivery at its own cost.  Thereafter, Satcon may immediately cancel, without liability, all Purchase Orders or portions of Purchase Orders for Products delayed more than thirty (30) days from the Purchase Order Delivery Date.  For Products delayed more than thirty (30) days that Satcon continues to require Perfect Galaxy to provide, Perfect Galaxy shall use best efforts to expedite delayed Products and shall pay all expediting costs.  If Perfect Galaxy delivers Products prior to seven (7) calendar days from the applicable Purchase Order Delivery Date, Perfect Galaxy shall reimburse Satcon for all verified storage, rescheduling, and related out-of-pocket expenses incurred by Satcon as a result of the Perfect Galaxy’s premature delivery.   6.3                               Reschedule Delivery.  Satcon may, without liability to Perfect Galaxy, reschedule delivery of (a) all or any part of a Purchase Order no later than sixty (60) days prior to the original Purchase Order Delivery Date for once, or (b) up to 50% of a Purchase Order between the thirty-first (31st) day and the sixtieth (60th) day prior to the original Purchase Order Delivery Date for once.  Satcon shall not reschedule a Purchase Order within thirty (30) days prior to the Purchase Order Delivery Date.   6.4                               Delivery Performance Guarantees with Satcon’s customers.  In the event that Satcon agrees to provide delivery performance guarantees to its customers, Satcon will advise Perfect Galaxy of the agreement and the Parties will negotiate to whether Perfect Galaxy will agree to share the potential exposures and the associated costs.   6.5                               Packaging.  All Products ordered by Satcon shall be packed for shipment and storage in a manner designated by Satcon no later than in the Purchase Order for the Product.  Perfect Galaxy shall apply notices, in a form previously approved in writing by Satcon, to any Products that it manufactures or has manufactured on behalf of Satcon and all packaging materials relating thereto.   All Products shall be shipped including a packing list (the “Packing List”), complying with international standards for such documents.  The Packing List shall be delivered inside an external easy-access pouch, safely attached to the shipping box.  Every shipment shall be packaged according to international standards and generally accepted methods and practices used in the electronics industry.   6.6                               Certificates of Origin.  Upon Satcon’s request, Perfect Galaxy shall, at its own cost, provide Satcon with certificates of origin with each shipment of the Products.  Perfect   19   Galaxy will also assist and maintain the proper country of origin for all components used in the manufacturing of the product.   6.7                               Passing of Title and Risk of Loss.  Title and risk of loss to the Products shall pass to Satcon at the time that such Products are placed with the freight forwarder in the Hong Kong Special Administrative Region for shipment.   6.8                               Acceptance.  All Products are subject to Satcon’s inspection and test at Satcon’s premises before acceptance.  Products not rejected by written notification to Perfect Galaxy within forty-five (45) days of receipt (“Rejected Products”) shall be deemed to have been accepted.  If rejected, Satcon shall promptly generate a non-conforming material report (NCR).  Upon acceptance of the disposition of the NCR from Perfect Galaxy, Satcon shall promptly return Rejected Products to Perfect Galaxy.  Perfect Galaxy shall bear the risk of loss for Rejected Products during shipment, shall reimburse Satcon for any costs of transportation incurred by Satcon in connection with the return to Perfect Galaxy of Rejected Products, and shall prepay expedited transportation back to Satcon.  Alternatively, Satcon may elect to accept the nonconforming Products in exchange for a credit, in an amount not to exceed ten percent (10%) of the Purchase Price for the nonconforming Products plus the cost of the materials which need to be replaced, against the Perfect Galaxy invoice amount as may be agreed upon in writing by Satcon and Perfect Galaxy.   ARTICLE VII WARRANTIES AND REMEDIES   7.1                               Warranties.   7.1.1                        Satcon represents and warrants that:  (i) Satcon has no knowledge of and that there are no unresolved claims, demands, or pending litigation alleging that the Products infringe, or misappropriate any Intellectual Property Rights of any third party, (ii) Satcon has obtained all necessary rights under any Intellectual Property Rights of third parties necessary (A) to permit Perfect Galaxy to manufacture Products pursuant to the Production Design and (B) for the sale, use, or other distribution of the Products supplied to Satcon under this Agreement, and (iii) the Products delivered under this Agreement do not infringe or misappropriate any Intellectual Property Rights of any third party.   7.1.2                        For a period of sixteen (16) months from the respective delivery date of each Product, Perfect Galaxy expressly warrants that all Products are free from defects in workmanship, and materials manufactured by Perfect Galaxy and its affiliates and conform to the Specifications requested by Satcon.  The Product Engineering Results provided by Perfect Galaxy shall be made with commercially reasonable degree of care.  Perfect Galaxy represents that it shall maintain reasonable traceability of materials used in Products.  All warranties survive any inspection, acceptance, payment, or resale by Satcon.  For the avoidance of doubts, Perfect Galaxy shall not liable for defects arising from Production Design, unauthorized repair, misuse, alteration or modification of the Products by Satcon or a third party.   7.1.3                        Satcon represents and warrants that the Production Design complies with all applicable laws, regulations and ordinances of any government, agency or public authority   20   having jurisdiction over the manufacture and delivery of Products in the country where the Approved Facility is located and where the Products will be sold or used.   7.1.4                        Perfect Galaxy warrants that the Products provided under this Agreement are wholly new and contain new components and parts throughout.  Perfect Galaxy further warrants that it has good and warrantable title to the Products, free and clear of any liens, encumbrances, or other restrictions on use or distribution.   7.1.5                        Perfect Galaxy agrees that its representations and warranties are reaffirmed with each shipment or delivery of Products.   7.1.6                        Perfect Galaxy shall pass through all warranties provided by any of the suppliers, vendors and manufacturers of parts, components and Sub Assemblies that it purchases to manufacture the Products.  Perfect Galaxy shall use reasonable commercial efforts to negotiate at least a five (5) year transferrable warranties on critical components, such as transformers and reactors contained within the Products.  Where Satcon incurs labor and material costs to repair or replace any defective materials, components and Sub Assemblies, Perfect Galaxy shall assist Satcon in recovering such costs from the vendors, suppliers or manufacturers under the applicable warranties, if any.   7.1.7                        THE FOREGOING WARRANTIES ARE EXCLUSIVE AND GIVEN AND ACCEPTED IN LIEU OF ALL OTHER WARRANTIES OF PERFECT GALAXY WITH RESPECT TO THE PRODUCTS, WRITTEN OR ORAL, EXPRESSED OR IMPLIED.  ALL OTHER WARRANTIES OF PERFECT GALAXY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY EXPRESSLY DISCLAIMED.   7.2                               Remedies.   7.2.1                        If Perfect Galaxy delivers Products that fail to comply with the warranties in this Agreement, or which experience an Epidemic Warranty Condition (“Affected Products”), whether or not apparent upon inspection, Perfect Galaxy shall promptly and at its sole expense, at Satcon’s option:  (i) repair or replace the Affected Products and (ii) pay to Satcon all costs of repairing or replacing Products that incorporate or are otherwise impacted by the Affected Products, including, but not limited to actual and reasonable materials costs, logistics expenses and labor charges on an hourly basis.  The hourly labor rates referred to in clause (ii) of the preceding sentence shall be mutually agreed upon at the first quarterly business meeting between the Parties, and the costs referred to in such clause (ii) for a given Product shall not exceed the cost of that Product.  THE FOREGOING REMEDIES ARE THE EXCLUSIVE REMEDIES PERFECT GALAXY PROVIDES IN THIS AGREEMENT UNLESS EXPRESSLY INDICATED OTHERWISE IN THIS AGREEMENT.   7.2.2                        In addition to the other rights and remedies provided in this Agreement, if at any time one or more of the Products experiences an Epidemic Warranty Condition, Satcon shall have the right to immediately suspend all Purchase Orders and/or Forecasts, and Perfect Galaxy, at its sole expense, shall take immediate remedial action for affected and potentially affected Products, according to a corrective action plan approved by Satcon.  If within a   21   reasonable time mutually agreed upon by the Parties, Perfect Galaxy has not remedied the Epidemic Warranty Condition, Satcon may reschedule or cancel all Purchase Orders and/or Forecasts for the affected Products without liability of any kind, including but not limited to liability for raw materials, inventory, work-in-process, or finished goods Perfect Galaxy may have on-hand for the Purchase Orders or the Forecast.   ARTICLE VIII ADDITIONAL COVENANTS   8.1                               Most Favored Customer.   8.1.1                        Perfect Galaxy agrees to treat Satcon at least as well as its most favored customers.  Perfect Galaxy agrees that the prices, warranties, benefits and other material terms being provided hereunder and to be provided hereafter are and shall be equivalent to or better than the terms being offered by Perfect Galaxy to its current and future customers; provided, however, Perfect Galaxy may offer other customers volume discounts in accordance with the volume discounts offered to Satcon.  This obligation requires Perfect Galaxy to provide Satcon with at least pari passu treatment with other customers (i) as to quantity of Products made available to Satcon in a shortage situation and (ii) as to the Purchase Order Delivery Dates for Purchase Orders.   8.1.2                        If Perfect Galaxy enters into an agreement with any other customer under circumstances substantially similar (as described above) to that of Satcon and if Perfect Galaxy provides such other customer with more favorable terms, then this Agreement shall be deemed appropriately amended to provide such terms to Satcon.  Perfect Galaxy shall promptly provide notice thereof to Satcon and shall provide to Satcon refund or credits, if any, in an amount equal to the difference between the lower prices charged to other customer and the amount paid by Satcon from the date the lower prices went into effect with the other customers.   8.2                               Interference with Employees.  Neither any Party nor any of its Affiliates shall during the Term and for a period of twelve (12) months thereafter, without the prior written approval of another Party, directly or indirectly, for itself or for any other person, firm, corporation, partnership, association or other entity, attempt to employ or enter into any contractual arrangement for personal services with any employee or former employee of such other Party or any of its Affiliates.  Each Party shall provide the other with a list of its affiliates to which this covenant shall apply.  Notwithstanding the previous sentence, a general solicitation not specifically targeted at the other Party’s employees shall not be a breach of this Paragraph.   8.3                               Exclusivity and Non-compete.   8.3.1                        The Parties agree to work on a non-exclusive basis, meaning that both Satcon and Perfect Galaxy may work with other contract manufacturers or customers without restrictions.  Notwithstanding the foregoing, during the term of this Agreement, Perfect Galaxy and its Affiliates shall not engage or participate in the design, development, manufacture, contract manufacture, marketing or sale of any photovoltaic inverters manufactured for Satcon for or to any Satcon competitors as detailed and updated from time to time in Satcon’s public filings with the US Securities and Exchange Commission.   22   8.3.2                        During the Term and for a period of two (2) years thereafter, unless otherwise expressly provided for herein, neither Perfect Galaxy nor any of its Affiliates may directly or indirectly engage, in any business which involves the product categories and related services described in the Paragraph immediately below (the “Restricted Business”), including without limitation design, development, utilizing, manufacturing, marketing, sales or distribution of any products within the scope of the Restricted Business.   Restricted Business:  photovoltaic inverters including subassemblies that Perfect Galaxy manufactures for and supplies to Satcon under this Agreement from time to time.   Notwithstanding anything herein to the contrary, if Satcon terminates this Agreement without cause pursuant to Section 10.3.1(a) herein, this Section 8.3 shall be modified to allow Perfect Galaxy to engage in photovoltaic inverter contract manufacturing activities twelve (12) months after the effective date of such termination.   8.4                               Compliance with Laws.  Each Product shall be manufactured in accordance with all applicable laws, regulations and ordinances of any government, agency or public authority having jurisdiction over the manufacture and delivery of Products in the country where the Approved Facility is located.  The Production Designs supplied by Satcon shall comply with all applicable laws, regulations and ordinances of any government, agency or public authority having jurisdiction over the Products.  Perfect Galaxy shall provide, upon request, photocopies of all documents evincing Perfect Galaxy’s compliance with this Paragraph 8.4, including, but not limited to the building ownership certificate(s) of the Approved Facility and the updated business license reflecting Perfect Galaxy’s legal capacity to manufacture Products.   8.5                               End of Life Products.  Before Perfect Galaxy stops offering any Products for sale to or for Satcon for any reason (“End of Life Products”), Perfect Galaxy shall give Satcon a minimum of twelve (12) months prior written notice (“End of Life Period”).  During the End of Life Period, Satcon will a) provide Perfect Galaxy with a forecast of anticipated demand for the End of Life Products during the End of Life Period; and/or b) may continue to place Purchase Orders for the End of Life Products, with deliveries not to exceed the End of Life Period.  Perfect Galaxy shall make reasonable efforts to make available spare parts for a period of twelve (12) months after notice of discontinuance of an End of Life Product.  At the expiration of the twelve (12) month period, Satcon shall pay Perfect Galaxy full price for the End of Life Products and either (i) request Perfect Galaxy to retain possession of those End of Life Products for which Perfect Galaxy shall be paid an additional amount equal to one percent (1%) per month as a storage fee or (ii) direct Perfect Galaxy to deliver the End of Life Products to Satcon’s freight forwarder in Hong Kong Special Administrative Region.   ARTICLE IX INTELLECTUAL PROPERTY   9.1                               Intellectual Property Rights.   9.1.1                        Without prejudice to its rights under applicable law, each Party agrees and acknowledges that as among the Parties, the other Party is the owner of all right, title and interest in and to their own Intellectual Property Rights as of the Effective Date and that no Party shall   23   obtain any ownership interest in any of the other Party’s Intellectual Property Rights, or any license of such rights, except, with respect to Perfect Galaxy, the right to manufacture Products pursuant to this Agreement, the right to disclose information to suppliers and vendors for the purpose of purchasing parts components, sub assemblies and spares.   9.1.2                        If at any time during the Term any Party is aware that any infringement of or act of unfair competition with respect to any of the Satcon Technology Rights or Perfect Galaxy Technology Rights is occurring or legal action has been taken, then it shall promptly (i) notify the other Party, (ii) identify (if known) the infringer and any other person responsible, (iii) to the extent known, the infringement or acts of unfair competition complained of and (iv) furnish the information which alerted it to such infringement or acts.   9.1.3                        License of Satcon Technology Rights and Perfect Galaxy Intellectual Property Rights.   (a)                                  Satcon hereby grants to Perfect Galaxy (and each Affiliate that operates an Approved Facility) in respect of each Product manufactured by Perfect Galaxy for Satcon a non-exclusive, worldwide license of the Satcon Technology Rights to the extent, and for the period of time, required for Perfect Galaxy to perform its obligations under this Agreement, including the manufacturing of Products and their repair and replacement.   (b)                                 Perfect Galaxy hereby grants a perpetual, non-exclusive, worldwide license of the Perfect Galaxy Intellectual Property Rights to Satcon in respect of each Product manufactured by Perfect Galaxy for Satcon to the extent required by Satcon to sell, service and repair (but not refurbish or manufacture) the Products.   (c)                                  Perfect Galaxy hereby grants a perpetual, Rights to the users of the Products to the extent required to use, service, repair (but not refurbish or manufacture) and resell the Products manufactured by Perfect Galaxy.   9.1.4                        Product Ownership.   (a)                                  Each Party acknowledges and agrees that any Intellectual Property Rights owned by any Party prior to the Effective Date, including, without limitation, Intellectual Property Rights related to any Product that was developed prior to the Effective Date, is the sole and exclusive Intellectual Property Right of each respective Party and the other Party will not, at any time, deliberately act in a manner so as to infringe on such Intellectual Property Rights.   (b)                                 Perfect Galaxy hereby acknowledges and agrees that Satcon shall exclusively own all right, title and interest in and to any Product Engineering or Intellectual Property Rights arising from Product Engineering, whether or not such Product Engineering was initiated at the request of Satcon through a Statement of Work, to the extent that Satcon has paid NRE for such Product Engineering.   (c)                                  Perfect Galaxy shall have the rights to sell Products to parties other than Satcon under the provisions of Paragraph 10.5.   24   ARTICLE X TERM AND TERMINATION   10.1                        Term.   (a)                                  This Agreement shall commence on the Effective Date and shall continue for five (5) years unless earlier terminated pursuant to Paragraph 10.3 (the “Term”).  The Term shall also include any renewal term pursuant to Paragraph 10.2 hereof.   10.2                        Renewal Term.  The Parties may mutually agree to renew this Agreement for additional one (1) year terms prior to the lapse of the initial Term, and thereafter, prior to the lapse of the then-current one (1) year renewal term.   10.3                        Termination.   10.3.1                  This Agreement will terminate in the event of any of the following:   (a)                                  Upon one hundred eighty (180) calendar days after Perfect Galaxy or Satcon, in its sole discretion, gives the other Party written notice.  Upon the notification from Perfect Galaxy, Perfect Galaxy agrees to a transition schedule that may extend beyond the one hundred eighty (180) days but shall not exceed two hundred seventy (270) days;   (b)                                 Immediately upon the written agreement of the Parties to terminate this Agreement;   (c)                                  Within 60 days upon Satcon’s written notice in the event of an Epidemic Warranty Condition in which Perfect Galaxy does not make commercially reasonable efforts to remedy and contain the Condition.   (d)                                 If Satcon or Perfect Galaxy is in material or persistent breach of any provisions of this Agreement and such breach, if capable of remedy, has not been remedied within forty-five (45) days after receipt by the other Party of notice of such breach; or   (e)                                  Any proceeding shall be instituted by or against any Party seeking to adjudicate it a bankrupt or an insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or unstayed for a period of ninety (90) days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or any substantial part of its property) shall occur; or any Party shall take any corporate action to authorize any of the actions set forth above in this subsection.   10.4                        Effect of Termination.  Upon the earlier of expiration or termination of this Agreement (i) Perfect Galaxy shall no longer be authorized to utilize any Satcon license   25   previously utilized in connection with this Agreement except in connection with Perfect Galaxy’s obligation to provide end of life support under Paragraph 8.5, (ii) each Party shall return to the other Party all copies of the Confidential Information previously disclosed by the other Party and no Party nor its Affiliates shall thereafter retain copies, transcriptions or summaries of any portion of the foregoing, (iii) Satcon shall immediately pay all outstanding invoices to Perfect Galaxy and all other amounts payable by Satcon to Perfect Galaxy under this Agreement (the “Satcon Obligations”), (iv) upon receipt of payment or a mutually agreed upon payment plan for all of the Satcon Obligations, Perfect Galaxy shall deliver and return to Satcon all Consigned Inventory and all Tooling in its possession and (v) the Parties shall remain liable for each of their respective liabilities hereunder that accrued prior to the date of termination and for obligations hereunder that survive termination.  Upon the earlier of expiration or termination of this Agreement and the payment of all Satcon Obligations, Perfect Galaxy shall ensure that Satcon shall have the right to enter into the premises where any Consigned Inventory and Tooling is located and the right to remove same without impediment.   10.5                        Perfect Galaxy’s Right to Sell Products in the Event of Satcon’s Breach.  Without limiting Perfect Galaxy’s remedies for breach under applicable law, Perfect Galaxy shall have the right to sell Products, parts, components, and Sub Assemblies then in its possession or on order if Satcon fails to cure a breach under this Agreement and Perfect Galaxy terminates this Agreement under 10.3.1(d).  Satcon hereby grants Perfect Galaxy a nonexclusive, worldwide license to make, have made, use, distribute, sell, offer to sell, have sold, supply and otherwise commercialize the Products, parts, components, and Sub Assemblies that are then in Perfect Galaxy inventory or on order in the event that Perfect Galaxy terminates this Agreement for Satcon’s breach pursuant to Paragraph 10.3.1(d).   10.6                        Satcon’s Right to Set Off in the Event of Perfect Galaxy’s Breach.  Without limiting Satcon’s remedies for breach under applicable law, if Satcon terminates the Agreement pursuant to either Paragraph 10.3.1(c) or Paragraph 10.3.1(d) herein and such termination is held to be legitimate in an arbitration conducted pursuant to Paragraph 13.13 herein, Satcon may set off any obligations, payments, claims and liabilities due from Perfect Galaxy and/or its Affiliates to Satcon and/or its Affiliates under this Agreement against all and any amounts due from Satcon and/or its Affiliates to Perfect Galaxy under this Agreement.  In addition, if this Agreement terminates as a result of a breach by Perfect Galaxy in such a manner that Satcon is not provided with the termination period set forth in Section 10.1(a) hereof, Perfect Galaxy shall reimburse Satcon for all costs and expenses reasonably incurred moving to a new contract manufacturing facility.   ARTICLE XI CONFIDENTIALITY   11.1                        Disclosure of Confidential Information.  Each Party may disclose to the other Party, from time to time during the Term, Confidential Information pursuant to the terms of this Agreement.  All such Confidential Information disclosed to the receiving Party during the Term is and shall remain the disclosing Party’s sole property and the disclosing Party shall retain all Intellectual Property Rights thereto.   26   11.2                        Confidentiality.   11.2.1                  Each Party shall (i) treat any other Party’s Confidential Information as confidential and shall not directly or indirectly, use, divulge, publish or otherwise disclose or allow to be disclosed any aspect of such other Party’s Confidential Information, except with such other Party’s prior written consent and as specifically permitted by this Agreement and (ii) refrain from any action or conduct which could reasonably be expected to compromise the confidentiality or proprietary nature of such other Party’s Confidential Information.  Upon the written request of a Party, the other Party shall immediately return to the requesting Party all originals and/or copies of any Confidential Information in the possession of such other Party.   11.2.2                  The Parties shall take all appropriate reasonable measures to prevent the unauthorized disclosure of the other Party’s Confidential Information exercising at least such care as it takes in respect of its own Confidential Information, but in no event less than due care.   11.3                        Information Not Deemed Confidential Information.  The obligations and restrictions set forth in this shall not apply to any Confidential Information that falls within any of the exceptions set forth below, so long as a Party produces credible written evidence that the alleged Confidential Information:   (a)                                  is or has become part of the public domain without breach of this Agreement by the Party claiming this exception;   (b)                                 was independently developed by or for a Party completely apart from the disclosures hereunder;   (c)                                  was received from a third party who lawfully acquires such information without restriction, and without breach of this Agreement the Party claiming this exception;   (d)                                 was required to be disclosed by any securities exchange or regulatory or governmental body to which that party is subject or submits, wherever situated, (only to the extent so required) whether or not the requirement for information has the force of law;   (e)                                  was disclosed only to its professional advisers, auditors or bankers, contractors and Affiliates necessary for the performance of this Agreement;   (f)                                    was in a Party’s possession prior to the disclosure by the other Party; and/or   (g)                                 is released pursuant to a binding court order or government regulation, provided that the Party delivers a copy of such order or action to the other Party and cooperates with the other Party if it elects to contest such disclosure.   27   ARTICLE XII INDEMNIFICATION   12.1                        Indemnification Obligation.   (a)                                  Each Party shall fully defend, indemnify, and hold harmless the other Party, their Affiliates, and their officers, directors, employees, contractors, agents, attorneys, and insurers (“Indemnified Parties”) against any and all claims, damages, costs, expenses (including, without limitation, court costs and attorneys’ fees), suits, losses, or liabilities (“Claims”) (i) of an Indemnified Party arising out of a breach of the indemnifying Party’s obligations under this Agreement, or (ii) or of third parties for any death, injury, or tangible property damage caused by or arising from negligent acts or omissions of the indemnifying Party, its Affiliates, and their officers, directors, employees, contractors, subcontractors, representatives, or agents (“Indemnifying Parties”) arising from or connected with the performance of this Agreement.  The Indemnifying Parties shall reimburse the Indemnified Parties for all losses, costs, and expenses the Indemnified Parties incur as a result of such Claims, including court costs and attorneys’ fees.  To receive the foregoing indemnities, the Party seeking indemnification must promptly notify the other in writing of a Claim and provide reasonable cooperation and full authority to defend or settle the Claim.  No party will have any obligation to indemnify the other under any settlement made without its written consent.   (b)                                 Satcon shall fully defend, indemnify, and hold harmless Perfect Galaxy, its Affiliates, and its and their officers, directors, employees, contractors, agents, attorneys, and insurers against any and all Claims of third parties for any death, injury, tangible property damage, or infringement of Intellectual Property Rights caused by or arising from all Specifications, Production Design and requirements established by Satcon for the Products.   (c)                                  Perfect Galaxy shall fully defend, indemnify, and hold harmless Satcon, its Affiliates, and its and their officers, and all Claims of third parties for any death, injury, or tangible property damage caused by or arising from Product Engineering provided by Perfect Galaxy and manufacturing and workmanship defects attributable to Perfect Galaxy.   12.2                        Insurance.  Perfect Galaxy shall maintain in full force and effect policies of (i) worker’s compensation or employers’ liability insurance as required by national or local law within statutory limits, and (ii) property insurance, with reputable and financially secure insurance carriers in an amount which is customarily carried by companies manufacturing electronic equipment with the same volume as Perfect Galaxy.  The applicable insurance policy will be endorsed to provide that the insurance company will endeavor to provide at least thirty (30) days prior notice of cancellation to Satcon.  Upon request by Satcon, Perfect Galaxy will provide to Satcon copies of said policies of insurance.   12.3                        Limitation of Liability.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, WHETHER FORESEEABLE OR NOT, THAT ARE IN ANY WAY RELATED TO THIS AGREEMENT.  FURTHER, THE MAXIMUM LIABILITY OF PERFECT GALAXY UNDER THIS AGREEMENT FOR ANY REASON SHALL NOT EXCEED FIVE MILLION US DOLLARS (US$5,000,000) IN THE AGGREGATE, AND THE MAXIMUM LIABILITY OF PERFECT GALAXY FOR ANY PARTICULAR PRODUCT SHALL NOT EXCEED THE PURCHASE PRICE FOR THAT PRODUCT.   28   ARTICLE XIII GENERAL TERMS   13.1                        Relationship of Parties.  Notwithstanding anything herein to the contrary, the relationship between Satcon and Perfect Galaxy is that of independent contractors.  No Party is the agent or legal representative of the other Party and no Party has the right or authority to bind the other Party in any manner.  This Agreement creates no relationship as partners or a joint venture, and creates no pooling arrangement.   13.2                        Assignment; Transfer.  No Party may can assign or transfer its rights and obligations under this Agreement without the prior written consent of the other Party, except that Satcon may assign and transfer its rights and obligations in entirety to an entity wholly owned by Satcon to be incorporated after the Effective Date upon submitting a written notice to Perfect Galaxy.   13.3                        Governing Law.  The laws of the state of California disregarding its conflict of laws provisions, exclusively govern this Agreement, all transactions and conduct related to this Agreement, and all disputes and causes of action between the Parties (in contract, warranty, tort, strict liability, by statute, regulation, or otherwise).  The Parties specifically disclaim application of the United Nations Convention on Contracts for the International Sale of Goods.   13.4                        Counterparts.  This Agreement may be executed in several counterparts that together shall be originals and constitute one and the same instrument.   13.5                        Waiver; Remedies Cumulative.  The failure of any Party to enforce any of its rights hereunder or at law shall not be deemed a waiver or a continuing waiver of any of its rights or remedies against another Party, unless such waiver is in writing and signed by the Party to be charged.  All rights and remedies conferred herein shall be cumulative and in addition to all of the rights and remedies available to each Party at law, equity or otherwise.   13.6                        Severability.  If any provision of this Agreement, or part thereof, is declared by a court of competent jurisdiction to be invalid, void or unenforceable, each and every other provision, or part thereof, shall nevertheless continue in full force and effect.   13.7                        Attorney’s Fees.  In the event a dispute arises regarding this Agreement, the prevailing Party shall be entitled to its reasonable attorney’s fees and expenses incurred in addition to any other relief to which it is entitled.   13.8                        Notice.  All notices, requests or other communications under this Agreement shall be in writing, and shall be sent to the designated representatives of the Parties at the addresses set forth below, and shall be deemed to have been duly given on the date of service if sent by facsimile (provided a hard copy is sent in one of the manners specified herein), or on the fourth (4th) day following service if sent by air courier service with written confirmation of delivery, or ten (10) calendar days after mailing if sent by first class, registered or certified mail, return receipt requested.  Each Party is required to notify the other Party in the above manner of any change of address.   If to Satcon:   25 Drydock Avenue, Boston, MA 02210, U.S.   29       Facsimile: +1 617 8972401 Attention: Steve Rhoades, CEO       If to Perfect Galaxy   Block C, 4/F., Sea View Estate, 2 – 8 Watson Road, North Point, Hong Kong SAR Attention: Y.C.Yu, VP of Operations   Any notice given under this Agreement outside business hours in the place to which it is addressed shall be deemed not to have been given until the start of the next period of business hours in such place.   13.9                        Further Assurances.  The Parties agree to execute such additional documents and perform such acts as are reasonably necessary to effectuate the intent of this Agreement.   13.10                 Entire Agreement.  This Agreement constitutes the entire agreement between the Parties regarding the subject matter hereof, and supersedes all prior or contemporaneous understandings or agreements regarding the subject matter hereof, whether oral or written.  This Agreement shall be modified or amended only by a written instrument executed by both Satcon and Perfect Galaxy.   13.11                 Authority.  The parties executing this Agreement on behalf of Satcon and Perfect Galaxy represent and warrant that they have the authority from their respective governing bodies to enter into this Agreement and to bind their respective companies to all the terms and conditions of this Agreement.   13.12                 Captions.  The captions of the Articles and Paragraphs in this Agreement are for convenience only and shall not be used to interpret the   13.13                 Arbitration.  In the case of any disputes, controversies, claims or differences which may arise among the Parties, out of or in relation to or in connection with this Agreement, or for the breach thereof, the Parties agree to good faith negotiation or mediation of any such dispute.  In the event such dispute is not resolved, such dispute shall be referred to and settled by arbitration (without being submitted to any court), except as otherwise expressly provided herein.  The arbitration shall take place in Los Angeles of California, in accordance with the rules of procedure of the American Arbitration Association applying the substantive laws of the State of California.  The award rendered shall be final and binding upon the Parties hereto, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.  In the event of arbitration, the panel shall consist of three (3) arbitrators, one (1) of whom shall be chosen by Satcon, one (1) of whom shall be chosen by Perfect Galaxy and/or Perfect Galaxy, and one (1) of whom shall be chosen by the two (2) arbitrators chosen by Satcon and Perfect Galaxy and/or Perfect Galaxy.   13.14                 Upon the effectiveness of this Agreement, the Previous Agreement is hereby amended, restated and replaced by this Agreement regarding the subject matter hereof.   30   IN WITNESS WHEREOF, and intending to be legally bound, the Parties have executed this Agreement on the dates set forth below to be effective as of the date first set forth above.     SATCON TECHNOLOGY CORPORATION           By: /s/ Charles S. Rhoades         Name: Charles S. Rhoades                 PERFECT GALAXY INTERNATIONAL LIMITED               By: /s/ Zhou Gengshen         Name: Zhou Gengshen       Title:   31   SCHEDULE 1   EPIDEMIC WARRANTY CONDITIONS   An Epidemic Warranty Condition of Products exists when a failure of Products to comply with the warranty in Paragraph 7.1.2 causes a significant percentage of Products to fail in Satcon’s application within sixteen (16) months after their delivery and more Products have the potential to fail within sixteen (16) months after their delivery due to the same defect.  The aforementioned percentage measures the actual failures of Products within some population of Products that share a common production characteristic or event related to the defect such as time of manufacture (same lot, batch or version), or that contain an identical suspect element or have undergone a unique suspect process that could have produced the defect (“Population”), and that can be directly attributed to the manufacturing process.  A calculation resulting in an annual failure rate of over five percent (5%) in the Population of Products (where the Population is contains one hundred (100) or more units that are under warranty as provided in this Agreement, or the failure of five (5) units (where the Population contains fewer than 100 units) that are under warranty as provided in this Agreement, is deemed Epidemic.   In the event of such Epidemic Conditions, Perfect Galaxy agrees to expedite the replacement or repair of all Product in the Population, immediately remedy the root cause of the defect and pay all reasonable costs associated with any remedial action.  Reasonable costs will include, but are not limited to, the cost to repair or replace the Products, expedited air freight and shipping charges, and direct costs incurred by Satcon or Satcon’s agents to remove and replace the nonconforming products.   In addition to other remedies provided in any other provision of this Agreement, if Satcon notifies Perfect Galaxy that any Product shows evidence of an Epidemic Warranty Condition and Perfect Galaxy confirms the existence of such Epidemic Warranty Condition, Perfect Galaxy shall use reasonable commercial efforts to prepare and propose a corrective action plan (“CAP”) with respect to such Product within five (5) business days of said confirmation, addressing implementation and procedure milestones for remedying such Epidemic Warranty Condition(s).   Satcon shall make available in a timely manner samples of the Products evidencing an Epidemic Warranty Condition.   Epidemic failure excludes:  Product failures directly due to action(s) that voids the Product warranty under this Agreement, non-conformities expressly approved by Satcon, and failures occurring in the Population outside of the warranty period in this Agreement.   32   EXHIBIT A   Consignment Agreement   This Consignment Agreement (this “Consignment Agreement”), is made and entered Virgin Islands, having a principal mailing address at 4/F., Sea View Estate, 2-8 Watson Road, North Point, Hong Kong SAR (hereinafter referred to as “Consignee”) and Satcon Technology Corporation, a company registered under the laws of the state of Delaware of the United States of America, having a principal place of business at 25 Drydock Avenue, Boston, MA 02210, U.S.A. (hereinafter referred to as “Consignor”).  Each Consignor and Consignee shall be referred to as a “Party” and collectively, the “Parties,” under this Consignment Agreement.   1                                         Consignment.  Consignor shall furnish on consignment in the custody of the Consignee, certain equipment, tooling, and other materials to be used for manufacturing Products (as defined in Contract Manufacturing Agreement between the Parties, dated July 15, 2011 (the “Manufacturing Agreement”) as listed in Exhibit 1 attached, which may be amended by the Parties in writing from time to time (the “Consigned Equipment”).  The Consigned Equipment will be shipped to Consignee at its facility in Shenzhen, P.R.C. (the “Facility”) at Consignor’s costs and expenses in operative status and at no other locations unless and until Consignor agrees otherwise in writing.  Consignee shall use the Consigned Equipment only for the purposes of manufacturing Products and providing other services for Consignor under the Manufacturing Agreement.  A duly authorized representative of Consignor shall have access at all reasonable times, and with three (3) business days prior notice, to the Facility to inspect the status and/or use of the Consigned Equipment.   2                                         Ownership.  Consignor shall at all times retain ownership and title of the Consigned Equipment.  Consignee shall give Consignor an immediate notice in the event that any of the Consigned Equipment is levied upon or is about to become liable or is threatened with seizure, and Consignee shall indemnify Consignor against all loss and damages caused by such action.   3                                         Risk of Loss.  Consignee shall bear all risks of loss, including, but not limited to, theft, destruction or damage from fire or other natural causes, of the Consigned Equipment while it is in its possession.  Consignee shall maintain insurance with respect to the Consigned Equipment against all risks of loss, in an amount equal to the full replacement cost of the Consigned Equipment in Consignee’s possession.  At Consignor’s request, Consignee shall furnish to Consignor certificates of insurance reflecting the foregoing coverage.   4                                        Charges and Expenses.  Consignee does not need to pay any charges to Consignor for using the Consigned Equipment in accordance with the terms and conditions provided herein.  Consignee shall be responsible for all expenses of storing, handling and using the Consigned Equipment once it arrives at the Facility.   33   5                                         Duration of Agreement and Termination.  This Consignment Agreement shall take effect on the date hereof and terminates upon the termination or expiration of the Manufacturing Agreement.  Upon termination of this Consignment Agreement, Consignee shall immediately return to Consignor all Consigned Equipment in operative status, normal tear and wear expected, at Consignee’s expense.  During the term of this Consignment Agreement, Consignor may recall any or all of the Consigned Equipment upon ten (10) days written notice to Consignee.  Consignee shall be relieved from any obligation to accept any Purchase Order or to conduct Production Engineering activities to the extent that such Consigned Equipment is required in manufacturing or engineering of Products.   6                                         No Liability.  Consignor shall not be responsible or liable for any loss, damage or injury to the property or the body of Consignee, its Affiliates (as defined in the Manufacturing Agreement), or their agents, employees, suppliers, or anyone directly or indirectly employed by Consignee in connection with using any of the Consigned Equipment.  Consignee is encouraged to obtain appropriate insurance against such risk of loss.   7                                         Maintenance, Operation and Upgrade.  Consignee shall not remove, alter, disfigure or cover up any numbering, lettering, or insignia displayed upon the Consigned Equipment, and shall see that the Consigned Equipment is not subjected to careless, unusually or needlessly rough usage; and Consignee shall at its own expense maintain the Consigned Equipment, unless Consignee reasonably considers that third party maintenance is required, which shall be at Consignor’s costs and expenses, and its appurtenances in good repair and operative condition, and return it in such condition to Consignor, ordinary wear and tear resulting from proper use thereof alone expected.  Consignee shall be responsible for, at its own cost, all necessary upgrades of the Consigned Equipment, unless Consignee reasonably considers that third party upgrade is required, which shall be at Consignor’s costs and expenses.   8                                         Repairs.  Consignee shall be responsible for the expense of all repairs while the Consigned Equipment is in the possession of Consignee, unless Consignee reasonably considers that third party repair, including labor, material, parts and other items, is required, which shall be at Consignor’s costs and expenses.   9                                        Operator.  Unless otherwise mutually agreed in writing, Consignee shall supply and pay all operators on the Consigned Equipment during the term of this Consignment Agreement.  All operators shall be competent.   10                                  Separation.  Consignee shall keep the Consigned Equipment reasonably segregated from Consignee’s own tooling, equipment and other materials, shall keep the Consigned Equipment identifiable as having been consigned to Consignee pursuant to the provisions of this Consignment Agreement, and shall maintain accurate records of all uses of the Consigned Equipment.   11                                  DISCLAIMER OF WARRANTIES.  CONSIGNOR, BEING NEITHER THE MANUFACTURER, NOR A SUPPLIER, NOR A DEALER IN THE CONSIGNED EQUIPMENT, MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY   34   MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE CONDITION OF THE CONSIGNED EQUIPMENT, ITS MERCHANTABILITY, ITS DESIGN, ITS CAPACITY, ITS PERFORMANCE, ITS MATERIAL, ITS WORKMANSHIP, ITS FITNESS FOR ANY PARTICULAR PURPOSE, OR THAT IT WILL MEET THE REQUIREMENTS OF ANY LAWS, RULES, SPECIFICATIONS, OR CONTRACTS WHICH PROVIDE FOR SPECIFIC APPARATUS OR SPECIAL METHODS.  CONSIGNOR FURTHER DISCLAIMS ANY LIABILITY WHATSOEVER FOR LOSS, DAMAGE, OR INJURY TO CONSIGNEE OR THIRD PARTIES AS A RESULT OF ANY DEFECTS, LATENT OR OTHERWISE, IN THE CONSIGNED EQUIPMENT.  CONSIGNOR SHALL NOT BE LIABLE IN ANY EVENT TO CONSIGNEE FOR ANY LOSS, DELAY, OR DAMAGE OF ANY KIND OR CHARACTER RESULTING FROM DEFECTS IN, OR INEFFICIENCY OF, THE CONSIGNED EQUIPMENT HEREBY OR ACCIDENTAL BREAKAGE THEREOF.  CONSIGNEE SHALL NOT BE LIABLE IN ANY EVENT TO CONSIGNEE FOR ANY LOSS, DELAY OR DAMAGE OF ANY KIND OR CHARACTER RESULTING FROM DEFECTS IN, OR INEFFICIENCY OF, THE CONSIGNED EQUIPMENT HEREBY OR ACCIDENTAL BREAKAGE THEREOF, UNLESS TO THE EXTENT THAT SUCH LOSS, DELAY OR DAMAGE IS CAUSED BY CONSIGNEE’S ACTIONS OR OMISSIONS.   12                                  Indemnity.  Consignee shall indemnify Consignor against, and hold Consignor harmless from, any and all liability for injury, disability and death of workmen and other persons caused by the operation, use, control, handling, or transportation of the Consigned Equipment during the term of this Consignment Agreement.  Consignee shall indemnify Consignor, and hold Consignor harmless from all loss and damage to the Consigned Equipment while it is in the possession of Consignee.   [Signature page follows.]   35   IN WITNESS WHEREOF, Consignor and Consignee have executed this Consignment Agreement as a sealed instrument as of the date first written above.   Consignee: Perfect Galaxy International Limited               By:           Title:         Consignor: Satcon Technology Corporation               By:           Title:     36

Name: 80/67/EEC: Council Decision of 17 December 1979 adopting the annual report on the economic situation in the Community and laying down the economic guidelines for 1980 Type: Decision_ENTSCHEID Subject Matter: nan Date Published: 1980-01-23 Avis juridique important|31980D006780/67/EEC: Council Decision of 17 December 1979 adopting the annual report on the economic situation in the Community and laying down the economic guidelines for 1980 Official Journal L 017 , 23/01/1980 P. 0020 - 0029****( 1 ) OJ NO L 63 , 5 . 3 . 1974 , P . 16 . ( 2 ) OJ NO L 330 , 24 . 12 . 1975 , P . 52 . ( 3 ) OJ NO C 4 , 7 . 1 . 1980 , P . 17 . ( 4 ) OPINION DELIVERED ON 24 AND 25 OCTOBER 1979 ( NOT YET PUBLISHED IN THE OFFICIAL JOURNAL ). COUNCIL DECISION OF 17 DECEMBER 1979 ADOPTING THE ANNUAL REPORT ON THE ECONOMIC SITUATION IN THE COMMUNITY AND LAYING DOWN THE ECONOMIC GUIDELINES FOR 1980 ( 80/67/EEC ) THE COUNCIL OF THE EUROPEAN COMMUNITIES , HAVING REGARD TO THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY , HAVING REGARD TO COUNCIL DECISION 74/120/EEC OF 18 FEBRUARY 1974 ON THE ATTAINMENT OF A HIGH DEGREE OF CONVERGENCE OF THE ECONOMIC POLICIES OF THE MEMBER STATES OF THE EUROPEAN ECONOMIC COMMUNITY ( 1 ), AS AMENDED BY DECISION 75/787/EEC ( 2 ), AND IN PARTICULAR ARTICLE 4 THEREOF , HAVING REGARD TO THE PROPOSAL FROM THE COMMISSION , HAVING REGARD TO THE OPINION OF THE EUROPEAN PARLIAMENT ( 3 ), HAVING REGARD TO THE OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE ( 4 ), WHEREAS THERE IS A NEED FOR CLOSE COOPERATION IN FACING UP TO THE PROBLEMS ARISING FROM NEW ADVERSE ECONOMIC FACTORS , HAS ADOPTED THIS DECISION : ARTICLE 1 THE COUNCIL HEREBY ADOPTS THE ANNUAL REPORT ON THE ECONOMIC SITUATION IN THE COMMUNITY AS CONTAINED IN SECTION 1 OF THE ANNEX AND LAYS DOWN THE GUIDELINES TO BE FOLLOWED BY EACH MEMBER STATE IN ITS ECONOMIC POLICY FOR 1980 , AS CONTAINED IN SECTIONS 2 TO 5 OF THE ANNEX . ARTICLE 2 THIS DECISION IS ADDRESSED TO THE MEMBER STATES . DONE AT BRUSSELS , 17 DECEMBER 1979 . FOR THE COUNCIL THE PRESIDENT M . O ' KENNEDY **** ( 1 ) ACCORDING TO THE COMMUNITY DEFINITION , THIS DEFICIT COVERS , IN ADDITION TO THE BORROWING REQUIREMENT OF GENERAL GOVERNMENT , ALSO THAT OF ENEL ( ELECTRICITY SUPPLY MONOPOLY ) AND THOSE OF THE INDEPENDENT PUBLIC TRADING BODIES AND ALSO LOCAL AUTHORITY ENTERPRISES . HOWEVER IT EXCLUDES TRANSFERS TO SPECIAL CREDIT INSTITUTIONS , REPAYMENT OF COMMERCIAL DEBTS INCURRED IN THE PAST AND CHANGES IN BANK DEPOSITS . ANNEX ANNUAL REPORT ON THE ECONOMIC SITUATION OF THE COMMUNITY AND ECONOMIC POLICY GUIDELINES FOR 1980 1 . ECONOMIC PROSPECTS AND OBJECTIVES FOR 1980 THIS REPORT IS PRINCIPALLY CONCERNED WITH THE POLICIES REQUIRED FOR THE EUROPEAN COMMUNITY TO COPE IN THE YEAR AHEAD WITH THE UNFAVOURABLE TURN IN THE INTERNATIONAL ECONOMIC ENVIRONMENT . TAKING INTO ACCOUNT THE RISE IN THE PRICE OF OIL IN THE PAST 12 MONTHS AND THE CURRENT RECESSION IN THE NORTH AMERICAN ECONOMY , AS WELL AS THE MANY UNRESOLVED DOMESTIC ECONOMIC PROBLEMS IN MEMBER STATES , EXPECTATIONS FOR 1980 HAVE TO BE RELATIVELY MODEST . THE ESSENTIAL FEATURES OF THE ECONOMIC FORECASTS TO 1980 , AS DRAWN UP BY THE COMMISSION ARE GIVEN IN THE TABLE BELOW . THE COMMUNITY ECONOMY 1973 TO 1980 // // // GDP VOLUME GROWTH // RISE IN CONSUMER PRICES // CURRENT ACCOUNT BALANCE OF PAYMENTS // GENERAL GOVERNMENT FINANCIAL DEFICITS // MONEY SUPPLY GROWTH ( M2 OR M3 ) // UNEMPLOYED IN LABOUR FORCE // // ( % ) // ( % ) // 1 000 MILLION ( EUA ) // ( % OF GDP ) // ( % ) // ( % ) // // 1973 // 6.0 // 8.4 // 1.1 // - 0.7 // 16.5 // 2.5 // 1974 // 1.6 // 13.4 // - 9.5 // - 1.7 // 12.8 // 2.9 // 1975 // - 1.6 // 12.8 // 0.8 // - 5.6 // 12.7 // 4.3 // 1976 // 5.0 // 11.1 // - 6.2 // - 3.8 // 12.5 // 4.9 // 1977 // 2.3 // 10.5 // 1.2 // - 3.3 // 12.3 // 5.3 // 1978 // 3.1 // 6.8 // 14.0 // - 4.0 // 12.7 // 5.5 // 1979 ( 1 ) // 3.1 // 8.9 // - 3.3 // - 4.0 // 10.9 // 5.6 // 1980 ( 1 ) // 2 // 9 // - 5.25 // - 3.9 // 10.5 // 6.2 // ( 1 ) FORECASTS OF THE COMMISSION STAFF ON THE BASIS OF PRESENT OR ANTICIPATED POLICIES . THE COMMUNITY CAN AIM FOR A CONTINUED MODERATE GDP VOLUME GROWTH IN 1980 OF ABOUT 2.5 TO 3 % IN THE MAJORITY OF MEMBER STATES , WHICH , TAKING INTO ACCOUNT THE LIKELY WEAKER PERFORMANCE OF SOME OTHERS , WOULD MAKE A COMMUNITY AVERAGE OF ABOUT 2 % . THIS COMPARES WITH AN AVERAGE GROWTH RATE OF A LITTLE OVER 3 % WHICH WAS EXPERIENCED , OR IS NOW FORECAST , FOR BOTH 1978 AND 1979 . THE OIL PRICE RISE OF ABOUT 60 % IN THE 12 MONTHS TO JUNE 1979 MEANS FOR THE COMMUNITY AS A WHOLE AN INITIAL DEFLATIONARY IMPACT OF THE ORDER OF 0.7 % OF GDP , MOUNTING PERHAPS TO 1 % AFTER A YEAR TAKING INTO ACCOUNT VARIOUS SECONDARY EFFECTS . THE SLOWER GDP GROWTH FORECAST FOR 1980 MEANS THAT THE GROWTH OF TOTAL EMPLOYMENT BEING EXPERIENCED IN 1979 IS LIKELY TO BE ARRESTED . WITH THE CONTINUED RISE IN THE POPULATION OF WORKING AGE ( BY 0.5 % IN 1980 ), UNEMPLOYMENT IS LIKELY TO RISE AGAIN SOMEWHAT IN THE COMMUNITY AS A WHOLE , ALTHOUGH NOT IN ALL MEMBER STATES . PROVIDED THAT IT IS CLEAR THAT MONETARY AND BUDGETARY POLICIES ARE BEING ACHIEVED AND INFLATIONARY PRESSURES SUCCESSFULLY CONTAINED , IT MAY BECOME POSSIBLE IN 1980 TO MAINTAIN A SIGNIFICANT MOMENTUM OF GROWTH , AVOIDING ANYTHING LIKE THE RECESSION WHICH THE COMMUNITY EXPERIENCED IN 1974/75 , WHICH LED TO A DOUBLING OF THE RATE OF UNEMPLOYMENT . THE IMPACT ON THE PRICE LEVEL IS VERY SIGNIFICANT , ESPECIALLY WHEN THE INCREASE IN ALL ENERGY PRICES IS TAKEN INTO ACCOUNT : AN INCREASE IN CONSUMER PRICES OF 2 TO 2.5 % IS THE AVERAGE EFFECT IN THE COMMUNITY , WITHOUT , HOWEVER , MAKING ANY ALLOWANCE FOR SECONDARY INFLATION EFFECTS ( THROUGH THE PRICE-WAGE SPIRAL ) WHICH HAVE TO BE LIMITED TO THE MINIMUM . THE PRICE EFFECTS WILL BE WORKING THEIR WAY THROUGH MAINLY IN THE SECOND HALF OF 1979 . UNAVOIDABLY THE YEAR-ON-YEAR RATE OF INFLATION IS INCREASED IN 1979 AND 1980 TO ABOUT 9 % , COMPARED TO THE LOW POINT OF JUST UNDER 7 % ACHIEVED IN 1978 . THE OBJECTIVE SHOULD LIMIT THE TEMPORARY RISE IN THE AVERAGE INFLATION RATE TO NO MORE THAN 2 % AND TO RE-ESTABLISH A DECELERATING TREND IN THE COURSE OF 1980 . THE COMMUNITY HAS A SPECIAL INTEREST IN SEEING A RAPID REVERSAL OF THE RECENT TENDENCY FOR INFLATION RATES TO BEGIN AGAIN TO DIVERGE . THE CURRENT ACCOUNT OF THE BALANCE OF PAYMENTS OF THE COMMUNITY IS AT PRESENT DETERIORATING , AND THE OUTCOME FOR 1979 AND 1980 IS LIKELY TO BE DEFICITS OF THE ORDER OF 3.25 TO 5.25 BILLION EUA , BY COMPARISON WITH THE SUBSTANTIAL SURPLUS OF 14 BILLION EUA RECORDED IN 1978 . THIS MOVEMENT REFLECTS THE INFLUENCE OF BOTH THE CHANGING RELATIVE CYCLICAL POSITION OF THE EUROPEAN AND UNITED STATES ECONOMIES AND THE INCREASED PRICE OF OIL ( WHICH INCREASES THE COMMUNITY ' S OIL BILL BY SOME 20 BILLION EUA ). THE CURRENT ACCOUNT OF MEMBER STATES COULD WELL CONTINUE TO DETERIORATE UNTIL THE END OF 1979 , BUT A SPONTANEOUS RECOVERY SHOULD BECOME APPARENT IN THE COURSE OF 1980 AS OPEC IMPORTS INCREASE AND RELATIVE CYCLICAL TRENDS BECOME LESS DIVERGENT . THE BALANCE OF PAYMENTS DETERIORATION HAS FOR THE TIME BEING TO BE ACCEPTED , SUBJECT TO THE SPECIAL POSITION OF CERTAIN MEMBER STATES , AND TO RECOGNITION OF THE OVERRIDING PRIORITY TO STRENGTHEN ENERGY POLICY SO AS TO REDUCE DEPENDENCE ON IMPORTED OIL . THE COMMUNITY IS FACED WITH TWO SETS OF DIFFICULT STRUCTURAL ECONOMIC PROBLEMS . THE FIRST IS THE COMPLEX OF ISSUED LINKING PRODUCTIVITY TRENDS , EMPLOYMENT POLICY AND INDUSTRIAL POLICY . THE SECOND CONCERNS ENERGY . TOGETHER THE HANDLING OF THESE ISSUES WILL BE QUITE AS FUNDAMENTAL TO FUTURE PERFORMANCE OF THE COMMUNITY ECONOMY IN TERMS OF PRICE STABILITY AND GROWTH AS ISSUES OF SHORT-TERM ECONOMIC STRATEGY . A NUMBER OF FACTORS SUGGEST THAT PAST LONG-RUN PRODUCTIVITY TRENDS , FOR EXAMPLE THE 4.3 % ANNUAL AVERAGE EXPERIENCED IN THE COMMUNITY IN 1960 TO 1973 , WILL NOT BE RESTORED IN THE FORESEEABLE FUTURE . WHILE ON BALANCE AVERAGE PRODUCTIVITY GROWTH IS LIKELY TO BE LOWER , THE CONTRIBUTING FACTORS ARE NOT HELPFUL TO EMPLOYMENT . THE QUANTITY OF WORK AVAILABLE IS IN NO WAY FIXED AND INCREASING PRODUCTIVITY IS REQUIRED TO DAMPEN THE RISE OF COSTS AND INFLATION , AND TO MAKE FOR A FAVOURABLE COMBINATION OF GROWTH , EMPLOYMENT AND MONETARY STABILITY . IN INDUSTRY THERE IS THE NEED FOR CONTINUING ADAPTATION TO NEW PATTERNS OF DEMAND AND NEW MANUFACTURING TECHNOLOGIES . PROGRESS IN MANUFACTURING INDUSTRY HAS TO COME WITH EXPOSURE TO COMPETITION , AND PROFITABILITY TO ASSURE INVESTMENT , RESEARCH AND DEVELOPMENT . INTERVENTION IN FAVOUR OF SECTORS WITH DECLINING DEMAND MUST BE LIMITED TO HELPING ASSURE AN ORDERLY AND SOCIALLY ACCEPTABLE RESTRUCTURING AND REDUCTION OF CAPACITY . WHILE THE TREND IN THE NUMBER OF PERSONS DIRECTLY EMPLOYED IN MANUFACTURING IS UNLIKELY IN MOST COUNTRIES ( THOUGH THERE SHOULD BE EXCEPTIONS ) TO ABSORB MUCH OF THE PRESENT UNEMPLOYMENT , A COMPETITIVE MANUFACTURING SECTOR IS BOTH FUNDAMENTAL TO THE COMMUNITY ' S PROSPERITY AND ECONOMIC STRENGTH , AND TO THE PROSPECTS MORE BROADLY FOR EMPLOYMENT GROWTH , FOR EXAMPLE THROUGH ITS IMPACT ON RELATED SERVICE SECTORS . MOREOVER CERTAIN GROWTH SECTORS SHOULD SEE A MARKED INCREASE IN EMPLOYMENT , NOTABLY IN ENERGY-RELATED INDUSTRIES . IN THE TERTIARY SECTOR THERE IS MUCH GREATER SCOPE FOR EMPLOYMENT GROWTH , AS WITNESSED BY TRENDS EVERYWHERE ( INCLUDING THE UNITED STATES WHERE TRENDS HAVE GONE FURTHER THAN IN EUROPE ), AND BY THE CONTINUING GROWTH IN LATENT DEMAND AND SUPPLY . GROWTH IS PERSISTENTLY STRONG FOR HEALTH , EDUCATION , TRAVEL , LEISURE AND SOCIAL SERVICES , ALTHOUGH THERE IS ALSO INCREASING CONCERN OVER THE QUALITY OF PUBLIC SERVICES . GREATER INDIGENOUS ENERGY PRODUCTION AND CONSERVATION IS NOW A VITAL MACROECONOMIC OBJECTIVE , WITHOUT WHICH THE PROSPECTS FOR NON-INFLATIONARY GROWTH ARE POOR INDEED . FOR THE SHORT-RUN AND MEDIUM-TERM OIL CEILINGS HAVE BEEN SET BY THE COMMUNITY ( 500 MILLION TONNES FOR CONSUMPTION IN 1979 , AND 472 MILLION TONNES OF IMPORTS IN 1985 ). THE EVIDENCE SUGGESTS THAT THESE OBJECTIVES CAN BE ACHIEVED BY BREAKING THE PAST ASSOCIATION BETWEEN THE GROWTH OF DOMESTIC PRODUCT AND OIL USE , ALTHOUGH THE FEASIBLE EXTENT OF THIS CHANGE IN TREND IS STILL THE SUBJECT OF CONSIDERABLE UNCERTAINTY . TO ACHIEVE A MODERATE GROWTH RATE IN COMMUNITY GDP IN 1980 , AND TO RESPOND ALSO TO THESE ISSUES OF STRUCTURAL DEVELOPMENT , THERE IS A VITAL ROLE TO BE PLAYED BY HOUSEHOLD SAVINGS AND PRIVATE INVESTMENT INCLUDING STOCKBUILDING . WHILE THESE VARIABLES ARE DIFFICULT TO PREDICT AT ALL EXACTLY , THEY SHOULD BE EXPECTED TO BEHAVE ACCORDING TO A NUMBER OF BASIC PRINCIPLES . IN 1980 SOME DECLINE IN THE HOUSEHOLD SAVINGS RATIO WOULD BE DESIRABLE , SO AS TO HELP SUSTAIN REAL DEMAND WITHOUT INCREASING COSTS AND THENCE PRICES . FOR THIS TO BE POSSIBLE , INFLATION EXPECTATIONS NEED VERY SOON TO BE CALMED DOWN , AND THIS REQUIRES CONFIDENCE IN THE OBJECTIVES OF ECONOMIC POLICY . INVESTMENT , INCLUDING STOCKBUILDING , IS TYPICALLY THE MOST VOLATILE COMPONENT OF THE BUSINESS CYCLE : IN 1975 INVESTMENT FELL 5 % IN VOLUME TERMS IN THE COMMUNITY AS A WHOLE , WHILE THE RUNNING DOWN OF STOCKS ALONE CONTRIBUTED 2 % TO THE DECLINE OF GDP . THE INDICATORS AT PRESENT ARE NOT UNFAVOURABLE . INVESTMENT ACTIVITY HAS BEEN STRENGTHENING IN 1979 , AND FORECASTS AND SURVEYS SUGGEST CONTINUED BUOYANCY IN 1980 IN THE COMMUNITY AS A WHOLE . AS REGARDS STOCKS , BUSINESS SURVEYS SHOW THAT THEIR LEVEL HAS CONTINUED TO DECLINE THROUGHOUT THE PAST 18 MONTHS , WHICH MEANS THAT THERE WOULD SEEM TO BE A LOW PROBABILITY OF A RUNNING DOWN OF STOCKS , ASSUMING THAT OTHER ECONOMIC BEHAVIOUR REMAINS SOUND . BOTH INVESTMENT AND STOCKBUILDING , HOWEVER , ARE HIGHLY SENSITIVE TO THE FINANCIAL CONDITION OF THE ENTERPRISE SECTOR - BOTH AS REGARDS PROFITABILITY AND AVAILABILITY OF CREDIT . THESE FACTORS IN TURN ARE GOING TO DEPEND GREATLY ON WHETHER HOUSEHOLDS IN THE NEXT YEAR ACCEPT - THROUGH THE DEVELOPMENT OF THEIR NOMINAL INCOMES - THE TERMS OF TRADE LOSS IMPOSED BY THE OIL PRICE RISE ; OR WHETHER THEY SEEK TO SHIFT THIS LOSS TO THE ENTERPRISE SECTOR OR TO GOVERNMENT ' S FINANCES THROUGH COMPENSATORY WAGE CLAIMS . 2 . PRINCIPLES FOR POLICY AT THE COMMUNITY LEVEL IT IS THE PARTICULAR ROLE OF THE COMMUNITY TO IDENTIFY THE COMMON PROBLEMS THAT CANNOT BE SOLVED ADEQUATELY AT THE NATIONAL LEVEL , AND TO WORK OUT THE CONCERTED RESPONSE THAT CAN GIVE THE BETTER RESULT . THE COMMUNITY HAS EMBARKED UPON A NEW VENTURE IN THE EUROPEAN MONETARY SYSTEM , WHICH HAS HELPED PROVIDE OVER THE LAST HALF-YEAR A MUCH NEEDED STABILITY IN INTRA-COMMUNITY EXCHANGE RATES , AS WELL AS IN SEPTEMBER AN EFFICIENT PROCEDURE FOR A LIMITED ADJUSTMENT TO CENTRAL PARITIES . THE EXCHANGE-RATE STABILITY PROVIDED BY THE SYSTEM NEEDS TO BE EXTENDED BEYOND THE CURRENTLY PARTICIPATING COUNTRIES , FOR EXAMPLE BY DEVELOPING A CONCERTED POLICY ALONG WITH THE UNITED STATES TOWARDS THE DOLLAR . IN THE PERIOD AHEAD IN WHICH THE BALANCE OF PAYMENTS EFFECTS OF THE NEW OIL PRICE RISE HAVE TO BE ABSORBED THE CREDIT MECHANISMS OF THE COMMUNITY , AS AUGMENTED WITH THE EUROPEAN MONETARY SYSTEM , PROVIDE THE MEANS OF ASSURING SOLIDARITY BETWEEN MEMBER STATES . WITHOUT PRETENDING THAT ALLEGIANCE TO A SYSTEM OF EXCHANGE-RATE STABILITY , ITSELF SUBJECT TO ALL THE TENSIONS THAT DIVERGENCE IN ECONOMIC PERFORMANCE CAN CREATE , IS AN ADEQUATE SOLUTION TO THE COMMUNITY ' S ECONOMIC POLICIES , THE EUROPEAN MONETARY SYSTEM PROVIDES A FRAMEWORK FOR THE CONSTRUCTION OF A SET OF SHORT- AND MEDIUM-TERM POLICIES , WHICH WHILE INEVITABLY MODULATED TO THE PARTICULAR CIRCUMSTANCES PREVAILING IN EACH MEMBER STATE , PRESENT TOGETHER A COORDINATED APPROACH TO TACKLING THESE PROBLEMS . IN THE PRESENT SITUATION A CONCERTED RESPONSE IS CALLED FOR ACCORDING TO WHICH MEMBER STATES SHOULD MOVE TOGETHER THROUGH TWO SUCCESSIVE PHASES OF POLICY . THE FIRST AND IMMEDIATE NEED , GIVEN THAT THE OIL PRICE RISE BE FULLY COMMUNICATED TO THE CONSUMER , IS TO PREVENT A SECONDARY INCREASE IN THE RATE OF INFLATION . THIS MEANS THAT IN THE PERIOD FROM NOW TO ABOUT MID-1980 THE EVOLUTION AND THE DISTRIBUTION OF INCOMES HAS TO BE ADJUSTED EITHER THROUGH LOWER REAL INCOME CLAIMS OR THROUGH A TEMPORARY ADJUSTMENT TO THE FULL WORKING OF INDEXATION MECHANISMS ( THE DETAILS OF COURSE WOULD VARY HERE BY COUNTRY ). THIS DONE , THE EUROPEAN MONETARY SYSTEM WILL SERVE TO REINFORCE THE DEFENCES AGAINST MONETARY DIVERGENCES . PROVIDED THAT THIS IS ACHIEVED , THERE SHOULD BE SOME ROOM FOR MANOEUVRE FOR POLICY TO DEVELOP . CONTROL OVER MONETARY AGGREGATES SHOULD BE KEPT STEADILY TO PRESENT STRICT POLICIES , BUT , PROVIDED THAT INFLATIONARY EXPECTATIONS ARE DECISIVELY LOWERED , IT SHOULD BECOME POSSIBLE AND DESIRABLE TO MOVE IN DUE COURSE TO MORE SUPPORTIVE BUDGETARY POLICY , IF ALSO INVESTMENT AND CONSUMPTION WERE WEAKER THAN EXPECTED . THE POLICY-MIX COULD ALSO IN SUCH AN EVENTUALITY , OR TO SOME EXTENT ALTERNATIVELY , INCLUDE A DE-ESCALATION OF INTEREST RATES . THE JUDGMENTS ON THESE ISSUES , AND THE POSSIBLE POLICY ADJUSTMENTS TO FOLLOW , WOULD REQUIRE A STRONGLY CONCERTED ARTICULATION . A FURTHER IMMEDIATE , AND UNCONDITIONAL REQUIREMENT IS THE STRENGTHENING OF ENERGY POLICY IN THE COMMUNITY . THE 1985 OIL IMPORT CEILINGS AGREED IN JUNE AT STRASBOURG HAVE IN SEPTEMBER BEEN SPECIFIED IN MORE DETAIL . PROGRESS IS NOW REQUIRED TO IMPLEMENT THESE OBJECTIVES BY SETTING INTO MOTION THE PROFOUND STRUCTURAL DEVELOPMENTS IN THE PRODUCTION AND SAVING OF ENERGY BY GOVERNMENTS , ENTERPRISES AND HOUSEHOLDS . THE PRICE MECHANISM MUST BE PUT POWERFULLY TO WORK AT THE LEVEL OF ENERGY USERS , WHILE GOVERNMENTS SHOULD TAKE THE LEAD WITH INVESTMENT PROGRAMMES AND INCENTIVES TO THE PRIVATE SECTOR . AT THE COMMUNITY LEVEL THERE ARE A NUMBER OF FURTHER POLICY INSTRUMENTS AVAILABLE . IN PARTICULAR THE COMMUNITY ' S INSTRUMENTS OF STRUCTURAL POLICY ARE GROWING WITH INCREASING BUDGETARY INTERVENTION THROUGH THE SOCIAL FUND , EAGGF ( GUIDANCE SECTION ), AND REGIONAL FUND AND IN THE DOMAINS OF INDUSTRY AND ENERGY , AS ALSO WITH INCREASING LOAN FINANCING FOR INVESTMENT THROUGH THE EUROPEAN INVESTMENT BANK , AND THE COMMISSION ' S EURATOM , ECSC AND NEW INVESTMENT FINANCING FACILITIES . THESE VARIOUS FINANCING ACTIVITIES ARE ENTIRELY DIRECTED TOWARDS THE PRIORITY REQUIREMENTS OF THE ECONOMIC SITUATION : EMPLOYMENT , INDUSTRIAL AND INFRASTRUCTURAL INVESTMENT AND ENERGY DEVELOPMENTS . 3 . MAIN LINES OF POLICY FOR 1980 MONETARY POLICY HAS AN IMPORTANT COUNTER-INFLATIONARY ROLE TO PLAY . FOR 1979 IT SEEMS LIKELY THAT MONETARY POLICY WILL SUCCEED IN BRINGING DOWN THE RATE OF GROWTH OF MONETARY EXPANSION TO ABOUT 11.5 % ON AVERAGE IN THE COMMUNITY , WHICH IS ABOUT THE SAME AS THE RATE OF GROWTH OF NOMINAL GROSS DOMESTIC PRODUCT . THIS REFLECTS A MORE RESTRICTIVE GENERAL STANCE OF POLICY BY COMPARISON WITH 1978 WHEN , IN THE INTERESTS OF HELPING RESTIMULATE GROWTH , MONEY SUPPLY WAS PERMITTED TO GROW ABOUT 13 % - NEARLY 2 % FASTER THAN NOMINAL GROSS DOMESTIC PRODUCT . THE TARGET RATES OF MONETARY EXPANSION FOR 1980 SHOULD BE KEPT EITHER LOWER , OR AT THE MOST NOT HIGHER THAN THOSE SET FOR 1979 . EXCEPT FOR CERTAIN CASES WHERE A CONTINUING TREND DECREASE IN THE VELOCITY OF CIRCULATION IS TO BE EXPECTED , THE RATE OF MONETARY EXPANSION SHOULD BE AIMED AT SLIGHTLY LESS THAN THAT OF NOMINAL GROSS DOMESTIC PRODUCT , SO AS TO SIGNAL , AND INDEED TO WORK TOWARDS A DECELERATION TREND IN THE RATE OF INFLATION IN THE COURSE OF 1980 . FOR THE COMMUNITY AS A WHOLE , MONEY SUPPLY MIGHT ( ON THE BASIS OF COMMISSION ESTIMATES , ASSUMING CONTINUATION OF EXISTING POLICIES ) BE CONSTRAINED TO A GROWTH OF 10.5 % - SLIGHTLY BELOW THAT PROJECTED FOR NOMINAL GROSS DOMESTIC PRODUCT ( 11.25 % ). NOMINAL INTEREST RATES MAY HAVE TO REMAIN HIGH BY HISTORICAL STANDARDS TO PERMIT A SUFFICIENT NON-MONETARY FINANCING OF PUBLIC DEFICITS . WHEN INFLATION IS SEEN TO BE ON A DECELERATING TREND AGAIN , IT WOULD BE DESIRABLE TO LOWER INTEREST RATES SO AS TO STIMULATE INVESTMENT AND EASE THE DEBT SERVICE BURDEN ON THE PUBLIC FINANCES . AN EVENTUAL DE-ESCALATION OF INTEREST RATES WOULD BE , TYPICALLY , THE TASK OF CONCERTED POLICY MOVES ACROSS THE COMMUNITY ; THE NEED FOR IMPROVED COORDINATION IN THIS FIELD HAS BEEN HEIGHTENED BY THE OPERATIONS OF THE EUROPEAN MONETARY SYSTEM . BUDGETARY POLICY WAS EXPANSIONARY IN BOTH 1978 AND 1979 , THE FINANCIAL DEFICIT OF GENERAL GOVERNMENT IN THE COMMUNITY AS A WHOLE HAVING RISEN SUCCESSIVELY FROM 3.3 % OF GDP IN 1977 TO 4.0 % IN 1978 AND IN 1979 . IT IS NOW DESIRABLE TO MOVE INTO A PHASE OF FALLING PUBLIC DEFICITS RELATIVE TO GDP , SO AS TO HELP ALLOW THE SHIFT OF SAVINGS IN PRIVATE INVESTMENT , AND TO REDUCE THE PUBLIC FINANCES ' CONTRIBUTION TO MONETARY EXPANSION . BUT THE EXTENT OF THESE REDUCTIONS SHOULD BE VARIED BY COUNTRY ACCORDING TO SEVERAL CRITERIA : THE STRENGTH OR WEAKNESS OF ECONOMIC ACTIVITY , THE SIZE TO WHICH PUBLIC DEFICITS HAVE GROWN OVER RECENT YEARS , THE EXTENT TO WHICH INFLATIONARY EXPECTATIONS REMAIN LIVE , CONSISTENCY WITH MONETARY POLICY OBJECTIVES AND THE URGENCY OF THE NEED TO SHIFT RESOURCE UTILIZATION FROM PUBLIC TO PRIVATE SECTORS FOR REASONS OF BALANCE OF PAYMENTS CONSTRAINTS OR TO STRENGTHEN THE DIRECTLY PRODUCTIVE BASE OF THE ECONOMY . THE MIX OF THESE CRITERIA LEAD TO A RANGE OF DESIRABLE OUTCOMES , BETWEEN REDUCTIONS IN THE GOVERNMENT DEFICIT AS A SHARE OF GDP IN SOME CASES ( FOR EXAMPLE GERMANY , IRELAND , ITALY , THE NETHERLANDS , THE UNITED KINGDOM ), TO THEIR APPROXIMATE STABILITY IN SOME OTHERS . FOR THE COMMUNITY AS A WHOLE THE FINANCIAL DEFICIT OF GENERAL GOVERNMENT IS LIKELY TO DECLINE FROM 4.0 % OF GDP IN 1979 TO 3.9 % IN 1980 ; THE BORROWING REQUIREMENT OF CENTRAL GOVERNMENTS WOULD IN GENERAL MOVE IN A SIMILAR DIRECTION ( ALTHOUGH THE COMMUNITY AVERAGE IS EXPECTED TO REMAIN STABLE IN TERMS OF GDP SHARE BECAUSE OF SOME EXCEPTIONAL FINANCIAL TRANSACTIONS ). THIS EVOLUTION IS APPROPRIATE ON THE BASIS OF THE UNDERLYING MACRO-ECONOMIC OBJECTIVES AND FORECASTS . HOWEVER , BUDGETARY POLICY HAS TO RETAIN ITS AUTOMATIC CONTRACYCLICAL FUNCTION , WHICH MEANS THAT IF THE RATE OF GROWTH OF ECONOMIC ACTIVITY WERE FASTER THAN FORECAST , THE PUBLIC DEFICITS SHOULD REDUCE BY A GREATER MARGIN , AND IF ECONOMIC ACTIVITY SHOULD BE WEAKER , PUBLIC DEFICITS WOULD TURN OUT TO BE GREATER . IT WOULD NOT BE APPROPRIATE AS OF NOW , AS A RESPONSE TO THE EFFECTS OF THE OIL PRICE RISE , TO RETURN TO A PHASE OF GENERAL , UNCONDITIONAL REFLATION THROUGH BUDGETARY POLICY , BECAUSE OF THE CONSTRAINTS ALREADY MENTIONED . HOWEVER , THERE ARE CONDITIONS IN WHICH A MORE ACTIVE BUDGETARY POLICY COULD BECOME APPROPRIATE IN 1980 , NOTABLY IN CIRCUMSTANCES WHERE THIS COULD HELP ESTABLISH FIRMER AND LESS INFLATIONARY GROWTH ( SEE FURTHER BELOW IN RELATION TO INCOME BARGAINING ), AND WHERE THIS WAS CONSISTENT WITH THE OBJECTIVES OF MONETARY POLICY . INCOME BARGAINING BEHAVIOUR WILL IN THE YEAR AHEAD CARRY A MAJOR RESPONSIBILITY FOR DETERMINING WHETHER THE PRESENT ECONOMIC DIFFICULTIES CAN BE ABSORBED WITHOUT DAMAGING THE PROSPECTS FOR CONTINUING ECONOMIC PROGRESS . OVER THE PAST 18 MONTHS , THE EVOLUTION OF WAGE INCOMES HAS ON AVERAGE IN THE COMMUNITY , THOUGH THERE ARE EXCEPTIONS , HELPED THE DECELERATION OF INFLATION RECORDED IN 1978 AND HAS SINCE THEN IN MOST COUNTRIES AVOIDED AGGRAVATING THE ACCELERATION OF INFLATION ( WHICH WAS DUE IN SUBSTANTIAL MEASURE TO A DETERIORATION IN THE TERMS OF TRADE THUS NOT WARRANTING COMPENSATORY WAGE CLAIMS ). THE NOMINAL GROWTH OF HOURLY WAGES IN THE COMMUNITY AS A WHOLE EVOLVED AS FOLLOWS : 12 % IN 1977 , 11 % IN 1978 AND 10 % IN THE SECOND QUARTER OF 1979 OVER ONE YEAR EARLIER . SEEN IN A MEDIUM-TERM PERSPECTIVE , HOWEVER , THERE IS STILL A WAY TO GO BEFORE THE RELATIVE SHARES OF WAGE AND SALARIED INCOME ON THE ONE HAND AND THAT OF THE ENTERPRISE SECTOR ON THE OTHER , ARE RESTORED TO LEVELS THAT MAY BE CONSIDERED NORMAL FOR THE STIMULATION OF PRODUCTIVE AND EMPLOYMENT CREATING INVESTMENT . IN THE FIRST INSTANCE THE SOCIAL PARTNERS HAVE TO AGREE - IN EACH COUNTRY IN ITS PARTICULAR SETTING AS REGARDS THE NATURE OF WAGE CONTRACTS AND NEGOTIATING PRACTISES - TO LIMIT TO THE MINIMUM THE REPERCUSSION OF ENERGY PRICE RISES INTO INCOMES . IN COUNTRIES WITH FIXED WAGE CONTRACTS , THIS MEANS NOT SEEKING TO RENEGOTIATE THEM BEFORE THEIR NORMAL EXPIRY . IN COUNTRIES WITH COMPREHENSIVE AND RAPID-ACTING WAGE INDEXATION MECHANISMS IT IS NECESSARY EITHER TO WITHHOLD PAYMENT OF SOME PART OF FUTURE INDEXATION ADJUSTMENTS SO AS NOT TO PASS ON THE RECENT ENERGY PRICE RISES , OR ALTERNATIVELY , TO MAKE EQUIVALENT REDUCTIONS IN CLAIMS FOR REAL PURCHASING POWER INCREASES . THESE PRINCIPLES ARE BEING RESPECTED IN SOME MEMBER STATES , BUT PROBLEMS REMAIN IN OTHER COUNTRIES WITH WAGE INDEXATION PRACTISES . THESE DIFFERENCES ARE DANGEROUS , SINCE THEY RISK LEADING TO A RENEWED DIVERGENCE IN RELATIVE INFLATION TRENDS BETWEEN MEMBER STATES . IN THE PERIOD AHEAD REAL WAGE INCREASES SHOULD BE NEAR TO ZERO IN THE COMMUNITY ON AVERAGE : MAINTENANCE OF PURCHASING POWER BUT HARDLY MORE . AS BETWEEN MEMBER STATES THERE WILL BE A RANGE OF JUSTIFIABLE OUTCOMES AROUND THIS AVERAGE , DEPENDING UPON RECENT PRODUCTIVITY PERFORMANCE , THE FINANCIAL POSITION OF THE ENTERPRISE SECTOR AND ON THE DEGREE OF PRICE STABILITY ACTUALLY ESTABLISHED . BEHAVIOUR ALONG THESE LINES WILL PERMIT A MORE CONTINUOUS ADVANCE IN REAL ECONOMIC GROWTH AND BETTER EMPLOYMENT PROSPECTS THAN WOULD OTHERWISE BE THE CASE . FAILURE TO ADJUST IN THIS WAY TO THE ENERGY PRICE SHOCK WOULD ON PAST EXPERIENCE LEAD TO A MUCH MORE DISAGREEABLE RESULT . THE GENERAL EMPLOYMENT STRATEGY HAS TO COUNT ON EMPLOYMENT GROWTH IN SERVICES OF THE WIDEST RANGE , WHILE STILL AIMING AT HIGH PRODUCTIVITY PERFORMANCE IN MANUFACTURING INDUSTRY . THE ROLE OF GOVERNMENT MUST BE TO FAVOUR THOSE TRENDS THROUGH ITS LABOUR MARKET , INDUSTRIAL AND REGIONAL POLICIES , ALTHOUGH THERE ARE CONSTRAINTS ( NOTABLY BUDGETARY ) ON THE EXTENT TO WHICH GOVERNMENTS SHOULD DIRECTLY INTERVENE IN LABOUR MARKETS . IN THE PAST THREE YEARS THE SCALE OF DIRECT EMPLOYMENT MEASURES BY GOVERNMENTS HAS CONSIDERABLY INCREASED . THE NUMBER OF PERSONS BENEFITING FROM FOUR MAIN CATEGORIES OF MANPOWER POLICY INTERVENTION ( EMPLOYMENT CREATION SUBSIDIES , WORK EXPERIENCE PROGRAMMES , PUBLIC SECTOR JOB CREATION PROGRAMMES , AND EMPLOYMENT MAINTENANCE MEASURES ) HAS INCREASED FROM AN ESTIMATED 1.4 MILLION PERSONS IN 1976 TO 2.1 MILLION IN 1977 AND FURTHER IN 1978 FOR THE COMMUNITY AS A WHOLE . THESE MEASURES ARE OF SIGNIFICANT SIZE IN RELATION TO THE NUMBER OF REGISTERED UNEMPLOYMENT . WITH THE PERSISTENCE OF HIGH UNEMPLOYMENT IN ALMOST ALL THE MEMBER COUNTRIES AND THE PROSPECT OF AN ACCELERATION IN THE GROWTH OF THE LABOUR SUPPLY IN THE NEXT FIVE TO 10 YEARS , PROPOSALS TO STEP UP CUTS IN WORKING HOURS OR TO EXTEND WORK-SHARING HAVE BECOME A MAJOR TOPIC IN DISCUSSIONS ON LABOUR MARKET POLICY . THERE IS NO WAY OF SAYING WITH CERTAINTY HOW GREAT THE SHORT- AND LONGER-TERM EMPLOYMENT EFFECT OF CUTS IN WORKING HOURS WOULD BE . CUTS IN WORKING HOURS ARE NOT A QUICK-ACTING PANACEA , NOR CAN THEY BE A SUBSTITUTE FOR GENERAL GROWTH AND ADJUSTMENT POLICIES . ONE SHOULD ENVISAGE - WITHOUT , HOWEVER , AGGRAVATING THE COSTS OF ENTERPRISES - SOME STRENGTHENING OF THE LONG-TERM TREND IN THE REDUCTION OF ANNUAL WORKING HOURS ( THE WORKING WEEK OR HOLIDAYS ), ALONGSIDE OTHER FORMS OF WORK-SHARING ( SCHEMES FOR EARLIER AND FLEXIBLE RETIREMENT , PART-TIME WORKING , REDUCED OVERTIME ) AND THE DEVELOPMENT OF A WIDER ARRAY OF VOCATIONAL TRAINING AND FURTHER TRAINING SCHEDULE . **** 4 . POLICY IN THE MEMBER STATES IN DENMARK , THE RISK EXISTS OF A FURTHER SIGNIFICANT WORSENING IN THE CURRENT BALANCE OF PAYMENTS DEFICIT IN 1980 AS A RESULT OF THE DETERIORATION IN THE TERMS OF TRADE . DESPITE THE RECENT ADJUSTMENT OF THE KRONE IN THE EUROPEAN MONETARY SYSTEM , ECONOMIC GROWTH WILL REMAIN SUBJECTED TO A PRESSING EXTERNAL CONSTRAINT . IN THESE CIRCUMSTANCES , OFFICIAL ACTION WILL NEED TO AIM PRIMARILY AT ENSURING A LASTING MODERATION IN COSTS , PARTICULARLY IN ORDER TO OBTAIN AN IMPROVEMENT IN THE BALANCE OF PAYMENTS . THIS MEANS THAT THE GROWTH IN INCOMES IN 1980 SHOULD BE CONSIDERABLY LOWER THAN IN PRECEDING YEARS IMPLYING A SMALLER RISE THAN NOW EXPECTED WITHIN THE FRAMEWORK OF EXISTING AGREEMENTS . IN THIS REGARD , STEPS MUST BE TAKEN TO ENSURE THAT AUTOMATIC INDEXATION DOES NOT CAUSE THE IMPACT OF THE HIGHER COST OF IMPORTED ENERGY SUPPLIES TO BE PASSED ON TO NOMINAL INCOMES . FOR THIS REASON , AN ALTERATION IN THE NATURE OF THE INDEXATION SYSTEM WOULD SEEM TO BE HIGHLY DESIRABLE . EVEN AFTER THE INCREASE IN INDIRECT TAXATION AND THE REDUCTION IN PUBLIC EXPENDITURE DECIDED LAST JUNE , THE GENERAL GOVERNMENT BORROWING REQUIREMENT COULD RISE FROM ITS LEVEL OF 1 % OF GDP IN 1979 TO 2 % OF FORECASTED GDP IN 1980 . IT COULD BECOME NECESSARY TO REDUCE THIS DEFICIT UNLESS THE RISE IN INCOMES IS LOWERED SUBSTANTIALLY . TO PROVIDE ROOM FOR FINANCING THE INCREASED BALANCE OF PAYMENTS DEFICIT AND MAINTAINING THE KRONE ' S POSITION ON FOREIGN EXCHANGE MARKETS , MONETARY POLICY WILL HAVE TO CONTINUE TO BE AIMED AT KEEPING INTEREST RATES HIGH AND MAINTAINING STRICT CONTROLS ON LENDING . IN THE FEDERAL REPUBLIC OF GERMANY , THE GOVERNMENT ' S STIMULATORY PROGRAMMES THAT WERE ADOPTED MAINLY IN 1978 HAVE SET IN MOTION A VIGOROUS ECONOMIC UPSWING WHICH , TO AN INCREASING DEGREE , IS BEING UNDERPINNED BY THE ENDOGENOUS EXPANSIONARY FORCES IN THE ECONOMY , NOTABLY INVESTMENT . THE DEVELOPMENT OF EMPLOYMENT HAS SHOWN A MORE FAVOURABLE TREND THAN WAS EXPECTED AT THE BEGINNING OF THE YEAR . THESE RESULTS CAN BE PARTLY ATTRIBUTED TO DECIDEDLY MODERATE WAGE SETTLEMENTS . WHILE THE PRICE CLIMATE HAS DETERIORATED , THIS IS LARGELY DUE TO THE RISE IN THE PRICE OF OIL AND TO THE INCREASE IN VALUE-ADDED TAX WHICH TOOK EFFECT ON 1 JULY 1979 ( THE LATTER INTENDED AS A MEDIUM-TERM CHANGE IN TAX STRUCTURE ). THE LEADING ECONOMIC INDICATORS SUGGEST THAT , DESPITE A SLOW DOWN IN THE COURSE OF THE YEAR , THE FAVOURABLE ECONOMIC SITUATION WILL CONTINUE INTO 1980 . THIS MEANS THAT SOME REDUCTION IN THE FINANCIAL DEFICIT OF THE PUBLIC AUTHORITIES AS A WHOLE FROM THE LEVEL OF 3 % GDP FORESEEN FOR 1979 , CAN BE ENVISAGED NEXT YEAR . NONETHELESS , THE RISK OF A MARKED WEAKENING OF ECONOMIC ACTIVITY REMAINS . ASIDE FROM UNCERTAINTIES ON THE EXPORT SIDE , INTERNAL DEMAND , IN PARTICULAR PRIVATE CONSUMPTION , COULD SLOW DOWN SIGNIFICANTLY . IF THIS WERE DISTINCTLY MORE PRONOUNCED THAN AT PRESENT EXPECTED , FINANCIAL POLICY COULD ALREADY HAVE A COMPENSATORY EFFECT BEFORE THE ENTRY INTO FORCE OF THE REDUCTION OF PERSONAL INCOME TAX PLANNED BY THE GOVERNMENT . THE RATE OF INCREASE OF ' CENTRAL BANK MONEY ' IS AT PRESENT CLOSE TO THE LOWER LIMIT OF THE RANGE OF FROM 6 TO 9 % SET LAST YEAR BY THE BUNDESBANK . FOR THE YEAR TO COME , THE BUNDESBANK HAS FIXED A TARGET RATE OF GROWTH OF FROM 5 TO 8 % FROM THE FOURTH QUARTER OF 1979 TO THE SAME QUARTER OF 1980 . THIS HAS THEREFORE ENSURED THAT , FROM THE POINT OF VIEW OF THE MONEY SUPPLY , A RELATIVELY LIMITED MARGIN FOR PRICE INCREASES HAS BEEN KEPT TO . THIS POLICY STANCE SHOULD MAKE IT EASIER FOR THE SOCIAL PARTNERS TO CONCLUDE MODERATE WAGE SETTLEMENTS , AN INDISPENSABLE CONDITION FOR BALANCED GROWTH OVER THE NEXT YEAR . IN FRANCE , ECONOMIC POLICY REMAINS ORIENTED TOWARDS STRUCTURAL REFORM . THE HIGHER CONTRIBUTIONS INTRODUCED IN ORDER TO PUT SOCIAL SECURITY ON A SOUNDER FOOTING HAVE BEEN COMBINED WITH RATHER STRICT CENTRAL GOVERNMENT BUDGET MANAGEMENT . AT THE SAME TIME , THE UNDERPINNING OF ECONOMIC ACTIVITY , FOR THE END OF 1979 AND THE BEGINNING OF 1980 , HAS BEEN ASSURED BY MEASURES TO BOOST INVESTMENT AND TO HELP LOW-INCOME GROUPS . THIS OVERALL STANCE SHOULD BE PROLONGED INTO 1980 IN ORDER TO PERMIT GROWTH TO CONTINUE AT AN ADEQUATE LEVEL AND SO THAT EXTERNAL TRADE CAN BE KEPT CLOSE TO EQUILIBRIUM ( DESPITE THE DETERIORATION IN THE TERMS OF TRADE OBSERVED IN 1979 AND EXPECTED FOR 1980 ); THE STATE BUDGET ON AN EXECUTION BASIS SHOULD BE SUCH THAT , IN 1980 , THE NET BORROWING REQUIREMENT IS KEPT WITHIN THE 1979 LIMITS , THAT IS 1.7 % OF GDP , THUS LEADING TO A STABILIZATION OF THE NET BORROWING REQUIREMENT OF PUBLIC ADMINISTRATIONS . WITH A COMBINATION OF A MODERATION OF ECONOMIC GROWTH AND CONTINUING INCREASES IN PRODUCTIVITY , THE INCREASE IN EMPLOYMENT WILL SLOW DOWN IN 1980 . MOREOVER , DUE TO THE SHARP INCREASE IN THE NUMBER OF PERSONS ENTERING THE LABOUR MARKET FOR THE FIRST TIME , AND IN SPITE OF THE RECENT MEASURES IN FAVOUR OF YOUNG PEOPLE , A FURTHER INCREASE IN UNEMPLOYMENT IS TO BE EXPECTED . THIS INCREASE CREATES THE RISK OF A RISE IN THE SAVINGS RATIO WHICH COULD IMPLY A MARKED SLOWDOWN IN THE EVOLUTION OF REAL PRIVATE CONSUMPTION . SHOULD THERE BE A MARKED SLOW DOWN IN ECONOMIC ACTIVITY , IT WOULD BE NECESSARY TO REINFORCE THE ARRANGEMENTS INSTITUTED IN 1979 IN ORDER TO SUPPORT ECONOMIC ACTIVITY TO THE EXTENT POSSIBLE IN THE CONTEXT OF EXTERNAL CONSTRAINTS . IN OTHER RESPECTS , IN ORDER TO REDUCE INFLATIONARY PRESSURES , IT WOULD BE ADVISABLE , NOT ONLY TO PURSUE A POLICY OF MODERATION ON NOMINAL INCOMES BUT ALSO TO RESTORE FREE COMPETITION IN ALL BRANCHES OF THE ECONOMY , INCLUDING IN PARTICULAR THE SERVICES SECTOR . RESTRUCTURING OF THE ECONOMY WILL ALSO HAVE TO BE SOUGHT THROUGH A LIMITATION IN THE SUBSIDIES GRANTED TO THE NATIONALIZED COMPANIES . THE OVERALL AIM OF MONETARY POLICY WILL CONTINUE TO BE THE STABILITY OF THE FRANC . TO THIS END , THE PRESENT LEVEL OF LIQUIDITY OF THE ECONOMY SHOULD BE HELD STEADY OR EVEN REDUCED . IN IRELAND , GROWTH WILL REMAIN MODERATE IN 1980 OWING TO A SLOWER EXPANSION OF DOMESTIC DEMAND AND DESPITE AN ANTICIPATED IMPROVEMENT IN THE PERFORMANCE OF AGRICULTURAL EXPORTS . THE INITIAL IMPACT OF DEARER IMPORTED RAW MATERIALS , IS LIABLE TO BE AMPLIFIED BY THE AUTOMATIC EFFECT OF WAGE INDEXATION WHICH WILL HAVE UNFAVOURABLE CONSEQUENCES ON JOB CREATION AND LEAD TO A DETERIORATION IN UNEMPLOYMENT , GIVEN THE RAPID RISE IN THE LABOUR FORCE . IN ADDITION , THE WORSENING OF THE BALANCE OF PAYMENTS DEFICIT WILL PROVE TO BE A MAJOR CONSTRAINT ON ECONOMIC POLICY . THUS BUDGETARY POLICY SHOULD MANAGE DOMESTIC DEMAND STRICTLY AND SHOULD BE GEARED TOWARDS A SUBSTANTIAL REDUCTION IN THE NET BORROWING REQUIREMENT OF CENTRAL GOVERNMENT AS A PERCENTAGE OF GNP , IN KEEPING WITH THE AIM , SET IN 1978 , OF BRINGING THIS TO 8 % IN 1980 . IN ADDITION , INCREASES IN INCOMES SHOULD NOT AIM TO COMPENSATE FOR THE DETERIORATION IN THE TERMS OF TRADE . IN THIS RESPECT , IT WOULD BE DESIRABLE FOR THE SOCIAL PARTNERS TO CONSIDER A CHANGE IN THE INDEXATION CLAUSE . IF THIS CHANGE IS NOT MADE , THE LEVEL OF SETTLEMENTS FOLLOWING THE TERMINATION OF THE CURRENT PROVISIONS SHOULD BE INFLUENCED BY THE FACT THAT AN INAPPROPRIATE COMPENSATION FOR THE DETERIORATION IN THE TERMS OF TRADE WILL HAVE ALREADY BEEN MADE . IN ORDER TO HELP THE BALANCE OF PAYMENTS AND SUPPORT RESERVES , MONETARY POLICY WILL HAVE TO REMAIN TIGHT BASED IN PARTICULAR ON THE MAINTENANCE OF A STRICT CEILING ON DOMESTIC CREDIT . IN ITALY , IN SPITE OF THE CONTINUED GROWTH OF THE ECONOMY IN 1979 , THE CURRENT ACCOUNT RECORDED ANOTHER SUBSTANTIAL SURPLUS . HOWEVER , THERE HAS BEEN A DISTURBING ACCELERATION IN THE RATE OF INFLATION WHICH IS IN DANGER OF RECEIVING AN ADDITIONAL BOOST FROM THE INTERACTION OF THE RISE IN OIL PRICES AND THE WAGE-INDEXATION SYSTEM . STILL GREATER EFFORTS WOULD THEREFORE SEEM TO BE NECESSARY TO COMBAT INFLATION WHILST AT THE SAME TIME ACHIEVING THE TRANSFER OF RESOURCES NECESSARY TO SUPPORT ECONOMIC GROWTH . IN THE PUBLIC FINANCE FIELD , THE GUIDELINES OF THE ECONOMIC PLAN FOR THE THREE-YEAR PERIOD 1979-81 , WHICH WAS PRESENTED LAST JANUARY AND WHICH HAS NOT YET BEEN TRANSLATED INTO PRACTICAL MEASURES , STILL APPEAR TO BE APPROPRIATE FOR ATTAINING THESE OBJECTIVES . IN THIS CONNECTION , STEPS SHOULD BE TAKEN TO ENSURE THAT THE DEFICIT OF THE ENLARGED PUBLIC SECTOR ( 1 ), EXPRESSED AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT , DOES NOT EXCEED 14 % IN 1980 . WITHIN THIS BROAD FRAMEWORK , THE SHARE OF CURRENT EXPENDITURE SHOULD BE CUT BACK , WHILST THE IMPLEMENTATION OF GOVERNMENT INVESTMENT PROJECTS SHOULD BE ACCELERATED AS FAR AS POSSIBLE . TO MEET BOTH THESE REQUIREMENTS , IT WOULD SEEM NECESSARY TO COMPLETE THE REFORM OF THE PENSIONS SYSTEM , TO CURB THE GROWTH OF SPENDING ON HEALTH CARE AND TO SPEED UP THE ADMINISTRATIVE PROCEDURES ON WHICH THE IMPLEMENTATION OF INCREASED INVESTMENT LARGELY DEPENDS . IN THE MONETARY FIELD , THE ABUNDANT LIQUIDITY WHICH HAS FORMED IN THE ECONOMY MUST BE GRADUALLY REABSORBED . TO ACHIEVE THIS AIM , THE GROWTH IN TOTAL LENDING SHOULD BE MODERATED AND THE POLICY OF CONSOLIDATING THE NATIONAL DEBT SHOULD BE CONTINUED . IN VIEW OF THE SHARP RISE IN PRICES AND , TO A LESSER EXTENT , THE FALL IN THE SURPLUS ON CURRENT ACCOUNT , INTEREST RATES SHOULD BE KEPT AT A SUFFICIENTLY HIGH LEVEL . THESE POLICY GUIDELINES INCLUDE CERTAIN ELEMENTS LIKELY TO SLOW DOWN THE RATE OF ECONOMIC GROWTH . IT WOULD THEREFORE SEEM TO BE NECESSARY , IN LINE WITH THE THREE-YEAR PLAN , TO ENCOURAGE THE PROPENSITY TO INVEST WHILST LIMITING THE GROWTH OF HOURLY WAGE-RATES TO THAT NEEDED TO COVER THE SIMULTANEOUS INCREASE IN PRICES . WITH THIS AIM IN MIND IT WOULD BE USEFUL TO SLOW DOWN THE RATE AT WHICH THE SLIDING SCALE ADJUSTS WAGES AND SALARIES TO PRICES , AND INSTEAD - IN ORDER TO ENSURE THAT THE PURCHASING POWER OF WAGE AND SALARY EARNERS IS MAINTAINED - TO GRANT REDUCTIONS IN TAXATION . IN THE NETHERLANDS , ECONOMIC ACTIVITY HAS BEEN FAIRLY BUOYANT IN 1979 ; SINCE MID-1978 UNEMPLOYMENT HAS LEVELLED OFF AT AROUND 4.5 % OF THE CIVILIAN LABOUR FORCE AND CONSUMER PRICE INFLATION HAS REMAINED RELATIVELY LOW . WITH EXPORT GROWTH EXPECTED TO SLACKEN , THE EXPANSION IN DUTCH ECONOMIC ACTIVITY IS LIKELY TO SLOW DOWN SLIGHTLY IN 1980 . GIVEN THE RAPID INCREASE IN THE VOLUME OF EXPORTS IN 1979 AND THE FORESEEABLE RISE IN THE EXPORT PRICE OF NATURAL GAS , THE TREND OF THE BALANCE OF PAYMENTS ON CURRENT ACCOUNT LOOKS MORE FAVOURABLE AND THE RECOVERY IS PROBABLY SET TO CONTINUE . CONSEQUENTLY , ECONOMIC POLICY MAKERS ' ROOM FOR MANOEUVRE IN THE SHORT-TERM IS SLIGHTLY GREATER THAN FORECAST . IN THE FRAMEWORK OF THE CENTRAL GOVERNMENT DRAFT BUDGET FOR 1980 THE AUTHORITIES HAVE THEREFORE TAKEN A SERIES OF NEW MEASURES ( STRENGTHENING OF EMPLOYMENT , ENERGY SAVING , STIMULATION OF INNOVATION AND STRUCTURAL CHANGE ) WHICH - TAKING ACCOUNT OF A CERTAIN NUMBER OF FISCAL MEASURES - WILL INCREASE THE BUDGET DEFICIT BY SOME 600 MILLION GUILDERS ( 0.3 % OF GDP ). IT IS NEVERTHELESS STILL NECESSARY TO PRESS AHEAD WITH EFFORT TO RESTRAIN THE MEDIUM-TERM GROWTH OF PUBLIC EXPENDITURE - THE ONLY WAY TO LIMIT THE INCREASE IN THE TAX BURDEN ON THE ECONOMICALLY ACTIVE SECTION OF THE POPULATION AND TO SECURE A LASTING IMPROVEMENT IN THE OUTLOOK FOR EMPLOYMENT . WITH RESPECT TO CENTRAL GOVERNMENT BORROWING REQUIREMENT IN 1980 THE TARGET SHOULD BE NOT TO EXCEED 3.6 % OF GDP ( 4.0 % OF NATIONAL INCOME ; THIS SHOULD MAKE IT POSSIBLE TO KEEP THE BORROWING REQUIREMENT ON A CASH BASIS FOR GENERAL GOVERNMENT UNCHANGED AT 5 % OF GDP ( 5.5 % OF NATIONAL INCOME ). THE MAIN RISK IS AN ACCELERATION OF INFLATION WHICH COULD ENDANGER THE ACHIEVEMENTS REALIZED RECENTLY IN THE FIELD OF COMPETITIVENESS . IT IS IN THIS CONTEXT IMPORTANT TO AVOID THAT THE INCREASE IN ENERGY PRICES PROVOKE AN ADDITIONAL INCREASE IN NOMINAL INCOMES . IN BELGIUM , THE RECOVERY OF ECONOMIC ACTIVITY WHICH BEGAN IN 1978 ACCELERATED NOTABLY IN 1979 . DESPITE THE EFFECT OF THE MEASURES TO ASSIST EMPLOYMENT ( TRAINING COURSES FOR YOUNG PEOPLE , EARLY RETIREMENT , ETC .) UNEMPLOYMENT WENT ON RISING , BUT ONLY FOR WOMEN . THE INCREASE IN CONSUMER PRICES HAS GATHERED MOMENTUM . THE CURRENT ACCOUNT DEFICIT SEEMED AGAIN TO BE WIDENING DESPITE RELATIVELY BUOYANT EXPORT PERFORMANCE . GROWTH WILL PROBABLY SLACKEN TO SOME EXTENT IN 1980 , PRIMARILY AS A RESULT OF THE SLOWDOWN IN THE EXPANSION OF EXPORT MARKETS . THIS MEANS THAT THE EMPLOYMENT SITUATION MIGHT WELL REMAIN PRECARIOUS . FURTHERMORE , SOME ACCELERATION IN CONSUMER PRICES SEEMS LIKELY . THE MOST WORRYING PROBLEM FOR ECONOMIC POLICY IS STILL THE PUBLIC FINANCE SITUATION . IN THE SHORT TERM , THE BURDEN OF ADJUSTMENT HAS BEEN BORNE BY MONETARY POLICY , BUT A REDUCTION IN THE BUDGET DEFICIT IS THE ONLY WAY TO BRING ABOUT A LASTING REDUCTION OF THE STRAINS ON THE FINANCIAL MARKET WHILE STEMMING THE TIDE OF INFLATION . IN ORDER TO AVOID AN APPRECIABLE INCREASE IN THE PRESSURE OF TAXATION AND PARA-FISCAL CHARGES , A STEPPING UP OF THE EFFORTS MADE IN RECENT YEARS TO REDUCE THE GROWTH OF CENTRAL GOVERNMENT EXPENDITURE IS A PRIORITY TASK AND SHOULD BE EXTENDED TO COVER ALSO OTHER PUBLIC ADMINISTRATIONS , NOTABLY SOCIAL SECURITY . WITHOUT SUCH AN EXTENSION OF AUSTERITY MEASURES A FURTHER RISE IN THE BORROWING REQUIREMENT OF GENERAL GOVERNMENT WILL BE UNAVOIDABLE , WHEREAS A REDUCTION OF THE BORROWING REQUIREMENT OF CENTRAL GOVERNMENT TO 7.1 % OF GDP AT MOST SHOULD BE AIMED AT FOR 1980 . WITH RESPECT TO INCOMES IT IS IMPORTANT TO ALLOW FOR THE FACT THAT THE TERMS OF TRADE DETERIORATION LIMITS SEVERELY THE SCOPE FOR GRANTING REAL INCREASES ( APART FROM INDEXATION ). IN LUXEMBOURG , THE ECONOMY HAS BEEN FAIRLY BUOYANT AND UNEMPLOYMENT HAS SHOWN SOME TENDENCY TO FALL . THE LEVEL OF TAX REVENUE HAS TURNED OUT TO BE DISTINCTLY HIGHER THAN EXPECTED A YEAR AGO MAINLY OWING TO THE PERSISTENT BUOYANCY OF THE TERTIARY SECTOR . IN 1979 , THE GENERAL GOVERNMENT ACCOUNT WILL THEREFORE CLOSE WITH NET LENDING OF THE ORDER OF 1.7 % OF GDP AND SHOULD REMAIN IN SURPLUS IN 1980 . EVEN ALLOWING FOR SOME SLOW-DOWN IN THE GROWTH OF ECONOMIC ACTIVITY , IT SHOULD NOT DECLINE BELOW 1 % OF GDP . TO THIS END , THE LENDING OF CENTRAL GOVERNMENT SHOULD NOT BE REDUCED BY MORE THAN 0.5 % OF GDP FROM 1979 TO 1980 . IN THE UNITED KINGDOM ECONOMIC ACTIVITY HAS BEEN SOMEWHAT UNBALANCED IN 1979 . THE STRONG GROWTH OF DOMESTIC DEMAND WAS LARGELY MET FROM IMPORTS SO THAT THE CURRENT ACCOUNT OF THE BALANCE OF PAYMENTS MOVED INTO SUBSTANTIAL DEFICIT , IN SPITE OF NORTH SEA OIL PRODUCTION APPROACHING SELF-SUFFICIENCY LEVELS . STERLING REMAINED STRONG HOWEVER , AS A RESULT OF THE INTERNATIONAL ENERGY SITUATION COUPLED WITH TIGHT MONETARY POLICIES IN THE UK . THIS HELPED TO DAMPEN PRICE INFLATION BUT CAUSED A FURTHER DETERIORATION IN THE UK ' S COMPETITIVE POSITION . THE NEW GOVERNMENT IDENTIFIED THE MAIN WEAKNESSES OF THE BRITISH ECONOMY AS BEING SUPPLY-RELATED AND IS ATTACKING THESE STRUCTURAL PROBLEMS BY REDUCING PUBLIC SECTOR INTERVENTION , BY IMPROVING INCENTIVES TO THE PRIVATE SECTOR IN PARTICULAR BY A SHARP CHANGE FROM DIRECT TO INDIRECT TAXATION , WHILE MAINTAINING FIRM MONETARY POLICIES . EXCHANGE CONTROLS HAVE BEEN REMOVED . TAKING INTO ACCOUNT THE EFFECTS OF THE NEW MONETARY AND BUDGETARY POLICIES , DOMESTIC DEMAND IS EXPECTED TO WEAKEN IN 1980 AND THE DEFICIT ON THE CURRENT ACCOUNT OF THE BALANCE OF PAYMENTS SHOULD BE REDUCED . ON PRESENT POLICIES , THE PUBLIC SECTOR BORROWING REQUIREMENT AS A PERCENTAGE OF GDP SHOULD NOT EXCEED IN 1980/81 THE FIGURE OF 4.5 % , AS IS NOW FORESEEN FOR 1979/80 . SHOULD EARNINGS RISE EXCESSIVELY , TAKING INTO ACCOUNT MOREOVER THE LIKELY FALL IN OUTPUT AND PRODUCTIVITY IN 1980 , THE CONSEQUENCES COULD BE VERY SERIOUS FOR INTERNATIONAL COMPETITIVENESS AND PARTICULARLY , FOR EMPLOYMENT PROSPECTS . THE GOVERNMENT SHOULD , HOWEVER , NOT ACCOMMODATE SUCH DEVELOPMENTS BY ADJUSTING THE TARGET RATE FOR THE GROWTH OF MONEY SUPPLY . ESTABLISHMENT OF A STABLE LOW RATE OF PRICE INFLATION AND IMPROVED CONDITIONS OF RESOURCE ALLOCATION HAVE TO BE OVERRIDING OBJECTIVES . 5 . CONCLUSION ECONOMIC PROSPECTS FOR 1980 HAVE BEEN MADE MORE DIFFICULT BECAUSE OF THE OIL PRICE RISE AND RECESSIONARY TRENDS ELSEWHERE IN THE INDUSTRIALIZED WORLD . HOWEVER , THE SITUATION OF THE EUROPEAN COMMUNITY HAS SOME FAVOURABLE FEATURES : A BUSINESS UPSWING HAS BEEN ACHIEVED IN 1979 , TOGETHER WITH IMPROVED EXCHANGE-RATE STABILITY IN THE EUROPEAN MONETARY SYSTEM , AND RELATIVELY SOUND BALANCE OF PAYMENTS SITUATIONS IN MOST MEMBER STATES . THE NEW ADVERSE FACTORS PRESENT THE COMMUNITY WITH THREE MAJOR PROBLEMS : THE INFLATION-GROWTH COMBINATION WILL BE WORSE FOR SOME TIME AHEAD , THERE IS A DANGER OF A RENEWED DIVERGENCE OF PRICE PERFORMANCE BETWEEN MEMBER STATES , AND THERE IS MUCH TO BE DONE FOR THE ENERGY POLICY RESPONSE TO BE ADEQUATE IN THE CIRCUMSTANCES . THE FOLLOWING THREE-PRONGED COMMUNITY POLICY RESPONSE IS REQUIRED : ( I ) IN A FIRST PHASE OF POLICY INCOMES HAVE TO BE CONSTRAINED SUCH THAT CONSUMERS ABSORB THE INCREASED COST OF ENERGY AND SECONDARY INCREASES IN INFLATION ARE AVOIDED ; MEANWHILE MONETARY POLICY SHOULD BE KEPT STRICT , AND BUDGETARY POLICY SHOULD AT THIS STAGE PROVIDE ONLY VERY LIMITED COMPENSATION FOR THE EFFECTS OF THE OIL PRICE RISE ; ( II ) PROVIDED THAT IT IS CLEAR THAT A DURABLE REDUCTION IN INFLATION HAS BEEN ACHIEVED , IT SHOULD BECOME POSSIBLE TO ADJUST POLICY IN DUE COURSE INTO A MORE ACTIVELY SUPPORTIVE POSTURE , NOTABLY IF ALSO INVESTMENT AND CONSUMPTION WERE FOUND TO BE WEAKENING SIGNIFICANTLY ; ( III ) ENERGY POLICY MUST IN ANY CASE BE STRENGTHENED IN ALL ITS ASPECTS , SINCE WITHOUT ACHIEVING A DEEP CHANGE IN PAST RELATIONSHIPS BETWEEN OIL IMPORTS AND ECONOMIC GROWTH , THERE IS LITTLE PROSPECT FOR THE LATTER TO PROGRESS . THIS POLICY APPROACH DOES NOT , IN THE JUDGEMENT OF THE COMMISSION , CHANGE THE OBJECTIVES OF POLICY - TO GIVE PRIORITY TO THE FIGHT AGAINST INFLATION WITHOUT STOPPING GROWTH . NOR SHOULD THERE BE FUNDAMENTAL CHANGES IN POLICIES DEFINED IN THE COURSE OF RECENT MONTHS ; THESE POLICIES DO , HOWEVER , REQUIRE STRONG AND URGENT IMPLEMENTATION .

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported):May 7, 2013 MACATAWA BANK CORPORATION (Exact name of registrant as specified in its charter) Michigan (State or other jurisdiction of Incorporation) 000-25927 (Commission File Number) 38-3391345 (I.R.S. Employer Identification No.) 10753 Macatawa Drive, Holland, Michigan (Address of principal executive offices) (Zip Code) (616)820-1444 (Registrant’s Telephone Number, Including Area Code) Not Applicable (Former name or former address, if changed since last year) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: o Written communications pursuant to Rule425 under the Securities Act (17 CFR 230.425). o Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR 240.14a-12). o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). Item 5.07 Submission of Matters to a Vote of Security Holders. Macatawa Bank Corporation's (the "Company") annual meeting of shareholders was held on May 7, 2013. At that meeting, the shareholders voted on four proposals and cast their votes as described below. Proposal 1 Four nominees for director for a term of three years stood for election at the meeting. All nominees for director were elected by the following votes: Election of Directors Votes Cast Broker For Withheld Non-Votes Wayne J. Elhart Charles A. Geenen Robert L. Herr Thomas J. Wesholski Proposal 2 Proposal 2 was a non-binding, advisory vote on the compensation of the named executive officers, as disclosed pursuant to Item 402 of Regulation S-K in the Company’s proxy statement, including the compensation tables and narrative discussion.This proposal was approved by the following votes: Votes Cast For Against Abstain Broker Non-Votes Proposal 3 Proposal 3 was a non-binding, advisory vote on the frequency of shareholder advisory approval of the compensation of the named executive officers.“One Year” was selected as the frequency of shareholder advisory approval by the following votes: Votes Cast One Year Two Years Three Years Abstain Broker Non-Votes Proposal 4 Proposal 4 was a proposal to ratify the appointment of BDO USA, LLP as independent registered public accounting firm for the year ending December 31, 2013, as described in the proxy statement.This proposal was approved by the following votes: Votes Cast For Against Abstain Broker Non-Votes 0 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated:May 8, 2013 MACATAWA BANK CORPORATION By /s/ Jon W. Swets Jon W. Swets Chief Financial Officer

Exhibit 10.14 FORM OF CONFIDENTIALITY AND NONCOMPETE AGREEMENT      This CONFIDENTIALITY AND NONCOMPETE AGREEMENT (this “Agreement”), dated as of January 23, 2004, is made by and among Resolute Holdings, LLC, a Delaware limited liability company, and its subsidiary Resolute Natural Resources Company, a Delaware corporation (together, the “Company”), and                      (“Employee”). WITNESSETH:      WHEREAS, the Company and its subsidiary have been recently created and organized in connection with a proposed transaction (the “Proposed Transaction”) in which Natural Gas Partners VII, L.P., a Delaware limited partnership (“NGP”), and others will each purchase Equity Units (as defined in the Company’s operating agreement) of the Company (the “Membership Interests”);      WHEREAS, in connection with the consummation of the Proposed Transaction, the Company and/or one or more of the Company’s subsidiaries (collectively, the “Related Parties”) plans to employ Employee on an “at-will” basis and to grant to Employee certain Incentive Interests in the Company (“Incentive Interests”);      WHEREAS, Employee desires to be employed on such basis and to receive the Incentive Interests;      WHEREAS, Employee acknowledges that, in the course of his employment by the Related Parties and performance of services on behalf of the Related Parties, he will become privy to various business opportunities, economic and trade secrets and relationships of the Related Parties; and      WHEREAS, it is a condition to (i) the consummation of the Proposed Transaction, and (ii) the employment of Employee by the Related Parties and the provision to Employee of the Incentive Interests, that Employee enter into a confidentiality and noncompete agreement on the terms and conditions hereinafter set forth;      NOW, THEREFORE, in consideration of, and as a material inducement to, NGP’s consummation of the Proposed Transaction, and in consideration of the employment of Employee by the Related Parties and the Company’s provision of the Incentive Interests to Employee, as well the Related Parties providing access to confidential information and training, the Company and Employee, intending to be legally bound, hereby agree as follows:      1. Business Opportunities and Intellectual Property.      (a) Employee shall promptly disclose to the Company all Business Opportunities and Intellectual Property (as defined below) that exist on the date hereof or become such during the Employment Term or the Post Termination Noncompete Term.          (b) Employee hereby assigns and agrees to assign to the Company, its successors, assigns, or designees, all of Employee’s right, title, and interest in and to all Business Opportunities and Intellectual Property that exist on the Noncompete Term, and further acknowledges and agrees that all Business Opportunities and Intellectual Property that exist on the date hereof or become such during the Employment Term or the Post Termination Noncompete Term constitute the exclusive property of the Company.      (c) For purposes hereof, “Business Opportunities” shall mean all business ideas, prospects, proposals and other opportunities pertaining to the lease, acquisition, exploration, production, gathering or marketing of hydrocarbons and related products and the exploration potential of geographical areas on which hydrocarbon exploration prospects are located, that are:      (i) developed by Employee: (A) during the period that Employee is employed by any of the Related Parties (the “Employment Term”), or (B) before the Employment Term, if such opportunities were developed in connection with (I) assets that have been sold or contributed to the Company by Employee, or (II) Employee’s activities in the oil and gas industry, directly or indirectly, related to the Related Parties’ properties or assets acquired during the Employment Term; and      (ii) originated by any third parties and brought to the attention of Employee, whether before or during the Employment Term, except to the extent that (I) such opportunities are not applicable, directly or indirectly, to any of the Related Parties’ properties or assets acquired during the Employment Term, and (II) third parties possess valid and enforceable rights to such opportunities; together with information relating thereto, including, without limitation, the “Related Parties’ Business Records” (as defined below).      (d) For purposes hereof “Intellectual Property” shall mean all ideas, inventions, discoveries, processes, designs, methods, substances, articles, computer programs, and improvements (including, without limitation, enhancements to, or further interpretation or processing of, information that was in the possession of Employee prior to the date of this Agreement), whether or not patentable or copyrightable, which do not fall within the definition of Business Opportunities, and which are discovered, conceived, invented, created, or developed by Employee, alone or with others if such discovery, conception, invention, creation, or development (i) occurs in the course of Employee’s employment with the Related Parties, or (ii) occurs with the use of any of the Related Parties’ time, materials, assets or facilities (including assets sold or contributed to the Company by Employee), or (iii) in the opinion of at least a majority of the Managers of the Company, relates or pertains in any way to the Related Parties’ properties or assets acquired during the Employment Term, except to the extent that any third party possesses a valid and enforceable right to such Intellectual Property.      2. NonCompete Obligations During Employment Term.      (a) Except as set forth in subsection (b) hereof and in the Disclosure Schedule, Employee agrees that during the Employment Term: 2        (i) Employee will not, other than through the Related Parties, engage or participate in any manner, whether directly or indirectly through any family member or as an employee, employer, consultant, agent, principal, partner, more than two percent equity-holder, officer, director, licensor, lender, lessor or in any other individual or representative capacity, in any business or activity which is engaged in leasing, acquiring, exploring, producing, gathering or marketing hydrocarbons and related products; and      (ii) all investments made by Employee (whether in Employee’s own name or in the name of any family members or made by any Controlled Affiliates, as defined below), which relate to the lease, acquisition, exploration, production, gathering or marketing of hydrocarbons and related products shall be made solely through the Related Parties; and Employee will not (directly or indirectly through any family members), and will not permit any Controlled Affiliate to: (A) invest or otherwise participate alongside the Related Parties in any Business Opportunities, or (B) invest or otherwise participate in any business or activity relating to a Business Opportunity, regardless of whether any of the Related Parties ultimately participates in such business or activity. For purposes hereof, “Controlled Affiliates” are entities in which Employee and Employee’s family members collectively own, directly or indirectly, a majority of the equity or voting interests. The restrictions of this Section 2(a) do not apply to purely passive investments in public companies that do not exceed two percent of the outstanding equity interest in the applicable company.      (b) Employee represents that neither Employee nor his Controlled Affiliates or his immediate family members (i.e., his spouse and minor children living in Employee’s household) own any investments or interests which relate to the lease, acquisition, exploration, production, gathering or marketing of hydrocarbons and related products, other than Employee’s interest in the Company. This paragraph shall not apply to, and the Employee shall be entitled to hold and acquire purely passive investments in public companies in the energy industry provided such investments do not exceed two percent of the outstanding equity securities of any company.      3. Confidentiality Obligations.      (a) Employee hereby acknowledges that all trade secrets and confidential or proprietary information of the Related Parties (collectively referred to herein as “Confidential Information”) constitute valuable, special and unique assets of the Related Parties’ business, and that access to and knowledge of such Confidential Information is essential to the performance of Employee’s duties. Employee agrees that during the Employment Term and during the eighteen month period following the date of termination of Employee’s employment (the “Termination Date”), Employee will hold the Confidential Information in strict confidence and will not publish, disseminate or otherwise disclose, directly or indirectly, to any person other than the Related Parties and their respective officers, directors and employees, any Confidential Information or use any Confidential Information for Employee’s own personal benefit or for the benefit of anyone other than the Related Parties. The Company agrees to provide Confidential Information to Employee in exchange for Employee’s agreement to keep such Confidential Information, and any Confidential Information to which Employee has already become privy, in strict confidence as provided in this Agreement. 3        (b) For purposes of this Section 3, it is agreed that Confidential Information includes, without limitation, any information heretofore or hereafter acquired, developed or used by any of the Related Parties relating to Business Opportunities or Intellectual Property or other geological, geophysical, economic, financial or management aspects of the business, operations, properties or prospects of the Related Parties whether oral or in written form, whether or not included in the Related Parties’ Business Records, but shall exclude any information which (A) is or has become part of common knowledge or understanding in the oil and gas industry or otherwise in the public domain (other than from disclosure by Employee in violation of this Agreement), (B) was rightfully in the possession of Employee, as shown by Employee’s records, prior to the date of this Agreement and which is not directly applicable to the business of the Company or any of its properties or assets, (C) is lawfully acquired by Employee after the Employment Term from any third party not bound by an obligation of confidence to the disclosing party; or (D) is independently developed by or for the Employee after the Employment Term without using the Confidential Information of the Related Parties; provided, however, that Employee shall provide to the Company copies of all information described in clause (B) to the extent reasonably requested by the Company; provided further, however, that this Section 3 shall not be applicable to the extent (1) Employee is required to testify in a judicial or regulatory proceeding pursuant to the order of a judge or administrative law judge after Employee requests that such Confidential Information be preserved or (2) Employee receives a valid and effective subpoena, interrogatory or other legally enforceable request for information in connection with a judicial process.      4. Obligations After Termination Date.      (a) The purpose of the provisions of Section 2 and this Section 4 are to protect the Company from unfair loss of goodwill and business advantage and to shield Employee from pressure to use or disclose Confidential Information or to trade on the goodwill belonging to the Company. Accordingly, during the Post-Termination Noncompete Term (as defined below), Employee will not engage or shareholder, officer, director, licensor, lender, lessor or in any other individual or representative capacity, in any business or activity which is engaged in leasing, acquiring, exploring, producing, gathering or marketing hydrocarbons and related products in an area that is within a ten (10) mile radius of the boundaries of, any mineral property interest of any of the Related Parties (including, without limitation, a mineral lease, overriding royalty interest, production payment, net profits interest, mineral fee interest, or option or right to acquire any of the foregoing, or an area of mutual interest as designated pursuant to contractual agreements between the Related Party and any third party) or any other property on which the Related Parties have, or are in the process of negotiating, an option, right, license, or authority to conduct or direct exploratory activities, such as three dimensional seismic acquisition or other seismic, geophysical and geochemical activities (but not including any preliminary geological mapping), as of the Termination Date; provided that, this Section 4 shall not preclude Employee from making personal investments in securities of oil and gas companies which are registered on a national stock exchange or on The Nasdaq Stock Market, if the aggregate amount owned by Employee and all family members and affiliates does not exceed 2% of such company’s outstanding securities.      (b) For purposes hereof, the “Post Termination Noncompete Term” is: 4        (i) the 18 month period following the Termination Date, if (A) Employee voluntarily resigned or otherwise voluntarily terminated his/her position as an officer or employee of the Related Parties, unless the Employee’s resignation follows the Related Parties’ reduction of Employee’s annual salary, (B) Employee’s employment by the Related Parties was terminated for Cause, or (C) Employee breached in any material respect any of the provisions of Sections 3, 4 or 5 hereof; or      (ii) in the event that (A) Employee’s services as an officer or employee are terminated by a Related Party other than for Cause or (B) Employee voluntarily resigned or otherwise voluntarily terminated his/her position following a reduction of Employee’s annual salary by a Related Party, and in either case, (C) Employee is not in breach in any material respect of any of the provisions of Section 3, 4 or 5 hereof, the period during which the Company makes Severance Payments (as defined below) to Employee, the length of which shall be determined by the Company at its discretion, but in no event to be longer than 18 months following the Termination Date.      (c) For purposes hereof, the term Severance Payments shall mean a monthly payment that is equal to the regular monthly salary that Employee was receiving from the Related Parties immediately before the Termination Date (which in no event shall be less than Employee’s regular monthly salary or monthly salary in effect immediately prior to the reduction that preceded Employee’s resignation, if applicable), and such Severance Payments shall be payable at the same times as Employee’s regular salary was paid immediately before the Termination Date.      (d) For purposes hereof, “Cause” means any of the following: (i) Employee’s conviction of, or plea of nolo contendere to, any felony or to any crime or offense causing substantial harm to the Company or its affiliates or involving acts of theft, fraud, embezzlement, moral turpitude or similar conduct; (ii) Employee’s repeated intoxication by alcohol or drugs during the performance of Employee’s duties in a manner that materially and adversely affects Employee’s performance of such duties; (iii) malfeasance in the conduct of Employee’s duties, including, but not limited to, (A) willful and intentional misuse or diversion of funds of the Company or its affiliates, (B) embezzlement, or (C) fraudulent or willful and material misrepresentations or concealments on any written reports submitted to the Company or its affiliates; (iv) Employee’s material violation of any provision of the Voting and Members Agreement of even date herewith among Employee, the Company and others that remains uncured for a period of 30 days after notice thereof; or (v) Employee’s material failure to perform the duties of Employee’s employment or engagement or material failure to follow or comply with the reasonable and lawful written directives of the managing Boards of the Company, in either case after Employee shall have been informed, in writing, of such material failure and given a period of not less than 60 days to remedy same.      (e) The Company shall not be obligated to make Severance Payments if Section 4(b)(ii) above applies; however, if the Company elects not to make such payments there shall be no Post Termination Noncompete Term under Section 4(b)(ii). If the Company does elect to make Severance Payments under Section 4(b)(ii), it must notify Employee of such decision no later than five business days after the Termination Date. Thereafter, the Company shall be entitled to cease making Severance Payments at any time and for any reason, but only upon at least 30 days advance written notice to Employee, at which time the Post Termination 5   Noncompete Term shall end. Employee acknowledges that any Severance Payments made to Employee under Section 4(b)(ii) above, as well as the Company’s agreement to provide Confidential Information to Employee, will constitute adequate consideration for Employee’s agreements set forth in Section 4(a) above.      (f) Employee will not, during the eighteen month period following the Termination Date, solicit, entice, persuade or induce, directly or indirectly, any employee (or person who within the preceding 90 days was an employee) of any of the Related Parties or any other person who is under contract with or rendering services to any of the Related Parties, to (i) terminate his or her employment by, or contractual relationship with, such person, (ii) refrain from extending or renewing the same (upon the same or new terms), (iii) refrain from rendering services to or for such person, (iv) become employed by or enter into contractual relations with any Persons other than such person, or (v) enter into a relationship with a competitor of any of the Related Parties.      5. Business Records.      (a) Employee agrees to promptly deliver to the Company, upon termination of Employee’s employment by the Related Parties, or at any other time when the Company so requests, all documents in existence on the Termination Date relating to the business of the Related Parties, including, without limitation: all geological and geophysical reports and related data such as maps, charts, logs, seismographs, seismic records and other reports and related data, calculations, summaries, memoranda and opinions relating to the foregoing, production records, electric logs, core data, pressure data, lease files, well files and records, land files, abstracts, title opinions, title or curative matters, contract files, notes, records, drawings, manuals, correspondence, financial and accounting information, customer lists, statistical data and compilations, patents, copyrights, trademarks, trade names, inventions, formulae, methods, processes, agreements, contracts, manuals or any other documents relating to the business of the Related Parties (collectively, the “Related Parties’ Business Records”), and all copies thereof and therefrom.      (b) Employee confirms that all of the Related Parties’ Business Records (and all copies thereof and therefrom) that are required to be delivered to the Company pursuant to this Section 5 constitute the exclusive property of the Company and the other Related Parties.      (c) The obligation of confidentiality set forth in Section 3 shall continue notwithstanding Employee’s delivery of any such documents to the Company.      (d) Notwithstanding the foregoing provisions of this Section 5 or any other provision of this Agreement, Employee shall be entitled to retain any written materials which, as shown by Employee’s records, were in Employee’s possession on or prior to the date hereof, subject to the Company’s right to receive a copy of such materials or, in lieu thereof, proof that such materials were in existence on the date hereof.      (e) The provisions of this Section 5 shall continue in effect notwithstanding termination of Employee’s employment for any reason. 6        6. Miscellaneous.      (a) The invalidity or non-enforceability of any provision of this Agreement in any respect shall not affect the validity or enforceability of this Agreement in any other respect or of any other provision of this Agreement. In the event that any provision of this Agreement shall be held invalid or unenforceable by a court of competent jurisdiction by reason of the geographic or business scope or the duration thereof, such invalidity or unenforceability shall attach only to the scope or duration of such provision and shall not affect or render invalid or unenforceable any other provision of this Agreement, and, to the fullest extent permitted by law, this Agreement shall be construed as if the geographic or business scope or the duration of such provision had been more narrowly drafted so as not to be invalid or unenforceable.      (b) Employee acknowledges that the Company’s remedy at law for any breach of the provisions of this Agreement is and will be insufficient and inadequate and that the Company shall be entitled to equitable relief, including by way of temporary and permanent injunction, in addition to any remedies the Company may have at law.      (c) The representations and covenants contained in this Agreement on the part of Employee will be construed as ancillary to and independent of any other agreement between the Company and Employee, and, except as set forth in this Agreement, the existence of any claim or cause of action of Employee against the Company or any of the other Related Parties or any officer, director, or shareholder of the Company or any of the other Related Parties, whether predicated on Employee’s employment or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants of Employee contained in this Agreement. In addition, the provisions of this Agreement shall continue to be binding upon Employee in accordance with their terms, notwithstanding the termination of Employee’s employment for any reason.      (d) The parties to this Agreement agree that the limitations contained in Section 4 with respect to time, geographical area, and scope of activity are reasonable. However, if any court shall determine that the time, geographical area, or scope of activity of any restriction contained in Section 4 is unenforceable, it is the intention of the parties that such restrictive covenant set forth herein shall not thereby be terminated but shall be deemed amended to the extent required to render it valid and enforceable.      (e) All notices or other communications required or permitted to be given under this Agreement shall be in writing and shall be duly given if personally delivered or on the third day after being sent postage pre-paid by certified or registered mail, return receipt requested or by telecopy as follows: (a) if addressed to Employee, at the address or telecopy number furnished to the Company by Employee, or (b) if addressed to the Company, at its principal place of business or at its telecopy number at such address, to the attention of the President. Either party may change its address or telecopy number set forth above by giving the other party notice of such change in accordance with the provisions of this Section 6(e). A notice shall be deemed given, if by personal delivery or expedited delivery service, on the date of such delivery to such address, if by certified mail, on the date of receipt, refusal or first attempted date of delivery if unclaimed, or if by telecopy, on the date of receipt of the transmission of such notice at such telecopy number. 7        (f) This Agreement may not be altered or amended except by a writing, duly executed by the party against whom such alteration or amendment is sought to be enforced.      (g) The parties agree that this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware (without regard to rules or principles of conflicts of law requiring the application of the law of another State).      (h) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.      (i) This Agreement may be executed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.      (j) This Agreement and the obligations of the parties hereunder shall be terminate if the Company ceases to conduct business as a result of the failure of Resolute Holdings, LLC to drawn upon the capital commitments of the “Purchasers” (as defined in the Operating Agreement of Resolute Holdings, LLC) and use the proceeds thereof to purchase material energy industry assets. in multiple counterparts as of the day and year first above written.             RESOLUTE HOLDINGS, LLC       By:           Nicholas J. Sutton, CEO                RESOLUTE NATURAL RESOURCES COMPANY       By:           Nicholas J. Sutton, CEO                EMPLOYEE: [name]                       8             Disclosure Schedule None. 9

Title: [OR] Owner occupied Home, Asked to leave Question:Pretty much all there is to it, it’s not a rental unit. The home owner lives in the house and I’m renting a room from them. We share living spaces and I pay fixed amount of “rent” each month and split electric. This was a completely verbal agreement as I’ve known this individual for a few years. Now the homeowner had asked me to move out because they would like to increase the rent for the room. They said another reason was that I just simply do not fit in well or get along with other people living there. I’m curious about what rights I’d have if anyone had any ideas. I understand that I most likely would be considered a “Lodger” and not a “Tennent” because it’s an owner occupied home. But I cannot find information specific to Oregon about the matter. Ideally I’d like to move out by the end of March or April but they have asked me to leave by the end of February. I cannot afford to move again until I’ve saved up money so Im trying to find out how much time I’d have if the owner served eviction papers or if that’s even required. I do not want to be thrown out on the street, I will lose my job and life will ultimately become much more difficult but I feel I have no other options other than digging down and fighting for the room to buy myself another month or two. Answer #1: They have given you sufficient notice to be out by the end of February. Yes, forcing her to evict you will buy you time, but it will cost you your ability to rent in the future. You do not want an eviction on your rental history.

Exhibit 10.16(c) EXECUTION VERSION AMENDED AND RESTATED EMPLOYMENT AGREEMENT April 25, 2008 This Amended and Restated Employment Agreement (“Agreement”), effective as of April 25, 2008 (the “Effective Date”), by and between PAUL J. MOONEY, currently residing at                                                   (the “Executive”) and Esmark Incorporated, a Delaware corporation (the “Company”). This Agreement supersedes and replaces that certain Amended and Restated Employment Agreement, dated July 17, 2007, between Wheeling-Pittsburgh Steel Corporation, a wholly-owned subsidiary of the Company (“WPSC”), and the Executive (the “Prior Agreement”). In consideration of the covenants and conditions herein contained and other good and valuable consideration, receipt of which is hereby acknowledged by each party, the parties hereby agree as follows: 1. EMPLOYMENT. The Company shall employ the Executive commencing on the Effective Date, and the Executive hereby accepts such employment, all upon the 2. DUTIES AND AUTHORITY. Executive shall serve as the Executive Vice President and Chief Financial Officer of the Company and ultimate parent of the Company, the Chief Financial Officer of Wheeling-Pittsburgh Corporation (“WPC”) and the Chief Financial Officer of WPSC, and report to the President of the ultimate parent of the Company, with those authorities, duties and responsibilities customary to that position and such other authorities, duties and responsibilities as the Board of Directors of the ultimate parent of the Company (the “Board”) may reasonably assign the Executive from time to time. The Executive shall use his best efforts, including the highest standards of professional competence and integrity, and shall devote substantially all of his business time and effort, in and to his employment hereunder, and shall not engage in any other business activity which would conflict with the rendition of his services hereunder, except that the Executive may hold directorships or related positions in charitable, educational or not-for-profit organizations, or directorships in business organizations if approved by the Board, and make passive investments, which do not unreasonably interfere with the Executive’s day-to-day acquittal of his responsibilities to the Company and its Affiliates. 3. TERM. (a) GENERAL. This Agreement shall have effect as of the Effective Date, and shall remain in effect until the first anniversary of the Effective Date, subject to earlier termination under Section 5 or extension as described below. The period from the Effective Date until this Agreement shall have expired in accordance with this Section 3 or been terminated in accordance with Section 5, Section 6 or Section 7 is hereafter referred to as “the term hereof” or “the term of this Agreement.” The term hereof shall be extended automatically for an additional year as of the first anniversary of the Effective Date and as of each subsequent annual anniversary of such date (each such extension date is referred to herein as a “Renewal Date”) unless at least one hundred and twenty (120) days prior to any such Renewal Date either party shall have given notice to the other party that the term of this Agreement shall not be so extended. (b) SURVIVAL OF CERTAIN PROVISIONS. Notwithstanding anything else herein contained, the provisions of Section 4 through and including Section 10 hereof shall survive the termination of this Agreement and of the Executive’s employment hereunder. 4. COMPENSATION. In return for his services hereunder, the Executive shall be entitled to (i) the Salary as specified below, (ii) bonuses, to the extent provided below, (iii) long-term incentives, and (iv) certain fringe benefits, to the extent provided below. (a) SALARY. At the Effective Date, the Company shall pay the Executive, in accordance with the Company’s customary payroll practices for executives, salary at an annual rate of $340,000, subject to annual review and upward adjustment at the determination of the Board or Compensation Committee of the Board (the “Compensation Committee”) (as so adjusted, the Executive’s “Salary”). (b) SIGNING BONUS. The Executive acknowledges his receipt of a $200,000 signing bonus (“Signing Bonus”) from the Company prior to the date hereof, in consideration for Executive’s execution of this Agreement and employment hereunder. (c) RETENTION BONUS. Within ten (10) business days after each month end from the Effective Date through June 30, 2008 (the “Retention Date”), the Company shall pay to Executive $86,667 (the “Retention Bonuses”); provided, however, that no such Retention Bonus shall be payable in any month in which or at any time thereafter in the event that Executive (i) is terminated for Conviction or (ii) terminates this Agreement and his employment hereunder pursuant to Section 5(e)(ii). (d) BONUS. In addition to Salary and at the discretion of the Board or Compensation Committee, the Executive may participate in the Company’s existing short-term incentive plan for executives, as the same may be amended from time to time by the Board or Compensation Committee. The Board may also award other bonuses from time to time in its discretion. (e) LONG-TERM INCENTIVES. The Executive shall be awarded such equity incentive awards as the Board or the Compensation Committee shall determine from time to time in their discretion, including without limitation, restricted stock unit awards. The Executive may be eligible to participate in other long-term incentive plans and programs as the Board or the Compensation Committee may deem appropriate from time to time. Notwithstanding anything contained herein to the contrary, all of Executive’s unvested equity and other long-term incentive awards of the Company shall fully vest on the date of a Trigger Event. (f) RESTRICTED STOCK UNITS. All restricted stock unit awards granted to Executive as of the Effective Date shall continue to vest as scheduled, and to the extent not vested as of the Retention Date, then the Company shall cause such restricted stock units to then vest provided that the Executive is employed by the Company as of the Retention Date. The Company shall cause one-third (1/3) of any restricted stock units granted to Executive in 2008 to vest on the Retention Date.   2 (g) FRINGE BENEFITS. The Executive will be eligible for and entitled to participate in other benefits maintained by the Company and/or its subsidiaries for its senior executive officers, as such benefits may be modified from time to time for all such employees, such as its medical, dental, 401(k), defined contribution pension plan, accident, disability, and life insurance benefits, on a basis not less favorable than that applicable to other comparable executives of the Company and/or its subsidiaries. Any such participation shall be subject to (i) the terms of the applicable plan documents, (ii) generally applicable policies of the Company and/or its subsidiaries and (iii) the discretion of the Board or any administrative or other committee provided for in or contemplated by such plan, exercised in accordance with applicable law. The Executive will also be entitled to the following: (i) Subject to the Company’s standard policies, four (4) weeks of vacation per calendar year (or any longer period as shall be provided under the Company’s and/or its subsidiaries’ general vacation policies), without reduction in Salary, to be taken at such times and intervals as shall be determined by the Executive subject to the reasonable business needs of the Company and to Company policies as in effect from time. (ii) Appropriate office space, administrative support, e.g., secretarial assistance, and such other facilities and services as are suitable to the Executive’s position and adequate for the performance of the Executive’s duties. (iii) Payment or reimbursement of the cost, not covered by health insurance, of one comprehensive physical examination during each year during the term of this Agreement. Executive acknowledges that he will have no right to cash compensation in lieu of any of the specific foregoing fringe benefits except with respect to vacation pay, and then only to the extent, if any, allowed by the Company’s vacation pay policies as in effect from time to time. (h) EXPENSES. The Executive will be entitled to reimbursement of all reasonable expenses, in accordance with the Company’s policy as in effect from time to time and on a basis not less favorable than that applicable to other executives of the Company, including, without limitation, telephone, travel and entertainment expenses incurred by the Executive in connection with the business of the Company, subject to such reasonable substantiation and documentation as may be specified by the Company. (i) INDEMNIFICATION. The Company shall, and the Company shall use its best efforts to cause any subsidiaries or Affiliates it may now or hereafter have to, indemnify the Executive to the maximum extent permitted by law and regulation in connection with any liability, expense or damage which the Executive incurs as a result of the Executive’s employment and positions with the Company and its current or future subsidiaries as contemplated by this Agreement, provided that the Executive shall not be indemnified with respect to any matter as to which he shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interest of the Company and its subsidiaries. The Company, on behalf of itself and its current and future parent corporations and subsidiaries, hereby confirms that the occupancy of all offices and positions which in the future are or were occupied or held by the Executive in connection with his   3 employment under this Agreement have been so occupied or held at the request of and for the benefit of the Company and its parent corporations and subsidiaries for purposes of the Executive’s entitlement to indemnification under applicable provisions of the respective articles of organization and/or other similar documents of the Company and its parent corporations and subsidiaries. Expenses incurred by the Executive in defending a claim, action, suit, investigation or proceeding shall be paid by the Company in advance of the final disposition thereof upon the receipt by the Company of an undertaking by the Executive to to be indemnified hereunder. The foregoing rights are not exclusive and shall not limit any rights accruing to the Executive under any other agreement or contract or under applicable law. (j) PARACHUTE PAYMENT TAXES. Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit under this Agreement or any other agreement or arrangement of the Company received or to be received by the Executive in connection with a Trigger Event or the termination of the Executive’s employment (all such payments and benefits, the “Total Payments”) is determined to be subject (in whole or part) to the excise tax imposed by Section 4999 of the Code (together with any interest or penalties imposed with respect to such excise tax, the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including without limitation any income taxes and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount equal to the Excise Tax (and, for the avoidance of doubt, the amount of the Total Payments). All determinations required to be made under this Section 4(j), including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s accountants or such other certified public accounting firm reasonably acceptable to the Company as may be designated by the Executive which shall provide detailed supporting calculations both to the Company and the Executive. No Gross-Up Payment shall be made before six (6) months and one (1) day after the Executive’s termination of employment or if the Executive is a Specified Employee as defined in Section 8(f) later than the end of the Executive’s taxable year next following the taxable year in which the Executive paid the Excise Tax. (k) EXECUTIVE ACKNOWLEDGMENT. Executive acknowledges and agrees that the Signing Bonus and the Retention Bonuses are in lieu of any payments (other than payments under the Company’s or its subsidiaries’ Supplemental Executive Retirement Plan (“SERP”) and for COBRA Continuation) that would be required to be made by the WPSC or its Affiliates as a result of any Change of Control event that occurred on or prior to the Effective Date pursuant to the Prior Agreement.   4 5. TERMINATION OF EMPLOYMENT ON OR PRIOR TO THE RETENTION DATE AND EFFECTS THEREOF. This Agreement and the Executive’s employment under this Agreement may be terminated on or prior to the Retention Date only in the following circumstances. The Company shall have only such obligations to the Executive (or in the event of his death, his estate), if any, as are specified below under the applicable termination provision. (a) UPON DEATH. In the event of the Executive’s death on or prior to the Retention Date, the Executive’s employment hereunder shall immediately and automatically terminate and Executive (or his estate) shall be entitled to the following: (i) Executive’s then Salary earned or accrued but unpaid through the date of termination, payable in accordance with the Company’s customary payroll practices; (ii) any unpaid Retention Bonuses, payable in a single lump sum within thirty (30) days of termination; (iii) the Company shall cause all of the Executive’s equity and other long-term incentive awards to fully vest and cause any stock options or stock appreciation rights held by the Executive at the time of termination to remain exercisable for ninety (90) days following such termination; and (iv) if at the time immediately prior to Executive’s termination the Executive (and his eligible dependents) was eligible to elect continued health coverage under Sections 601-607 of ERISA (“COBRA Continuation”) then, for a period of eighteen (18) months from such timely election, the Company shall also pay that share of the premium cost of Executive’s COBRA Continuation (and that of his eligible dependents’ electing COBRA Continuation) in the Company’s group health plan as it pays for active employees of the Company and their dependents generally; and (v) Executive’s SERP contribution earned or accrued but unpaid through the date of termination. The payments and benefits listed in subparagraphs (i) through and including (v) of this Section 5(a) shall be collectively referred to herein as the “Retention Benefits”. (b) AS A RESULT OF DISABILITY. In the event that the Executive becomes disabled within the meaning of the Company’s then applicable long-term disability plan on or prior to the Retention Date, the Company may terminate the Executive’s employment upon notice to the Executive. In the event of termination for disability on or prior to the Retention Date, the Executive shall be entitled to the Retention Benefits. (c) BY THE COMPANY FOR CONVICTION. The Company may terminate the Executive’s employment for Conviction (as defined in Section 8(a)(i) below) at any time on or prior to the Retention Date upon notice to the Executive. In the event of termination for Conviction, the Executive shall not be entitled to the Retention Benefits but shall receive only his then Salary earned or accrued through the date of termination.   5 (d) BY THE COMPANY OTHER THAN FOR CONVICTION. The Company may terminate Executive’s employment other than for Conviction upon thirty (30) days notice to the Executive (or at the Company’s option immediately with thirty (30) days continued compensation, including then Salary and benefits, in lieu of such notice). In the event of such termination on or prior to the Retention Date, Executive (or in the event of his death following termination, his estate) shall be entitled to the Retention Benefits, subject to Section 7. (e) BY THE EXECUTIVE. Executive may terminate his employment and this Agreement for any or no reason whatsoever on or prior to the Retention Date, with thirty (30) days’ written notice to the Company of such resignation. (i) GOOD REASON. Subject to Section 7(b), in the event that the Executive (i) gives the Company thirty (30) days’ advance written notice that Executive is terminating his employment for Good Reason, (ii) Executive has given such notice within sixty (60) days of having Good Reason, and (iii) the Company has not cured the event of Good Reason for which Executive provided notice within thirty (30) days from receipt of such notice, then on the effective date of his resignation he shall be entitled to receive the Retention Benefits. (ii) RESIGNATION WITHOUT GOOD REASON. In the event that Executive resigns other than in the circumstances described in subparagraph (i) above or in Section 7(b) on or prior to the Retention Date and gives the Company thirty (30) day’s advance written notice of such resignation, the Executive shall not be entitled to the Retention Benefits but shall receive only his then Salary earned or accrued through the date of termination. The Company may at its sole option waive the requirement of advance notice and decline to accept the Executive’s service for any period following its receipt of notice, but in that event, Executive shall be entitled to continued compensation in accordance with Section 4 for the entirety of the otherwise applicable notice period (and will be deemed an employee for such period). 6. TERMINATION FOLLOWING THE RETENTION DATE AND EFFECTS THEREOF. This Agreement and the Executive’s employment under this Agreement may be terminated following the Retention Date only in the following circumstances. The Company shall have only such obligations to the Executive (or in the event of his death, his estate), if any, as are specified below under the applicable termination provision. (a) UPON DEATH. In the event of the Executive’s death following the Retention Date but during the term hereof, the Executive’s employment hereunder shall immediately and automatically terminate and the Executive (or his estate) shall be entitled to a payment from the Company, equal to: (A) his then Salary earned but unpaid through the end of the month in which termination occurred, payable in a single lump sum within thirty (30) days of termination, plus (B) the dollar equivalent of accrued vacation and unreimbursed expenses through the end of the month in which termination occurred, payable in a single lump sum within thirty (30) days of termination, plus (C) any earned but unpaid bonuses, payable in a single lump sum within thirty (30) days of termination, plus (D) a pro-rata (based on time employed during the year) annual bonus, in an amount determined under the terms of the applicable Company bonus plan, payable at the same time as executive bonuses are paid generally under the applicable Company bonus   6 plan, but in no event later than March 15 of the year following the year in which termination occurred and plus (E) Executive’s SERP contribution earned and accrued but unpaid through the date of termination. Additionally, the Company shall cause all of the Executive’s equity and other long-term incentive awards to fully vest, cause any stock options or stock appreciation rights held by the Executive at the time of death to remain exercisable for six (6) months following such death and provide COBRA Continuation in accordance with Section 6(d)(v) below, notwithstanding Section 6(d)(v) for a period of thirty-six (36) months. following the Retention Date but during the term hereof within the meaning of the Company’s and/or its subsidiaries’ then applicable long-term disability plan, the Company may terminate the Executive’s employment upon notice to the Executive. In the event of termination for disability, the Executive shall be entitled to a payment from Company, equal to (A) his then Salary earned but unpaid through the end of the month in which termination occurred, payable in a as executive bonuses are paid generally under the applicable Company bonus plan, but in no event later than March 15 of the year following the year in which termination occurred and plus (E) Executive’s SERP contribution earned and Executive at the time of termination to remain exercisable for ninety (90) days following such termination and provide COBRA Continuation in accordance with Section 6(d)(v) below. (c) BY THE COMPANY FOR CAUSE. The Company may terminate the Executive’s employment for Cause (as defined in Section 8(a) below) at any time following the Retention Date but during the term hereof upon notice to the Executive setting forth in reasonable detail the nature of such Cause. In the event of the Executive’s termination for Cause following the Retention Date but during the term hereof, the Executive shall be entitled to his then Salary earned but single lump sum within thirty (30) days of termination. (d) BY THE COMPANY OTHER THAN FOR CAUSE. The Company may terminate Executive’s employment other than for Cause following the Retention Date upon thirty (30) days notice to the Executive (or at its option immediately with thirty (30) days continued compensation, including then Salary and benefits, in lieu of such notice). In the event of such termination following the Retention Date but during the term hereof, other than as provided in Section 7(a), Executive (or in the event of his death following termination, his estate) shall be entitled only to the additional amounts and benefits described in subparagraphs (i) through and including (vi) below.   7 (i) Unpaid Base Salary. The Company shall pay to Executive his then Salary earned but unpaid through the end of the month in which termination occurred, payable in a single lump sum within thirty (30) days of termination. (ii) Accrued Vacation, Expenses and Bonus Payments. The Executive shall be entitled to a payment from the Company equal to (i) the dollar equivalent of accrued vacation and unreimbursed expenses through the end of the month in which termination occurred, payable in a single lump sum within thirty (30) days of termination, plus (ii) any earned but unpaid bonuses, payable in a single lump sum within thirty (30) days of termination, plus (iii) the amount equal to one hundred percent (100%) of the Executive’s annual target bonus for the year of termination, payable in a single lump sum at the same time as executive bonuses are paid generally under the applicable Company bonus plan, but in no event later than March 15 of the year following the year in which termination occurs. (iii) Salary Continuation. The Company shall continue to make Salary payments (in the amount of the Executive’s Salary immediately before the termination) to the Executive for one (1) year from the date of termination in accordance with the Company’s customary payroll practices prior to such termination; provided that if the Executive is a Specified Employee, Salary payments due during the first six (6) months shall be accumulated and paid in a lump sum six (6) months and one (1) day after the termination. (iv) Vesting of Long-Term Incentives and Stock Options/Rights. The Company shall cause (i) all of the Executive’s equity and other long-term incentive awards to fully vest and (ii) any stock options or stock appreciation rights held by the following such termination. (v) Health Care Continuation. If at Executive’s termination of employment by the Company without Cause the Executive is eligible to and timely elects continued health coverage under Sections 601-607 of ERISA (“COBRA Continuation”) then, for a period of eighteen (18) months from such election, the Company shall also pay that share of the premium cost of Executive’s COBRA Continuation (and that of his eligible dependents also electing COBRA Continuation) in the Company’s or its subsidiaries’ group health plan as it pays for active employees of the Company and their dependents generally. (vi) Executive’s SERP contribution earned and accrued but unpaid through the date of termination. for any or no reason whatsoever at any time following the Retention Date but during the term hereof. (i) GOOD REASON. Except as provided in Section 7(b), in the event the Executive (i) gives the Company such ninety (90) days’ advance written notice that the   8 Executive is terminating his employment for Good Reason, (ii) Executive has given such notice within sixty (60) days of having Good Reason and (iii) the Company has not cured the event of Good Reason for which Executive provided notice within thirty (30) days from receipt of such notice, then on the effective date of his resignation he shall be entitled to receive the amounts and benefits described in Section 6(d)(i) through and including Section 6(d)(vi). (ii) RESIGNATION WITHOUT GOOD REASON. In the event the Executive resigns at any time following the Retention Date but during the term hereof other than in the circumstances described in subparagraph (i) above and Section 7(b), and gives the Company sixty (60) days’ advance written notice of such resignation, the Executive shall be entitled to his then Salary and SERP contribution earned but single lump sum within thirty (30) days of termination. The Company may at its sole option waive the requirement of advance notice and decline to accept the Executive’s service for any period following its receipt of notice, but in that event, Executive shall be entitled to continued compensation in accordance with be deemed to be an employee for such period). 7. EFFECT OF A TRIGGER EVENT. (a) TERMINATION BY THE COMPANY AFTER A TRIGGER EVENT. The Company may terminate the Executive’s employment (i) other than for Conviction on or prior to the Retention Date or (ii) other than for Cause following the Retention Date but during the term hereof upon thirty (30) days notice to the Executive (or at its option immediately with thirty (30) days continued compensation, including then Salary and benefits, in lieu of such notice) within one (1) year after a Trigger Event. In the event of such termination within one year after a Trigger Event, be entitled only to the additional amounts and benefits described in subparagraphs (i) through and including (v) below: payable in a single lump sum within thirty (30) days of termination; (ii) Payment in Lieu of Salary and Bonus. The Executive shall be entitled to receive a payment from the Company, equal to (A) two (2) times his Salary at the highest annualized rate in effect during the one (1) year immediately preceding the date of the Trigger Event, payable in a single lump sum fifteen (15) days after the termination or, if the Executive is a Specified Employee, six (6) months and one (1) day after the termination, plus (B) two (2) times his maximum annual bonus, payable in a single lump sum fifteen (15) days after the termination or, if the Executive is a Specified Employee, six (6) months and one (1) day after the termination, plus (C) any earned but unpaid bonuses, payable (iii) Accrued Vacation and Expenses. The Executive shall be entitled to a payment from the Company equal to the dollar equivalent of accrued vacation and unreimbursed expenses through the end of the month in which termination   9 (A) cause all equity and other long-term incentive awards held by Executive to fully vest as of the time of termination and (B) provide COBRA Continuation in accordance with Section 6(d)(v) above; and (v) SERP Contribution. Executive’s SERP contribution earned and accrued but unpaid through the date of termination. Anything in this Agreement to the contrary notwithstanding, if the Executive’s employment with the Company is terminated other than for Cause prior to the date on which a Trigger Event occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Trigger Event or (ii) otherwise arose in connection with or anticipation of a Trigger Event then for all purposes of this Agreement the date of the Trigger Event shall mean the date immediately prior to the date of such termination. (b) TERMINATION BY EXECUTIVE AFTER A TRIGGER EVENT. (i) Executive may terminate his employment by giving written notice of termination to the Company at any time during the thirty (30) day period immediately following the six (6) month anniversary of the date of a Change of Control and be entitled to receive the amounts and benefits described in Section 7(a) above. (ii) Also, in the event that the Executive (A) gives the Company ninety (90) days’ advance written notice that Executive is terminating his employment for Good Reason, (B) Executive has given such notice within sixty (60) days of having Good Reason, (C) the Company has not cured the event of Good Reason for which Executive provide notice within thirty (30) days from receipt of such notice, and (D) the notice is provided within the first twelve (12) months after a Trigger Event, then on the effective date of his resignation Executive shall be entitled to receive the amounts and benefits described in Section 7(a) above. (iii) Anything in this Agreement to the contrary notwithstanding, if the circumstances constituting Good Reason occur prior to the date on which a Trigger Event occurs, and it is reasonably demonstrated that such circumstances occurred at the request of a third party who has taken steps reasonably calculated to effect a Trigger Event or otherwise arose in connection with or anticipation of a Trigger Event, then for all purposes of this Agreement the date of the Trigger Event shall mean the date immediately prior to the occurrence of such circumstances. 8. DEFINITIONS. For the purposes of Section 5, Section 6 and Section 7: (a) “Cause” means the Executive has: (i) been convicted of, or has pled guilty or nolo contendere to any felony (a “Conviction”), or any misdemeanor involving moral turpitude under the laws of the United States or any state or political subdivisions thereof; (ii) committed a   10 breach of duty of loyalty which a third-party neutral arbitrator determines is materially detrimental to the Company; (iii) materially violated any provision of Section 9 of this Agreement; (iv) willfully failed to substantially perform or adhere to explicitly stated duties or guidelines of employment or to follow the directives of the Board (which are not unlawful to perform or to adhere to or follow and which are within the scope of Executive’s duties) following a written warning that if such failure continues it will be deemed a basis for a “For Cause” dismissal; or (v) acted with willful misconduct in the performance of the Executive’s duties. No act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company. Following a Change of Control, subsection (iv) above shall be deleted from this definition of “Cause.” (b) “Change of Control” means the occurrence of any of the following: (i) a merger or consolidation of the Company with or into another person or the sale, transfer, or other disposition of all or substantially all of the Company’s assets to one or more other persons in a single transaction or series of related transactions, unless securities possessing more than 50% of the total combined voting power of the survivor’s or acquirer’s outstanding securities (or the securities of any parent thereof) are held by a person or persons who held securities possessing more than 50% of the total combined voting power of the Company immediately prior to that transaction; (ii) any person or group of persons (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended and in effect from time to time), other than the Company or an Affiliate, directly or indirectly acquires beneficial ownership (determined pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under the said Exchange Act) of securities possessing more than 50% of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s stockholders; (iii) over a period of thirty-six (36) consecutive months or less from the Effective Date, there is a change in the composition of the Board such that a majority of the members of the Board (rounded up to the next whole number, if a fraction) ceases to be composed of individuals who either (1) have been members of the Board continuously since the beginning of the thirty-six (36) month period referred to above or (2) have been elected or nominated for election as Board members during such period by at least a majority of the members Board described in the preceding clause (1) who were still in office at the time that election or nomination was approved by the Board, provided, however, that a Change of Control shall be deemed to have occurred in any event if, by reason of one or more actual or threatened proxy contests for the election of directors or otherwise, a majority of the Board shall consist of individuals, other than directors referred to in clause (1) above, whose election as members of the Board occur within such thirty-six (36) month period at the request or on behalf of the same person or group of persons (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended and in effect from time to time), (iv) funds managed by the Company’s largest shareholder, Franklin Mutual Advisors LLC (“Franklin”), increase their collective ownership of outstanding capital stock of the Company to greater than seventy percent (70%), (v) funds managed by Franklin reduce their collective ownership of outstanding capital stock of the Company to twenty-five percent (25%) or less and any one or more acquirers of stock from Franklin, acting individually or as a group, acquire twenty percent (20%) or more of the outstanding stock of the Company, (vi) a change of the majority of the Board’s composition in a contested election, or (vii) the liquidation or dissolution of the Company (other than a dissolution occurring upon a merger or consolidation thereof).   11 (c) “Good Reason” means (i) the assignment to the Executive of any duties inconsistent with the Executive’s status as Executive Vice President and Chief Financial Officer of the Company and ultimate parent of the Company, Chief Financial Officer of WPC and Chief Financial Officer of WPSC, or a meaningful alteration, adverse to the Executive, in the nature or status of the Executive’s responsibilities (including reporting responsibilities); (ii) permanent relocation of his principal place of employment to a location more than seventy-five (75) miles distant from his principal place of employment as of the Effective Date; provided that a permanent relocation of Executive’s principal place of employment to Wexford, PA shall not constitute an event of Good Reason pursuant to this clause (ii); (iii) a reduction by the Company in the may be increased from time to time except for across-the-board salary reductions similarly affecting all senior executives of the Company and all senior executives of any person in control of the Company; (iv) the failure by the Company and/or its subsidiaries to continue in effect any compensation plan in which the Executive participates which is material to the Executive’s total compensation, including without limitation equity compensation plans and programs, or the failure by the Company to continue the Executive’s participation therein on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants; (v) the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company’s or its subsidiaries’ pension, life insurance, medical, health and accident, or disability plans at any time subsequent to the Effective Date, or the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at any time subsequent to the Effective Date, (vi) a failure of the Company to obtain the assumption in writing of its obligations under this Agreement by any successor to all or substantially all of the stock or assets of the Company within fifteen (15) days after a merger, consolidation, sale or similar transaction or (vii) a material breach by the Company of this Agreement. Notwithstanding the foregoing, the events described in (iv) and (v) above shall not constitute “Good Reason” where they are the direct result of the elimination or modification of benefit plans or arrangements by the Company with respect to employees generally. (d) “Downstream Operations Event” means the occurrence of either of the following: (i) a merger or consolidation of Esmark Steel Service Group, Inc., a Delaware corporation (“ESSG”), with or into another person or the sale, transfer, or other disposition of all or substantially all of ESSG’s assets to Company immediately prior to that transaction; or (ii) any person or group of pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under said voting power of ESSG’s outstanding securities. (e) “Mill Operations Event” means the occurrence of either of the following: (i) a merger or consolidation of the WPC or WPSC with or into another person or the sale, transfer, or   12 other disposition of all or substantially all of the WPC’s or WPSC’s assets to voting power of WPC’s or WPSC’s outstanding securities. (f) “Specified Employee” means a specified employee as defined in Section 409A of the Code and applicable regulations as of the date of the Executive’s termination. (g) “Trigger Event” means the occurrence of any of a Change of Control, Mill Operations Event or a Downstream Operations Event. 9. PROVISIONS RELATING TO EXECUTIVE CONDUCT AND TERMINATION OF EMPLOYMENT. (a) CESSATION OF AUTHORITY ON TERMINATION. Immediately upon the Executive terminating or being terminated from his position with the Company for any reason or no reason, the Executive will stop serving the functions of the terminated or expired position, or any other positions with any Affiliate, and shall be without any of the authority of or responsible for any position. On request of the Board, at any time following the Executive’s termination of employment for any reason or no reason, the Executive shall resign from the Board if then a member and the board of directors or any other officership or directorship of the Company or any subsidiary or Affiliate of Company. (b) NO OBLIGATION TO MITIGATE. The Executive shall not be required to seek other employment or income to reduce any amounts payable to the Executive by the Company under Section 5, Section 6 or Section 7. Further, the amount of any payment or benefit provided for by Section 5, Section 6 or Section 7 shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, retirement benefits, by offset against any amounts claimed to be owed by the Executive to the Company, or otherwise. (c) RELEASE OF CLAIMS. Notwithstanding the foregoing, the Executive shall not be entitled to any payments under Section 5, Section 6 or Section 7 unless within twenty-one (21) days following his termination he shall have executed and delivered to the Company a general release of claims in the form attached hereto as Exhibit A. (d) SECTION 409A. Notwithstanding the foregoing provisions of this Agreement to the contrary, if the Company determines that any amounts to be paid to the Executive under this Agreement are subject to Section 409A of the Code, then the Company shall in good faith adjust the form and the timing of such payments as it reasonably determines to be necessary or advisable to be in compliance with Section 409A. If such a payment must be delayed to comply with Section 409A, then the deferred payments shall be paid at the earliest practicable date permitted by Section 409A.   13 (e) CONFIDENTIALITY. The Executive recognizes and acknowledges that certain assets of the Company constitute Confidential Information. The term “Confidential Information” as used in this Agreement shall mean all information which is known only to the Executive or the Company, other employees or others in a confidential relationship with the Company and any persons controlling, controlled by or under common control with the Company (each, an “Affiliate”) and their respective employees, officers and partners), and relating to the Company’s or any Affiliate’s business (including, without limitation, information regarding clients, customers, pricing policies, methods of operation, proprietary computer programs, sales, products, profits, costs, markets, key personnel, formulae, product applications, technical processes, and trade secrets), as such information may exist from time to time, which the Executive acquired or obtained by virtue of work performed for the Company and its Affiliates, or which the Executive may acquire or may have acquired knowledge of during the performance of said work. The Executive agrees that at all times during his employment and thereafter (including periods after the term of this Agreement), he will keep and maintain all Confidential Information and all of the affairs of the Company and its Affiliates confidential, and will not, except (i) as necessary for the performance of his responsibilities hereunder or (ii) as required by judicial process and after three (3) days prior notice to the Company unless required earlier by a court order or a legal requirement, disclose to any person for any reason or purpose whatsoever, directly or indirectly, all or any part of the Confidential Information of the Company and its Affiliates. The Executive is not bound by the restrictions in this paragraph with respect to any information that becomes public other than as a consequence of the breach by the Executive of his confidentiality obligations hereunder or is disclosed without an obligation of confidentiality. The Executive can disclose all information to his personal advisors subject to becoming liable for any violation by them of Executive’s confidentiality obligations. (f) RETURN OF MATERIALS. The Executive agrees that on the termination of his employment, however such termination may occur, the Executive will promptly return to the Company all materials and other property from time to time held by the Executive and proprietary to the Company and its Affiliates including without limitation any documents incorporating, reflecting or reproducing in whole or in part any Confidential Information, credit cards, and the like. (g) NON-SOLICITATION AND NON-COMPETE. The Executive agrees that, (i) except as agreed by the Board, during the term hereof, the Executive will not, directly or indirectly, either as a principal, agent, employee, employer, stockholder, co-partner or in any other capacity whatsoever, engage in any outside activity, whether or not competitive with the business of the Company, that could foreseeably give rise to a conflict of interest or otherwise interfere with his duties and obligations to the Company; (ii) during the term hereof and for twelve (12) months after the term, the Executive will not, directly or indirectly, either as a principal, agent, employee, employer, stockholder, co-partner or in any other capacity whatsoever, solicit, hire or attempt to hire, or assist others in soliciting, hiring or attempting to hire, any individual employed   14 by the Company at any time while the Executive was also so employed, or encourage any such individual to terminate his or her relationship with the Company; provided, however, that nothing in this Section 9(g) shall be deemed to prohibit Executive from: (A) making general solicitations of employment published in newspapers, trade journals or other publications of general circulation; or (B) employing individuals who have terminated their employment with the Company; (iii) during the term hereof and for twelve (12) months after the term, the engage in or undertake any planning for any activity which is competitive with the business of the Company, as conducted or under consideration at any time during his employment by the Company; provided that (A) an ownership interest by Executive of one percent (1%) or less in any outstanding equity securities of any company which is competitive with the business of the Company whose equity securities are listed on a national securities exchange, national or capital markets or traded in the over-the-counter bulletin board or (B) Executive’s employment by or otherwise association with a business or entity of which a subsidiary, division, segment, unit, etc. is in material direct competition with the Company or subsidiary of the Company but as to which such subsidiary, division, segment, unit, etc. the Executive has no direct or indirect responsibility or involvement, so long as the Executive does not breach the confidentiality obligations hereunder, shall not be prohibited and shall not constitute activity which is competitive with the business of the Company. (h) INJUNCTIVE RELIEF. The Executive acknowledges that a breach of any of the covenants contained in this Section 9 may result in material, irreparable injury to the Company for which there is no adequate remedy at law, that it shall not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat of breach, the Company shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction restraining the Executive from engaging in activities prohibited by this Section 9 or such other relief as may be required to specifically enforce any of the covenants in this Section 9. The Executive agrees and consents that injunctive relief may be sought in any state or federal court of record in the Commonwealth of Pennsylvania, or in the state and county in which a violation may occur or in any other court having jurisdiction, at the election of the Company; to the extent that the Company seeks a temporary restraining order (but not a preliminary or permanent injunction), the Executive agrees that a temporary restraining order may be obtained ex parte. The Executive agrees and submits to personal jurisdiction before each and every court designated above for that purpose. (i) BLUE-PENCILLING. The parties consider the covenants and restrictions contained in this Section 9 to be reasonable. However, if and when any such covenant or restriction is found to be void or unenforceable and would have been valid had some part of it been deleted or had its scope of application been modified, such covenant or restriction shall be deemed to have been applied with such modification as would be necessary and consistent with the intent of the parties to have made it valid, enforceable and effective.   15 (j) NONINTERFERENCE. In the event of any dispute under this Agreement or otherwise relating to the Executive’s relationship with the Company, any Affiliate of the Company, or their respective principals or management, whether or not during the term of this Agreement, the Executive agrees not to bring any legal proceeding or take any legal action to seek to enjoin or otherwise impede the purchase, sale, financing, refinancing, development, establishment or operation of any business venture or entity in which any of such persons or entities has any interest. 10. MISCELLANEOUS. (a) FREEDOM TO CONTRACT. The Executive represents that he is free to enter into this Agreement and carry out his obligations hereunder without any conflict with any prior agreements, and that he has not made and will not make any agreement in conflict with this Agreement. (b) ENTIRE AGREEMENT. This Agreement represents the entire and only understanding between the parties on the subject matter hereof and supersedes any other agreements or understandings between them on such subject matter. In the event of any inconsistency between this Agreement and any plan, policy or program of the Company or any agreement or instrument between the Company and the Executive with respect to the vesting of long-term incentive awards, including grants of restricted stock of the Company, the terms of this Agreement shall govern. (c) SPECIFIC ENFORCEMENT. The parties acknowledge and agree that the Executive’s breach of the provisions of Section 9 or Section 10 of this Agreement may cause irreparable harm to the Company, that the remedy of damages will not be adequate for the enforcement of such provisions, and that such provisions may be enforced by equitable relief, including injunctive relief, which relief shall be cumulative and in addition to any other relief to which the Company may be entitled. (d) BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the respective parties. Without the express written consent of the other party or parties, neither the Company nor the Executive may assign any duties or right or interest hereunder or right to receive any money hereunder and any such assignment shall be void; provided, however, that without the Executive’s consent the Company may assign its rights and obligations hereunder in their entirety to any successor to all or substantially all of its business, whether affected by merger or otherwise. The preceding sentence, however, shall not prevent the transfer of any right or interest to receive any money hereunder by the Executive by way of testamentary disposition or intestate succession. The Company shall require any successor or assign (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition or property or stock, liquidation or otherwise) to all or a significant portion of the assets of the Company, by agreement in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same no such succession had taken place. Regardless of whether such agreement is executed by a successor, this Agreement shall continue to be binding upon the Company and any successor and assign shall be deemed the “Company” for purposes of this Agreement.   16 (e) SEVERABILITY. In the event any provision of this Agreement shall be determined in any circumstances to be invalid or unenforceable, such determination shall not affect or impair any other provision of this Agreement or the enforcement of such provision in other appropriate circumstances. (f) NOTICES. All notices and other communications hereunder shall be in writing or by written telecommunication, and shall be deemed to have been duly given if delivered personally or if sent by overnight courier or by certified mail, return receipt requested, postage prepaid or sent by written telecommunication or telecopy, to the relevant address set forth below, or to such other address as the recipient of such notice or communication shall have specified to the other party hereto in accordance with this Section 10(f): Esmark Incorporated 1134 Market Street Wheeling, WV 26003 Telecopy: 304-234-2690 with a copy to the Company’s Senior Vice President, Human Resources at the same address. If to the Executive, at his last residence shown on the records of the Company. Any such notice shall be deemed to have been received (i) if delivered personally, when received, (ii) if sent by overnight courier, when sent, (iii) if mailed, two (2) days after being mailed as described above and (iv) in the case of facsimile transmission, when confirmed by facsimile machine report. (g) ARBITRATION OF CLAIMS. The parties hereto agree that except as provided in Section 10(c) above any dispute hereunder, or otherwise relating to the Executive’s relationship with the Company, whether or not arising during the term of this Agreement, shall be resolved by submission to final and binding arbitration held in Pittsburgh, Pennsylvania or as otherwise mutually agreed under the National Rules for the Resolution of Employment Disputes of the American Arbitration Association then existing, and judgment on any arbitration award may be entered in any court of competent jurisdiction. Any cause of action or matter in dispute is hereby waived unless arbitration proceedings are initiated by the complaining party within one (1) year from the later of the accrual of the cause of action or the date on which the cause of action should reasonably have been discovered. The Executive and the Company agree any such arbitrator shall not be empowered to amend or modify this Agreement or any other relevant agreement in any respect and further agree that the arbitrator shall not have the jurisdiction to award punitive damages and shall be without the authority to award relief other than monetary damages. Executive and the Company understand and agree that the Company shall bear the arbitrator’s fee and any other type of expense or cost that Executive would not be required to   17 bear if Executive were free to bring the dispute or claim in court as well as any other expense or cost that is unique to arbitration. Except as provided in Section 10(i) below, Executive and the Company shall each pay their own attorneys’ fees incurred in connection with an arbitration, and the arbitrator will not have authority to award attorneys’ fees unless a statute or contract at issue in the dispute authorizes the award of attorneys’ fees to the prevailing party, in which case the arbitrator shall have the authority to make an award of attorneys’ fees as required or permitted by applicable law. If there is a dispute as to whether Executive or the Company is the prevailing party, the arbitrator will decide this issue. Any cause of action or matter in dispute is hereby waived unless arbitration proceedings are initiated by the complaining party within one (1) year from the later of the accrual of the cause of action or the date on which the cause of action should reasonably have been discovered. (h) JURY & PUNITIVE DAMAGES WAIVER. EACH PARTY EXPRESSLY WAIVES ANY AND ALL RIGHTS THAT HE OR IT MAY HAVE TO HAVE ANY DISPUTE (WHETHER OR NOT ARISING DURING THE TERM OF THIS AGREEMENT) HEREUNDER OR OTHERWISE RELATING TO THE EXECUTIVE’S RELATIONSHIP WITH THE EMPLOYER OR ANY AFFILIATE TRIED BEFORE OR DETERMINED BY A JURY OR TO CLAIM OR RECOVER PUNITIVE DAMAGES. (i) REIMBURSEMENT OF LEGAL FEES. In the event that it shall be necessary or desirable for the Executive to retain legal counsel or incur other costs and expenses in connection with the enforcement of any or all of his rights under Agreement, and provided that the Executive substantially prevails in the enforcement of such rights, the Company shall pay (or the Executive shall be entitled to recover from the Company, as the case may be) the Executive’s reasonable attorneys’ fees and costs and expenses in connection with the enforcement of his rights, including the enforcement of any arbitration award, up to $50,000 in the aggregate. (j) AMENDMENT. This Agreement may be modified only by an instrument in writing executed by the parties hereto. (k) INTERPRETATIVE MATTERS; COUNTERPARTS. The headings of sections of this Agreement are for convenience of reference only and shall not affect its meaning or construction. The language used in this Agreement will be deemed to be the strict construction will be applied against any party. Except as provided in Section 10(g), no delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege. This Agreement may be executed in multiple counterparts, each of one and the same instrument. In making proof of this Agreement it shall not be necessary to produce or account for more than one such counterpart. (l) GOVERNING LAW. This Agreement is to be governed and construed according to the internal substantive laws of the Commonwealth of Pennsylvania.   18 (m) CONFLICTS. To the extent that this Agreement conflicts with any provision, in any handbook, policy manual, plan, rule, regulation or any other document, the provisions of this Agreement shall take precedent. (n) CONSULTATION WITH COUNSEL. The Executive acknowledges that he has had a full and complete opportunity to consult with counsel or other advisers of his own choosing concerning the terms, enforceability and implications of this Agreement, and that the Company has not made any representations or warranties to the Executive concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement. (o) WITHHOLDING. Any payments provided for in this Agreement shall be paid net of any applicable tax withholding required under federal, state or local law. (p) REGISTRATION RIGHTS. If any Company common stock issued to the Executive under this Agreement is not registered under the Securities Act of 1933, at the request of the Executive, the Company shall file with the Securities and Exchange Commission a registration statement on the applicable form, relating to the resale by the Executive of all of the common stock, and the Company shall use its commercially reasonable best efforts to cause such registration statement to be declared effective. (Signatures appear on the following page.)   19 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date   ESMARK INCORPORATED By:   /s/ J. Gregory Pilewicz Name:   J. Gregory Pilewicz Title:   Senior Vice President EXECUTIVE: By:   /s/ Paul J. Mooney   PAUL J. MOONEY   20 GUARANTEE Wheeling-Pittsburgh Steel Corporation (“WPSC”) hereby absolutely, irrevocably and unconditionally guarantees, for so long as a majority of the issued and outstanding capital stock of WPSC is owned, directly or indirectly, by Esmark Incorporated, the prompt and punctual (i) payment when due and at all times thereafter of all salary, bonus, incentive payments, fringe benefits or other compensation and any other sums due or which may become due thereon or under this Agreement and (ii) performance and observance by the Company of all the terms, covenants and conditions of this Agreement, whether according to the present terms thereof or as such terms may hereafter at any time from time to time be amended, supplemented, renewed, extended, waived or otherwise modified whether or not with notice to, or the consent of WPSC.   WHEELING-PITTSBURGH STEEL CORPORATION By:   Name:   J. Gregory Pilewicz Title:   Senior Vice President Esmark Steel Service Group (“ESSG”) hereby absolutely, irrevocably and outstanding capital stock of ESSG is owned, directly or indirectly, by Esmark whether or not with notice to, or the consent of ESSG.   ESMARK STEEL SERVICE GROUP, INC. By:   /s/ Thomas A. Modrowski Name:   Thomas A. Modrowski Title:   President   21 EXHIBIT A RELEASE OF CLAIMS In exchange for the severance pay and other benefits set forth in my Amended and Restated Employment Agreement with Esmark Incorporated (the “Company”) effective as of                     , 2008 (as amended through the date hereof, the “Employment Agreement”), I forever give up, waive and release any and all claims, charges, complaints, grievances or promises of any and every kind I may have up to the date of this Release against the Company, its subsidiaries and other affiliates and their directors, officers and employees, and related persons, including, without limitation, my rights under Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, the Employee Retirement Income Security Act (“ERISA”), the Equal Pay Act, the Americans with Disabilities Act (“ADA”), the Age Discrimination in Employment Act (“ADEA”) and other federal and state statutes prohibiting discrimination on the basis of age, sex, race, color, handicap, religion and national origin and any common law claims, including without limitation, claims for defamation, intentional infliction of emotional distress, intentional interference with contract, negligent infliction of emotional distress, personal injury, breach of contract, unpaid wages or compensation, or claims for unreimbursed expenses. This release shall not extend to any claim to amounts due me in accordance with the terms of my Employment Agreement after termination of my employment or to claims to indemnity I may have under the terms of my Employment Agreement, applicable law, or the Company’s articles of organization or bylaws for having served as a director, officer or employee of the Company, its subsidiaries or any affiliate. I acknowledge that I have been advised of my right to consult an attorney before I sign this Release and that I have twenty-one (21) days to consider whether to sign this Release. If the Release is not received by the Company at the end of the twenty-one (21) day period, it will be considered expired and withdrawn and the Company’s severance obligations under my Employment Agreement void. If I execute this Release prior to the end of the twenty-one (21) day period that has been provided for me to consider it, I agree and acknowledge that the prior execution was a knowing and voluntary waiver of my right to consider this Release for a full twenty-one (21) days, and was due to my conclusion that I had ample time in which to consider and understand this Release, and in which to review this Release with my counsel. Nothing in this Release shall be construed to affect the Equal Employment Opportunity Commission’s (“Commission”) independent right and responsibility to enforce the law. I understand, however, that, while this Release does not affect my right to file a charge or participate in an investigation or proceeding conducted by the Commission, it does bar any claim I might have to receive monetary damages in connection with any Commission proceeding concerning matters covered by this Release.   22 I understand I have the right to revoke this Release within seven (7) days of signing it. I understand that to revoke this Release, I must notice the Company in writing in accordance with the notice procedures set forth in my Employment Agreement.     PAUL J. MOONEY Dated:       23

BlackRock Funds II BlackRock Floating Rate Income Portfolio Investor A, Investor C and Institutional Shares Investor C1 Shares (the “Fund”) Supplement dated April 27, 2016 to the Statement of Additional Information dated December 29, 2015 Effective immediately, C. Adrian Marshall, CFA, James Keenan, CFA and Joshua Tarnow are the portfolio managers of the Fund. The information set forth below pertaining to Mr. Tarnow is provided as of March 31, 2016. The paragraph under the section of the Statement of Additional Information entitled “Management and Advisory Arrangements — Information Regarding the Portfolio Managers” is deleted in its entirety and replaced with the following: C. Adrian Marshall, CFA, James Keenan, CFA and Joshua Tarnow are the portfolio managers and are jointly and primarily responsible for the day-to-day management of the Fund’s portfolio. The table under the subsection of the Statement of Additional Information entitled “Management and Advisory Arrangements — Information Regarding the Portfolio Managers — Other Funds and Accounts Managed ” is deleted in its entirety and replaced with the following: Number of Other Accounts Managed and Assets by Account Type Number of Other Accounts and Assets for Which Advisory Fee is Performance-Based Name of Portfolio Manager Other Registered Investment Companies Other Pooled Investment Vehicles Other Accounts Other Registered Investment Companies Other Pooled Investment Vehicles Other Accounts C. Adrian Marshall, CFA 6 23 15 0 4 0 $2.77 Billion $6.67 Billion $2.07 Billion $0 $1.22 Million $0 James Keenan, CFA 13 30 16 0 1 4 $24.25 Billion $13.92 Billion $6.84 Billion $0 $0.32 Million $566.3 Million Joshua Tarnow* 2 6 5 0 0 1 $5.29 Billion $476.6 Million $561.1 Million $0 $0 $202 Million * Information is provided as of March 31, 2016. The first sentence under the subsection of the Statement of Additional Information entitled “Management and Advisory Arrangements — Information Regarding the Portfolio Managers — Portfolio Manager Compensation Overview ” is deleted and replaced with the following: The discussion below describes the compensation of Messrs. Marshall and Keenan as of August 31, 2015 and the compensation of Mr. Tarnow as of March 31, 2016. The table beneath the first paragraph under the subsection of the Statement of Additional Information entitled “Portfolio Manager Compensation Overview — Discretionary Incentive Compensation” is deleted in its entirety and replaced with the following: Portfolio Managers Applicable Benchmarks C. Adrian Marshall, CFA A combination of market-based indices (e.g., S&P Leveraged All Loan Index), certain customized indices and certain fund industry peer groups. James Keenan, CFA A combination of market-based indices (e.g., The Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index), certain customized indices and certain fund industry peer groups. Joshua Tarnow Bank of America Merrill Lynch 3 Month U.S. Treasury Bill Index The last sentence under the subsection of the Statement of Additional Information entitled “Management and Advisory Arrangements — Information Regarding the Portfolio Managers — Portfolio Manager Compensation Overview — Distribution of Discretionary Incentive Compensation — Long-Term Incentive Plan Awards ” is deleted and replaced with the following: Messrs. Keenan, Marshall and Tarnow have unvested long-term incentive awards. The table under the subsection of the Statement of Additional Information entitled “Management and Advisory Arrangements — Information Regarding the Portfolio Managers — Portfolio Manager Beneficial Holdings ” is deleted in its entirety and replaced with the following: Portfolio Manager Dollar Range of Securities Equity Beneficially Owned 1 C. Adrian Marshall, CFA $500,001 - $1,000,000 James Keenan, CFA $100,001 - $500,000 Joshua Tarnow None 1 Includes securities attributable to the portfolio manager’s participation in certain deferred compensation and retirement programs. The last two sentences of the first paragraph under the subsection of the Statement of Additional Information entitled “Management and Advisory Arrangements — Information Regarding the Portfolio Managers — Portfolio Manager Potential Material Conflicts of Interest ” are deleted and replaced with the following: It should also be noted that Messrs. Keenan, Marshall and Tarnow may be managing hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts, subject to incentive fees. Messrs.

Exhibit 10.38 December 27, 2012 Via Hand Delivery Donna Lehmann c/o Affinity Gaming 3775 Breakthrough Way, Suite 300 Las Vegas, NV 89135 Dear Donna: This letter, when counter-signed by you, shall serve as the second amendment (the "Second Amendment") to the Executive Severance Agreement dated as of January 11, 2011, and amended October 31, 2011, by and between you and Herbst Gaming, LLC and governing the terms and conditions of your separation from employment with the Company (the "Executive Severance Agreement"). All capitalized terms set forth in this Second Amendment, unless otherwise hereinafter defined, shall have the same meaning as in the Executive Severance Agreement. 1. The preamble of the Executive Severance Agreement is amended to provide that the Company is now known as Affinity Gaming, formerly known as Affinity Gaming, LLC and, before that, Herbst Gaming, LLC. 2. The references in the Executive Severance Agreement to the Letter Agreement shall mean the Letter Agreement between you and the Company dated as of January 11, 2011, amended as of May 6, 2011, and October 31, 2011, and further amended as of this date. The references in the Executive Severance Agreement to the Duty of Loyalty Agreement shall mean the Duty of Loyalty Agreement between you and the company dated as of January 11, 2011 and amended as of October 31, 2011 and this date. 3. Except as specifically set forth in paragraphs 1 and 2 of this Second Amendment, all other terms and conditions of the Executive Severance Agreement shall remain unchanged. Sincerely, /s/ David D. Ross David D. Ross Chief Executive Officer ACCEPTED and AGREED TO this 27th day of December, 2012: /s/ Donna Lehmann Donna Lehmann

Exhibit 10.1 STOCK OPTION AGREEMENT INTERNATIONAL STAR, INC. 2 This STOCK OPTION AGREEMENT,hereinafter referred to as the “Option” or the “Agreement,” is made on April 28, 2010 (“Grant Date”),between International Star, Inc., a Nevada corporation (the “Company”) and Sterling M. Redfern, who resides at [ ] (“Optionee”). The Company, pursuant to the terms of the International Star, Inc. 2006 Stock Option Plan adopted by the Company's Board of Directors on September 13, 2006 (the “Plan”), hereby grants an option of 10,000,000 shares of Common Stock of the Company, par value $0.001 per share (“Common Stock”),to the Optionee at the price and in all respects subject to the terms, definitions and provisions of this Agreement. 1.Exercise Price.The exercise price of the Option is $0.01 for each share. 2.Exercise and Option.This Option shall be exercisable at any time and from time to time as of the Grant Date in accordance with the terms of this Agreement as follows: (a)Method of Exercise.This Option shall be exercisable by a written notice, which shall: (i)state the election to exercise the Option, the number of shares in respect of which it is being exercised, the person in whose name the stock certificate or certificates for such shares of Common Stock is to be registered, his address and Social Security Number (or if more than one, the names, addresses and Social Security Numbers of such persons); (ii)contain such representations and agreements as to the holder's investment intent with respect to such shares of Common Stock as may be satisfactory to the Company's counsel; (iii)be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by any person or persons other than the Optionee, be accompanied by proof, satisfactory to counsel for the Company, of the right of such person or persons to exercise the Option. (iv)be accompanied by payment to the Company of the full exercise price for the shares with respect to which the Option is exercised.The exercise price shall be paid in cash or cash equivalent. (b)Securities Exemption.The Company shall not be required to issue or deliver any certificates for shares of Common Stock purchased upon the exercise of an option (i) prior to the completion of any registration or other qualification of such shares under any state or federal laws or rulings or regulations of any government regulatory body, which the Company shall determine to be necessary or advisable or, (ii) prior to receiving an opinion of counsel, satisfactory to the Company that the sale or issuance of such shares is exempt from these registration or qualification requirements. 1 (c)Restrictions on Exercise.As a condition to the exercise of this Option, the Company may require the person exercising this Option to make any representation and warranty to the Company as may be required by any applicable law or regulation. (d)Termination, Death & Disability. (i)In the event the Optionee terminates his Continuous Service to the Company for any reason other than death or Disability, or in the event the Continuous Service of the Optionee shall be terminated by the Company without cause, this Option may be exercised in whole or in part at any time within three (3) months after such termination of Continous Service, but in no case later than the Expiration Date set forth below. (ii) In the event the Continous Service of the Optionee shall be terminated by the Company for “Cause,” any unexercised portion of this Option shall be forfeited. (iii)In the event the Optionee becomes Disabled while rendering Continuous Service, this Option may be exercised by the Optionee or the Optionee’s legal representative in whole or in part at any time within one (1) year after the date of the Optionee’s Disability, but in no case later than the Expiration Date set forth below. (iv)In the event the Optionee dies while rendering Continuous Service or within three (3) months thereafter, this Option may be exercised by the Optionee’s beneficiary, as designated according to this Agreement, or, if no beneficiary has been designated, by the person to whom the Option is transferred by the laws of descent and distribution.Such exercise may occur in whole or in part at any time within one (1) year after the date of the Optionee’s death, but in no case later than the Expiration Date set forth below. (v)This Option expires on the day before the 5th anniversary of the Grant Date (the “Expiration Date”). 3.Transferability of Option. (a)This Option may not be pledged or encumbered in favor of any party other than the Company.This Option may not be assigned or transferred other than by will or the laws of descent and distribution, except as provided in paragraph (b) below. (b)The Optionee may designate a beneficiary to exercise the rights of the Optionee and to receive any distributions with respect to the Option upon the Optionee’s death.Such designation shall be effective upon submission to the Company in writing signed by the Optionee. 4.Stock Subject to the Option.In addition to the restrictions set forth above, the Company and the Optionee agree that the Common Stock of the Company acquired pursuant to this Agreement shall be subject to the restrictions set forth in the Plan. 2 5.Adjustments Upon Changes in Capitalization.The number of shares of Common Stock subject to this Agreement shall be proportionately adjusted for any change in the stock structure of the Company resulting from any stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock. 6.Notices.Each notice relating to this Agreement shall be in writing and delivered in person or by certified mail to the proper address. Each notice shall be deemed to have been given on the date it is received.Each notice to the Company shall be addressed to it at its principal office, now at P.O. Box 7202, Shreveport, Louisiana 71101, attention Secretary.Each notice to the Optionee or other person or persons then entitled to exercise the Option shall be addressed to the Optionee or such other person or persons at the Optionee’s address set forth in the heading of this Agreement.Anyone to whom a notice may be given under this Agreement may designate a new address by notice to that effect. 7.Sale or Merger.The Option shall terminate upon the sale or merger of the Company whereby the Company is not the surviving entity, unless the surviving entity assumes the Option.In the event of such sale or merger whereby the Company is not the surviving entity, the Company may, prior to such sale or merger, cancel the Option by payment in cash to the Optionee of the amount by which the Fair Market Value of the shares to which the Optionee is entitled under the Option exceeds the exercise price of such shares. 8.Plan Amendments.This Agreement shall be subject to the terms of the Plan, as amended, except that the Option that is the subject of this Agreement may not in any way be restricted or limited by any Plan amendment or termination approved after the Grant Date without the Optionee’s written consent. 9.Successors.This Agreement shall be binding upon and inure to the benefit of the successors, assigns, heirs and legal representatives of the respective parties.This Agreement shall be the sole and exclusive source of any and all rights which the Optionee, his heirs, legal representatives or successors may have in respect to the Plan or any options granted or issued hereunder, whether to himself or to any other person. 10.Terms.Any terms used in this Agreement that are not otherwise defined herein shall have the meanings prescribed to them in the Plan. 11.Entire Agreement.This Agreement contains the entire understanding of the parties and shall not be modified or amended except in writing and duly signed by the parties.No waiver by either party of any default under this Agreement shall be deemed a waiver of any later default. 3 IN WITNESS WHEREOF, the Company and the Optionee have caused this Agreement to be executed as of the day, month and year first above written. INTERNATIONAL STAR, INC. By/s/ Virginia K. Shehee Virginia K. Shehee, Chairman OPTIONEE By /s/ Sterling M. Redfern Sterling M. Redfern 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM8-K CURRENT REPORT Pursuant to Section13 or 15(d)of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported):May 5, 2011 Acorda Therapeutics,Inc. (Exact name of registrant as specified in its charter) Delaware 000-50513 13-3831168 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 15 Skyline Drive, Hawthorne, NY (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code:(914) 347-4300 Not Applicable Former name or former address, if changed since last report Check the appropriate box below if the Form8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: oWritten communications pursuant to Rule425 under the Securities Act (17 CFR 230.425) oSoliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR 240.14a-12) oPre-commencement communications pursuant to Rule14d-2(b)under the Exchange Act (17 CFR 240.14d-2(b)) oPre-commencement communications pursuant to Rule13e-4(c)under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On May 5, 2011, Acorda Therapeutics, Inc. issued a press release announcing its financial results for the first quarter ended March 31, 2011.A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K, and incorporated by reference into this Item 2.02. Item 9.01 Financial Statements and Exhibits (d) Exhibits Exhibit No.Description 99.1Press Release dated May 5, 2011. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Acorda Therapeutics,Inc. May 5, 2011 By: /s/ David Lawrence Name: David Lawrence Title: Chief Financial Officer Exhibit Index Exhibit No.Description 99.1Press Release dated May 5, 2011

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-D ASSET-BACKED ISSUER DISTRIBUTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the monthly distribution period from August30, 2007toSeptember 17, 2007 Commission File Number of issuing entity: 333-140804-04 J.P. Morgan Chase Commercial Mortgage Securities Trust 2007-LDP12 (Exact name of issuing entity as specified in its charter) Commission File Number of depositor: 333-140804 J.P. Morgan Chase Commercial Mortgage Securities Corp. (Exact name of depositor as specified in its charter) JPMorgan Chase Bank, N.A. UBS Real Estate Securities Inc. Nomura Credit & Capital Inc. Natixis Real Estate Capital Inc. (Exact name of sponsor as specified in its charter) New York (State or other jurisdiction of incorporation or organization of the issuing entity) Applied for, but not yet received from the I.R.S. (I.R.S. Employer Identification No.) c/o LaSalle Bank National Association 135 South LaSalle Street Chicago, Illinois 60603 (Address of principal executive offices of the issuing entity) (Zip Code) 312-904-7323 (Telephone number, including area code) N/A (Former name, former address, if changed since last report) Registered/reporting pursuant to (check one) Name of exchange Title of class Section 12(b) Section 12(g) Section 15(d) (If Section 12(b)) Classes A-1, A-2,A-3,A-4, A-SB, A-1A, X, A-M, A-J,B, C, D,E, and F. o o x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xNo o SEC 2503 (03-05) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. PART I - DISTRIBUTION INFORMATION Item 1. Distribution and Pool Performance Information. The monthly distribution report for the periodreferenced above forthe holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2007-LDP12, Commercial Mortgage Pass-Through Certificates, Series 2007-LDP12 is attached as Exhibit 99.1. PART II - OTHER INFORMATION Item 2. Legal Proceedings. None. Item 3. Sales of Securities and Use of Proceeds. None. Item 4. Defaults Upon Senior Securities. Not applicable. Item 5. Submission of Matters to a Vote of Security Holders. None. Item 6. Significant Obligors of Pool Assets. None. Item 7. Significant Enhancement Provider Information. None. Item 8. Other Information. None. Item 9. Exhibits. (a) 24 Power-of-Attorney and Secretary's Certificate, datedAugust 30, 2007, and Unanimous Written Consent of the Board of Directors of J.P. Morgan Chase Commercial Mortgage Securities Corp., datedAugust 24, 2007. (b) 99.1 Monthly distribution report pursuant to Section 4.02 of the Pooling and Servicing Agreement for the period referenced above. The date and time stamp on the attached monthly distribution report is 14-Sep-2007 15:56. SIGNATURES* Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: September 21, 2007 J.P. Morgan Chase Commercial Mortgage Securities Corp. By: Barbara L. Marik, acting in her capacity asSenior Vice President of LaSalle Bank National Association, the Trustee of the J.P. Morgan Chase Commercial Mortgage Securities Trust 2007-LDP12, as Attorney-in-Fact /s/ Barbara L. Marik Barbara L. Marik Senior Vice President

  EXHIBIT 10.2 SUPPLEMENTAL INDENTURE      SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of January 19, 2006, among MSX International, Inc., a Delaware corporation (the “Company”), MSX International Limited, a company incorporated under the laws of England and Wales (“MSXI Limited” and, together with the Company, the “Issuers”), Creative Technology Services, L.L.C., a Michigan limited liability company (“CTS”), and BNY Midwest Trust Company, an Illinois trust company, as trustee (in such capacity, the “Trustee”) and as collateral agent (in such capacity, the “Collateral Agent”), in each case, under the Indenture referred to below. WITNESSETH:      WHEREAS the Issuers and the Subsidiary Guarantors named therein have heretofore executed and delivered to the Trustee an Indenture (as such may be amended from time to time, the “Indenture”), dated as of August 1, 2003, providing for the issuance of Senior Secured Note Units due 2007 (the “Units”), each Unit consisting of $860 principal amount of 11% Senior Secured Notes due 2007 issued by the Company and $140 principal amount of 11% Senior Secured Notes due 2007 issued by MSXI Limited (together, the “Notes”);      WHEREAS Section 11.6 of the Indenture provides that under certain circumstances a Guarantor may be released from its Guarantee upon the sale of all of its Capital Stock to any Person that is not a Subsidiary of the Company by execution and delivery to the Trustee of a supplemental indenture; and      WHEREAS pursuant to Section 9.1(5) of the Indenture, the Trustee and the Issuers are authorized to execute and deliver this Supplemental Indenture;      NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Issuers, CTS and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:      1. Definitions. (a) Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.      (b) For all purposes of this Supplemental Indenture, except as otherwise herein expressly provided or unless the context otherwise requires: (i) the terms and expressions used herein shall have the same meanings as corresponding terms and expressions used in the Indenture; and (ii) the words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.          2. Release of Guarantee. Each of the parties hereto hereby agrees that from and after the date hereof, CTS: (a) is unconditionally released and discharged from and in respect of any and all claims, causes of action, liabilities and obligations of any nature whatsoever, inchoate or mature, know and unknown, whether or not asserted heretofore, arising or related to its Guarantee in accordance with Section 11.6 of the Indenture; and (b) shall no longer be a Subsidiary Guarantor for any purpose under the Indenture or the Notes.      3. Release of Liens.           a. Pursuant to and subject to compliance with the terms of the Indenture, the Collateral Agent hereby agrees that the Security Interests created by the Indenture and the Collateral Agreements , and all right, title and interest in and to (i) the Capital Stock of CTS (“CTS Capital Stock”) and (ii) the Collateral owned by CTS (“CTS Collateral” and together with CTS Capital Stock, the “Released Interests”), in each case, that were granted, pledged, conveyed, transferred and assigned to the Collateral Agent pursuant to the Indenture and the Collateral Agreements are released and terminated.           b. The Collateral Agent irrevocably authorizes Dickinson Wright PLLC, counsel to JPMorgan Chase Bank N.A., agent for the Lenders party to the Senior Credit Facility, and any agent appointed by Dickinson Wright PLLC, to file, in the name and on behalf of the Collateral Agent, any and all UCC termination statements and such other documents necessary or desirable to terminate all Security Interests securing the Released Interests under the Indenture and the Collateral Agreements.      4. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder heretofore or hereafter authenticated and delivered shall be bound hereby.      5. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.      6. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. The recitals and statements herein are deemed to be those of the Issuers and CTS and not of the Trustee.      7. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.          8. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction thereof.          IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.             MSX INTERNATIONAL, INC.       By:   /s/ Frederick K. Minturn         Name:   Frederick K. Minturn        Title:   Executive Vice President and Chief Financial Officer                  MSX INTERNATIONAL LIMITED Title:   Director                  CREATIVE TECHNOLOGY SERVICES, L.L.C. Title:   Vice President                  BNY MIDWEST TRUST COMPANY, as Trustee       By:   /s/ Roxane Ellwanger         Name:   Roxane Ellwanger        Title:   Assistant Vice President                  as Collateral Agent  

EXHIBIT 10(a) SUBLEASE AGREEMENT Sublease Agreement made as of February 1, 2007, between MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware corporation having a usual place of business at 500 Boylston Street, Boston, Massachusetts 02116 (“Tenant”), and NEWSTAR FINANCIAL, INC., a Delaware corporation having a usual place of business at 75-101 Federal Street, Suite 1900, Boston, Massachusetts 02110 (“Subtenant”). This Sublease Agreement shall be referred to herein as the “Sublease”. Whereas, by an Amended and Restated Lease dated as of February 1, 2000 (collectively, including any rules or regulations that have been or may be promulgated thereunder, being referred to herein as the “Main Lease”, a redacted copy of which Main Lease is attached hereto as Exhibit A), Five Hundred Boylston West Venture (“Landlord’”) leased certain space, as more particularly described in the Main Lease (the “Tenant’s Premises”), in the building located at 500 Boylston Street, Boston, Massachusetts 02116 (the “Building”), to Tenant for a term ending on February 28, 2013; and Whereas, Tenant has agreed to sublease to Subtenant, pursuant to the provisions of this Sublease, an area comprising approximately 15,116 rentable square feet of space within a portion of the Tenant’s Premises consisting of a portion of the twelfth (12th) floor of the Building, and as more particularly shown on the plan attached hereto as Exhibit B (such subleased portion of the Tenant’s Premises being referred to herein as the “Premises”). Now, therefore, it is agreed between the parties hereto as follows: 1. Agreement to Sublease for Term. Tenant hereby subleases to Subtenant, and Subtenant hereby takes and subleases from Tenant, the Premises for a term of approximately seventy-three (73) months, beginning on the date that Tenant delivers the Consent (as hereinafter defined) to Subtenant, and Tenant certifies to Subtenant that the Demising Work (as hereinafter defined) has been substantially completed (the “Commencement Date”) and ending at 1 1:59 p.m. on February 27, 2013. Subsequent to the Commencement Date, within ten (10) days after any request by Tenant, Subtenant shall execute a letter confirming the Commencement Date. In addition, notwithstanding anything to the contrary contained herein, Subtenant’s rental obligations shall commence on May 15, 2007 (the “Rent Commencement Date”). 2. Incorporation of Main Lease. a. Subtenant acknowledges that it has had a complete opportunity to review the Main Lease. Except as otherwise expressly provided in this Sublease, the provisions of the Main Lease are incorporated into and made a part of this Sublease as they relate to the Premises and also to the Building and any land on which the Building is located (the “Land” and, together with the Building, the “Property”) which serve or are available to occupants of the Premises. The provisions of the Main Lease which are so incorporated into this Sublease pursuant to the preceding sentence shall, coincident with their incorporation, be amended so that references in the Main Lease to “Landlord” and “Tenant” shall be deemed to refer in this Sublease to Tenant and Subtenant, respectively, unless the context indicates that such amendment should not be made or such amendment would have an illogical effect on the provision being so amended. All uses of the term “Sublease” in this Sublease shall be regarded as referring to this Sublease, into which the Main Lease has been so incorporated. Subtenant hereby covenants to Tenant and, if Landlord has consented to this Sublease, to Landlord that, except as may be otherwise expressly provided in this Sublease, Subtenant assumes, is bound by, shall comply with, and shall faithfully perform all of the obligations of Tenant (as tenant) under the Main Lease with respect to the Premises and those Common Areas of the Building used by Subtenant from and after the Commencement Date. The relationship between, and rights of, Subtenant and Tenant shall, except as may be otherwise expressly provided in this Sublease, be governed by the Main Lease, and, without limiting the generality of the foregoing, Tenant shall have all of the rights granted to Landlord under the Main Lease and be entitled to exercise such rights with respect to the enforcement of the provisions of this Sublease and the termination of this Sublease. b. Notwithstanding any of the foregoing provisions of this section to the contrary, the following provisions of the Main Lease are not incorporated into or made a part of this Sublease: The words starting with “provided... Chiller Space” and ending “in Article 12” in Section 2.02; second paragraph of Section 2.05 (except Tenant shall provide Subtenant with copies of tax bills after Tenant receives the same from Landlord); Sections 2.06 and 2.07 (except Tenant shall provide Subtenant with statements after Tenant receives the same from Landlord); Section 2.08; Section 3.01(d) (except Tenant shall provide Subtenant an abatement to the extent Tenant receives an abatement); Section 3.01(e) (except as otherwise provide in Section 12 hereof); Section 3.02 (except to the extent Subtenant contracts directly with Landlord for extra services); Section 3.04(b); Section 3.05; first two sentences of Section 4.02; Section 4.06; last sentence of first paragraph of Section 4.07; last sentence of first paragraph of Section 5.03; Section 5.04(d); Section 5.07(b),(c) and (d); Article 7; Section 8.12; Section 8.18: Section 8.19; Article 9; Article 10 (Option to Expand); Article 11 (First Right to Lease and Right of Partial Surrender); Section 12.01 (except to the extent provided in Sublease); Section 12.02; Section 12.03; Section 12.04; Section 12.05; and Section 12.06 and Exhibits A; D; E; F; G; H; I; J; L; and M. To the extent that a provision in the Main Lease has been redacted in the copy of the Main Lease attached hereto and is not otherwise listed above, such provision also shall not be incorporated into or made part of this Sublease and neither Tenant nor Subtenant shall have any rights or obligations to the other party with respect to such redacted provisions. In addition, all references in Section 5.07 to Tenant Improvements shall not include Subtenant Improvements and Subtenant shall be solely responsible at its sole cost and expense in the event of a casualty for their restoration if the Sublease is not terminated. All Tenant’s elections to terminate under the Main Lease are those solely of Tenant and not of Subtenant. Tenant will not terminate the Main Lease as it relates to the Premises except as expressly set forth therein or as allowed by law. “Notwithstanding anything to the contrary, Tenant shall be permitted to enter into a voluntary agreement with Landlord to terminate the Main Lease or any part of it as it relates to the Premises (specifically excluding Tenant’s right to terminate the Main Lease or any part of it to the extent permitted in the Main Lease or by law, in which case no such agreement with Landlord is required) on ten (10) days’ prior written notice to Subtenant, provided that Landlord agrees in a writing reasonably satisfactory to Subtenant to recognize Subtenant as a direct tenant on all of the terms and conditions of this Sublease, effective upon the date of such termination. c. Subtenant acknowledges and agrees that Tenant (i) has no control over the provision and/or quality of the heat, light, water, air conditioning, electricity and other utilities, janitorial, cleaning, window-washing, elevator or any other Building services, and building   2 maintenance and repair and (ii) except as otherwise expressly set forth herein, assumes no responsibility in connection therewith, and shall not be liable in any way with respect to the failure of or interference with any of such services, including without limitation Subtenant’s loss of business. 3. Subordination to Main Lease and Conflicts. Notwithstanding any other provisions of this Sublease to the contrary, this Sublease, and the interest of Subtenant in the Premises under this Sublease, shall in all respects be subject and subordinate to all of the provisions of the Main Lease. To the extent that any provision of this Sublease modifies or differs from any of the provisions of the Main Lease, the provisions of this Sublease shall be controlling, provided, however, that if any provision of this Sublease violates the Main Lease, or asserts authority in one of the parties beyond the authority provided to such party by the Main Lease, the provisions of the Main Lease shall be deemed to limit the provisions hereof. Nothing in this section shall, however, be deemed to confer upon Subtenant any greater rights than those set forth in this Sublease or to limit any of Subtenant’s obligations under this Sublease. All of the rights granted to Subtenant under this Sublease are limited to the extent that Tenant has reserved those rights in the Main Lease. Tenant is hereby vested with full power and authority to subordinate Subtenant’s interest in the Premises under this Sublease to any mortgage, deed of trust, ground or underlying lease, or other lien or interest hereafter placed on the Premises, and Subtenant shall, upon demand by Tenant, execute such further instruments to effect such subordination as Tenant may request. Upon Subtenant’s failure to execute any such instrument, Tenant may execute any such instrument on Subtenant’s behalf and Subtenant hereby irrevocably appoints Tenant as Subtenant’s attorney in fact coupled with an interest for such purpose. 4. Termination of Main Lease and Sublease. If this Sublease has not previously terminated by its terms, this Sublease shall terminate upon the termination of the Main Lease. If the Main Lease shall terminate for any reason during the term of this Sublease, this Sublease shall simultaneously terminate on the date of such termination of the Main Lease with the same force and effect as if such termination date had been specified herein as the termination date hereof. Upon the expiration or termination of this Sublease, whether by forfeiture, lapse of time or otherwise, Subtenant shall at once surrender and deliver the Premises in the condition and repair required by, and in accordance with the provisions of, the Main Lease, including without limitation Section 4.07 of the Main Lease. 5. Rent. a. Except as otherwise expressly provided in this Sublease, commencing on and as of the Commencement Date, and continuing throughout the term of this Sublease, Subtenant shall pay to Tenant, as rent, base rent (the “Base Rent”) in accordance with the schedule set forth below as part of this subsection. Unless Tenant instructs Subtenant otherwise in writing, Subtenant shall make such payments in advance on the day of each month on which rent is required to be paid by Tenant under the Main Lease. Subtenant shall make such payments without notice, demand, abatement, deduction, counterclaim, or setoff.   3 Period    Rent per Square Foot     Annual Rent     Monthly Rent   Commencement Date the day before the Rent Commencement Date    $ 0.00     $ 0.00     $ 0.00   Rent Commencement Date - March 31,2009    $ 29.00 *   $ 438,364.00 *   $ 36,530.33 * April 1 ,2009 - March 31, 2011    $ 31.50     $ 476,154.00     $ 39,679.50   April 1 ,2011 - February 27, 2013    $ 32.50     $ 491,270.00     $ 40,939.17   b. Except as otherwise expressly provided in this Sublease, commencing on and as of the Rent Commencement Date, and continuing throughout the term of this Sublease, Subtenant shall pay to Tenant, as additional rent, Subtenant’s Share and Subtenant’s Electric Share (both defined below) of all operating expenses, real estate taxes, rent taxes, utility charges, lease auditing expenses and fees payable in connection with Tenant’s auditing of any of the foregoing sums, and other regular additional sums payable by Tenant to Landlord under the Main Lease (the “Escalations”), with Subtenant’s Share and Subtenant’s Electric Share of such Escalations being collectively referred to herein as the “Subescalations”. For the purposes of this Sublease, the term “Subtenant’s Share” for all Subescalations (except electric service to the Premises) shall be defined as a ratio, the numerator being the rentable square footage of the Premises and the denominator being the rentable square footage of Tenant’s Premises. As of the date hereof, Subtenant’s Share is four and 27/100 percent (4.27%). For the purposes of this Sublease, the term “Subtenant’s Electric Share” shall be defined as a ratio, the numerator being the rentable square footage of the Premises and the denominator being the rentable square footage of the twelfth (12th) floor of the Tenant’s Premises. As of the date hereof, Subtenant’s Electric Share is sixty eight and 44/100 percent (68.44%). The parties hereto acknowledge that the Subtenant’s Share and Subtenant’s Electric Share may change from time to time during the term of this Sublease based upon any change in the rentable square footage of the Premises and/or Tenant’s Premises. Prior to the Commencement Date and from time to time during the Sublease term thereafter, Tenant shall provide Subtenant with an estimate of the monthly Subescalations due from Subtenant. Subtenant shall pay to Tenant Subescalations with Subtenant’s payments of Base Rent (except during the Free Rent Period (hereinafter defined), during which time such Subescalations shall be credited against the Maximum Free Rent Amount (hereinafter defined)). Subtenant shall make all such payments without abatement, deduction, counterclaim, or setoff. As soon as is practicable after the end of each calendar year Tenant shall submit to Subtenant a statement of the actual Subescalations for such calendar year, as well as a statement to show any   * subject to Free Rent as set forth in Section 5.i. below.   4 increase in Subescalations for such calendar year as compared with Tenant’s estimate of such Subescalations. If Tenant’s statement discloses that Subtenant owes an amount that is less than the estimated payments for such calendar year previously paid by Subtenant, Tenant will credit such excess against the next installment of Rent due (or, if after the expiration or earlier termination of this Sublease, and provided there then exists no uncured event of default, Tenant shall reimburse Subtenant for such amount). If Tenant’s statement discloses that Subtenant owes more than the estimated payments for such calendar year previously made by Subtenant, Subtenant will pay the deficiency to Tenant within ten (10) days after delivery of the statement. The provisions of this Section 5.b. shall survive the termination of this Sublease. To the extent any Subescalations are not included in such estimate provided by Tenant, Subtenant shall make such payments within ten (10) days of receipt of an invoice therefor from Tenant, and without abatement, deduction, counterclaim, or setoff. In the event Landlord or Tenant desires to install a check meter for Subtenant’s electrical usage, Tenant agrees that any costs incurred with respect to such installation shall not be passed to Subtenant. To the extent Subtenant requires services in excess of the services provided by Landlord and charged to Tenant as operating expenses under Section 2.04 of the Main Lease, including without limitation extra electrical feeders or risers to meet Subtenant’s electricity requirements, excess water usage (including without limitation condenser water if provided by Landlord), and after-hours HVAC service, Subtenant shall contract directly with Landlord for such services. Notwithstanding the forgoing, commencing on and as of the Commencement Date, and continuing throughout the term of this Sublease, to the extent Tenant becomes liable to Landlord for such additional services provided by Landlord or any third parties, Subtenant shall pay to Tenant, as additional rent and upon demand, one hundred percent (100%) of all such expenses incurred by Tenant for such services and/or any service provided by Tenant to Subtenant. c. Under this Sublease, payments of Base Rent and Subescalations constitute payments of rent. Any other payments that are required to be paid by Subtenant to Tenant under this Sublease shall be deemed to be additional rent payable hereunder by Subtenant to Tenant, and shall, unless otherwise expressly provided in this Sublease, be due and payable on the later to occur of that date (i) which is ten (10) business days after Subtenant’s receipt of an invoice therefor from Tenant, or (ii) on which the next payment by Subtenant of Base Rent is due. Tenant and Subtenant hereby acknowledge and agree that the covenants set forth in this Sublease are to be treated as independent covenants and that Tenant’s default or alleged default with respect to any covenant set forth herein shall not give rise to a corresponding right on the part of Subtenant to withhold any Rent or terminate this Sublease. d. The late payment provisions of the Main Lease shall apply to any payments that are deemed hereunder to be Rent and that arrive later than the last day on which Rent may be paid by Tenant under the Main Lease without incurring a late payment penalty or other charge of any kind under the Main Lease. e. If the term of this Sublease begins or ends on any day other than the first day of a calendar month, then all amounts to be paid by Subtenant to Tenant for Base Rent or Subescalations under this Sublease for the resulting fractions of a full calendar month shall be prorated on a per diem basis.   5 f. Except as otherwise expressly provided in this Sublease, all payments to be made by Subtenant pursuant to this Sublease shall be made to Tenant by electronic funds transfer to Tenant in United States legal tender and addressed to Massachusetts Financial Services Company, Attn: Jude Capachietti, Corporate Finance - 6th Floor, 500 Boylston Street, Boston, Massachusetts. g. Subtenant shall pay as additional rent directly to the Landlord, Tenant and/or the proper authorities or service providers charged with the collection thereof all charges for gas, water, electricity, telephone and other utilities used or consumed on the Premises whether separately metered or submetered or directly provided to Subtenant by such authorities or service providers. h. Subtenant shall pay, as additional rent, all taxes which may be lawfully charged, assessed, or imposed upon all fixtures and equipment of every type and also upon all personal property in the Premises, and Subtenant shall pay all license fees and other charges which may lawfully be imposed upon the business of the Subtenant conducted upon the Premises. i. Commencing on the Rent Commencement Date and continuing until the date on which the Maximum Free Rent Amount has been reached (the “Free Rent Period”), Subtenant shall be entitled to a monthly abatement of Base Rent and Subescalations (the “Free Rent”), prorated for partial months, until the aggregate value of the Free Rent equals the Maximum Free Rent Amount. The “Maximum Free Rent Amount” shall be $457,966.19, which amount is based upon $29.00 multiplied by the rentable square footage of the Premises at 7% interest per annum (360 day) compounded daily. Based upon the Maximum Free Rent Amount, the Free Rent Period shall be approximately seven and one-half (7  1/2) months. Notwithstanding the forgoing, if an Event of Default occurs during the Free Rent Period, Subtenant shall no longer be entitled to any Free Rent (regardless of whether the Maximum Free Rent Amount has been achieved) and Subtenant shall commence monthly payment of the Base Rent and Subescalations immediately upon the date of such Event of Default. In all events, immediately upon the full credit of the Maximum Free Rent Amount, Subtenant shall commence monthly payment of the Base Rent and Subescalations. By way of example, if the total Base Rent and Subescalations due for the first month of the Free Rent Period equaled $54,331.76, and the total Base Rent and Subescalations due for the second month of the Free Rent Period equaled $54,672.11, then at the beginning of the third month of the Free Rent Period the remaining Maximum Free Rent Amount available would be $348,962.32 (i.e., $457,966.19 - $54,331.76 - $54,672.11 = $348,962.32). 6. Delivery of Possession and Adjustment of Term. Notwithstanding any other provisions of this Sublease to the contrary, if for any reason whatsoever, Tenant is unable to deliver possession of the Premises to Subtenant free of tenants, including MFS, personal property and furniture on or prior to the Commencement Date, then (a) Tenant shall not be liable to Subtenant for any direct or indirect damages or expenses, including without limitation consequential damages, incurred by Subtenant which arise out of such inability to so deliver possession on the Commencement Date, (b) this Sublease shall remain in full force and effect, (c) the Commencement Date shall automatically be adjusted forward on a day-for-day basis until the date on which Tenant delivers possession of the Premises to Subtenant, and (d) Tenant shall   6 use reasonable efforts to deliver possession of the Premises to Subtenant on the earliest possible date. If the Commencement Date, as so adjusted, or the delivery of the Consent has not occurred by March 15, 2007, for any reason other than a Force Majeure (as hereinafter defined) or the actions or failure to act of Subtenant, Subtenant shall have the right to terminate this Sublease upon thirty (30) days prior written notice to Tenant provided that the Commencement Date does not occur within such thirty (30) day period. In addition, if delivery of the executed Consent has not occurred by March 15, 2007, Tenant shall have the right to terminate this Sublease upon thirty (30) days prior written notice to Subtenant, provided that the delivery of the Consent does not occur within such thirty-(30)-day period. Upon such termination, this Sublease shall terminate and the parties shall have no further recourse against each other in connection with this Sublease. 7. Use of Premises. Subtenant shall use the Premises for general office purposes and for no other purpose. 8. Parking. Subject to the approval of Landlord, Tenant shall make available to Subtenant up to five (5) unreserved parking spaces available to Tenant under the Main Lease (the “Parking Spaces”). Subtenant acknowledges and agrees that (i) pursuant to Section 12.01 of the Main Lease, use of the Parking Spaces may be subject to separate license agreements between the operator of the garage in which the Parking Spaces are located (the “Garage Operator”) and the employee(s) of Subtenant using such Parking Spaces and (ii) the availability of the Parking Spaces is at all times subject to Section 12.01 of the Main Lease. If at any time, Subtenant shall, by thirty (30) days written notice to Tenant (or such longer period as required by Landlord), elect not to use any or all of the Parking Spaces, Subtenant shall, thirty (30) days (or any such longer period as required by Landlord) after Tenant’s receipt of such notice, be deemed to have waived its right to such unused Parking Spaces until such time as Subtenant reelects, by six (6) months’ advance written notice to Tenant, to use such unused Parking Spaces for the remainder of the term of this Sublease. Subtenant shall pay the rates charged by the Garage Operator for the Parking Spaces directly to Landlord as and when the same are due. Subtenant shall (i) be solely responsible for any fees, fines or other penalties incurred by Subtenant or Subtenant’s employees, agents, contractors, subtenants, licensees, assignees, franchisees or invitees due to non-compliance with Landlord’s and Tenant’s rules and regulations regarding the parking areas enacted and amended from time to time, (ii) indemnify and hold Tenant harmless from any such fees, fines or other penalties, and (iii) immediately reimburse Tenant, as additional rent, for any such fees, costs and expenses to the extent Landlord charges Tenant therefor. 9. Subtenant Identification. Subject to Landlord’s consent, Tenant shall arrange for Subtenant’s name to be included, in the Building-standard format, in the Building directories maintained by Landlord for the identification of the Building’s occupants. 10. Condition of Premises; Improvement Work; Cabling. a. Subtenant has made or caused to be made a thorough examination and inspection of the Premises and is familiar with the condition of every part thereof. Subtenant agrees that, except as expressly provided herein, (i) it enters into this Sublease without relying upon any representations, warranties or promises by Tenant, its agents, representatives, employers, servants or any other person in respect of the Building or the Premises, (ii) no rights, easements   7 or licenses are acquired by Subtenant by implication or otherwise except as expressly set forth herein, (iii) except as expressly set forth herein, Tenant shall have no obligation to do any work in order to make the Premises, Building, Common Areas and/or parking areas suitable and ready for occupancy and use by Subtenant and (iv) except for the Demising Work, Subtenant shall accept the Premises in its “as is” condition as of the date of this Sublease. Except for the Demising Work, Tenant does not warrant or make any representation concerning the adequacy or sufficiency for Subtenant’s present or future purposes of the Premises, the Building, any improvements in or to the Premises or the Building, any common areas in or appurtenant to the Building (including without limitation the Common Areas), any equipment, facilities, fixtures, or furnishings in the Premises or the Building, or the real estate of which the aforementioned items constitute a part. Except for the Demising Work, Subtenant shall be responsible, at its sole expense, for any improvement work that it may require on or relating to the Premises, including without limitation the construction of walls in or entrances to the Premises and any security systems. Subtenant may not undertake any improvement work on or relating to the Premises, including without limitation any construction activities, except in compliance with this Sublease and the Main Lease, and Subtenant shall in each instance perform such work only after having obtained both of the individual prior written consents of Tenant and Landlord, including all plans, drawings, and specifications relating to such work. b. Commencing on the Commencement Date, all of Tenant’s voice and data cabling located in the Premises except for such inter-floor cabling as is used by Tenant to connect its telecommunications and data systems within the remainder of the Tenant’s Premises (the “Cabling”) shall be transferred to Subtenant. Subtenant takes the Cabling in its “AS IS” condition, and Tenant does not warrant or make any representation concerning the condition, adequacy or sufficiency of the Cabling for Subtenant’s present or future purposes. Subtenant shall be responsible, at its sole expense, for any repairs that may be required to the Cabling and shall, subject to the provisions of the Main Lease, either return the Cabling upon the expiration or earlier termination of this Sublease in the same condition as of the Commencement Date, ordinary wear and tear excepted, or remove the same if required by Landlord. 11. Maintenance of Premises. Subtenant shall, at its sole expense, keep the Premises and the equipment, facilities, fixtures, and furniture therein neat, clean, and in as good condition and repair as when Subtenant first was granted access to the Premises, reasonable wear and tear excepted, and shall perform all obligations of Tenant under the Main Lease with respect to Subtenant’s activities in and about the Premises and the Building. Except as otherwise expressly provided in this Sublease, (a) Tenant shall not now or at any time in the future be required to make any expenditure whatsoever with respect to the Premises and does not assume any obligation to perform the terms, conditions, or covenants that are, under the Main Lease, to be performed by Landlord, and (b) if Landlord should fail to perform any of such terms, conditions, or covenants, Tenant shall be under no obligation or liability whatsoever to Subtenant arising out of such failure to perform by Landlord. 12. Tenant’s Obligations Limited. The Main Lease specifies certain obligations, representations, and warranties of Landlord thereunder. Notwithstanding the incorporation of the Main Lease into this Sublease as provided elsewhere herein or any other provisions of this Sublease to the contrary, (a) Tenant is not obligated to perform, or guarantee the performance by Landlord of, Landlord’s obligations (including without limitation any provision of services or   8 supplies or any construction, restoration, repair or maintenance obligations or requirements) under the Main Lease, and Landlord’s representations and warranties in the Main Lease are not to be considered the representations and warranties of Tenant under this Sublease, (b) Tenant shall have no liability for any damage, loss, claim, liability, or expense arising out of the failure of Landlord to perform its obligations under the Main Lease, the breach by Landlord of its representations and warranties under the Main Lease, the acts or omissions of Landlord, or any other circumstance or event beyond Tenant’s control. Upon written notice from Subtenant to Tenant of Landlord’s failure to so perform its obligations or of Landlord’s breach of such representations and warranties, Tenant shall notify Landlord to that effect and demand Landlord’s performance or rectification of such breach. Tenant shall, at Subtenant’s sole cost and expense, use such other reasonable efforts as Subtenant may reasonably request to cause Landlord to comply with its obligations under the Main Lease, including, without limitation, exercising Tenant’s rights of self-help under Section 3.01(e) of the Main Lease pursuant to the terms and conditions of Section 3.01(e) of the Main Lease provided that Subtenant (x) is not in default hereunder, (y) requests Tenant in writing to exercise such self-help rights and certifies to Tenant that the terms and conditions set forth in Section 3.01(e) are satisfied and (z) reimburses Tenant in advance of the exercise by Tenant of such self-help rights for the costs to exercise such self-help rights (the “Subtenant Self-Help Payment”), it being understood and agreed that Tenant will request Landlord to reimburse the cost of such Subtenant Self-Help Payment pursuant to Section 3.01(e) of the Main Lease. Provided that Subtenant has fully complied with (x), (y) and (z) above, Subtenant reserves the right to enjoin Tenant to exercise Tenant’s rights of self-help under Section 3.01(e) of the Main Lease pursuant to the terms and conditions of Section 3.01(e) of the Main Lease in the event Tenant fails to make such exercise after Subtenant’s compliance with (x), (y) and (z) above. To the extent of any reimbursement by Landlord of the Subtenant Self-Help Payment, Tenant shall reimburse Subtenant. Notwithstanding anything to the contrary in the preceding sentence, Tenant shall have no obligation to commence suit or initiate legal proceedings on behalf of, or in conjunction with, Subtenant against Landlord; however, if Landlord does not reimburse Tenant for Subtenant Self-Help Payment and Tenant does not sue and/or make a demand on Landlord for Subtenant Self-Help Payment, Tenant shall be responsible to Subtenant for the same. Except as otherwise expressly provided in this Sublease, Tenant shall have no obligation to Subtenant for any default under this Sublease that results from the default or any other act of Landlord under the Main Lease. The performance by Tenant of its obligations hereunder shall be conditioned upon the performance by Landlord of its obligations under the Main Lease. In any circumstance in which Tenant’s consent is required under this Sublease and Tenant has agreed herein not to unreasonably withhold or delay such consent, and in which a corresponding consent of Landlord is required pursuant to the Main Lease in order to avoid having the Tenant’s consent constitute a breach of the Main Lease, then Tenant shall not be deemed to have unreasonably withheld or delayed its consent if such corresponding consent of Landlord has not been obtained. 13. Notice from Landlord of Default. If Tenant shall receive notice from Landlord of any default by Subtenant occurring under the Main Lease with respect to the Premises, or if there is a default by Subtenant hereunder, Tenant shall notify Subtenant of such default and provide Subtenant with a period from the date of such notification by Tenant in which to cure such default, which period shall be three (3) days for a monetary default and fifteen (15) days for a non-monetary default, unless a shorter period is indicated in the Main Lease or in this Sublease, in which case the cure period shall be as set forth in the Main Lease or set forth in the Sublease.   9 If any such default by Subtenant remains uncured after Tenant has given Subtenant notice and an opportunity to cure as aforesaid, Tenant shall have, in addition to any other rights and remedies available to Tenant, the right but not any obligation to cure such default and recover from Subtenant as additional rent all expenses, including without limitation reasonable attorneys’ fees, incurred by Tenant in connection with such cure, together with interest thereon until paid at the maximum rate permitted under applicable law. In the event of such an uncured default by Subtenant, Tenant also shall have all rights afforded to a landlord at law and in equity under Massachusetts law and all of the rights and remedies in its dealings with Subtenant as Landlord has under the Main Lease, including without limitation Article 6 of the Main Lease, in its dealings with Tenant in the event of a default by Tenant under the Main Lease. All damages and expenses, including without limitation reasonable attorneys’ fees, incurred by Tenant in connection with any such cure, together with interest thereon until paid at the maximum rate permitted under applicable law, shall be paid by Subtenant to Tenant, as additional rent hereunder, immediately upon Tenant’s demand therefor. No remedy or election hereunder shall be deemed exclusive, but shall, whenever possible, be cumulative with all other remedies at law or in equity. The expiration or termination of this Sublease and/or the termination of Subtenant’s right to possession of the Premises shall not relieve Subtenant of liability under any indemnity provisions of this Sublease as to matters occurring or accruing during the term of the Sublease or by reason of Subtenant’s occupancy of the Premises. 14. Insurance. Subtenant shall, at its sole expense, obtain and maintain the following insurance policies, issued by insurers acceptable to Tenant and authorized to do business in the Commonwealth of Massachusetts: (a) the types and amounts of insurance coverage that Tenant is required to obtain and maintain under the Main Lease and (b) business interruption insurance throughout the term of this Sublease sufficient to cover at least twenty-four (24) months of Rent due hereunder and Subtenant’s business losses during such twenty-four (24)-month period. Tenant shall use the proceeds of such policies in the manner required of Tenant under the Main Lease. Subtenant shall name Tenant and Landlord as additionally named insureds under all such policies. Such policies shall be primary and non-contributing with any insurance maintained by Tenant and shall provide that they shall not be canceled or modified without thirty (30) days’ prior written notice to Tenant. A certificate of the insurer evidencing the existence and amount of each of such required insurance policies shall be delivered by Subtenant to Tenant before the date on which Subtenant is first given access to or possession of the Premises, and thereafter within twenty (20) days after any written request from Tenant. With respect to each of such required insurance policies, Subtenant shall provide Tenant with proof of renewal or qualified replacement insurance policies at least ten (10) days before termination of the insurance policy that was previously in effect. All of such insurance policies shall be maintained throughout the term of this Agreement. 15. Compliance with Laws. Subtenant shall use the Premises only in a manner that is in compliance with all of the requirements with respect to the Premises which are imposed or issued by (a) governmental authorities that have jurisdiction over the Premises, and/or (b) insurance companies that have issued insurance policies covering the Premises and/or persons using or anticipated to use the Premises. Subtenant shall indemnify Tenant against, and hold Tenant harmless from, any damage, loss, claim, liability, or expense, including without limitation reasonable attorneys’ fees, arising out of Subtenant’s failure to comply with this section.   10 16. No Waste or Nuisance. Subtenant shall not commit or suffer to be committed any waste upon the Premises or any nuisance or other action which may disturb the quiet enjoyment of any other tenant or occupant in the Building. 17. Hazardous Waste. Subtenant’s use of the Premises shall not involve or result in the use, generation, manufacturing, transportation, storage, handling, or disposal of, or the performance of any activity in connection with, any “hazardous substance” or “hazardous waste”, as these terms are defined under federal, state, and local laws and regulations, of types or in quantities that (a) are not permitted under applicable laws and regulations, (b) would, under such laws and regulations, subject Tenant or the Premises to any claim or liability, including without limitation any damages, penalties, or fines, or any liens on the Premises or the Building or any part thereof or (c) are in violation of the terms of the Main Lease. Subtenant shall indemnify Tenant and Landlord against, and hold Tenant and Landlord harmless from, any damage, loss, claim, liability, or expense, including without limitation reasonable attorneys’ fees, arising out of any claim or charge made by federal, state, or local government entities or private parties concerning violations and/or alleged violations of such laws and regulations or any related applicable court orders or common law which were caused or alleged to be caused by Subtenant or its officers, employees, contractors, agents, licensees, subtenants, assignees, franchisees or invitees in connection with the use of the Premises by such party or parties. 18. Default by Subtenant. Subtenant shall do nothing that will subject the Main Lease to termination by Landlord under the provisions of the Main Lease. If Subtenant is in default under the provisions of the Main Lease, Tenant shall be entitled, but not obligated, to cure such default on behalf of and for the account of Subtenant, in which case all damages and expenses, including without limitation reasonable attorneys’ fees, incurred by Tenant in connection with such cure, together with interest thereon until paid at the maximum rate permitted under applicable law, shall be paid by Subtenant to Tenant, as additional rent hereunder, immediately upon Tenant’s demand therefor. By so curing any such default of Subtenant on behalf of and for the account of Subtenant, Tenant shall not be deemed to have waived any of its rights or released Subtenant from any of its obligations under this Sublease. Tenant shall, however, also be entitled to cure such default on its own account to preserve its interest in and under the Main Lease, and may terminate this Sublease by-reason of such default of Subtenant if Subtenant does not pay to Tenant, as additional rent hereunder, all damages and expenses, including without limitation reasonable attorneys’ fees, incurred by Tenant in connection with such cure, together with interest thereon until paid at the maximum rate permitted under applicable law, within ten (10) days after demand therefor. In the event Tenant terminates this Sublease due to a default by Subtenant, Subtenant shall immediately reimburse Tenant, as additional rent, the unamortized value of the Free Rent (amortized on a straight-line basis over the term of this Sublease) as of the date of such termination, which remedy shall be in addition to all of Tenant’s other rights and remedies set forth herein and at law and in equity. In the event that the Main Lease is terminated by Landlord by reason of Subtenant’s default, Subtenant shall indemnify Tenant against, and hold Tenant harmless from, all damages and expenses that Tenant may become liable to pay under the Main Lease resulting from such default, plus all other expenses relating thereto, including without limitation (i) reasonable attorneys’ fees and the full expense (including the value of the work required to be done by Tenant’s personnel) of relocating Tenant to new leased premises as a replacement for the Tenant’s Premises, which new leased premises shall be at least equivalent to the Tenant’s   11 Premises in terms of size, quality of location, and quality of construction and (ii) the unamortized value of the Free Rent (amortized on a straight-line basis over the term of this Sublease) as of the date of such termination. 19. Tenant’s Right of Entry. In addition to any right of entry to the Premises that Tenant may have under the provisions of the Main Lease, Tenant reserves the right upon one business day’s written notice to enter the Premises during regular business hours (except no such notice shall be required in the event of an emergency) from time to time to determine whether Subtenant is in compliance with this Sublease. 20. Subleasing, Assignment, or Transfer. a. Subtenant shall not have the right to sublease, assign, or transfer (whether voluntarily or by operation of law) the Premises or any portion thereof, and shall not suffer or permit the Premises or any portion thereof to be subleased, assigned, or transferred by operation of law or otherwise. Subtenant covenants and agrees that neither the Premises, nor any part thereof, will be encumbered in any manner by reason of any act or omission on the part of Subtenant, or used or occupied, or permitted to be used or occupied, or utilized for any reason whatsoever, by anyone other than Subtenant, or for any use or purpose other than as permitted hereunder. For purposes of this Sublease, “transfer” shall mean the assignment (collateral or otherwise), mortgage, sublease, transfer, pledge or encumbrance by Subtenant of this Sublease or any interest therein or the grant by Subtenant of any license, concession or other right of occupancy of the Premises or any portion thereof. “Transfer” shall also include the transfer (a) if Subtenant is a corporation, and Subtenant’s stock is not publicly traded over a recognized securities exchange, of more than fifty percent (50%) of the voting stock of such corporation during the Term of this Sublease (whether or not in one or more transfers) or the dissolution, merger or liquidation of the corporation, or (b) if Subtenant is a partnership or other entity, of more than twenty-five percent (25%) of the profit and loss participation in such partnership or entity during the Term of this Sublease (whether or not in one or more transfers) or the dissolution, merger of liquidation of the partnership. If Subtenant is a limited or general partnership (or is comprised of two or more persons, individually or as co-partners), Subtenant shall not be entitled to change or convert to (i) a limited liability company, (ii) a limited liability partnership or (iii) any other entity which possesses the characteristics of limited liability without the prior written consent of Tenant, which consent may be given or withheld in Tenant’s sole discretion. b. Provided that Subtenant shall not then be in default beyond any applicable grace period under the Sublease at either (x) the time that Subtenant provides notice to Tenant of the proposed assignment or sublet or (y) the commencement of the term under the proposed assignment or sublet, Section 20.a. shall not apply to:     (i) Occupancy by an Affiliate (as defined below) of NewStar Financial, Inc. and no further consent shall be required with regard thereto, provided, however, that Subtenant shall give Tenant and Landlord thirty (30) days’ prior written notice of such occupancy. For the purposes hereof, an “Affiliate” shall be defined as any other entity which Controls, is Controlled by, or is under common Control with NewStar Financial, Inc.,   12   with “Control” being defined as ownership of more than 50% of the voting interest in such entity, or an entity into or with which NewStar Financial, Inc. is merged.     (ii) An assignment or sublease to an Affiliate of NewStar Financial, Inc. provided that Subtenant shall provide (a) Tenant and Landlord thirty (30) days’ written notice prior to the commencement of any assignment or subletting and (b) Tenant financial statements for the Affiliate in a form acceptable to Tenant.     (iii) An assignment of this Sublease to an Affiliate provided that the Affiliate (a) enters into an agreement with Tenant in which such assignee agrees to assume, perform and be bound by all of the obligations of Subtenant under this Sublease (except that no such agreement shall be required if such assumption is expressly provided for by statutory law) and (b) either (I) the acquiring entity has a net worth at least equal to that of Subtenant at the execution of this Sublease or (II) Subtenant shall fully guaranty the payment and performance of such acquiring entity under this Sublease. c. Subtenant shall deliver to Tenant a fully executed copy of each sublease or assignment made hereunder within two (2) business days after the date of its full execution. d. Subtenant shall remain fully liable for the due and timely performance of all of Subtenant’s obligations hereunder notwithstanding any subletting or assignment provided for herein and, without limiting the generality of the foregoing, shall remain fully responsible and liable to Tenant for all acts and omissions of any subtenant, assignee or anyone claiming by, through or under any subtenant or assignee which shall be in violation of any of the obligations of this Sublease, and any such violation shall be deemed to be a violation by Subtenant. Notwithstanding any assignment and assumption by the assignee of the obligations of Subtenant hereunder, the Subtenant herein named, and each successor in interest of Subtenant herein named, shall remain liable jointly and severally (as a primary obligor) with its assignee and all subsequent assignees for the performance of Subtenant’s obligations hereunder, and shall remain fully and directly responsible and liable to Tenant for all acts and omissions on the part of any assignee or subtenant subsequent to it in violation of any of the 21. Indemnification. Subtenant shall indemnify Tenant against, and hold Tenant harmless from, any damage, loss, claim, liability, or expense, including without limitation reasonable attorneys’ fees, arising out of (a) any negligent act, omission or willful misconduct of Subtenant and/or any of its agents, servants, employees, invitees, customers or contractors; (b) any accident, injury or damage whatsoever caused to any person, or to the property of any person, occurring in or about the Premises; (c) with respect to Subtenant’s activities on or about the Building, any accident, injury or damage occurring outside the Premises but on or about the property on which the Building is situated, (d) any breach of any covenant or representation set forth herein, or (e) any claim by Landlord under the Main Lease with respect to the Premises or Subtenant’s activities on or about the Building.   13 22. Tenant Not Liable. In no event shall Tenant or any of its officers, employees, contractors, agents, or invitees be liable for any damage, loss, claim, liability, or expense sustained by Subtenant or any of its officers, employees, contractors, agents, licensees, subtenants, assignees, franchisees or invitees (or anyone claiming through them or on their behalf) resulting directly or indirectly from (a) any latent defect in the Premises or the Building, including without limitation any parking or common areas thereof, or in any equipment, facilities, fixtures, or furniture located therein, or (b) any accident or other occurrence in or about the Premises or the Building, including without limitation any parking or common areas thereof, or (c) any negligent acts or omissions of any owner, tenant, or other occupant of the Building (other than Tenant with respect to its own activities on the Premises) or of any invitee or other person in the Building. All property placed in the Premises, Building and parking areas by Subtenant or any of its officers, employees, contractors, agents, licensees, subtenants, assignees, franchisees or invitees shall be so placed at the sole risk of such party, and Tenant shall have no liability whatsoever for any damage thereto. Subtenant agrees to cooperate in any reasonable safety or security program required by law and/or developed by Landlord and/or Tenant. No recourse shall be had on any of Tenant’s obligations hereunder or for any claim based thereon or otherwise in respect thereof against any incorporator, subscriber to the capital stock, shareholder, officer or director, past, present or future, of any corporation, or any partner of any partnership (general or limited) or joint venturer of any joint venture or trustee or beneficiary of any trust, which shall be Tenant hereunder or included in the term “Tenant” or of any successor of such corporation, partnership, joint venture or trust or against any principal, disclosed or undisclosed, or any affiliate of any party which shall be Tenant or included in the term “Tenant,” whether directly or through Tenant or through any receiver, assignee, trustee in bankruptcy or through any person, firm or corporation, whether by virtue of any constitution, statute or rule of law or by enforcement of any assessment or penalty or otherwise, all such liability being expressly waived and released by Subtenant. In no event shall Tenant or any of Tenant’s agents or employees (or any of the officers, trustees, directors, partners, beneficiaries, joint venturer, members, incorporators, stockholders or other principals or representatives and the like, disclosed or undisclosed, thereof) ever be liable for consequential or incidental damages. Subtenant shall look solely to Tenant’s leasehold estate for the satisfaction of any right of Subtenant for the collection of a judgment or other judicial process or arbitration award requiring the payment of money by Tenant and no other property or assets of Tenant, Tenant’s agents, incorporators, shareholders, officers, directors, partners, members, principals (disclosed or undisclosed) or affiliates shall be subject to levy, lien, attachment or other enforcement procedure for the satisfaction of Tenant’s rights and remedies under or with respect to this Sublease, the relationship of Tenant and Subtenant hereunder or under law, or Subtenant’s use and occupancy of the Premises or any other liability of Subtenant to Tenant. 23. Covenant of Quiet Enjoyment. Tenant covenants that for so long as Subtenant makes timely payment of the Base Rent, Subescalations and all other amounts due under this Sublease and timely performs all of Subtenant’s other obligations under this Sublease, Subtenant may peaceably and quietly have, hold, and enjoy the Premises throughout the term (until and unless terminated) of this Sublease, subject to the other provisions of this Sublease, provided, however, that Subtenant has no right, and by this Sublease is granted no right, to exercise any right to extend the term or any right to expand the Premises which may be or have been granted by Landlord to Tenant under the Main Lease.   14 24. Surrender of Premises. Unless otherwise instructed by Tenant, Subtenant shall at its own expense and before the end of the term hereof (a) remove all alterations and improvements to the Premises which were not consented to by Tenant and/or Landlord (as the case may be) as required under this Sublease and the Main Lease, (b) remove all alterations and improvements to the Premises as requested by Tenant and/or Landlord (as the case may be) at the time that any plans for such work are approved by same, (c) repair all damage resulting from the initial installation or subsequent removal of the items specified in the two preceding clauses, and close all floor, ceiling, and roof openings and (d) restore and surrender the Premises to Tenant in as good condition and repair as the Premises were in when Subtenant was first granted access to the Premises, reasonable wear and tear excepted. All property of Subtenant remaining on the Premises after the termination of the term hereof shall be deemed to have been abandoned by Subtenant, provided, however, that if any such property so remains on the Premises and the removal of such property would impose an expense on Tenant, then, at Tenant’s election, Tenant shall be entitled, but not obligated, to remove such property on behalf of and for the account of Subtenant, in which case all expenses so incurred by Tenant in connection therewith shall be paid by Subtenant to Tenant, as additional rent hereunder, immediately upon Tenant’s demand therefor. 25. Holding Over by Subtenant. If Subtenant (including without limitation any subtenant, successor, or assignee of Subtenant) holds over and remains in possession of the Premises or any part thereof beyond the termination of the term of this Sublease, (a) unless and until Tenant and Subtenant have otherwise expressly agreed, such holding over shall under no circumstances be deemed to constitute a tenancy at will, a month-to-month tenancy, or any other form of tenancy, and, instead, such holding over shall be regarded as occurring over Tenant’s objection, and Subtenant shall be (i) a trespasser without any right to occupy the Premises, (ii) a tenant at sufferance, or (iii) a holdover tenant, whichever is deemed by the law of the pertinent jurisdiction to hold the least rights to, or estate in, the Premises, (b) Subtenant shall pay to Tenant, as a charge for the occupancy of the Premises objected to by Tenant, an amount equal to (i) the combined total of the Base Rent, the additional rent, and all other payments required under this Sublease, at the rates at which such payments were being made by Subtenant during the month immediately preceding the termination of the term of this Sublease, multiplied by (ii) two hundred percent (200%), and such payments shall be made on the same schedule and in accordance with the same procedures as were in effect concerning such payments prior to the commencement of such holding over, (c) in addition to and without limiting any other rights and remedies that Tenant may have on account of such holding over, Subtenant shall pay to Tenant all direct, indirect, and consequential damages, costs, and expenses incurred by Tenant as a result of such holding over, including without limitation any costs and expenses that Landlord charges to Tenant on account thereof, and (d) indemnify Tenant against, and hold Tenant harmless from, any damage, loss, claim, liability, or expense, including without limitation all direct and consequential damages for which Tenant is responsible under the Main Lease and reasonable attorneys’ fees, arising out of such holding over. 26. Fire, Casualty, and Eminent Domain. With respect to any damage or destruction by fire or other casualty, or any taking by eminent domain, the provisions of the Main Lease shall govern, and Tenant shall have the right, without Subtenant’ s consent, to make, in Tenant’s sole discretion, whatever elections are provided to Tenant under the Main Lease. Notwithstanding such incorporation by reference, Subtenant acknowledges that pursuant to   15 Section 5.01 of the Main Lease, insurance coverage of the Building is to be provided by Landlord, and Tenant shall have no obligation during the term of this Sublease to provide any such insurance coverage. Subtenant agrees to look solely to Landlord for the furnishing of such insurance coverage. Tenant shall cooperate reasonably with Subtenant in obtaining for Subtenant’s benefit the performance of Landlord of its obligations under the Main Lease, but Tenant shall in no event be liable to Subtenant, nor, except as otherwise expressly set forth in the casualty or condemnation provisions of the Main Lease, shall the obligations of Subtenant hereunder be impaired or the performance thereof excused because of any failure or delay on Landlord’s part in furnishing such insurance coverage, except as permitted under the terms of the Main Lease or at law. To the extent that Tenant receives a rent abatement pursuant to Section 5.07(a) of Main Lease with respect to the Premises, Subtenant shall receive an abatement of its rental obligations hereunder but in no event shall such abatement be greater than the amount received by Tenant which is attributable to the Premises. 27. Force Majeure. This Sublease and the obligation hereunder of Subtenant to pay Base Rent, additional rent and all other payments due hereunder and to perform under all other provisions of this Sublease shall in no way be affected, impaired, or excused because Tenant is unable to fulfill any of the obligations that, under this Sublease, are expressly or implicitly to be performed by Tenant if Tenant is delayed or prevented from so doing by reason of accident, inclement weather, fire, flood, strike, other labor dispute, war, act of God, act of government, or any other cause beyond the control of Tenant (such events being collectively referred to herein as a “Force Majeure”). 28. Confidentiality. Except as may be required by law or to enforce this Sublease, Tenant and Subtenant each acknowledge and agree that the operations of Tenant and Subtenant in the Building are of a highly confidential nature and that under no circumstances shall either party or any of their respective employees disclose or make public any information obtained by either party regarding the other party’s operations or information generated from their respective operations in the Building that may be learned in connection with the execution of the Main Lease and/or this Sublease. In addition, except as may be required by law or to enforce this Sublease, each of Tenant and Subtenant covenant that they shall not disclose or make public any of the terms and conditions of the Main Lease or this Sublease or any of the schedules or exhibits thereto. 29. Broker or Brokers. Each party represents and warrants to the other that it has dealt with no broker or agent in connection with this Sublease other than McCall & Almy and CB Richard Ellis, and each party covenants that it shall indemnify the other party against, and hold the other party harmless from, any reasonable attorneys’ fees, arising out of any breach by the party making such covenant of the foregoing representation and warranty. Tenant acknowledges and agrees that any broker’s fees due to either or both of such agents shall be at the sole expense of Tenant pursuant to a separate agreement with McCall & Almy, and only if, as, and when this Sublease is unconditionally executed and delivered by Tenant and Subtenant. 30. Successors and Assigns. This Sublease shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns, heirs, and legal representatives, provided, however, that this provision shall not operate to permit any subleasing,   16 assignment, mortgage, lien, charge, or other transfer or encumbrance that is contrary to the provisions of this Sublease. 31. Subtenant to Attorn to Landlord. In the event that the Main Lease is terminated for any reason other than the election by Tenant to terminate the Main Lease pursuant to any right of election possessed by Tenant under the Main Lease, then at Landlord’s election Subtenant shall attorn to Landlord and this Sublease shall be deemed to be and shall become a direct lease between Landlord and Subtenant. 32. Time of the Essence. Time is of the essence of each provision of this Sublease. 33. Interpretation of Indemnifications. Except as otherwise expressly provided in this Sublease, any obligations of Subtenant to indemnify and hold harmless another party pursuant to the provisions of this Sublease and/or the Main Lease (insofar as this Sublease incorporates the Main Lease) shall be deemed and interpreted to be obligations in favor of both Tenant and Landlord and their respective successors and assigns. 34. Notices. Unless otherwise expressly provided in this Sublease, all notices and other communications given pursuant to this Sublease shall be in writing and shall be sent by (1) first class, United States Mail, postage prepaid, certified, with return receipt requested, (2) hand delivery to the intended address, or (3) nationally recognized overnight delivery service. All such notices and other communications shall be effective (i) in three (3) business days after deposit in United States Mail in case of (1) above, (ii) actual delivery in case of (2) above, and (iii) the next business day in case of (3) above. Such notices and other communications shall be addressed to the parties at the addresses for each of them that are specified below, which addresses may be changed by the giving of notice as provided in this section:   If to Tenant:   Massachusetts Financial Services Company   Attn: General Counsel 500 Boylston Street Boston, Massachusetts 02116 If to Subtenant:   Before Commencement Date:   NewStar Financial, Inc. 75-101 Federal Street, Suite 1900 Boston, Massachusetts 02110 Attn: Scott Poirier   After Commencement Date:   500 Boylston Street Boston, Massachusetts 02116 Attn: Scott Poirier 35. Waivers. No waiver by any party of a breach of any provision of this Sublease, and no failure by any party to exercise any right or remedy relating to a breach of any provision   17 of this Sublease, shall (a) constitute a waiver or relinquishment for the future of such provision, (b) constitute a waiver of or consent to any subsequent breach of such provision, or (c) bar any right or remedy of such party relating to any such subsequent breach. The exercise by any party of any right or election under this Sublease shall not preclude such party from exercising any other right or election that it may have under this Sublease. 36. Sublease Terminology. Except as otherwise expressly provided in this Sublease, capitalized terms used but not defined herein shall have the meanings assigned to them in the Main Lease. All consents of Tenant shall be in the sole discretion of Tenant unless otherwise specifically set forth herein. Wherever it is required by, or appears to be logically sensible in, the context of the language used in this Sublease, singular numbers and terms shall include the corresponding plural numbers and terms, masculine terms shall include the corresponding feminine and neuter terms, and the term “person” shall include “corporation”, “company”, “firm”, “organization”, “association”, “entity”, and analogous terms. Captions and headings in this Sublease are used for convenience of reference only, do not form a part of this Sublease, and shall not affect in any way the meaning or interpretation of this Sublease. 37. Invalid Provisions. If any provision of this Sublease, or the application of such provision to any party or circumstance, is found by a court of competent jurisdiction to be invalid or unenforceable, (a) the remainder of this Sublease shall not be affected and shall remain in full force and effect, (b) such invalid provision or application shall be deemed to be stricken from this Sublease, and (c) the parties shall use good faith efforts to preserve the intent of this Sublease by substituting a reasonably comparable provision for the benefit of the party or parties that the invalid or unenforceable provision was intended to benefit. 38. Entire Agreement. This Sublease constitutes the entire agreement between the parties as to the subject matter hereof and supersedes all prior agreements as the subject matter hereof. No statement, representation, promise, or inducement as to the subject matter hereof which is not included in this Sublease shall be binding upon the parties. This Sublease may not be amended, revised, extended, or otherwise modified except by a written instrument signed by Tenant and Subtenant. 39. Governing Law. This Sublease shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, except for the portion of such laws having to do with conflicts of laws. 40. Landlord’s Consent as Condition Precedent. This Sublease, and the rights and obligations of all parties hereto, are subject to the condition precedent that Landlord consent in writing to this Sublease (“Consent”), which Consent must be in form and substance satisfactory to Tenant in its sole discretion. Such Consent by Landlord may be provided either by its endorsement set forth as a part of this Sublease or in a separate document. Upon Tenant’s request, Subtenant shall deliver to Landlord and Tenant copies of Subtenant’s financial information and other documentation reasonably requested by Landlord in connection with Landlord’s grant of Consent. 41. No Privity of Estate. Nothing contained in this Sublease shall be construed to create privity of estate or of contract between Subtenant and Landlord.   18 42. Estoppel Certificate. Subtenant agrees, from time to time, upon not less than ten (10) days prior written request by Tenant, to execute, acknowledge and deliver to Tenant a statement in writing, addressed to such party as Tenant shall designate in its notice to Subtenant, certifying that this Sublease is unmodified and in full force and effect (or, if there have been any modifications, that the same is in full force and effect as modified and stating the modifications) stating that Subtenant is not in default hereunder (or if in default, the nature of such default, in reasonable detail), and such other relevant facts regarding this Sublease as Tenant may reasonably request. Any such statement delivered pursuant to this Section 42 may be relied upon by any such person. 43. Authority of Subtenant. Subtenant represents and warrants (a) that it is a valid existing corporation licensed to do business in the Commonwealth of Massachusetts and (b) that it has the power and authority to execute and deliver the Sublease and perform its obligations hereunder. 44. Tenant Estoppel. Tenant hereby certifies to Subtenant as follows: (a) The Main Lease is in full force and effect; a true and correct redacted copy of the Lease is attached hereto as Exhibit A; none of the information contained in the redacted portions of such copy of the Main Lease modify Subtenant’s rights or obligations under this Sublease; there are no amendments or modifications of any kind to the Main Lease relating to the Premises and there are no other promises, agreements, understandings, or commitments between Landlord and Tenant relating to the Premises; and Tenant has not given Landlord any notice of termination of the Main Lease as a whole or with respect to the Premises. (b) There has not been and is now no assignment by Tenant of the Main Lease, or any rights therein, to any party. There has not been and is now no sublease of the Premises by Tenant to any party, except for this Sublease. (c) As of the date hereof, there is no notice of default to Tenant under the Main Lease from Landlord. No uncured default, event of default, or breach by Tenant exists under the Main Lease with respect to the payment of Rent by Tenant under the Main Lease and no facts or circumstances exist that, with the passage of time or the giving of notice, or both, will or could constitute a default, event of default, or breach by Tenant with respect to the payment of Rent by Tenant under the Main Lease. To the best of Tenant’s knowledge, no non-monetary uncured default, event of default, or breach by Tenant exists under the Main Lease and no facts or circumstances exist that, with the passage of time or the giving of notice, or both, will or could constitute a non-monetary default, event of default, or breach by Tenant under the Main Lease. As of the date hereof, there is no claim by Tenant against Landlord alleging Landlord’s default under the Main Lease and, to the best of Tenant’s knowledge, no facts or circumstances exist that, with the passage of time or the giving of notice, or both, will or could constitute a default, event of default, or breach by Landlord under the Main Lease. (d) Tenant agrees that no future amendment or other modification of the Main Lease which would materially impact the Premises or Subtenant’s rights under the Sublease shall be enforceable unless such amendment or other modification has been consented to in writing by   19 Subtenant, except to the extent such amendment or modification would have no material impact on the Premises or Subtenant’s rights under the Sublease in which case no such consent is required. (e) Tenant agrees to provide copies to Subtenant at the address listed in Section 34 hereof of all notices of items that would have a material impact upon the Sublease or Subtenant’s operations in the Premises (including any notices of default and/or termination) given to Landlord or received by Tenant under the Main Lease with respect to the Premises. (f) Tenant acknowledges that the term of the Main Lease with respect to the Premises shall not expire until February 28, 2013 unless sooner terminated in accordance with the terms of the Main Lease. (g) Tenant has no right to surrender the Premises that is not disclosed in the redacted copy of the Main Lease attached hereto. To the best of Tenant’s knowledge, no party holds any right of first lease, right of first offer, right of first refusal or other option to lease the Premises during the term of the Sublease. (h) Tenant will request from Landlord, as part of the Consent, the estoppel for subtenants contemplated by Section 4.12 of the Main Lease (and in the event a separate consent document is not delivered by Landlord, Tenant shall request a separate estoppel for subtenants pursuant to Section 4.12 of the Main Lease). 45. Waiver of Right to Trial by Jury. Tenant and Subtenant hereby waive any right to a trial by jury in any action or proceeding based upon, or related to, the subject matter of this Sublease. This waiver is knowingly, intentionally, and voluntarily made by each of the parties hereto and each party acknowledges to the other that neither the other party nor any person acting on its respective behalf has made any representations to induce this waiver of trial by jury or in any way to modify or nullify its effect. The parties acknowledge that they have read and understand the meaning and ramifications of this waiver provision and have elected same of their own free will. 46. Counterparts. This Sublease may be executed in one or more counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument. [signatures on following page]   20 Witness the execution hereof under seal as of the date first written above.   MASSACHUSETTS FINANCIAL SERVICES COMPANY    NEWSTAR FINANCIAL, INC. By:   /s/ Paul Kirwan    By:   /s/ Richard Scott Poirier Name:   Paul Kirwan    Name:   Richard Scott Poirier Title:   C.F.O.    Title:   Managing Director   21 EXHIBIT A MAIN LEASE AMENDED AND RESTATED LEASE BETWEEN FIVE HUNDRED BOYLSTON WEST VENTURE, AS LANDLORD AND MASSACHUSETTS FINANCIAL SERVICES COMPANY, AS TENANT DATED AS OF February 1, 2000 LEASE TABLE OF CONTENTS   BACKGROUND    1 BASIC LEASE INFORMATION    1 ARTICLE 1    5 1.01 LEASE    5 1.02 APPURTENANT RIGHTS    5 ARTICLE 2    5 2.01 TERM    5 2.02 USE    5 2.03 RENT    5 2.04 OPERATING COST    6 2.05 IMPOSITIONS    9 2.06 COMPUTATION OF OPERATING COST AND IMPOSITIONS    10    11 2.08 TENANT’S AUDIT RIGHTS    11 ARTICLE 3. LANDLORD’S COVENANTS    13 3.01 BASIC SERVICES    13 3.02 EXTRA SERVICES    16 3.03 WINDOW COVERINGS    17 3.04 GRAPHICS AND SIGNAGE    17 3.05 TENANT EXTRA IMPROVEMENTS    19 3.06 REPAIR OBLIGATION    19 3.07 PEACEFUL ENJOYMENT    19 ARTICLE 4. TENANT’S COVENANTS    20 4.01 OMITTED    20 4.02 CONSTRUCTION OF TENANT IMPROVEMENTS    20 4.03 TAXES ON PERSONAL PROPERTY    20 4.04 REPAIRS BY TENANT    20 4.05 WASTE    21 4.06 ASSIGNMENT OR SUBLEASE    21 4.07 ALTERATIONS AND SURRENDER    27 4.08 COMPLIANCE WITH LAWS AND INSURANCE STANDARDS    28 4.09 ENTRY FOR REPAIRS AND LEASING    29 4.10 No NUISANCE    29 4.11 SUBORDINATION    29 4.12 ESTOPPEL CERTIFICATE    30 4.13 TENANT’S REMEDIES    31 4.14 RULES AND REGULATIONS    31 4.16 PAYMENT OF LANDLORD’S EXPENSES    31 ARTICLE 5. CASUALTY, EMINENT DOMAIN    31   -i- 5.01 CASUALTY INSURANCE    31 5.02 LIABILITY INSURANCE    32 5.03 TENANT’S INSURANCE    32 5.04 INDEMNITY AND EXONERATION    33 4.15 PERSONAL PROPERTY AT TENANT’S RISK    33 5.05 WAIVER OF SUBROGATION RIGHTS    35 5.06 CONDEMNATION AND Loss OR DAMAGE    36 5.07 DAMAGE DUE TO FIRE AND CASUALTY    37 ARTICLE 6    42 6.01 EVENTS OF DEFAULT    42 6.02 REMEDIES UPON DEFAULT    43 6.03 DAMAGES UPON TERMINATION    43 6.04 COMPUTATION OF RENT FOR PURPOSES OF DEFAULT    45 6.05 LIQUIDATED DAMAGES    45 6.06 RIGHTS OF LANDLORD IN BANKRUPTCY    45 6.07 LATE CHARGE    46 ARTICLE 7. APPRAISAL    46 7.01 APPRAISAL OF FAIR MARKET NET RENT    46 ARTICLES 8. MISCELLANEOUS    48 8.01 No WAIVER    48 8.02 HOLDING OVER    48 8.03 AMENDMENTS AND MODIFICATIONS    48 8.04 TRANSFERS BY LANDLORD    48 8.05 SEVERABILITY    49 8.06 NOTICES    49 8.07 No JOINT VENTURE    49 8.08 SUCCESSORS AND ASSIGNS    49 8.09 APPLICABLE LAW    49 8.10 TIME OF THE ESSENCE    49 8. 11 SUBMISSION NOT AN OPTION    49 8.12 BROKERAGE    50 8 13 WAIVER OF JURY TRIAL    50 8.14 ALL AGREEMENTS CONTAINED    50 8.15 CUMULATIVE REMEDIES    50 8.16 FAILURE TO ENFORCE    50 8.17 NOTICE OF LEASE    51 8.18 EXPENSE REIMBURSEMENT    51 8.19 BUILDING NAME    51 8.20 OMITTED    52 8.21 OMITTED    52 8.22 HIRING PRACTICES    52 8.23 No RIGHTS IN ADJOINING PARCEL    52 ARTICLE 9. OPTION TO EXTEND THE TERM    53 9.01 GRANT AND EXERCISE OF OPTION TO EXTEND    53 9.02 BASE RENT DURING EXTENDED TERM    54 9.03 LEASE CONTINUES IN EFFECT    54 ARTICLE 10. OPTIONS TO EXPAND THE LEASED PREMISES    55   -ii- 10.01 GRANT OF OPTIONS TO EXPAND    55 10.02 EXERCISE OF OPTIONS TO EXPAND    57 10.03 RENT FOR EXPANSION SPACE    58 10.04 CONDITION OF EXPANSION SPACE    58 10.05 EXPANSION SPACE PART OF LEASED PREMISES    58 ARTICLE 11. FIRST RIGHT TO LEASE AND RIGHT OF PARTIAL SURRENDER    58 11.01 EXERCISE OF FIRST RIGHT TO LEASE    58 11.02 RIGHT OF PARTIAL SURRENDER    64 ARTICLE 12. PARKING, STORAGE SPACE, ROOFTOP SATELLITE DISH SPACE, UTILITY SHAFT SPACE, PUMP AND CHILLER SPACE, AND EMERGENCY GENERATOR    65 12.01 PARKING    65 12.02 STORAGE SPACE    66 12.03 ROOFTOP SATELLITE DISH SPACE    67 12.04 UTILITY SHAFT SPACE    67 12.05 PUMP AND CHILLER SPACE    67 12.06 EMERGENCY GENERATORS    68 ARTICLE 13    68 13.01 DEFINITIONS    68 ARTICLE 14 SURVIVAL OF EXISTING LEASE    74 EXHIBIT A    1 EXHIBIT A-l - DESCRIPTION OF LAND    1 EXHIBIT B    1 EXHIBIT C - BUILDING RULES AND REGULATIONS    1 EXHIBIT D - UTILITY SHAFT SPACE    1 EXHIBIT E - BASEMENT STORAGE SPACE    1 EXHIBIT F - PENTHOUSE STORAGE SPACE    1 EXHIBIT G - ROOFTOP SATELLITE DISH SPACE    1 EXHIBIT H - ROOFTOP USE PROVISIONS    1 EXHIBIT I - SPECIAL MFS EQUIPMENT    1 EXHIBIT J - EMERGENCY GENERATOR PROVISIONS    1 EXHIBIT K - LANDLORD SERVICES    1 EXHIBIT L - MFS EXTERIOR SIGN    1 EXHIBIT M - ADJACENT 222 BERKELEY SPACE    1   -iii- Background A. Landlord and Tenant entered into that certain Lease dated as of September 9,1986 (the “Original Lease”) as amended by a First Amendment to Lease dated as of September 9,1986, a Second Amendment to Lease dated as of May 8,198-7, a Third Amendment to Lease dated as of August 25,1989, a Fourth Amendment to Lease dated as of June 1,1992, a Fifth Amendment to Lease dated as of July 18,1993, and a Sixth Amendment to Lease dated April 29,1993 (the Original Lease as so amended, the “Existing Lease”). B. Landlord and Tenant desire to extend the term of the Existing Lease by amending and restating the Existing Lease on the terms and conditions set forth herein. C. This Amended and Restated Lease shall become effective on the Effective Date set forth below. NOW, THEREFORE, the Existing Lease is hereby amended and restated in its entirety as of the Effective Date as follows: Basic Lease Information   Effective Date:   February 1, 2000 Tenant:   Massachusetts Financial Services Company Address:   500 Boylston Street Boston, MA 02116 Attention: General Counsel Landlord:   Five Hundred Boylston West Venture Address:   c/o Hines Interests Limited Partnership 222 Berkeley Street, Suite 1420 Boston, MA 021 16-3751 Leased Premises:   (a)        Floors seven (7) through nine (9) of the Building (inclusive of 191 square feet of space on the seventh floor of the Building currently being used by Tenant for mechanical equipment and referred to herein as the “Pump and Chiller Space”), consisting of 65,006 square feet of Net Rentable Area, all as shown on Exhibit A attached hereto (“Space A”),   27   (b)        Floors ten (10) through fifteen (15) of the Building, consisting of 132,510 square feet of Net Rentable Area, as shown on Exhibit A attached hereto (“Space B”),   (c)        Floors nineteen (19) through twenty-five (25) of the Building, consisting of 156,071 square feet of Net Rentable Area, as shown on Exhibit A attached hereto (“Space C”),   (d)        A vertical column of space, defined by the projection of the rectangle with an area of 19 square feet, from the fifteenth (15th) floor to and including the eighteenth (18th) floor of the Building, as shown on Exhibit D attached hereto and consisting of a total of 76 square feet of Net Rentable Area (the “Utility Shaft Space”),   (e)        The storage space on lower levels P1 through P3 of the Building, consisting of approximately 3,620 square feet, as shown on Exhibit E attached hereto (the “Basement Storage Space”),   (f)         The additional storage space, consisting of approximately 1 ,775 square feet, located in a cylindrical structure built on the roof of the Building, as shown on Exhibit F attached hereto (the “Penthouse Storage Space”), and   (g)        The space on the roof of the Building, consisting of approximately 64 square feet, as shown on Exhibit G attached hereto (the “Rooftop Satellite Dish Space”). Net Rentable Area of Leased Premises:   A total of 353,663 square feet for Space A, Space B, Space C, and the Utility Shaft Space, exclusive of the Basement Storage Space, the Penthouse Storage Space, and the Rooftop Satellite Dish Space. Term Commencement Date:   The Effective Date   -2- Term Expiration Date:   February 28, 2013 Option to Extend Term:   One (1) option often (10) years Base Rent:   Tenant’s Proportionate Share:    58.03%, subject to adjustment as set forth in Section 13.01   -4- THIS AMENDED AND RESTATED LEASE (this “Lease”) is entered into as of the Effective Date between Landlord and Tenant. ARTICLE 1 1.01 Lease. Landlord leases to Tenant and Tenant leases from Landlord the Leased Premises (excluding all Building Common Areas and Common Areas located therein, the exterior faces of exterior walls, and all pipes, ducts, conduits, wires, appurtenant fixtures located therein serving other parts of the Building) upon all of the terms, covenants and conditions set forth herein. 1.02 Appurtenant Rights. Tenant shall have, as appurtenant to the Leased Premises, rights to use in common (subject to reasonable rules of general applicability to tenants and other users of the Building from time to time made by Landlord of which Tenant is given notice): (a) the common lobbies, corridors, stairways, elevators and loading platform of the Building, and the pipes, ducts, conduits, wires and appurtenant meters and equipment serving the Leased Premises in common with others; (b) common driveways and walkways necessary for access to the Building; (c) if the Leased Premises include less than the entire rentable floor area of any floor, the common toilets, corridors and elevator lobby on such floor and serving the Leased Premises; and (d) all other areas or facilities in or about the Building from time to time intended for general use by Tenant, other Building tenants, and Landlord. ARTICLE 2 2.01 Term. The Term of this Lease commenced on the Term Commencement Date. The Term shall expire, unless sooner terminated in accordance with the terms hereof, on the Term Expiration Date, subject to the terms of Article 9. 2.02 Use. Tenant shall use the Leased Premises solely for the Permitted Use and for no other use or purpose, except as permitted by Landlord pursuant to Landlord’s written consent; provided, however, that Tenant’s use of the Utility Shaft Space, the Basement Storage Space, the Penthouse Storage Space, the Rooftop Satellite Dish Space, and the Pump and Chiller Space shall be limited as set forth in Article 12. 2.03 Rent. All obligations of Tenant to make payments to Landlord under this Lease shall constitute Rent. Tenant shall pay the Rent at the times and in the manner hereinafter set forth. Base Rent for the Leased Premises and Tenant’s Proportionate Share of Estimated Operating Cost and Impositions for Space A, Space B, Space C, and the Utility Shaft Space shall be paid commencing on the Term Commencement Date. Tenant shall have no obligation to pay Operating Cost or Impositions for the Basement Storage Space, the Penthouse Storage Space, or the Rooftop Satellite Dish Space. Commencing on the Term   -5- Commencement Date, Tenant shall pay the Base Rent in twelve (12) equal installments on the first day of each calendar month during each year of the Term including any extension thereof, in advance. Together with each installment of Base Rent, Tenant shall pay to Landlord one-twelfth (1/12th) of Tenant’s Proportionate Share of Estimated Operating Cost for the then current year and one-twelfth (1/12th) of Tenant’s Proportionate Share of Estimated Impositions for the then current year. All Gross Rent shall be paid without demand and (except as expressly provided in this Lease) without any reduction, abatement, counterclaim or setoff, at the address for Landlord specified on the Basic Lease Information sheet or at such other address as may be designated by Landlord from time to time. If the Term commences on a day other than the first day of a calendar month, or if the Term terminates on a day other than the last day of a calendar month, then Gross Rent provided for such partial month shall be equitably prorated on such date of commencement or termination. 2.04 Operating Cost. (a) Operating Cost shall mean all expenses and costs of every kind and nature which Landlord shall pay or become obligated to pay because of or in connection with the management, maintenance, preservation or operation of the Building (determined in accordance with generally accepted accounting principles, consistently applied) including, but not limited to the following: (1) Expenses of the operation, maintenance and security of the Building, including compensation in the form of wages, salaries, and other compensation and benefits (including payroll taxes, federal, state and local unemployment taxes and social security taxes), insurance, welfare and retirement benefits, and related expenses and benefits of all on-site and off-site employees (to the extent involved directly in the operation, maintenance, management and preservation of the Building); (2) Cost incurred by Landlord in Greater Boston for Landlord’s office and management office operation for the Building; (3) All tools, supplies, materials and equipment used in the operation and maintenance of the Building, including rental fees for the same, if such items are not purchased and amortized, pursuant to (10) below; (4) Utilities, including water and power, sewer, gas, communication, heating, lighting, air conditioning and ventilating the entire Building; (5) All maintenance, janitorial and service agreements or costs for the Building, including, without limitation, alarm service, landscaping,   -6- window cleaning, painting and decorating Common Areas, escalator and elevator maintenance, rubbish and snow removal, pest control, equipment maintenance or servicing or maintenance or cleaning for sidewalks, Building exterior, roof and service areas, and all other costs incurred by Landlord in providing the services and complying with Landlord’s obligations under Section 3.01 below; (6) A management fee in connection with the operation of the Building; Tenant’s share to be three percent (3%) of all Rent, excluding such fee; (7) Legal and accounting services for the Building, including the costs of audits by certified public accountants; provided, however, that the legal expenses shall not include legal costs incurred in proceedings by or against any specific tenant or legal costs incurred in connection with the leasing, development and/or construction of the Building; (8) All insurance premiums and costs applicable to the Building and Landlord’s personal property used in connection therewith, including but not limited to, the premiums and cost of fire, casualty and liability coverage and rental abatement or business interruption insurance set forth herein; (9) Repairs (including, where necessary, replacements) and general maintenance; (10) Amortization (together with reasonable financing charges) of capital improvements made to the Building subsequent to the Term Commencement Date of the Original Lease which (i) are designed to and will improve the operating efficiency of the Building, (ii) are required by governmental authorities (other than those which, prior to initial occupancy, were required by such governmental authorities as a condition of such occupancy) or are designed to comply with applicable laws or (iii) constitute equipment of a capital nature contemplated in (3) above (such as, for example, snow blowers, vacuums and sweepers), which in Landlord’s reasonable judgment, is ultimately less costly to purchase then to rent; provided, however, that the amount of such amortization for items in (i) above shall not exceed in any year the amount of costs reasonably determined by Landlord to have been saved by the expenditure either through direct reduction or minimization of increases which would have otherwise occurred. (b) Notwithstanding any other provision herein to the contrary, in the event that the Building is not fully occupied during any year of the Term, an   -7- adjustment shall be made in computing Operating Cost for such year so that Operating Cost shall be computed as though the Office Section of the Building had been fully occupied during such year; provided, however, that in no event shall Landlord collect in total, from Tenant and all other tenants of the Building, an amount greater than one hundred percent (100%) of the actual Operating Cost during any year of the Term. (c) Notwithstanding the foregoing, Operating Cost shall not include (i) the costs or expenses incurred by Landlord in the initial construction and development of the Building; (ii) payments of principal, interest or other charges on any Mortgage; (iii) costs of financing or refinancing of any Mortgage or costs incurred in connection with any other financing, sale, or syndication of the Building; (iv) any rent paid on any ground or underlying lease of the Land; (v) taxes (other than Impositions) imposed on Landlord; (vi) costs relating to maintaining Landlord’s existence as a corporation, limited partnership or other entity; (vii) costs of leasing other rentable areas in the Building, including advertising, leasing commissions, public relations expenses, tenant improvement allowances, moving expenses, and legal expenses related to lease negotiations and enforcement of leases; (viii) costs of leasehold improvements (including interior painting and decorations) in other tenants’ space; (ix) the incremental increases in premiums for insurance required to be carried by Landlord pursuant to this Lease when such increases are caused by any special or hazardous use of the Building by Landlord or other tenants, provided that office, retail, parking, restaurant, and ancillary uses customarily associated with a mixed office and retail project shall not be considered special or hazardous; (x) costs paid directly by individual tenants to suppliers, including tenant electricity and telephone costs; (xi) costs incurred by Landlord relating to any violation by Landlord or any other tenant of the terms and conditions of any lease of space to the extent that such costs would not otherwise have been incurred by Landlord but for such breach; (xii) the cost of making installations, alterations or replacements to the Building or Building equipment that under generally accepted accounting principles are properly classified as capital expenditures, except to the extent the amortized costs may be charged under Section 2.04(a)(10) above; (xiii) depreciation; (xiv) reserves for bad debts, repairs or capital improvements; (xv) the cost of any items for which Landlord is reimbursed by insurance, condemnation, refund, rebate or otherwise (which Landlord shall use commercially reasonable efforts to obtain), provided that the reasonable costs incurred in such recovery and any uncollected deductible shall be included in Operating Cost; (xvi) any expenses for repairs or maintenance to the extent recovered separately under warranties, guarantees and service contracts (which Landlord shall use commercially reasonable efforts to enforce, provided that the reasonable costs incurred in such enforcement shall be included in Operating Cost); (xvii) damages, penalties or fines that Landlord is obligated to pay by reason of Landlord’s violation of applicable law or failure to comply with its lease   -8- obligations; (xviii) contributions to charitable organizations; (xix) compensation paid to any executives or principals of Landlord above the grade of senior property manager, except that such costs shall be included in Operating Cost to the extent such person actually performs services that are attributable to actual Building operations or that would have been performed by an outside consultant and included in Operating Cost hereunder; (xx) costs associated with the operation repair, maintenance and management of the parking garage forming part of the Building (including the elevators serving the garage), (xxi) specific costs that are separately billed to or paid by specific tenants leasing space in the Building, or those costs and expenses which are specifically attributable to or separately paid by the tenants in the Commercial Section of the Building, (xxii) specific costs attributable to any services not available to Tenant, (xxiii) that portion of the costs and expenses relating to the loading dock facilities and the General Common Areas that is paid by the tenants in the Commercial Section of the Building; (xxiv) the cost of installing, operating, and maintaining any retail concession or other special Building facility, such as an observatory, broadcasting facility, fitness club, or dining facility; (xxv) the cost of services or materials provided to Landlord by any affiliate of Landlord, to the extent such costs exceed the costs that would have been paid by Landlord in an arm’s length transaction, provided that this clause shall not be construed to affect the management fee charged under Section 2.04(a)(6) above; or (xxvi) the cost of acquiring sculptures, paintings and other works of art. 2.05 Impositions. Impositions shall mean all real estate or personal property taxes, possessory interest taxes, Development Impact Project Exaction or so-called “linkage” payments (provided that such linkage payments shall not be included in Impositions after calendar year 1999), or similar charges, business or license taxes or fees, service payments in lieu of such taxes or fees, annual or periodic license or use fees, excises, assessments, levies, fees or charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind (including fees “in-lieu” of any such tax or assessment) which are assessed, levied, charged, confirmed, or imposed by any public authority upon the Land, the Building, its operations or the Rent (or any portion or component thereof) including, in the year paid, all fees and costs reasonably incurred by Landlord in seeking to obtain an abatement or reduction of, or a limit on any increase, in any taxes, regardless of whether any abatement, reduction or limitation is obtained, but excluding (i) inheritance or estate taxes imposed upon or assessed against the Building, or any part thereof or interest therein, (ii) taxes computed upon the basis of the net income derived from the Building by Landlord or the owner of any interest therein, and (iii) that portion of the items enumerated in this Section that is allocable on a per-square-foot basis to the Commercial Section of the Building. “Impositions” shall not include any of the enumerated items payable with respect to the parking garage forming part of the Building (including the elevators serving such garage). Landlord shall be responsible for the timely payment of all Impositions to the applicable governmental authority, subject to Tenant’s obligation to pay its Proportionate Share of Impositions to Landlord pursuant to this   -9- Article 2. In no event shall Landlord collect in total, from Tenant and all other tenants in the Building, an amount greater than one hundred percent (100%) of the actual Impositions during any year of the Term. Landlord shall provide Tenant with copies of the real estate tax bills evidencing the Estimated Impositions and the final Impositions for the year in question within five (5) business days after Landlord’s receipt thereof; provided that any failure by Landlord to provide such copies shall not constitute a Landlord default or affect Tenant’s obligations under this Lease. For so long as (i) Tenant and any Affiliate (whether as Tenant under this Lease or as subtenant under a sublease), together with other tenants in the Building that request Landlord to file an appeal of Impositions and are not in default under their respective leases, continue to occupy at least fifty percent (50%) of the Net Rentable Area of the Office Section of the Building and (ii) no Event of Default exists, at Tenant’s reasonable request made not later than ten (10) days prior to the expiration of the period for appealing Impositions, Landlord will file an appeal for such Impositions. Landlord shall retain control over all discussions and negotiations with the governmental authorities with respect to such appeal. Tenant shall, from time to time within thirty (30) days after request, reimburse Landlord for all costs incurred by Landlord in connection with any appeal requested by Tenant (except to the extent Landlord is reimbursed by any other tenants requesting such appeal for such tenants’ proportionate share of such expenses, Landlord agreeing to use commercially reasonable efforts, including the exercise of commercially reasonably remedies, to enforce the obligation of such requesting tenants under their leases to pay their proportionate share of such expenses). At Tenant’s request, Landlord shall provide its good faith estimate of the estimated costs that Landlord then expects to incur in connection with any such appeal requested by Tenant. If Landlord receives any abatements of Impositions for the year in question, the same shall be applied to reimburse Tenant for such costs previously paid by Tenant to Landlord (and, as applicable, to reimburse Landlord for any such unreimbursed costs). Whether or not the appeal was requested by Tenant or any other tenant, the net amount of the abatement received by Landlord shall be applied to reduce the amount of Impositions for such year. Nothing herein shall preclude Landlord from initiating and prosecuting any appeal of Impositions at any time, whether or not requested by Tenant or any other tenant. 2.06 Computation of Operating Cost and Impositions. (a) Notice of Estimated Amounts. Estimated Operating Cost and Estimated Impositions for any calendar year shall be as set forth in Landlord’s notice to Tenant of such amounts from time to time; provided that any change in such estimated amounts shall be made on not less than thirty (30) days’ advance notice to Tenant. On or before November 1 of any calendar year, Landlord shall deliver to Tenant Landlord’s preliminary, good faith estimates of such costs for the next calendar year; provided that (i) any failure by Landlord to provide such preliminary estimates shall not constitute a Landlord default or affect Tenant’s obligations under this Lease, and (ii) Tenant acknowledges that   -10- information regarding Estimated Impositions may not then be available. If Landlord has not delivered such estimates to Tenant by November 1, Landlord shall provide such estimates within ten (10) days after Tenant’s request therefor. If Landlord does not provide Tenant with notice of the Estimated Operating Cost and Estimated Impositions prior to December 1 of any calendar year with respect to the amounts payable during the next calendar year, Tenant shall continue to make payments of Estimated Operating Cost and Estimated Impositions at the rates then in effect, subject to Landlord’s right to give notice of a change in such estimates under the first sentence of this paragraph. (b) Year-End Statement. Landlord shall provide Tenant, within 120 days after the end of each calendar year (including, without limitation, the calendar year in which the Term shall expire or terminate), with a statement prepared or reviewed by a certified public accountant setting forth the actual Operating Cost and the actual Impositions for such preceding year, accompanied by a computation of Tenant’s Proportionate Share of the Operating Cost and the Impositions for such year. Landlord’s failure to give such notice and statements within such 120-day period for any calendar year for which an adjustment is due, shall not release either party from the obligation to make the adjustment provided for in Section 2.07. 2.07 Adjustment for Variation Between Estimated and Actual. If the Operating Cost and/or the Impositions for any calendar year exceed the Estimated Operating Cost and/or the Estimated Impositions, Tenant shall pay to Landlord Tenant’s Proportionate Share of such excess within thirty (30) days after receipt of Landlord’s statement pursuant to Section 2.06(b). If the Operating Cost and/or Impositions for any calendar year is less than the Estimated Operating Cost and/or the Estimated Impositions for such year, then Tenant’s Proportionate Share of such difference shall be refunded to Tenant within thirty (30) days after the Operating Cost Adjustment and/or the Impositions Adjustment is finally determined under Section 2.06(b) or credited against the next installment of Gross Rent then due. Should the Term commence or terminate at any time other than the first day of a calendar year, Tenant’s Proportionate Share of the Operating Cost and/or Impositions shall be prorated for the exact number of calendar days in such year in the Term for which Tenant is obligated to pay Gross Rent, and in the case of any expiration or earlier termination of the Term, the provisions of this Section 2.07 shall survive such expiration or earlier termination.   -11- 3.01 Basic Services. Landlord or its affiliates shall operate the Building to a standard of quality consistent with that of first-class office buildings in downtown Boston, Massachusetts. Landlord shall be responsible for compliance with all applicable laws now or hereafter in force relating to or as a result of the use or occupancy of the common areas of the Building as a general office/retail building (excluding any matters arising from any special use of or alterations in the Leased Premises made by Tenant), provided that the costs so incurred may be included in Operating Cost for the Building to the extent permitted under Article 2. (a) Landlord previously administered improvement of certain portions of the Leased Premises by constructing certain Tenant Improvements pursuant to the Existing Lease. (b) Landlord shall furnish Tenant during Business Hours (unless otherwise stated herein) during the Term the following services, all as more particularly described on Exhibit K attached hereto: (i) Water used by the building standard cooling, drinking and sanitation systems, and for maintenance and janitorial services. (ii) Central heat and air conditioning in season, at such temperatures and in such amounts as are from time to time furnished to tenants in comparable buildings in downtown Boston, or as may be permitted or controlled by applicable laws, ordinances, rules and regulations. (iii) Maintenance, repairs, structural and exterior maintenance (including exterior glass and glazing), painting and electric lighting service for all Common Areas, Building Common Areas and General Common Areas in the manner and to the extent customarily provided by landlords in first-class office buildings in downtown Boston. (iv) Janitorial service after Business Hours on Business Days.   -13- (v) Electricity for typewriters, voice writers, calculating machines, low consumption duplicating machines, low consumption electronic data processing equipment, other machines of similar low electrical consumption, and special lighting fixtures requiring low voltage (it being agreed that Tenant’s total consumption for such items as part of basic services under this Section 3.01(b)(v) shall not exceed two (2) watts per square foot of Usable Area, exclusive of electricity required for HVAC under Section 3.01(b)(ii) above, and that the installation of any wiring or equipment required for electrical consumption pursuant to Section 3.02(e) below in excess of the levels supplied under this clause (v) and clause (vi) below shall be at Tenant’s cost). (vi) Initial lamps, bulbs, starters and ballasts for building standard fixtures used within the Leased Premises, and electricity for lighting such fixtures. (vii) Security for the Building. (viii) Public elevator service serving the floors on which the Leased Premises are situated, including freight elevators. (c) Except as otherwise expressly provided in this Lease, Landlord shall not be liable for injuries to persons, loss of or damage to property, or inconvenience to or interruption of business operations, nor shall Landlord be deemed to have evicted Tenant, nor shall there be any abatement of Rent, nor shall Tenant be relieved from performance of any covenant on its part to be performed hereunder by reason of (i) deficiency in the provision of Basic Services, (ii) breakdown of equipment or machinery utilized in supplying services, or any repair or alteration of any part of the Building or failure to make such repair, or (iii) curtailment or cessation of services due to events of Force Majeure. Landlord shall use its best efforts, consistent with the standard of operating first-class high-rise office towers in downtown Boston, to remedy the matters described in clauses (i) through (iii) in the preceding sentence. (d) If Tenant is prevented, on account of Landlord’s failure to provide the services under Section 3.01(b) or to perform any of its other obligations under this Lease, from using all or any portion of the Premises and such failure is due to a cause within Landlord’s control or to Landlord’s negligence or willful misconduct, and Tenant does not use the Premises or such portion thereof, for more than three (3) consecutive business days following notice to Landlord, then from and after the end of such three (3) business day period until the Premises (or such portion) is rendered usable, Gross Rent allocable to the Premises (or such portion), or a just and proportionate part thereof, shall be abated. If Tenant is prevented, on   -14- account of Landlord’s failure to provide the services under Section 3.01(b) or to perform any of its other obligations under this Lease, from using all or any portion of the Premises and such failure is not due to a cause within Landlord’s control or to Landlord’s negligence or willful misconduct, and Tenant does not use the Premises or such portion thereof, for more than five (5) consecutive business days following notice to Landlord, then from and after the end of such five (5) business day period until the Premises (or such portion) is rendered usable, Gross Rent allocable to the Premises (or such portion), or a just and proportionate part thereof, shall be abated. In addition, if any interruption under this paragraph prevents Tenant from resuming its regular business operations on the date when the Premises (or such portion) is rendered usable, then Gross Rent allocable to the Premises (or such portion), or a just and proportionate part thereof, shall be further abated from the date the Premises (or such portion) is rendered usable for the period reasonably required for Tenant, using commercially reasonable efforts from the date of the original interruption, to resume such business operations as early as possible (or, if earlier, until the date such operations are actually resumed), but only to the extent that such rental abatement for such additional period is reimbursed by the rental interruption insurance policy from time to time maintained by Landlord. If rental interruption insurance covering the additional period described in the immediately preceding sentence (or covering the period under the next preceding sentence above from the fifth until the tenth business day after notice) shall be available from time to time during the Term through Landlord’s insurer only at an additional premium (it being acknowledged that as of the date hereof there is no additional premium for such additional period between the fifth and tenth business day after notice), then either Tenant shall pay such additional premium (which amount shall be allocated on a per-square-foot basis between Tenant and any other tenants in the Building, if any, that request Landlord to provide such additional rental interruption coverage) as Additional Rent hereunder within thirty (30) days after Landlord notifies Tenant of any such additional premium or, if Tenant elects not to make such payment, the rental abatement for such additional period described in the immediately preceding sentence shall not apply (and/or such five (5)-business-day period after notice shall be deemed to be ten (10) business days after notice, or such shorter period between five and ten business days as may be available without additional premium, as the case may be). As used in this paragraph, “business day” shall refer to full Business Days (from 8:00 A.M. to 6:00 P.M.) commencing on the business day next following the Business Day on which Tenant delivers to Landlord notice of the service failure. Any notice by Tenant of an interruption under this paragraph above may be delivered orally to Landlord’s property manager (which oral notice shall constitute effective notice under this Section 3.01(d)), provided that written confirmation of such oral notice referring to Tenant’s claim pursuant to this Section shall be delivered to Landlord within twenty-four hours thereafter.   -15- (e) If Landlord fails to perform its obligation to clean the Premises pursuant to Section 3.01(b) or any of its other service, maintenance or repair obligations under the Lease for any reason within Landlord’s control so as to render all or any substantial portion of the Premises unfit for use and occupancy by Tenant, and such failure continues (i) in the event of an emergency threatening life or property, for three (3) Business Days after receipt by Landlord of written notice from Tenant of such failure; or (ii) in the event of any other failure, for ten (10) Business Days after receipt by Landlord of written notice from Tenant of such failure (which cure periods shall be extended, if Landlord has commenced cure within such period, for such time as Landlord reasonably requires to cure such failure provided that Landlord thereafter diligently prosecutes such cure to completion), then, upon prior notice to Landlord and only for so long as Landlord has not cured such failure or commenced and diligently prosecuted such cure, Tenant may perform the service for the account of Landlord provided that the service is performed within the Premises in a manner consistent with the operation of a first-class high-rise office tower in downtown Boston, Massachusetts and does not affect any Building systems, common areas, or other tenant in the Building. Landlord shall, within thirty (30) days after demand therefor, reimburse Tenant the reasonable costs so incurred by Tenant in curing such Landlord failure. In no event shall Tenant have the right to offset against, withhold, or deduct such amounts from Gross Rent or Additional Rent payable under this Lease. (f) Sections 3.01(d) and (e) shall not apply to any matters arising as a result of fire, casualty, condemnation, or other matters as to which Article 5 applies. 3.02 Extra Services. Landlord shall provide to Tenant at Tenant’s sole cost and expense at standard Building charges in effect from time to time (which, in the case of services described in subparagraph (e) below shall be at Landlord’s actual cost and in the case of each of the other subparagraphs below at Landlord’s actual cost plus Landlord’s prevailing, reasonable administrative charges) and subject to the limitations hereinafter set forth, the following: (a) Heating, ventilation, air conditioning or extra service provided by Landlord to Tenant (i) during hours other than Business Hours, (ii) on days other than Business Days, said heating, ventilation and air conditioning or extra service to be furnished solely upon the prior written request of Tenant given with such advance notice as Landlord may reasonably require in a manner consistent with the standard of operating first-class high-rise office towers in downtown Boston (which is currently before 2:00 p.m. on any Business Day for after-hours HVAC service on such day and before 2:00 p.m. on Friday for after-hours HVAC service for the weekend);   -16- (b) Additional air conditioning and ventilating capacity or chilled and/or condenser water required by reason of any electrical, data processing or other equipment or facilities or services required to support the same, in excess of that which would be required for Building Standard Improvements; (c) Repair and maintenance which is the obligation of Tenant hereunder; (d) Additional cleaning and janitorial services required if the quality, quantity or use of Tenant Extra Improvements are not consistent with Building Standard Improvements and require more service; (e) Additional electricity above the standards specified in Sections 3.01(b)(v) and (vi), in which case Tenant, at Tenant’s option, shall either (i) install, at its sole cost and expense, a separate meter or meters for its electrical consumption, and all work necessary for such installation shall be done in accordance with the requirements of Section 4.02 (regarding Tenant Improvements), or (ii) agree to pay to Landlord all additional costs associated with such additional electrical service, based on a determination by Landlord’s engineer as to the level of electrical consumption in the Leased Premises, which determination shall be conclusive and binding on the parties; (f) Maintenance and replacement of initial lamps, bulbs, starters and ballasts; (g) Any Basic Service in amounts reasonably determined by Landlord to exceed the amounts required to be provided under Section 3.01(b), but only if Landlord elects to provide such additional or excess service. The cost chargeable to Tenant for all extra services shall constitute Additional Rent. 3.03 Window Coverings. All window coverings have been previously provided by Landlord as Building Standard Improvements. Tenant shall not place or maintain any window coverings, blinds or drapes (other than those supplied by Landlord) on any exterior window without Landlord’s prior written approval, which Landlord shall have the right to grant or withhold in its absolute and sole discretion. Tenant acknowledges that a breach of this covenant will directly and adversely affect the exterior appearance of the Building. 3.04 Graphics and Signage. (a) General Signage. Landlord has previously installed, at Tenant’s expense, identification of Tenant’s name and suite numerals at the main entrance door to the Leased Premises. Landlord has also previously provided, at Landlord’s expense,   -17- Tenant identification in the main lobby of the Building, pursuant to a design approved by Tenant, Landlord and New England Mutual Life Insurance Company. All signs, notices and graphics of every kind or character, visible in or from public corridors, the Common Areas, the Building Common Areas, the General Common Areas, or the exterior of the Leased Premises shall be subject to Landlord’s prior written approval, which Landlord shall have the right to withhold in its absolute and sole discretion. (b) Exterior Signage. For so long as (i) the Tenant originally named herein, any entity into or with which it is merged or consolidated, and/or any other of its Affiliates (as such term is defined in Section 4.06(a)), continues to occupy (whether as Tenant under this Lease or as subtenant under a sublease, but excluding space that Tenant or its Affiliate subleases to others) (x) at least forty-five percent (45%) of the Net Rentable Area of the Office Section of the Building and (y) more space in the Office Section of the Building than any other tenant and its affiliates, and (ii) no Event of Default exists, and subject to Tenant obtaining all required governmental approvals (with Landlord’s cooperation, at Tenant’s expense), Landlord shall permit Tenant to install and maintain, at Tenant’s expense, a sign on the exterior of the Building identifying “Massachusetts Financial Services Company” (or its Affiliate, subject to and in accordance with the next sentence below) as a tenant in the Building, in the location and of a size, materials, design, and graphics shown on Exhibit L attached hereto (or in such other location or of such other size, materials, design, or graphics as may hereafter be approved by Landlord in its sole and reasonable discretion); provided that (x) prior to such installation Landlord shall have reasonably approved in writing the specific manner of affixing such sign to the exterior facade of the Building, and (y) at the expiration or earlier termination of the Lease Term (or, if earlier, at the time when Tenant ceases to satisfy either of the conditions set forth in clauses (i) and (ii) above) Landlord shall have the right to remove such sign and restore the affected areas of the Building to the condition existing prior to the installation of such sign, and Tenant shall reimburse Landlord, within thirty (30) days after demand, for all reasonable costs incurred by Landlord in performing such removal and restoration work. Any proposed change in the name displayed on such exterior sign on the Building shall be subject to Landlord’s prior approval, which approval shall not be unreasonably withheld or delayed if the change reflects a change in the corporate name of Massachusetts Financial Services Company or its merger with or consolidation into its Affiliate or assignment of this Lease to its Affiliate as described in Section 4.06(a), provided that (A) the proposed name displayed on the exterior Building sign shall continue to be the name of a first-class financial services company principally identified with one of the following categories: (i) the distribution of mutual funds to the public, (ii) commercial banking, (iii) investment banking, or (iv) insurance, and (B) the sign is in the location and of the size, materials, design and graphics shown on Exhibit L attached hereto (or is in such other location or of such other size, materials, design, or graphics as may hereafter be approved by Landlord in its sole and reasonable discretion).   -18- 3.05 Tenant Extra Improvements. All Tenant Extra Improvements under the Existing Lease have previously been installed pursuant to the provisions of the Existing Lease. Landlord shall not seek the benefits of depreciation deductions or income tax credit allowances for federal or state income tax reporting purposes with respect to any Tenant Extra Improvements for which Tenant has fully reimbursed Landlord under Section 3.05 of the Original Lease. 3.06 Repair Obligation. Landlord shall be obligated to repair only the following: (i) the structural portions of the Building, (ii) the exterior wall of the Building, including glass and glazing, (iii) the roof, (iv) mechanical, HVAC, electrical, plumbing and life safety systems, serving to the perimeter of the Leased Premises, (v) Common Areas, Building Common Areas and General Common Areas, and (vi) subject to Section 5.05, any damage caused to the Leased Premises by an action of Landlord. Landlord shall have the right, but not the obligation, to undertake work of repair which Tenant is required to perform pursuant to Section 4.04 and which Tenant fails or refuses to perform in a timely and efficient manner after notice from Landlord (except in cases of emergency); and all costs incurred by Landlord in performing any such repair for the account of Tenant shall be repaid by Tenant to Landlord upon demand, together with an amount equal to ten percent (10%) of such costs, to reimburse Landlord for its administration and managerial effort. 3.07 Peaceful Enjoyment. So long as Tenant pays the Rent and performs all of Tenant’s covenants and agreements contained in this Lease, Tenant shall peacefully have, hold and enjoy the Leased Premises, subject to the other terms hereof and all easements, restrictions, agreements or encumbrances now or hereafter of record (collectively, the “Encumbrances”), to which this Lease is and shall be subject and subordinate, including specifically that certain Amended and Restated Sale and Construction Agreement by and among the City of Boston, the Boston Redevelopment Authority, New England Mutual Life Insurance Company and Gerald D. Hines Interests, Inc., dated April 15,1986, recorded with the Suffolk Registry of Deeds in Book 12515, Page 78 (the “Sale and Construction Agreement”), the covenants therein relating to the Land being incorporated by reference herein, as required pursuant to the terms of Section 1304 thereof. Landlord represents that none of the Encumbrances to which the Lease is and shall be subject shall unreasonably interfere with the use of the Leased Premises for the Permitted Uses or with Tenant’s rights hereunder, so long as Tenant pays the Rent and performs all of Tenant’s covenants and agreements contained in this Lease, including without limitation the specific provisions of the Sale and Construction Agreement referenced in this Section 3.07 and in Section 8.22 below. Nothing in this Section shall be construed to impose on Tenant, under any Encumbrance recorded after the date hereof, either (i) any additional financial obligation not set forth in this Lease or (ii) any material non-monetary obligation that is inconsistent with the standards for operating first-class high-rise office buildings in downtown Boston. This Section shall not apply to any Mortgage, as to which the provisions of Section 4.11 shall apply.   -19- 4.01 Omitted. 4.02 Construction of Tenant Improvements. The existing Tenant Improvements have previously been installed and constructed by Landlord and Tenant pursuant to the terms of the Existing Lease. Tenant hereby accepts the condition of the Leased Premises in its “as is” condition existing on the Effective Date of this Lease, and Landlord shall have no obligation to provide any Tenant Improvements or any allowance therefor, except for the Expense Reimbursement set forth in Section 8.18 below. (The preceding sentence shall not be construed to derogate from Landlord’s obligations to repair or restore the Tenant Improvements in the Leased Premises to the extent set forth in Article 5.) Any future Tenant Improvements that Tenant desires to install shall be subject to Section 4.07 below. All additions to or improvements of the Leased Premises, whether of Building Standard Improvements, Tenant Extra Improvements installed pursuant to Section 3.05, or other Tenant Improvements hereafter installed pursuant to Section 4.07, shall become the property of Landlord upon termination of this Lease and shall be surrendered to Landlord upon termination of this Lease by lapse of time or otherwise, subject to Tenant’s rights and obligations of removal with respect thereto as provided in Section 4.07. 4.03 Taxes on Personal Property. In addition to, and wholly apart from its obligation to pay Tenant’s Proportionate Share of Operating Costs and Impositions, Tenant shall be responsible for and shall pay, prior to delinquency, taxes or governmental service fees, possessory interest taxes, fees or charges in lieu of any such taxes, capital levies, or other charges imposed upon, levied with respect to or assessed against its personal property, or the value of its Tenant Improvements or its interests pursuant to this Lease. To the extent that any such taxes are not separately assessed and billed to Tenant, Tenant shall pay the amount thereof as invoiced to Tenant by Landlord. 4.04 Repairs by Tenant. Tenant shall be obligated to maintain and repair the Leased Premises, to keep the same in good order, repair and condition and, upon expiration of the Term, surrender the same to Landlord in the same condition as when first leased by Tenant (whether under the Existing Lease or this Lease, as the case may be), except for (i) reasonable wear and tear, (ii) damage by fire or other casualty (provided that Tenant shall be responsible for repair of any damage that is caused by Tenant or its Invitees, to the extent that the cost of repairing such damage (a) is not covered by Landlord’s property insurance policy under Section 5.01 (such as the deductible) and is not subject to the waiver of subrogation under Section 5.05, or (b) is or would be covered by insurance that Tenant maintains or is required to maintain hereunder), and (iii) damage caused by Landlord’s negligence or willful misconduct (provided that Tenant shall be responsible for such damage to the extent such damage is covered by insurance that Tenant maintains or is required to maintain hereunder). Tenant’s obligation shall include, without limitation, the obligation to maintain and repair all walls (except the exterior surface or structural portion   -20- of the Building or any building systems), floors, ceilings, windows (except for windows located on the exterior of the Building), doors and Tenant’s fixtures in or exclusively serving the Leased Premises, and (to the extent that the cost of Tenant maintains or is required to maintain hereunder) to repair all damage caused by Tenant or its Invitees to the Leased Premises or anywhere in the Building, provided that to the extent (if any) that such repair of the exterior surfaces or structural portions of the Building or building systems shall be required to be made at Tenant’s expense pursuant to this Section above, it shall be performed by Landlord at Tenant’s sole cost and expense. At the request of Tenant, Landlord shall perform the work of maintenance and repair constituting Tenant’s obligation pursuant to this paragraph above at Tenant’s sole cost and expense and as an extra service to be rendered pursuant to Section 3.02(c). In addition, Tenant shall be responsible, at its sole cost, for the maintenance and repair (subject to and in accordance with the preceding paragraph) of the special equipment installed by Tenant in areas of the Building outside of the Leased Premises that exclusively serves the Leased Premises, as listed on Exhibit I hereto. Tenant shall be permitted access to such equipment to perform such maintenance and repair, provided, however, that (i) any such access in or through areas of the Building outside of the Leased Premises shall be coordinated in advance through Landlord or its property manager, (ii) such work shall not affect any Building systems or other tenant spaces or equipment, and (iii) such work shall otherwise be carried out in compliance with the terms of this Lease. Any work of repair and maintenance performed by or for the account of Tenant by persons other than Landlord shall be performed by contractors approved by Landlord (which approval shall not be unreasonably withheld provided that the contractor is a licensed contractor experienced in performing the type and nature of work at issue in first-class high-rise office towers in downtown Boston, provides evidence of insurance required hereunder, and complies with the provisions of this Lease that are applicable to such work) and in accordance with procedures Landlord shall from time to time establish. Nothing herein contained, however, shall be deemed to impose upon Tenant the obligation for performance of work of maintenance and repair required to be performed by reason of Landlord’s negligence or wrongful acts or those of Landlord’s agents, employees, contractors or licensees. 4.05 Waste. Tenant shall not commit or allow any waste or damage to be committed in any portion of the Leased Premises. 4.06 Assignment or Sublease.   -21- (a) Transactions with Affiliates. In the event Tenant intends to assign this Lease or sublet the Leased Premises or any part thereof to a person or entity which controls, is controlled by or is under common control with Tenant, or an entity into or with which Tenant is merged or consolidated or to which substantially all of Tenant’s assets are transferred (hereinafter, “Affiliate”), then Tenant shall give Landlord written notice of such intent. Landlord’s approval shall not be required, but Tenant shall provide Landlord with a copy of all executed documents effecting such assignment or sublease. (b) Initial Notice for Other Transactions. Tenant shall have the right to assign this Lease or sublet the Leased Premises, or any portion thereof, to a person or entity other than an Affiliate, only subject to and in accordance with the terms set forth in this Section 4.06 below. In the event Tenant intends to assign this other than an Affiliate, then Tenant shall give Landlord written notice of such intent (the “Initial Notice”). Such Initial Notice may be given before or after Tenant commences marketing the space or negotiations with third parties for the space and shall include (i) in the case of a proposed assignment of the Lease, the proposed effective date of the proposed assignment, (ii) in the case of a proposed sublease, the proposed space that Tenant intends to sublease and the proposed commencement date and the proposed duration of such proposed sublease, (iii) any special restrictions that Tenant may impose regarding future alterations to the space by a subtenant (including any restrictions or requirements as to removing or maintaining internal staircases), and (iv) only to the extent then available, the identity of the proposed assignee or subtenant and the other proposed terms of the assignment or sublease. Such Initial Notice may describe a specific proposed transaction or provide a range of proposed commencement dates, durations, and spaces (for example, two floors as a single sublease space or as separately subleased floors, commencing within six to twelve months for a term of three to five years). (c) Landlord’s Recapture Right. Landlord shall have a period of thirty (30) days from receipt of Tenant’s Initial Notice within which to notify Tenant in writing that Landlord elects to terminate this Lease as to the space in the Leased Premises so affected as of the commencement date set forth in Tenant’s Initial Notice (which commencement date shall not be earlier than ninety days after the date Tenant’s Initial Notice is given) and only for the period specified by Tenant in its Initial Notice, in which event Tenant will be relieved of all further obligations hereunder as to such space from and after such commencement date and for the period Landlord has not returned such recaptured space to Tenant, and Landlord and Tenant shall each pay one-half of the cost of constructing any required demising walls and (unless Tenant’s Initial Notice specified that the internal stair openings not be filled in) filling in internal stair openings necessary to separate   -22- Tenant’s remaining space from such recaptured space. If Tenant’s Initial Notice specified a range of commencement dates, durations, or spaces under Section 4.06(b), Landlord’s recapture right may specify any combination of terms that are within the permitted ranges or permitted combinations of terms specified in Tenant’s Initial Notice. (For example, if Tenant’s Initial Notice set forth the ranges of proposed commencement dates, durations, and spaces set forth at the end of Section 4.06(b) above, Landlord’s notice of recapture notice could, among other combinations, specify a recapture of one floor commencing in nine months for a term of four years.) If Landlord should fail to notify Tenant in writing of such election within said thirty (30) day period, Landlord shall be deemed to have elected not to exercise its recapture right under this Section 4.06(c) for the space in question. If Landlord terminates this Lease as to a portion of the Leased Premises for the period and other terms provided in this Section 4.06(c) above, Landlord and Tenant shall enter into a modification of this Lease (in a form satisfactory to both parties) so as to equitably reflect the recapture of such space. If Landlord exercises its recapture right under this Section 4.06(c), Landlord may relet the recaptured space to any party (including any party identified by Tenant). If Landlord elects to recapture space under this Section 4.06(c) for a period that covers less than the remainder of the Term of this Lease, in connection with the delivery of such space to Tenant at the end of such recapture period, Landlord shall (a) remove any improvements made to such space by or for its occupant during the recapture period to the extent the same are required to be removed pursuant to any special restriction on alterations set forth in Tenant’s Initial Notice (and otherwise comply with any special restrictions as to the condition of the space set forth in Tenant’s Initial Notice) and (b) remove any internal stairs installed by such occupant connecting the recaptured space to other space leased by such occupant. If such occupant holds over in such space after the end of such recapture period, Landlord shall not be liable to Tenant for any delay in delivering such recaptured space to Tenant, provided that Landlord shall use reasonable efforts (including legal process, if appropriate) to cause such space to be delivered to Tenant free and clear of such occupant. (d) Tenant’s Request for Approval. If Landlord elects (or is deemed to have elected) not to exercise its recapture right under Section 4.06(c), Tenant may thereafter deliver to Landlord a written request for approval (“Request for Approval”) of a proposed assignment of the Lease or sublease for the space, term, and on all other terms (including any special restrictions on alterations) described in Tenant’s Initial Notice (or within the ranges of terms set forth in such Initial Notice) to a specific proposed assignee or subtenant. Tenant’s Request for Approval shall be accompanied by an exact copy of the proposed agreements between Tenant and the proposed assignee or subtenant. Prior to Tenant’s submission of such Request for Approval, Tenant may request Landlord’s approval   -23- of the identity of the proposed subtenant or assignee or any other aspects of the proposed transaction. To the extent not previously approved by Landlord, in the Request for Approval Tenant shall provide Landlord with (i) the name of the proposed assignee or subtenant, (ii) such information as to the financial responsibility and standing of such assignee or subtenant as Landlord shall reasonably require, (iii) a summary of such of the relevant terms and provisions upon which the proposed assignment or subletting is to be made as Landlord shall reasonably require, and (iv) any additional information or documents that are reasonably requested by Landlord within ten (10) business days after receipt of the information required to be delivered above. Tenant shall not assign this Lease, nor sublet the Leased Premises or any portion thereof to any person or entity who is then a tenant in the Building or any person or entity with whom, as of the date of Tenant’s inquiry to Landlord as to such prospect, Landlord or any of its affiliates or agents is currently in bona fide negotiations with respect to space in the Building (or within the preceding six (6) months has been in bona fide negotiations with respect to space in the Building as evidenced by a term sheet or lease proposal from Landlord or the prospect, together with a counterproposal thereto by the other party, or a signed letter of intent); provided, however, that this sentence shall not apply if and so long as Landlord has no suitable space in the Building for such existing tenant or prospect that is then available or scheduled to become available within six (6) months before or after the effective date of Tenant’s proposed sublease (or assignment) and such existing tenant is not vacating all or part of its existing premises or foregoing any expansion rights in order to sublease such space (or receive an assignment of the Lease) from Tenant. (e) Landlord’s Approval. Tenant may assign the Lease or sublease the space set forth in Tenant’s Initial Notice only after complying with the foregoing provisions and then obtaining the prior written approval of Landlord, which approval shall not be unreasonably withheld or delayed so long as (x) the use of the Leased Premises by such proposed assignee or sublessee would-be a Permitted Use, (y) the character and business reputation of the proposed assignee or sublessee is consistent with the character of the Building as a first-class office building, and (z) for any proposed assignment of this Lease or any proposed sublease that covers (together with all other sublease(s) then in effect or proposed) more than 90,000 square feet of the Net Rentable Area of the Leased Premises, excluding subleases under 10,000 square feet of Net Rentable Area (a “Major Transaction”), the proposed assignee or sublessee is of sound financial condition sufficient to satisfy its obligations under this Lease or the sublease, as the case may be, as determined by Landlord in the exercise of its reasonable business judgment. Landlord shall approve or disapprove the proposed assignee or sublessee within ten (10) business days after receipt of all of the information required to be provided or made available to Landlord under Section 4.06(d); provided that (x) if Tenant’s Request for Approval conspicuously states in capital letters that Landlord’s failure to   -24- disapprove the proposed assignee or sublessee within ten (10) business days after receipt of all of the information required to be provided or made available to Landlord under Section 4.06(d) (subject to clause (y) below in the case of a Major Transaction), Landlord’s failure to disapprove the proposed assignee or sublessee within such ten-business-day period shall be deemed an approval, and (y) for a Major Transaction, Landlord shall not be deemed to have approved the proposed assignee or sublessee unless and until Landlord shall have failed to give its approval within a further five (5)-business-day period after Tenant delivers to Landlord (with a copy of such notice to the holder of any Mortgage of which Tenant has received notice) a reminder notice conspicuously stating in capital letters that Landlord has failed to disapprove the proposed assignee or sublessee within the initial ten (l0)-business-day period and that Landlord’s failure to disapprove such proposed assignee or sublessee within five (5) business days after receipt of such reminder notice shall be deemed an approval. No approval or deemed approval of any assignee or sublessee shall derogate from any of the provisions of this Section 4.06 or affect any of Tenant’s rights and obligations to Landlord under the Lease, notwithstanding anything to the contrary in the proposed form of assignment or sublease. In no event shall a failure by Landlord to approve a proposed subtenant or assignee cause a termination of this Lease. (f) Excess Rents. Except for any sublease or assignment to an Affiliate of Tenant under Section 4.06(a) above, Tenant shall pay to Landlord two thirds (2/3rds) of the Profits (as hereafter defined), if any, from any sublease or assignment, and Tenant shall retain one third (l/3rd) of the Profits, if any, from such sublease or assignment. “Profits” shall be determined (A) by deducting, from the rent or other consideration received by Tenant in connection with any sublease or assignment, the Rent payable hereunder (or the allocable portion thereof) for the subleased space and monthly payment period in question, and (B) only after first deducting in full (i.e., without any requirement that costs be amortized over the term of the sublease or assignment) all of (i) the amounts incurred by Tenant for alterations installed solely for sublease or assignment purposes, and (ii) reasonable out-of-pocket subletting and assignment costs incurred by Tenant including, without limitation, subtenant or assignment cash inducements, improvement allowances, brokerage commissions and attorneys’ fees. Tenant shall pay to Landlord its share of such Profits, if any, within thirty (30) days after receipt from time to time of such Profits. (g) General Terms. In the case of each assignment or sublease: (i) Tenant and the assignee or subtenant, as the case may be, shall execute an assignment or sublease, which shall include terms that do not materially differ from those theretofore disclosed to Landlord; (ii) within five (5) business days after the execution thereof, an executed copy of the assignment or sublease shall be delivered to Landlord; (iii) the terms and provisions of any such assignment or   -25- sublease shall specifically prohibit the assignment of the interest of the assignee or sublessee or the sub-subletting of all or any portion of the Leased Premises covered by the sublease without the prior written consent of the Landlord, which shall be granted or withheld in accordance with and subject to the provisions of this Section 4.06; (iv) no assignment or subletting shall affect the continuing primary liability of the Tenant originally named herein (which, following assignment or sublease, shall be joint and several with the assignee or subtenant, as the case may be; however, Landlord shall have no obligation to name any such assignee or sublessee, in connection with enforcing any of Landlord’s rights against the Tenant originally named herein); (v) no consent by Landlord to any of the foregoing in the specific instance shall operate as a waiver in any subsequent instance; (vi) each assignee or sublessee shall be required by the terms of the assignment or sublease to comply with all applicable provisions of this Lease, to the same extent as Tenant hereunder; (vii) no assignment or subletting shall permit the assignee, sublessee or any other person or entity having an interest in the possession, use, occupancy or utilization of the Leased Premises, to receive or to pay rental or payment on account of the use, occupancy or utilization of the Leased Premises based in whole or in part on the net income or profits derived by any person or entity from any property leased, used, occupied or utilized (other than an amount based on a fixed percentage or percentages of receipts of sales); and (viii) no assignment shall be binding upon Landlord, unless Tenant shall deliver to Landlord an instrument in recordable form which contains a covenant of assumption by the assignee (and in form and in substance reasonably satisfactory to Landlord) running to Landlord and all persons claiming by, through and under Landlord, but the failure or refusal of the assignee to execute such instrument of assumption shall not release or discharge the assignee from its primary and joint and several liability for the obligations of the Tenant hereunder. At Landlord’s request, Tenant and the assignee or subtenant, as the case may be, shall execute and deliver an instrument acknowledging the terms of this Section 4.06, in a form mutually acceptable to each of the parties. (h) No Release. No assignment or subletting by Tenant shall relieve the Tenant originally named herein of any obligation under this Lease. Tenant shall not assign the Lease or sublease the Premises or any portion thereof, except in accordance with the procedures set forth in this Section 4.06. Any assignment or subletting which conflicts with the provisions hereof shall be void. (i) Continuing Process. If (a) Tenant has failed to execute an assignment or sublease within six (6) months for a sublease involving less than two (2) floors of the Leased Premises (or twelve (12) months for an assignment of the Lease or a sublease involving two (2) floors or more of the Leased Premises) after the date of Landlord’s election (or deemed election) by Landlord not to recapture the space under Section 4.06(c)) (provided that such period may be extended for not more than two (2) months with respect to a transaction that is then   -26- in active bona fide negotiations if prior to the end of such period Tenant furnishes Landlord with evidence that within the preceding six months Tenant has been in active bona fide negotiations with the proposed subtenant or assignee as evidenced by a signed letter of intent or a term sheet or lease proposal, together with a counterproposal by the prospect or Tenant), or (b) Tenant desires to change the terms of the proposed sublease or assignment specified in Tenant’s Initial Notice as set forth above, Tenant shall again be obligated to notify Landlord of any intent to assign this Lease or sublet all or any portion of the Leased Premises, and Landlord shall again have the right to recapture or to approve any proposed assignment or sublease under Sections 4.06(c) and (e) above. 4.07 Alterations and Surrender. Tenant shall not make or allow to be made any alterations or physical additions in or to the Leased Premises without obtaining the prior written consent of Landlord, which consent shall not be unreasonably withheld with respect to proposed alterations and additions that (i) comply with all applicable laws, ordinances, rules and regulations, (ii) are compatible with the Building and its mechanical, electrical, HVAC and life safety systems, and do not excessively burden the capacity of such systems; (iii) will not interfere with the use and occupancy of any other portion of the Building; (iv) will not affect the structural integrity of the Building; and (v) satisfy the standards and comply with the procedures and requirements required for Tenant Improvements, as set forth in Exhibit B attached hereto. Specifically, but without limiting the generality of the foregoing, Landlord’s right of consent shall encompass plans and specifications for proposed alterations or additions, construction means and methods, the identity of any contractor or subcontractor to be employed on the work of alterations or additions, and the time for performance of such work. Tenant shall supply to Landlord any documents and information reasonably requested by Landlord in connection with its consent hereunder. Notwithstanding the foregoing, any nonstructural alterations within the Leased Premises (including, without limitation, installations of cabling) that do not affect any mechanical, electrical, or other Building systems, do not cost more than $100,000 (as increased every five years after the Effective Date by the percentage increase in the Index for the preceding five-year period) in the aggregate for each project (including all related work), and do not adversely affect the value of the Leased Premises for general office uses shall not require Landlord’s prior approval, provided that Tenant shall give Landlord notice of the commencement of such work (including plans and specifications therefor, as provided herein) at least ten (10) days in advance and the work otherwise complies with the provisions of this Section 4.07 and this Lease. All Tenant Improvements permitted hereunder shall be made and performed by Tenant without cost or expense to Landlord. Tenant shall take such steps as may be necessary to avoid the filing, perfection or enforcement of any lien for labor or materials against the Land or the Building by reason of work performed by or on behalf of Tenant. All Tenant Improvements (whether previously made under the Existing Lease or hereafter made under this Lease) shall become the property of Landlord upon the termination of this   -27- Lease and shall be surrendered to Landlord upon the termination of this Lease by lapse of time or otherwise; provided, however, that this clause shall not apply (a) to any Tenant Improvements specified for removal by Tenant to Landlord and approved by Landlord in writing (which approval shall not be unreasonably withheld) prior to the installation of such Tenant Improvements (whether made under the Existing Lease or this Lease) or (b) to Tenant’s Property (collectively, the “Removable Property”). All Removable Property and any Tenant Improvements made after the Effective Date that are not suitable for general office uses and are specified by Landlord, at the time of Landlord’s approval of the same, for removal at the end of the Term, shall be removed by Tenant, at Tenant’s expense, prior to the expiration of the Term; provided that Tenant shall not be required to remove its cabling in the Leased Premises at the end of the Term. Tenant shall be responsible for leaving the Leased Premises clean and neat (and the obligations of Tenant provided for in this paragraph shall survive any expiration or termination of this Lease). Title to all Tenant Improvements not removed by Tenant pursuant to this paragraph on or prior to the termination of the Term shall automatically be conveyed and transferred by Tenant to Landlord upon such expiration or termination, and shall be deemed abandoned by Tenant and shall thereupon become the property of Landlord. Tenant shall execute such documentation confirming and ratifying such conveyance and transfer as Landlord shall reasonably require. Any Tenant’s Property that Tenant fails to remove at the end of the Term shall be deemed abandoned by Tenant, and Landlord may, at Tenant’s expense, remove, store, and/or dispose of any or all of such Tenant’s Property. Tenant shall repair at its sole cost and expense all damage caused to the Leased Premises or the Building by removal of Tenant’ s Removable Property as Tenant shall be allowed or required to remove from the Leased Premises by Landlord as set forth above. 4.08 Compliance with Laws and Insurance Standards. Tenant shall not occupy for use, or permit any portion of the Leased Premises to be occupied or used, for any business or purpose which is disreputable or creates a fire hazard, or permit anything to be done which would in any way increase the rate of insurance coverage on the Building and/or its contents. If Tenant does or permits anything to be done which shall increase the cost of any insurance policy required to be carried hereunder, then Tenant shall reimburse Landlord, within thirty (30) days after demand, for any such additional premiums. Landlord shall deliver to Tenant a written statement setting forth the amount of any such insurance cost increase and showing in reasonable detail the manner in which it has been computed. Subject to the provisions of Section 8.22, Tenant shall comply with all laws, ordinances, orders, rules and regulations (state, federal, municipal or promulgated by other agencies or bodies having or claiming jurisdiction) related to the conduct of Tenant’s business therein, including but not limited to, any requirements concerning hiring of employees, and Tenant shall keep the Leased Premises equipped with all safety appliances required by any law or ordinance or other regulation of any public authority because of any use made by Tenant of the Leased Premises, and shall procure all licenses and permits so required because of such use, and, if required by Landlord, do any work so required because of such use, it being understood that the foregoing provisions shall not be   -28- construed to broaden in any way the Permitted Use. Any base building life safety systems required to be installed hereafter in the Leased Premises shall be installed at Tenant’s expense. Landlord shall repair any components of the base building life safety systems located within the Leased Premises that Tenant may from time to time notify Landlord are in need of repair. (Life safety systems serving to the perimeter of the Leased Premises are Landlord’s repair obligation under Section 3.06.) Tenant may, in good faith, diligently contest the application of any law, ordinance or regulation to the Leased Premises or to the conduct of Tenant’s business therein, provided that (i) Tenant provides Landlord with notice of such contest and such information with respect thereto as Landlord may from time to time reasonably request, (ii) Tenant’s conduct of its business in the Leased Premises pending the resolution of such contest shall not affect the validity or extent of the insurance that Landlord or Tenant is required to maintain hereunder or increase the premiums therefor (unless Tenant agrees to pay such increased premiums), and (iii) Tenant shall indemnify Landlord (subject to Section 5.05(e)) against all claims, loss, damage and cost suffered or incurred by Landlord as a result of such contest or the conduct of Tenant’s business pending the resolution of such contest. Nothing done by Tenant in its use or occupancy of the Leased Premises shall create, require or cause imposition of any requirement by any public authority for structural or other upgrading of or improvement to the Building. 4.09 Entry for Repairs and Leasing. After reasonable notice (but not more than two days’ notice, except in emergencies when no such notice shall be required), Landlord, its agents and representatives, shall have the right to enter the Leased Premises (accompanied by a Tenant representative if Tenant so requests, except in emergencies) to inspect the same, to exercise such rights as may be permitted hereunder, to make repairs to the Building, or alterations required for the Building or other tenant spaces therein, to deal with emergencies, to post such notices as may be permitted or required by law to prevent the perfection of liens against Landlord’s interest in the Building or to exhibit the Leased Premises to prospective tenants (during the last two (2) years of the Term), purchasers, encumbrancers or others, or for any other purpose as Landlord may deem necessary or desirable; provided, however, that Landlord shall use its best efforts not to unreasonably interfere with Tenant’s business operations. At Tenant’s request, except in cases of emergency, Landlord shall perform any such repairs or alterations after Business Hours, provided that Tenant shall pay Landlord, as Additional Rent, the extra costs incurred for such after-hours work. Tenant shall not be entitled to any abatement of Rent by reason of the exercise of any such right of entry. 4.10 No Nuisance. Tenant shall conduct its business and control its agents, employees, invitees and visitors in such manner as not to create any nuisance, or interfere with, annoy or disturb any other tenant or Landlord in its operation of the Building. 4.11 Subordination. Landlord represents that, as of the date hereof, there is no Mortgage on the Building. This Lease and the rights of Tenant hereunder shall be subject   -29- and subordinate to the lien of any Mortgage, and to any and all advances made thereunder, interest thereon or costs incurred in connection therewith, provided that, as a condition to such subordination, the holder of any such Mortgage and Tenant shall execute an agreement which shall provide (i) that so long as this Lease is in full force and effect and there exists no Event of Default hereunder, Tenant’s rights under this Lease shall not be disturbed by reason of such subordination or by reason of foreclosure of such Mortgage, or exercise of the statutory power of sale, or receipt of deed in lieu of foreclosure, and (ii) that Tenant shall attorn to the holder or the purchaser at any such sale or foreclosure or the grantee of any such deed. In the event of such attornment, this Lease shall continue in full force and effect as a direct lease between such mortgagee, purchaser or grantee, as a successor landlord, and Tenant, upon all the terms, conditions and covenants set forth herein, except that such mortgagee, purchaser or grantee (unless formerly the Landlord under this Lease) shall not be (a) bound by any payment of Rent for more than one month in advance; (b) bound by any amendment or modification of this Lease made after the date Tenant first had notice of such Mortgage without the consent of the holder of the Mortgage; (c) liable in any way to Tenant for any act or omission, neglect or default on the part of Landlord under this Lease; (d) obligated to perform any work or improvements to be done by Landlord in the Leased Premises; or (e) subject to any counterclaim or setoff which theretofore accrued to Tenant against Landlord. The foregoing, however, shall not relieve such mortgagee or purchaser of the obligation to remedy or cure any conditions at the Leased Premises or the Property the existence of which (i) constitutes a Landlord default under the Lease, (ii) continues at the time of such succession or acquisition, and (iii) Tenant has provided Landlord and such mortgagee of which Tenant has received notice with notice of prior to such succession or acquisition. Without the consent of Tenant, the holder of any such Mortgage shall have the right to elect to be subject and subordinate to this Lease, such subordination to be effective upon such terms and conditions as such holder may direct which are not inconsistent with the provisions hereof. 4.12 Estoppel Certificate. At Landlord’s request, Tenant shall execute (within fifteen (15) business days after Tenant receives any such request) estoppel certificates on a form specified by Landlord, addressed to Landlord and (i) any mortgagee or prospective mortgagee of Landlord or (ii) any purchaser or prospective purchaser of all or any portion of, or interest in, the Building, certifying as to such facts (if true) and acknowledging such notice provisions as such mortgagee(s) or purchaser(s) may reasonably require; provided, however, that in no event shall any such estoppel certificate require an amendment of the provisions hereof or otherwise affect or abridge Tenant’s rights hereunder. At Tenant’s request, Landlord shall execute (within fifteen (15) business days after Landlord receives any such request) an estoppel certificate addressed to any prospective assignee or subtenant of Tenant certifying, in a form reasonably acceptable to Landlord, as to the documents constituting the Lease and any amendment thereto, the term hereof, and to Landlord’s knowledge the status of Tenant’s compliance with its obligations hereunder.   -30- 4.13 Tenant’s Remedies. Tenant shall look solely to Landlord’s interest in the Building and the Land for recovery of any judgment from Landlord and in the insurance proceeds, condemnation awards, and rents therefrom, subject to Section 8.04 and subject to the rights of any mortgagee under its Mortgage under Section 4.11 to all rents, profits, issues, proceeds, and awards. Landlord, its agents, employees, and, if Landlord is a partnership, its partners, whether general or limited, or if Landlord is a corporation, its directors, officers or shareholders, shall never be personally liable for any such judgment. Any lien obtained to enforce any such judgment and levy of execution thereon shall be 4.14 Rules and Regulations. Tenant shall comply with the rules and regulations for the Building attached as Exhibit C and such reasonable amendments thereto as Landlord may adopt from time to time with prior notice to and consultation with Tenant. Landlord reserves the right to modify or rescind any of these rules and regulations and to make future rules and regulations required for the safety, protection, and maintenance of the Building consistent with first-class high-rise office towers in downtown Boston, the operation and preservation of good order thereof, and the protection and comfort of the tenants and their employees and visitors. Landlord shall not discriminate between Tenant and other tenants in the Building in enforcing such rules and regulations. 4.16 Payment of Expenses. Tenant shall pay, as Additional Rent, all reasonable costs, counsel and other fees incurred by Landlord in connection with all requests by Tenant for consent or approval hereunder, and the successful enforcement by Landlord of any obligation of Tenant under this Lease. Landlord shall pay all reasonable costs, counsel and other fees incurred by Tenant in connection with the successful enforcement by Tenant of any obligation of Landlord under this Lease. ARTICLE 5. INSURANCE, INDEMNIFICATION, CASUALTY, AND EMINENT DOMAIN 5.01 Casualty Insurance. Landlord shall maintain, or cause to be maintained, a policy or policies of insurance with the premiums thereon fully paid in advance, issued by and binding upon an insurance company of good financial standing, insuring the Building against loss or damage by fire or other insurable hazards and contingencies as are covered in a standard “all risks” property insurance policy for the full replacement cost thereof (including the Tenant Improvements in the Leased Premises and excluding footings, foundations and underground installations), subject to such deductibles as Landlord or its mortgagee shall from time to time require; provided, that Landlord shall not be obligated to insure any Tenant’s Property that Tenant may keep or maintain in the Leased Premises. The replacement cost insurance policy for the Tenant Improvements in the Leased Premises shall be based on coverage amounts of which Tenant from time to time notifies Landlord (with such supporting information as may be reasonably requested by Landlord’s insurer to support such coverage amounts) as Tenant’s estimate of the replacement cost   -31- thereof (or such higher amounts as Landlord may from time to time estimate for the replacement cost of the Tenant Improvements), it being understood that the actual insurance proceeds for an insured claim shall be based on the replacement cost of the damaged Tenant Improvements in accordance with the terms and conditions of such replacement cost insurance policy. If the annual premiums charged Landlord for such casualty insurance exceed the standard premium rates because the nature of Tenant’s, operations results in extra-hazardous exposure or because the level of insurance for Tenant Improvements hereunder exceeds the level generally provided by Landlord for other tenants’ premises in the Building, then Tenant shall, within thirty (30) days after receipt of appropriate premium invoices, reimburse Landlord for such increases in premium as Additional Rent. Upon request of Tenant, Landlord shall provide reasonable evidence that the insurance required to be maintained hereunder is in full force and effect. 5.2 Liability Insurance. Landlord (with respect to the Building) and Tenant (with respect to the Leased Premises and the activities of Tenant within other portions of the Building) shall maintain or cause to be maintained (whether by Tenant or its parent company) a policy or policies of commercial general liability insurance with the premiums thereon fully paid in advance issued by and binding upon an insurance company of good financial standing, such insurance to afford minimum protection of not less than Five Million Dollars ($5,000,000.00) for bodily injury or death in any one occurrence and of not less than One Million Dollars ($1,000,000.00) for property damage in any one occurrence, or such higher limits, if any, as are customarily carried in similar first-class high-rise office buildings in downtown Boston, provided, however, that Landlord shall not request an increase in the limits of Tenant’s policies more frequently than once every five (5) years. If Landlord’s insurance contains a general aggregate limit, it shall apply separately to this Lease or be no less than two times the occurrence limit. The coverages required to be carried shall be extended to include blanket contractual liability, personal injury liability (libel, slander, false arrest and wrongful eviction), and broad form property damage liability. The certificate for Tenant’s insurance shall indicate that the Tenant’s insurance is primary, with any other insurance available to Landlord or any other named insured being excess. The certificate for Landlord’s insurance shall indicate that the Landlord’s insurance is primary, with any other insurance available to Tenant or any other named insured being excess. During the Term of this Lease, Landlord shall also maintain workers’ compensation insurance with statutory limits and employees’ liability insurance with limits of not less than $1,000,000 for each accident. Upon request of either party, the other party shall provide reasonable evidence that the insurance required to be maintained hereunder is in full force and effect. 5.3 Tenant’s Property Insurance. (a) Tenant shall carry “all risks” property insurance (including but not limited to sprinkler leakage and water damage) on all Tenant’s Property in the Leased Premises or located elsewhere in the Building in the amount of its full   -32- replacement cost. In addition, Tenant shall maintain workers’ compensation insurance and all such other insurance relating to Tenant’s use and occupancy of the Leased Premises and the Building as may be required by applicable law. All such policies required to be carried by Tenant hereunder and all evidence of insurance provided to Landlord shall be issued by responsible, financially sound companies qualified to do business and in good standing in the Commonwealth of Massachusetts and shall contain an endorsement showing that Landlord and each holder of a Mortgage (disclosed in writing to Tenant) is included as an additional insured (except as to workers compensation insurance and as to Tenant’s Property), as its interests may appear, and an endorsement whereby the insurer, agrees not to cancel or alter the policy without not less than thirty (30) days prior written notice to Landlord, to such mortgagee and all other named insureds. Tenant shall, on or prior to the Term Commencement Date, deposit with Landlord certificates of such insurance, and thereafter, on or prior to fifteen (15) days before the expiration date of any coverage thereunder, shall deposit with Landlord certificates evidencing the renewal of such policies. Any insurance under this Article 5 may be maintained by Tenant under a blanket policy or policies; provided, however, that (a) the minimum amount of the total insurance afforded by such blanket policy which shall be allocabie to the Leased Premises and any sublimits of such policy allocable to the Leased Premises, shall be in amounts which shall not be less than the amounts of the insurance required hereunder (and the general aggregate limit shall be no less than two times the occurrence limit), (b) if such blanket policies do not provide separate sublimits for the Leased Premises, such policies shall be for such higher amounts as Landlord may from tine to time reasonably approve in a manner consistent with comparable first-class high-rise office towers in downtown Boston, and (c) the protection afforded to Landlord and each holder of a Mortgage under any blanket policy shall be not less than that which would have been afforded under a separate policy or policies relating only to the Leased Premises, and the certificate evidencing such insurance shall contain provisions confirming the foregoing. (b) In the event that Tenant fails to provide evidence of insurance required to be provided by Tenant hereunder, Landlord shall be authorized (but not required) to procure such coverage in the amounts stated with all costs thereof to be chargeable to Tenant as Additional Rent, and payable by Tenant upon receipt of written invoice therefor. 5.04 Indemnity and Exoneration. Except to the extent such indemnity or exoneration is prohibited by law and subject to Section 5.05 below: (a) Tenants Risk. All of Tenant’s Property that, during the continuance of this Lease or any occupancy of the Premises by Tenant or anyone claiming under Tenant, may be in the Leased Premises or elsewhere in the Building, and (subject to Section 5.07 below) all Tenant Extra Improvements, shall be at the sole risk and   -33- hazard of Tenant. If the whole or any part thereof shall be destroyed or damaged by fire, water or otherwise, by the leakage or bursting of water pipes, steam pipes, or other pipes, or from any other cause, no part of such loss or damage is to be charged to or be borne by Landlord. Notwithstanding the foregoing but subject to Section 5.05, Landlord shall not be exonerated for such damage or loss to the extent the same is caused by Landlord’s negligence or willful misconduct. Landlord, shall not be liable to Tenant for injury to any person or any loss or damage to any of Tenant’s Property or (subject to Section 5.07 below) any Tenant Extra Improvements or any inconvenience caused by theft, burglary, or other criminal act by a third party, or by other acts of unauthorized persons in or about the Building; (b) Tenant’s Indemnification. Subject to the limitations on Tenant’s liability set forth in this Section 5.04 and elsewhere in this Lease, Tenant shall indemnify Landlord and hold Landlord harmless of and from any and all loss, cost, damage, injury or expense to the extent arising from claims of injury to or death of person, or damage to property (i) occurring in the Leased Premises or resulting from the use or occupancy of the Leased Premises or activities of Tenant in the Leased Premises, except to the extent due to the negligence, fault or misconduct of Landlord or any of its agents, employees, or contractors, or (ii) resulting from the negligence, fault or misconduct of Tenant or its agents, employees, or contractors in the Building; (c) Tenant’s Work. Subject to the limitations on Tenant’s liability set forth in this Section 5.04 and elsewhere in this Lease, Tenant shall hold and save Landlord harmless and indemnify Landlord of and from any and all loss, cost, damage, injury or expense to the extent arising from claims for work or labor performed, materials or supplies furnished to or at the request of Tenant or in connection with performance of any work done by or for the account of Tenant in the Leased Premises or the Building (except for work performed by Landlord); and (d) Landlord’s Indemnification. Subject to the limitations on Landlord’s liability set forth in this Section 5.04 and elsewhere in this Lease, Landlord shall hold harmless and indemnify Tenant against any and all loss, cost, damage, injury or expense incurred by Tenant arising from (i) claims of injury to or death of persons or damage to property in or upon the common areas of the Building or the Land, to the extent due to the negligence, fault or misconduct of Landlord or any of its agents, employees, or contractors, and (ii) any claim asserted against Tenant by the City of Boston or any other governmental authority based on any alleged noncompliance of the Leased Premises or the Building with any applicable building codes or regulations in effect at the Term Commencement Date under the Original Lease; provided that Landlord shall not be responsible for any noncompliance of the Tenant Improvements.   -34- (e) Defense and Settlement. Promptly upon receipt by either party (the “Indemnified Party”) of a notice of a claim, suit or action by a third party for which the Indemnified Party is entitled to indemnification by the other party (the “Indemnifying Party”) under this Section 5.04 or elsewhere as expressly set forth in this Lease, the Indemnified Party shall give the Indemnifying Party written notice thereof, together with copies of all documents received by the Indemnified Party in connection therewith. The Indemnified Party shall, at the Indemnifying Party’s’ request, tender to the Indemnifying Party control of the defense and settlement thereof (provided that such settlement does not impose any liability on the Indemnified Party not satisfied by the Indemnifying Party or involve an admission of liability on the part of the Indemnified Party) and shall reasonably cooperate with the Indemnifying Party in such defense. The Indemnifying Party shall have the right to engage counsel of the Indemnifying Party’s choice reasonably acceptable to the Indemnified Party. Until the Indemnifying Party accepts control of the defense of such claim, the Indemnified Party shall have the right to employ the Indemnified Party’s own counsel, reasonably acceptable to the Indemnifying Party. If the Indemnified Party believes that it needs its own independent counsel, the costs and expenses thereof shall be for the Indemnified Party’s own account and the Indemnified Party shall not have a claim hereunder for reimbursement therefor. The giving of notice including the delivery of all documents and, if requested, tendering defense of claims, required by this paragraph are conditions precedent to the Indemnifying Party’s indemnification obligations under this Section 5.04 or elsewhere as expressly set forth in this Lease, as the case may be. The Indemnified Party shall have no claim for indemnification for any settlement of any claim unless written notice of such settlement shall have been first furnished to the Indemnifying Party in accordance with the provisions of this paragraph, and the Indemnifying Party shall have consented, in writing, to such settlement. If requested by either party, the parties shall use reasonable efforts to maintain the confidentiality of any non-public matters that are subject to indemnification hereunder, except that disclosure of such matters shall not be prohibited (x) if disclosure is required by law or by a court or public authority of competent jurisdiction, (y) in connection with the enforcement of each party’s rights and remedies hereunder, or (z) to each party’s respective insurers, accountants, agents, attorneys, advisors, and existing or prospective lenders, investors, or buyers. 5.05 Waiver of Subrogation Rights. (a) Anything in this Lease to the contrary notwithstanding, to the extent any such claim is covered by insurance, or would be covered by any required insurance, Landlord and Tenant each waive all rights of recovery, claim, action or cause of action against the other, its agents (including partners, both general and limited), officers, directors, shareholders or employees, for any loss or damage that may occur to the Leased Premises, or any improvements thereto, to the Building or   -35- to any personal property of such party therein, by reason of fire, the elements, or any other cause which are required to be insured against under the terms of the “all risks” property insurance policies obtained pursuant to this Lease, or any other peril which is in fact insured, regardless of cause or origin, including negligence of the other party hereto, its agents, officers or employees; and each party covenants that no insurer shall hold any right of subrogation against such other party. Each party shall advise insurers of the foregoing and such waiver shall be a part of each/policy maintained by such party which applies to the Leased Premises, any part of the Building or Tenant’s use and occupancy of any part thereof. Each party shall be responsible for maintaining the waiver of subrogation endorsement as part of its respective insurance policy. (b) In no event shall Landlord be liable to Tenant for any indirect or consequential damages (including any loss of business or profits) or for loss or damage to any works of art, or other unusually valuable property or equipment not customarily expected to be found within comparable business offices in downtown Boston. In no event shall Tenant be liable to Landlord for any indirect or consequential damages (including any loss of business or profits) or for loss or damage to any works of art, or other unusually valuable property or equipment not customarily expected to be found within comparable office towers in downtown Boston. (c) Notwithstanding Section 5.05(b) above, the formulas for computing damages that are expressly set forth in Sections 6.03 through 6.05 for Tenant’s default under this Lease and the remedies set forth in Section 8.02 for Tenant’s holdover shall not be deemed to be indirect or consequential damages. 5.06 Condemnation and Loss or Damage. (a) If the Leased Premises (or any material part thereof covering at least one-fourth of the Net Rentable Area of Leased Premises) or any portion of the Building (including access to the Leased Premises) shall be taken or condemned for any public purpose to such an extent as to render the Leased Premises or remaining portion thereof unfit for use and occupancy in accordance with standards generally applicable to first-class high-rise office buildings in downtown Boston, this Lease shall, at the option of Tenant (provided such option shall be exercised by Tenant giving notice to Landlord within sixty (60) days from the date Tenant has been notified in writing of such taking or condemnation) forthwith cease and terminate as of the date of the taking. If the Leased Premises (or any material part thereof covering at least one-fourth of the Net Rentable Area of Leased Premises) or a substantial portion of the Building (including access to the Building that renders the Building unfit for use and occupancy in accordance with standards generally applicable to first-class high-rise office buildings in downtown Boston) shall be   -36- taken or condemned for any public purpose, this Lease shall, at the option of Landlord (provided such option shall be exercised by Landlord giving of notice to Tenant within sixty (60) days from the date Landlord has been notified in writing of such taking or condemnation) forthwith cease and terminate as of the date of the taking. Landlord’s right to terminate as set forth in the immediately preceding sentence shall be effective only if Landlord terminates the leases of all tenants, in the Office Section of the Building that are similarly situated with respect to the taking or condemnation (regardless of the amount of space demised to such tenants). All proceeds from any taking or condemnation of the Leased Premises shall belong to and be paid to Landlord, and Tenant hereby assigns to Landlord its interest in said proceeds, subject to the rights of any holder of any Mortgage; provided, however, that Landlord shall cooperate with Tenant if Tenant seeks, in a separate proceeding, to recover, at its cost and expense, compensation for its moving and relocation expenses and Tenant’s Property. In no event shall any such recovery by Tenant have the effect of diminishing or delaying the award payable to Landlord on account of any taking or condemnation. If in any such case the Leased Premises or any portion thereof are rendered unfit for use and occupation in accordance with standards generally applicable to first-class high-rise office buildings in downtown Boston (or any common areas or facilities required for access to the Leased Premises are taken) and this Lease is not terminated, Landlord shall use due diligence (following the expiration of the period in which Landlord may terminate this Lease pursuant to the foregoing provisions of this Section and subject to the extent and availability of the condemnation proceeds received by Landlord) to put the Leased Premises, or any common areas or facilities required for access to the Leased Premises, or what may remain of either (excluding any items installed or paid for by Tenant which Tenant may be required to remove pursuant to Section 4.07), into proper condition for use and occupation, and a just proportion of the Gross Rent according to the nature and extent of the taking shall be abated until the Leased Premises or such remainder shall have been put by Landlord in such condition; and in case of a taking which permanently reduces the area of the Leased Premises, a just proportion of the Gross Rent shall be abated for the remainder of the Term. (b) In the event of a temporary taking of the Leased Premises or any part thereof not exceeding sixty (60) days, a just proportion of the Gross Rent according to the nature and extent of the taking shall be abated for the period of such temporary taking, and Tenant shall remain fully obligated for performance of all of the other covenants and obligations on its part to be performed pursuant to the terms of this Lease. All proceeds awarded or paid with respect thereto shall belong to Landlord. 5.07 Damage Due to Fire and Casualty.   -37- (a) Restoration and Rent Abatement. If the Building or the Leased Premises or any part thereof shall be damaged by fire or other insured casualty, then, subject to the terms of this Section 5.07 below, Landlord shall proceed with diligence, subject to then applicable statutes, building codes, zoning ordinances and regulations of any governmental authority, and at the expense of Landlord (but only to the extent of insurance proceeds made available to Landlord by any mortgagee of the Building and any ground lessor) to repair or cause to be repaired such damage, including such Tenant Improvements as shall have been so damaged. If such damage arises from any act or omission of Tenant, Tenant shall reimburse Landlord for the cost of repair up to the deductible amount in Landlord’s insurance policy (which deductible is currently $5,000, subject to increase by Landlord from time to time in a commercially reasonable manner not inconsistent with the operation of first-class high-rise office towers in downtown Boston). If Tenant desires to change the layout or other aspects of the damaged Tenant Improvements that require restoration, Tenant shall submit plans and specifications for such changes to Landlord for approval in accordance with Section 4.07. All repairs to Tenant Improvements shall be performed by Landlord, to the extent of the available proceeds from the Landlord’s insurance policy under Section 5.01 that are attributable to the cost of restoring the damaged Tenant Improvements. If particular items or materials of Tenant Improvements are not reasonably available for inclusion in such restoration, substitutes of comparable quality may be used in such restoration with Tenant’s reasonable prior approval. To the extent the cost of Tenant Improvements that Tenant desires to install as part of such restoration shall exceed such proceeds, such Tenant Improvements shall be installed by Landlord at Tenant’s expense. At Tenant’s request, Landlord shall provide its good faith estimate of the estimated costs that Landlord then expects to incur at Tenant’s expense, which amounts shall be subject to Tenant’s prior reasonable approval. The cost of any repairs that are performed by Landlord at Tenant’s expense under this Section 5.07 (including costs of design fees, and reasonable charges for administration, overhead and construction management services by Landlord and Landlord’s contractor) shall constitute Additional Rent hereunder. All repairs to and replacements of Tenant’s Property shall be made by and at the expense of Tenant. If the Leased Premises or any part thereof shall have been rendered unfit for use and occupation hereunder by reason of such damage, the Gross Rent or a just and proportionate part thereof, according to the nature and extent to which the Leased Premises shall have been so rendered unfit, shall be abated from the date of casualty until the date that Landlord shall have restored the Leased Premises (including the Tenant Improvements) as nearly as practicable to the condition in which they were immediately prior to such fire or other casualty, plus a reasonable period of time, not to exceed ten business days, for Tenant to move in and re-install any Tenant’s Property damaged by such casualty (the parties agreeing to reasonably cooperate with each other to coordinate the restoration of the Tenant Improvements by Landlord and the re-installation of Tenant’s Property by Tenant so as to restore   -38- the affected portion of the Leased Premises as soon as practicable); provided, however, that there shall be no abatement for the period of any delay in completing the Tenant Improvements arising from any changes by Tenant in the layout or other aspects of the damaged Tenant Improvements as set forth above, or from any changes in Tenant’s Property or other areas of the Leased Premises, or from any delay in the work due to Tenant’s approval of the costs of such work as set forth above. Landlord shall not be liable for delays in the making of any such repairs which are due to events of Force Majeure, nor shall Landlord be liable for any inconvenience or annoyance to Tenant or injury to the business of Tenant resulting from delays in repairing such damage. The preceding sentence shall not derogate from the provisions regarding rent abatement and termination expressly set forth in this Section 5.07. (b) Landlord Termination Right. If (i) the Leased Premises are so damaged by fire or other casualty (whether or not insured) at any time during the last thirty months of the Term that the cost to repair such damage is reasonably estimated to exceed one-third of the total Gross Rent payable hereunder for the period from the estimated completion date of repair until the end of the Term, (ii) at any time the Building (or any portion thereof, whether or not including any portion of the Leased Premises) is so damaged by fire or other casualty (whether or not insured) that substantial alteration or reconstruction (i.e., damages resulting in an Estimated Restoration Date more than twelve (12) months from the date of damage as set forth in an engineering estimate provided by Landlord) or demolition of the Building (or a portion thereof) shall in Landlord’s judgment be required, or (iii) at any time damage to the Building occurs by fire or other insured casualty and any mortgagee or ground lessor shall refuse to permit insurance proceeds to be utilized for the repair or replacement of such property and Landlord determines not to repair such damage, then and in any of such events, this Lease and the term hereof may be terminated at the election of Landlord by a notice from Landlord to Tenant within sixty (60) days, or such longer period as is required to complete arrangements with any mortgagee or ground lessor regarding such situation (not to exceed a total of one hundred twenty days), following such fire or other casually; the effective termination date pursuant to such notice shall be not less than thirty (30) days after the day on which such termination notice is received by Tenant; provided that in the case of a termination by Landlord under clause (i) or (iii) above, if Tenant may continue to lawfully occupy the undamaged portion of the Leased Premises in accordance with all applicable building codes and other legal requirements notwithstanding such casualty, Tenant may elect, by notice to Landlord given within thirty (30) days after the date that Landlord gives such termination notice, to extend such effective termination date as to the entire undamaged portion of the Leased Premises (provided that such undamaged portion includes full floors covering more than 50% of the Leased Premises existing prior to such casualty that are contiguous to each other and that Landlord may elect to exclude any space on   -39- floors not contiguous to such undamaged full floors that Landlord deems necessary for leasing with other space to third parties) for up to the date one year after the casualty, provided that Landlord shall not be required to restore the Building (including any Tenant Improvements) and Tenant shall not be entitled to any rent abatement for such undamaged portion for any period beyond the effective date of termination that would have occurred pursuant to the Landlord’s termination notice. (If Tenant then has an outstanding right to extend the Term under Article 9 and Landlord exercises its termination right under clause (i) of the immediately preceding sentence, Tenant may irrevocably exercise its extension option under Article 9 by notice delivered to Landlord within thirty (30) days after receipt of Landlord’s termination notice under such clause (i), in which event (a) such termination notice shall be deemed to have been rescinded and (b) the Base Rent for the Extension Term shall be determined at the time and in the manner set forth in Section 9.02 and Article 7, provided that Tenant shall have no right to deliver a Withdrawal Notice with respect thereto. Landlord’s right to terminate under clauses (ii) and (iii) above shall be effective only if Landlord terminates the leases of all tenants in the Office Section of the Building that are similarly situated with respect to the casualty, regardless of the amount of space demised to such tenants.) In the event of any termination, the Term shall expire as though such effective termination date were the date originally stipulated in the Basic Lease Information section for the end of the Term and the Gross Rent shall be apportioned as of such date (which apportionment date shall not affect the rent abatement otherwise available during the period prior to such termination, to the extent set forth in Section 5.07(a) above). (c) Tenant Termination Right. If all or part of the Leased Premises shall be destroyed or rendered wholly untenantable by fire or other casualty (whether or not insured) and this Lease has not been terminated pursuant to any other provision hereof, Landlord shall prepare an engineering estimate of the date when the Landlord’s restoration work will be substantially completed (the “Estimated Restoration Date”) and give written notice thereof to Tenant within 90 days after the date of the damage; provided, that if such damage is due to an uninsured casualty and Landlord elects not to restore such damage, Landlord shall so notify Tenant within such 90-day period. If the Estimated Restoration Date is later than one year from the date of the damage, or if Landlord gives notice under the proviso clause of the preceding sentence that such damage will not be restored, Tenant may terminate this Lease by giving Landlord written notice of its election to do so within forty-five (45) days after the date of Landlord’s notice under this paragraph above. Tenant shall have no right to terminate this Lease on account of fire or other casualty, except as expressly provided in this Section 5.07(c). If Landlord’s restoration work has not been substantially completed within the one-year period after the date of damage (or such later date as may have been   -40- specified in Landlord’s initial notice of the Estimated Restoration Date), subject in either case to extension for not more than ninety (90) days, except in cases of Force Majeure, in which event the extension shall not exceed a total of six (6) months in the aggregate, then Tenant shall have the right to terminate this Lease by giving Landlord written notice of its election to do so within 30 days after the end of such period, and if Tenant timely gives such notice, this Lease shall terminate 30 days after the date thereof unless Landlord’s restoration work is substantially completed within such 30-day period, in which event such termination notice shall be void and this Lease shall continue in full force and effect. If Landlord shall not have terminated the Lease pursuant to Section 5.07(b), Tenant shall also have the right to terminate this Lease if the conditions described in clause (i) of Section 5.07(b) shall occur, by notice from Tenant to Landlord given within sixty (60) days after the date of damage, the effective date of which shall not be less than thirty (30) days or more than ninety (90) days after the day on which the termination notice is given to Landlord. Tenant’s notice may specify a later date for such termination, not more than one year after the casualty, provided that Tenant may continue to lawfully occupy legal requirements notwithstanding such casualty, Landlord shall not be required to restore the Building (including any Tenant Improvements), and Tenant shall not be entitled to any rent abatement for any period beyond the date ninety (d) Rights to Proceeds. The proceeds from any insurance paid by reason of damage to or destruction of the Building or any part thereof, the Building Standard Improvements, the Tenant Improvements, and any other element, component or property insured by Landlord shall belong to and be paid to Landlord, subject to the rights of the holder of any Mortgage, and Tenant hereby assigns to Landlord any interest in said proceeds. Notwithstanding the foregoing, if this Lease is terminated under this Section 5.07 effective as of a date that is more than three (3) years prior to the then scheduled expiration of the Term, then, subject to the rights of the holder of any Mortgage, (i) the proceeds of the property insurance that are attributable to the Tenant Improvements in the Leased Premises shall belong to and be paid to Landlord in an amount equal to the Standard Tenant Build-out Amount and (ii) Tenant shall be entitled to any balance of such proceeds for the Tenant Improvements. For purposes of this paragraph, the “Standard Tenant Build-out Amount” shall mean $50.00 per square foot of the Net Rentable Area of the Leased Premises (as increased by the percentage increase in the Index between the Effective Date of this Lease and the effective date of the termination of the Lease).   -41- ARTICLE 6 6.01 Events of Default. The occurrence of any of the following shall constitute an “Event of Default” on the part of Tenant: (a) Nonpayment Of Rent. Failure to pay any payment of Rent due and payable hereunder, upon the date when payment is due, such failure continuing for a period of five (5) business days after written notice of such failure; provided, however, that Landlord shall not be required to provide such notice more than twice during any one-year period within the Term with respect to non-payment of Gross Rent, the third such non-payment constituting default without requirement of notice; (b) Other Obligations. Failure to perform any obligation, agreement or covenant under this Lease other than those matters specified in Section 6.01(a), such failure continuing for thirty (30) days after written notice of such failure (or such longer period as is reasonably necessary to remedy such default, provided that Tenant shall within such thirty (30) day period have commenced such remedy and thereafter Tenant shall continuously and diligently pursue such remedy at all times until such default is cured); (c) Abandonment. Abandonment of the Leased Premises or any part thereof during the Term. Tenant shall be deemed to have abandoned the Leased Premises if the Leased Premises remain substantially vacant or unoccupied to an extent that vitiates the validity of insurance coverage thereon; (d) General Assignment. A general assignment by Tenant for the benefit of creditors; (e) Bankruptcy. The filing of any voluntary petition in bankruptcy by Tenant, or the filing of an involuntary petition by Tenant’s creditors, which involuntary petition remains undischarged or unstayed for a period of sixty (60) days. In the event that under applicable law the trustee in bankruptcy or Tenant has the right to affirm this Lease and continue to perform the obligations of Tenant hereunder, such trustee or Tenant shall, in such time period as may be permitted by the bankruptcy court having jurisdiction, cure all defaults of Tenant hereunder outstanding as of the date of the affirmance of this Lease and provide to Landlord such adequate assurances as may be necessary to ensure Landlord of the continued performance of Tenant’s obligations under this Lease; (f) Receivership. The employment of a receiver to take possession of substantially all of Tenant’s assets or the Leased Premises, if such receivership remains undissolved for a period of ten (10) business days after creation thereof;   -42- (g) Attachment. The attachment, execution or other judicial seizure of all or substantially all of Tenant’s assets or the Leased Premises, if such attachment or other seizure remains undismissed or undischarged for a period of ten (10) business days after the levy thereof; (h) Insolvency. The admission by Tenant in writing of its inability, to pay its debts as they become due, the filing by Tenant of a petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, the filing by Tenant of an answer admitting or failing timely to contest a material allegation of a petition filed against Tenant in any such proceeding or, if within sixty (60) days after the commencement of any proceeding against Tenant seeking any reorganization, or arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceeding shall not have been dismissed. 6.02 Remedies upon Default. (a) If an Event of Default occurs, Landlord shall have the right, with or without notice or demand, immediately to terminate this Lease, and at any time thereafter recover possession of the Leased Premises or any part thereof and expel and remove therefrom Tenant and any other person occupying the same, by any lawful means, and again repossess and enjoy the Leased Premises without prejudice to any of the remedies that Landlord may have under this Lease, or at law or equity by reason of Tenant’s default or of such termination. Nothing in this Article 6 shall be construed to derogate from the provisions of Section 5.05(b) as to Tenant’s liability for indirect or consequential damages. (b) Even though Tenant has breached this Lease, this Lease shall continue in effect for so long as Landlord does not terminate Tenant’s right to possession under Section 6.02(a) hereof, and Landlord may enforce all of its rights and remedies under this Lease, including, without limitation, the right to recover Rent as it becomes due. Acts of maintenance, preservation or efforts to lease the Leased Premises or the appointment of a receiver upon application of Landlord to protect Landlord’s interest under this Lease shall not constitute an election to terminate Tenant’s right to possession. 6.03 Damages upon Termination. Should Landlord terminate this Lease pursuant to the provisions of Section 6.02(a) hereof, Landlord shall have all the rights and remedies of a landlord in law or in equity. Upon such termination, in addition to any other rights and remedies to which Landlord may be entitled under applicable law, Landlord shall be entitled to recover from Tenant: (i) the worth at the time of award of the unpaid Rent and other amounts which had been earned at the time of termination; (ii) the worth at   -43- the time of award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss that the Tenant proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the rental value of the Premises for the balance of the Term; and (iv) any other amount necessary to compensate Landlord for all the detriment proximately and directly caused by Tenant’s failure to perform its obligations under this Lease or which, in the ordinary course, would be likely to result therefrom. Tenant further covenants, as an additional cumulative obligation after any such termination, to punctually pay to Landlord all sums and perform all obligations which Tenant covenants in this Lease to pay and to perform, as if this Lease had not been terminated. In calculating the amounts to be paid by Tenant pursuant to this Section 6.03, Tenant shall be credited with any amount paid to Landlord pursuant to this Section 6.03 and also (in respect of the amounts referred to in (i) and (ii)) the net proceeds of rent obtained by Landlord by reletting the Leased Premises through the time of award, after deducting all Landlord’s expenses in connection with such reletting, including, without limitation, all repossession costs, brokerage commissions, fees for legal services and expenses of preparing the Leased Premises for reletting, it being agreed by Tenant that Landlord may (x) relet the Leased Premises or any part thereof for a term or terms which may at Landlord’s option be equal or less than or exceed the period which would otherwise have constituted the balance of the Term and may grant such concessions and free rent as Landlord in the exercise of its business judgment considers advisable or necessary to relet the same and (y) make such alterations, repairs and decorations in the Leased Premises as Landlord in the exercise of its business judgment considers advisable or necessary to relet the same, and no action of Landlord in accordance with the foregoing or failure to relet or collect rent under Landlord’s reletting of the Premises shall operate or be construed to release or reduce Tenant’s liability as aforesaid. The “time of award” shall refer to such time as (I) Tenant shall, as a settlement of the amounts due pursuant to this Section 6.03, pay to Landlord such sums pursuant to a written agreement in form and substance satisfactory to Landlord, or (II) the date on which a judgment shall be entered in a court of competent jurisdiction to the effect that Tenant shall pay Landlord the amounts due and owing pursuant to this Section 6.03. The “worth at the time of award” of the amounts referred to in (i) and (ii) shall mean such amounts together with interest at the lesser of (x) the prime rate from time to time published in the Wall Street Journal plus four percent per annum or (y) the maximum rate allowed by law. The “worth at the time of award” of the amount referred to in (iii) shall mean such amounts as computed by reference to competent appraisal evidence or the formula prescribed by and using the lowest discount rate permitted under applicable law. Landlord’s actual damages hereunder shall be subject to mitigation by the amount of the damages that Tenant proves would have been avoided by Landlord in the exercise of commercially reasonable efforts to relet the Leased Premises; provided that such reasonable efforts shall not require Landlord (i) to solicit or negotiate with prospective new tenants until Landlord obtains full and complete possession of the Leased Premises, free of   -44- any claim by Tenant or its successors, (ii) to relet the Leased Premises prior to leasing any other space in the Building then available or scheduled to become available, (iii) to relet the Leased Premises in a manner inconsistent with Landlord’s leasing requirements under the preceding sentence or inconsistent with the criteria for Landlord’s approval of proposed assignees or subtenants under Section 4.06, (iv) to expend any amounts on tenant improvements or other leasing costs in excess of the levels in Landlord’s budget or leasing guidelines for the Building, or (v) to relet the Leased Premises for a rental less than the current fair market rental then prevailing for similar office space in the Building. Tenant’s liability hereunder shall not be diminished or reduced if, or to the extent, that such reasonable efforts of Landlord to relet the Leased Premises are unsuccessful. 6.04 Computation of Rent for Purposes of Default. For purposes of computing unpaid Rent which would have accrued and become payable under this Lease pursuant to the provisions of Section 6.03, unpaid Rent shall consist of the sum of: (1) the total Base Rent for the balance of the Term, plus (2) a computation of the Operating Cost and Impositions for the balance of the Term, the assumed Operating Cost for the calendar year of the default and each future calendar year in the Term to be equal to the Operating Cost for the calendar year prior to the year in which the default occurs compounded at a per annum rate equal to the mean average rate of inflation for the preceding five (5) calendar years as determined pursuant to the Index. 6.5 Liquidated Damages. In lieu of the damages provided for in Section 6.03, Landlord, at its sole option, may by written notice to Tenant, at any time after this Lease is terminated pursuant to Section 6.02(a) or is otherwise terminated for breach of any obligation of Tenant, elect to recover, and Tenant shall thereupon pay, as liquidated damages, an amount equal to the aggregate of Gross Rent accrued for a one-year period ending on the first day of the month immediately prior to any such termination, plus the amount of Gross Rent accrued and unpaid at the later of (i) the time of any such termination, or (ii) the time when Tenant vacates the Leased Premises, and less the amount of any recovery by Landlord under the provisions of Section 6.03. 6.6 Rights of Landlord in Bankruptcy. Nothing contained in this Lease shall limit or prejudice the right of Landlord to prove for and obtain in proceedings for bankruptcy or insolvency, by reason of the termination of this Lease, an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which, the damages are to be proved, whether or not the amount be greater, equal to, or less than the amount of the loss or damages referred to in this Article 6.   -45- 6.07 Late Charge. In addition to its other remedies, Landlord shall have the right to add to the amount of any payment required to be made by Tenant hereunder, and which is not paid on or before the date the same is due, an amount equal to (i) two percent (2%) of the delinquency after five (5) days and (ii) five percent (5%) of the delinquency after ten (10) days for each month or any portion thereof that the delinquency remains outstanding after notice of such delinquency, the parties agreeing that Landlord’s damage by virtue of such delinquencies would be difficult to compute and the amount stated herein represents a reasonable estimate thereof. The late charge shall be due upon demand by Landlord. Tenant shall reimburse Landlord for all costs and expenses (including reasonable attorney’s fees) incurred by Landlord to recover the late charges due hereunder. ARTICLE 8. MISCELLANEOUS 8.01 No Waiver. Failure of Landlord or Tenant to declare any default immediately upon occurrence thereof, or delay in taking any action in connection therewith, shall not waive such default, but Landlord or Tenant, as the case may be, shall have the right to declare any such default at any time thereafter. 8.2 Holding Over. In the event of holding over by Tenant after expiration or termination of this Lease without the written consent of Landlord, Tenant shall pay for each month of holdover tenancy (x) twice the Base Rent that Tenant was obligated to pay for the month immediately preceding the end of the Term for each month or partial month of any such hold-over period plus (y) Tenant’s Proportionate Share of Operating Cost and Impositions for such period, together with such other amounts as may become due hereunder. No holding over by Tenant after the Term shall operate to extend the Term. In the event of any unauthorized holding over, Tenant shall indemnify Landlord, subject to the provisions of Section 5.04(e), (i) against all claims for damages by any other tenant to whom Landlord may have leased all or any part of the Leased Premises covered hereby effective upon the termination of this Lease, and (ii) for all other losses, costs and expenses, including reasonable attorney’s fees, incurred by Landlord by reason of such holding over. Any holding over with the consent of Landlord in writing shall thereafter constitute a lease from month to month. 8.3 Amendments and Modifications. This Lease may not be altered, changed or amended, except by an instrument in writing signed by both parties hereto. 8.4 Transfers by Landlord. Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and obligations hereunder to any person or entity to which Landlord sells or otherwise transfers Landlord’s interest in the Building. The covenants and obligations of Landlord contained in this Lease shall be binding upon Landlord and its successors from time to time only with respect to breaches occurring during their respective periods of ownership of the Landlord’s interest hereunder. Notwithstanding the foregoing, upon any sale or other transfer of Landlord’s interest in the Building (other than transfers made in connection with a mortgage granted by Landlord on the Property, as to which Section 4.11 shall apply), (i) the transferring Landlord shall not have any further liability or obligation under this Lease to Tenant, for matters arising before or after the date of such sale or transfer, and (ii) the transferee Landlord shall be deemed to have assumed all liabilities and obligations of the transferring Landlord under this Lease, for matters arising before and after the date of such sale or transfer. Nothing in this Section 8.04 shall be construed to supersede, or derogate from the right of any transferring or transferee Landlord to rely conclusively upon, the certifications made in any estoppel certificate delivered by Tenant to Landlord pursuant to Section 4.12. The foregoing provisions of this assumption shall be self-operative upon the occurrence of any such sale or transfer, without the need for any separate instrument, but in confirmation   -48- thereof upon the request of Tenant the transferee Landlord shall execute and deliver to Tenant an agreement confirming such assumption. 8.5 Severability. If any term or provision of this Lease, or the application thereof to any person or circumstances, shall to any extent be invalid or unenforceable, the remainder of this Lease, or the application of such provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each provision of this Lease shall be valid and shall be enforceable to the fullest extent permitted by law. 8.6 Notices. All notices, demands, consents and approvals which may be or are required to be given by either party to the other hereunder shall be in writing and shall be deemed to have been fully given by personal delivery, or on the next business day after being entrusted to a nationally recognized overnight courier service providing receipts for delivery, or three (3) business days after being deposited in the United States mail, certified or registered, postage prepaid, and addressed to the party to be notified at the address for such party specified on the Basic Lease Information sheet, or to such other place as the party to be notified may from time to time designate by at least fifteen (15) days notice to the notifying party. 8.7 No Joint Venture. This Lease shall not be deemed or construed to create or establish any relationship of partnership or joint venture or similar relationship or arrangement between Landlord and Tenant hereunder. 8.8 Successors and Assigns. This Lease shall be binding upon and inure to the benefit of Landlord, its successors and assigns (subject to the provisions hereof, including, but without limitation, Sections 4.11 and 8.04); and shall be binding upon and inure to the benefit of Tenant, its successors, and to the extent assignment may be permitted as of right or approved by Landlord hereunder pursuant to Section 4.06, Tenant’s assigns. 8.9 Applicable Law. All rights and remedies of Landlord and Tenant under this Lease shall be construed and enforced according to the laws of the Commonwealth of Massachusetts. 8.10 Time of the Essence. Time is of the essence of each and every covenant herein contained. 8.11 Submission Not an Option. The submission of this Lease for examination does not constitute a reservation of or option for the Leased Premises or an offer to lease, it being understood and agreed that neither Landlord nor Tenant shall be legally bound with respect to the leasing of the Leased Premises unless and until this Lease has been executed and delivered by both Landlord and Tenant.   -49- 8.12 Brokerage. Tenant and Landlord each warrants to the other that it has had no dealings with any broker or agent in connection with (a) the Original Lease other than the broker named in the Original Lease and (b) this Lease other than McCall & Almy, Inc. Each of Landlord and Tenant covenant to defend (with counsel reasonably approved by the other party), hold harmless and indemnify (subject to the provisions of Section 5.04(e)) the other party from and against any and all costs, expense or liability for any compensation, commission and charges claimed by any broker or agent arising out of the warranting party’s dealings in connection with (a) the Original Lease (other than the broker named in the Original Lease) or (b) this Lease or the negotiation thereof (other than McCall & Almy, Inc.). The fee of McCall & Almy, Inc. shall be paid by Landlord in an amount equal to $442,078.75 ($1.25 per square foot of Net Rentable Area) with respect to this Lease. Landlord shall hold harmless and indemnify Tenant (subject to the provisions of Section 5.04(e)) from and against any and all costs, expense or liability for any compensation, commission and charges, if any, claimed by the broker named in the Original Lease in connection with this Lease. 8.13 Waiver of Jury Trial. Landlord and Tenant hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other, on or in respect of any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant hereunder, Tenant’s use or occupancy of the Leased Premises, and/or any claim of injury or damages. 8.14 All Agreements Contained. Subject to Article 14 below, this Lease contains all of the agreements of the parties with respect to the subject matter hereof and supersedes all prior dealings between them with respect to such subject matter. 8.15 Cumulative Remedies. The specific remedies to which Landlord may resort under the terms of this Lease are cumulative and, subject to Section 5.05(b), are not intended to be exclusive of any other remedies or means of redress to which it may be lawfully entitled in case of any breach or threatened breach by Tenant of any provisions of this Lease. In addition to the other remedies provided in this Lease, Landlord shall be entitled to the restraint by injunction of the violation or attempted or threatened violation of any of the covenants, conditions or provisions of this Lease of to a decree compelling specific performance of any such covenants, conditions or provisions. 8.16 Failure to Enforce. The failure of Landlord or Tenant to seek redress for violation of, or to insist upon strict performance of, any covenant or condition of this Lease, shall not be deemed a waiver of such violation, nor prevent a subsequent act which would have originally constituted a violation from having all the force and effect of the original violation. The failure of Landlord to enforce any of the rules and regulations referred to herein, whether heretofore or hereafter adopted by Landlord or the failure of Landlord to enforce any of said rules and regulations against any other tenant in the Building shall not be deemed a waiver of any such rules or regulations. The receipt by   -50- Landlord of Rent with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach. No provision of this Lease shall be deemed to have been waived by Landlord or Tenant, unless such waiver shall be in writing and signed by the party granting such waiver. No consent or waiver, express or implied, by Landlord or Tenant to any breach of any agreement or duty shall be construed as a waiver or consent to or of any other breach of the same or any other agreement or duty, 8.17 Notice of Lease. Tenant agrees not to record this Lease or any amendment thereto. Simultaneously with the execution of this Lease, both parties hereto shall execute and deliver a notice of this Lease in form appropriate for recording or registration. Upon the request of either party hereto, both parties shall execute and deliver, in a form mutually acceptable to Landlord and Tenant, (i) a notice in form appropriate for recording or registration of any amendment of this Lease, (ii) an agreement by Tenant to make payments and give notices to whatever individual or entity shall be designated by Landlord for receiving any such notice or payment and to comply with the reasonably customary provisions of any assignment of rents granted to the holder of any Mortgage, and (iii) if this Lease is terminated before the expiration of the Term, an instrument in form appropriate for recording or registration pursuant to which Tenant acknowledges the date of termination. 8.20 Omitted. 8.21 Omitted. 8.22 Hiring Practices. Tenant acknowledges that this Lease is subject to the provisions of the Sale and Construction Agreement, and Tenant covenants that Tenant shall comply with the laws, ordinances, regulations and orders referenced in Section 1201 thereof; provided, however, that Landlord shall have no right to terminate this Lease by reason of Tenant’s breach of this covenant until (a) Landlord shall have notified Tenant of Tenant’s default and Tenant shall have failed to cure such default within thirty (30) days after the date of such notice; and (b) Landlord, after receipt of notification of non-compliance from the City of Boston or another party entitled to enforce the provisions of the Sale and Construction Agreement, shall have commenced an action for specific performance of such covenant and shall have prosecuted such action to final judgment, not subject to appeal. Notwithstanding the foregoing, however, in the event that the City of Boston, or any agency or instrumentality thereof, at any time (i) declares Landlord in default under the Sale and Construction Agreement by reason of Tenant’s noncompliance with the laws, ordinances, regulations and orders referenced in Section 120.1, or (ii) takes any action, whether administrative, judicial or otherwise, to enforce Landlord’s obligation to cause Tenant’s compliance with such laws, ordinances, regulations and orders, then Landlord shall have the right to terminate this Lease upon notice to Tenant as provided in clause (a) above; provided that in such case Tenant’s cure period shall be thirty (30) days less than such period as Landlord may then have to avoid the consequences of a default under the Sale and Construction Agreement. 8.23 No Rights in Adjoining Parcel. Tenant expressly acknowledges that Tenant does not have any legal or equitable rights, express or implied, or however otherwise denominated or characterized, in the parcel of land bounded by Boylston and Berkeley Streets, St. James Avenue and the Land, or any airspace above such parcel (the “Adjoining Parcel”), or in any improvements now or hereafter constructed thereon or therein, and Tenant hereby waives all claims of such rights, including, but not limited to claims of easements for light, air or view, in the event of any development of the Adjoining Parcel. Tenant further covenants that Tenant shall not take any action to affect any permitting or design approval process undertaken with respect to the Adjoining Parcel or any   -52- development thereof, and that Tenant, shall not intervene, directly or indirectly in any administrative or judicial proceedings involving the Adjoining Parcel or any development thereof. This Section 8.23 shall not be construed to derogate from Tenant’s rights and obligations with respect to the Adjacent 222 Berkeley Space, if the same is leased by Tenant pursuant to the terms of Section 10.01(b) below UTILITY SHAFT SPACE, PUMP AND CHILLER SPACE, AND EMERGENCY GENERATOR 12.01 Parking. Landlord shall make available in the garage forming part of the Building a total of up to one (1) unreserved parking space for each 3,200 square feet of Net Rentable Area in the Leased Premises and any Expansion Space added under Article 10 (but excluding Available Space offered under Section 11.01, as to which any parking spaces shall be subject to the terms of the offer of such space). The parking spaces provided under this Section 12.01 shall be made available directly to employees of Tenant who are from time to time designated by Tenant to use such allocated parking spaces, which employees shall pay the monthly parking charges directly to Landlord. Landlord may require each such employee using a parking space to execute a separate license agreement with the garage operator with respect to such parking space, which shall be in the commercially reasonable form customarily used by Landlord for tenants in the Building generally. If Tenant does not require all of the parking spaces allocable to it (or if any such employee of Tenant defaults in his or her obligations under such agreement), Tenant shall relinquish its right to such parking spaces to Landlord, provided that if Tenant thereafter from time to time, on at least ninety (90) days’ prior notice before the first   -65- calendar day of the month requested for use of such spaces, requests to recommence using any spaces so relinquished (up to the total number of spaces allocated to Tenant above) Landlord shall make such spaces available on or before such requested date to employees so designated by Tenant from time to time (other than employees who defaulted under their parking agreements). The rates charged by the garage operator for such parking shall be the prevailing market rates for parking in the Building as established by the garage operator from time to time. Tenant’s right to allow its employees to use the parking, spaces shall be subject to (i) timely payment of the parking charges, (ii) such reasonable rules and regulations as Landlord or its operator may establish for the Building from time to time, and (iii) all applicable laws, ordinances and regulations. ARTICLE 13 13.01 Definitions. Terms used herein shall have the following meanings: “Additional Rent” shall mean all monetary obligations of Tenant hereunder, other than the obligation for payment of Gross Rent. “Affiliate” shall have the meaning set forth in Section 4.06(a). “Available Space” shall mean space with respect to which (i) a tenant’s lease has terminated, whether by expiration of the term of such lease or any extension option, right of first refusal or agreement of expansion, or otherwise, and (ii) such space has not been relet to such tenant immediately thereafter, the previous lease with respect to such space has not been renewed and/or an expansion right previously granted to such tenant or to a third person with respect to such space has not been exercised. “Base Rent” shall mean the amount set forth on the Basic Lease Information sheet for the initial Leased Premises, as the same may be adjusted from time to time in accordance with the provisions of this Lease. “Basic Services” shall mean the services described in Section 3.01 hereof. “Building” shall mean the 25-story building (consisting of a 6-story low-rise portion, a 19-story high-rise portion and 3 levels of parking space below grade) located on the Land, and comprising the Office Section, the Commercial Section and common areas such as mechanical rooms, elevator machine rooms, loading dock facilities, janitor and utility rooms, electrical and communication closets and similar facilities. “Building Common Areas” shall mean all areas of the Building servicing more than one floor of the Building as a whole, including, but not limited to central mechanical rooms, elevator machine rooms, pump rooms, loading dock facilities, electrical and communication rooms, postal, security and janitorial facilities and the ground floor lobby (and if any such area is bordered by any demising wall which abuts any space that is leasable, such area shall be measured from the midpoint of such demising wall), but excluding General Common Areas and the parking garage forming part of the Building.   -68- “Building Standard Improvements” shall mean the improvements to certain portions of the Leased Premises set forth on Exhibit B. “Business Hours” shall mean 8 A.M. to 6 P.M. on Business Days. “Business Days” shall mean Monday through Friday, excluding federal holidays. “Commercial Section” shall mean that portion of the Building dedicated to commercial and retail uses. As of the date hereof, the Commercial Section of the Building contains 65,359 square feet of Net Rentable Area. The parties acknowledge that the area set forth for the Commercial Section shall not be subject to re-measurement, except in the event of a casualty, condemnation or other event causing a physical change in the area of the Building. “Common Areas” shall mean all areas on the particular multi-tenant floor of the Building devoted to non-exclusive uses, such as corridors, lobbies, fire vestibules, elevator foyers, service elevator receiving areas, mailrooms, electric and communication closets and other similar facilities for the benefit of all tenants or invitees on that particular floor. “Estimated Impositions” for any calendar year shall mean Landlord’s good faith estimate of Impositions for such calendar year. “Estimated Operating Cost” for any calendar year shall mean Landlord’s good faith estimate of Operating Cost for such calendar year. “Fair Market Net Rent” shall mean the annual net fair market rental value (i.e., net of Operating Cost and Impositions) for the space under this Lease for which such rent rate is to be determined for a term coterminous with the time period for which such Fair Market Net Rent is to be effective, upon all of the other terms of this Lease. In determining such Fair Market Net Rent, if reference is made to other lease transactions for comparable space in the Building or for comparable space in comparable other first-class high-rise office towers in Boston, Massachusetts, appropriate adjustments shall be made to the rental rates in such transactions to take into consideration differences in any relevant factors, which may include, without limitation, differences in buildings, views, relative floor plan efficiency, tenant improvements, proposed term of lease, extent of service provided or to be provided, the time the particular rate under consideration became or is to become effective and any other relevant terms or conditions. “Force Majeure” shall mean any circumstance beyond the reasonable control of Landlord, including, without limitation, acts of God, acts of the public enemy, governmental interference, court orders, requisition or orders of governmental bodies or authorities, requirements under any statute, law, rule, regulation or similar requirement of a   -69- governmental authority which shall be enacted or shall arise following the date of this Lease, casualties, strikes, unavailability of labor and materials, delays in obtaining insurance proceeds, insurrection, riot, civil commotion, lock-out, or any other unforeseeable event (other than the inability to obtain financing), the occurrence of which would prevent or preclude Landlord from fully and completely carrying out and performing its obligations under this Lease. “General Common Areas” shall mean those areas forming part of the Building and devoted to non-exclusive uses which are not measured, including, but not limited to, walkways, courtyards and all landscaped areas (including pools and fountains). General Common Areas shall not include any portion of the parking garage forming part of the Building. “Gross Rent” shall mean, for each year or portion thereof of the Term, the sum of Base Rent and Tenant’s Proportionate Share of Operating Cost and Impositions for such year or portion thereof. “Impositions” shall have the meaning given in Section 2.05. “Impositions Adjustment” for any calendar year shall mean the amount of the Impositions in excess of, or less than, the amount of Estimated Impositions. “Index” shall mean the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index (All Urban Consumers, All Items, 1967 equals 100) for the Metropolitan Area or Region of which Boston, Massachusetts is a part. If such Index is discontinued or revised, the percentage increase in question shall be determined by reference to the index designated as the successor or substitute index by the government of the United States. “Invitees” shall mean agents, servants, employees, contractors, licensees and business invitees. “Land” (or the “Property”) shall mean the parcel of real property owned by the Landlord, located in the City of Boston, Suffolk County, Massachusetts, bounded in part by Clarendon and Boylston Streets and St. James Avenue and more specifically described in Exhibit A-l attached hereto. “Leased Premises” or “Premises” shall mean the premises specified as such on the Basic Lease Information sheet, as the same may be expanded pursuant to Article 10 or Section 11.01 of this Lease or reduced pursuant to Section 11.02 of this Lease. “Mortgage” shall mean any and all mortgages securing indebtedness for money borrowed by Landlord or indebtedness for the refinancing of any such indebtedness, provided any such mortgage grants a lien on all or any portion of the   -70- Building, including all amendments and modifications thereto, from time to time. Any reference to “Mortgage” and “Mortgagee” herein shall include a sale and leaseback and the grantee-lessor of a sale and leaseback used for financing purposes. “Net Rentable Area” shall mean the area or areas of the space within the Building determined as follows: (a) Net Rentable Area on a single tenancy floor shall consist of: (i) the area determined by measuring from the inside surface of the outer glass of each exterior wall (and extensions of the plane thereof in non-glass areas) to the inside surface of the outer glass on the opposite exterior wall (and extensions of the plane thereof in non-glass areas) and shall include all areas within the outside walls, but shall exclude vertical penetrations, including without implied limitation fire stairs, elevator shafts, and areas for central heating, ventilating and air conditioning, mechanical and electrical facilities; plus (ii) Tenant’s Allocation of Building Common Areas; (b) Net Rentable Area for a multi-tenancy floor shall consist of: (x) all space within the demising walls (measured from the mid-point of the demising walls; and in the case of exterior walls, measured as defined in (i) above); plus (y) Tenant’s Allocation of Building Common Areas; plus (z) Tenant’s Floor Share of all Common Areas. No deductions from Net Rentable Area shall be made for columns or projections necessary to the Building, or for vertical penetrations which are for the specific use of Tenant (such as, but not limited to, special elevators or stairs, mechanical and electrical facilities and air conditioning equipment). The Net Rentable Area of the Leased Premises has been calculated on the basis of the foregoing definition and is hereby stipulated for all purposes hereof to be the amount, expressed in terms of square feet, stated on the Basic Lease Information sheet. “Office Section” shall mean that portion of the Building dedicated to office uses. As of the date hereof, the Office Section of the Building contains 641,503 square feet of Net Rentable Area. The parties acknowledge that the area set forth for the Office Section shall not be subject to re-measurement, except in the event of a casualty, condemnation or other event causing a physical change in the area of the Building.   -71- “Operating Cost” shall have the meaning given in Section 2.04. “Operating Cost Adjustment” for any calendar year shall mean the amount of Operating Cost in excess of, or less than, the amount of Estimated Operating Cost. “Permitted Use” shall mean general business office use in the Leased Premises (and ancillary uses thereto that are expressly permitted under this Lease or are made with Landlord’s reasonable prior approval) of a kind appropriate in a building of the type and quality of the Building; provided, however, that Permitted Use shall not include (a) offices of any agency or bureau of the United States or any state or political subdivision thereof; (b) offices or agencies of any foreign government or political subdivision thereof; (c) offices of any health care professionals or service organization; (d) schools or other training facilities which are not ancillary to corporate, executive or professional office use; (e) retail or restaurant uses (except in the Commercial Section and except for facilities limited to the exclusive use of Tenant’s employees and other Invitees); (f) communications firms, such as radio and/or television stations; (g) employment agencies or (h) any use or activity which is disreputable, creates a fire hazard or would cause Landlord’s insurance rate to be increased. “Rent” shall mean Gross Rent plus Additional Rent, all of which shall be paid in lawful money of the United States. “Space A” – See Basic Lease Information sheet. “Space B” – See Basic Lease Information sheet. “Space C” – See Basic Lease Information sheet. “Sublease” shall include any sublease, underletting at any level, tenancy, concession, license, franchise or other arrangement providing for the use or occupancy of all or any portion of the Leased Premises. “Tenant Extra Improvements” shall mean the improvements of the Leased Premises approved by Landlord and previously installed at Tenant’s expense pursuant to the Existing Lease or otherwise, or hereafter installed at Tenant’s expense pursuant to Section 4.07 of the Lease. “Tenant Improvements” shall mean all physical additions, alterations and other leasehold improvements in the Leased Premises under the Existing Lease or this Lease, whether previously made or hereafter made by Landlord or Tenant, excluding base building equipment and Tenant’s Property.   -72- “Tenant’s Allocation” shall mean an area determined by multiplying the total square footage of the Building Common Areas by the ratio of the Net Rentable Area of the Leased Premises (excluding any allocation of Building Common Areas) to the Net Rentable Area of the Office Section (excluding only the Building Common Areas). “Tenant’s Floor Share” shall mean the ratio of Tenant’s Usable Area to the aggregate Usable Area on Tenant’s floor. “Tenant’s Property” shall mean all trade fixtures, business equipment, computers (together with all cabling, raised flooring, fire suppression equipment for Tenant’s computer room, and ancillary equipment), furniture, goods, supplies and other personal property and effects owned or leased by Tenant or by any persons claiming by, through, and under Tenant, including without limitation any of the foregoing items in the Utility Shaft Space, the Pump and Chiller Space, the Basement Storage Space, and the Penthouse Storage Space, such as air conditioning equipment and generators. “Tenant’s Proportionate Share” is specified on the Basic Lease Information sheet and is based on the ratio which the Net Rentable Area of the Leased Premises (exclusive of the Basement Storage Space, the Penthouse Storage Space, and the Rooftop Satellite Dish Space) bears to the greater of (i) ninety-five percent (95%) of the total Net Rentable Area of the Office Section, or (ii) the Total Leased Net Rentable Area for the year in question. “Term” shall mean a period of calendar years, or fractions thereof, commencing with the Term Commencement Date and ending on the Term Expiration Date stated on the Basic Lease Information sheet, subject to extension under Article 9. “Term Commencement Date” shall mean the date specified as such in the Basic Lease Information sheet. “Term Expiration Date” shall mean the date specified on the Basic Lease Information sheet when the Term shall end, unless sooner terminated or extended pursuant to the terms of this Lease. “Total Leased Net Rentable Area” shall mean the sum of the Net Rentable Area leased to all Office Section tenants over the course of a year, determined on the basis of a weighted averaging of the sum of the Net Rentable Area leased to all Office Section tenants on each day of that year. “Usable Area” shall mean the Net Rentable Area of the leased premises in question, less the portion of such Net Rentable Area attributable to Common Areas and Building Common Areas.   -73- Other terms used on the Basic Lease Information sheet which is a part of this Lease, or elsewhere in this Lease shall have the meaning given them thereon and herein. ARTICLE 14 SURVIVAL OF EXISTING LEASE This Lease is intended to be an extension, and not a novation, of the Existing Lease. The provisions of this Lease shall apply with respect to matters occurring during the period commencing on the Term Commencement Date of this Lease through the expiration or earlier termination of the Term, and for such liabilities, obligations and indemnities that expressly or by context survive such expiration or earlier termination. The provisions of the Existing Lease shall apply solely with respect to the portion of the term of the Existing Lease ending on the day immediately preceding the Term Commencement Date of this Lease. The parties agree that there was and shall be no adjustment of Base Rent for the Leased Premises on the March 1, 1998 Adjustment Date under Section 2.03(b) of the Existing Lease. Each of Landlord and Tenant hereby certifies that, to the best of its knowledge as of the date hereof, the other party is not in default under the Existing Lease and no condition or event exists or has occurred which, with notice or the passage of time, would constitute such a default.   -74- IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Lease as a sealed instrument as of the day and year first above written.   “Landlord” FIVE HUNDRED BOYLSTON WEST VENTURE, a Joint Venture By:   Boylston West 1986 Associates Limited Partnership, Venture         By:   GDHI Limited Partnership,         General Partner         By:   Hines Consolidated Investments, Inc., General Partner                     By:   /s/ Jeffrey C. Hines                     Jeffrey C. Hines                     Senior Executive Vice President   “Tenant” MASSACHUSETTS FINANCIAL SERVICES COMPANY By:   /s/ James F. Bailey   James F. Bailey   Senior Vice President   -75- EXHIBIT B Building Standard Improvements Note: Part 1 of Exhibit B below has been included for purposes of establishing certain of the defined terms “Building Standard Improvements” used in this Lease. Nothing in this Exhibit B shall impose on Landlord any obligation to perform any tenant improvement work or provide any allowance for such work in the existing Leased Premises or any Expansion Space or other expansion space hereafter leased by Tenant under Articles 10 or 11 of this Lease. As noted in Section 4.07 of the Lease, Part 2 of Exhibit B below sets forth general procedures in connection with Tenant’s performance of Tenant Improvements to the Leased Premises that are constructed after the Effective Date. 1. Building Standard Improvements shall consist of: A. Partitions. One (1) linear foot of ceiling height partition per twelve (12) square feet of Useable Area. All required partitions will be 5/8” gypsum board, painted with two coats of latex on 2 1/2” metal studs at 24” on center, with 2 1/2” base. B. Doors and Hardware. One (1) full height, solid core, wood veneer door with a metal frame and lever handle latch set hardware per three hundred (300) square feet of Useable Area. C. Ceiling. A 12” x 12” x  5/8” thick fissured-type mineral fiber concealed grid acoustical ceiling throughout the Leased Premises. D. Lighting. One (1) 2’ x 4’ recessed fluorescent lighting fixture with anodized aluminum parabolic shaped louvers, including initial lamping, per eighty-five (85) square feet of Useable Area. Common Areas and Building Common Areas on all office floors shall have lighting selected by Landlord. E. Electrical Outlets. One (1) duplex wall-mounted convenience outlet mounted at standard locations with white plastic cover plate for each one hundred twenty (120) square feet of Useable Area.   B-1 F. Telephone Outlets. One (1) telephone wall outlet mounted at standard locations for each two hundred ten (210) square feet of Useable Area with pull wire through the partition. G. Floor Covering. Standard grade of carpeting, typical for first-class office space. H. Switch. One (1) single way light switch, rocker type, mounted at standard locations with white plastic cover plate for each three hundred (300) square feet of Useable Area. I. Window Covering. Horizontal aluminum one-inch-slat blinds for exterior windows. J. Life Safety Systems. Flush ceiling-mounted fire sprinkler heads to conform with Tenant partition layout utilizing the Building Standard partition and lighting, for light hazard occupancy design criteria. Up to one sprinkler head per 125 square feet of Useable Area. Manual fire alarm pull stations, exit lights, and audio fire alarm speakers shall be provided at the Building stair doors and elevator lobbies. K. HVAC. The HVAC system for the Lease Premises to suit normal general office space utilizing the Building Standard lighting fixtures. 2. General Tenant Improvement Provisions. Tenant shall engage the Building’s structural, mechanical, electrical and life safety systems engineers for any work affecting such components of the Building. Tenant shall deliver to Landlord complete construction documents to enable Landlord to review all structural, mechanical, electrical and life safety plans and specifications and other plans for the Tenant Improvements that Tenant proposes to perform. The plans and specifications for Tenant Improvements shall be consistent with the plans and specifications for the Building and shall be subject to Landlord’s prior approval, which shall not be unreasonably withheld or delayed, subject to the requirements of Section 4.07 of the Lease. Tenant shall be solely responsible for the compliance of any plans for Tenant Improvements with all applicable laws, regulations, and building codes. After Landlord’s approval of Tenant’s plans and specifications, Tenant shall cause the Tenant Improvements to be constructed in accordance with the plans and specifications; provided, however, that Tenant shall not install any Tenant Improvements   B-2 that do not conform to the plans and specifications for the Building, or do not conform to any applicable regulations, laws, ordinances, codes and rules; such conformity shall be the obligation of Tenant. All Tenant Improvements furnished and installed by Tenant shall be installed in a manner that conforms with the schedule for any work being performed by Landlord’s contractors in the Building, and the work of installation shall be handled in such a manner as to maintain harmonious labor relations and as not to interfere with or delay any work of Landlord’s contractors in the Building. Tenant’s contractors, subcontractors and laborers shall be subject to approval by Landlord (not to be unreasonably withheld or delayed) and shall comply with Landlord’s rules and regulations for performing work in the Building that Landlord may from time to time prescribe in accordance with Section 4.14 of this Lease. If any contractors, mechanics, laborers or materialmen employed by or on behalf of Tenant cause any dispute, strike or unrest with or amongst other contractors, mechanics, laborers or materialmen who may then or thereafter be engaged in work at the Building, Tenant shall, within two (2) days after written notice to do so by Landlord, either eliminate the problem or remove the person(s) causing the problem.   B-3 EXHIBIT C Building Rules And Regulations for 500 Boylston Street (the “Building”)   1. The sidewalks, doorways, halls, stairways, vestibules and other similar areas shall not be obstructed or used for any purpose other than ingress to and egress from tenants’ respective leased premises, and for going from one part of the Building to another part.   2 Plumbing fixtures shall be used only for their designated purpose, and no substances of any kind shall be deposited therein which they are not designed to handle. Damage to any such fixture resulting from misuse by any tenant or its employees or invitees shall be repaired at the expense of such tenant.   3. Signs, advertisements, graphics, or notices visible in or from public corridors shall be subject to Landlord’s written approval. Nails, screws, and other attachments to the Building require prior written consent from Landlord. Upon the removal of any sign, notice or graphic from a building door or public corridor the Tenant is responsible for returning the surface to its original condition.   4. Landlord will provide and maintain an alphabetical directory board for all tenants of the Building, in the first floor (main lobby) of the Building, the size, design and location to be determined by Landlord. No other directory shall be allowed.   5. All contractors and technicians rendering any installation service to tenants shall be subject to Landlord’s approval (not to be unreasonably withheld or delayed) and supervision prior to performing services. This provision applies to all installation work performed in the Building, including, (but not limited to) installation of telephone, telegraph equipment and electrical devices, windows, ceilings, and any other physical portion of the Building.   6. Movement into, inside of or out of the Building of furniture, office equipment, or other bulky material which requires the use of elevators, stairways, or Building entrance and lobby shall be restricted to hours reasonably established by Landlord. All such movements shall be restricted to the Building’s freight elevators. Prearrangements with Landlord should be made regarding the time, method, and routing of movement, and tenants shall assume all risks of damage to articles moved and injury to persons or public resulting from such moves. Landlord shall not be liable for any acts or damages resulting from any such activity, to the extent set forth in Article 5 of the Lease.   C-1 7. Any damage to the Building by the movement of a tenant’s property, or done by a tenant’s property while in the Building, shall be repaired at such tenant’s expense.   8. Landlord shall have the power to reasonably prescribe the weight and position of safes and other heavy equipment, which shall in all cases, to distribute weight, stand on supporting devices approved by Landlord. In addition, tenants shall obtain written approval of Landlord (not to be unreasonably withheld, delayed or, conditioned) prior to installation or subsequent relocation of any libraries or storage rooms. Tenants shall be responsible for all costs associated with said installation or relocation, including, but not limited to engineering analysis and structural changes.   9. All routine deliveries to the premises shall be made between the hours of 6:00 a.m. and 6:00 p.m. weekdays (other than holidays) unless other arrangements are approved in advance by the Building management office, and only shall be made through the freight elevators. Passenger elevators are to be used only for the movement of persons, unless an exception is approved by the Building management office. Courier use of passenger elevators shall be limited to Business Hours during Business Days unless otherwise approved by Landlord. Delivery hours are subject to change by Landlord in a manner consistent with the operation of a first-class high-rise building in downtown Boston. Tenants will adhere to any peak period delivery restrictions implemented by the City of Boston.   10. Corridor doors, when not in use, shall be kept closed.   11. Tenants shall cooperate with Landlord in maintaining their leased premises. Tenants shall not employ any person for the purpose of cleaning the leased premises other than the Building’s cleaning and maintenance personnel; provided that Tenant may engage another cleaning contractor for Tenant’s computer rooms, which contractor shall be subject to Landlord’s reasonable prior approval, shall provide Landlord with a certificate of insurance reasonably approved by Landlord, and shall coordinate any access to the Leased Premises after Business Hours through Landlord’s on-site personnel.   12. Deliveries of water, soft drinks, newspapers, or other such items to any tenant’s leased premises shall be made only by suppliers approved by Landlord (not to be unreasonably withheld, delayed or conditioned) and shall be restricted to hours reasonably established by Landlord and made by use of the freight elevators, if Landlord so directs.   13. Nothing shall be swept or thrown into the corridors, halls, elevator shafts, or stairways. No birds, fish, or animals of any kind (other than seeing-eye dogs) shall be brought into or kept in, on or about any tenant’s leased premises.   C-2 14. No cooking shall be done in any tenant’s leased premises except in connection with convenience lunch room, beverage service for employees and guests or other dining facilities approved by Landlord pursuant to the Lease (all on a non-commercial basis). All permitted cooking shall be done in a manner which complies with all of the provisions of the tenant’s lease and which does not produce fumes or odors. All cooking facilities shall be subject to approval of Landlord and must be approved by all applicable state and municipal authorities. Landlord acknowledges that Tenant has installed, with Landlord’s approval, the executive dining rooms and cooking facilities existing in the Leased Premises as of the Effective Date. Tenant’s use of such executive dining rooms and cooking facilities (including any associated open-flame cooking facilities) shall be made in strict accordance with applicable laws and shall be made in accordance with all of the provisions of the Lease, including without limitation Section 4.08. Tenant shall maintain or cause to be maintained all such equipment in accordance with the provisions of this Lease and applicable laws and in a manner consistent with first-class high-rise office towers in downtown Boston, which maintenance shall include, without limitation, cleaning out grease traps and inspecting drain pipes at least semi-annually and cleaning of exhaust hoods and servicing associated fire suppression equipment at least annually.   15. Food, soft drink or other vending machines shall not be placed within any tenant’s leased premises without Landlord’s prior written consent (not to be unreasonably withheld, delayed or conditioned).   16. No tenant shall use or keep on its leased premises any kerosene, gasoline, or inflammable or combustible fluid or material other than limited quantities reasonably necessary for the operation and maintenance of office equipment and any emergency generator (and associated fuel tank) installed with Landlord’s approval under the Lease. No tenant shall use or keep any noxious gas or substances in its leased premises, or permit its leased premises to be used in a manner offensive or objectionable to Landlord or other occupants of the Building by reason of noise, odors, or vibrations, or interfere in any way with other tenants or those having business therein. All equipment causing vibrations shall be isolated.   17. Tenants shall not tamper with or attempt to adjust temperature control thermostats in their leased premises. Landlord shall make adjustments in thermostats on call from tenants.   18. Tenants shall comply with all requirements necessary for the security of their leased premises and the Building, including the use of service passes issued by Landlord for after hours movement of office equipment/packages, and signing security register in Building lobby after hours.   C-3 19. Landlord will furnish each tenant with a reasonable number of initial keys for entrance doors into its leased premises, and may charge for additional keys thereafter. All such keys shall remain the property of Landlord. No additional locks will be allowed on any door of any leased premises without Landlord’s prior written consent and tenants shall not make any duplicate keys, except those provided by Landlord. Upon termination of this Lease, each tenant shall surrender to Landlord all keys to its leased premises, and give to Landlord the combination of all locks for safes and vault doors, if any, in the leased premises.   20. Canvassing, peddling, soliciting and distribution of handbills in the Building are prohibited and each tenant will cooperate to prevent these activities.   21. Any changes made to these rules and regulations, when made and written notice given to a tenant, shall be binding upon such tenant as if originally herein prescribed. To the extent that any rules and regulations are inconsistent with an express provision of the Lease, the terms of the Lease shall control.   22. Tenants shall not make or permit any improper noises in the Building or otherwise interfere in any way with other tenants or persons having business with them.   23. Landlord will not be responsible for lost or stolen personal property, money or jewelry from any tenant’s leased premises or public areas, regardless of whether such loss occurs when such area is locked against entry or not.   24. Building emergency stairs shall only be used for emergency purposes.   25. Tenant will work with Landlord in informing and enforcing building delivery rules with Tenants delivery personnel, agents or invitees.   26. The building common areas including the garage and exterior are non smoking areas. Tenants who permit smoking within their leased premises shall control the smoke and odor so it is not offensive or does not interfere with other building Tenants.   27. All Tenants will cooperate with Landlord and abide with local code in the testing and servicing of the Building life safety system.   C-4 EXHIBIT K Landlord Services   I. Cleaning Services. The following services are the Building Standard Janitorial Services for Five Hundred Boylston: Daily Services – General Cleaning of Leased Premises 1. Empty trash cans. 2. Dust horizontal surfaces; desks, chairs, files, telephones, picture frames, etc. Computers will not be dusted. 3. Damp wash and wipe dry Formica desktops free of papers. 4. Clean and sanitize drinking fountains. 5. Spot clean partition glass, including lobby doors for fingerprints and smudges. 6. Dust mop and spot clean all tiled areas. 7. Vacuum all carpeted traffic areas daily and wall to wall at least once per week. Daily Services – Building Standard Restrooms (in the Leased Premises or on multi-tenant floors) 1. Remove trash and clean receptacles. 2. Clean and sanitize lavatories, commodes and urinals. 3. Clean out corners and edges, 4. Clean mirrors. 5. Spot clean wall tile and partitions. 6. Replenish supplies. 7. Sweep floor. 8. Mop and disinfect floor as necessary. Daily Service – Building Passenger Elevators 1. Clean light lenses and replace burned out bulbs. 2. Spot clean walls. 3. Clean edges, corners and tracks. 4. Vacuum carpet. Daily Services – Building Street Level   K-1 1. Sweep all marble and/or granite public areas. 2. Clean all glass entrance ways and side panels. 3. Empty all trash urns. 4. Spot clean marble and/or granite walls. 5. Dust all horizontal edges. Weekly Services -Stairways in the Building and Leased Premises 1. Sweep from top to bottom. 2. Dust handrails and ledges. 3. Dust lights between floors. Weekly Services – Building Interior Marble/Granite Floors 1. Wash all public areas. Monthly Services – Building Tile Floors 1. Clean and wash all traffic lanes and other “high wear” areas. Annual Service – Building General 1. Clean inside and outside of all exterior windows semi-annually. 2. Clean all fluorescent light fixture lenses. 3. Wash down all Building-standard restroom walls and partitions (in Leased Premises or on multi-tenant floors). Services as required per standard Landlord cleaning program 1. Spot clean carpeted areas in Leased Premises. 2. Shampoo public areas outside tenant space. 3. Damp mop all tile floors in Leased Premises 4. Machine buff all vinyl tile floor in Leased Premises monthly. 5. Strip and re-coat all vinyl tile floors in Leased Premises once a year. Services – Building Exterior 1. Police building perimeter for trash. 2. Remove trash from tree wells and planters. Services – Building Day Crew   K-2 1. Police and replenish supplies in all Building-standard restrooms (in Leased 2. Vacuum all passenger elevators twice each day. 3. Clean and vacuum garage elevators. 4. Clean all ash urns twice each day. 5. Clean all glass entrance doors in main lobby. 6. Dust mop and/or damp mop all marble and/or granite floors in main lobby once each day. 7. Clean non-retail windows on building perimeter at street level as needed. 8. Clean service area, hallway and dock area. Additional cleaning services required because of the nature of Tenant’s improvements or otherwise shall be provided by Landlord as an extra service at Tenant’s expense in accordance with the Lease. Such additional services include, without limitation, costs of cleaning and trash removal from Tenant’s executive kitchen, dining facilities, and lunchroom, special carpet maintenance program for lunchroom areas, cleaning refrigerators and providing paper supplies to kitchenettes, computer room trash removal, disposal charges for wooden pallets, cleaning and supplying any non-building-standard bathrooms, and cleaning any marble or granite floors within the Leased Premises.   II. HVAC. A. Landlord shall furnish space heating and cooling during Business Hours as normal seasonal changes may require to provide reasonably comfortable space temperature and ventilation for occupants of the Leased Premises under normal business operations and weather conditions, and as may be permitted or controlled by applicable laws, ordinances, rules, and regulations. B. If Tenant shall require air conditioning, heating or ventilation outside Business Hours, Landlord shall furnish such service at Tenant’s expense in accordance with the Lease. C. The air conditioning system is designed to achieve the following temperatures:        Summer    Winter Outdoor    DB    88° F    9°F    WB    74° F    —   Indoor    DB    78° F    72° F    WB    63.5° F    —     K-3 The air conditioning system is designed for occupancy of not more than one person per 150 square feet of usable floor area, and for a combined lighting and standard electrical load not to exceed four watts per square foot of usable floor area. If Tenant exceeds this condition or introduces into the Leased Premises equipment that overloads the system, and/or in any other way causes the system not adequately to perform their proper functions, supplementary systems may at Landlord’s option be provided by Landlord, the reasonable cost of which shall be at Tenant’s expense. Under no circumstances shall any supplemental cooling system be installed that exceeds the Building’s cooling water system capacity.   III. Security. Perimeter access control is provided for the Building main lobby and loading dock at times outside Business Hours, with reasonable free access periods just prior to and after Business Hours to facilitate tenant access and egress. Elevators providing access to tenant floors will be shut down or controlled by card access during night and weekend hours based on activity in the Building but generally between 7:00 p.m. through 7:00 a.m. daily and all day on weekends and selected holidays; provided that Tenant shall have elevator access to the Leased Premises on a 24 hour-a-day, seven-days-a-week basis, subject to the terms and conditions of the Lease. The Building lobby will be staffed 24 hours per day seven days per week with at least one person. Landlord may, from time to time throughout the Term, substitute reasonable equivalents for any of the foregoing specific components of access control.   K-4 EXHIBIT B PLAN OF PREMISES   23 LOGO [g85319exa_001p100.jpg] EXHIBIT C SUBTENANT IMPROVEMENTS AGREEMENT This Subtenant Improvements Agreement (the “Agreement” or “Subtenant Improvements Agreement”) is attached to and made a part of that certain Sublease (“Sublease”) of even date herewith, by and between MASSACHUSETTS FINANCIAL SERVICES COMPANY (“Tenant”), and NEWSTAR FINANCIAL, INC. (“Subtenant”). The capitalized terms used in this Agreement that are defined in the Sublease shall have the same meanings as provided in the Sublease. 1. General 1.1 Purpose. This Agreement sets forth the terms and conditions governing Subtenant’s construction of tenant improvements to be installed in the Premises (the “Subtenant Improvements”) and the Tenant’s Demising Work (defined below). 1.2 Construction Representatives. Prior to submission of the Space Plan pursuant to Section 3 hereof, each of Tenant and Subtenant shall designate a representative (“Representative”) who shall act for Tenant and Subtenant, as the case may be, in all matters regarding Subtenant Improvements. All inquiries, requests, instructions, authorizations or other communications with respect to the Subtenant Improvements shall be made to Tenant’s Representative or Subtenant’s Representative, as the case may be. Authorizations made by Subtenant’s Representative shall be binding and Subtenant shall be responsible for all costs authorized by Subtenant’s Representative. Either party may change its Representative at any time by written notice to the other party. Tenant shall not be obligated to respond to or act upon any plan, drawing, change order approval or other matter relating to the Subtenant Improvements until it has been executed by Subtenant’s Representative. 2. Demising Work. Subject to the consent of Landlord, Tenant, at Tenant’s sole cost and with contractors selected by Tenant in Tenant’s sole discretion, shall (i) construct the demising walls for the Premises, (ii) create those necessary common area corridors to separate the Premises from the Tenant’s Premises, (iii) enclose the existing internal stairwell and (iv) if necessary, separate the mechanical, electrical and life safety systems (the “Demising Work”), all with Building standard materials and equipment and all as more particularly set forth in the Construction Drawings and Specifications (defined below). Tenant shall notify Subtenant of the contractor(s) selected to perform the Demising Work so as to allow Subtenant to request bids from such contractor(s) for construction of the Subtenant Improvements. Tenant and Subtenant and their respective contractors shall use commercially reasonable efforts to coordinate the Demising Work and the Subtenant Improvements such that, to the extent feasible, both shall be performed at the same time. Notwithstanding the forgoing, Subtenant acknowledges and agrees that in the event any portion of the construction of the Subtenant Improvements interferes with, or in the reasonable judgment of Tenant may interfere with, the construction of the Demising Work, in all such events the Demising Work shall take priority.   24 3. Design and Schedule. (a) Space Plan: The “Space Plan” as used herein shall mean a plan containing, among other things, a partition layout, door location and some furniture located hi key spaces within the Premises. (b) Construction Drawings and Specifications: The “Construction Drawings and Specifications” as used herein shall mean the construction working drawings, the mechanical, electrical and other technical specifications, and the finishing details, including wall finishes and colors and technical and mechanical equipment installation, if any, all of which details the installation of the Subtenant Improvements in the Premises and the Demising Work. The Construction Drawings shall be signed by Subtenant’s Representative and shall be delivered to Tenant for its review no later than the date that is fifteen (15) days from the date hereof. The Construction Drawings and Specifications shall:     (i) be compatible with the Building shell, and with the design, construction and equipment of the Building;     (ii) comply with all applicable laws, codes and ordinances including the Americans With Disabilities Act, and the rules and regulations of all governmental authorities having jurisdiction;     (iii) comply with all applicable insurance regulations and the requirements of the Board of Underwriters for a fire resistant Class A building;     (iv) include locations of all Subtenant Improvements including complete dimensions; and     (v) indicate an overall materials specification and level of quality consistent with other new first-class office space construction in the Boston metropolitan area. (c) Except as specified by Tenant pursuant to Section 8 hereof or by Landlord pursuant to the Main Lease, all Subtenant Improvements which are permanently affixed to the Premises or alter the operational systems of the Building shall become the property of Tenant upon expiration or earlier termination of the Sublease and shall remain in the Premises at all times during the Term of the Sublease. 3.2 Approvals by Tenant. The Space Plan and all Construction Drawings and Specifications for the Subtenant Improvements (collectively, the “Subtenant Plans”) shall be subject to Tenant’s prior written approval, which shall not be unreasonably withheld or delayed, except that Tenant shall have complete discretion with regard to granting or withholding approval of the portions of the Subtenant Plans constituting the Demising Work and otherwise to the extent the Subtenant Plans would impact the Building’s structure or systems, affect future marketability of the Tenant’s Premises or would be visible from the common facilities or exterior of the Building. Any changes, additions or modifications that Subtenant desires to make to the Subtenant Plans shall also be subject to Tenant’s prior written approval, which shall not be   25 unreasonably withheld or delayed except as provided above for the Demising Work or Building structure, system or appearance impact. 4. Construction of Subtenant Improvements. Following Landlord’s and Tenant’s final approval of the Subtenant Plans and Subtenant obtaining permits, Subtenant shall commence and diligently proceed with the construction of the Subtenant Improvements. Tenant and Subtenant acknowledge that Subtenant shall hire a contractor mutually acceptable to Landlord, Tenant and Subtenant to complete the Subtenant Improvements. The Subtenant Improvements shall be conducted with due diligence, in a good and workmanlike manner befitting a first class office building, and in accordance with the Subtenant Plans and all applicable laws, codes, ordinances and rules and regulations of all governmental authorities having jurisdiction. Subtenant shall (i) apply for a construction permit for the Subtenant Improvements (the “Building Permit”) no later than three (3) business days after receipt of Landlord’s and Tenant’s approval of the Construction Drawings and Specifications and (ii) complete construction no later than the date that is ninety (90) days following Subtenant’s receipt of the Building Permit. Subtenant hereby agrees to indemnify Landlord and Tenant and hold Landlord and Tenant harmless from any and all claims for personal or bodily injury and property damage that may arise from the performance of the Subtenant Improvements, whether resulting from the negligence or willful misconduct of its general contractors, subcontractors or otherwise. Subtenant and its contractors and subcontractors shall execute such additional documents as Tenant deems reasonably appropriate to evidence said indemnity. Notwithstanding the foregoing, Subtenant shall not commence the Subtenant Improvements until the following is provided:     (a) Insurance. Prior to construction, Subtenant shall provide Tenant with an original certificate of All-Risk Builder’s Risk Insurance (the “Builder’s Risk Insurance Policy”), subject to Tenant’s reasonable approval, in the minimum amount of the replacement cost of the Subtenant Improvements issued by a company or companies acceptable to Tenant and authorized to do business in the Commonwealth of Massachusetts, covering the Premises, with premiums prepaid, and which names the Tenant as an additional insured. Said policy shall insure the Subtenant Improvements and all materials and supplies for the Subtenant Improvements stored on the Premises (or at any other sites and including the Premises) against loss or damage by fire and the risks and hazards insured against by the standard form of extended coverage, and against vandalism and malicious mischief, and such other risks and hazards as Tenant may reasonably request. Said insurance coverage shall be for 100% of replacement cost, including architectural fees. The Builder’s Risk Insurance Policy shall contain a provision that the insurance company waive the rights of recovery or subrogation against Tenant, its agents, servants, invitees, employees, co-tenants, co-venturers, affiliate companies, and their insurers.     (b) Governmental Permits. Building permits and other appropriate permits and licenses from the appropriate agency or office of any governmental or regulatory   26   body having jurisdiction over the Premises and which are required for the construction of the Subtenant Improvements.     (c) Additional Insurance. Additional insurance in the form of and meeting the requirements as Tenant may determine in its reasonable discretion including, but not limited to, the requirements listed on Schedule I attached hereto. 5. Change Orders. If Subtenant requests any change or addition to or subtraction from the Subtenant Improvements (“Change Order”) after Subtenant’s and Tenant’s approval of the final and complete Construction Drawings and Specifications for the Subtenant Improvements, Tenant shall respond to Subtenant’s request for consent as soon as reasonably possible, but in no event later than five (5) business days after being made. Any changes, additions or modifications that Subtenant desires to make to the Subtenant Plans shall not be unreasonably withheld, except that Tenant shall have complete discretion with regard to granting or withholding approval for the Demising Work and Building structure, system or appearance as provided in Section 3.2 above. Subtenant acknowledges and agrees that all change orders shall also be subject to the Landlord’s prior written consent to the extent required under the Main Lease. All costs incurred by Tenant in connection with such change orders shall by reimbursed by Subtenant to Tenant, as additional rent, with fifteen (15) days of Subtenant’s receipt of an invoice therefor. 6. Cooperation With Other Tenants. Subtenant shall promptly remove from the common facilities any of Subtenant’s vehicles, equipment, materials, supplies or other property deposited in the common facilities during the construction of the Subtenant Improvements. Further, Subtenant shall at no time disrupt or allow disruption to Tenant’s or any other existing tenant’s parking vehicles and pedestrian access, nor allow disruptions of mechanical, electrical, telephone and plumbing services. In addition, Subtenant shall not interrupt the normal business operations of Tenant or of any other tenant at the Building or on the Land (as defined in the Sublease). To the extent construction of the Subtenant Improvements does, or in the reasonable opinion of Tenant and/or Landlord may, interrupt the normal business operations of Tenant or of any other tenant at the Building or on the Land, such portion of the Subtenant Improvement work shall be performed after normal business hours at such times as are reasonable directed by Tenant and/or Landlord. 7. Inspection by Tenant. Tenant shall have the right to inspect the Subtenant Improvements at all reasonable times. Tenant’s failure to inspect the Subtenant Improvements shall in no event constitute a waiver of any of Tenant’s rights hereunder nor shall Tenant’s inspection of the Subtenant Improvements constitute the Tenant’s approval of same. 8. Removal of Specialized Subtenant Improvements. Portions of the Subtenant Improvements, if any, as reasonably determined by Tenant to be specialized improvements shall, at the election of Tenant, either be removed by Subtenant at its expense before the expiration of the Term or shall remain in the Premises and be surrendered therewith at the expiration date or earlier termination of this Sublease as the property of Tenant without disturbance, molestation or injury. If Tenant requires the removal of all or part of said specialized Subtenant Improvements, Tenant shall so notify Subtenant at the time that Tenant renders its approval to the Space Plan and Construction Drawings pursuant to Section 3.2 above, and Subtenant, at the expiration or earlier termination of the Sublease, at its expense, shall repair any damage to the Premises or the   27 Building caused by such removal and restore the Premises to its condition prior to the installation of such specialized Subtenant Improvements. If Subtenant fails to remove said specialized Subtenant Improvements that Subtenant is required to remove hereunder, then Tenant may (but shall not be obligated to) remove the same and the cost of such removal, repair and restoration, together with any and all damages which Tenant may suffer and sustain by reason of the failure of Subtenant to remove the same, shall be charged to Subtenant and paid upon demand. 9. Completion of Subtenant Improvements. Subtenant shall notify Tenant in writing when the Subtenant Improvements have been substantially completed. Tenant shall thereupon have the opportunity to inspect the Premises in order to determine if the Premises have been substantially completed in accordance with the Subtenant Plans. If the Subtenant Improvements have not been substantially completed in accordance with the Subtenant Plans, Tenant shall immediately following inspection, provide Subtenant with written notification of the items deemed incorrect or incomplete. Subtenant shall forthwith proceed to correct the incorrect or incomplete items. Notwithstanding anything to the contrary, the Subtenant Improvements shall not be considered suitable for review by Tenant until all designated or required governmental inspections, permits and certifications necessary for the Subtenant Improvements, including, but not limited to a temporary or final certificate of occupancy, have been made, given and/or posted. 10. Consent of Landlord. Subtenant shall be solely responsible for obtaining the consent of Landlord to the construction of the Subtenant Improvements pursuant to the terms and conditions of the Main Lease prior to any construction therein and immediately upon receipt shall deliver a copy of such consent to Tenant.   28 IN WITNESS WHEREOF, Tenant and Subtenant have executed this Agreement as of the 1st day of February, 2007.   MASSACHUSETTS FINANCIAL SERVICES COMPANY   NEWSTAR FINANCIAL, INC. By:     By:   Name:   Paul Kirwan   Name:   Richard Scott Poirier Title:   C. F. O.   Title:   Managing Director   29 SCHEDULE I TO EXHIBIT C INSURANCE REQUIREMENTS Subtenant must provide Tenant and Landlord with written evidence of the following minimum insurance requirements. In no way do the following minimum requirements limit the liability assumed elsewhere in the Subtenant Improvements Agreement or the Sublease, as amended.   A. Workers’ Compensation and Employer’s Liability .     1. Statutory requirements in the Commonwealth of Massachusetts to include all areas involved in operations covered under the Subtenant Improvements Agreement for the Premises.     2. Coverage “B” – Employer’s Liability, limit – $ 1,000,000.   B. Commercial General Liability.     1. Commercial General Liability: Form providing coverage not less than that of the occurrence form ISO Standard Commercial General Liability Insurance, including but not limited to bodily injury, personal injury, independent contractors’ products – completed operations (construction risks only), Broad Form Property Damage(including Completed Operations for a period of not less than three (3) years – construction risk only). For those contractors selling/manufacturing products, Commercial General Liability coverage should be specifically endorsed to include products liability.     2. Contractual Liability, Blanket basis insuring the liability assumed under this Agreement.     3. Limits of Liability: Bodily Injury and Property Damage – $1,000,000 each occurrence, $1,000,000 aggregate; and Personal Injury – $1,000,000 each occurrence.   C. Commercial Auto Policy     1. Commercial Auto Policy form, including all Owned, Non-Owned and Hired Vehicles.     2. Limits of Liability: Bodily Injury – $1,000,000 each person, $1,000,000 each occurrence; and Property Damage – $1,000,000 each occurrence.   D. Umbrella Liability Such insurance shall provide coverage with limits of not less than $4,000,000 per occurrence/$4,000,000 aggregate, in excess of the underlying coverages listed in Paragraphs A, B, and C above.   30 ADDITIONAL REQUIREMENTS   1. Landlord, Tenant and its management company shall be included as an Additional Insured on all coverages listed above. In the event of an insured loss, Subtenant’s insurance company shall have waived any rights of subrogation against Tenant and Landlord.   2. Subtenant shall require the same primary minimum insurance requirements as listed above, from its contractor, subcontractors and suppliers and they shall also comply with the additional requirements listed herein.   3. All insurance coverages required as herein set forth shall be primary and at the sole cost and expense of Subtenant, contractor, subcontractors, or suppliers, and all deductibles shall be assumed by, for the account of, and at the sole risk of said Subtenant, contractor, subcontractors or suppliers. Insurance coverages will be in a form and carrier acceptable to Landlord and Tenant with a minimum rating of A:VII or higher.   4. A Certificate of Insurance together with policies and endorsements evidencing all of the above must be presented to Landlord and Tenant prior to commencement of the Subtenant Improvements.   5. The cancellation provision of such Certificate of Insurance shall provide as follows: “To be effective as to certificate holder, the issuing companies must provide to the below named certificate holder sixty (60) days’ written notice prior to any cancellation or material modification of the above-described policies before the expiration dates thereof.”   31

AMENDMENT NO. 1 TO LOAN AGREEMENT         This AMENDMENT NO. 1 TO LOAN AGREEMENT dated as of February 25, 2020 (the “Amendment”), between AirCo 1, LLC, a Delaware limited liability company (the “Borrower”), and Minnesota Bank & Trust, a Minnesota state banking corporation (the “Lender”). RECITALS: A. The Borrower and the Lender are parties to that certain Loan Agreement dated as of April 3, 2019, as amended by that certain Change in Terms Agreement dated November 8, 2019 (as so amended, the “Original Agreement”). B. The Borrower has requested that the Lender amend the Original Agreement. C. Subject to the terms and conditions of this Amendment, the Lender will agree to the foregoing request of the Borrower. 1.Defined Terms. All capitalized terms used in this Amendment shall, except where the context otherwise requires, have the meanings set forth in the Original Agreement as amended hereby. 2.Amendment. The term “Stated Termination Date” defined in Section 2(a) (1) Original Agreement is hereby extended to August 31, 2021. 3.Conditions to Effectiveness. This Amendment shall become effective on the date (the “Effective Date”) when, and only when, the Lender shall have received: (a)this Amendment, duly executed by the Borrower; (b)an Acknowledgment and Agreement, in the form provided by the Lender, duly executed by Air T, Inc.; and (c)such other documents as the Lender may reasonably request. 4.Representations and Warranties. To induce the Lender to enter into this Amendment, the Borrower represents and warrants to the Lender as follows: (a)The execution, delivery and performance by the Borrower of this Amendment and any other Loan Document to which the Borrower is a party have been duly authorized by all necessary corporate action, do not require any approval or consent of, or any registration, qualification or filing with, any government agency or authority or any approval or consent of any other person (including, without limitation, any shareholder), do not and will not conflict with, result in any violation of or constitute any 5471622_1.docx default under, any provision of the Borrower’s articles of incorporation or bylaws, any agreement binding on or applicable to the Borrower or any of its property, or any law or governmental regulation or court decree or order, binding upon or applicable to the Borrower or of any of its property and will not result in the creation or imposition of any security interest or other lien or encumbrance in or on any of its property pursuant to the provisions of any agreement applicable to the Borrower or any of its property; (b)The representations and warranties contained in the Original Agreement are true and correct as of the date hereof as though made on that date except: (i) to the extent that such representations and warranties relate solely to an earlier date; and (ii) that the representations and warranties set forth in Section 6(i) of the Original Agreement to the internally-prepared financial statements of the Borrower shall be deemed to be a reference to the financial statements of the Borrower most recently delivered to the Lender pursuant to Section 7(a)(ii) of the Original Agreement; (c)No events have taken place and no circumstances exist at the date hereof which would give the Borrower the right to assert a defense, offset or counterclaim to any claim by the Lender for payment of the Obligations; (d)The Original Agreement, as amended by this Amendment and each other Loan Document to which the Borrower is a party are the legal, valid and binding obligations of the Borrower and are enforceable in accordance with their respective terms, subject only to bankruptcy, insolvency, reorganization, moratorium or similar laws, rulings or decisions at the time in effect affecting the enforceability of rights of creditors generally and to general equitable principles which may limit the right to obtain equitable remedies; and (e)Before and after giving effect to this Amendment, there does not exist any Default or Event of Default. 5.Release. The Borrower hereby releases and forever discharges the Lender and its successors, assigns, directors, officers, agents, employees and participants from any and all actions, causes of action, suits, proceedings, debts, sums of money, covenants, contracts, controversies, claims and demands, at law or in equity, which the Borrower ever had or now has against the Lender or its successors, assigns, directors, officers, agents, employees or participants by virtue of the Lender’s relationship to the Borrower in connection with the Loan Documents and the transactions related thereto 6.Reference to and Effect on the Loan Documents. (a)From and after the date of this Amendment, each reference in the Original Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Original Agreement, and each reference to the “Loan Agreement”, the “Loan Agreement”, “thereunder”, “thereof”, “therein” or words of like import referring to the Original Agreement in any other Loan Document shall mean and be a reference to the         2 Original Agreement as amended hereby; and except as specifically set forth above, the Original Agreement remains in full force and effect and is hereby ratified and confirmed. (b)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lender under the Agreement or any other Loan Document, nor constitute a waiver of any provision of the Agreement or any such other Loan Document. 7.Costs, Expenses and Taxes. The Borrower agrees to pay on demand all costs and expenses of the Lender in connection with the preparation, reproduction, execution and delivery of this Amendment and the other documents to be delivered hereunder or thereunder, including their reasonable attorneys’ fees and legal expenses. In addition, the Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution and delivery, filing or recording of this Amendment and the other instruments and documents to be delivered hereunder and agrees to save the Lender harmless from and against any and all liabilities with respect to, or resulting from, any delay in the Borrower’s paying or omission to pay, such taxes or fees. 8.Governing Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF. 9.Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 10.Counterparts. This Amendment may be executed in counterparts and by separate parties in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same document. Receipt by telecopy, pdf file or other electronic means of any executed signature page to this Amendment shall constitute effective delivery of such signature page. 11.Recitals. The Recitals hereto are incorporated herein by reference and constitute a part of this Amendment.         3 executed as of the date first above. AIRCO 1, LLC By: ________________________________ Name: ________________________________ Its: ________________________________ Minnesota Bank & Trust By:_________________________________ Name: Eric P. Gundersen [signature page Amendment No. 1 to Loan Agreement] 18778475v1 084126\039\4897311.v2

Name: Commission Regulation (EEC) No 1448/83 of 3 June 1983 fixing the import levies on white sugar and raw sugar Type: Regulation Date Published: nan No L 146/20 Official Journal of the European Communities 4. 6 . 83 COMMISSION REGULATION (EEC) No 1448/83 of 3 June 1983 fixing the import levies on white sugar and raw sugar at present in force should be altered to the amounts set out in the Annex hereto, THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 1785/81 of 30 June 1981 on the common organization of the markets in the sugar sector ('), as last amended by Regulation (EEC) No 606/82 (2), and in particular Article 16 (8 ) thereof, Whereas the . import levies on white sugar and raw sugar were fixed by Regulation (EEC) No 1716/82 (3), as last amended by Regulation (EEC) No 1431 /83 (4) ; Whereas it follows from applying the detailed rules contained in Regulation (EEC) No 1716/82 to the information known to the Commission that the levies HAS ADOPTED THIS REGULATION : Article 1 The import levies referred to in Article 16 ( 1 ) of Regu ­ lation (EEC) No 1785/81 shall be, in respect of white sugar and standard quality raw sugar, as set out in the Annex hereto . Article 2 This Regulation shall enter into force on 4 June 1983 . This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels, 3 June 1983 . For the Commission Poul DALSAGER Member of the Commission (') OJ No L 177, 1 . 7 . 1981 , p. 4 . (2) OJ No L 74, 18 . 3 . 1982, p. 1 . (3) OJ No L 189, 1 . 7. 1982, p. 42. ^ OJ No L 145. 3 . 6 . 1983, D . 48 . ANNEX to the Commission Regulation of 3 June 1983 fixing the import levies on white sugar and raw sugar (ECU/100 kg) CCT heading No Description Levy 17.01 Beet sugar and cane sugar, in solid form : A. White sugar : flavoured or coloured sugar 26,31 B. Raw sugar 23,76 (') (') Applicable to raw sugar with a yield of 92 % ; if the yield is other than 92 % , the levy applicable is calculated in accordance with the provisions of Article 2 of Regulation (EEC) No 837/68 .

Exhibit 10.2 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this “Agreement”) by and among Vapor Corp., a Nevada corporation (the “ Company ”), and Harlan Press, a resident of the State of Florida (“ Executive ”) is entered into as of February 27, 2012. WITNESSETH: WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders to employ Executive as Chief Financial Officer of the Company pursuant to the terms and subject to the conditions of this Agreement; and WHEREAS, the Executive desires to accept employment as the Chief Financial Officer of the Company pursuant to the terms and subject to the conditions of this Agreement. contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. EMPLOYMENT Upon the terms and subject to the conditions of this Agreement, the Company employs the Executive, and the Executive accepts employment. 2. TERM, DATES AND PLACE OF PERFORMANCE 2.1 Term. The term of this Agreement shall begin on February 29, 2012 (the “Effective Date”), and, unless sooner terminated in accordance with the provisions of this Agreement, shall end on February 28, 2015 (the “Initial Term ”), and will thereafter automatically extend for successive one-year periods (each a “Renewal Term”) unless either party gives at least six months’ advance written notice to the other party of its intention not to extend the Initial Term or any Renewal Term, as applicable (a “Notice of Non-Renewal”). 2.2 Dates. This Agreement refers to the dates defined in this Section as follows: (i) the period of time during which the Executive is an employee of the Company during the Initial Term and any Renewal Term is hereinafter referred to as the “Term”; and (ii) each year which begins with the Effective Date (or with the anniversary of the Effective Date) and continues until the next anniversary of the Effective Date is hereinafter referred to as an “Employment Year”. 2.3 Principal Place of Employment. During the Term, the principal place of employment of Executive shall be at Company’s principal offices in Dania Beach, FL, or such other location within the Counties of Miami-Dade, Broward or Palm Beach (the “Tri-County Area”), as established by the Company; provided, that, Executive acknowledges and agrees that the nature of the Executive’s position and overall responsibilities with the Company shall require Executive to travel within and without the United States from time to time during the Term and such travel may for extended periods of time. 3. POSITION AND DUTIES 3.1 Position and Duties. Executive shall serve as the Chief Financial Officer of the Company and, at the request of the Board and for no compensation beyond that specified in Section 4.1 hereof, in such other positions with the Company and its subsidiaries that are reasonably acceptable to Executive. Executive shall have executive duties, functions, authority, and responsibilities commensurate with the office of Chief Financial Officer or such other offices Executive from time to time holds with the Company, as a public company, and its subsidiaries, subject, in accordance with applicable law, to the supervision and direction of the Board and the Company’s Chief Executive Officer. 3.2 Devotion of Time and Effort. Executive shall use Executive’s good faith, best efforts and judgment (a) in performing Executive’s duties required hereunder and (b) to act in the best interests of the Company. Executive shall devote his full working time, attention and efforts to the business and affairs of the Company and to the fulfillment of the duties under this Agreement in a diligent and competent fashion, but may participate in charitable and personal investment activities to a reasonable extent, as long as such activities do not, in the reasonable discretion of the Board, interfere with the performance of his duties and responsibilities hereunder. In the event that the Board reasonably determines that the participation, service or activities set forth in this Section 3.2 interfere with the performance of Executive’s duties and responsibilities hereunder or otherwise violate the terms of this Agreement or any other agreement to which Executive and the Company or any of its subsidiaries are party, then the Board shall notify Executive in writing that Executive is required to cease such participation, service and/or activities, and Executive shall immediately cease such participation, service or activities. Any failure to cease such participation, service or activities shall be deemed to be a continuing and substantial willful failure to follow the lawful instructions of the Board for purposes of this Agreement. 4. COMPENSATION 4.1 Base Salary. Executive shall be entitled to receive base salary (“Base Salary”) at the annual rate as follows: (a) One Hundred and Seventy Five Thousand Dollars ($175,000) during the first Employment Year, (b) One Hundred and Eighty One Thousand Dollars ($181,000) during the second Employment year and (c) One Hundred and Ninety Thousand Dollars ($190,000) during the third Employment Year, in each instance less all applicable tax withholdings and deductions by the Company. The Base Salary shall be payable in accordance with the Company’s customary payroll practices and net of all applicable tax withholding and deductions by the Company. Notwithstanding the preceding sentence, the Board shall review Executive’s Base Salary annually and may make adjustments to increase but not decrease such Base Salary, in accordance with the compensation practices and guidelines of the Company in effect from time to time during the Term. In the Board’s annual review of Executive’s Base Salary, it shall in good faith and in consultation with Executive consider any material increase in value of the Company during the Term in determining any increase in the Base Salary. 4.2 Annual Bonus. Commencing on the Effective Date, Executive shall be eligible to participate in the Company’s annual performance based bonus program, as the same may be established from time to time by the Board in consultation with the Executive for executive officers of the Company and any annual bonus earned thereunder (the “ Annual Bonus ”) shall be paid no later than the 15th day of the third month following the end of the fiscal year for which it is earned (and no earlier than January 1 of the year following such fiscal year) and following certification by the Board of the achievement of agreed-upon performance measures and the amount of the bonus to be paid to Executive for the applicable fiscal year; provided, that in the event that such certification does not occur on or prior to the 15 th day of the third month following the end of such fiscal year, the Annual Bonus will be paid no later than December 31 of the year following such fiscal year. 4.3 Stock Options Award. As of the Effective Date, Executive shall, subject to the approval of the Board (or, if applicable, its Compensation Committee) be granted 200,000 stock options (“Options”) to purchase up to 200,000 shares of Company common stock pursuant to and in accordance with the Company’s Equity Incentive Plan at an exercise price equal to the fair market value of a share of Company common stock on the date of grant and such Options shall vest at a rate of 5,555.6 per month during the Term and contain such other terms as reasonably determined by the Board (or, if applicable, its Compensation Committee) and consistent with the Equity Incentive Plan. The Options shall be evidenced by the customary form of agreement utilized under the Equity Incentive Plan. Executive acknowledges and agrees that notwithstanding the terms of the Option, the Option does not confer any right to continue in the employ of the Company hereunder or interfere in any way with the Company’s right to terminate his employment pursuant to any of the provisions hereof. 4.4 Vacation. During the Term, Executive shall be entitled to three (3) weeks of paid vacation Employment Year to be used and accrued in accordance with the Company’s policy as it may be established from time to time. In addition, Executive shall receive other paid time-off in accordance with the Company’s policies for senior executives as such policies may exist from time to time. 4.5 Welfare, Pension and Incentive Benefit Plans. During the Term, the Company shall provide Executive with employee benefit plans and insurance programs on a basis no less favorable than as in effect with respect to the Company’s employees immediately prior to the Effective Date, including, without limitation, company-paid medical benefits; provided, that if the provision of such company-paid medical benefits would cause the imposition of any tax under Section 4980D of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code ”), the parties agree to negotiate in good faith an alternative arrangement for providing such benefits in an economically neutral manner which does not cause the imposition of such tax. 4.6 Business Expenses. Executive will be promptly reimbursed for all reasonable business expenses incurred by Executive in connection with Executive’s employment subject to Executive’s compliance with the Company’s expense reimbursement policies as in effect from time to time during the Term. 5. TERMINATION; TERMINATION BENEFITS 5.1 Due to Death or Disability. (a) If Executive dies during the Term, Executive’s employment and this Agreement shall terminate on the date of his death. The Company may terminate Executive’s employment if he becomes “ Disabled ,” as defined below, upon delivery of a Notice of Termination (as defined below) to Executive. Upon termination of Executive’s employment due to Executive’s death or by the Company due to Executive’s Disability, Executive (or his estate, as applicable) shall be entitled to compensation and payment for any unreimbursed expenses incurred, accrued but unpaid then current Base Salary and Annual Bonus and other accrued but unpaid employee benefits as provided in this Agreement, in each case through the Date of Termination (as defined below) (the “ Accrued Amounts ”); provided, that the portion of such Accrued Amounts representing unreimbursed expenses shall be paid as soon as practicable following Executive’s compliance with Section 4.6 hereof;   2 (b) For purposes of this Agreement, the term “Disabled” or “Disability” shall mean a medically determined physical or mental incapacity as a result of which Executive is entitled to receive (i) long term disability benefits under the Company’s long term disability policy, which shall be in effect as of the Effective Date, or (ii) if no such policy is in effect, United States Social Security Disability Insurance benefits. 5.2 By the Company Without “Cause”. (a) The Company may terminate Executive’s employment without “Cause” (as defined below) at any time following the Effective Date upon delivery of a Notice of Termination to Executive. (b) Upon termination of Executive’s employment by the Company Without Cause, other than due to death, Disability or a Change of Control Termination Event, Executive shall be entitled to: (i) the Accrued Amounts, payable in accordance with Section 5.1(a); (ii) subject to Executive’s execution and delivery to the Company of (a) a letter of resignation resigning as a member of the Board, if applicable, and all other positions with the Company and its subsidiaries (the “Letter of Resignation”) and (b) a general release of claims in such form as reasonably determined by the Company and containing carve outs for (A) indemnification, contribution, and directors and officers insurance rights to which Executive may be entitled, (B) rights in his capacity as an equity holder, (C) rights to collect the Severance Payment and COBRA Coverage, and (D) rights to any vested employee benefits (which execution version of such release will be provided no later than five (5) calendar days following the Date of Termination) and such general release (the “ Release ”) has become irrevocable pursuant to its terms and applicable law, payments equal to three (3) months’ Base Salary for each year of service at the prevailing rate, which payment will be made in installments in accordance with the normal payroll schedule following the Date of Termination (the “ Severance Payment ”) subject to the delay of payment under Section 5.7. The minimum Severance Payment will be equal to three (3) months Base Salary and the maximum Severance Payment will be equal to eighteen (18) months Base Salary; and (iii) if Executive elects to continue his medical coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Executive shall pay for coverage under COBRA following the Date of Termination (the “ COBRA Coverage ”). 5.3 By the Company For Cause. (a) The Company may terminate Executive’s employment for “Cause” in accordance with the requirements of this Section 5.3. (b) Upon termination of Executive’s employment by the Company for Cause, Executive shall be entitled to the Accrued Amounts. (c) For purposes of this Agreement, “Cause” shall mean: (i) continuing and substantial willful failure, neglect or refusal by Executive to perform his duties under this Agreement or to follow the lawful instructions of the Board which has not been cured by Executive (if curable) within ten (10) days after written notice thereof to Executive from the Company; (ii) Executive’s commission of any material act of fraud or embezzlement against the Company; (iii) Executive’s material breach of this Agreement, which breach has not been cured by Executive (if curable) within ten (10) days after written notice thereof to Executive from the Company; (iv) Executive’s conviction of (or pleading guilty or nolo contendere to) any felony; (v) alcohol or other substance abuse by Executive which, in the reasonable discretion of the Board, materially and adversely affects Executive’s ability to perform his duties required or requested consistent with Executive’s obligations under this Agreement and applicable law; or (vi) any finding by the Securities and Exchange Commission pertaining to Executive which, in the opinion of independent counsel selected by the Company, could reasonably be expected to impair or impede the Company’s ability to register, list, or otherwise offer its stock to the public, or to maintain itself as a publicly-traded company in good standing with the Securities and Exchange Commission.   3 (d) Cause shall not exist with respect to clauses (i), (ii), (iii) or (v) unless and until there shall have been delivered to Executive a copy of a resolution, duly adopted by the affirmative vote of not less than a majority of the members of the Board at a meeting of the Board held for the purpose (after five (5) days’ prior written notice to Executive of such meeting and the purpose thereof and an opportunity for Executive, together with his counsel, to be heard before the Board at such meeting), of a finding that, in the good faith opinion of the Board, Executive was guilty of any of the conduct specified in any of such clauses. No act or failure to act by the Executive shall be considered “willful” if done or omitted by Executive in good faith with reasonable belief that such action or omission was in the best interests of the Company. 5.4 By Executive For Good Reason. (a) Executive may terminate his employment for “Good Reason” (as defined below) by providing a Notice of Termination to the Board within thirty (30) days of the occurrence of the circumstances giving rise to such Good Reason. The foregoing notice shall describe the claimed event or circumstance and set forth Executive’s intention to terminate his employment with the Company; provided, that, the Company has not substantially cured such event within thirty (30) days after receiving such notice. Upon termination by Executive of his employment for “Good Reason”, Executive will be entitled to: (i) the Accrued Amounts payable in accordance with Section 5.1(a); (ii) subject to Executive’s execution and delivery to the Company of the Letter of Resignation and the Release, the Severance Payment which payment will be made on the later of the 60 th day following the Date of Termination or the date on which the Release has become irrevocable pursuant to its terms and applicable law, subject to the delay of payment under Section 5.7; and (iii) the COBRA Coverage. (b) For purposes of this Agreement, “Good Reason” shall mean: (i) any material failure of the Company to fulfill its obligations under this Agreement, including the failure to make any material payment due hereunder when due, or any other material breach of a term or condition of this Agreement; (ii) a material and adverse change to, or a material reduction of, Executive’s duties and responsibilities to the Company, including no longer reporting to the Board or a change in title; provided however, that, the hiring or engagement of any person or entity by the Company with the approval of Executive to perform any of Executive’s duties and responsibilities to the Company shall not constitute Good Reason;  (iii) a material reduction in Executive’s Base Salary (unless such reduction is caused by bona fide financial exigencies and is part of an overall and nondiscriminatory reduction by the Company to the base salaries of all of its senior executives and such reduction is proportional in amount to the reductions suffered by all of such other senior executives); or (iv) the relocation of Executive’s principal place of work outside the Tri-County Area. An event set forth in the foregoing clauses (i) through (iv) shall not constitute “Good Reason” unless and until Executive shall have provided the Company with notice thereof no later than 30 days following Executive’s becoming aware of such event and the Company shall have failed to remedy such event within 30 days of receipt of such notice. 5.5 Termination Following a Change of Control. (a) If, within 12 months following a Change of Control, the Company terminates Executive’s employment without Cause, other than due to death or Disability, or there is a Termination for Good Reason (a “Change in Control Termination”), the Executive shall be entitled to be paid by the Company following the Date of Termination: (i) the Accrued Amounts payable in accordance with Section 5.1(a) within five (5) days following the Date of Termination; Release, the Severance Payment which payment will be made on the later of the 60 th day following the Date of Termination or the date on which the Release has become irrevocable pursuant to its terms and applicable law, subject to the delay of payment under Section 5.7; and (iii) the COBRA Coverage (b) For purposes of this Agreement, “Change of Control” shall mean: (i) Any sale, lease, license, exchange or other transfer (in one or a series of related transactions) of all or substantially all of the consolidated assets of the Company and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries to an entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportion as their ownership of the Company immediately prior to such sale, lease, license or other disposition;   4 (ii) Any “person” as such term is used in Section 13(d) and Section 14(d) of the becomes, directly or indirectly, the “beneficial owner” as defined in Rule 13d-3 under the Exchange Act of securities of the Company that represent more than 50% of the combined voting power of the Company’s then outstanding voting securities, other than by virtue of a merger, consolidation or similar transaction, provided that, notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because the level of ownership held by any such person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided further that if a Change in Control would occur (but for the operation of this proviso) as a result of the acquisition of voting securities by the Company, and after such share acquisition, any such Subject Person becomes the owner of any additional voting securities of the Company that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities owned by such Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur; (iii) During any period of 12 consecutive months, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by stockholders, of each new director was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period; or (iv) There is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction. 5.6 By Executive Without Good Reason. (a) Executive may terminate his employment without Good Reason by providing a Notice of Termination to the Company at least thirty (30) days prior to the Date of Termination. (b) Upon termination by Executive of his employment without Good Reason, Executive shall be entitled to receive the Accrued Amounts payable in accordance with Section 5.1(a). 5.7 Non-Renewal of the Term. (a) Upon termination of Executive’s employment as a result of non-renewal of the Initial Term or any Renewal Term by the Company, Executive will be entitled to the Accrued Amounts payable in accordance with Section 5.1(a). (b) Upon termination of Executive’s employment as a result of non-renewal of the Initial Term or any Renewal Term by the Executive, Executive will be entitled to 5.8 Nonqualified Deferred Compensation. Notwithstanding any provision of this Agreement to the contrary (but subject in all respects to Section 16.9 below), if all or any portion of the payments due under Section 5 are determined to be “nonqualified deferred compensation” subject to Section 409A of the Code, and the Company determines that Executive is a “specified employee” (as defined in Section 409A(a)(2)(B)(i) of the Code and other guidance issued thereunder), then such Severance Payment will be made on the first day of the seventh month following the month in which Executive’s termination of employment occurs. 5.9 Notice of Termination; Non-Renewal. Any termination of employment pursuant to Sections 5.1 through 5.6 shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 16.2. (a) For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company, as the case may be, hereunder or preclude Executive or the Company, as the case may be, from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder. (b) For purposes of this Agreement, “Date of Termination” means (i) if Executive’s employment is terminated pursuant to Sections 5.1 through 5.6, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided, such Date of Termination is in accordance with Sections 5.4 or 5.6, as the case may be), (ii) if Executive’s employment is terminated by reason of death, the date of death, and (iii) the expiration of the Initial Term or any Renewal Term, as applicable.   5 (c) A termination of employment pursuant to Section 5.7 shall be communicated by a Notice of Non-Renewal to the other party hereto given in accordance with Section 2 and Section 16.2. Notwithstanding anything to the contrary set forth in the Agreement, Executive hereby agrees to execute and deliver the Letter of Resignation to the Company if Executive’s employment is validly terminated for any reason other than for death. 6. NON-SOLICITATION During the Term and for a period of twelve (12) month period after the Date of Termination in the event of termination (i) without Cause or (ii) for Good Reason, Executive shall not: (i) request, induce or attempt to influence any person or entity who is or was a client, customer, contractor or supplier of the Company to limit, curtail or cancel its business with the Company or (ii) request, induce, or attempt to influence any current or future officer, director, employee, consultant, agent or representative of the Company to: (a) terminate his, her, or its employment or business relationship with the Company; or (b) commit any act that, if committed by Executive, would constitute a breach of any term or provision of this Section 6. 7. NON-COMPETITION; WORK PRODUCT (a) During the Term and for a period of twelve (12) months after the Date of Reason, Executive shall not, directly or indirectly, (a) engage in any business for Executive’s own account that competes with the business of the Company or its affiliates (including, without limitation, businesses which the Company or its affiliates have specific plans to conduct in the future and as to which Executive is aware of such planning), (b) enter the employ of, or render any services to, any person or entity engaged in any business that competes with the business of the Company or its subsidiaries, (c) acquire a financial interest in any person or entity engaged in any business that competes with the business of the Company or its subsidiaries, directly or indirectly, as an individual, partner, stockholder, officer, director, principal, agent, trustee or consultant, or (d) interfere with business relationships (whether formed before or after the date of this Agreement) between the Company or any of its subsidiaries and their respective customers, suppliers or contractors. Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly, own, solely as an investment, securities of any entity engaged in the business of the Company or its subsidiaries which are publicly traded on a national or regional stock exchange or on an over-the-counter market if Executive (i) is not a controlling person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own five percent (5%) or more of any class of securities of such person. (b) All copyrights, patents, trade secrets, or other intellectual property rights associated with any ideas, concepts, techniques, inventions, processes, or works of authorship developed or created by Executive during the Term (collectively, the “Work Product”) shall belong exclusively to the Company and shall, to the extent possible, be considered a work made by Executive for hire for the within the meaning of Title 17 of the United States Code. To the extent the Work Product may not be considered work made by Executive for hire for the Company, Executive agrees to assign, and automatically assign at the time of creation of the Work Product, without any requirement of further consideration, any right, title, or interest Executive may have in such Work Product. Upon the request of the Company, Executive shall take such further actions, including execution and delivery of instruments of conveyance, as may be appropriate to give full and proper effect to such assignment. 8. CONFIDENTIALITY/TRADE SECRETS Executive specifically agrees that Executive will not at any time, whether during or subsequent to the Term, in any fashion, form or manner, except in furtherance of Executive’s duties at the Company or with the specific written consent of the Company, either directly or indirectly use, divulge, disclose or communicate to any person or entity in any manner whatsoever, any confidential information or trade secrets of any kind, nature or description concerning any matters affecting or relating to the business of the Company (the “ Proprietary Information ”), including, without limitation, (a) all information, design or software programs (including object codes and source codes), techniques, drawings, plans, experimental and research work, inventions, patterns, processes and know-how, whether or not patentable, and whether or not at a commercial stage related to the Company or any subsidiary thereof, (b) buying habits or practices of any of its customers or vendors, (c) the Company’s marketing methods, sales activities, promotion, credit and financial data and related information, (d) the Company’s costs or sources of materials, (e) the prices it obtains or has obtained or at which it sells or has sold its products or services, (f) lists or other written records used in the Company’s business, (g) compensation paid to employees and other terms of employment, or (h) any other confidential information of, about or concerning the business of the Company, its manner of operation, or other confidential data of any kind, nature, or description (excluding any information that is or becomes publicly known or available for use through no fault of Executive or as directed by court order). The parties hereto stipulate that as between them, Proprietary Information constitutes trade secrets that derive independent economic value, persons who can obtain economic value or cause economic harm to the Company from its disclosure or use and that Proprietary Information is the subject of efforts which are reasonable under the circumstances to maintain its secrecy and of which this Section 8 is an example, and that any breach of this Section 8 shall be a material breach of this Agreement. All Proprietary Information shall be and remain the Company’s sole property.   6 9. INJUNCTIVE RELIEF Executive acknowledges that any violation of any provision of Sections 6 through 8 or Section 12 hereof by Executive will cause irreparable damage to the Company, that such damages will be incapable of precise measurement and that, as a result, the Company will not have an adequate remedy at law to redress the harm which such violations will cause. Therefore, in the event of any violation or threatened violation of any provision of Sections 6 through 8 or Section 12 hereof by Executive, in addition to any other rights at law or in equity the Company may have, Executive agrees that the Company will be entitled to seek, without proof of an inadequate remedy at law, posting any bond or proof of damages, equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available. 10. BLUE PENCIL It is the desire and intent of the Parties that the provisions of Sections 6 through 8 or Section 12 hereof shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any portion of Sections 6 through 8 or Section 12 hereof shall be adjudicated to be invalid or unenforceable, such provision shall be deemed amended either to conform to such restrictions as the court or arbitrator may allow, or to delete therefrom or reform the portion thus adjudicated to be invalid and unenforceable, such deletion or reformation to apply only with respect to the operation of such Section in the particular jurisdiction in which such adjudication is made. It is expressly agreed that any court or arbitrator shall have the authority to modify any provision of Sections 6 through 8 or Section 12 hereof if necessary to render it enforceable, in such manner as to preserve as much as possible the parties’ original intentions, as expressed therein, with respect to the scope thereof. 11. COMPANY’S AND EXECUTIVE’S DUTIES ON TERMINATION In the event of termination of Executive’s employment pursuant to Section 5, Executive agrees to deliver promptly to the Company all Proprietary Information which is or has been in Executive’s possession or under Executive’s control. Upon termination of Executive’s employment by the Company for any reason whatsoever and at any earlier time the Company so requests, Executive will deliver to the custody of the person designated by the Company all originals and copies of such documents and other property of the Company in Executive’s possession, under Executive’s control or to which Executive may have access. 12. NON-DISPARAGEMENT During and after the Term, for any reason, neither Executive nor his agents, on the one hand, nor the Company, or its senior executives or the Board, on the other hand, shall directly or indirectly issue or communicate any public statement, or statement likely to become public, that maligns, denigrates or disparages the other (including, in the case of communications by Executive or his agents, any of the Company’s officers, directors or employees). The foregoing shall not be violated by truthful responses to legal process or governmental inquiry or by private statements to any of the Company’s officers, directors or employees; provided, that, in the case of Executive, such statements are made in the course of carrying out his duties pursuant to this Agreement. 13. INDEMNIFICATION The Company shall indemnify the Executive against all losses, claims, expenses, or other liabilities of any nature arising by reason of the fact that Executive: (a) is or was a director, officer, employee, or agent of the Company or any of its subsidiaries; or (b) while a director, officer, employee or agent of the Company or any of its subsidiaries, is or was serving at the request of the Company as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another corporation, partnership, joint venture, trust, employee benefit plan or other entity, in each case to the fullest extent permitted under the Nevada Revised Statutes, Private Corporations Law, as the same exists or may hereafter be amended. Without limiting the generality of the foregoing, Executive shall be entitled in connection with Executive’s employment and in connection with Executive’s services as an officer and/or director of the Company to the benefit of the provisions relating to indemnification and advancement of defense costs and expenses contained in the bylaws and articles of incorporation of the Company, as the same in the future may be amended (not including any amendments or additions that limit or narrow, but including any that add to or broaden, the protection afforded to the Executive), to the fullest extent permitted by applicable law. The Company shall advance to Executive all costs of investigation or defense incurred by the Executive in connection with any pending or threatened claim for which Executive may be entitled to indemnification hereunder, provided that the Executive shall agree to return to the Company any such reimbursed amounts, without interest, if it is determined in a final, non-appealable judgment by a court of competent jurisdiction that the Executive is not entitled to indemnification by the Company for losses incurred in connection with such claim. The indemnification obligations of the Employer shall survive from the Effective Date of this Agreement and continue until three (3) months after the expiration of any applicable statute of limitations with respect to any claim made against Executive for which Executive is or may be entitled to indemnification   7 (the “Survival Period ”), and shall survive after the Survival Period with respect to any indemnification claim as to which the Company has received notice on or prior to the end of the Survival Period. During the Term of this Agreement and during the Survival Period, the Company shall, to the extent that the Board determines it to be economically reasonable, maintain for the benefit of Executive, on an “occurrence” basis, a directors and officers errors and omissions insurance policy, or a similar insurance policy(ies), providing coverage from a financially reputable carrier. Anything in this Agreement to the contrary notwithstanding, this Section 13 shall survive the termination of this Agreement for any reason, and no release which may be entered into in connection with the termination of the Executive's employment will be deemed to release the Employer from its obligations under this Section 13. 14. REPRESENTATIONS AND WARRANTIES 14.1 Executive hereby represents and warrants to the Company, and Executive acknowledges, that the Company has relied on such representations and warranties in employing Executive and entering into this Agreement, as follows: (a) Executive has the legal capacity and right to execute and deliver this Agreement and to perform his obligations contemplated hereby, and this Agreement has been duly executed by Executive; (b) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject; (c) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other person or entity; (d) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms; and (e) Executive understands that the Company will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance. 14.2 The Company hereby represents and warrants to Executive, and the Company acknowledges that Executive has relied on such representations and warranties in entering into this Agreement, as follows: (a) the Company has all requisite power and authority to execute and deliver been duly executed by the Company; (b) the execution, delivery and performance of this Agreement by the Company does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Company is a party or any judgment, order or decree to which the Company is subject; (c) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of the Company, enforceable in accordance with its terms; and  (d) the Company understands that Executive will rely upon the accuracy and truth of the representations and warranties of the Company set forth herein and the Company consents to such reliance. 15. ARBITRATION Any controversy arising out of or relating to this Agreement, its enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of its provisions, or any other controversy arising out of Executive’s employment with the Company or the termination of Executive’s employment with the Company, including, but not limited to, any state or federal statutory claims, shall be submitted to arbitration in Broward County, Florida, before a sole arbitrator selected from the American Arbitration Association,; provided, however, that provisional injunctive relief may, but need not, be sought by either party to this Agreement in a court of law while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the arbitrator. Final resolution of any dispute through arbitration may include any remedy or relief which the arbitrator deems just and equitable, including any and all remedies provided by applicable state or federal statutes. The Company shall bear all administrative costs of any arbitration initiated under this Section 15, including any filing fees and arbitrator fees. At the conclusion of the arbitration, the arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the arbitrator’s award or decision is based. Any award or relief granted by the arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction. The parties hereto acknowledge and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with this Agreement. The   8 arbitrator shall award reasonable attorney’s fees (including reasonable disbursements) to the party that the arbitrator has determined to be the prevailing party in such arbitration. Except as may be necessary to enter judgment upon the award or to the extent required by applicable law, all claims, defenses and proceedings (including, without limiting the generality of the foregoing, the existence of the controversy and the fact that there is an arbitration proceeding) shall be treated in a confidential manner by the arbitrator, the parties hereto and their counsel, and each of their agents, employees and all others acting on behalf of or in concert with them. Without limiting the generality of the foregoing, no one shall divulge to any person or entity not directly involved in the arbitration the contents of the pleadings, papers, orders, hearings, trials, or awards in the arbitration, except as may be necessary to enter judgment upon an award as required by applicable law. Any court proceedings relating to the arbitration hereunder, including, without limiting the generality of the foregoing, to prevent or compel arbitration or to confirm, correct, vacate or otherwise enforce an arbitration award, shall be filed under seal with the court, to the extent permitted by law. 16. GENERAL PROVISIONS 16.1 Assignment, Binding Effect. This Agreement, and Executive’s rights and obligations hereunder, may not be assigned or delegated, in whole or in part, by Executive, and any prohibited assignment attempted by the Executive is void. This Agreement shall be binding on any successor to the Company, whether by merger, acquisition of substantially all of the Company’s assets, or otherwise, as fully as if such successor was a signatory hereto and the Company shall cause such successor to, and such successor shall, expressly assume the Company’s obligations hereunder. Notwithstanding anything else herein contained, the term “Company” as used in this agreement, shall include all such successors. 16.2 Notices. (a) All notices, requests, demands or other communications that are required or may be given under this Agreement shall be in writing and shall be given by personal delivery, by certified or registered United States mail (postage prepaid, return receipt requested), by a nationally recognized overnight delivery service for next day delivery, or by facsimile transmission, as follows (or to such other address as any party may give in a notice given in accordance with the provisions hereof): If to the Company, Vapor Corp. 3001 Griffin Road Dania Beach, Florida 33312 If to Executive, Harlan Press c/o Vapor Corp. 3001 Griffin Road Dania Beach, FL 33312 (b) All notices, requests or other communications will be effective and deemed given only as follows: (i) if given by personal delivery, upon such personal delivery, (ii) if sent by certified or registered mail, on the fifth business day after being deposited in the United States mail, (iii) if sent for next day delivery by overnight delivery service, on the date of delivery as confirmed by written confirmation of delivery, (iv) if sent by facsimile, upon the transmitter’s confirmation of receipt of such facsimile transmission, except that if such confirmation is received after 5:00 p.m. (in the recipient’s time zone) on a business day, or is received on a day that is not a business day, then such notice, request or communication will not be deemed effective or given until the next succeeding business day. Notices, requests and other communications sent in any other manner, including by electronic mail, will not be effective. 16.3 Governing Law. This Agreement is governed by, and is to be construed and enforced in accordance with, the laws of the State of Florida without regard to principles of conflicts of laws. 16.4 Amendment. No provisions of this Agreement may be amended, modified or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer selected at such time by the Board, and such waiver is set forth in writing and signed by the party to be charged. 16.5 Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior or contemporaneous agreements, arrangements and understandings, whether oral or written, between the parties with respect to such subject matter. Executive and the Company affirm that each fully understands this Agreement’s meaning and effect. Each party hereto has participated fully and equally in the negotiation and drafting of this agreement. This Agreement contains section headings for reference only. The headings in no way affect the meaning or interpretation of this Agreement. For purposes of Sections 6, 7, 8 and 12 of this Agreement, the “Company” as used therein shall be deemed to include the Company and its subsidiaries and their respective successors and assigns.   9 16.6 Withholding. All payments hereunder shall be subject to any required withholding of federal, state and local taxes pursuant to any applicable law or regulation. 16.7 Severability. The sections, paragraphs and provisions of this Agreement are severable. If any such section, paragraph or provision is found to be unenforceable, the remaining sections, paragraphs and provisions will remain in 16.8 Counterparts. This Agreement may be executed and delivered (by facsimile, PDF or other electronic transmission) in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 16.9 Section 409A. Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payment of the benefits set forth herein either shall be exempt from the requirements of Section 409A of the Code, or shall comply with the requirements of such provision. Furthermore, the Company and its respective officers, directors, employees or agents make no guarantee that this Agreement complies with, or is exempt from, the provisions of Section 409A of the Code and none of the foregoing shall have any liability for the failure of this Agreement to comply with, or be exempt from, the provisions of Code Section 409A. The parties hereto agree to make such amendments from time to time to the terms and conditions of this Agreement as are necessary to ensure that this Agreement complies with the terms of and in a manner permitted by Section 409A of the Code and any regulation or other official guidance promulgated thereunder. Each payment due hereunder shall be treated as a separate payment under Section 409A of the Code. To the extent required by Code Section 409A, “termination of employment” (or any similar terms) shall mean “separation from service” (as defined in Treasury Regulations Section 1.409A-1(h) and the default presumptions thereof). With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, and (iii) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense was incurred.   VAPOR CORP.: By:   /s/ Kevin Frija Name:   Kevin Frija Title:   Chairman & CEO EXECUTIVE: By:   /s/ Harlan Press Name:   Harlan Press Title:   Chief Financial Officer   10

Exhibit 10.3      AMENDMENT TO THE RESTRICTED STOCK UNIT AWARDS UNDER THE FOSSIL GROUP, INC. 2008 LONG-TERM INCENTIVE PLAN This AMENDMENT TO THE RESTRICTED STOCK UNIT AWARDS (this “Amendment”), dated as of _________, is made and entered into by Fossil Group, Inc., a Delaware corporation (the “Company”). Terms used in this Amendment with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such terms in the Fossil Group, Inc. 2008 Long-Term Incentive Plan (the “Plan”) and the Restricted Stock Unit Awards granted to _______________________ (the “Participant”) on ____________, 20___ (the “Award”). WITNESSETH: WHEREAS, Section 15 of the Award authorizes the amendment of the Awards by a writing executed by the Participant and the Company; and WHEREAS, the Participant and the Company desire to amend the Awards to permit continued vesting of the Restricted Stock Units granted thereunder in accordance with the terms of that certain Executive Severance Agreement entered into by and between the Participant and the Company (the “Severance Agreement”) upon the Participant’s “Termination of Service” without “Cause” or for “Good Reason” (as each term is defined in the Severance Agreement). NOW, THEREFORE, effective as of _____________ (the “Effective Date”) and pursuant to Section 15 of the Awards, in consideration of the mutual promises, conditions, and covenants contained herein and in the Award and the Severance Agreement, and other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties agree to amend the Awards as follows: 1.    Section 2 of the Awards is amended by deleting the second paragraph of said Section in its entirety and substituting in lieu thereof the following: Notwithstanding the vesting conditions set forth in the Notice of Grant, in the event the Participant incurs a Termination of Service (as such term is defined in that certain Executive Severance Agreement by and between the Company and the Participant (the “Severance Agreement”)) without Cause (as defined in the Severance Agreement) or for Good Reason (as defined in the Severance Agreement) prior to a Change in Control, then the then-outstanding Restricted Stock Units shall vest pro-rata on the date such award would vest on its terms, in an amount equal to (1) the ratio derived by dividing the sum of eighteen (18) months plus the number of whole calendar months from the respective Date of Grant through the Termination Date, by the total number of months from the Date of Grant through the date such award would vest on its terms, provided the ratio is no greater than one, multiplied by (2) the number of performance based restricted stock unit awards that would have vested and shall be electronically converted into shares of Common Stock on the Vesting Date, subject to and based upon the achievement of the performance goals and vesting schedule set forth in the Notice of Grant, to the same extent such Restricted Stock Units would have otherwise vested had the Participant remained employed during such period, , provided, however, if such Termination of Service occurs in connection with or following a Change in Control, then (A) if the Termination of Service occurs within the first half of the applicable performance period, then full acceleration of vesting at Target (as defined in the Severance Agreement) performance, and (B) if the Termination of Service occurs within the second half of the applicable performance period, then accelerated vesting of the award, based on actual performance if measurable, or at Target performance if the performance is not measurable. 2.    Section 4 of the Awards is amended by replacing each instance of the term “Retirement Date” in Section 4 with the term “Termination of Service”. 3.    Except as expressly amended by this Amendment, the Award shall continue in full force and effect in accordance with the provisions thereof. IN WITNESS WHEREOF, the Company and the Participant have executed, or caused to be executed, this Amendment to be effective as of the Effective Date. FOSSIL GROUP, INC. By:                 Name:                  Title:                 PARTICIPANT                              «Participant»    

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549 SCHEDULE 13G Under the Securities Exchange Act of 1934 (Amendment No. 2)* Buckeye Partners, L.P. (Name of Issuer) Limited Partnership Units Representing Limited Partner Interests (Title of Class of Securities) (CUSIP Number) December 31, 2014 (Date of Event Which Requires Filing of this Statement) Check the appropriate box to designate the rule pursuant to which this Schedule is filed: [X]Rule 13d-1(b) []Rule 13d-1(c) []Rule 13d-1(d) *The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act, but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 13G/APage 2 of 5 Pages 1 NAME OF REPORTING PERSON Tortoise Capital Advisors, L.L.C. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [] (b) [ X] (See Instructions) 3 SEC USE ONLY 4 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 5 SOLE VOTING POWER 45 6 SHARED VOTING POWER 10,086,794 (see Item 4) 7 SOLE DISPOSITIVE POWER 45 8 SHARED DISPOSITIVE POWER 10,923,069 (see Item 4) 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,923,114 (see Item 4) 10 CHECK IF THE AGGREGATE AMOUNT IN ROW 9 EXCLUDES CERTAIN SHARES (See Instructions) Not Applicable 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 8.6% (see Item 4) 12 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IA Page 3 of 5 Pages Item 1(a) Name of Issuer: Buckeye Partners, L.P. Item 1(b) Address of Issuer's Principal Executive Offices: One Greenway Plaza, Suite 600, Houston, Texas77046 Item 2(a) Name of Persons Filing: This 13G is being filed by Tortoise Capital Advisors, L.L.C., a Delaware limited liability company (“TCA”). Item 2(b) Address of Principal Business Office or, if None, Residence: The principal business address is 11550 Ash Street, Suite 300, Leawood, Kansas 66211. Item 2(c) Citizenship: TCA is a Delaware limited liability company. Item 2(d) Title of Class of Securities: Limited Partnership Units Representing Limited Partner Interests Item 2(e) CUSIP Number: Item 3 The Reporting Person is: TCA is an investment adviser in accordance with Rule 13d-1(b)(1)(ii)(E). Item 4 Ownership: TCA acts as an investment adviser to certain investment companies registered under the Investment Company Act of 1940.TCA, by virtue of investment advisory agreements with these investment companies, has all investment and voting power over securities owned of record by these investment companies.However, despite their delegation of investment and voting power to TCA, these investment companies may be deemed to be the beneficial owners under Rule 13d-3 of the Act, of the securities they own of record because they have the right to acquire investment and voting power through termination of their investment advisory agreement with TCA.Thus, TCA has reported that it shares voting power and dispositive power over the securities owned of record by these investment companies.TCA also acts as an investment adviser to certain managed accounts.Under contractual agreements with managed account clients, TCA, with respect to the securities held in the client managed accounts, has investment and voting power with respect to certain client accounts, and has investment power but no voting power with respect to certain other client accounts.TCA has reported that it shares voting and/or investment power over the securities held by these client managed accounts despite a delegation of voting and/or investment power to TCA because the clients have the right to acquire investment and voting power through termination of their agreements with TCA. TCA may be deemed the beneficial owner of the securities covered by this statement under Rule 13d-3 of the Act that are held by its clients. Page 4 of 5 Pages (a)Amount beneficially owned:10,923,114 (b)Percent of class:8.6% (c)Number of shares as to which the person has: (i) Sole power to vote or direct the vote: 45 (ii) Shared power to vote or direct the vote: (iii) Sole power to dispose or to direct the disposition of: 45 (iv) Shared power to dispose or to direct the disposition of: Item 5 Ownership of Five Percent or Less of a Class: Not Applicable Item 6 Ownership of More than Five Percent on Behalf of Another Person: The investment companies and client managed accounts discussed in Item 4 above have the right to receive all dividends from, and the proceeds from the sale of, the securities held in their respective accounts.The interest of any one such person does not exceed 5% of the class of securities. Item 7 Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on By the Parent Holding Company or Control Person: Not Applicable Item 8 Identification and Classification of Members of the Group: Not Applicable Item 9 Notice of Dissolution of Group: Not Applicable Item 10 Certifications: By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect, other than activities solely in connection with a nomination under §240.14a-11. Page 5 of 5 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Tortoise Capital Advisors, L.L.C. Dated: February 10, 2015 By: /s/P. Bradley Adams Name: P. Bradley Adams Title: Managing Director

EXHIBIT 10.6   AMENDMENT #1 TO THE CONVERTIBLE PROMISSORY NOTE ISSUED ON FEBRUARY 14, 2018   THIS AMENDMENT #1 TO THE CONVERTIBLE PROMISSORY NOTE ISSUED ON February 14, 2018 (the “Amendment”) is entered into by and between Cerebain Biotech Corp., a Nevada corporation (the “Company”), and Crown Bridge Partners, LLC, a New York limited liability company (the “Holder”) (collectively the “Parties”).   BACKGROUND   A. The Company and Holder are the parties to that certain convertible promissory note originally issued by the Company to the Holder on February 14, 2018, in the original principal amount of $130,000.00 (the “Note”); and   B. The Parties desire to amend the Note as set forth expressly below.   NOW THEREFORE, in consideration of the execution and delivery of the Amendment are hereby acknowledged, the Parties agree as follows:   1. The maturity date of the First Tranche (as defined in the Note) shall be extended to September 2, 2019.   2. This Amendment shall be deemed part of, but shall take precedence over and supersede any provisions to the contrary contained in the Note. Except as specifically modified hereby, all of the provisions of the Note, which are not in conflict with the terms of this Amendment, shall remain in full force and effect.   [Signature page to follow]   1         Cerebain Biotech Corp.                   By:     By:   Name: Eric Clemons   Name:     Title: Chief Executive Officer   Title:         2  

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 February21, 2012 Date of Report (Date of earliest event reported) DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 1-13647 73-1356520 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 5330 East 31st Street, Tulsa, Oklahoma74135 (Address of principal executive offices and zip code) Registrant’s telephone number, including area code:(918) 660-7700 N/A (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ]Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ]Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ]Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ]Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02RESULTS OF OPERATIONS AND FINANCIAL CONDITION OnFebruary 21, 2012, Dollar Thrifty Automotive Group, Inc., a Delaware corporation (the “Company”), issued the news release attached hereto as Exhibit 99.1 reporting financial results of the Company for thefourth quarterand year endedDecember 31, 2011. 2 ITEM 9.01FINANCIAL STATEMENTS AND EXHIBITS (d)Exhibits Exhibit No.Description News release of Dollar Thrifty Automotive Group, Inc. datedFebruary 21, 2012: Dollar Thrifty Automotive Group Reports Record Fourth Quarter and Full Year Profit 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. (Registrant) February21, 2012 By: /s/ H. CLIFFORD BUSTER III H. Clifford Buster III Senior Executive Vice President, Chief Financial Officer and Principal Financial Officer 4 INDEX TO EXHIBITS Exhibit No.Description News release of Dollar Thrifty Automotive Group, Inc. datedFebruary 21, 2012: Dollar Thrifty Automotive Group Reports Record Fourth Quarter and Full Year Profit 5

Exhibit 10.40 EXECUTION COPY AMENDMENT NO. 5 TO RECEIVABLES PURCHASE AGREEMENT           THIS AMENDMENT NO. 5 TO RECEIVABLES PURCHASE AGREEMENT (this “Amendment”), dated as of December 21, 2009, is entered into among HBI RECEIVABLES LLC, as seller (“Seller”), HANESBRANDS INC., in its capacity as servicer (in such capacity, the “Servicer”), the Committed Purchasers party hereto, the Conduit Purchasers party hereto, the Managing Agents party hereto, and HSBC SECURITIES (USA) INC. (“HSBC”), as assignee of JPMORGAN CHASE BANK, N.A., as agent (in such capacity, the “Agent”). Capitalized terms used herein without definition shall have the meanings ascribed thereto in the “Purchase Agreement” referred to below. PRELIMINARY STATEMENTS           A. Reference is made to that certain Receivables Purchase Agreement dated as of November 27, 2007 among Seller, Servicer, the Committed Purchasers, the Conduit Purchasers, the Managing Agents and the Agent (as amended prior to the date hereof and as the same may be further amended, restated, supplemented or modified from time to time, the “Purchase Agreement”).           B. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto have agreed to amend certain provisions of the Purchase Agreement upon the terms and conditions set forth herein.      SECTION 1. Amendment. Subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the parties hereto hereby agree to amend the Purchase Agreement as follows:      (a) Exhibit I to the Purchase Agreement is hereby amended to delete the definition of “Dilution Reserve Floor” in its entirety and replace it with the following:      “Dilution Reserve Floor” means 23.0%.      (b) Exhibit I to the Purchase Agreement is hereby amended to delete the definition of “Excluded Receivable” in its entirety and replace it with the following:      “Excluded Receivable” means (i) any account receivable arising in connection with the sale of goods by the business operations of HBI which were the business operations of National Textiles, L.L.C. prior to the merger of National Textiles, L.L.C. into HBI, and which account receivable is identified on Seller’s and Servicer’s systems, books and records in the manner specified by Seller pursuant to Section 7.1(m), (ii) at all times on and after the Additional Obligor Exclusion Date, any account receivable for which the Obligor is the Additional Excluded Obligor or any of its affiliates, and (iii) at all times on and *PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST     after the Wal-Mart Exclusion Date, any present or future account receivable for which the Obligor is Wal-Mart Stores, Inc. or any of its affiliates.      (c) Exhibit I to the Purchase Agreement is hereby amended to delete the definition of “Facility Termination Date” in its entirety and replace it with the following:      “Facility Termination Date” means the earliest to occur of (i) December 20, 2010 and (ii) the Amortization Date.      (d) Exhibit I to the Purchase Agreement is hereby amended to add the following definitions of “Additional Excluded Obligor”, “Additional Obligor Exclusion Date” and “Wal-Mart Exclusion Date”, in proper alphabetical order:      “Additional Excluded Obligor” means the single Obligor specified in the notice delivered in connection with the Additional Obligor Exclusion Date . For the avoidance of doubt, Seller may designate only a single entity as an Additional Excluded Obligor during the term of this Agreement.      “Additional Obligor Exclusion Date” means the date designated as the “Additional Obligor Exclusion Date” in a notice from Seller to the Agent and each Managing Agent, which notice is delivered at least three (3) Business Days prior to such designated date, and which shall specify the name of the Additional Excluded Obligor. For the avoidance of doubt, Seller may designate only a single Additional Obligor Exclusion Date during the term of this Agreement.      “Wal-Mart Exclusion Date” means December 21, 2009.      (e) The Purchase Agreement is hereby amended to delete Schedule C in its entirety and replace it with the new Schedule C attached hereto as Attachment 1.      SECTION 2. Consent to Transfers; Weekly Report Delivery Date.      (a) Consent to Transfers. The Agent, the Managing Agents and the Purchasers hereby consent to the sale by the Seller to the Originator (x) on the Additional Obligor Exclusion Date, of the Receivables for which the Obligor is the Additional Excluded Obligor or any of its affiliates and (y) on the Wal-Mart Exclusion Date, of the Receivables for which the Obligor is Wal-Mart Stores, Inc. or any of its affiliates; provided that: (i) in each case such sale will be governed by a Bill of Sale substantially in the form of Exhibit I attached hereto, (ii) the sale shall be on arm’s-length terms and Seller shall receive fair value for such Receivables sold by it, and (iii) such consent is conditioned upon each of the following statements being true and correct as of, and after giving effect to such sale on, the Additional Obligor Exclusion Date and the Wal-Mart Exclusion Date, as applicable:      (A) each of the representations and warranties set forth in the Purchase Agreement is true and correct, 2        (B) no Amortization Event or Potential Amortization Event has occurred and is continuing, and      (C) the Purchaser Interests do not exceed 100%.      (b) Weekly Report Delivery Date. The parties hereto agree that the Weekly Report required to be delivered on January 6, 2010 pursuant to Section 8.5 of the Purchase Agreement shall be delivered on January 7, 2010 instead.      SECTION 3. Representations and Warranties. Each of the Seller and the Servicer hereby represents and warrants to each of the other parties hereto, as to itself that:      (a) It has all necessary corporate or company power and authority to execute and deliver this Amendment and to perform its obligations under the Purchase Agreement as amended hereby, the execution and delivery of this Amendment and the performance of its obligations under the Purchase Agreement as amended hereby has been duly authorized by all necessary corporate or company action on its part and this Amendment constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).      (b) On the date hereof, before and after giving effect to this Amendment, (i) no Amortization Event or Potential Amortization Event has occurred and is continuing and (ii) the aggregate Purchaser Interests do not exceed 100%.      SECTION 4. Conditions Precedent. This Amendment shall become effective on the first Business Day (the “Effective Date”) on which the Agent or its counsel has received (i) five (5) counterpart signature pages to this Amendment executed by each of the parties hereto and (ii) five (5) counterpart signature pages to the Fee Letter dated as of the date hereof among the Agent, the Managing Agents and the Seller, executed by each of the parties thereto.      SECTION 5. Reference to and Effect on the Transaction Documents.      (a) Upon the effectiveness of this Amendment, (i) each reference in the Purchase Agreement to “this Receivables Purchase Agreement”, “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean and be a reference to the Purchase Agreement as amended or otherwise modified hereby, and (ii) each reference to the Purchase Agreement in any other Transaction Document or any other document, instrument or agreement executed and/or delivered in connection therewith, shall mean and be a reference to the Purchase Agreement as amended or otherwise modified hereby.      (b) Except as specifically amended, terminated or otherwise modified above, the terms and conditions of the Purchase Agreement, of all other Transaction Documents and any other documents, instruments and agreements executed and/or delivered in 3   connection therewith, shall remain in full force and effect and are hereby ratified and confirmed.      (c) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent, any Managing Agent or any Purchaser under the Purchase Agreement or any other Transaction Document or any other document, instrument or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein.      SECTION 6. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or other electronic format shall be effective as delivery of a manually executed counterpart of this Amendment.      SECTION 7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.      SECTION 8. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.      SECTION 9. Fees and Expenses. Seller hereby confirms its agreement to pay on demand all reasonable costs and expenses of the Agent, the Managing Agents or Purchasers in connection with the preparation, execution and delivery of this Amendment and any of the other instruments, documents and agreements to be executed and/or delivered in connection herewith, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel to the Agent, Managing Agents or Purchasers with respect thereto. [Remainder of Page Deliberately Left Blank] 4             IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers as of the date first above written.             HBI RECEIVABLES LLC       By:   /s/ Richard D. Moss         Name:   Richard D. Moss        Title:           HANESBRANDS INC., as Servicer Senior Vice President and Treasurer      Signature Page to Amendment No. 5 to RPA                 BRYANT PARK FUNDING LLC, as a Conduit Purchaser       By:   /s/ Damian A. Perez         Name:   Damian A. Perez        Title:   Vice President        HSBC SECURITIES (USA) Inc., as a Managing Agent and Agent       By:   /s/ Suzanna Baird         Name:   Suzanna Baird        Title:   Vice President        HSBC BANK USA, NATIONAL ASSOCIATION, as a Committed Purchaser       By:   /s/ Alan Vitulich         Name:   Alan Vitulich        Title:   Vice President      Signature Page to                 MARKET STREET FUNDING LLC, as a Conduit Purchaser       By:   /s/ Doris J. Hearn         Name:   Doris J. Hearn        Title:   Vice President        PNC BANK, N.A., as a Committed Purchaser and as a Managing Agent       By:   /s/ William P. Falcon         Name:   William P. Falcon        Title:   Vice President      Signature Page to     Attachment 1 to Amendment No. 5 to Receivables Purchase Agreement SCHEDULE C SPECIAL CONCENTRATION PERCENTAGES       Obligor Name   Special Concentration Percentage       [****]   [****]%   ****   Omitted pursuant to a confidential treatment request     EXHIBIT I Bill of Sale [Attached]     Form of Bill of Sale and Assignment      The undersigned HBI Receivables LLC, a limited liability company organized under the laws of the State of Delaware (“Assignor”), on and as of [date], hereby absolutely sells, transfers, assigns, sets-over, quitclaims and conveys to Hanesbrands Inc., a corporation organized under the laws of Maryland (“Assignee”), without recourse and without representations or warranties of any type, kind, character or nature, express or implied, all of Assignor’s right, title and interest in and to each of the Receivables identified in the Schedule attached hereto, the Collections with respect thereto and the other Related Security and respect thereto (as each are defined in the Receivables Sale Agreement, dated as of November 27, 2007, between the Assignee and the Assignor, as amended, restated, supplemented or modified from time to time, the “Receivables Sale Agreement”) (the “Transferred Property”). Such Receivables have an aggregate face amount of $[____________]. The Assignee shall pay the Assignor a purchase price of $[____________] (“Purchase Price”) for such Transferred Property. A portion of the Purchase Price may be paid through a reduction in the outstanding principal amount of the Subordinated Note (as defined in the Receivables Sale Agreement). Each of the Assignor and Assignee agree that the Purchase Price constitutes a good faith estimate of the amount of the Transferred Property as of [date], and that after [such date], upon a final determination of the amount of the Transferred Property sold hereunder by the Assignor to Assignee, the Assignor and Assignee shall reconcile any overpayment or underpayment hereunder as between themselves.      It is the intention of the Assignor and the Assignee that the transfer and assignment of Transferred Property contemplated by this Bill of Sale and Assignment shall constitute a sale of such Transferred Property from the Assignor to the Assignee and the beneficial interest in and title to such Transferred Property shall not be part of the Assignor’s estate in the event of the filing of a bankruptcy petition by or against the Assignor under any bankruptcy law.      This Bill of Sale and Assignment shall be binding upon and inure to the benefit of each of the respective successors and assigns of the Assignor and the Assignee.      THIS BILL OF SALE AND ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. *      *      *      *          IN WITNESS WHEREOF, the undersigned have caused this Bill of Sale and Assignment to be duly executed as of the day and year first above written.               ASSIGNOR: HBI RECEIVABLES LLC               By:                   Name: Title:                             ASSIGNEE: HANESBRANDS INC.               By:                   Name: Title:         RECEIVABLES SCHEDULE Receivables for which the Obligor is [Wal-Mart Stores, Inc.] [Additional Excluded Obligor] or any of its affiliates  

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14C INFORMATION Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934 Check the appropriate box: x Preliminary Information Statement o Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) o Definitive Information Statement PAZOO, INC. (Name of Registrant As Specified in Charter) Payment of Filing Fee (Check the appropriate box): x No Fee required. o Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. Title of each class of securities to which transaction applies: Aggregate number of securities to which transaction applies: Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): Proposed maximum aggregate value of transaction: Total fee paid: o Fee paid previously with preliminary materials o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Form, Schedule or Registration Statement No.: Filing Party: Date Filed: Pazoo, Inc. 760 Route 10, Suite 203 Whippany, New Jersey 07981 INFORMATION STATEMENT WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY Dear Shareholders: We are writing to advise you that our Board of Directors and shareholders holding a majority of our outstanding voting capital stock have approved a reverse stock split, effecting the common stock, at a ratio of 100 to 1, meaning that following the Effective Date, as defined below, of the reverse stock split the common shareholders will own one share of common stock for each one hundred shares of common stock currently owned by such shareholder. These actions were approved by written consent on January 4, 2016 by our Board of Directors and a majority of holders of our voting capital stock, in accordance with Nevada Revised Statutes. Our directors and majority of the shareholders of our outstanding capital stock, as of the record date of January 4, 2016, have approved the reverse stock split after carefully considering it and concluding that approving the reverse stock split was in the best interests of our Company and our shareholders. WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY. No action is required by you. Pursuant to Rule 14(c)-2 under the Securities Exchange Act of 1934, as amended, the proposals will not be adopted until a date at least twenty (20) days after the date of this Information Statement has been mailed to our shareholders. This Information Statement is first mailed to you on or about January 29, 2016. ONLY THE STOCKHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON JANUARY 4, 2016, THE RECORD DATE, ARE ENTITLED TO NOTICE OF THE CORPORATE ACTION. STOCKHOLDERS WHO HOLD IN EXCESS OF 50% OF PAZOO’s SHARES OF VOTING CAPITAL STOCK ENTITLED TO VOTE ON THE ACTION HAVE VOTED IN FAVOR OF THE ACTIONS. AS A RESULT, THE ACTION HAS BEEN APPROVED WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER STOCKHOLDERS OF PAZOO. THESE ACTIONS ARE EXPECTED TO BE EFFECTIVE ON A DATE THAT IS AT LEAST TWENTY (20) DAYS AFTER THE MAILING OF THE DEFINITIVE INFORMATION STATEMENT TO THE SHAREHOLDERS OF RECORD. We encourage you to read the attached Information Statement carefully for further information regarding these actions. In accordance with Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended, the approval of the action described herein by the holders of a majority of the voting power of the Company will be deemed ratified and effective at a date that is at least 20 days after the date this Information Statement has been mailed or furnished to our stockholders. This Information Statement is first being mailed or furnished to stockholders on or about January 29, 2016. Pazoo, Inc. 760 Route 10, Suite 203 Whippany, New Jersey 07981 INFORMATION STATEMENT AND NOTICE OF ACTIONS TAKEN BY WRITTEN CONSENT OF THE MAJORITY SHAREHOLDERS OF THE VOTING CAPITAL STOCK OF THE CORPORATION THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS' MEETING WILL BE HELD TO CONSIDER THE MATTERS DESCRIBED HEREIN. This Information Statement is being furnished to you solely for the purpose of informing stockholders of the matters described herein in compliance with Regulation 14C of the Exchange Act. GENERAL This Information Statement is being furnished to all holders of the common stock of Pazoo, Inc. (the "Company") as of January 4, 2016 in connection with the action taken by written consent of holders of a majority of the outstanding voting power of the Company to authorize the Reverse Stock Split. "We," "us," "our," the “Registrant” and the "Company" refers to Pazoo, Inc., a Nevada corporation RECOMMENDATION OF THE BOARD OF DIRECTORS The Board of Directors of the Company (the “Board”) believes that the stockholders of the Company will benefit from the Reverse Stock Split because it will attract potential investment from outside investors which will create a more liquid public market for its common stock.In order to facilitate such transaction, the Board has determined that the capitalization structure of the Company should be changed. ACTIONS TO BE TAKEN This Information Statement contains a brief summary of the material aspects of the actions approved by the Board and the holders of the majority of the outstanding voting capital stock of the Company. REVERSE STOCK SPLIT DECREASE THE NUMBER OF ISSUED AND OUTSTANDING SHARES OF OUR COMMON STOCK GENERAL The Board approved a resolution to effectuate a 100:1 reverse stock split.Under this reverse stock split each 100 shares of our Common Stock will be automatically converted into 1 share of Common Stock.To avoid the issuance of fractional shares of Common Stock, the Company will issue an additional share to all holders of fractional shares.The effective date of the reverse stock split will be February 19, 2016 (the “Effective Date”). PLEASE NOTE THAT THE REVERSE STOCK SPLIT WILL NOT CHANGE YOUR PROPORTIONATE EQUITY INTERESTS IN THE COMPANY, EXCEPT AS MAY RESULT FROM THE ISSUANCE OR CANCELLATION OF SHARES PURSUANT TO THE FRACTIONAL SHARES. PLEASE NOTE THAT THE REVERSE STOCK SPLIT WILL HAVE THE EFFECT OF SUBSTANTIALLY INCREASING THE NUMBER OF SHARES THE COMPANY WILL BE ABLE TO ISSUE TO NEW OR EXISTING SHAREHOLDERS, INCLUDING HOLDERS OF CONVERTIBLE SERIES OF PREFERRED STOCK, BECAUSE THE NUMBER OF AUTHORIZED SHARES WILL REMAIN THE SAME WHILE THE NUMBER OF SHARES ISSUED AND OUTSTANDING WILL BE REDUCED 100-FOLD. PURPOSE AND MATERIAL EFFECTS OF THE REVERSE STOCK SPLIT The Board of Directors believe that, among other reasons, the number of outstanding shares of our Common Stock have contributed to a lack of investor interest in the Company and has made it difficult to attract new investors and potential business partners.As a result, the Board of Directors has proposed the Reverse Stock Split as one method to attract business opportunities in the Company. When a company engages in a reverse stock split, it substitutes one share of stock for a predetermined amount of shares of stock. It does not increase the market capitalization of the company. An example of a reverse split is the following. A company has 10,000,000 shares of common stock outstanding. Assume the market price is $.01 per share. Assume that the company declares a 1 for 5 reverse stock split. After the reverse split, that company will have 1/5 as many shares outstanding, or 2,000,000 shares outstanding. The stock will have a market price of $0.05. If an individual investor owned 10,000 shares of that company before the split at $.01 per share, he will own 2,000 shares at $.05 after the split. In either case, his stock will be worth $100. He is no better off before or after. Except that such company hopes that the higher stock price will make that company look better and thus the company will be a more attractive potential business partners and investors. There is no assurance that that company's stock will rise in price after a reverse split or that a suitable business partner or investor will emerge. We believe that the reverse stock split may improve the price level of our Common Stock and that the higher share price could help generate interest in the Company among investors and other business opportunities. However, the effect of the reverse split upon the market price for our Common Stock cannot be predicted, and the history of similar stock split combinations for companies in like circumstances is varied. There can be no assurance that the market price per share of our Common Stock after the reverse split will rise in proportion to the reduction in the number of shares of Common Stock outstanding resulting from the reverse split. The market price of our Common Stock may also be based on our performance and other factors, some of which may be unrelated to the number of shares outstanding. The reverse split will affect all of our common stockholders uniformly and will not immediately affect any stockholder's percentage ownership interests in the Company, except to the extent that the reverse split results in any of our stockholders owning a fractional share. All stockholders holding a fractional share shall be issued an additional share. The principal effect of the Reverse Stock Split will be that the number of shares of Common Stock issued and outstanding will be reduced from 1,594,496,703 shares of Common Stock as of January 4, 2016, to approximately 15,944,967 shares (depending on the number of fractional shares that are issued). The Reverse Stock Split will affect the shares of common stock outstanding. The number of issued and authorized shares of Preferred Stock will not be affected. The Reverse Stock Split will not affect the par value of our Common Stock. As a result, on the effective date of the Reverse Stock Split, the stated capital on our balance sheet attributable to our Common Stock will be reduced to less than the present amount, and the additional paid-in capital account shall be credited with the amount by which the stated capital is reduced. The per share net income or loss and net book value of our Common Stock will be increased because there will be fewer shares of our Common Stock outstanding. The Reverse Stock Split will not change the proportionate equity interests of our stockholders, nor will the respective voting rights and other rights of stockholders be altered. The Common Stock issued pursuant to the Reverse Stock Split will remain fully paid and non-assessable. The Reverse Stock Split is not intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Securities Exchange Act of 1934. We will continue to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934. Stockholders should recognize that they will own fewer numbers of shares than they presently own (a number equal to the number of shares owned immediately prior to the filing of the certificate of amendment divided by 100). While we expect that the Reverse Stock Split will result in an increase in the potential market price of our Common Stock, there can be no assurance that the Reverse Stock Split will increase the potential market price of our Common Stock by a multiple equal to the exchange number or result in the permanent increase in any potential market price (which is dependent upon many factors, including our performance and prospects). Also, should the market price of our Common Stock decline, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would pertain in the absence of a reverse split. Furthermore, the possibility exists that potential liquidity in the market price of our Common Stock could be adversely affected by the reduced number of shares that would be outstanding after the reverse split. In addition, the reverse split will increase the number of stockholders of the Company who own odd lots (less than 100 shares). Stockholders who hold odd lots typically will experience an increase in the cost of selling their shares, as well as possible greater difficulty in effecting such sales. Consequently, there can be no assurance that the reverse split will achieve the desired results that have been outlined above. Anti-Takeover Effects of the Reverse Stock Split THE OVERALL EFFECT OF THE REVERSE STOCK SPLIT MAY BE TO RENDER MORE DIFFICULT THE ACCOMPLISHMENT OF MERGERS OR THE ASSUMPTION OF CONTROL BY A PRINCIPAL STOCKHOLDER, AND THUS MAKE DIFFICULT THE REMOVAL OF MANAGEMENT. The effective increase in our authorized shares could potentially be used by management to thwart a take-over attempt.The over-all effects of this proposal might be to render it more difficult or discourage a merger, tender offer or proxy contest, or the assumption of control by a holder of a large block of the Company’s securities and the removal of incumbent management.The proposal could make the accomplishment of a merger or similar transaction more difficult, even if, it is beneficial to shareholders.Management might use the additional shares to resist or frustrate a third-party transaction, favored by a majority of the independent stockholders, that would provide an above market premium, by issuing additional shares to frustrate the take-over effort. This proposal is not the result of management’s knowledge of an effort to accumulate the issuer’s securities or to obtain control of the issuer by means of a merger, tender offer, solicitation or otherwise.It was done as a way to attract potential investors and conduct a financing transaction. Neither the Company’s charter nor its by-laws presently contain any provisions having anti-takeover effects and this proposal is not a plan by management to adopt a series of amendments to the Company’s charter or by-laws to institute an anti-takeover provision.The Company does not have any plans or proposals to adopt other provisions or enter into other arrangements that may have material anti-takeover consequences. As discussed above, the Reverse Stock Split was the subject of a unanimous vote by the Board of Directors approving the Reverse Stock Split.There are no rules or practices on any stock exchange that permit such exchange to reserve the right to refuse to list or to de-list any stock which completes a reverse stock split. PLANS, PROPOSALS OR ARRANGEMENTS TO ISSUE NEWLY AVAILABLE SHARES OF COMMON STOCK The main purpose of completing this Reverse Stock Split is to increase the market price of the common stock and increase amount of shares available in order to have the ability to issue shares and attract investors.The Company has not entered into any agreements whereby it has agreed to issue the newly available shares. FRACTIONAL SHARES We will not issue fractional certificates for post-reverse split shares in connection with the reverse split. Instead, an additional share shall be issued to all holders of a fractional share. To the extent any holders of pre-reverse split shares are entitled to fractional shares as a result of the Reverse Stock Split, the Company will issue an additional share to all holders of fractional shares. STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES WITHOUT THE LETTER OF TRANSMITTAL. SUMMARY OF REVERSE STOCK SPLIT Below is a brief summary of the reverse stock split: The issued and outstanding Common Stock shall be reduced on the basis of one post-split share of the Common Stock for every 100 pre-split shares of the Common Stock outstanding. The consolidation shall not affect any rights, privileges or obligations with respect to the shares of the Common Stock existing prior to the consolidation. Stockholders of record of the Common Stock as of January 4, 2016 shall have their total shares reduced on the basis of one post-split share of Common Stock for every 100 pre-split shares outstanding. As a result of the reduction of the Common Stock, the pre-split total of issued and outstanding shares of 1,594,496,703shall be consolidated to a total of approximately 15,944,967 issued and outstanding shares (depending on the number of fractional shares that are be issued or cancelled). The Company’s authorized number of common stock shall remain at 2,950,000,000 shares of the Common Stock. This action has been approved by the Board and the written consents of the holders of the majority of the outstanding voting capital stock of the Company. The entire cost of furnishing this Information Statement will be borne by the Company. The Company will request brokerage houses, nominees, custodians, fiduciaries and other like parties to forward this Information Statement to the beneficial owners of the Common Stock held of record by them and will reimburse such persons for their reasonable charges and expenses in connection therewith. The Board of Directors has fixed the close of business on January 4, 2016, as the record date (the “Record Date”) for the determination of Stockholders who are entitled to receive this Information Statement. You are being provided with this Information Statement pursuant to Section 14C of the Exchange Act and Regulation 14C and Schedule 14C thereunder, and, in accordance therewith, the Reverse Stock Split will not be filed with the Secretary of State of the State of Nevada or become effective until at least 20 calendar days after the mailing of this Information Statement. This Information Statement is being mailed on or about January 29, 2016 to all Stockholders of record as of the Record Date. ADDITIONAL INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance therewith files reports, proxy statements and other information including annual and quarterly reports on Form 10-K and 10-Q (the “1934 Act Filings”) with the Securities and Exchange Commission (the “Commission”). Reports and other information filed by the Company can be inspected and copied at the public reference facilities maintained at the Commission at Room 1024, 450 Fifth Street, N.W., Washington, DC 20549. Copies of such material can be obtained upon written request addressed to the Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a web site on the Internet (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission through the Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). OUTSTANDING VOTING SECURITIES Our authorized capital stock consists of 2,950,000,000 shares of Common Stock, par value $0.0001 per share, of which 1,594,496,703 shares are outstanding as of January 4, 2016.Additionally, the Company has authorized 5,000,000 Series B Preferred Stock have voting power (1,000 votes for every share of Series B Preferred Stock) of which 1,762,500 issued and outstanding as of January 4, 2016. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following information table sets forth certain information regarding the Company’s common stock owned on the Record Date by (i) each who is known by the Company to own beneficially more than 5% of its outstanding Common Stock, (ii) each director and officer, and (iii) all officers and directors as a group: Name and Address of Voting Shareholders (1) Number of Shares Voted Percentage of Class Percentage Total of Voting Power (2) David Cunic Common: 15,000,000Series B: 312,500 0.94%17.73 % % Antonio Del Hierro Series B: 150,000 % % Steve Basloe Common: 15,000,000 Series B: 500,000 0.94%28.37 % % David Lieberthal Series B: 150,000 % % Ben Hoehn Common: 2,500,000Series B: 250,000 0.16%14.18 % % Ben Bingham Series B: 150,000 % % Jordan Stroum Series B: 125,000 % % Gregory Jung Series B: 125,000 % % All Votes Cast (5 persons) Common: 32,500,000Series B: 1,762,500 2.04%100.00 % % Address of all voting shareholders is 760 Route 10, Suite 203, Whippany, New Jersey. Percent of Class is based on 1,594,496,703shares of common stockand1,762,500 Shares of Series B (which have 1,000 votes per share) issued and outstanding as of January 4, 2016. DISSENTER’S RIGHTS OF APPRAISAL The Stockholders have no dissenter’s right under Nevada Corporate Law, the Company’s articles of incorporation consistent with above, or By-Laws to dissent from any of the provisions adopted in the Amendments. VOTE REQUIRED Pursuant to the Company's By-Laws and the Nevada Revised Statutes, a vote by the holders of at least a majority of the Company’s outstanding votes is required to effect the Amendment and the Increase in Authorized Capital. As of the record date, the Company had 1,594,496,703 of the shares of common stock that are entitled to one vote each for a total of 1,594,496,703 votes.Additionally, the holders of the Series B Preferred Stock are entitled to 1,000 votes for every share of Series B Preferred Stock.As of the record date, the Company had 1,762,500 of the shares of Series B Preferred Stock are entitled to 1,762,500,000 votes. The consenting stockholders voted in favor of the Reverse Stock Split described herein in a unanimous written consent, dated January 4, 2016. Because consenting shareholder hold 32,500,000 shares of the issued and outstanding common stock representing 32,500,000 votes, and 1,762,500 shares Series B Preferred stock representing 1,762,500,000 votes, for a total of 1,795,000,000 votes of the capital stock (which shares are equal to 53.47% of the total issued and outstanding voting capital stock on the record date), no action by the minority stockholders in connection with the Reverse Stock Split. VOTE REQUIRED FOR APPROVAL In accordance with Section 78.315 and 78.320 of the Nevada Revised Statutes, the following actions were taken based upon the unanimous recommendation and approval by the Company's Board of Directors and the written consent of the majority voting power. The Board of Directors of the Company has adopted, ratified and approved the Reverse Stock Split. The securities that are entitled to vote to approve the Reverse Stock Split consist of issued and outstanding shares of the Company's $0.001 par value common voting stock outstanding on January 4, 2016, and the holders of the issued and outstanding shares of the Company’s Series B Preferred Stock outstanding on January 4, 2016, the record date for determining shareholders who are entitled to notice of and to vote on the proposed Reverse Stock Split. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF The Board of Directors fixed the close of business on January 4, 2016 as the record date for the determination of the common and preferred shareholders entitled to notice of the action by written consent. As of the record date, the Company had 1,594,496,703 voting shares of common stock issued and outstanding. The holders of shares of common stock are entitled to one vote per share on matter to be voted upon by shareholders. The holders of shares of common stock are entitled to receive pro rata dividends, when and if declared by the Board of Directors in its discretion, out of funds legally available therefore. Dividends on the common stock are declared by the Board of Directors. In addition, the payment of any such dividends will depend on the Company's financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant. As of the record date, the Company had 1,762,500 voting shares of Series B Preferred Stock issued and outstanding. The holders of shares of Series B Preferred Stock are entitled to one thousand votes per share, for a total of 1,762,500,000 on any matter to be voted upon by shareholders. Shareholders and the holders of a controlling interest equaling approximately 53.47% of the voting power of the Company, as of the record date, have consented to the proposed Reverse Stock Split. The shareholders have consented to the action required to adopt the Reverse Stock Split. This consent was sufficient, without any further action, to provide the necessary stockholder approval of the action. SECURITY OWNERSHIP OF EXECUTIVE OFFICERS, DIRECTORS AND FIVE PERCENT STOCKHOLDERS The following table sets forth certain information concerning the ownership of the Company's common stock as of January 4, 2016 with respect to: (i) each person known to the Company to be the beneficial owner of more than five percent of the Company's common stock; (ii) all directors; and (iii) directors and executive officers of the Company as a group. The notes accompanying the information in the table below are necessary for a complete understanding of the figures provided below. As of January 4, 2016, there were 1,594,496,703 shares of common stock issued and outstanding and 1,762,500 shares of Series B Preferred stock outstanding. Name and Address of Voting Shareholders (1) Number of Shares Voted Percentage of Class Percentage Total of Voting Power (2) David Cunic Common: 15,000,000Series B: 312,500 0.94%17.73 % % Antonio Del Hierro Series B: 150,000 % % Steve Basloe Common: 15,000,000 Series B: 500,000 0.94%28.37 % % David Lieberthal Series B: 150,000 % % Ben Hoehn Common: 2,500,000Series B: 250,000 0.16%14.18 % % Ben Bingham Series B: 150,000 % % Jordan Stroum Series B: 125,000 % % Gregory Jung Series B: 125,000 % % All Votes Cast (5 persons) Common: 32,500,000Series B: 1,762,500 2.04%100.00 % % Percent of Class is based on 1,594,496,703 shares of common stockand1,762,500 shares of Series B Preferred Stock issued and outstanding as of January 4, 2016. Address of all officers and directors is 760 Route 10, Suite 203, Whippany, New Jersey The applicable percentage of ownership for each beneficial owner is based on 3,356,996,703 total votes as a result of 1,594,496,703 shares of common stock outstanding as of January 4, 2016, and 1,762,500 shares of Series B Preferred Stock, with one thousand votes for every share, outstanding as of January 4, 2016. In calculating the number of shares beneficially owned (not owned for voting purposes) by a stockholder and the percentage of ownership of that stockholder, shares of common stock issuable upon the exercise of options or warrants, or the conversion of other securities held by that stockholder, that are exercisable within 60 days, are deemed outstanding for that holder; however, such shares are not deemed outstanding for computing the percentage ownership of any other stockholder. INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON No director, executive officer, nominee for election as a director, associate of any director, executive officer or nominee or any other person has any substantial interest, direct or indirect, by security holdings or otherwise, in the proposed reverse stock split of the Company's common stock and of those shares or in any action covered by the related resolutions adopted by the Board of Directors, which is not shared by all other stockholders. FORWARD-LOOKING STATEMENTS This Information Statement may contain certain “forward-looking” statements (as that term is defined in the Private Securities Litigation Reform Act of 1995 or by the U.S. Securities and Exchange Commission in its rules, regulations and releases) representing our expectations or beliefs regarding our company. These forward-looking statements include, but are not limited to, statements concerning our operations, economic performance, financial condition, and prospects and opportunities. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “might,” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements, by their nature, involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors, including factors discussed in this and other of our filings with the U.S. Securities and Exchange Commission. WHERE YOU CAN FIND MORE INFORMATION We are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and in accordance with the Securities Exchange Act, we file periodic reports, documents, and other information with the Securities and Exchange Commission relating to our business, financial statements, and other matters. These reports and other information may be inspected and are available for copying at the offices of the Securities and Exchange Commission, treet, N.E., Washington, DC 20549. Our SEC filings are also available to the public on the SEC’s website athttp://www.sec.gov. INCORPORATION OF FINANCIAL INFORMATION We incorporate by reference our Annual Report on Form 10-K for fiscal year ended December 31, 2014 and our Quarterly Reports on Forms 10Q for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THIS INFORMATION STATEMENT IS FOR INFORMATIONAL PURPOSES ONLY. PLEASE READ THIS INFORMATION STATEMENT CAREFULLY. Dated: January 18, 2016 By Order of the Board of Directors /s/ David Cunic Chief Executive Officer and Director

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Schedule 13G Under the Securities Exchange Act of 1934 (Amendment No.: 4 )* Name of issuer: SEACOR Holdings Inc Title of Class of Securities:Common Stock CUSIP Number:811904101 Date of Event Which Requires Filing of this Statement: December 31, 2015 Check the appropriate box to designate the rule pursuant to which this Schedule is filed: (X) Rule 13d-1(b) ( ) Rule 13d-1(c) ( ) Rule 13d-1(d) *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (Continued on the following page(s)) 13G CUSIP No.:811904101 1.NAME OF REPORTING PERSON S.S.

CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in this Post-Effective Amendment No. 48 to Registration Statement No. 333-83516 of Sun Life of Canada (U.S.) Variable Account F on Form N-4 of our report dated April 24, 2013 related to the statutory-basis financial statements of Sun Life Assurance Company of Canada (U.S.) (the “Company”) as of December 31, 2012 and 2011 and for each of the three years in the period ended December 31, 2012 (which report expresses an unmodified opinion in accordance with accounting practices prescribed or permitted by the Insurance Department of the State of Delaware and includes an emphasis-of-matter paragraph relating to the Company’s adoption of Statement of Statutory

HPIL Holding Announces Change in Business Activities. SAGINAW, MI, September 11, 2012 HPIL Holding (the "Company") (OTCQB: HPIL) (Pinksheets: HPIL) is pleased to announce the change in the focus of the Company's business. From this point forward the Company is in the business of Miscellaneous Investing (Investors, NEC - SIC Code: 6799). The Company is a worldwide diversified holding company. The Company is focused on investing in both private and public companies in differing business sectors. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, seeks to acquire various types of business. Also the Company will continue to look at the acquisition of intellectual properties and technologies, with a particular interest in the healthcare and environmental quality sectors. Mr. Louis Bertoli, President & C.E.O. said: “We are concentrating on developing the Company and we are currently actively evaluating purchases”. Nitin Amersey, C.F.O. and Corporate Secretary & Treasurer, said: “We are actively analyzing information on our target Companies and we look forward to completing these transactions”. Safe Harbor: This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (The "Act"). In particular, when used in the preceding discussion, the words "pleased," "plan," "confident that," "believe," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, general acceptance of the Company's products and technologies, competitive factors, the ability to successfully complete additional financings and other risks described in the Company's SEC reports and filings. Contact: For more information, please contact:

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 20, 2014 EXLSERVICE HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 001-33089 82-0572194 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 280 Park Avenue, 38th Floor New York, New York 10017 (Address of principal executive offices) Registrant’s telephone number, including area code:(212)277-7100 NOT APPLICABLE (Former name or address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions: ¨ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under theExchange Act (17 CFR 240.13e-4(c)) Item 5.02.Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On June 20, 2014, Mr. William Bloom resigned from his position as President, Global Client Services of ExlService Holdings, Inc. (the “Company”), effective as of July 18, 2014. Item 5.07.Submission of Matters to a Vote of Security Holders. On June 20, 2014, theCompany held its annual meeting of stockholders.At the meeting, stockholders voted on the following items: (1) the election of three Class II members of the Board of Directors of the Company, (2)the ratification of the selection of Ernst & Young LLP as the independent registered public accounting firm of the Company for fiscal year 2014, (3) the approval of the compensation of the named executive officers of the Company and (4) the approval of the performance-based provisions of the 2006 Omnibus Award Plan for Section 162(m) purposes. Eachof the three nominees for election to the Board of Directors wasduly elected to serve as a director until the annual meeting of stockholders in 2017 or untilhis or hersuccessoris duly elected and qualified in accordance with the by-laws of the Company. The final results of the voting were as follows: Nominees For Withhold Broker Non-Votes David B. Kelso Clyde W. Ostler Som Mittal The proposal to ratify the selection of Ernst & Young LLP as the independent registered public accounting firm of the Company for fiscal year 2014 was approved. The final results of the voting were as follows: For Against Abstain Broker Non-Vote - The proposal to approve the compensation of the named executive officers of the Company was approved.The final results of the voting were as follows: For Against Abstain Broker Non-Vote The proposal to approve the performance-based provisions of the 2006 Omnibus Award Plan for Section 162(m) purposes were approved.The final results of the voting were as follows: For Against Abstain Broker Non-Vote 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EXLSERVICE HOLDINGS, INC. (Registrant) Date:June 23, 2014 By: /s/ Nancy Saltzman Name: Nancy Saltzman Title: Executive Vice President, General Counseland Secretary 3

EXHIBIT 99.1 Bezeq - The Israel Telecommunication Corp. Ltd. (the “Company”), To: The Tel Aviv Stock Exchange The Israeli Securities Authority Immediate Report - Bezeq International Workers Organization The Company received a notice from its subsidiary, Bezeq International Ltd. (hereinafter, "Bezeq International") that it had been notified by the New General Federation of Labor (hereinafter, the "Histadrut") that more than a third of Bezeq International employees have chosen to join the Histadrut, and that it therefore constituted a representative employee organization among Bezeq International employees. Bezeq International will examine the Histadrut's notice, including the membership forms, as required by law. The above information constitutes a translation of Immediate Report published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.

  Exhibit 10.4 CONVERTIBLE PROMISSORY NOTE $100,000.00 Dated:   September 26, 2005      FOR VALUE RECEIVED, SmartVideo Technologies, Inc., a Delaware corporation (the “Company”), hereby promises to pay to Glenn Singer, an individual and resident of the State of Florida, with a mailing address of 552 North Island Drive, Golden Beach, Florida 33160 or his assigns (the “Lender”) the principal amount of One Hundred Thousand Dollars ($100,000.00), together with interest accrued thereon calculated from the date hereof in accordance with the provisions of this Note.      Interest from the date hereof on the principal amount outstanding hereunder from time to time until maturity, and after the maturity hereof until paid, shall be payable at a rate of eight percent (8%) per annum. Interest shall be calculated on a year of 360 days based upon the actual number of days elapsed. After the occurrence of an Event of Default, as defined below, until this Note is paid in full or the Event of Default is satisfied or cured, as applicable, interest on the principal amount outstanding from time to time shall be payable at twelve percent (12%) per annum.      In addition, the Company shall issue to the Lender, a Warrant to purchase 33,333 shares of Common Stock, par value $.001 per share at an exercise price of $2.00 per share.      Except as otherwise described herein, principal together with all accrued and unpaid interest thereon shall be payable in a single installment one year from the date of this Note. Principal and interest shall be paid in lawful money of the United States of America in immediately available funds at the address of Lender as first set forth above or at such other place as Lender may from time to time designate.      The unpaid principal balance of this Note may be prepaid in whole or in part at any time and from time to time without premium or penalty. Each prepayment amount with respect to this Note shall be applied first to the principal balance of this Note and then to the accrued and unpaid interest of this Note.      Upon the closing of the first capital raising transaction in which the Company receives gross proceeds of at least Two Million Five Hundred Thousand Dollars ($2,500,000.00) from the sale of its equity securities as contemplated between the Company and Lender (a “Qualified Financing”), the principal amount outstanding under this Note shall convert into shares or units of the equity securities sold in the Qualified Financing at a per share sale price or unit sale price equal to the per share sale price or unit sale price of the Qualified Financing (the “Purchase Price”). Each dollar of principal amount then outstanding under this Note shall constitute a dollar of Purchase Price for the Qualified Financing equity securities. At the time of conversion, Lender shall have the option of converting all accrued and unpaid interest on the same terms as the conversion of principal herein, alternatively the Company may pay accrued and unpaid interest in cash at the time of conversion.      In the event the Qualified Financing as contemplated by the Company and the Lender does not occur, the Lender shall have the right to convert the into shares of the Company’s     common stock at a per share price equal to closing price on the date the conversion notice is received by the Company. At the time of conversion, Lender shall also have the option of converting all accrued and unpaid interest on the same terms as the conversion of principal herein. For purposes of this provision, the shares issuable on conversion will be issued as restricted shares with the appropriate restrictive legend(s) and shall have piggy-back registration rights to be included in the Company’s next registration statement.      The Lender understands and agrees that the conversion of the Notes into equity securities of the Company may require the execution of certain agreements (in form reasonably agreeable to the Lender) relating to the purchase and sale of such securities as well as registration, co-sale, and voting rights, if any, relating to such equity securities.      If any payment on this Note shall be due on a Saturday, a Sunday, or a day which is a legal holiday, the payment shall be made without default on the next succeeding day which is a business day, but any interest-bearing portions of the payment shall continue to accrue interest until payment during the extension.      Failure to pay, when due, the principal, any interest or any other sum payable with respect to the Note, and continuance of the failure for five (5) business days after the date on which the principal, installment of interest or other sum is due (whether upon maturity hereof, upon any prepayment date, upon acceleration, or otherwise) shall constitute an event of default (“Event of Default”) with respect to this Note. Upon an Event of Default, the interest rate payable in respect of this Note shall increase from the date of the Event of Default from eight percent (8%) to twelve percent (12%) until the Event of Default shall be satisfied or cured.      The Company agrees to pay to Lender and reimburse Lender for any and all reasonable costs and expenses, including attorney’s fees and court costs, if any, incurred by Lender in connection with the enforcement or collection hereof, both before and after the commencement of any action to enforce or collect this Note, but whether or not any such action is commenced by Lender. The Company waives presentment, protest and demand, notice of protest, notice of dishonor and nonpayment of this Note and expressly agrees that this Note or any payment hereunder may be extended from time to time without in any way affecting the liability of the Company hereunder.      The rights and remedies of Lender hereunder, shall be cumulative and concurrent and may be pursued singularly, successively or together at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur, and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release of the same or any other right or remedy.      The Company hereby declares, represents, and warrants that the indebtedness evidenced hereby is made for the purpose of acquiring or carrying on a business, professional, or commercial activity.      The Lender represents that he is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Exchange Act.      After all principal of, and accrued interest at any time owed on, this Note have been paid in full, or converted pursuant to the terms of this Note, this Note will be surrendered to the Company for cancellation and will not be reissued. -2-        This Note may be assigned by Lender or any subsequent lender at anytime or from time to time, provided, however, that without the prior written consent of the Company this Note may not be assigned by Lender: (a) during the six (6) month period following the date hereof; or (b) to any competitor of the Company. This Note shall inure to the benefit of and be enforceable by Lender and Lender’s successors and assigns and any other person to whom Lender or any subsequent lender may grant an interest in the Company’s obligations hereunder, and shall be binding and enforceable against the Company and the Company’s successors and assigns. Upon any sale, assignment, transfer or negotiation of this Note by Lender, the subsequent lender hereof shall notify the Company of such sale, assignment, transfer or negotiation at the Company’s address shown above, or at such other address as the Company may designate by written notice to Lender. Upon receipt of that notice, the subsequent lender shall become a Lender of this Note and shall be entitled to future payments of principal and interest and other distributions under this Note, provided that the right to acquire shares or units of equity securities of the Company pursuant hereto shall terminate.      This Note shall be governed by and construed in accordance with the domestic laws of the State of Georgia, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Georgia or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Georgia. Notwithstanding any other provisions of this Note or any other instrument or document executed in connection therewith, it is expressly agreed and understood that the Company does not intend or expect to pay, nor does the Lender intend or expect to charge, accept or collect any interest which, when added to any other charge upon the principal, shall be in excess of the highest lawful rate allowable under the laws of the State of Georgia. Should acceleration, prepayment or any other charges upon the principal or any portion thereof result in the computation or earning of interest in excess of the highest lawful rate allowable under the laws of the State of Georgia, any and all such excess is hereby waived and shall be credited to the outstanding principal balance or returned to the Company.      IN WITNESS WHEREOF, the undersigned have duly executed this Note, or have caused this Note to be duly executed on their behalf, as of the day and year first hereinabove set forth.             SMARTVIDEO TECHNOLOGIES, INC., a Delaware corporation       By:   /s/ Richard E. Bennett, Jr.         Richard E. Bennett, Jr.        President & CEO      -3-

EXHIBIT 10 (p) CHANGE IN CONTROL AGREEMENT As Amended and Restated Effective January 1, 2009 THIS AGREEMENT, effective as of                          (the “Effective Date”), is between Computer Task Group, Incorporated, a New York corporation with its executive offices at 800 Delaware Avenue, Buffalo, New York 14209 (the “Corporation”), and                          , an individual residing at                                               (the “Executive”). The Agreement is amended and restated effective January 1, 2009. RECITALS: WHEREAS, the Executive is employed by the Corporation; and WHEREAS, it is in the best interests of the Corporation to reinforce and encourage the Executive’s continued disinterested full attention and undistracted dedication to the duties of the Executive currently and in the potentially disturbing circumstances of a possible change in control of the Corporation by providing some degree of personal financial security to the Executive; and WHEREAS, it is in the best interests of the Corporation to enable the Executive, without being influenced by the uncertainties of the Executive’s own situation, to assess and advise the Corporation whether proposals concerning any potential change in control are in the best interests of the Corporation and its shareholders and to take other action regarding these proposals as the Corporation might determine to be appropriate; and WHEREAS, to induce the Executive to remain in the employ of the Corporation, the Board of Directors has determined it is desirable to pay the Executive the compensation set forth below if the Executive’s employment with the Corporation terminates in one of the circumstances described below in connection with a change in control of the Corporation; and WHEREAS, this Agreement has been amended and restated effective January 1, 2009 to comply with final regulations promulgated under Internal Revenue Code (“Code”) Section 409A and shall be construed to the extent practicable so as to avoid causing any amounts payable to the Executive hereunder to be includable in his gross income under Code Section 409A(a)(1). NOW, THEREFORE, in consideration of the promises and of the covenants contained in this Agreement, the Corporation and the Executive agree as follows: DEFINITIONS. The following definitions apply for purposes of this Agreement. (a) “Aggregate Exercise Price” means: (i) in the case of options to acquire common stock of the Corporation owned by the Executive, the total amount of cash or immediately available funds the Executive would be required to pay to the Corporation to purchase all of the common stock of the Corporation that, on the date as of which the Aggregate Exercise Price is to be determined, the Executive is entitled to purchase under the terms of all issued, outstanding and unexercised options to purchase common stock of the Corporation that are outstanding and exercisable on the date as of which the Aggregate Exercise Price of those options is to be determined; and (ii) in the case of options to acquire Successor Equity, the total amount of cash or immediately available funds the Executive would be required to pay to the Successor to   91 purchase all the Successor Equity that, on the date as of which the Aggregate the terms of all issued, outstanding and unexercised options to purchase Successor Equity that are outstanding and exercisable on the date as of which the Aggregate Exercise Price of those options is to be determined. (b) “Built in Gain” means an amount equal to: (i) the Highest Sale Price as of the date of a Change in Control multiplied by the total number of shares of common stock of the Corporation that the Executive could acquire by exercising all of the options to acquire common stock of the Corporation that, as of the date of the Change in Control, were issued to the Executive, outstanding and unexercised, minus (ii) the Aggregate Exercise Price of those options. (c) “Board of Directors” or “Board” means the Board of Directors of the Corporation. (d) “Cause” means a finding by the Board of Directors, with notice in writing to the Executive setting forth in reasonable detail its reasons, that any of the following conditions exist: (i) The Executive’s willful and continued failure substantially to perform his duties as an executive employee of the Corporation (other than as a result of the Executive’s Disability). (ii) A willful act or omission by the Executive constituting fraud or other malfeasance, including without limitation acts of dishonesty constituting a felony offense under the laws of the United States or any state thereof, and any act or omission by the Executive constituting immoral conduct, which in any such case is injurious to the financial condition or business reputation of the Corporation. (iii) A material breach by the Executive of the provisions of his agreement with the Corporation relating to confidentiality and proprietary information and trade secrets. For purposes of this definition, an act or failure to act will be deemed “willful” only if it is effected by the Executive not in good faith and without a reasonable belief that his action or failure to act was in or not opposed to the Corporation’s best interests. (e) “Change in Control” means any one of the following occurrences: (i) Approval by the stockholders of the Corporation of the dissolution or liquidation of the Corporation; (ii) Approval by the stockholders of the Corporation of an agreement to merge or consolidate, or otherwise reorganize, with or into one or more entities that are not Subsidiaries or other affiliates, as a result of which less than two-thirds of the outstanding voting securities of the surviving or resulting entity immediately after the reorganization are, or will be, owned, directly or indirectly, by stockholders of the Corporation immediately before such reorganization (assuming for purposes of such determination that there is no change in the record ownership of the Corporation’s securities from the record date for such approval until such reorganization and that such record owners hold no securities of the other parties to such reorganization, but including in such determination any securities of the other parties to such reorganization held by affiliates of the Corporation);   92 (iii) Approval by the stockholders of the Corporation of the sale of substantially all of the Corporation’s business and/or assets to a person or entity that is not a Subsidiary or other affiliate; or (iv) Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended from time to time, but excluding any person described in and satisfying the conditions of Rule 13d-1(b)(1) thereunder), other than the Corporation, any Subsidiary of the Corporation, any employee benefit plan of the Corporation or of any of its Subsidiaries or any Person holding common shares of the Corporation for or pursuant to the terms of any such employee benefit plan, becomes the beneficial owner (as defined in Rule Corporation representing more than 20% of the combined voting power of the Corporation’s then outstanding securities entitled to then vote generally in the election of directors of the Corporation; or (v) During any period not longer than two consecutive years, individuals who at the beginning of such period constituted the Board cease to constitute at least a majority thereof, unless the election, or the nomination for election by the Corporation’s stockholders, of each new Board member was approved by a vote of at least three-quarters of the Board members then still in office who were Board members at the beginning of such period (including for these purposes, new members whose election or nomination was so approved). (f) “Code” means the Internal Revenue Code of1986, as amended. (g) “Conversion Options” means an option or options to purchase Successor Equity, which option or options may be granted by the Successor to the Executive and are exercisable in full immediately following the Change in Control for an Aggregate Exercise Price that does not exceed the Aggregate Exercise Price of the options to purchase common stock of the Corporation owned by the Executive on the date of the Change in Control and which options, if exercised by the Executive in full immediately following that Change in Control, would provide for the ownership by the Executive of Successor Equity that, immediately following the acquisition of that Successor Equity by the Executive, may be sold by the Executive, free of any restrictions imposed on the sale of securities by the Securities Act of 1933, and which satisfy the requirements of Regulation §1.409A-1(b)(5)(v)(D) so that the exchange of options to purchase stock of the Corporation for Conversion Options will not be treated as the grant of a new stock right or change in the form of payment for purposes of said Regulation. Under no circumstances is the Executive required to accept a grant of Conversion Options from the Successor. (h) “Corporation” means Computer Task Group, Incorporated. (i) “Disability” means a disability that exists for a period of at least 6 months and because of which the Executive is physically or mentally unable to substantially perform his regular duties as an executive employee of the Corporation. (j) “Good Reason” means the occurrence of one or more of the following events, provided that the Executive shall give the Corporation a written notice, within 90 days following the initial occurrence of the event, describing the event that the Executive claims to be Good Reason and stating the Executive’s intention to terminate employment unless the Corporation takes appropriate corrective action: (i) A material diminution in the Executive’s responsibilities, duties, role or authority within the business organization. (ii) A material reduction by the Corporation in the Executive’s annual base salary as in effect on the date of a Change in Control or as in effect thereafter if that base salary has been increased.   93 (iii) A material reduction by the Corporation in the aggregate value of benefits provided to the Executive, as in effect on the date of a Change in Control or as in effect after that date if those benefits have been increased. “Benefits” includes all profit sharing, 401(k), retirement, pension, health, medical, dental, disability, insurance, automobile, severance, vacation, leave, reimbursement, and similar benefits. (iv) A material breach by the Corporation of any provision of this Agreement or of any other agreement requiring the payment of compensation to the Executive. (v) Removal from, or failure to re-elect, the Executive to the position of Senior Vice President, Secretary and General Counsel. (vi) A requirement, in the Executive’s reasonable judgment, that the services required to be performed by the Executive would necessitate the Executive moving his residence at least 50 miles from the Buffalo, New York area. The Corporation shall have 30 days following the date of receipt of the written notice from the Executive stating his claim of Good Reason in which to take appropriate corrective action. If the Corporation does not correct the Good Reason condition, the Executive’s Good Reason termination will be deemed to have occurred on the day following the 30-day period. (l) “Highest Sale Price” means: (i) with respect to the common stock of the Corporation, the highest closing sale price at which common stock of the Corporation has been sold, in an established securities market, during the 12 consecutive month period ending on the date as of which the Highest Sale Price of the common stock of the Corporation is to be determined; and (ii) with respect to Successor Equity, the highest closing sale price at which Successor Equity has been sold, in an established securities market, during the 12 consecutive month period ending on the date of which the Highest Sale Price of the Successor Equity is to be determined. (m) “Regulation” means Treasury Regulations promulgated under Code Section 409A as amended. (n) “Subsidiary” means any corporation or other entity a majority of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation. (o) “Successor” means, the person, firm, corporation or other entity that, as a result of a Change in Control, has succeeded, directly or indirectly, to all or substantially all the assets, rights, properties, liabilities and obligations of the Corporation. (p) “Successor Equity” means capital stock or any other equity interest in the Successor. (q) “Termination of Employment” has the meaning provided in Regulation §1.409A-1(h) (1) (ii). If the Executive provides services as an independent contractor, the Executive will not be considered to have a Termination of Employment until the Executive has ceased providing services both as an employee and as an independent contractor. The preceding sentence shall not apply with respect to nonqualified deferred compensation plan in which the Executive participates as an employee to the extent that the Executive’s sole activity as an independent contractor with respect to the Corporation is to serve on the Corporation’s Board of Directors.   94 BENEFITS UPON CHANGE IN CONTROL. The Corporation will provide the benefits listed below in Sections 0(a) and 0(b) on a Change in Control. All amounts payable on a Change in Control under all subsections of this Section will be made by bank check or wire transfer at the Change in Control, or, if that is not within the control of the Corporation, not later than the tenth business day following the Change in Control except as otherwise provided in Section 0(a) or 0(b). For purposes of this Section, references to payments by the Corporation include payments from any entity related to the Corporation, such as the Corporation’s Stock Employee Compensation Trusts. (a) STOCK RIGHTS. As of the date of the Change in Control, the Executive will become fully vested in, and entitled to exercise immediately all stock-related awards he has been granted under any plans or agreements of the Corporation, including without limitation, awards under the 1991 Stock Option Plan and the 2000 Equity Award Plan, other than any stock-related award that constitutes a “deferral of compensation” within the meaning of Code Section 409A and the Regulations. The Executive will be entitled to exercise all these awards for a period of not less than 12 months following the Change in Control provided that such exercise period shall not in any event extend beyond the last day of the original exercise period of the relevant stock-related award. The acceleration of vesting and exercisability under this Section will apply notwithstanding any provision in the 2000 Equity Award Plan or any other plan or agreement that would prevent the acceleration and vesting of the awards or cause them to be canceled, rescinded or otherwise impaired. (b) DEFERRED COMPENSATION. All deferred or otherwise contingent compensation of the Executive will become (i) vested and (ii) immediately payable in cash provided, however, that any such compensation that constitutes deferred compensation within the meaning of Code Section 409A and the Regulations thereunder shall be payable only at the time and in the manner provided under the relevant deferred compensation plan. For purposes only of (ii) in the preceding sentence, a Change in Control under Section 0(e) (ii) will be determined only by substituting 70% for 50% in that Section 0(e) (ii). BENEFITS UPON TERMINATION. The Corporation will provide the benefits listed below in Sections 0(a) through (f) on the termination of the Executive’s employment by the Corporation for any reason other than Cause or by the Executive for Good Reason (“Involuntary Termination”) in either case within 6 months before a Change in Control or within 24 months after a Change in Control. For purposes of this Section, references to payments by the Corporation include payments from any entity related to the Corporation, such as the Stock Employee Compensation Trusts. Also, references to payments by the Successor include payments from the Corporation’s Stock Employee Compensation Trusts if those trusts are permitted to make the payments. (a) SALARY. The Executive will receive two (2) times his or her full rate of salary, (whether or not deferred) on the date immediately prior to the Change in Control or, if greater, the amount in effect at any date after the Change in Control. (b) BONUS. The Executive will receive a cash bonus equal to two (2) times the average annual bonus payable (whether or not deferred) to him or her in the 3 calendar years preceding the year in which the Change in Control occurs. (c) FRINGE BENEFITS. The Executive will receive a lump sum payment equal to 25% of the sum of (i) one times his full rate of salary, as defined in Section 0(a), and (ii) highest annual bonus, as defined in Section 0(b). This payment represents the value to which the parties agree the Executive otherwise would be entitled with respect to fringe benefits (including without limitation profit sharing, 401(k), retirement, pension, health, medical, dental, disability, insurance, automobile, severance, vacation, leave, reimbursement, and similar benefits) for 24 months. Notwithstanding any payment under this Section 0(c), the Executive shall remain entitled to exercise his COBRA rights under any group health plan maintained by the Corporation or the Successor as applicable.   95 (d) INDEMNIFICATION. For a 60-month period following the date of the Executive’s termination of employment, the Corporation will continue any indemnification agreement with the Executive and will provide directors’ and officers’ liability insurance insuring the Executive that coverage will have limits and scope of coverage not less than that in effect immediately prior to the Change in Control. (e) CASH-OUT OF STOCK OPTIONS AND OTHER EQUITY-RELATED COMPENSATION. (i) IN CORPORATION. If the Executive continues to own, on the later of the date of his Termination of Employment or the date of the Change in Control (the “Determination Date”), unexercised options to purchase common stock of the Corporation, the options shall be cancelled, and the Executive shall receive a lump sum amount equal to: (A) the Highest Sale Price of the common stock of the Corporation determined as of the Determination Date; MULTIPLIED BY (B) the aggregate number of shares of common stock of the Corporation the Executive is entitled to purchase pursuant to the terms of all unexercised options to purchase any common stock of the Corporation owned by the Executive on the Determination Date; MINUS (C) the Aggregate Exercise Price of the issued and outstanding unexercised options to purchase common stock of the Corporation owned by the Executive on the Determination Date. (ii) IN SUCCESSOR. If Executive owns, on the later of the date of his Termination of Employment (the “Determination Date”), unexercised Conversion Options, the Conversion Options shall be cancelled, and the Executive shall receive a lump sum amount equal to: (A) the Highest Sale Price, determined as of the Determination Date, of each unit of Successor Equity that could be acquired by the Executive on the exercise of all outstanding Conversion Options; MULTIPLIED BY (B) the aggregate number of units of Successor Equity the Executive is entitled to purchase pursuant to the terms of all Conversion Options owned by the Executive and exercisable on the Determination Date; MINUS Conversion Options. (f) TIME OF PAYMENT. Payments under subsections (a), (b), (c) and (e) of this Section 0 shall be made on the day following the six month anniversary of the Executive’s Termination of Employment. (g) ESTABLISHMENT OF RABBI TRUST. On or before the date of a Change in Control or, if later, on or before the date of the Executive’s Termination of Employment, the Corporation shall transfer cash and/or liquid assets having a value equal to the amounts that will become payable to the Executive under subsection (a), (b), (c) and (e) of this Section 0 to an irrevocable grantor trust established with a bank trustee that is reasonably acceptable to the Executive. The trust agreement shall be similar to the form of agreement provided in IRS Revenue Procedure 92-64 (concerning rabbi trusts) and shall provide that no amount held in the trust shall revert to the Corporation or its Successor or be used for any other purpose (other than the payment of the Corporation’s creditors in the event of its insolvency) until the amounts that will become payable to the Executive under subsections (a), (b), (c) and (e) of this Section 0 have been paid.   96 WITHHOLDING. The Corporation will deduct or withhold from all salary and bonus payments, and from all other payments made to the Executive pursuant to this Agreement, all amounts that may be required to be deducted or withheld under any applicable Social Security contribution, income tax withholding or other similar law now in effect or that may become effective during the term of this Agreement. OTHER TERMINATION. Upon termination of the Executive’s employment for Cause or because of death or Disability, or not within the time related to a Change in Control as described in Section 0, no benefits will be payable under this Agreement. NON-EXCLUSIVITY OF RIGHTS. Except as otherwise specifically provided, nothing in this Agreement prevents or limits the Executive’s continued or future participation in any benefit, incentive, or other plan, practice, or program provided by the Corporation and for which the Executive may qualify. Any amount of vested benefit or any amount to which the Executive is otherwise entitled under any plan, practice, or program of the Corporation will be payable in accordance with the plan, practice, or program, except as specifically modified by this Agreement. However, if the Executive receives the payments under Section 0, the Executive will not be entitled to any severance payments (which excludes for this purpose all types of equity-based compensation not cashed out under Section 0(e)) otherwise payable under any other agreement, plan, or practice providing for severance compensation. NO OBLIGATION TO SEEK OTHER EMPLOYMENT. The Executive will not be obligated to seek other employment or to take other action to mitigate any amount payable to him under this Agreement. SUCCESSORS. This Agreement is personal to the Executive and may not be assigned by the Executive other than by will or the laws of descent and distribution. Executive’s legal representatives or successors in interest. Notwithstanding any other provision of this Agreement, the Executive may designate a successor or successors in interest to receive any amounts due under this Agreement after the Executive’s death. A designation of a successor in interest must be made in writing, signed by the Executive, and delivered to the Corporation. Except as otherwise provided in this Agreement, if the Executive has not designated a successor in interest, payment of benefits under this Agreement will be made to the Executive’s estate. This Section will not supersede any designation of beneficiary or successor in interest made by the Executive or provided for under any other plan, practice, or program of the Corporation. This Agreement will inure to the benefit of and be binding upon the Corporation and its successors and assigns. The Corporation will require any successor (whether direct or indirect, by acquisition of assets, merger, consolidation or otherwise) to all or substantially all of the operations or assets of the Corporation or any successor, and without regard to the form of transaction used to acquire the operations or assets of the Corporation, to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no succession had taken place. As used in this Agreement, “Corporation” means the Corporation and any successor to its operations or assets as set forth in this Section that is required by this clause to assume and agree to perform this Agreement or that otherwise assumes and agrees to perform this Agreement. BENEFIT CLAIMS. In the event the Executive, or his beneficiaries, as the case may be, and the Corporation disagree as to their respective rights and obligations under this Agreement, and the Executive or his beneficiaries are successful in establishing, privately or otherwise, that his or their position is substantially correct, or that the Corporation’s position is substantially wrong or unreasonable, or in the event that the disagreement is resolved by settlement, the Corporation will pay all costs and expenses, including counsel fees, that the Executive or his beneficiaries may incur in connection therewith directly to the provider of the services or as may otherwise be directed by the Executive or his beneficiaries. The Corporation will not delay or reduce the amount of any payment provided for   97 hereunder or setoff or counterclaim against any such amount for any reason whatsoever; it is the intention of the Corporation and the Executive that the amounts payable to the Executive or his beneficiaries hereunder will continue to be paid in all events in the manner and at the times herein provided. All payments made by the Corporation hereunder will be final and the Corporation will not seek to recover all or any part of any portion of any payments hereunder for any reason. FAILURE, DELAY OR WAIVER. No course of action or failure to act by the Corporation or the Executive will constitute a waiver by the party of any right or remedy under this Agreement, and no waiver by either party of any right or remedy under this Agreement will be effective unless made in writing. SEVERABILITY. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be enforceable under applicable law. However, if any provision of this Agreement is deemed unenforceable under applicable law by a court having jurisdiction, the provision will be unenforceable only to the extent necessary to make it enforceable without invalidating the remainder thereof or any of the remaining provisions of this Agreement. NOTICE. All written communications to parties required hereunder must be in writing and (a) delivered in person, (b) mailed by registered or certified mail, return receipt requested, (such mailed notice to be effective 4 days after the date it is mailed) or (c) sent by facsimile transmission, with confirmation sent by way of one of the above methods, to the party at the address given below for the party (or to any other address as the party designates in a writing complying with this Section, delivered to the other party): Computer Task Group, Incorporated 800 Delaware Avenue Buffalo, New York 14209 Attention: General Counsel Telephone: 716-882-8000 Telecopier: 716-887-7370   98 MISCELLANEOUS. This Agreement (a) may not be amended, modified or terminated orally or by any course of conduct pursued by the Corporation or the Executive, but may be amended, modified or terminated only by a written agreement duly executed by the Corporation and the Executive, (b) is binding upon and inures to the benefit of the Corporation and the Executive and each of their respective heirs, representatives, successors and assignees, except that the Executive may not assign any of his or her rights or obligations pursuant to this Agreement, (c) except as otherwise specifically provided in this Agreement, constitutes the entire agreement between the Corporation and the Executive with respect to the subject matter of this Agreement, and supersedes all oral and written proposals, representations, understandings and agreements previously made or existing with respect to such subject matter, excluding for this purpose any non-disclosure, confidentiality and other similar agreements, and (d) will be governed by, and interpreted and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of law. TERM. (a) Except as provided in Section 0(b), this Agreement will not be terminated earlier than 36 months after its Effective Date. The Agreement will be extended automatically for additional 12-month periods unless one party notifies the other prior to the beginning of the successive 36 month period that it is terminating the Agreement. The intention of the preceding sentence is that if a party does not give notice, at least 36 months remain in the Agreement. (b) This Agreement will terminate when the Corporation has made the last payment provided for under it, including without limitation, any payments payable at any time under Sections 0 and 0. However, the indemnification obligations under Section 0(d) will survive any termination and will remain in full force and effect for the period specified. RULE GOVERNING PAYMENT DATES. In any case where this Agreement requires the payment of an amount during a period of two or more days that overlaps two calendar years, the payee shall have no right to determine the calendar year in which payment actually occurs. IN WITNESS WHEREOF, the parties have duly executed this restatement of the Agreement on the              day of             , to be effective January 1, 2009.   Computer Task Group, Incorporated By     Title     Executive     99

Exhibit CERTIFICATION I, Douglas Roth, certify that: 1. I have reviewed this quarterly report on Form10-Q of Aceto Corporation (the “Registrant”); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles; and c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and 5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. Dated:May 8, 2009 /s/ Douglas Roth Chief Financial Officer (Principal Financial and Accounting

  Exhibit 10.41                                                 Veraz Networks, Inc 926 Rock Avenue, Suite 20 San Jose, CA 95131 USA [Veraz Networks Logo]   www.veraznetworks.com     Tel:  +1-408-750-9400 Fax: +1-408-546-0081               November 29, 2007   Mr. Mike West C/O Veraz Networks, Inc.   Re:     Appointment to the Board of Directors of Veraz Networks, Inc. (“Veraz”)   Dear Mike:   I am very happy to report that, as we have previously agreed, you were appointed to the Board of Directors of Veraz (the “Board”) at a meeting held today. Additionally, you were appointed to be a member of the nominating, governance and compensation committees of the Board.   You have been automatically granted a non-statutory stock option to purchase 15,000 shares of Veraz’s common stock, at an exercise price equal to $4.85 (the closing price of Veraz common stock as of today). Additionally, the Board has granted to you 10,000 restricted stock units. Twenty-five percent (25%) of the RSUs and the shares underlying the option shall vest on each of November 30, 2008; November 30, 2009, November 30, 2010; and November 20, 2011 for so long as you continue to serve as a director, until the entire amount of the grant is vested. All additional terms, including acceleration of vesting following a Change of Control, are set forth in Veraz’ 2006 Equity Incentive Plan, a copy of which is attached hereto. A copy of the grant notice and additional documentation regarding the above-described grant will be provided within a week.   As a non-employee director of Veraz, you will receive an annual retainer of $10,000 for your services as a member of the Board, an additional annual retainer of $5,000 per committee for your services on the compensation, governance and nominating committees of the Board for a total annual retainer of $25,000. All payments will be made on a quarterly basis. Veraz will also reimburse you for your travel expenses in attending board and committee meetings.   I have also attached for your information a copy of Veraz’s standard indemnification agreement. We have entered into this agreement with all directors, officers and certain other employees. This agreement provides, among other things, that we will indemnify our directors for any and all expenses, including attorneys’ fees, in any action or proceeding arising out of service as one of our directors. Additionally, for your information, I have attached a copy of the summary of our current Director and Officer Summary of Insurance. Obviously, you will be covered by this policy immediately after joining the Board.   1.   I trust that you will find these terms and conditions consistent with our prior agreement. Please sign and date this letter below as well as the attached indemnification agreement. We look forward to a productive and enjoyable future relationship.   Very truly yours,   Veraz Networks, Inc.     By:  /s/  Douglas A. Sabella Douglas A. Sabella President and CEO   Accepted:               /s/   Mike West       1/21/08                   Date   Attachments:      2006 Equity Incentive Plan      Indemnification Agreement      Director and Officer Summary of Insurance

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 19, 2016 GREAT SOUTHERN BANCORP, INC. (Exact name of Registrant as specified in its Charter) Maryland 0-18082 43-1524856 (State or other jurisdiction of incorporation) (Commission File No.) (IRS Employer Identification Number) 1451 East Battlefield, Springfield, Missouri (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (417) 887-4400 N/A (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 7.01.Regulation FD Disclosure Set forth below is presentation material of Great Southern Bancorp, Inc., the holding company for Great Southern Bank. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. GREAT SOUTHERN BANCORP, INC. DateOctober 19, 2016 By: /s/Joseph W. Turner Joseph W. Turner President and Chief Executive Officer

EXHIBIT 99.2 VERMONT TRANSCO LLC Financial Statements December31, 2010 and 2009 (With Report of Independent Registered Public Accounting Firm Thereon) VERMONT TRANSCO LLC Table of Contents Page(s) Report of Independent Registered Public Accounting Firm 1 Balance Sheets 2 - 3 Statements of Income 4 Statements of Changes in Members'Equity 5 Statements of Cash Flows 6 - 7 Notes to Financial Statements 8 - 27 Report of Independent Registered Public Accounting Firm The Stockholder and Board of Directors Vermont Electric Power Company, Inc. as Manager of Vermont Transco LLC: We have audited the accompanying balance sheets of Vermont Transco LLC (theCompany) as of December31, 2010 and 2009, and the related statements of income, changes in members’ equity, and cash flows for each of the years in the three-year period ended December31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (UnitedStates). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Vermont Transco LLC as of December31, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the three-year period ended December31, 2010 in conformity with U.S.generally accepted accounting principles. /s/KPMG LLP March8, 2011 Vt. Reg. No. 92-0000241 VERMONT TRANSCO LLC Balance Sheets December 31, 2010 and 2009 Assets Utility plant (notes 2 and 4) $ 727,217,713 Less accumulated depreciation and amortization ) ) Net utility plant 734,388,118 629,695,166 Current assets: Cash 2,066,045 733,150 Bond sinking fund deposits 564,000 526,000 Bond interest deposits 4,537,947 4,573,388 Accounts receivable: Affiliated companies — 1,938,667 Other Due from Vermont Electric Power Company, Inc. (note 1(b)) 9,767,793 38,157,854 Note receivable – related party (note 8) 125,000 925,000 Note receivable – Vermont Electric Power Company, Inc. (note 8) — 10,000,000 Materials and supplies 7,333,500 6,248,996 Prepaids and other assets 1,143,965 1,562,514 Total current assets 34,505,635 71,628,767 Regulatory and other assets: Regulatory assets 3,659,535 4,230,885 Unamortized debt expense, net 2,563,063 2,712,165 Deferred project costs and other 5,740,634 3,156,985 Total regulatory and other assets 11,963,232 10,100,035 Total assets $ 711,423,968 (Continued) 2 VERMONT TRANSCO LLC Balance Sheets December 31, 2010 and 2009 Members’ Equity and Liabilities Capitalization: Members’ equity (note 3) $ 325,469,433 Mandatorily redeemable membership units (notes 3, 8, and 13) 10,000,000 10,000,000 First mortgage bonds, net of current maturities (note 4) 317,272,000 329,093,000 Total capitalization 734,187,930 664,562,433 Commitments and contingencies (notes 7, 11, and 13) Current liabilities: Bank overdraft 891,788 2,975,031 Current maturities of long-term obligations (note 4) 11,821,000 2,313,115 Accounts payable: Affiliated companies 1,236,182 1,168,310 Other Accrued interest 4,563,321 4,575,485 Accrued construction expenses 4,699,609 9,961,114 Accrued expenses 2,781,167 3,917,234 Total current liabilities 33,175,418 34,085,625 Long-term liabilities: Deferred cost of removal liabilities 4,732,373 3,339,769 Deferred income 660,920 659,160 Due to Vermont Electric Power Company, Inc. (note 1(b)) 8,100,344 8,776,981 Total liabilities 46,669,055 46,861,535 Total capitalization and liabilities $ 711,423,968 See accompanying notes to financial statements. 3 VERMONT TRANSCO LLC Statements of Income Years ended December 31, 2010, 2009 and 2008 Operating revenues: Transmission revenues $ 90,649,734 73,575,150 Rent of transmission facilities to others 999,587 2,435,380 1,624,487 103,547,271 93,085,114 75,199,637 Operating expenses: Transmission expenses: Operations 4,069,124 3,369,434 3,396,212 Maintenance 6,490,760 5,625,653 4,854,048 Charges for transmission facilities of others 44,183 41,705 42,602 Administrative and general expenses 5,581,386 7,718,153 8,672,360 Depreciation and amortization 16,031,969 13,942,091 10,740,097 Taxes other than income 11,445,565 10,485,062 7,405,913 Total operating expenses 43,662,987 41,182,098 35,111,232 Operating income 59,884,284 51,903,016 40,088,405 Other (income) expenses: Interest on first mortgage bonds 18,197,213 13,477,726 11,994,760 Other interest expense 803,189 1,057,144 572,468 Amortization of debt expense 148,791 101,560 97,788 Other Interest and other income ) ) ) Allowance for borrowed funds used during construction ) ) ) Allowance for equity funds during construction ) ) ) Total other expenses, net 8,035,738 9,279,993 4,441,154 Income before tax $ 42,623,023 35,647,251 See accompanying notes to financial statements. 4 VERMONT TRANSCO LLC Statements of Changes in Members’ Equity Years ended December 31, 2010, 2009 and 2008 Total Membership units Members’ members’ Class A Class B equity equity Balances at December 31, 2007 $ 15,615,560 6,451,691 198,201,791 Issuance of membership units 22,782,180 15,900,820 — 38,683,000 Income before tax — — 35,647,251 35,647,251 Distribution of income before tax to members — — ) ) Balances at December 31, 2008 $ 31,516,380 19,245,281 249,678,381 Membership units at December 31, 2008 19,891,672 3,151,638 Balances at December 31, 2008 $ 31,516,380 19,245,281 249,678,381 Issuance of membership units 44,808,770 15,239,020 — 60,047,790 Income before tax — — 42,623,023 42,623,023 Distribution of income before tax to members — — ) ) Balances at December 31, 2009 $ 46,755,400 34,988,543 325,469,433 Membership units at December 31, 2009 24,372,549 4,675,540 Balances at December 31, 2009 $ 46,755,400 34,988,543 325,469,433 Issuance of membership units 61,687,300 6,274,980 — 67,962,280 Income before tax — — 51,848,546 51,848,546 Distribution of income before tax to members — — ) ) Balances at December 31, 2010 $ 53,030,380 48,472,760 406,915,930 See accompanying notes to financial statements. 5 VERMONT TRANSCO LLC Statements of Cash Flows Years ended December 31, 2010, 2009 and 2008 Cash flows from operating activities: Income before tax $ 42,623,023 35,647,251 Adjustments to reconcile income before tax to net cash provided by operating activities: Depreciation and amortization 15,460,619 13,370,741 10,168,747 Amortization of regulatory assets 571,350 571,350 571,350 Amortization of debt expense 148,791 101,560 97,788 Changes in assets and liabilities: Accounts receivable ) ) ) Materials and supplies ) 435,812 ) Regulatory assets — — — Accounts payable ) 3,772,475 2,099,253 Due from related party — ) 13,847,108 Other assets and liabilities ) 1,975,888 3,104,015 Net cash provided by operating activities 59,213,859 61,021,796 64,553,869 Cash flows from investing activities: Change in bond sinking fund deposits ) ) ) Advances to repayments of related party 10,800,000 ) ) Capital expenditures, including interest capitalized ) ) ) Net cash used in investing activities ) ) ) Cash flows from financing activities: Change in bank overdraft ) 1,380,293 ) Proceeds from bond issuance — 135,000,000 — Repayment of bonds ) ) ) Debt issue costs 311 ) ) Borrowings of notes payable to bank — — 20,857,520 Repayments of notes payable to bank — ) — Repayment of other long-term debt ) ) ) Due from Vermont Electric Power Company, Inc., net 27,713,424 ) — Issuance of membership units 67,962,280 60,047,790 38,683,000 Issuance of mandatorily redeemable membership units — — 10,000,000 Distribution of income before tax to members ) ) ) Net cash provided by financing activities 52,915,328 106,082,914 44,143,483 Net increase (decrease) in cash 1,332,895 660,250 ) Cash, beginning of year 733,150 72,900 129,287 Cash, end of year $ 733,150 72,900 (Continued) 6 VERMONT TRANSCO LLC Statements of Cash Flows Years ended December 31, 2010, 2009 and 2008 Supplemental disclosures of cash flow information: Cash paid for interest, net of amounts capitalized $ 7,830,970 9,392,394 Noncash investing activity: In 2010, 2009, and 2008, the Company recorded accrued construction expenses of $(7,725,685), $(337,977), and $(8,698,749), respectively. See accompanying notes to financial statements. 7 VERMONT TRANSCO LLC Notes to Financial Statements December31, 2010 and 2009 Summary of Significant Accounting Principles (a) Description of Business On June2, 2006, VT Transco LLC (theCompany) was formed as a Vermont Limited Liability Company. The Company became operational effective June30, 2006. The Company’s purpose is to plan, construct, operate, own, and maintain electric transmission and related facilities to provide for an adequate and reliable transmission system that meets the needs of all users on the system and supports equal transmission access to a competitive wholesale electric energy market. The Company is subject to regulation by the Federal Energy Regulatory Commission (FERC) as to rates, terms of service and financing and by state regulatory commissions as to other aspects of business, including the construction of electric transmission assets. The largest owners of membership units are as follows: VELCO 9