Document:

ABC News Production / Distribution Agreement, dated June 12, 2007

 Exhibit 10.3 
 PRODUCTION/DISTRIBUTION AGREEMENT 
 This Production/Distribution Agreement (this “Agreement”) is
entered into as of June 12, 2007 (the “Effective Date”), between American Broadcasting Companies, Inc., a Delaware corporation (“ABC”) and Radio Networks, LLC, a Delaware limited liability company (“Distributor”).

 ABC operates a news service under the name “ABC News.” ABC desires to produce a radio version of its ABC News service and
Distributor desires to distribute it to its radio station affiliates, all as set forth in and pursuant to this Agreement. 
 The parties
agree as follows: 
  

	1.	Definitions 

  

	 	1.1.	“ABC” has the meaning set forth in the preamble. 

  

	 	1.2.	“ABC Indemnitees” has the meaning set forth in Section 10.2. 

  

	 	1.3.	“Affiliate” shall mean with respect to any entity, any other person or entity, controlling, controlled by, or under common control with such entity, where control shall
mean the possession of the power or right to cause or direct the management or policies of such entity. 

  

	 	1.4.	The phrase “all media” as used in this agreement means all media now known or hereafter devised. 

  

	 	1.5.	“Change in Control” has the meaning set forth in Section 7.2 

  

	 	1.6.	“CPI” shall mean the Consumer Price Index for All Urban Consumers, U.S. City Average (1982-1984=100) Unadjusted, all items indexed, published by the Bureau of Labor
Statistics United States Department of Labor. 

  

	 	1.7.	“Distributor” has the meaning set forth in the preamble. 

  

	 	1.8.	“Distributor Indemnitees” has the meaning set forth in Section 10.1 

  

	 	1.9.	“Effective Date” has the meaning set forth in the Preamble. 

  

	 	1.10.	“Indemnitees” has the meaning set forth in Section 10.3 

  

	 	1.11.	“Losses” has the meaning set forth in Section 10.1. 

  

	 	1.12.	“Marks” has the meaning set forth in Section 5.2. 

	 	1.13.	“Program” means any program, series or other content furnished by ABC to Distributor as part of the Radio Service. References herein to “Radio Service” shall be
deemed to include all Programs included therein. 

  

	 	1.14.	“Radio Service” means the English-language, audio news service produced by or on behalf of ABC pursuant to this Agreement for use by Distributor and its sublicensees
hereunder, which for purposes of clarification includes “e-prep.” 

  

	 	1.15.	“Term” has the meaning set forth in Section 7.1. 

  

	 	1.16.	“Termination Right” has the meaning set forth in Section 7.2 

  

	 	1.17.	“Territory” means the world. 

  

	2.	Production Budget 

  

	 	2.1.	The initial budget is attached hereto as Exhibit 2.1. The budget includes all production costs of the Radio Service, including, without limitation, (i) all host, performing and
producing fees; (ii) all costs of music electrical transcription licenses for any music included in the Radio Service; (iii) all actual out-of-pocket third-party expenses; and (iv) an allocation of any personnel, equipment or
facilities of ABC that is devoted to the production of the Radio Service (pro-rated if shared with other operations of ABC). At least 90 days prior to the end of each year during the Term, the parties will consult on the next annual budget. If the
parties cannot agree on the next annual budget, then the total costs and expenditures under the next annual budget will be that of the previous annual budget, increased by the CPI, and the Programs will be substantially similar to those under the
previous annual budget, subject to any changes in personnel or format for Programs required by ABC in its reasonable discretion to keep the cost of the Programs within the budgeted amount. 

  

	 	2.2.	In the event the actual production cost of the Radio Service exceeds the budgeted amount, ABC will give Distributor the opportunity to pay the amount of such overage. If Distributor
declines, ABC may reduce the Programs and other services provided pursuant to the budget; provided that ABC will make the decision as to which Programs or services to cut in consultation with Distributor. In no event will ABC be required to spend
any amount on the production of the Radio Service in excess of the amount reimbursed by Distributor. 

  

	 	2.3.	Unless otherwise agreed, Distributor will pay the annual budgeted amount to ABC on a monthly basis in advance. In addition to any other rights and remedies, ABC may suspend
production of the Radio Service during any period in which Distributor is in default on its payment obligation. ABC will provide Distributor with quarterly statements comparing production expenses to the annual budget and the payments received from
Distributor. 

  

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	 	2.4.	In the event that either party wishes to create new English-language, audio-only services for terrestrial radio under the “ABC News” brand name, then the parties will
negotiate in good faith the costs in terms of use of such additional service. 

  

	 	2.5.	ABC shall use its reasonable efforts to encourage its news talent to work with Distributor on new programming ideas. ABC shall use its reasonable efforts to prevent its staff
anchors/newspersons from providing services to a commercial competitor of ABC for an audio news program to be broadcast on terrestrial radio beyond the extent that such persons currently provide services to such entities from time to time. For the
avoidance of doubt and notwithstanding anything to the contrary, Distributor acknowledges that this provision will not prohibit individual ABC News Staff members (i) from having deals with non-commercial radio services, or (ii) from
promoting a television program on non-ABC Radio affiliates or (iii) from promoting third party ventures (e.g., a reporter doing a book tour). 

  

	 	2.6.	Subject to Section 2.2 hereof, unless otherwise agreed in writing by the parties in connection with the budget, ABC will deliver the Radio Service to Distributor in
substantially the same manner and with at least the same level of content and quality as the Radio Service is currently delivered. 

  

	3.	License Fees 

  

	 	3.1.	In addition to the payment of the budgeted amount, Distributor will pay ABC a license fee. The license fee shall be Seven Million Dollars ($7,000,000) for the first year of this
Agreement, commencing on the Effective Date. For each year thereafter during the Term, the license fee will be equal to the license fee from the previous year increased by the CPI. The license fee will be paid monthly together with the monthly
payment of the budgeted production expenses. 

  

	 	3.2.	 In addition to the budgeted amount and the license fee above, Distributor will pay ABC a fee equal to fifty percent (50%) of Net Sales (as defined below), due
and payable to ABC within thirty (30) days from the end of each calendar quarter (or the next business day after) commencing on October 30, 2007 for activity through September 30, 2007, and accompanied by statements with reasonable
detail of the Net Sales for each such quarter. Should Net Sales exceed $1,000,000 in any calendar year, ABC shall thereafter have the right to inspect and audit at its own expense, during normal business hours and no more than once every twelve
months, Distributor’s accounting books and records reasonably related to Net Sales to enable ABC to confirm the fees payable under this Section 3.2. “Net Sales” means all monies collected by Distributor arising from agreements
entered into by Distributor after June 12, 2007 for the distribution of the Radio Service as directed to listeners anywhere in the world which shall include any extensions or renewals of existing agreements for the Radio Service outside
the United States but shall exclude 

  

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any agreements entered into by Distributor for the United States, its territories and possessions, including without limitation license fees, distribution
fees, advertising sales, barter sales (valued at fair market value) and monies received from such distribution of the Radio Service in combination with other programs (with the parties to mutually agreed upon the percentage of monies be included in
Net Sales), less in each case monies credited for refunds and any advertising agency commissions. 

  

	4.	Distribution Rights and Obligations 

  

	 	4.1.	ABC hereby grants Distributor the exclusive license to promote, market and distribute the Radio Service during the Term to FCC-licensed, terrestrial radio broadcast stations in the
Territory for broadcast over over-the-air radio, which broadcast is intended for reception by the general public in places to which no admission is charged and Distributor shall use reasonable commercial efforts to promote, market and distribute the
Radio Service consistent with past levels. Distributor shall also have the right and license to redistribute whole programs (combining Radio Service elements and other elements), which Distributor has simultaneously or previously distributed through
terrestrial radio pursuant to the previous sentence, through any form or medium or distribution channel now known or hereafter devised, provided that such redistribution consists of entire programs substantially as a whole and that the portions of
the programs constituting the Radio Service are not redistributed out of the context of such programs. Such right and license shall include the right for Distributor to grant sublicenses under the rights granted hereunder. 

 

	 	4.2.	 All licenses, rights and interest in, to and with respect to the Radio Service not specifically granted to Distributor herein are retained by and reserved to ABC,
including, but not limited to, and without limiting any rights or licenses of Distributor explicitly set forth in Sections 4.1 and 4.3 and otherwise in this Agreement, (i) the right to distribute the Radio Service audio by any means of
exhibition, display, transmission, distribution, duplication, playback except as explicitly set forth in Sections 4.1 and 4.3; (ii) the right to perform the Radio Service by means of all forms of radio, television, computer and other media
devices, methods and improvements now known or hereafter devised (except as explicitly set forth in Sections 4.1 and 4.3), including, but not limited to, (a) cable transmission, (b) satellite-to-home transmission, (c) DBS (including
DARS), (d) closed circuit distribution, (e) networked telecommunications systems, including the internet, (f) audio cassettes, compact discs and computer storage and playback devices, and (g) transmissions to mobile devices; and
(iii) the right to transmit the Radio Service by means of audio-on-demand, on-line and all other forms of interactive and digital media (subject to Section 4.3). For the avoidance of doubt, the reserved rights include but are not limited
to the right to license, distribute and otherwise exploit the Radio Service by means of all media outside the Territory, as well as all rights in all media to foreign-language versions of the Radio Service (except as provided in Section 4.1 and
subject to Section 8.2). 

  

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Nothing contained herein shall in any way limiting any of the rights or licenses granted to Distributor in Sections 4.1 and 4.3 or otherwise in this
Agreement. 

  

	 	4.3.	Without limiting the rights granted in Section 4.1, Distributor will have the right to authorize any terrestrial radio station that broadcasts the Radio Service to simulcast
the portion of its signal containing the Radio Service via internet streaming, provided that such streaming is simultaneous with the terrestrial radio broadcast and contains substantially all of the terrestrial radio signal. The simulcast rights set
forth in this Section 4.3 and the redistribution rights granted in Section 4.1 are subject to ABC’s ability to clear any third party content contained therein, such as that of the Associated Press, and further subject to Distributor’s
payment of any additional third party fees required to be paid due to such streaming. ABC makes no representations or warranties regarding the rights required for distribution of the Radio Service other than by terrestrial radio and Distributor will
have the obligation of determining, in consultation with ABC, whether any additional rights clearances are required for such alternative forms of distribution. Distributor further represents and warrants that as between ABC and Distributor,
Distributor and/or any terrestrial radio station that broadcasts the Radio Service shall be responsible for any public performance license or other fees required to be paid as a result of any musical compositions contained in the Radio Service that
is transmitted over the internet or as other permitted hereunder. 

  

	 	4.4.	Distributor may sell advertising time in and around the Radio Service; provided, however, that sales of any time embedded in the Radio Service must comply with ABC’s Broadcast
Standards and Practices by ABC. Distributor shall be entitled to collect and retain all proceeds from advertising sold by it. Distributor will be responsible for the insertion of advertising into the Radio Service and ABC will be responsible only
for the insertion of event cue tones to trigger such insertion; provided, however, that ABC will not be liable for inadvertent failure to insert such event cue tones. ABC shall not sell advertising time in and around the Radio Service for its own
account or insert promotional announcements without the consent of Distributor; provided, however, that items on the Radio Service may contain credits to television programs on which material related to the items appear. 

  

	 	4.5.	 Except as expressly provided herein with respect to the insertion of advertising, Distributor shall not, and shall not permit its sublicensees to, edit, alter,
modify or juxtapose the Radio Service, except in connection with the exercise of its rights hereunder in connection with the distribution, promotion and marketing of the Radio Service as permitted hereunder and to create highlights of the Radio
Service. Without limiting the foregoing, Distributor shall have the right to authorize its sublicensees, consistent with their obligations pursuant to the applicable provisions of the Communications Act of 1934, to create highlights and to delete
any material that it reasonably believes unsuitable for broadcast and to preempt for a program of immediate and outstanding local or national importance. Notwithstanding anything to the 

  

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contrary, Distributor shall cease distribution of any highlight created in a manner that is not consistent with ordinary past practices and to which ABC
reasonably objects. 

  

	 	4.6.	Distributor shall require all of its sublicensees to be responsible for all necessary radio station licenses, including music performance rights licenses, as now are or hereafter
may be in general use by radio broadcasting stations and necessary for Station to broadcast the Radio Service and for the payment of any public performance music licenses or royalty payments which may be required to be paid to any party or
organization, such as BMI, ASCAP, SESAC, or any other like organization on account of the broadcast of the music contained in the Radio Service. 

  

	 	4.7.	Attached hereto as Exhibit 4.7 is the standard affiliation agreement to be used by Distributor in connection with Distributor’s sublicense of the Radio Service to radio
broadcasters. Distributor will give ABC at least five (5) business days prior notice of any material changes to this Agreement and will not make any material change to which ABC reasonably objects within three (3) business days of receipt
of such notice. Distributor may, for the avoidance of doubt, make changes that are consistent with the rights and licenses granted hereunder or as may be necessary to clarify any conflict between the terms of this Agreement and those of the attached
affiliation agreement. 

  

	5.	Intellectual Property 

  

	 	5.1.	As between ABC and Distributor, ABC shall own all rights, exclusively, in all media, throughout the universe, in perpetuity, including without limitation the copyrights, trademarks,
trade dress, format rights, distribution rights, and all other allied and ancillary rights in and to the Radio Service, and all elements thereof. Furthermore, ABC shall have full business, production and creative control over the development and
production decisions of the Radio Service. Distributor shall neither acquire nor assert copyright ownership or any other proprietary rights in the Radio Service or any Programs, including the format thereof and/or any logo contained therein, or in
any derivation, adaptation, variation or name thereof. Without limiting the foregoing, Distributor hereby assigns to ABC all of Distributor’s worldwide right, title and interest in and to the Radio Service and the Programs, including the format
thereof and/or logos contained therein. 

  

	 	5.2.	 Distributor acknowledges and agrees that certain proprietary intellectual property (collectively, “Marks”), including, but not limited to, the trade
names, logos, service marks, trademarks and characters used solely in connection with the Radio Service and the titles of the Programs, are the exclusive property of ABC, its Affiliates, or ABC’s program suppliers. Distributor shall not sell or
use, or authorize or intentionally assist any third party to sell or use the Marks or any Programs, in whole or in part, to sponsor, advertise, endorse or promote any product or service other than the Radio Service. All right, title and interest

  

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in and to the Marks and the Programs shall, as between the parties, at all times be the sole property of ABC, and Distributor shall not make any claim to the
contrary. 

  

	6.	Marketing and Promotional Material 

  

	 	6.1.	Distributor shall have the right to prepare marketing and promotional material for the Radio Service subject to the terms hereof. Prior to the distribution of any marketing or
promotional materials, ABC shall have the right to pre-approve in writing all advertising and promotional material created by Distributor for the Programs which approval shall not be unreasonably withheld or delayed; it being understood and agreed
that (i) once an item has been approved it shall be deemed approved for any subsequent uses permitted hereunder (unless otherwise noted at the time of initial approval and subject to (iii)); (ii) any materials supplied by ABC shall be
deemed pre-approved by ABC and shall not require any approval, except as to changes in the manner of their use or unless ABC notifies Distributor to the contrary based on changed circumstances; and (iii) if any materials used pursuant to this
Section involve or incorporate ABC logos or trademarks, Distributor shall, at all times, use the then-current version of such logo or trademark. For each Program, ABC shall, in a reasonable amount of time prior to the commencement of the License
Period for such Program deliver to Distributor any advertising, marketing, promotional and other materials that ABC, in its discretion, decides to provide in connection with the Program. Distributor shall be under no obligation to use the
advertising, marketing, promotional or other materials provided by ABC. Distributor shall not distribute any material which violates any restrictions imposed by ABC or ABC’s program suppliers and disclosed to Distributor by ABC. All approved
printed materials used by Distributor in connection with the Radio Service and the Programs, including but not limited to, advertising and promotional materials, shall bear a properly located copyright notice in the name of ABC (i.e.,
“©ABC”) or such other notice as ABC specifies to Distributor in writing. Distributor may provide such materials to its sublicensees and will use all reasonable efforts to enforce compliance with these provisions by its sublicensees.
All uses of the Marks by Distributor and its sublicensees will inure to the benefit of ABC. Notwithstanding anything to the contrary, in no event may Distributor create or use promotional or marketing material that implies the endorsement by any ABC
talent or any ABC entity of any specific product or service, other than Radio Service. 

  

	7.	Term 

  

	 	7.1.	The “Term” means the period beginning on the date hereof and ending on the later of the tenth anniversary of the Effective Date and any extension of the Term in accordance
with Section 8. In addition, any obligations of the parties which remain executory after the Term shall remain in force until expiration or discharge. 

  

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	 	7.2.	Distributor shall immediately notify ABC in writing after any Change in Control, and shall use reasonable efforts to notify ABC in writing at least fifteen (15) days prior to
the effectiveness of a Change in Control. Upon the occurrence of a Change in Control to any entity competing with any business of ABC or Disney and whether or not ABC receives notice thereof, ABC shall have the right to terminate this Agreement
immediately (“Termination Right”). The Termination Right shall expire ninety (90) days following the later of (i) effectiveness of a Change in Control or (ii) the date ABC obtains notice of the Change in Control.
“Change in Control” shall mean the acquisition, through one or a series of transactions, by a non-Affiliate of Distributor of the power or right, whether direct or indirect, to cause or direct the management or policies of Distributor.

  

	 	7.3.	Either party may terminate this Agreement, effective at any time, by giving the other party written notice, if the other party (i) has materially breached this Agreement and
such breach is not cured within sixty (60) days of such notice or (ii) becomes insolvent or bankrupt or takes any action to seek bankruptcy protection. 

  

	8.	Rights of First Negotiation 

  

	 	8.1.	The parties hereto will commence good faith, mutually exclusive negotiations to renew this Agreement no later than half-way through year eight of the Term. If no agreement has been
reached during a six months of such negotiations (i.e., by the start of year nine), then the parties will be free to negotiate with others. 

  

	 	8.2.	In the event that ABC at any time during the Term plans to produce, itself or through any other person or entity, or to otherwise, directly or indirectly, promote, market or
distribute, any audio news service primarily for terrestrial radio for Canada and/or Mexico and/or the United States for any language other than English, then ABC will promptly notify Distributor of any such plans, and ABC will negotiate in good
faith with Distributor exclusively for forty five days prior to discussing or negotiating with any third party for any such distribution services or other rights (“Terms”). Prior to agreeing to Terms with any third party, ABC will provide
written notice to Distributor outlining such Terms, whereupon Distributor shall have the right to enter into an agreement with ABC on such Terms. If Distributor does not accept the Terms outlined in any such notice within thirty (30) days of
receiving such notice from ABC, ABC will be free to enter into an agreement with respect to such Terms with any other person or entity, but only on terms that are the same as or less favorable than those Terms offered to Distributor.

  

	9.	Representations and Warranties 

  

	 	9.1.	ABC warrants, represents and covenants that during the term of this Agreement: 

  

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	 	9.1.1.	ABC has the complete and unencumbered right, power, and authority to make and enter into this Agreement and to fully perform all of the obligations to be performed by ABC hereunder,
including without limitation, to grant all rights granted in Agreement; 

  

	 	9.1.2.	Each Program, and each element thereof, will be of a high quality consistent with past standards for ABC News Radio productions; 

  

	 	9.1.3.	ABC has secured and/or will secure prior to delivery of the Programs all rights and licenses necessary for ABC’s production and delivery to Distributor of such Program. The
rights referred to in the preceding sentence shall include, without limitation, all necessary literary, artistic and/or intellectual property rights, music electrical transcription rights and privacy rights; 

  

	 	9.1.4.	ABC has paid, and/or will pay, all taxes, charges and fees relating to the production, delivery and use of any Program, except for taxes, charges and fees applicable to uses by
Distributor hereunder which will be paid directly by Distributor. On delivery of each Program, such Program will be free and clear of any encumbrance, including any lien or tax which is not subordinate and subject to all rights granted to
Distributor herein; 

  

	 	9.1.5.	No Program, nor the existence, production or any use permitted hereunder thereof or of any element thereof, will infringe on any copyright of, trademark or trade name of, violate
any right of privacy of, constitute a libel or slander against or violate or infringe any literary, artistic, intellectual, dramatic or other right of any person or entity whatsoever (except for music performance rights); 

 

	 	9.1.6.	No use by Distributor permitted hereunder of any Program will violate any federal, state, local or other law, rule or regulation and all of the same shall be capable of being duly
licensed and broadcast under all applicable laws; 

  

	 	9.1.7.	ABC has not granted or attempted to grant, and shall not grant, to any person or entity whatsoever any right that would or might derogate from or interfere with any right granted to
Distributor herein or the performance of Distributor’s obligations hereunder; 

  

	 	9.1.8.	There is not now outstanding any litigation, or, to the knowledge of ABC’s senior management, threatened litigation or claims, which could impair ABC’s ability to fully
perform all of its obligations hereunder or which could impair the rights granted to Distributor hereunder. 

  

	 	9.1.9.	 Except for the rights granted to Distributor under this Agreement, ABC has not granted or attempted to grant, and, except as permitted in Section 8.2, shall
not grant, to any person or entity whatsoever any right or option 

  

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to promote, market or distribute any audio news service primarily for terrestrial radio for Canada, Mexico, or the United States.

  

	 	9.2.	The warranties, representations and indemnification obligations hereunder shall survive the performance, expiration or earlier termination of the Term. 

  

	10.	Indemnification. 

  

	 	10.1.	ABC agrees to hold Distributor, its parent company(ies), divisions, subsidiaries and Affiliates and any present or former officers, directors, shareholders employees, licensees and
agents of any of the foregoing, and their respective heirs, executors, administrators, successors and assigns (collectively the “Distributor Indemnitees”), harmless, from any claims, actions, demands, deficiencies, assessments,
liabilities, losses, damages, expenses (including, without limitation, reasonable fees and expenses of counsel) (collectively, “Losses”) which any Distributor Indemnitee may suffer by reason of ABC’s breach of, or non-compliance with,
any covenant or provision herein contained or the inaccuracy of any warranty or representation made in this Agreement or agreements made or to be performed by ABC pursuant hereto, or arising out of any Program or commercial material included in the
Radio Service or by reason of ABC’s willful misconduct. 

  

	 	10.2.	Distributor agrees to indemnify ABC, its parent company(ies), divisions, subsidiaries and Affiliates and any present or former officers, directors, shareholders employees, licensees
and agents of any of the foregoing, and their respective heirs, executors, administrators, successors and assigns (the “ABC Indemnitees”) against and hold the ABC Indemnitees harmless from any and all Losses incurred or suffered by any ABC
Indemnitee arising out of a breach by Distributor of the representations, warranties, covenants or agreements made or to be performed by it pursuant hereto, or arising out of any program or commercial material (apart from the Radio Service)
furnished by Distributor. Without limitation of the foregoing, Distributor will indemnify the ABC Indemnitees against and hold the ABC Indemnitees harmless from any and all Losses arising out of: 

  

	 	10.2.1.	The use of commercials, public service announcements and other matters unrelated to the Radio Service hereunder, but broadcast with any Programs hereunder by Distributor or any
sublicensee of Distributor or any Distributor Indemnitee; 

  

	 	10.2.2.	Any claim relating solely to material furnished by Distributor to ABC in violation of any third party’s rights; 

  

	 	10.2.3.	Any claim relating solely to willful misconduct of Distributor (including without limitation the willful misuse by Distributor of ideas or material furnished by Distributor to ABC);
and 

  

	 	10.2.4.	Any claim relating to the distribution activities of Distributor. 

  

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	 	10.3.	The following procedures shall govern all claims for indemnification made under any provision of this Agreement. A written notice (an “Indemnification Notice”) with
respect to any claim for indemnification shall be given by the party seeking indemnification (the “Indemnitee”) to the party from which indemnification is sought (the “Indemnitor”) within thirty (30) days of the discovery by
the Indemnitee of such claim, which Indemnification Notice shall set forth the facts relating to such claim then known to the Indemnitee (provided that failure to give such Indemnification Notice as aforesaid shall not release the Indemnitor from
its indemnification obligations hereunder unless and to the extent the Indemnitor has been prejudiced thereby). The party receiving an Indemnification Notice shall send a written response to the party seeking indemnification stating whether it
agrees with or rejects such claim in whole or in part. Failure to give such response within ninety (90) days after receipt of the Indemnification Notice shall be conclusively deemed to constitute acknowledgment of the validity of such claim. If
any such claim shall arise by reason of any claim made by third parties, the Indemnitor shall have the right, upon written notice to Indemnitee within thirty (30) days after receipt of the Indemnification Notice, to assume the defense of the
matter giving rise to the claim for indemnification through counsel of its selection reasonably acceptable to Indemnitee, at Indemnitor’s expense, and the Indemnitee shall have the right, at its own expense, to employ counsel to represent it;
provided, however, that if any action shall include both the Indemnitor and the Indemnitee and there is a conflict of interest because of the availability of different or additional defenses to the Indemnitee, the Indemnitee shall have
the right to select separate counsel to participate in the defense of such action on its behalf, at the Indemnitor’s expense. The Indemnitee shall cooperate fully to make available to the Indemnitor all pertinent information under the
Indemnitee’s control as to the claim and shall make appropriate personnel available for any discovery, trial or appeal. If the Indemnitor does not elect to undertake the defense as set forth above, the Indemnitee shall have the right to assume
the defense of such matter on behalf of and for the account of the Indemnitor; provided, however, the Indemnitee shall not settle or compromise any claim without the consent of the Indemnitor, which consent shall not be unreasonably
withheld. The Indemnitor may settle any claim at any time at its expense, so long as such settlement includes as an unconditional term thereof the giving by the claimant of a release of the Indemnitee from all liability with respect to such claim.

  

	11.	Force Majeure 

  

	 	11.1.	 The failure of ABC to timely supply its production services and materials because of fire, flood, epidemic, earthquake, explosion, accident, or other act of God;
act of public enemy; act of government, including governmental order, regulation or order of any court of competent jurisdiction; labor dispute or strike; riot; civil disturbance; war (whether declared or undeclared) or armed conflict; failure of
common carriers; or other cause of a similar nature beyond the control of ABC shall not constitute grounds for any action by Distributor to recover damages. Any time period or date certain specified in this Agreement shall be 

  

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postponed for a period of time equal to the duration of the event of force majeure. In the event of a force majeure event, ABC shall use all reasonable
efforts to cure the nonperformance resulting from such force majeure event; and ABC shall promptly notify Distributor whether or not it shall be able to make a late performance of its obligations hereunder, and if so, when that shall occur;
provided, however, that if the force majeure event causes a delay of thirty (30) days or more, this agreement may be terminated at the option of Distributor. Signal loss or degradation in the transmission of the Radio Service to Distributor due
to atmospheric conditions, failure of satellite or common carrier facilities, third party interference or other circumstances beyond ABC’s control shall not be deemed a breach of this Agreement, nor shall they be deemed a force majeure event
unless systematic and sustained.  

  

	12.	Confidentiality 

  

	 	12.1.	Other than as may be required by any applicable law, governmental order or regulation or by order or decree of any court of competent jurisdiction, neither ABC nor Distributor shall
publicly divulge or announce, or in any manner disclose to any third party, any of the specific terms and conditions of this Agreement, including without limitation the reimbursements payable hereunder. For the sole purpose of this paragraph, a
third party shall be deemed not to include accountants, auditors, legal counsel, lending institutions, strategic partners, investors, acquirers, affiliates of The ABC Television Network and parent or related companies, provided they are subject to
confidentiality obligations. 

  

	13.	Audit Rights 

  

	 	13.1.	ABC shall keep books of account at its New York office with respect to the production of the Radio Service. Said books, to the extent they have not become incontestable or have not
been previously examined, may be examined at Distributor’s expense once in each 12 month period (the first of which commences upon the first anniversary of the Effective Date) by a national firm of reputable CPAs or entertainment industry
auditing firms, the selection of which is subject to ABC’s approval not to be unreasonably withheld. No such examination may continue beyond a period of 30 days after commencement. A copy of the report of such examination shall be delivered to
ABC at such time as it is made available to Distributor. If any audit discloses, or Distributor otherwise discovers an undisputed overstatement of production expenses, the amount of such undisputed overstatement shall be credited to
Distributor’s next required payment hereunder or if none, promptly paid to Distributor. ABC statements of production expenses shall be considered incontestable if not audited during the calendar year following the year in which they were
issued. 

  

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	14.	Assignment 

  

	 	14.1.	Neither party may assign this Agreement or any of its rights or obligations hereunder, in whole or in part without the prior written approval of the other, except that Distributor
may license the Radio Service, and grant sublicenses under the rights and licenses granted to it hereunder, to broadcasters in the ordinary course of business. Any attempted assignment shall be deemed a material breach of this Agreement.
Notwithstanding the foregoing, either party shall have the right to assign this Agreement, or any part thereof, to any of its Affiliates with the resources to fulfill its obligations hereunder or to any entity acquiring all or substantially all of
its assets and businesses. 

  

	15.	Service Of Notice 

  

	 	15.1.	Any notice given to ABC or Distributor pursuant to this Agreement shall be given in writing and delivered by hand delivery, by an overnight courier of national reputation, by
facsimile (with a copy sent via first class mail) addressed as set forth below. 

 To ABC: 
 American Broadcasting Companies, Inc. 
 77 West 66th Street 
 New York, NY 10023 
 Attention: Vice President, ABC News Radio 
 Fax: (212) 456-5881 
 With a copy to (which shall not constitute notice): 
 American Broadcasting Companies, Inc. 
 77 West 66th Street 
 New York, NY 10023 
 Attention: Senior Vice President, Business and Legal Affairs 
 Fax: (212) 456-7753 
 To Distributor: 
 Radio Networks, LLC 
 13725 Montfort Drive

 Dallas, TX 75240 
 Attention:
President, Radio Networks 
 Fax: (972) 286-8622 
  

 13 

 With a copy to (which shall not constitute notice): 
 Citadel Broadcasting Corporation 
 142 West
57th Street, 11th Floor 
 New York, NY 10019 
 Attn: General Counsel & Vice President 
 Fax: (212) 887-1675 
 Notices shall be deemed received the same day if hand delivered or sent via facsimile, and the next day if sent via overnight courier. 
  

	 	15.2.	If the last date on which a notice that this Agreement requires or permits to be given shall fall on a Saturday, Sunday or day on which the department of the sending party
responsible for sending such notice is not open for business, then such last date shall be deemed postponed until the first day that is not a Saturday, Sunday or closed day. 

  

	16.	New York Law 

  

	 	16.1.	This Agreement shall be governed by the law of the State of New York applicable to agreements executed and performed entirely therein. 

  

	17.	Relationship Of Parties 

  

	 	17.1.	ABC and Distributor are independent contractors with respect to each other and nothing herein shall create any association, partnership, joint venture or agency relationship between
ABC and Distributor. All persons employed by either party in connection with its performance hereunder shall be that party’s employees or agents, and, as between the parties, that party shall be solely responsible for all matters relating to
such persons, including, without limitation, all compensation, withholding taxes, workers’ compensation insurance and any other payments, deductions and contributions which may be required by any law, personal service contract, or collective
bargaining agreement applicable to that party and/or such persons. Each party shall indemnify, defend and hold harmless the other and the other’s Affiliates, licensees and assigns from and against the obligation to make any such payments,
deductions or contributions. 

  

	18.	Provision Validity 

  

	 	18.1.	In the event that any provision of this agreement is deemed by a court of competent jurisdiction to be invalid or unenforceable, then that provision shall be deemed to have been
deleted herefrom and shall in no way affect the validity or enforceability of any other provision of this agreement. 

  

	 	18.2.	If any provision hereof conflicts with any law, the latter shall prevail, but such provision shall be restricted only to the extent necessary to meet the applicable minimum
requirements of such law and shall not affect any other provision hereof nor the validity or enforceability of this Agreement. 

  

 14 

	19.	Section 508 

  

	 	19.1.	In compliance with Section 508 of the Communications Act of 1934, as amended, ABC represents and warrants that it has not accepted nor agreed to accept, and will not permit its
employees, agents, representative, contractors or Affiliates to accept any monies, services or other consideration for the inclusion of any commercial material or matter in any Program. ABC hereby certifies that it has no knowledge of any
information relating to any Program that is required to be disclosed by Distributor under Section 508 and that it will promptly disclose to Distributor any such information of which it hereafter acquires knowledge. At Distributor’s
request, ABC will furnish to Distributor such affidavits or statements as Distributor may require with respect to compliance with Section 508. 

  

	20.	Further Assurances 

  

	 	20.1.	Each party shall execute and deliver to the other, after opportunity to review and negotiate draft language, promptly upon such party’s request, any other instruments or
documents consistent herewith considered by the requesting party to be necessary or desirable to evidence, effectuate or confirm this Agreement, or any of the terms and conditions hereof. 

  

	21.	Complete Agreement 

  

	 	21.1.	This Agreement contains the entire understanding of the parties, and supersedes all prior written or oral agreements and understandings between ABC and Distributor relating to the
subject matter of this Agreement. No modification, alteration or amendment to this Agreement shall be valid unless in writing and signed by the parties hereto. 

  

	22.	No Third Party Beneficiaries 

  

	 	22.1.	This Agreement is for the sole benefit of the parties hereto and their authorized successors and permitted assigns. Nothing herein, express or implied, is intended to or shall
confer upon any person or entity (including, but not limited to, sublicensees of Distributor), other than the parties hereto and their authorized successors and permitted assigns, any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement. 

  

	23.	Counterparts 

  

	 	23.1.	This Agreement may be executed in any number of counterparts and all said counterparts when executed and delivered, each as an original, shall constitute but one and the same
instrument. Signatures transmitted via fax shall be considered originals for the purposes of this Agreement. 

 [signatures on
the following page] 
  

 15 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. 
  

			
	 AMERICAN BROADCASTING
 COMPANIES,
INC.

		
	By	 	 /s/ David K. Thompson

	Name:	 	David K. Thompson
	Title:	 	Vice President
	
	RADIO NETWORKS, LLC
		
	By	 	 /s/ Marsha L. Reed

	Name:	 	Marsha L. Reed
	Title:	 	Secretary

  

 16Employment Agreement

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as
of June 13, 2007 (the “Effective Date”) by and between ECC Capital Corporation (the “Company”) and Larry Moretti (“Executive”). 
 WHEREAS, Executive is currently employed by Performance Credit Corporation., formerly known as Encore Credit Corp., a wholly owned subsidiary of the Company (“Encore”); and 
 WHEREAS, the Company and Executive desire to enter into this Agreement in order to specify the terms of Executive’s employment by Encore.

 THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 
  

	1.	EMPLOYMENT 

 The Company hereby employs Executive
and Executive hereby accepts employment upon the terms and conditions set forth below. 
  

	2.	TERM 

 2.1 Term. The term of this Agreement
shall commence on June 13, 2007 the (“Effective Date”), and shall continue on the terms and conditions set forth below, until Executive’s employment is terminated as provided in Section 5 (the “Term”). 
  

	3.	COMPENSATION 

 3.1 Base Compensation.
Executive shall be paid a salary at the annual rate of $200,000 (the “Base Compensation”). The Base Compensation shall be reviewed at least annually, and may be increased or decreased. In the event that the Base Compensation is increased,
the new salary shall be the Base Compensation for purposes of this Agreement thereafter. 
 3.2 Bonus Compensation. Executive will be
paid a cash bonus of $400,000 in a lump sum on January 2, 2008, unless Executive has a Separation from Service prior to January 2, 2008. Executive will be paid a cash bonus of $100,000 in a lump sum on March 31, 2008, unless Executive
has a Separation from Service prior to March 31, 2008. 
 3.3 Benefits. The Executive shall be entitled to participate in all
pension, 401(k) and other employee plans and benefits in accordance with the terms of such plans or policies as may be in effect from time to time. 
  

 1 

 3.4 Automobile Allowance. The Company shall provide Executive with one (1) automobile
allowance not to exceed $2000 per month during the term of Executive’s employment hereunder. 
 3.6 Method of Payment. The
monetary compensation payable and any benefits due to Executive hereunder may be paid or provided in whole or in part, from time to time, by the Company and/or its respective parents, subsidiaries and affiliates, but shall at all times remain the
responsibility of the Company. 
  

	4.	POSITION AND DUTIES 

 4.1 Position or Duties.
Executive shall hold such position and have such duties as assigned to him by the Company from time to time. 
 4.2 Devotion of Time and
Effort. Executive shall use Executive’s good faith best efforts and judgment in performing Executive’s duties as required hereunder and to act in the best interests of the Company. Executive shall devote all of his business time,
attention and energies to the business of the Company. 
 4.3 Other Activities. Executive may engage in other activities for
Executive’s own account while employed hereunder, including without limitation, charitable, community and other business activities, provided that in the judgment of the Board of Directors of the Company (the “Board”) such other
activities do not materially interfere with the performance of Executive’s duties hereunder, and do not violate Sections 6 and 7. 
 4.4 Vacation. Executive shall be entitled to two (2) weeks paid vacation annually. Such vacation shall be subject to the Company’s policies concerning accrual, use and scheduling of vacation, as such policies may be in
effect from time to time. Executive’s vacation pay shall be calculated based upon an annual salary of $250,000, which was Executive’s Base Compensation for all purposes prior to this Agreement. 
 4.5 Business Expenses. Executive shall be entitled to reimbursement of reasonable business expenses in accordance with Company policies, as they
may be in effect from time to time. 
  

	5.	TERMINATION 

 5.1 Due to Death.
Executive’s employment shall terminate as of the date of his death. 
 5.2 Due to Disability. The Company may terminate
Executive’s employment in the event of Executive’s “Disability,” as defined in Section 9.15(a). 
  

 2 

 5.3 By the Company Without “Cause”. The Company may terminate Executive’s
employment without “Cause” as defined in Section 5.5 below at any time following the Effective Date, upon written notice to Executive. 
 5.4 By Executive Without “Good Reason”. Executive may terminate his employment hereunder without Good Reason, as defined in Section 5.6 below, at any time upon written notice to the Company.

 5.5 By The Company For Cause. The Company may terminate Executive’s employment for “Cause” at any time, upon written
notice to Executive. For purposes of this Agreement, “Cause” shall mean: 
 (a) Executive’s conviction of or plea of nolo
contender to a felony or any crime involving moral turpitude; 
 (b) Executive’s commission of any act of theft, embezzlement or
misappropriation against the Company; 
 (c) Executive’s failure to substantially perform Executive’s duties hereunder (other
than such failure resulting from Executive’s incapacity due to physical or mental illness), which failure is not remedied within thirty (30) days after written demand for substantial performance is delivered by the Company which
specifically identifies the manner in which the Company believes that Executive has not substantially performed Executive’s duties; or 
 (d) Executive’s material breach of his obligations under this Agreement, which breach is not remedied within thirty (30) days after written notice is delivered by the Company which specifically identifies the breach that the
Company believes has occurred. 
 5.6 By Executive For Good Reason. Executive may terminate his employment for good reason upon at
least thirty (30) days prior written notice to the Company. For purposes of this Agreement, “Good Reason” shall mean the Company’s material breach of the salary and benefit obligations hereunder and either such breach is
incurable or, if curable, has not been cured within fifteen (15) days following receipt of written notice by Executive to the Company of such breach by the Company. Executive shall be deemed to have waived Executive’s right to terminate
for “good reason” with respect to a breach if Executive does not notify the Company in writing of such breach within fifteen (15) days of such breach, or, if such breach is not immediately known to him, and could not reasonably be
expected to be know by him, within fifteen (15) days of his discovery of such breach. Following a Change in Control, as defined below, “Good Reason” shall also mean: (a) a material reduction in the authority of Executive;
(b) Executive’s assignment to a position other than an officer position with the Company and any of its subsidiaries; or (c) a relocation of Executive’s primary office location outside of Orange County, California, without
Executive’s prior written consent. The fact that the Company becomes a subsidiary of another entity, or that the Company’s 

  

 3 

 
status changes from publicly-traded to privately-held, as a result of the Change in Control, shall not, by itself, constitute a material reduction in the
authority of Executive. In addition, provided that Executive remains employed by the Company for ninety (90) days following a Change in Control, during the thirty (30) days following the ninety (90) day period after the Change in
Control, if Executive elects to terminate his employment with the Company for any reason or no reason, he shall be deemed to have “Good Reason”. 
 5.7 Severance Payment. Solely for purposes of determining the Severance Amount under this Section 5.7(a), Base Compensation shall mean $250,000, which was Executive’s Base Compensation for all
purposes prior to this Agreement. In the event Executive has a Separation from Service by reason of the termination of Executive’s employment pursuant to Sections 5.1 (Death), 5.4 (Without Good Reason), or 5.5 (For Cause), Executive (or
Executive’s estate, as applicable) shall have the right to receive Executive’s compensation as otherwise provided under this Agreement through the effective date of termination. Executive shall have no further right to receive
compensation, benefits or other consideration from the Company, and Executive shall not be entitled to any severance payments or benefits, except as required by applicable law. In the event Executive has a Separation from Service by reason of the
termination of Executive’s employment pursuant to Section 5.2 (Due to Disability), Section 5.3 (Without Cause), or Section 5.6 (For Good Reason), Executive shall continue to render services to the Company pursuant to this
Agreement until the date of termination occurs and shall continue to receive compensation, as provided in this Agreement, through the termination date, and, upon such Separation from Service, Executive shall be entitled to severance pay and benefits
as set forth in subparagraph (a) through (c) below, provided that Executive executes and delivers (and does not revoke, if a revocation period is required by law) a general release of claims in a form acceptable to the Company in its sole
and absolute discretion, and is not in material breach of any of the provisions of this Agreement. 
 (a) Amount. The Company
shall pay Executive an amount equal to (i) 200 percent of Executive’s Base Compensation, less (ii) the total amount of bonus compensation payable pursuant to Section 3.2 (the “Severance Amount”). The Severance Amount
shall be subject to withholding under applicable law. Except as otherwise provided herein, the Severance Amount will be paid in the following payments (the “Severance Payments”): (A) upon the Executive’s Separation from Service,
twenty-five (25) percent of the Severance Amount shall be paid to Executive; and (B) the remaining seventy-five (75) percent of the Severance Amount shall be paid in substantially equal semi-monthly installment payments, on the
fifteenth and last days of each calendar month, over the following twelve (12) months upon occurring after the Executive’s Separation from Service. Notwithstanding the foregoing, if Executive is a Specified Employee on the date of
Executive’s Separation from Service, the Severance Payments shall commence upon the date which is six months after the date of Executive’s Separation from Service (or, if earlier, the date of Executive’s death), and the Severance
Payments that otherwise would have been made to Executive prior to the date which is six months after the date of Executive’s Separation from Service (or, if earlier, the date of Executive’s death) shall be paid upon such date, in
accordance with Section 409A(a)(2)(B)(i) of the Code and the Treasury Regulation Section 1.409A-3(i)(2). 
  

 4 

 (b) Vesting. In addition to the
Severance Payments, any unvested stock options or restricted stock held by Executive shall vest as follows: 1/12th
of the unvested stock options and/or restricted stock held by Executive as of the termination date shall vest at the end of each one-month period following the date of termination for the twelve-month period following the date of termination (the
“Vesting”). Any stock option or restricted stock vested in accordance with this Section 5.7(b) shall be exercisable within ninety (90) days following the twelve-month vesting period. 
 (c) Additional Benefits. 
 (i)
In addition to the Severance Payments and the Vesting, provided that Executive has a Separation from Service prior to January 1, 2008 and Executive is eligible for and timely elects COBRA health care coverage continuation, the Company shall
reimburse Executive for the portion of the COBRA premium equal to the excess (if any) of (A) the COBRA premium, over (B) Executive’s monthly contribution towards health care benefits immediately prior to the date of Separation from
Service, for Executive to continue his (and, if applicable, his family’s) health care coverage, which was in effect as of the date of Separation from Service, for the months from the date of Separation from Service through December 31,
2007, provided that Executive (and, if applicable, his family) remains eligible for such coverage (the “COBRA Reimbursement Benefits”). The COBRA Reimbursement Benefits shall satisfy the requirements of Treasury Regulation
Section 1.409A-3(i)(1)(iv)(A) and shall be paid on or before the last day of Executive’s taxable year following the taxable year in which the COBRA premium expense is incurred by Executive. Notwithstanding the foregoing, if Executive is a
Specified Employee on the date of Executive’s Separation from Service, the COBRA Reimbursement Benefits shall commence upon the date which is six months after the date of Executive’s Separation from Service (or, if earlier, the date of
Executive’s death), and the COBRA Reimbursement Benefits that otherwise would have been made to Executive prior to the date which is six months after the date of Executive’s Separation from Service (or, if earlier, the date of
Executive’s death) shall be paid upon such date, in accordance with Section 409A(a)(2)(B)(i) of the Code and Treasury Regulation Section 1.409A-3(i)(2). No COBRA Reimbursement Benefits shall be paid to Executive unless Executive has a
Separation from Service prior to January 1, 2008. 
 (ii) Executive will be paid an additional cash bonus of $48,620 in a lump sum on
January 2, 2008. 
 5.8 Change in Control. 
 For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events: 
 (a) within twenty-four (24) months of the Effective Date, the individuals constituting the Board as of the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least
two-thirds (2/3rds) of the Board; provided, however, that if the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least two-thirds (2/3rds) of the Incumbent Board,
such new director shall be considered a member of the Incumbent Board; or 
  

 5 

 (b) an acquisition of any voting securities of the Company (the “Voting Securities”) by
any “person” (as the term “person” is used for purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) immediately after which such person has
“beneficial ownership” (within the meaning of Rule 13d-3 promulgated under the 1934 Act) (“Beneficial Ownership”) of 35% or more of the combined voting power of the Company’s then outstanding Voting Securities; or

 (c) approval by the stockholders of the Company of: 
 (i) a merger, consolidation, share exchange or reorganization involving the Company, unless 
 (A) the stockholders of the Company, immediately before such merger, consolidation, share exchange or reorganization, own, directly
or indirectly immediately following such merger, consolidation, share exchange or reorganization, at least 80% of the combined voting power of the outstanding voting securities of the corporation that is the successor in such merger, consolidation,
share exchange or reorganization (the “Surviving Company”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation, share exchange or reorganization; provided, however,
that a merger, consolidation, share exchange or reorganization of the Company shall not constitute a “change in control” if such merger, consolidation, share exchange or reorganization of the Company is approved by the Board and is
recommended by Executive to the Board for its approval; and 
 (B) the individuals who were members of the Incumbent
Board immediately prior to the execution of the agreement providing for such merger, consolidation, share exchange or reorganization constitute at least two-thirds (2/3rds) of the members of the board of directors of the Surviving Company; or

 (ii) a complete liquidation or dissolution of the Company; or 
 (iii) an agreement for the sale or other disposition of all or substantially all of the assets of the Company. 
  

 6 

 5.9 Certain Additional Payments. 
 (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event a Section 409A Change in Control
Event shall occur and it shall be determined that any Payment would be subject to the Excise Tax, then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount equal to the Excise Tax imposed
upon the Payments, but not any Excise Tax resulting from the receipt of any Gross-Up Payment. 
 (b) Subject to the provisions of
Section 5.9(c), all determinations required to be made under this Section 5.9, 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 nationally recognized certified public accounting firm used by the Company immediately prior to the Change in Control or, if such firm declines to serve, such other nationally recognized certified public
accounting firm as may be designated by the Executive (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within fifteen (15) business days of the receipt of notice from
the Executive that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Subject to Section 5.9(e) below, any Gross-Up Payment, as
determined pursuant to this Section 5.9, shall be paid by the Company to the Executive within five (5) days of the receipt of the Accounting Firm’s determination; provided, however, the Gross-Up Payments shall be made not later
than the end of Executive’s taxable year next following Executive’s taxable year in which Executive remits the related taxes in accordance with Treasury Regulation Section 1.409A-3(i)(1)(v). Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. For purposes of making the calculations required by this Section 5.9, the Accounting Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on
reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Internal Revenue Code, as amended (the “Code”). 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 Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to
be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 5.9(c) and the 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 Company to or for the benefit of the Executive. 
 (c) The
Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later
than ten (10) business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim

  

 7 

 
prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: 
 (i) give the Company any information reasonably requested by the Company relating to such claim, 
 (ii) take such action in connection with contesting such claim as the 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 Company, 
 (iii) cooperate with the Company in good faith in order effectively to contest such claim, and 
 (iv) permit the Company to participate in any proceedings relating to such claim; 
 provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest
and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 5.9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the
Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the 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 Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. All costs and expenses (including additional interest and penalties) paid or to be reimbursed by the Company shall be paid or reimbursed not
later than the end of 

  

 8 

 
Executive’s taxable year following Executive’s taxable year in which the taxes that are subject to the audit or litigation are remitted to the
taxing authority, or where as a result of such audit or litigation there taxes are remitted, the end of the Executive’s taxable year following the Executive’s taxable year in which the audit is completed or there is a final and
nonappealable settlement or other resolution of the litigation, in accordance with Treasury Regulation Section 1.409A-3(i)(1)(v). 
 (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 5.9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the
Company’s complying with the requirements of Section 5.9(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 5.9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund 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 in an amount equal to the Gross-Up Payment that the Company would
otherwise be required to pay, and the balance of the amount advance shall be repaid to the Company by Executive within sixty (60) days of such determination. 
 (e) Notwithstanding any other provision of this Section 5.9, the Company may withhold and pay over to the Internal Revenue Service for the benefit of the Executive all or any portion of the Gross-Up Payment
that it determines in good faith that it is or may be in the future required to withhold, and the Executive hereby consents to such withholding. 
 (f) Notwithstanding the foregoing, if the net amount Executive would realize from any Payment and any Gross-Up Payment after payment of all income, employment and excise taxes on such Payments and such Gross-Up Payment would be less
than the net amount Executive would realize if all Payments were limited to the maximum amount that may be paid to Executive without any portion thereof being an “excess parachute payment” under Section 280G of the Code, then
Executive’s payments and benefits under the Agreement, (and under all other contracts, arrangements, and programs) shall not, in the aggregate, exceed the maximum amount that may be paid to Executive without any portion thereof being an
“excess parachute payment” under Section 280G of the Code, as determined in good faith by the Accounting Firm. The Company shall bear the expense of the Accounting Firm’s determination. If Executive’s payments and benefits
must be reduced to avoid any portion thereof being an “excess parachute payment,” Executive’s payments and benefits shall be reduced in the priority order Executive designates or, if Executive fails promptly to designate an order, in
the priority order designated by the Company. If an amount in excess of the limit set forth in this Section is paid to Executive, Executive shall repay the excess amount to the Company upon demand, with interest at the rate provided in
Section 1274(b)(2)(B) of the Code. Executive and the Company agree to cooperate with each other reasonably in 

  

 9 

 
connection with any administrative or judicial proceedings concerning the existence of payments and benefits (or portions thereof) that are “excess
parachute payments” and the amounts thereof. 
 (g) Definitions. The following terms shall have the following meanings for
purposes of this Section 5.9. 
 (i) “Excise Tax” shall mean the excise tax imposed by Section 4999 of the
Code, together with any interest or penalties imposed with respect to such excise tax. 
 (ii) A “Payment”
shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise. 
 5.10 Vesting Upon Change in Control. 
 Notwithstanding the provisions of any plan or agreement to the contrary, upon a Change in Control, all unvested stock options held by Executive shall be fully vested and exercisable, and all restricted stock held by Executive shall be fully
vested. Except as expressly set forth in this Section 5.10, such stock options and restricted stock shall be subject to the terms of the plans and agreements under which they were issued. 
  

	6.	CONFIDENTIALITY 

 During the Term, Executive will
have access to and become acquainted with various information relating to the Company’s business operations, including customer (meaning a broker or borrower) lists, customer files, marketing data, business plans, strategies, employee lists,
contracts, financial records and accounts, projections and budgets, and similar information. Executive agrees that to the extent such information is not generally known to or available to the public and/or the industry, and gives the Company an
advantage over competitors who do not know of or use such information, such information and documents constitute “Confidential Information” of the Company. Executive further agrees that any documents relating to the business of the
Company, whether they are prepared by Executive or come into Executive’s possession in any other way, are owned by the Company, shall remain the exclusive property of the Company, and must be returned to the Company upon termination of
employment. Executive shall not use any Confidential Information of the Company, directly or indirectly, for Executive’s own benefit, or the benefit of any person or entity other than the Company, nor shall Executive disclose Confidential
Information to any person or entity other than the Company and its employees, either during the Term or at any time thereafter, except as may be appropriate for Executive to perform his duties as an employee, officer and/or director, directly or
indirectly, of the Company. In the event Executive violates this provision during any period in which he is receiving severance under Section 5.7 of this Agreement, in addition to any other remedies the Company may have, the Company may
terminate the Severance Payments, Vesting and Severance Benefits under Section 5.7. 
  

 10 

	7.	NON-SOLICITATION/NON-COMPETITION 

 7.1
Non-Solicitation. During the Term and for the twelve-month period following the Term, Executive shall not solicit any of the Company’s employees, agents or independent contractors to end their relationship with the Company, or solicit or
otherwise induce any such person to perform services for Executive, or any other person or entity. In the event Executive violates this provision during any period in which he is receiving severance under Section 5.7 of this Agreement, in
addition to any other remedies the Company may have, the Company may terminate the Severance Payments, Vesting and Severance Benefits under Section 5.7. 
 7.2 Non-Competition. Executive acknowledges that Encore does business throughout the United States, and that Executive has access to Confidential Information of the Company in the course of performing his
duties under this Agreement. In order to protect the legitimate business interests of the Company and to avoid misuse of its Confidential Information, during the Term, and (i) if Executive’s employment terminates pursuant to
Section 5.4 or 5.5, or (ii) if Executive’s employment terminates pursuant to Section 5.2, 5.3 or 5.6 and Executive is receiving severance under Section 5.7 of this Agreement, for the one-year period after the Term, Executive
shall not, directly or indirectly, serve as an employee, consultant, officer, director, lender, investor, shareholder, partner, manager or member of any person or entity, or own or act as a sole proprietor of a business that engages in subprime
wholesale mortgage lending during that period in any County of the State of California or any of the States of the United States of America, other than the Company or its affiliates, or as approved in advance in writing by the Board; provided,
however, that ownership of less than one (1) percent of the publicly traded securities of any publicly traded entity shall not violate this provision. In the event Executive violates this provision during any period in which he is receiving
severance under Section 5.7 of this Agreement, in addition to any other remedies the Company may have, the Company may terminate the Severance Payments, Vesting and Severance Benefits under Section 5.7. 
  

	8.	ARBITRATION AGREEMENT 

 8.1 Claims Subject to
Arbitration. Any controversy, dispute or claim between Executive and the Company, or its parents, subsidiaries, affiliates and any of their officers, directors, agents or other employees, shall be resolved by binding arbitration, at the request
of either party. 
 The arbitrability of any controversy, dispute or claim under this policy shall be determined by application of the
substantive provisions of the Federal Arbitration Act (9 U.S.C. sections 1 and 2) and by application of the procedural provisions of the California Arbitration Act, except as provided herein. Arbitration shall be the exclusive method for
resolving any dispute and all remedies available from a court of competent 

  

 11 

 
jurisdiction shall be available; provided, however, that either party may request provisional relief from a court of competent jurisdiction, as provided in
California Code of Civil Procedure Section 1281.8, if such relief is not available in a timely fashion through arbitration. 
 The
claims which are to be arbitrated include, but are not limited to any Claim arising out of or relating to this Agreement or the employment relationship between Executive and the Company, claims for wages and other compensation, claims for breach of
contract (express or implied), claims for violation of public policy, wrongful termination, tort claims, claims for unlawful discrimination and/or harassment (including, but not limited to, race, religious creed, color, national origin, ancestry,
physical disability, mental disability, gender identity or expression, medical condition, marital status, age, pregnancy, sex or sexual orientation) to the extent allowed by law, and claims for violation of any federal, state, or other government
law, statute, regulation, or ordinance, except for claims for workers’ compensation and unemployment insurance benefits. This Agreement shall not be interpreted to provide for arbitration of any dispute that does not constitute a claim
recognized under applicable law. 
 8.2 Selection of Arbitrator. The Executive and the Company will select a single neutral arbitrator
by mutual agreement. If the Executive and the Company are unable to agree on a neutral arbitrator within thirty (30) days of a demand for arbitration, either party may elect to obtain a list of arbitrators from the Judicial Arbitration and
Mediation Service (“AMS”) or the American Arbitration Association (“AAA”), and the arbitrator shall be selected by alternate striking of names from the list until a single arbitrator remains. The party initiating the arbitration
shall be the first to strike a name. 
 8.3 Demand for Arbitration. The demand for arbitration must be in writing and must be made by
the aggrieved party within the statute of limitations period provided under applicable State and/or Federal law for the particular claim(s). Failure to make a written demand within the applicable statutory period constitutes a waiver of the right to
assert that claim in any forum. 
 8.4 Location of Arbitration. Arbitration proceedings will be held in Orange County, California.

 8.5 Choice of Law. The arbitrator shall apply applicable State and/or Federal substantive law to determine issues of liability and
damages regarding all claims to be arbitrated, and shall apply the California Evidence Code to the proceeding. 
 8.6 Discovery. The
parties shall be entitled to conduct reasonable discovery and the arbitrator shall have the authority to determine what constitutes reasonable discovery. The arbitrator shall hear motions for summary judgment/adjudication as provided in the
California Code of Civil Procedure. 
 8.7 Written Opinion and Award. Within thirty days following the hearing and the submission of
the matter to the arbitrator, the arbitrator shall issue a written opinion 

  

 12 

 
and award which shall be signed and dated. The arbitrator’s award shall decide all issues submitted by the parties, and the arbitrator may not decide
any issue not submitted. The opinion and award shall include factual findings and the reasons upon which the decision is based. The arbitrator shall be permitted to award only those remedies in law or equity which are requested by the parties and
allowed by law. 
 8.8 Appeals. The final award may be appealed to another arbitrator who will be chosen by the parties in the same
manner as the original arbitrator. All the rules governing judicial appeals of judgments from the Superior Court of the State of California shall apply to any appeal of this award, including but not limited to the time frames, deadlines and the
standards of review. 
 8.9 Costs of Arbitration. The cost of the arbitrator and other incidental costs of arbitration that would not
be incurred in a court proceeding shall be borne by the Company. The parties shall each bear their own costs and attorneys’ fees in any arbitration proceeding, provided, however, that the arbitrator shall have the authority to require either
party to pay the costs and attorneys’ fees of the other party to the extent permitted under applicable federal or state law, as a part of any remedy that may be ordered. 
 8.10 Waiver of Right to Jury. Both the Company and Executive understands that by using arbitration to resolve disputes they are giving up any
right that they may have to a judge or jury trial with regard to all issues concerning employment or otherwise covered by this Section 8. 
  

	9.	GENERAL PROVISIONS 

 9.1 Assignment; Binding
Effect. Neither the Company nor Executive may assign, delegate or otherwise transfer this Agreement or any of their respective rights or obligations hereunder without the prior written consent of the other party; provided, however, that the
Company may assign its rights and obligations under this Agreement for ECC Capital Corp. without the prior written consent of Executive. Any attempted prohibited assignment or delegation shall be void. This Agreement shall be binding upon and inure
to the benefit of any permitted successors or assigns of the parties and the heirs, executors, administrators and/or personal representatives of Executive. 
 9.2 Notices. All notices, requests, demands and other communications that are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or digital transmission method with electronic confirmation of receipt; the day after it is sent, if sent for next-day delivery to a domestic address by recognized
overnight delivery service (e.g., FedEx); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice shall be sent to: 
  

 13 

			
	If to the Company:	  	ECC Capital Corporation
		  	1733 Alton Parkway
		  	Irvine, California 92606
		  	Attention: Chairman, Compensation Committee
		  	Phone: (949) 955-8700
		
	If to Executive:	  	Larry Moretti
		  	1733 Alton Parkway
		  	Irvine, California 92606
		  	Phone: (949) 955-8720

 Any party may change its address for the purpose of this Section 9.2 by giving the other
party written notice of its new address in the manner set forth above. 
 9.3 Entire Agreement. This Agreement constitutes the entire
agreement of the Parties with respect to the subject matter hereof, and supersedes all prior agreements; provided, however, that this Agreement shall supplement, not supercede, any prior agreements concerning the Confidential Information, Trade
Secrets or other intellectual property of the Company, and any conflicts or inconsistencies between such agreements shall be resolved so that the provision providing greater rights to the Company shall prevail. 
 9.4 Amendments; Waivers. This Agreement may be amended or modified, and any of the terms and covenants may be waived, only by a written instrument
executed by the parties hereto, or, in the case of a waiver, by the party waiving compliance. Any waiver by any party in any one or more instances of any term or covenant contained in this Agreement shall neither be deemed to be nor construed as a
further or continuing waiver of any such term or covenant of this Agreement. 
 9.5 Provisions Severable. In case any one or more
provisions of this Agreement shall be invalid, illegal or unenforceable, in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not, in any way, be affected or impaired thereby. If any provision
hereof is determined by any court of competent jurisdiction to be invalid or unenforceable by reason of such provision extending the covenants and agreements contained herein for too great a period of time or over too great a geographical area, or
being too extensive in any other respect, such provision shall be interpreted to extend only over the maximum period of time and geographical area, and to the maximum extent in all other respects, as to which it is valid and enforceable, all as
determined by such court in such action. 
 9.6 Attorney’s Fees. If any legal action, arbitration or other proceeding, is brought
for the enforcement of this Agreement, or because of an alleged dispute, breach or default in connection with any of the provisions of this Agreement, each of the parties hereto shall be responsible for payment of their own attorneys’ fees and
other costs incurred by them in that action or proceeding, without regard to whomever is the prevailing party in such action or proceeding with respect to such claims, except as otherwise provided in Section 8. 
  

 14 

 9.7 Governing Law. This Agreement shall be construed, performed and enforced in accordance with,
and governed by the laws of the State of California without giving effect to the principles of conflict of laws thereof. 
 9.8
Non-Disparagement. During his employment and thereafter, Executive agrees to represent the Company in a positive light and not to disparage or in any other way communicate to any person or entity any negative information or opinion concerning
the Company, its parents, subsidiaries and affiliates, or any of their partners, members, shareholders, officers, directors, employees or agents, or any of them. This provision shall not prohibit Executive from making any statements or taking any
actions required by law, or reporting any actions or inactions Executive believes to be unlawful. This provision shall not be interpreted to require or encourage Executive to make any misrepresentations. 
 9.9 Return of Property. Upon termination of Executive’s employment, Executive shall return to the Company any and all Company property,
materials, or equipment in his possession, including, without limitation, Company property described in Section 6. 
 9.10
Cooperation. During Executive’s employment with the Company and thereafter, Executive agrees to cooperate with Employer and Employer’s agents, accountants and attorneys concerning any matter with which Executive was involved during
his employment. Such cooperation shall include, but not be limited to, providing information to, meeting with and reviewing documents provided by Employer and Employer’s agents, accountants and attorneys during normal business hours or other
mutually agreeable hours upon reasonable notice and to make himself available for depositions and hearings, if necessary and upon reasonable notice. If Executive’s cooperation is required after the termination of Executive’s employment,
the Company shall reimburse Executive for any out of pocket expenses incurred in and any wages lost by Executive for time spent performing his obligations hereunder. 
 9.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument. 
 9.12 Headings. The headings contained in this Agreement are provided solely for the Parties’ convenience and shall not be deemed to alter the
meaning of the text of the Agreement. 
 9.13 Survival. Sections 6, 7, 8, and 9 shall survive the termination of this Agreement.

  

 15 

 9.14 Compliance with Section 409A of the Internal Revenue Code. This Agreement shall be
interpreted, construed and administered in a manner that satisfies the requirements of Sections 409A(a)(2), (3) and (4) of the Code and the Treasury Regulations thereunder (subject to the transitional relief under Internal Revenue Service
Notice 2005-1, the Proposed Regulations under Section 409A of the Code and other applicable authority issued by the Internal Revenue Service). As provided in Internal Revenue Notice 2006-79, notwithstanding any other provision of this
Agreement, with respect to an election or amendment to change a time and form of payment under this Agreement made on or after January 1, 2007 and on or before December 31, 2007, the election or amendment may apply only to amounts that
would not otherwise be payable in 2007 and may not cause an amount to be paid in 2007 that would not otherwise be payable in 2007. 
 9.15
Definitions for Purposes of Section 409A of the Internal Revenue Code. The following definitions shall apply for purposes of compliance with the requirements of Section 409A(a)(2), (3) and (4) of the Code. 
 (a) “Disability”, with respect to Executive, shall mean Executive’s disability, within the meaning of Section 409A(a)(2)(C) of
the Code and Treasury Regulation Section 1.409A-3(i)(4). 
 (b) “Section 409A Change in Control Event” shall mean a
Change of Control, which constitutes a “change in control event,” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), with respect to Executive. 
 (c) “Separation from Service”, with respect to a Service Provider, shall mean such Service Provider’s “separation from
service,” as defined in Treasury Regulation Section 1.409A-1(h). 
 (d) “Service Provider” shall mean Executive or
any other “service provider”, as defined in Treasury Regulation Section 1.409A-1(f). 
 (e) “Service
Recipient”, with respect to Executive, shall mean the “service recipient,” as defined in Treasury Regulation Section 1.409A-1(g), as determined from time to time. As provided in Treasury Regulation Section 1.409A-1(g),
the “service recipient” shall mean the person for whom the services are performed and with respect to whom the legally binding right to compensation arises, and all persons with whom such person would be considered a single employer under
Section 414(b) or 414(c) of the Code. 
 (f) “Specified Employee” shall mean a Service Provider who, as of the date of
the Service Provider’s “separation from service,” as defined in Treasury Regulation Section 1.409A-1(h), is a “Key Employee” of the Service Recipient any stock of which is publicly traded on an established
securities market or otherwise. For purposes of this definition, a Service Provider is a “Key Employee” if the Service Provider meets the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in
accordance with the Treasury Regulations thereunder and disregarding 

  

 16 

 
Section 416(i)(5) of the Code) at any time during the Testing Year. If a Service Provider is a “Key Employee” (as defined above) as of
a Specified Employee Identification Date, the Service Provider shall be treated as “Key Employee” for the entire 12 month period beginning on the Specified Employee Effective Date. For purposes of this Section 9.15(f), a
Service Provider’s compensation for a Testing Year shall mean such Service Provider’s compensation, as determined under Treasury Regulation Section 1.415(c)-2(d)(4), from the Service Recipient for such Testing Year. The
“Specified Employees” shall be determined in accordance with Section 409A(a)(2)(B)(i) of the Code and Treasury Regulation Section 1.409A-1(i). 
 (g) “Specified Employee Effective Date” means the first day of the fourth month following the Specified Employee Identification Date. The Specified Employee Effective Date may be changed by the
Company, in its discretion, in accordance with Treasury Regulation Section 1.409A-1(i)(4). 
 (h) “Specified Employee
Identification Date”, for purposes of Treasury Regulation Section 1.409A-1(i)(3), shall mean December 31. The “Specified Employee Identification Date” shall apply to all “nonqualified deferred compensation
plans” (as defined in Treasury Regulation Section 1.409A-1(a)) of the Service Recipient and all affected Service Providers. The “Specified Employee Identification Date” may be changed by the Company, in its discretion, in
accordance with Treasury Regulation Section 1.409A-1(i)(3). 
 (i) “Testing Year” shall mean the 12 month period ending
on the Specified Employee Identification Date, as determined from time to time. 
 IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the date first written above. 
  

							
	THE COMPANY:	  		 	
			
	 ECC Capital Corporation,
 a Maryland
corporation
	  		 	
				
	By:	 	  
	  		 	Date:                                     
                                        
                     
	Name:	 	Roque A. Santi   Its: President	  		 	
			
	EXECUTIVE:	  		 	
			
	  
	  		 	Date:                                     
                                        
                     
	Larry Moretti	  		 	

  

 17

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