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Amended and Restated

REGISTRATION RIGHTS AGREEMENT

     This Amended and Restated Registration Rights Agreement (this "Agreement"), dated as of May 
_____
, 2008 by and between UNIVERSAL
ENERGY CORP., a Delaware corporation (the "Company"), and each buyer identified on the Schedule of Buyers attached hereto (collectively, the “BUYERS” and each individually, the
“BUYER”).

	
WHEREAS:

     A. In connection with the Securities Purchase Agreement by and among the parties hereto of dated November 26, 2007 (the "Securities Purchase Agreement"), the Company has agreed, upon the terms and subject to the conditions contained therein, to issue and sell to the Buyer Warrants in the amount described in the Securities Purchase Agreement, where each of the Warrants is exercisable
into shares of the Company's Common Stock, par value $0.0001 per share (the "Common Stock"), upon the terms and conditions and subject to the limitations and conditions set forth in the
Warrants, all subject to the terms and conditions of the Securities Purchase Agreement; and

     B. To induce the Buyer to execute and deliver the Consent and Waiver dated May 
_____
, 2008 the Company has agreed to provide certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "1933 Act"), and applicable state securities laws.

     NOW, THEREFORE, In consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Buyer hereby agree as follows:

	
1.      		
DEFINITIONS. a. As used in this Agreement, the following terms shall have the following meanings:	
	 

     “Additional Registration Statement” shall have the meaning ascribed to it in Section 3(b) below.

     “Additional Registration Effectiveness Deadline” shall have the meaning ascribed to it in Section 3(b) below.

     “Additional Registration Filing Deadline” shall have the meaning ascribed to it in Section 3(b) below.

     "Buyer" means the purchaser of Debentures and Warrants pursuant to the Securities Purchase Agreement specified on the signature page hereof, and any transferee or
assignee who agrees to become bound by the provisions of this Agreement in accordance with Section 10 hereof.

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“Commission” shall mean the United States Securities and Exchange Commission.

     "Cutback Shares" means any of the Target Registration Amount of Registrable Securities not included in any of the Registration Statements
previously declared effective hereunder as a result of a limitation on the maximum number of shares of Common Stock of the Company permitted to be registered by the staff of the SEC pursuant to Rule 415.

     “Effective Date” shall mean the date that the initial Registration Statement is first declared effective by the Commission.

     "Effectiveness Period" means, as to any Registration Statement required to be filed pursuant to this Agreement, the period commencing on the Effective Date of such
Registration Statement and ending on the earliest to occur of (a) the fifth anniversary of such Effective Date, (b) such time as all of the Registrable Securities covered by such Registration Statement have been publicly sold by the Holders of the
Registrable Securities included therein, or (iii) such time as all of the Registrable Securities covered by such Registration Statement may be sold by the Holders pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a
written opinion letter to such effect, addressed and acceptable to the Company's transfer agent and the affected Holders.

     “Effectiveness Deadline,” (a) with respect to the Initial Registration Statement, shall mean the 120th calendar day after the date hereof and with respect to
any Additional Registration Statements which may be required pursuant to Section 3(b), the 90th calendar day following the date on which an additional Registration Statement is required to be filed hereunder; provided, however, that in the event the
Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as to such Registration Statement shall be the fifth
Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, (b) with respect to any Additional Registration Statement, shall mean the Additional Registration Effectiveness Deadline and
(c) with respect to any Additional Warrant Registration Statement, shall mean the Additional Warrant Registration Effectiveness Deadline. 

“Exclusion Period” shall have the meaning set forth in Section 3(p) below.

     “Filing Deadline” shall mean the Initial Registration Filing Deadline, the Additional Warrant Registration Filing Deadline or any applicable Additional
Registration Filing Deadline.

     “Initial Registration Filing Deadline” shall mean, with respect to the Initial Registration Statement required hereunder, the 45th calendar day following the
date hereof.

     “Initial Registration Minimum” means a number of Registrable Securities equal to the lesser of (i) the total number of Registrable Securities and (ii) the
maximum number which would enable the Company to conduct such offering in accordance with the provisions of Rule 415 as advised by the staff of the Commission (the “Staff”) in a
written comment letter or otherwise (which number shall be no less than one-third of the number of issued and outstanding shares of Common

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Stock that are held by non-affiliates of the Company on the day immediately prior to the filing date of the Initial Registration Statement, unless the Staff expressly requires otherwise).

     "Investor" means a Buyer or any transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 10 hereof and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 10.

      “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.

     "Register," "Registered," and "Registration" refer to a registration effected by preparing and filing a
Registration Statement or Statements in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous basis ("Rule 415"), and the declaration or ordering of effectiveness of such Registration Statement by the Commission.

     "Registrable Securities," for a given Registration, means (a) any shares of Common Stock (the “Warrant Shares”) issued or issuable upon exercise of or otherwise pursuant to the Warrant(s), and (b) any shares of capital stock issued or issuable as a dividend on or in exchange for or otherwise with respect to any of the foregoing, (c) any
additional shares of Common Stock issuable in connection with any anti-dilution provisions in the Warrants (in each case, without giving effect to any limitations on exercise set forth in the Warrant), (d) any shares of Common Stock issuable upon
exercise of warrants issued to any placement agent as compensation in connection with the financing that is the subject of the Purchase Agreement ("Placement Agent Warrant Shares"), (e) any
shares of common stock issued or issuable upon exercise of or otherwise pursuant to warrants issued and outstanding as of the date hereof (“Additional Warrant Shares”), and (f) any
securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing.”

     "Registration Statement(s)" means a registration statement(s) of the Company under the 1933 Act.

“Registration Trigger Date” shall have the meaning set forth in Section 3(b) below.

     “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

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     “SEC Guidance” means (i) the Securities Act, and (ii) any publicly-available written or oral guidance, comments, requirements or requests of the Commission
staff.

“SEC Share Reduction” shall have the meaning ascribed to it in Section 2(a) below. “Securities” shall have the meaning
ascribed to it in the Securities Purchase Agreement. “Target Registration Amount” shall have the meaning set forth in Section 2(a) below. “Target
Registration Shortfall” shall have the meaning set forth in Section 2(a) below.

     “Warrants” means the warrants issued by the Company pursuant to the Securities Purchase Agreement in conjunction with the Debenture issued by the
Company.

     “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

     b. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.

	
2.      		
REGISTRATION. a. MANDATORY REGISTRATION. The Company shall prepare, and, on or prior	
	 

to the Initial Registration Filing Deadline (as defined above) file with the Commission a Registration Statement on Form S-1 (or, if Form S-1 is not then available, on such form of Registration Statement as is then available to
effect a registration of the Registrable Securities, subject to the consent of the Buyer, which consent will not be unreasonably withheld)(the “Initial Registration Statement”)
covering the resale of the Registrable Securities which Registration Statement, to the extent allowable under the 1933 Act and the rules and regulations promulgated thereunder (including Rule 416), shall state that such Registration Statement also
covers such indeterminate number of additional shares of Common Stock as may become issuable upon exercise of or otherwise pursuant to the Warrants to prevent dilution resulting from stock splits, stock dividends or similar transactions. The number
of shares of Common Stock initially included in such Registration Statement shall be no less than the aggregate number of Warrant Shares that are then issuable upon exercise of or otherwise pursuant to the Warrants, without regard to any limitation
on the Buyer's ability to exercise the Warrants (collectively, the “Target Registration Amount”), provided that the Company shall not be required to register any of the shares
issuable upon exercise of the “E Warrants” and “F Warrants” (as each is defined in the Securities Purchase
Agreement) in the Initial Registration Statement. Notwithstanding the foregoing, if the Company is advised by the staff of the Commission in a written comment letter that it is not eligible to conduct the offering of the Debentures under Rule 415
promulgated under the 1933 Act because of the number of shares sought to be included in the Registration Statement, then the Company may reduce (an “SEC Share Reduction”) the
number of shares covered by such Registration Statement to the maximum number which would enable the Company to conduct such offering in accordance with the provisions of Rule 415 (“Rule 415
Eligible”).  In the event of an SEC Share Reduction, the inclusion of the Warrant Shares in such initial Registration Statement shall take precedence over
and shall not be cut back until the following securities of the Company are cut back and removed from such Registration

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Statement (in the following order): (i) Placement Agent Warrant Shares (to be cut back on a pro-rata basis), (ii) any securities of the Company to be included in such Registration Statement pursuant to Section 3(r), and (iii) the
Warrant shares and the Additional Warrant Shares, on a prorate basis. Any cut back of Warrant Shares will be applied pro rata to each holder in proportion to the principal amount of Debentures held by each Holder. In the event that, due to an SEC
Share Reduction or otherwise, any Registration Statement filed hereunder shall (when combined with any previous Registration Statements that are current and effective) register a number of shares of Common Stock which less than the Target
Registration Amount (a “Target Registration Shortfall”), then the unregistered portion of the Target Registration Amount (the “Target Registration Shortfall Amount”) shall be included in the next Additional Registration Statement
(in accordance with Section 3(b) below).

The Company shall, by 9:30 a.m. New York City time on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424. The Company acknowledges that the
number of shares initially included in each Registration Statement represents a good faith estimate of the maximum number of shares issuable upon exercise of or otherwise pursuant to the Warrants and shall be amended if not sufficient. Each
Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to (and subject to the approval of) the Buyer and its counsel prior to its filing or other
submission.

     b. PIGGY-BACK REGISTRATIONS. If at any time prior to the expiration of the Registration Period (as hereinafter defined) the Company shall determine to file with the
Commission a Registration Statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities (other than on Form S-4 or Form S-8 or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), the Company shall send to Buyer written notice of such determination
and, if within fifteen (15) days after the effective date of such notice, the Buyer shall so request in writing, the Company shall include in such Registration Statement all or any part of the Registrable Securities the Buyer requests to be
registered, except that if, (i) inclusion of such shares would result in the offering not being Rule 415 Eligible, or (ii) in connection with any underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall
impose a limitation on the number of shares of Common Stock which may be included in the Registration Statement because, in such underwriter(s)' judgment, marketing or other factors dictate such limitation is necessary to facilitate public
distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Buyer has requested inclusion hereunder (i) as would enable the offering to
be Rule 415 Eligible or (ii) as the underwriter shall permit;

     PROVIDED, HOWEVER, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which
are not entitled by contract to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities; and

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     PROVIDED, FURTHER, HOWEVER, that, after giving effect to the immediately preceding proviso, any exclusion of Registrable Securities shall be made pro rata with holders
of other securities having the contractual right to include such securities in the Registration Statement other than holders of securities entitled to inclusion of their securities in such Registration Statement by reason of demand registration
rights. No right to registration of Registrable Securities under this Section 2(b) shall be construed to limit any registration required under Section 2(a) hereof. If an offering in connection with which the Buyer is entitled to registration under
this Section 2(d) is an underwritten offering, then the Buyer shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in an underwritten offering using the same underwriter or underwriters and, subject to the
provisions of this Agreement, on the same terms and conditions as other shares of Common Stock included in such underwritten offering. Notwithstanding anything to the contrary set forth herein, the registration rights of the Buyer pursuant to this
Section 2(b) shall only be available in the event the Company fails to timely file, obtain effectiveness or maintain effectiveness of any Registration Statement to be filed pursuant to Section 2(a) in accordance with the terms of this
Agreement.

     3.  OBLIGATIONS OF THE COMPANY.  In connection with the registration of the Registrable Securities, the Company shall have the following obligations:

     a.  The Company shall prepare promptly, and file with the Commission as soon as practicable after the date of the date hereof (but no later than the Filing Deadline), Registration Statements with
respect to the number of Registrable Securities provided in Section 2(a), and thereafter use its best efforts to cause each such Registration Statement relating to Registrable Securities to become effective as soon as possible after such filing, but
in any event shall cause each such Registration Statement relating to Registrable Securities to become effective no later than the Effectiveness Deadline, and shall keep the Registration Statement current and effective pursuant to Rule 415 at all
times until such date as is the earlier of (i) the date on which all of the Registrable Securities for such Registration Statement have been sold and (ii) the date on which all of the Registrable Securities for such Registration Statement (in the
opinion of counsel to the Buyer) may be immediately sold to the public without registration or restriction (including without limitation as to volume by each holder thereof) under the 1933 Act (the "REGISTRATION PERIOD"), which Registration
Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the
statements therein not misleading.

     b.  The Company shall prepare and file with the Commission such amendments (including post-effective amendments) and supplements to each Registration Statements and the prospectus used in connection
with the Registration Statements as may be necessary to keep the Registration Statements current and effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by the Registration Statements until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in the Registration Statements. In the event of a Target Registration Shortfall (the date of each of which is referred to as a “Registration Trigger Date”), or in the event that on any Trading Day (as defined in the Debenture) (each such Trading Day is also referred to as a "Registration Trigger Date") the number of shares
available under a

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Registration Statement filed pursuant to this Agreement is otherwise insufficient to cover all of the Registrable Securities issued or issuable upon exercise of or otherwise pursuant to the Warrants (based on the Exercise  Price
[as defined in the Warrants] then in effect), and otherwise issuable pursuant to the Transaction Documents, without giving effect to any limitations on the Buyer' ability to exercise the Warrants or otherwise receive shares of Common Stock pursuant
to the Transaction Documents, the Company shall amend the Registration Statement, or file a new Registration Statement (on the short form available therefore, if applicable), or both (each, an “Additional
Registration Statement”), so as to cover at least 100% of the total number of Registrable Securities so issued or issuable (based on the Exercise Prices of
the Warrants, and other relevant factors on which the Company reasonably elects to rely, and without giving effect to any limitations on exercise contained in the Warrants or limitations on exercise contained in the Securities Purchase Agreement or
Warrant) as of the Registration Trigger Date (subject to an SEC Share Reduction, if applicable). The Company shall prepare and file each Additional Registration Statement as soon as practicable following any Registration Trigger Date, but not later
than not later than the date that is thirty (30) days following the applicable Registration Trigger Date (the “Additional Registration Filing Deadline”) provided that, if Cutback
Shares are required to be included in the Additional Registration Statement, the “Additional Registration Filing Deadline” shall mean the later of (i) the date that is sixty (60)
days after the date substantially all (as such term is then interpreted by the Commission) of the Registrable Securities registered under the immediately preceding Registration Statement are sold and (ii) the date that is six (6) months following
the date of effectiveness of the most recently effective Registration Statement or Additional Registration Statement filed hereunder. The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof, but in any event the Company shall cause such amendment and/or new Registration Statement to become effective within sixty (60) days of the Registration Trigger Date (the “Additional Registration Effectiveness Deadline”) or as promptly as practicable in the event the Company is required to increase its authorized shares.

     c. The Company shall furnish to the Buyer and its legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the Commission, or received by the Company, one copy of
each Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and each amendment or supplement thereto, and, in the case of the Registration Statement referred to in Section 2(a), each letter written by or on
behalf of the Company to the Commission or the staff of the Commission, and each item of correspondence from the Commission or the staff of the Commission, in each case relating to such Registration Statement (other than any portion of any thereof
which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as the Buyer
may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Buyer. The Company will immediately notify the Buyer by facsimile of the effectiveness of each Registration Statement or any post-effective
amendment. The Company will promptly respond to any and all comments received from the Commission, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the Commission as soon as practicable and
shall file an acceleration request as soon as practicable, but no later than three (3) business days (the "Acceleration Request Deadline"), following the resolution or clearance of all
Commission comments or, if applicable, following notification by the Commission that any such Registration Statement or any amendment thereto will not be subject to review.

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     d. The Company shall use reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration Statements under such other securities or "blue sky" laws of such
jurisdictions in the United States as the Buyer shall reasonably request, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions;

     e. As promptly as practicable after becoming aware of such event, the Company shall notify the Buyer of the happening of any event, of which the Company has knowledge, as a result of which the
prospectus included in any Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and use
its best efforts promptly to prepare a supplement or amendment to any Registration Statement to correct such untrue statement or omission, and deliver such number of copies of such supplement or amendment to the Buyer as the Buyer may reasonably
request; provided that, for not more than twenty (20) consecutive days (or a total of not more than sixty (60) days in any twelve (12) month period), the Company may delay the disclosure of material non-public information concerning the Company (as
well as prospectus or Registration Statement updating) the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company (an "Allowed Delay"); provided, further, that the Company shall promptly (i) notify the Buyer in writing of the existence of (but in no event, without the prior written consent of the Buyer, shall the Company disclose to the Buyer any of the facts or
circumstances regarding) material non-public information giving rise to an Allowed Delay and (ii) advise the Buyer in writing to cease all sales under such Registration Statement until the end of the Allowed Delay, provided the above actions are
consistent with the requirements of the 1933 Act and/or 1934 Act or other applicable law. Upon expiration of the Allowed Delay, the Company shall again be bound by the first sentence of this Section 3(e) with respect to the information giving rise
thereto.

     f. The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify the Buyer who holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution
thereof.

     g.  The Company shall permit a single firm of counsel designated by the Buyer to review such Registration Statement and all amendments and supplements thereto (as well as all requests for acceleration
or effectiveness thereof), at Buyer’s own cost, a reasonable period of time prior to their filing with the Commission (not less than three (3) business days but not more then five (5) business days) and not file any document in a form to which
such counsel reasonably objects and will not request acceleration of such Registration Statement without prior notice to such counsel. 

     h. The Company shall hold in confidence and not make any disclosure of information concerning the Buyer provided to the Company unless (i) disclosure of such information is necessary

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to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this or any other agreement. The
Company agrees that it shall, upon learning that disclosure of such information concerning the Buyer is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Buyer prior to making
such disclosure, and allow the Buyer, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

     i.  The Company shall use its best efforts to (i) cause all the Registrable Securities covered by the Registration Statement to be listed on each national securities exchange on which securities of
the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) to the extent the securities of the same class or series are not then
listed on a national securities exchange, secure the designation and quotation, of all the Registrable Securities covered by the Registration Statement on the NNM or, if not eligible for the NNM on the Nasdaq Small Cap or, if not eligible for the Nasdaq Small Cap, on the Over the Counter electronic bulletin board and, without limiting the generality of the foregoing, to arrange for at least two market makers to register with
the Financial Industry Regulatory Authority (“FINRA”) as such with respect to such Registrable Securities. 

     j.  The Company shall provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement.

     k.  The Company shall cooperate with the Buyer who holds Registrable Securities being offered and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable Securities to be offered pursuant to such Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the managing
underwriter or underwriters, if any, or the Buyer may reasonably request and registered in such names as the managing underwriter or underwriters, if any, or the Buyer may request, and, within three (3) business days after a Registration Statement
which includes Registrable Securities is ordered effective by the Commission, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to the
Buyer) an appropriate instruction and an opinion of such counsel in the form required by the transfer agent in order to issue the Registrable Securities free of restrictive legends.

     l. At the request of the holders of a majority-in-interest of the Registrable Securities, the Company shall prepare and file with the Commission such amendments (including post-effective amendments)
and supplements to a Registration Statement and any prospectus used in connection with the Registration Statement as may be necessary in order to change the plan of distribution set forth in such Registration Statement.

     m. The Company shall not, and shall not agree to, allow the holders of any securities of the Company to include any of their securities in any Registration Statement under Section 2(a) hereof or any
amendment or supplement thereto under Section 3(b) hereof without the consent of the

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holders of a majority-in-interest of the Registrable Securities, except for securities which have contractual demand or piggyback registration rights in effect at the time of the date hereof. In addition, the Company shall not
offer any securities for its own account or the account of others in any Registration Statement under Section 2(a) hereof or any amendment or supplement thereto under Section 3(b) hereof without the consent of the holders of a majority-in-interest
of the Registrable Securities.

     n.  The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Buyer of Registrable Securities pursuant to a Registration Statement.

     o.  The Company shall comply with all applicable laws related to a Registration Statement and offering and sale of securities and all applicable rules and regulations of governmental authorities in
connection therewith (including without limitation the 1933 Act and the 1934 Act and the rules and regulations promulgated by the Commission).

     p. Further Registration Statements. Except for a registration statement filed on behalf of the Buyer pursuant to Section 2 or Section 3 of
this Agreement, and except for an underwritten public offering, the Company will not file any registration statements or amend any already filed registration statement with the Commission or with state regulatory authorities without the consent of
the Subscriber until the expiration of the "Exclusion Period," which shall be defined as the sooner of (i) the date that the Registration Statement shall have been current and available for
use in connection with the resale of the Registrable Securities for a period of 180 days, or (ii) until all the Warrant Shares have been resold or transferred by the Subscribers pursuant to the Registration Statement or are eligible for immediate
unrestricted resale pursuant to Rule 144(k), without volume limitations. The Exclusion Period will be tolled during the pendency of an Event of Default as defined in the Debenture or an Event of Default as defined in the Warrants. 

     q. NASD Rule 2710 Filing; Broker Compensation. The Company shall cooperate with any broker-dealer through which a Holder proposes to resell
its Registrable Securities in effecting a filing with the FINRA Corporate Financing Department pursuant to NASD Rule 2710, as requested by any such Holder. 

     r. No Piggyback On Registrations. Except as and to the extent expressly allowed by the Securities Purchase Agreement, neither the Company nor
any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in a Registration Statement other than the Registrable Securities, and the Company shall not during the Effectiveness Period
enter into any agreement providing any such right to any of its security holders. Anything herein to the contrary notwithstanding, the provisions of this subsection r. shall not apply to the Additional Warrant Shares.

4. ADDITIONAL REGISTRATION STATEMENT FOR SHARES UNDERLYING E

WARRANTS AND F WARRANTS. Subject to SEC Guidance, the Company shall prepare and file each an additional registration statement (the “Additional Warrant
Registration Statement”) as soon as practicable following the date that the Holder exercises its E Warrant (the “Additional Warrant Registration Trigger Date”), but not later than the 45th calendar day following the Additional Warrant Registration Trigger Date (the “Additional Warrant
Registration Filing

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Deadline”).  The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof, but in
any event the Company shall cause such amendment and/or new Registration Statement to become effective by the 120th calendar day following the Registration Trigger Date (the “Additional Registration Effectiveness Deadline”).

     5.  OBLIGATIONS OF THE BUYER.  In connection with the registration of the Registrable Securities, the Buyer shall have the following obligations:

     a. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of the Buyer that the Buyer
shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least three (3) business days prior to the first anticipated filing date of the Registration Statement, the
Company shall notify the Buyer of the information the Company requires from each Buyer.

     b.  The Buyer, by the Buyer's acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the
Registration Statements hereunder, unless the Buyer has notified the Company in writing of the Buyer's election to exclude all of the Buyer's Registrable Securities from the Registration Statements.

     c.  In the event of an underwritten offering pursuant to Section 2(b) in which any Registrable Securities are to be included, the Buyer agrees to enter into and perform the Buyer's obligations under
an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the managing underwriter of such offering and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of the Registrable Securities, unless the Buyer has notified the Company in writing of the Buyer's election to exclude all of the Buyer's Registrable Securities from such Registration
Statement.

     d.  The Buyer agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(e) or 3(f), the Buyer will immediately discontinue disposition
of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Buyer's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(e) or 3(f) and, if so directed by the
Company, the Buyer shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Buyer's possession, of the prospectus covering such Registrable Securities current
at the time of receipt of such notice.

     e.  No Buyer may participate in any underwritten registration hereunder unless the Buyer (i) agrees to sell the Buyer's Registrable Securities on the basis provided in any underwriting arrangements in
usual and customary form entered into by the Company, (ii) completes and executes

11

all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions and any expenses in excess of those payable by the Company pursuant to Section 5 below.

     f. Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex A (a “Selling Shareholder
Questionnaire”) not less than two Trading Days prior to the Filing Date or by the end of the fourth Trading Day following the date on which such Holder receives draft materials in accordance with this
Section.

     6. EXPENSES OF REGISTRATION. All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualification fees, printers and accounting fees, the fees and disbursements of counsel for the Company shall be borne by the
Company.

     7.  INDEMNIFICATION.  In the event any Registrable Securities are included in a Registration Statement under this Agreement:

     a.  To the extent permitted by law, the Company will indemnify, hold harmless and defend (i) the Buyer, (ii) the directors, officers, partners, managers, members, employees, agents and each person who
controls any Buyer within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), if any, (iii) any underwriter (as defined in the 1933 Act) for the
Buyer in connection with an underwritten offering pursuant to Section 2(b) hereof, and (iv) the directors, officers, partners, employees and each person who controls any such underwriter within the meaning of the 1933 Act or the 1934 Act, if any
(each, an "Indemnified Person"), against any joint or several losses, claims, damages, liabilities or expenses (collectively, together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, "Claims") to which any of them may become subject insofar as such Claims arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or the omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements therein
not misleading; (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto with the Commission) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances
under which the statements therein were made, not misleading; or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities (the matters in the foregoing clauses (i) through (iii) being, collectively, "Violations"). The Company shall reimburse
the Indemnified Person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section 7(a): (i) shall not apply to a Claim arising out of or based upon a Violation which

12

occurs in reliance upon and in conformity with information furnished in writing to the Company by any Indemnified Person or underwriter for such Indemnified Person expressly for use in connection with the preparation of such
Registration Statement or any such amendment thereof or supplement thereto; (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be
unreasonably withheld; and (iii) with respect to any preliminary prospectus, shall not inure to the benefit of any Indemnified Person if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a
timely basis in the prospectus, as then amended or supplemented, such corrected prospectus was timely made available by the Company pursuant to Section 3(c) hereof, and the Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the Buyer pursuant to Section 10.

     b. Promptly after receipt by an Indemnified Person under this Section 7 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if Claim in
respect thereof is to be made against any the Company under this Section 7, deliver to the Company a written notice of the commencement thereof, and the Company shall have the right to participate in, and, to the extent the Company so desires, to
assume control of the defense thereof with counsel mutually satisfactory to the Company and the Indemnified Person, as the case may be. 

     PROVIDED, HOWEVER, that an Indemnified Person shall have the right to retain its own counsel with the fees and expenses to be paid by the Company, if, in the
reasonable opinion of counsel retained by the Company, the representation by such counsel of the Indemnified Person and the Company would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other
party represented by such counsel in such proceeding. The Company shall pay for only one separate legal counsel for the Indemnified Persons, and such legal counsel shall be selected by Buyer, if the Buyer is entitled to indemnification hereunder.
The failure to deliver written notice to the Company within a reasonable time of the commencement of any such action shall not relieve the Company of any liability to the Indemnified Person under this Section 6, except to the extent that the Company
is actually prejudiced in its ability to defend such action. The indemnification required by this Section 7 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.

     c. To the extent permitted by law, the Buyer will indemnify, hold harmless and defend (i) the Company, and (ii) the directors, officers, partners, managers, members, employees, or agents of the
Company, if any (each, a "Company Indemnified Person"), against any joint or several losses, claims, damages, liabilities or expenses (collectively, together with actions, proceedings or
inquiries by any regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, "Claims") to which any of them may become subject insofar as such Claims
arise out of or are based upon a Claim arising out of or based upon any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities, which occurs due to the inclusion by the Company in a Registration Statement of false or

13

misleading information about the Buyer, where such information was furnished in writing to the Company by the Buyer for the purpose of inclusion in such Registration Statement.

     8. CONTRIBUTION. To the extent any indemnification by the Company is prohibited or limited by law, the Company agrees to make the maximum contribution with respect to
any amounts for which it would otherwise be liable under Section 7 to the fullest extent permitted by law, based upon a comparative fault standard. 

     9. REPORTS UNDER THE 1934 ACT. With a view to making available to the Buyer the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the Commission that may at any time permit the Buyer to sell securities of the Company to the public without registration ("Rule 144"), the Company agrees to:

     a.  make and keep public information available, as those terms are understood and defined in Rule 144;

     b.  file with the Commission in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements
(it being understood that nothing herein shall limit the Company's obligations under Section 4(c) of the Securities Purchase Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144;
and

     c.  furnish to the Buyer so long as the Buyer owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule
144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the
Buyers to sell such securities pursuant to Rule 144 without registration.

     10. ASSIGNMENT OF REGISTRATION RIGHTS. The rights under this Agreement shall be automatically assignable by the Buyers to any transferee of all or any portion of
Registrable Securities if: (i) the Buyer agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a
reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment, the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws, (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein, and (v) such transfer shall have been made in  accordance with the applicable
requirements of the Securities Purchase Agreement. In the event that the Buyer transfers all or any portion of its Registrable Securities pursuant to this Section, the Company shall have at least ten (10) days to file any amendments or supplements
necessary to keep the Registration Statement current and effective pursuant to Rule 415, and the commencement date of any Event of Default under the Debenture or the Warrants caused thereby will be extended by ten (10) days.

14

     11.  AMENDMENT OF REGISTRATION RIGHTS.  Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with written consent of the Company, the Buyer (to the extent such Buyer still owns Registrable Securities) and Buyers who hold a majority interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding upon the Buyer and the Company.

	
12.      		
MISCELLANEOUS. a. A person or entity is deemed to be a holder of Registrable Securities whenever such	
	 

person or entity owns of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company
shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.

     b. Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be:

If to the Company: To the address set forth immediately below such Company’s name on the signature pages hereto.

	
With copy to:

	 	
Joseph Sierchio, Esq.

Sierchio Greco & Greco, LLP

110 East 59th Street, 29th Floor

New York, New York 10022

Tel. (212) 246-3030

Fax (212) 486-0208

     If to a Buyer: To the address set forth immediately below such Buyer's name on the signature pages hereto.

Each party shall provide notice to the other party of any change in address.

     c.  Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

     d. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance

15

with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the
City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. The parties hereby
waive all rights to a trial by jury.  If either party shall commence an action or proceeding to enforce any provisions of the this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

     e. This Agreement and the Securities Purchase Agreement (including all schedules and exhibits thereto) constitute the entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Securities Purchase Agreement supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

     f. Subject to the requirements of Section 10 hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.

     g. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

     h. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by
a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

     i. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

16

     j.  Except as otherwise provided herein, all consents and other determinations to be made by the Buyer pursuant to this Agreement shall be made by Buyers holding a majority of the Registrable
Securities, determined as if the all of the Debenture and Warrants then outstanding have been converted or exercised into for Registrable Securities.

     k.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for breach of its obligations hereunder will be inadequate and agrees, in the event of a breach or threatened breach by the Company of any of the provisions hereunder, that the Buyer shall
be entitled, in addition to all other available remedies in law or in equity, to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, without the
necessity of showing economic loss and without any bond or other security being required.

     l. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any
party.

     m. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision
hereof.

     n. The initial number of Registrable Securities included in any Registration Statement and each increase to the number of Registrable Securities included therein shall be allocated pro rata among the
Buyers based on the number of Registrable Securities held by the Buyer at the time of such establishment or increase, as the case may be. In the event a Buyer shall sell or otherwise transfer any of such holder's Registrable Securities, each
transferee shall be allocated a pro rata portion of the number of Registrable Securities included in a Registration Statement for such transferor. Any shares of Common Stock included in a Registration Statement and which remain allocated to any
person or entity which does not hold any Registrable Securities shall be allocated to the remaining Buyers, pro rata based on the number of shares of Registrable Securities then held by the Buyers. For the avoidance of doubt, the number of
Registrable Securities held by a Buyer shall be determined as if all the Debenture and Warrants then outstanding and held by a Buyer were converted into or exercised for Registrable Securities, without regard to any limitation on the Buyer's ability
to convert the Debenture or exercise the Warrants.

     o.  There shall be no oral modifications or amendments to this Agreement.  This Agreement may be modified or amended only in writing.

17

     IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the ___th day of May,
2008.

	
COMPANY:

	
UNIVERSAL ENERGY CORP.

By: 
________________________

Print Name: 
_________________

Title: 
_______________________

	
ADDRESS:

30 Skyline Drive

Lake Mary, FL 32746

Phone: 800-975-2076

Fax: 800-805-4561

	
BUYER: [Insert Name Of Buyer]

	
By: 
________________________

Print Name: 
_________________

Title: 
_______________________

	
ADDRESS:

___________________

___________________

___________________

Phone: 
_____________

Fax: 
_______________

18

SCHEDULE OF BUYERS

19

Annex A

     UNIVERSAL ENERGY CORP. Selling Securityholder Notice and Questionnaire

The undersigned beneficial owner of common stock (the “Registrable Securities”) of Universal Energy Corp., a Delaware corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of
the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is
annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.

     Certain legal consequences arise from being named as a selling securityholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable
Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Registration Statement and the related prospectus.

	
NOTICE

The undersigned beneficial owner (the “Selling Securityholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

	
1.      		
Name.	
	 
	 	
(a)      		
Full Legal Name of Selling Securityholder	
	 
	 	
(b)      		
Full Legal Name of Registered Holder (if not the same as (a) above) through	
	 

	
which Registrable Securities are held:

     (c) Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this
Questionnaire):

20

	
2. Address for Notices to Selling Securityholder:

	
Telephone: 
_____________________

Fax: 
___________________________

Contact Person: 
__________________

	
3.      		
Broker-Dealer Status:	
	 
	 	
(a) Are you a broker-dealer?	
	 

	
                          Yes 
		
 		
No 
		
 		
 
		
 		
 
		
 		
 
		
 		
 
	
	
 
	
	
                          (b) 
		
 		
If “yes” to Section 3(a), did you receive 
		
 		
your 
		
 		
Registrable 
		
 		
Securities 
		
 		
as 
	
	
compensation for investment banking services to the Company? 
		
 		
 
		
 		
 
		
 		
 
		
 		
 
	

Yes __ No __

     Note: If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

	
(c) 
		
 		
Are you an affiliate of a broker-dealer? 
	
	
Yes 
		
 		
No 
	

     (d) If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable
Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

	
Yes 
		
 		
No 
	
	
Note: 
		
 		
If “no” to Section 3(d), the Commission’s staff has indicated that you should be 
	

identified as an underwriter in the Registration Statement.

4. Beneficial Ownership of Securities of the Company Owned by the Selling Securityholder.

Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Purchase Agreement.

     (a) Type and Amount of other securities beneficially owned by the Selling Securityholder:

21

	
5. Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or
has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

	 	
State any exceptions here:

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains
effective.

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus
and any amendments or supplements thereto.  The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Date: 
__________
 Beneficial Owner: 
__________________________

	
By: 
_____________________________

Print Name: 
______________________

Title: 
___________________________

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

22EMPLOYMENT AGREEMENT

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT is entered into as of the 5th day of May, 2008 (the "Effective Date") between the FEDERAL HOME LOAN BANK OF CHICAGO (the "Bank") and Matthew R. Feldman (the "Executive").

RECITALS:

A.The Bank and the Executive have agreed to a compensation arrangement that closely aligns the interests of the Executive with the interests of the members of the Bank and that provides appropriate incentives to the Executive for the successful performance of his duties; and

B.The Bank and the Executive wish to confirm the employment of the Executive by the Bank on the terms and conditions hereinafter set forth; and

C.The Bank recognizes the valuable services that the Executive has rendered and desires to be assured that the Executive will continue his active participation in the business of the Bank, subject to the terms of this Agreement, and desires to assure Executive that his employment will continue subject to the terms of this Agreement.

NOW, THEREFORE, in consideration of the promises and the mutual agreements contained in this Agreement, it is agreed as follows:

1.  DEFINITIONS.  

As used in this Agreement, unless the context otherwise requires a different meaning, the following terms shall have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof and words in the masculine gender being deemed to be feminine as may be applicable):

Board means the Board of Directors of the Bank.  

Cause means any of the following activities by the Executive: (i) the conviction of the Executive for a felony, or a crime involving moral turpitude; (ii) the commission of any act involving dishonesty, disloyalty, or fraud with respect to the Bank or any of its members; (iii) willful and continued failure to perform material duties which are reasonably directed by the Board which are consistent with the terms of this Agreement and the position of President and CEO; (iv) gross negligence or willful misconduct with respect to the Bank or any of its members; (v) any violation of Bank policies regarding sexual harassment, discrimination, substance abuse or the Bank's Code of Ethics to the extent such acts would provide grounds for a termination for cause with respect to other employees; or (vi) a material breach by the Executive of a material provision of this Agreement.  No act or failure to act on the part of the Executive shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that his action or omission was in the best interests of the Bank.

Confidential Information means:  (a) financial information, including but not limited to earnings, assets, debts, prices, fee structures, volumes of purchases or sales, or other financial data, whether relating to the Bank generally, or to particular products or services offered by the Bank; (b) customer or member information, including but not limited to information concerning the products or services utilized or purchased by members, the names and addresses of members, terms of funding or loan agreements, or of particular transactions, or related information about potential members; (c) marketing information, including but not limited to details about ongoing or proposed marketing programs or agreements by or on behalf of the Bank, marketing forecasts, results of marketing efforts or information about impending transactions, and pricing strategies; (d) personnel information, including but not limited to employees' personal or medical histories, employment agreements, commission and bonus plans, compensation or other terms of employment, actual or proposed promotions, hiring, resignations, disciplinary actions, terminations, training methods, performance or other employee information; (e) information contained in any computer files, including, but not limited to reports of examination issued by the Bank's regulator, current and historical information regarding the Bank's borrowing and other relationships with its members and other borrowers, and to the results of the Bank's internal ratings of its members and other borrowers, confidential information of third parties provided to the Bank under an agreement requiring the Bank to maintain the confidentiality of such information except for specified permitted uses, or other proprietary operating software systems, and any associated passwords; (f) procedures manuals, policy manuals, sales training materials, brochures, funding agreements, license agreements, minutes of board meetings, minutes of manager's meetings, sales meetings; and (g) contacts, including but not limited to any compilations of past, existing or prospective sources of business, proposals or agreements between members and the Bank, any sales or borrowing histories or other revenue information by member or customer, status of member or customer accounts or credit, or related information about actual or prospective members or contacts.

Determination Date means the date of termination of the Executive's employment with the Bank for any reason whatsoever or any earlier date (during the Restricted Period) of an alleged breach of the Restrictive Covenants by the Executive.

Disability means that the Executive (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months as determined under the Bank's short- or long-term disability program; or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months as determined under the Bank's short- or long-term disability program, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering the Bank's employees.

Good Reason means any of the following:
(a)a reduction by the Bank in the Executive's base salary; or

(b)a material change in the geographic location of the Executive's principal office assignment; 

(c)a material breach of this Agreement by the Bank; 

(d)a material diminution in the Executive's authority, duties, or responsibilities as an Executive of the Bank; or

(e)the Executive is prevented, by factors outside of the Executive's control, from (i) fulfilling his responsibilities as President and CEO of the Bank, (ii) achieving progress in improving the profitability of the Bank, or (iii) achieving the strategic goals and objectives established by the Board, such acts of prevention being defined as a material breach of this Agreement by the Bank; provided, however, that "prevention" does not include the Board's lawful authority to exercise control over the affairs of the Bank.

For purposes of this Agreement, Good Reason shall not be deemed to exist unless the Executive's termination of employment for Good Reason occurs within two (2) years following the initial existence of one of the conditions specified in clauses (a) through (e) above, the Executive provides the Board with written notice of the existence of such condition within ninety (90) days after the initial existence of the condition, and the Board fails to remedy the condition within thirty (30) days after the receipt of such notice by the Board.

Notwithstanding the foregoing, Good Reason will not exist if the Executive voluntarily agrees in writing to any of the changes listed above as constituting Good Reason.

Person means any individual or any corporation, partnership, joint venture, association, or other entity or enterprise.

Protected Employees means employees of the Bank who were employed by the Bank at any time within six (6) months prior to the Determination Date.

Restricted Period means the period of the Executive's employment by the Bank under this Agreement plus a period extending two (2) years from the date of termination of employment.

Restrictive Covenants means the restrictive covenants contained in Section 9(b) and (c) hereof.

Retirement means the planned and voluntary termination by the Executive of his employment on or after reaching the earliest retirement age permitted by the Financial Institutions Retirement Fund.

Term of the Agreement means the period which commences on the Effective Date and, unless earlier terminated pursuant to Section 6, ends on May 31, 2011.  The "Term of the Agreement" shall also include, as applicable, each subsequent one-year renewal period following the automatic renewal of this Agreement pursuant to Section 3, to the extent such automatic renewals occur.

2.  DUTIES OF EMPLOYEE.

The Executive has been retained by the Bank as its President and Chief Executive Officer ("President and CEO") with overall charge and responsibility for the business and affairs of the Bank.  The Executive shall report directly to the Board and shall perform such duties as the Executive shall reasonably be directed to perform by the Board.  The Executive shall devote his best efforts to the performance of his duties of his position with the Bank and shall devote substantially all of his business time and attention to the performance of his duties under this Agreement, excluding any periods of vacation and sick leave to which the Executive is entitled.  The Executive may (a) serve on civic or charitable boards or committees and (b) deliver lectures and fulfill speaking engagements, so long as such activities do not in the view of the Board interfere, in any substantive respect, with the Executive's responsibilities hereunder or conflict in any material way with the business of the Bank or the Bank's Code of Ethics.

3.  TERM OF THE AGREEMENT.

Unless terminated earlier as provided in Section 6, the Executive's employment as President and CEO under this Agreement will continue for the Term of the Agreement; provided, however, that the Term of the Agreement shall be automatically extended by one (1) year effective June 1, 2011 and each year thereafter until such date as either the Bank or the Executive shall have terminated this automatic extension provision by giving written notice to the other party at least three (3) months prior to the end of the initial Term of the Agreement or any extension thereof.

4.  COMPENSATION.  

(a)Salary.  The Executive's initial base salary is $650,000, which base salary shall be effective retroactively to April 14, 2008 and shall be payable in accordance with Bank's payroll payment dates.  The Executive agrees that his base salary shall not be increased prior to June 1, 2011.  Such date shall be referred to as the "Compensation Review Date."  The Personnel & Compensation Committee of the Board (the "P&C Committee") will review the performance of the Executive at least annually.  Based on such reviews, the P&C Committee in its discretion may increase the Executive's base salary following the occurrence of the Compensation Review Date, and such increased amount shall thereafter constitute the Executive's "base salary" for all purposes under this Agreement.  

(b)Incentive Programs.  

(i)Short-Term Bonus Plan. The Executive agrees that he will not participate in the Bank's Incentive Compensation Plan dated April 24, 2007, the Bank's Management Incentive Compensation Plan dated April 24, 2007, the President's Incentive Compensation Plan dated January 21, 2003, or the Bank's Long-Term Supplemental Incentive Compensation Plan dated January 22, 2008 (the Executive waiving hereby all performance units previously granted to the Executive pursuant to such Plan), or any successor plans, until after the Compensation Review Date.  Notwithstanding the foregoing, for each fiscal year of the Bank beginning with the fiscal year ending December 31, 2008, the Executive shall be eligible to receive an annual bonus targeted at sixty percent (60%) of his base salary and having a maximum payout of one hundred percent (100%) of his base salary.  Such bonus shall be earned by the Executive with respect to each fiscal year during the Term of the Agreement if he attains the performance objectives to be mutually agreed upon by the Board and the Executive for each such fiscal year; provided that, in addition to attaining such performance objectives, the first such bonus payment for which the Executive shall be eligible hereunder shall also be subject to the further condition that the Bank has (A) earned a net profit for the fiscal year and (B) has paid dividends on its capital stock for at least two (2) consecutive quarters during such fiscal year.  Such performance objectives and bonus shall be determined in accordance with the terms of a new incentive compensation plan to be approved by the Board not later than July 22, 2008.  The bonus, if any, for a given year shall be paid on or about March 15 of the following year or as otherwise required to comply with the short-term deferral rules of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code").

(ii)Long-Term Incentive Plan.  In addition to the short-term bonus described in Section 4(b)(i), the Board shall establish a new long-term incentive program, not later than July 22, 2008, in which the Executive will be a participant.  Such plan shall use the Compensation Review Date as the initial payment date under such plan.  The Executive shall earn a bonus under such long-term plan equal to three (3) times his base salary if he attains the performance objective targets agreed upon by the Board and the Executive under the terms of such plan.  Such bonus shall be earned by the Executive with respect to the three-year performance period under such plan if he attains the performance objectives to be mutually agreed upon by the Board and the Executive for the stated plan performance period(s); provided that the performance objectives agreed to in such long-term incentive plan must include, among other objectives, both (A) net profitability of the Bank for at least four (4) quarters during the performance period and (B) the payment of dividends on the Bank's capital stock for at least two (2) consecutive quarters during such performance period.

5.  EXECUTIVE BENEFITS.  

The Executive shall be eligible to participate in or receive benefits that are provided to employees under the Bank's various employee benefit plans, excluding bonus plans, if any, except as provided in Section 4.  The terms of those plans are set forth in the respective plan documents, and are subject to change based on the terms set forth therein. 

The Bank shall provide the Executive with the following perquisites:  (b) a parking space at the Bank's main office (with the taxable value of such perquisite being grossed up to the Executive for tax purposes) and (b) such airline upgrade coupons for Bank-related travel as were typically provided to the Bank's previous president and chief executive officer.

6.  TERMINATION.  

The Executive's employment under this Agreement may be terminated under the following circumstances:

	Death.  Upon the Executive's death, in which case this Agreement and the Term of the Agreement will terminate on the date of death;

	Disability.  Upon the Executive's Disability, in which case the Executive may be eligible for leave under one or more of the Bank's medical leave and/or disability plans.  If the Executive's Disability results in the Executive's inability to perform, with or without reasonable accommodation (as defined under the Americans with Disabilities Act), the Executive's duties under this Agreement, after the initial ninety- (90-) day period of Disability, the Bank may give the Executive thirty (30) days' written notice of termination of this Agreement.  If the Executive does not return to the performance of the Executive's duties hereunder on a full-time basis by the end of the thirty day notice period, then the Bank may terminate the Executive's employment hereunder effective on the thirty-first (31st) day following the giving by the Bank of such written notice of termination.  Although employment under the terms of this Agreement and the Term of the Agreement will end, the termination of this Agreement will not affect the Executive's employment and benefits under the Bank's medical leave and/or disability plans, if applicable;

	Termination by the Board for Cause.  The Board may terminate the Executive's employment at any time for Cause, such termination to be effective as of the date stated in a written notice of termination delivered to the Executive.  Before proceeding with termination under subparts (iii) through (vi) of the definition of "Cause", the Board will give the Executive written notice of the grounds for termination and thirty (30) days to cure, if curable.  If the Executive fails or is unable to cure, the Executive's employment will terminate immediately;

	Resignation by the Executive Other Than for Good Reason.  The Executive may voluntarily resign his position with the Bank at any time for any reason or for no reason, other than under circumstances constituting Good Reason, upon thirty (30) days' prior written notice to the Bank.  Such resignation will be effective as of the date stated in such written notice, unless otherwise mutually agreed by the parties;

	Termination by the Bank Other Than for Cause.  The Bank may terminate Executive's employment for any reason or for no reason, other than under circumstances constituting Cause, upon thirty (30) days' prior written notice to Executive.  Such termination will be effective as of the date stated in a written notice of termination;

	Termination by Executive With Good Reason.  The Executive may resign the Executive's employment hereunder at any time for Good Reason.  The Executive must give the Bank written notice explaining the reasoning for the Executive's determination that an event giving rise to Good Reason for termination has occurred and allow the Bank thirty (30) days to cure as further described in the definition of "Good Reason" in Section 1.  If the Bank fails to cure, the Executive's employment under this Agreement will end on the date stated in the notice by the Executive (or such earlier date after the delivery of such notice as the Bank may elect); or

	Non-Renewal of Agreement.  The Bank may exercise its right not to renew this Agreement pursuant to Section 3.  Such non-renewal shall be deemed to be a termination and will be effective as of the last day of the Term of the Agreement immediately following the Bank's notice to the Executive that this Agreement is not being renewed.

In no event will the termination of the Executive's employment affect the rights and obligations of the parties set forth in this Agreement, except as expressly set forth herein.  Any termination of the Executive's employment pursuant to this Section 6 will be deemed to be a termination of all of the Executive's positions with the Bank.

7.  TERMINATION PAYMENTS.  

The Executive will be entitled to receive the following payments upon termination of the Executive's employment hereunder:

	Termination Under Certain Circumstances.  In the event of the termination of the Executive's employment pursuant to any of the following provisions:

	Section 6(a)[Death]
	Section 6(b)[Disability]
	Section 6(c)[By the Bank for Cause]
	Section 6(d)[By the Executive Other Than for Good Reason]

the Bank will pay to the Executive (or the Executive's estate, as the case may be) immediately following such termination all accrued unutilized vacation time as of such date, and as soon as practicable, but in any event no later than the next regularly-scheduled pay date that occurs at least five (5) days after such termination, all accrued and unpaid salary for time worked as of the date of termination.  The Executive will not be entitled to any other compensation, bonus or severance pay from the Bank; provided, however, that nothing in this Section 7(a) shall affect any vested rights which the Executive has under any pension, thrift, or other benefit plan, excluding the Bank's Employee Severance Plan dated May 1, 2007 or any successor plan (the "Severance Plan").

	Termination Under Other Circumstances.  In the event of termination of the Executive's employment pursuant to any of the following provisions:

	Section 6(e)[By the Bank Other Than for Cause]
	Section 6(f)[By the Executive for Good Reason]
	Section 6(g)[Non-Renewal by the Bank of the Agreement]

the Executive will be entitled to receive the following payments and benefits:

	on the Bank's next scheduled pay date that occurs at least five (5) days after termination, all accrued and unpaid salary for time worked as of the date of termination;
	on the Bank's next scheduled pay date that occurs at least five (5) days after termination, all accrued but unutilized vacation time as of the date of termination, determined in accordance with the Bank's employee handbook;
	salary continuation (at the base salary level in effect at the time of termination) pursuant to the Bank's normal payroll schedule for a period of time beginning on the date of termination and continuing for one (1) year; and
	continued participation in the Bank's employee health care benefit plans in accordance with the terms of the Bank's Severance Plan that would be applicable to the Executive if his employment had been terminated pursuant to such plan, provided that the Bank will continue paying the employer's portion of the Executive's medical and/or dental insurance premiums, if the Executive participates in either or both programs, for one (1) year from the date of termination. 

 
(c)Taxes.  The Executive shall be responsible for the payment of all federal, state, and local income and other taxes which may be due with respect to any payments made to the Executive pursuant to this Agreement; provided, however, that if the Executive incurs any additional tax liabilities, penalties, and/or interest under Section 409A of the Code, then the Bank shall indemnify and hold the Executive harmless for such additional tax liabilities, penalties, and/or interest.

These payments are contingent upon the Executive complying with Sections 9, 11, 12, and 13 of this Agreement and signing a general release of all claims against the Bank in such form as the Bank shall reasonably require.  The Executive will not be entitled to any other compensation, bonus, or severance pay from the Bank; provided, however, that nothing in this Section 7(b) shall affect any vested rights which the Executive has under any pension, thrift, or other benefit plan, excluding the Severance Plan.

8.  CONFLICT OF INTEREST.  

The Executive may not use his position, influence, knowledge of confidential information, or the Bank's assets for personal gain.  A direct or indirect financial interest, including joint ventures in or with a competitor, supplier, vendor, customer or prospective customer without disclosure and written approval from the Board is strictly prohibited and could be grounds for dismissal for Cause.  The Executive shall at all times comply with the Bank's Code of Ethics.

9.  EXECUTIVE COVENANTS.

(a)General.  The Executive and the Bank understand and agree that the purpose of the provisions of this Section 9 is to protect legitimate business interests of the Bank, as more fully described below, and is not intended to impair or infringe upon the Executive's right to work, earn a living, or acquire and possess property from the fruits of his labor.  The Executive hereby acknowledges that the post-employment restrictions set forth in this Section 9 are reasonable and that they do not, and will not, unduly impair his ability to earn a living after the termination of this employment with the Bank.  Therefore, subject to the limitations of reasonableness imposed by law upon the restrictions set forth herein, the Executive shall be subject to the restrictions set forth in this Section 9.

(b)Restriction on Disclosure and Use of Confidential Information.  The Executive understands and agrees that the Confidential Information constitutes a valuable asset of the Bank and its affiliated entities, and may not be converted to the Executive's own use.  Accordingly, the Executive hereby agrees that the Executive shall not, directly or indirectly, at any time during the Restricted Period reveal, divulge, or disclose to any Person not expressly authorized by the Bank any Confidential Information, and the Executive shall not, directly or indirectly, at any time during the Restricted Period use or make use of any Confidential Information in connection with any business activity other than that of the Bank.  The parties acknowledge and agree that this Agreement is not intended to, and does not, alter either the Bank's rights or the Executive's obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices.

(c)Nonsolicitation of Protected Employees.  The Executive understands and agrees that the relationship between the Bank and each of its Protected Employees constitutes a valuable asset of the Bank and may not be converted to the Executive's own use.  Accordingly, the Executive hereby agrees that during the Restricted Period the Executive shall not directly or indirectly on the Executive's own behalf or as a principal or representative of any Person solicit any Protected Employee to terminate his or her employment with the Bank.

(d)Exceptions from Disclosure Restrictions.  Anything herein to the contrary notwithstanding, the Executive shall not be restricted from disclosing or using Confidential Information that:  (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure by the Executive or his agent; (ii) becomes available to the Executive in a manner that is not in contravention of applicable law from a source (other than the Bank or its affiliated entities or one of its or their officers, employees, agents or representatives) that is not known by the Executive to be bound by a confidential relationship with the Bank or its affiliated entities or by a confidentiality or other similar agreement; (iii) was known to the Executive on a non-confidential basis and not in contravention of applicable law or a confidentiality or other similar agreement before its disclosure to the Executive by the Bank or its affiliated entities or one of its or their officers, employees, agents, or representatives; or (iv) is required to be disclosed by law, court order, or legal process; provided, however, that in the event disclosure is required by law, court order, or legal process, the Executive shall provide the Bank with prompt notice of such requirement so that the Bank may seek an appropriate order prior to any such required disclosure by the Executive.

10.  ENFORCEMENT OF RESTRICTIVE COVENANTS.  In the event the Executive breaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Bank shall have the right and remedy to enjoin, preliminarily and permanently, the Executive from violating or threatening to violate the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Bank and that money damages would not provide an adequate remedy to the Bank.  The rights referred to in the preceding sentence shall be independent of any others and severally enforceable, and shall be in addition to, and not in lieu of, any other rights and remedies available to the Bank at law or in equity.

11.  RETURN OF PROPERTY.  

The Executive agrees to deliver to the Bank upon the cessation of the Executive's employment, and at any other time upon the Bank's request:  (a) all documents and other materials, whether made or compiled by the Executive alone or with others or made available to the Executive while employed by the Bank, pertaining to Confidential Information or other inventions and works of Bank;  (b) all Confidential Information, other inventions or any other property of Bank in the Executive's possession, custody or control, and (c) all cellular telephones, data storage devices, and personal digital assistants paid for or issued by the Bank.  This includes Confidential Information contained on Personal Digital Assistants, mobile phones, external hard drives, USB "flash" drives, other USB storage devices, FireWire storage devices, digital music players, digital tapes, floppy disks, CD's, DVD's, personal e-mail accounts (including web-based e-mail accounts such as Hotmail, gmail, or Yahoo), memory cards, Zip disks or drives, and all other similar mediums which can be used to store electronic data.

12.  FUTURE COOPERATION AND ASSISTANCE.  

(a)Cooperation in Future Matters.  The Executive hereby agrees that, for a period of one (1) year following his date of termination, he shall cooperate with the Bank's reasonable requests relating to matters that pertain to the Executive's employment by the Bank, including, without limitation, providing information or limited consultation as to such matters, participating in legal proceedings, investigations, or audits on behalf of the Bank, or otherwise making himself reasonable available to the Bank for other related purposes.  Any such cooperation shall be performed at times scheduled taking into consideration the Executive's other commitments, and the Executive shall be compensated at a reasonable hourly or per diem rate to be agreed upon by the parties to the extent such cooperation is required on more than an occasional and limited basis.  The Executive shall also be reimbursed for all reasonable out of pocket expenses.  The Executive shall not be required to perform such cooperation to the extent it conflicts with any requirements of exclusivity of service for another employer or otherwise, nor in any manner that in the good faith belief of the Executive would conflict with his rights under or ability to enforce this Agreement.

(b)Assistance with Claims.  The Executive agrees that, for the period beginning on the Effective Date, and continuing for a reasonable period after the Executive's date of termination, the Executive will assist the Bank in defense of any claims that may be made against the Bank, and will assist the Bank in the prosecution of any claims that may be made by the Bank, to the extent that such claims may relate to services performed by the Executive for the Bank.  The Executive agrees to promptly inform the Bank if he becomes aware of any lawsuits involving such claims that may be filed against the Bank.  The Bank agrees to provide legal counsel to the Executive in connection with such assistance (to the extent legally permitted), and to reimburse the Executive for all of the Executive's reasonable out of pocket expenses associated with such assistance, including travel expenses.  For periods after the Executive's employment with the Bank terminates, the Bank agrees to provide reasonable compensation to the Executive for such assistance.  The Executive also agrees to promptly inform the Bank if he is asked to assist in any investigation of the Bank (or its actions) that may relate to services performed by the Executive for the Bank, regardless of whether a lawsuit has then been filed against the Bank with respect to such investigation, unless the Executive is prohibited by law or legal process from so informing the Bank.

13.  PUBLICITY; NON-DISPARAGEMENT.  Neither party shall issue, without consent of the other party, any press release or make any public announcement with respect to this Agreement or the employment relationship between them.  Following the date of this Agreement and regardless of any dispute that may arise in the future, the Executive and the Bank jointly and mutually agree that they will not disparage, criticize, or make statements which are negative, detrimental, or injurious to the other to any individual or company, including within the Bank.

14.  FEDERAL BENEFITS RULES.   

If any provision of this Agreement (or any award of compensation) would cause the Executive to incur any additional tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Bank may reform such provision provided that it will (i) maintain, to the maximum extent practical, the original intent of the applicable provision without violating the provisions of Section 409A of the Code and (ii) notify and consult with the Executive regarding such amendments or modifications prior to the effective date of any change.

15.  SEVERABILITY.  

The Executive acknowledges and agrees that the Restrictive Covenants are reasonable and valid in all respects.  If any provision, restriction or section in this Agreement is determined to be in violation of any law, rule or regulation or otherwise unenforceable, such determination shall not affect the validity of any other provision, restriction or section of this Agreement, but such other provisions, restrictions or sections shall remain in full force and effect.  Each provision, restriction or section of this Agreement is severable from every other provision, restriction or section and constitutes a separate and distinct covenant.  In the event that a court of competent jurisdiction determines that any provision of this Agreement is overly broad or unenforceable, the Bank and the Executive specifically request that such court sever it or reform such provision so that it is enforceable to the maximum extent permitted by law; provided that the Bank's obligation to pay the Termination Payments set forth in Section 7(b) are contingent upon the Executive complying with Sections 9, 11, 12, and 13.  If the Executive challenges the enforceability of Sections 9, 11, 12, or 13, the Executive will not be entitled to the separation payments set forth in Section 7(b).  

16.  SUCCESSORS.  

This Agreement shall be binding upon and inure to the benefit of the Bank and its successors and assigns, and the Executive, the Executive's heirs, executors and administrators.  

17.  ENTIRE AGREEMENT; MODIFICATION.  

This Agreement constitutes the entire Agreement between the parties hereto, and fully supersedes any prior agreements or understandings between the parties including, without limitation, the Employment Agreement dated January 29, 2008 between the Bank and the Executive.  The parties acknowledge that they have not relied on any representations, promises, or agreements of any kind made in connection with the decision to sign this Agreement, except for those set forth in this Agreement.  This Agreement may not be altered or amended except in writing, signed by the Executive and an authorized representative of the Bank.

 

18.  CHOICE OF LAW AND VENUE.  

The parties agree that this Agreement is to be governed by and construed under the law of the State of Illinois without regard to its conflicts of law provisions.  The parties further agree that all disputes shall be resolved exclusively in state or federal court in Cook County, Illinois.  

19.  FEES.

The Bank agrees that is shall reimburse the Executive up to a maximum amount of $10,000 for the reasonable legal fees incurred by him in connection with the review and negotiation of this Agreement.  Such amount shall be grossed up to the Executive for tax purposes.

20.  NOTICES.  

Any notice required or permitted hereunder shall be in writing, and shall be deemed duly given when hand delivered, or when mailed, first class mail, postage prepaid, registered or certified, return receipt requested, to the addresses set forth below:

Bank

111 E. Wacker Dr., Suite 800

Chicago, IL  60601

Attention:  General Counsel

Executive

1440 Forest Avenue

Wilmette, IL  60091

 

The foregoing addresses may be changed at any time, or from time to time, by written notice given in accordance with the provisions of this section.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date.

	
FEDERAL HOME LOAN BANK OF CHICAGO
	
EXECUTIVE

	 	 
	
By:  /s/ David Kuhl
	
By: /s/ Matthew R. Feldman

	
Name:  David Kuhl
	
Name:Matthew R. Feldman

	
Title:    Chairman of the Board of Directors
	
Title:President and CEO

	
Dated:  June 4, 2008
	
Dated:  June 2, 2008

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