Document:

ISDA®

    

    

    International Swaps and Derivatives Association, Inc.

    

    

    2002 MASTER AGREEMENT

     

          MUFG BANK, LTD ("Party A")

        

    and

    AEROCENTURY CORP. ("Party B")

      

    	

          

    dated as of March 12,
          2019

    

    

    have entered and/or anticipate entering into one or more transactions (each a 
        “Transaction”) that are or will be governed by this 2002 Master Agreement, which includes the schedule (the “Schedule”), and the documents and other confirming evidence (each a “Confirmation”) exchanged between the parties or otherwise effective
        for the purpose of confirming or evidencing those Transactions. This 2002 Master Agreement and the Schedule are together referred to as this “Master Agreement”.

    

    

    Accordingly, the parties agree as follows:—

    

    

    1.          Interpretation

    

    

    (a)        Definitions. The terms defined in Section 14 and elsewhere in this Master Agreement will have the meanings therein specified for the purpose of this Master Agreement.

    

    

    (b)        Inconsistency.  In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the
        provisions of any Confirmation and this Master Agreement, such Confirmation will prevail for the purpose of the relevant Transaction.

    

    

    (c)        Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a single agreement between the parties (collectively referred to as this
        “Agreement”), and the parties would not otherwise enter into any Transactions.

    

    

    2.          Obligations

    

    

    (a) 

                General Conditions.

    

    

    (i)         Each party will make each payment or delivery specified in each Confirmation to be made
        by it, subject to the other provisions of this Agreement.

    

    

    (ii)        Payments under this Agreement will be made on the due date for value on that date in the
        place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other
        than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement.

    

    

    

    

    Copyright © 2002 by International Swaps and Derivatives Association, Inc.

    
      
        

    

    

    

    (iii)         Each obligation of each party under Section 2(a)(i) is subject to
        (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has
        occurred or been effectively designated and (3) each other condition specified in this Agreement to be a condition precedent for the purpose of this Section 2(a)(iii).

    

    

    (b)        Change of Account.  Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the Scheduled Settlement Date for the
        payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change.

    

    

    (c)        Netting of Payments. If on any date amounts would otherwise be payable:—

    

    

    (i)         in the same currency; and

    

    

    (ii)        in respect of the same Transaction,

    

    

    by each party to the other, then, on such date, each party’s obligation to make payment of any such
        amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation
        upon the party by which the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

    

    

    The parties may elect in respect of two or more Transactions that a net amount and payment obligation
        will be determined in respect of all amounts payable on the same date in the same currency in respect of those Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule
        or any Confirmation by specifying that “Multiple Transaction Payment Netting” applies to the Transactions identified as being subject to the election (in which case clause (ii) above will not apply to such Transactions). If Multiple Transaction
        Payment Netting is applicable to Transactions, it will apply to those Transactions with effect from the starting date specified in the Schedule or such Confirmation, or, if a starting date is not specified in the Schedule or such Confirmation, the
        starting date otherwise agreed by the parties in writing. This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or
        deliveries.

    

    

    (d)        Deduction or Withholding for Tax.

    

    

    (i)         Gross-Up. All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any applicable law, as modified by
        the practice of any relevant governmental revenue authority, then in effect.  If a party is so required to deduct or withhold, then that party (“X”) will:—

    

    

    (1)        promptly notify the other party (“Y”) of such requirement;

    

    

    (2)        pay to the relevant authorities the full amount required to be deducted or withheld
        (including the full amount required to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such
        amount has been assessed against Y;

    

    

    (3)        promptly forward to Y an official receipt (or a certified copy), or other documentation
        reasonably acceptable to Y, evidencing such payment to such authorities; and

    
      
        

    

    

    

    (4)        if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
        payment to which Y is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed against X or Y) will equal the full
        amount Y would have received had no such deduction or withholding been required. However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for:—

    

    

    (A)       the failure by Y to comply with or perform any agreement contained in     Section

    4(a)(i), 4(a)(iii) or 4(d); or

    

    

    (B)         the failure of a representation made by Y pursuant to Section 3(f) to be accurate and
        true unless such failure would not have occurred but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, after a Transaction is entered into (regardless of whether such action is taken or brought with
        respect to a party to this Agreement) or (II) a Change in Tax Law.

    

    

    (ii)        Liability. If:—

    

    

    (1)        X is required by any applicable law, as modified by the practice of any relevant
        governmental revenue authority, to make any deduction or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4);

    

    

    (2)        X does not so deduct or withhold; and

    

    

    (3)        a liability resulting from such Tax is assessed directly against X,

    

    

    then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y
        will promptly pay to X the amount of such liability (including any related liability for interest, but including any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i),
        4(a)(iii) or 4(d)).

    

    

    3.          Representations

    

    

    Each party makes the representations contained in Sections 3(a), 3(b), 3(c), 3(d), 3(e) and 3(f) and,
        if specified in the Schedule as applying, 3(g) to the other party (which representations will be deemed to be repeated b y each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at
        all times until the termination of this Agreement).  If any “Additional Representation” is specified in the Schedule or any Confirmation as applying,  the party or parties specified for such Additional Representation will make and, if applicable,
        be deemed to repeat such Additional Representation at the time or times specified for such Additional Representation.

    

    

    (a)        Basic Representations.

    

    

    (i)         Status. It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing;

    

    

    (ii)        Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement
        that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorize such execution,
        delivery and performance;

    
      
        

    

    

    

    (iii)       No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or
        judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets;

    

    

    (iv)       Consents. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full
        force and effect and all conditions of any such consents have been complied with; and

    

    

    (v)        Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their
        respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application (regardless of
        whether enforcement is sought in a proceeding in equity or at law)).

    

    

    (b)        Absence of Certain Events.  No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would
        occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party.

    

    

    (c)        Absence of Litigation. There is not pending or, to its knowledge, threatened against it, any of its Credit Support Providers or any of its applicable Specified Entities any action, suit or proceeding at law or in equity or before
        any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the leg ality, validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to
        perform its obligations under this Agreement or such Credit Support Document.

    

    

    (d)        Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of
        the date of the information, true, accurate and complete in every material respect.

    

    

    (e)        Payer Tax Representation. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true.

    

    

    (f)         Payee Tax Representations.  Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true.

    

    

    (g)        No Agency. It is entering into this Agreement, including each Transaction, as principal and not as agent of any person or entity.

    

    

    4.          Agreements

    

    

    Each party agrees with the other that, so long as either party has or may have any obligation under
        this Agreement or under any Credit Support Document to which it is a party:—

    

    

    (a)        Furnish Specified Information.  It will deliver to the other party or, in certain cases under clause (iii) below, to such government or taxing authority as the other party reasonably directs:—

    

    

    (i)         any forms, documents or certificates relating to taxation specified in the Schedule or
        any

    Confirmation,

    

    

    (ii)        any other documents specified in the Schedule or any Confirmation; and

    
      
        

    

    

    

    (iii)       upon reasonable demand by such other party, any form or document
        that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or
        on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the lega l or commercial position of the party in receipt of
        such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification,

    

    

    in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as
        soon as reasonably practicable.

    

    

    (b)        Maintain Authorizations.  It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this
        Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future.

    

    

    (c)        Comply With Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations
        under this Agreement or any Credit Support Document to which it is a party.

    

    

    (d)        Tax Agreement.  It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure.

    

    

    (e)        Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated,
        organized, managed and controlled or considered to have its seat, or where an Office through which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”), and will indemnify the other party against any Stamp Tax levied
        or imposed upon the other party or in respect of the other party’s execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.

    

    

    5.          Events of Default and Termination Events

    

    

    (a)        Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes
        (subject to Sections 5(c) and 6(e)(iv)) an event of default (an “Event of Default”) with respect to such party:—

    

    

    (i)         Failure to Pay or Deliver.  Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) required to be made by it if such failure
        is not remedied on or before the first Local Business Day in the case of any such payment or the first Local Delivery Day in the case of any such delivery after, in each case, notice of such failure is given to the party;

    

    

    (ii)        Breach of Agreement; Repudiation of Agreement.

    

    

    (1)        Failure by the party to comply with or perform any agreement or obligation (other than an
        obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i),

    4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance
        with this Agreement  if such failure is not remedied within 30 days after notice of such failure is given to the party; or

    

    

    (2)        the party disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges
        the validity of, this Master Agreement, any Confirmation executed and delivered by that party or any

    
      
        

    

    

    

    Transaction evidenced by such a Confirmation (or such action is taken by any
        person or entity appointed or empowered to operate it or act on its behalf);

    

    

    (iii)       Credit Support Default.

    

    

    (1)        Failure by the party or any Credit Support Provider of such party to comply with or
        perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed;

    

    

    (2)        the expiration or termination of such Credit Support Document or the failing or ceasing of
        such Credit Support Document, or any security interest granted by such party or such Credit Support Provider to the other party pursuant to any such Credit Support Document, to be in full force and effect for the purpose of this Agreement (in each
        case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or

    

    

    (3)        the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in
        whole or in part, or challenges the validity of, such Credit Support Document (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf);

    

    

    (iv)       Misrepresentation. A representation (other than a representation under Section 3(e) or 3(f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in
        this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated;

    

    

    (v)        Default Under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:—

    

    

    (1)        defaults (other than by failing to make a delivery) under a Specified Transaction or any
        credit support arrangement relating to a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, such default results in a liquidation of, an acceleration of obligations under, or an early termination
        of, that Specified Transaction;

    

    

    (2)        defaults, after giving effect to any applicable notice requirement or grace period, in
        making any payment due on the last payment or exchange date of, or any payment on early termination of, a Specified Transaction (or, if there is no applicable notice requirement or grace period, such default continues for at least one Local
        Business Day);

    

    

    (3)        defaults in making any delivery due under (including any delivery due on the last delivery
        or exchange date of) a Specified Transaction or any credit support arrangement relating to a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, such default results in a liquidation of, an
        acceleration of obligations under, or an early termination of, all transactions outstanding under the documentation applicable to that Specified Transaction; or

    

    

    (4)        disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the
        validity of, a Specified Transaction or any credit support arrangement relating to a Specified Transaction that is, in either case, confirmed or evidenced by a document or other confirming evidence executed and delivered by that party, Credit
        Support Provider or Specified Entity (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf);

    
      
        

    

    

    

    occurrence or existence of:—

    

    

    (1)        a default, event of default or other similar condition or event (however described) in
        respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of an y of them (individually or collectively) where
        the aggregate principal amount of such agreements or instruments, either alone or together with the amount, if any, referred to in clause (2) below, is not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted
        in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments before it would otherwise have been due and payable; or

    

    

    (2)        a default by such party, such Credit Support Provider or such Specified Entity
        (individually or collectively) in making one or more payments under such agreements or instruments on the due date for payment (after giving effect to any applicable notice requirement or grace period) in an aggregate amount, either alone or
        together with the amount, if any, referred to in clause (1) above, of not less than the applicable Threshold Amount;

    

    

    (vii) Bankruptcy.  The party, any Credit Support Provider of
        such party or any applicable Specified

    Entity of such party:—

    

    

    (1)        is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes
        insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4)(A)
        institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of
        its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or
        liquidation by it or such regulator, supervisor or similar official, or (B) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law
        affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and such proceeding or petition is instituted or presented by a person or entity not described in clause (A) above and either (I) results  in a judgment of
        insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding -up or liquidation or (II) is not dismissed, discharged, stayed or restrained in each case within 15 days of the institution or presentation
        thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional
        liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution,
        attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each
        case within 15 days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) above (inclusive); or (9)
        takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or

    
      
        

    

    

    

    or amalgamates with, or merges with or into, or transfers all or substantially
        all its assets to, or reorganizes, reincorporates or reconstitutes into or as, another entity and, at the time of such consolidation, amalgamation, merger, transfer, reorganization, reincorporation or reconstitution:—

    

    

    (1)        the resulting, surviving or transferee entity fails to assume all the obligations of such
        party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party; or

    

    

    (2)        the benefits of any Credit Support Document fail to extend (without the consent of the
        other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement.

    

    

    (b) 
                Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support
        Provider of such party or any Specified Entity of such party of any event specified below constitutes (subject to Section 5(c)) an Illegality if the event is specified in clause (i) below, a Force Majeure Event if the event is specified in clause
        (ii) below, a Tax Event if the event is specified in clause (iii) below, a Tax Event Upon Merger if the event is specified in clause (iv) below, and, if specified to be applicable, a Credit Event Upon Merger if the event is specified pursuant to
        clause (v) below or an Additional Termination Event if the event is specified pursuant to clause (vi) below:—

    

    

    (i)         Illegality. After giving effect to any applicable provision, disruption fallback or remedy specified in, or pursuant to, the relevant Confirmation or elsewhere in this Agreement, due to an event or circumstance
        (other than any action taken by a party or, if applicable, any Credit Support Provider of such party) occurring after a Transaction is entered into, it becomes unlawful under any applicable law (including without limitation the laws of any country
        in which payment, delivery or compliance is required by either party or any Credit Support Provider, as the case may be), on any day, or it would be unlawful if the relevant payment, delivery or compliance were required on that day (in each case,
        other than as a result of a breach by the party of Section 4(b)):—

    

    

    (1)        for the Office through which such party (which will be the Affected Party) makes and
        receives payments or deliveries with respect to such Transaction to perform any absolute or contingent obligation to make a payment or delivery in respect of such Transaction, to receive a payment or delivery in respect of such Transaction or to
        comply with any other material provision of this Agreement relating to such Transaction; or

    

    

    (2)        for such party or any Credit Support Provider of such party (which will be the Affected
        Party) to perform any absolute or contingent obligation to make a payment or delivery which such party or Credit Support Provider has under any Credit Support Document relating to such Transaction, to receive a payment or delivery under such Credit
        Support Document or to comply with any other material provision of such Credit Support Document;

    

    

    (ii)        Force Majeure Event. After giving effect to any applicable provision, disruption fallback or remedy specified in, or pursuant to, the relevant Confirmation or elsewhere in this Agreement, by reason of force
        majeure or act of state occurring after a Transaction is entered into, on any day:—

    

    

    (1)        the Office through which such party (which will be the Affected Party) makes and receives
        payments or deliveries with respect to such Transaction is prevented from performing any absolute or contingent obligation to make a payment or delivery in  respect of such Transaction, from receiving a payment or delivery in respect of such
        Transaction or from complying with any other material provision of this Agreement relating to such Transaction (or would be so prevented if such payment, delivery or compliance were required on that day), or it becomes impossible or

    
      
        

    

    

    

    impracticable for such Office so to perform, receive or comply (or it would be
        impossible or impracticable for such Office so to perform, receive or comply if such payment, delivery or compliance were required on that day); or

    

    

    (2)        such party or any Credit Support Provider of such party (which will be the Affected
        Party) is prevented from performing any absolute or contingent obligation to make a payment or delivery which such party or Credit Support Provider has under any Credit Support Document relating to such Transaction, from receiving a payment or
        delivery under such Credit Support Document or from complying with any other material provision of such Credit Support Document (or would be so prevented if such payment, delivery or compliance were required on that day), or it becomes impossible
        or impracticable for such party or Credit Support Provider so to perform, receive or comply (or it would be impossible or impracticable for such party or Credit Support Provider so to perform, receive or comply if such payment, delivery or
        compliance were required on that day),

    

    

    so long as the force majeure or act of state is beyond the control of such Office, such party or
        such Credit Support Provider, as appropriate, and such Office, party or Credit Support Provider could not, after using all reasonable efforts (which will not require such party or Credit Support Provider to incur a loss, other than immaterial,
        incidental expenses), overcome such prevention, impossibility or impracticability;

    

    

    (iii)       Tax Event. Due to (1) any action taken by a taxing authority, or brought in a court of competent jurisdiction, after a Transaction is entered into (regardless of whether such action is taken or
        brought with respect to a party to this Agreement) or (2) a Change in Tax Law, the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Settlement Date (A) be required to
        pay to the other party an additional amount in respect of an Indemnifiable Tax under Section

    2(d)(i)(4) (except in respect of interest under Section 9(h)) or (B) receive a payment from which an
        amount is required to be deducted or withheld for or on account of a Tax (except in respect of interest under Section

    9(h)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4)
        (other than by reason of Section 2(d)(i)(4)(A) or (B));

    

    

    (iv)       Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding Scheduled Settlement Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section
        2(d)(i)(4) (except in respect of interest under Section 9(h)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Tax in respect of which the other party is not required to pay an additional amount
        (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets (or any substantial part of the assets
        comprising the business conducted by it as of the date of this Master Agreement) to, or reorganizing, reincorporating or reconstituting into or as, another entity  (which will be the Affected  Party) where such action  does not constitute  a Merger
        Without Assumption;

    

    

    (v)        Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule as applying to the party, a Designated Event (as defined below) occurs with respect to such party, any Credit Support Provider
        of such party or any applicable Specified Entity of such party (in each case, “X”) and such Designated Event does not constitute a Merger Without Assumption, and the creditworthiness of X or, if applicable, the successor, surviving or transferee
        entity of X, after taking into account any applicable Credit Support Document, is materially weaker immediately after the occurrence of such Designated Event than that of X immediately prior to the occurrence of such Designated Event (and, in any
        such event, such party or its successor, surviving or transferee entity, as appropriate, will be the Affected Party). A “Designated Event” with respect to X means that:—

    

    

    (1)      X consolidates or amalgamates with, or merges with or into, or transfers all or
        substantially all its assets (or any substantial part of the assets comprising the business conducted by X as of the

    
      
        

    

    

    

    entity;

    

    

    (2)        any person, related group of persons or entity acquires directly or indirectly the
        beneficial ownership of (A) equity securities having the power to elect a majority of the board of directors (or its equivalent) of X or (B) any other ownership interest enabling it to exercise control of X; or

    

    

    (3)        X effects any substantial change in its capital structure by means of the issuance,
        incurrence or guarantee of debt or the issuance of (A) preferred stock or other securities convertible into or exchangeable for debt or preferred stock or (B) in the case of entities other than corporations, any other form of ownership interest; or

    

    

    (vi)       Additional Termination Event. If any “Additional Termination Event” is specified in the Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or Affected
        Parties will be as specified for such Additional Termination Event in the Schedule or such Confirmation).

    

    

    (c) 

                Hierarchy of Events.

    

    

    (i)         An event or circumstance that constitutes or gives rise to an Illegality or a Force
        Majeure Event will not, for so long as that is the case, also constitute or give rise to an Event of Default under Section 5(a)(i),

    5(a)(ii)(l) or 5(a)(iii)(1) insofar as such event or circumstance relates to the failure to make any payment or delivery or a failure to comply with any other material provision of this Agreement or a Credit Support
        Document, as the case may be.

    

    

    (ii)        Except in circumstances contemplated by clause (i) above, if an event or circumstance
        which would otherwise constitute or give rise to an Illegality or a Force Majeure Event also constitutes an Event of Default or any other Termination Event, it will be treated as an Event of Default or such other Termination Event, as the case may
        be, and will not constitute or give rise to an Illegality or a Force Majeure Event.

    

    

    (iii)       If an event or circumstance which would otherwise constitute or give rise to a Force
        Majeure Event also constitutes an Illegality, it will be treated as an Illegality, except as described in clause (ii) above, and not a Force Majeure Event.

    

    

    (d)        Deferral of Payments and Deliveries During Waiting Period. If an Illegality or a Force Majeure Event has occurred and is continuing with respect to a Transaction, each payment or delivery which would otherwise be
        required to be made under that Transaction will be deferred to, and will not be due until:—

    

    

    (i)         the first Local Business Day or, in the case of a delivery, the first Local Delivery Day
        (or the first day that would have been a Local Business Day or Local Delivery Day, as appropriate, but for the occurrence of the event or circumstance constituting or giving rise to that Illegality or Force Majeure Event) following the end of any
        applicable Waiting Period in respect of that Illegality or Force Majeure Event, as the case may be; or

    

    

    (ii)        if earlier, the date on which the event or circumstance constituting or giving rise to
        that Illegality or Force Majeure Event ceases to exist or, if such date is not a Local Business Day or, in the case of a delivery, a Local Delivery Day, the first following day that is a Local Business Day or Local Delivery Day, as appropriate.

    

    

    (e)        Inability of Head or Home Office to Perform Obligations of Branch.  If (i) an Illegality or a Force Majeure Event occurs under Section 5(b)(i)(1) or 5(b)(ii)(1) and the relevant Office is not the Affected Party’s
        head or home office, (ii) Section 10(a) applies, (iii) the other party seeks performance of the relevant obligation or

    
      
        

    

    

    

    or home office fails so to perform or comply due to the occurrence of an event or
        circumstance which would, if that head or home office were the Office through which the Affected Party makes and receives payments and deliveries with respect to the relevant Transaction, constitute or give rise to an Illegality or a Force Ma jeure
        Event, and such failure would otherwise constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(l) with respect to such party then, for so long as the relevant event or circumstance continues to exist with respect to both the Office
        referred to in Section 5(b)(i)(1) or 5(b)(ii)(l), as the case may be, and the Affected Party’s head or home office, such failure will not constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1).

    

    

    6.          Early Termination; Close-Out Netting

    

    

    (a)        Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the “Non-defaulting Party”)
        may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions.  If,
        however, “Automatic  Early Termination”  is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an
        Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, t o the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the 
        occurrence with respect to  such party of   an  Event of   Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

    

    

    (b)        Right to Terminate Following Termination Event.

    

    

    (i)         Notice. If a Termination Event other than a Force Majeure Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each
        Affected Transaction, and will also give the other party such other information about that Termination Event as the other party may reasonably require. If a Force Majeure Event occurs, each party will, promptly upon becoming aware of it, use all
        reasonable efforts to notify the other party, specifying the nature of that Force Majeure Event, and will also give the other party such other information about that Force Majeure Event as the other party may reasonably require.

    

    

    (ii)        Transfer to Avoid Termination Event. If a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected P arty
        will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party to incur a loss, other than immaterial, incidental expenses) to transfer within 20 days
        after it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination Event ceases to exist.

    

    

    If the Affected Party is not able to make such a transfer it will give notice to the other party to
        that effect within such 20 day period, whereupon the other party may effect such a transfer within 30 days after the notice is given under Section 6(b)(i).

    

    

    Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the
        prior written consent of the other party, which consent will not be withheld if such other party’s policies in effect at such time would permit it to enter into transactions with the transferee on the terms proposed.

    

    

    (iii)       Two Affected Parties. If a Tax Event occurs and there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after notice of such occurrence is given under Section
        6(b)(i) to avoid that Termination Event.

    
      
        

    

    

    

    (iv) Right to Terminate.

    

    

    (1)        If:—

    

    

    (A)       a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may
        be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or

    

    

    (B)         a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax

    Event Upon Merger occurs and the Burdened Party is not the Affected Party,

    

    

    the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax
        Event or an Additional Termination Event if there are two Affected Parties, or the Non- affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, if the relevant Termination
        Event is then continuing, by not more than 20 days notice to the other party, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions.

    

    

    (2)        If at any time an Illegality or a Force Majeure Event has occurred and is then continuing
        and any applicable Waiting Period has expired:—

    

    

    (A)       Subject to clause (B) below, either party may, by not more than 20 days notice to the
        other party, designate (I) a day not earlier than the day on which such notice becomes effective as an Early Termination Date in respect of all Affected Transactions or (II) by specifying in that notice the Affected Transactions in respect of which
        it is designating the relevant day as an Early Termination Date, a day not earlier than two Local Business Days following the day on which such notice becomes effective as an Early Termination Date in respect of less than all Affected Transactions.
        Upon receipt of a notice designating an Early Termination Date in respect of less than all Affected Transactions, the other party may, by notice to the designating party, if such notice is effective on or before the day so designated, designate
        that same day as an Early Termination Date in respect of any or all other Affected Transactions.

    

    

    (B)         An Affected Party (if the Illegality or Force Majeure Event relates to performance by
        such party or any Credit Support Provider of such party of an obligation to make any payment or delivery under, or to compliance with any other material provision of, the relevant Credit Support Document) will only have the right to designate an
        Early Termination Date under Section 6(b)(iv)(2)(A) as a result of an Illegality under Section 5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2) following the prior designation by the other party of an Early Termination Date, pursuant
        to Section

    6(b)(iv)(2)(A), in respect of less than all Affected Transactions. (c) Effect of Designation.

    (i)        If notice designating an Early Termination Date is given under Section
        6(a) or 6(b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing.

    

    

    (ii)        Upon the occurrence or effective designation of an Early Termination Date, no further
        payments or deliveries under Section 2(a)(i) or 9(h)(i) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement.  The amount, if any, payable in respect of an Early
        Termination Date will be determined pursuant to Sections 6(e) and 9(h)(ii).

    
      
        

    

    

    

    (d)        Calculations; Payment Date.

    

    

    (i)         Statement.   On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide
        to the other party a statement (1) showing, in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such calculations), (2) specifying (except where there are two Affected
        Parties) any Early Termination Amount payable and (3) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation or market data obtained in
        determining a Close -out Amount, the records of the party obtaining such quotation or market data will be conclusive evidence of the existence and accuracy of such quotation or market data.

    

    

    (ii)        Payment Date. An Early Termination Amount due in respect of any Early Termination Date will, together with any amount of interest payable pursuant to Section 9(h)(ii)(2), be payable (1) on the day on
        which notice of the amount payable is effective in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default and (2) on the day which is two Local Business Days after the day on which notice of the
        amount payable is effective (or, if there are two Affected Parties, after the day on which the statement provided pursuant to clause (i) above by the second party to provide such a statement is effective) in the case of an Early Termination Date
        which is designated as a result of a Termination Event.

    

    

    (e)        Payments on Early Termination.  If an Early Termination Date occurs, the amount, if any, payable in respect of that Early Termination Date  (the “Early Termination Amount”) will be determined pursuant to this
        Section 6(e) and will be subject to Section 6(f).

    

    

    (i)        Events of Default. If the Early Termination Date results from an Event of Default, the Early Termination Amount will be an amount equal to (1) the sum of (A) the Termination Currency Equivalent of the Close-out 
        Amount or Close-out Amounts  (whether positive or negative) determined by the Non- defaulting Party for each Terminated Transaction or group of Terminated Transactions, as the case may be, and (B) the Termination Currency Equivalent of the Unpaid
        Amounts owing to the Non-defaulting Party less (2) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If the Early Termination Amount is a positive number, the Defaulting Party will pay it to the Non-defaulting
        Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of the Early Termination Amount to the Defaulting Party.

    

    

    (ii)        Termination Events. If the Early Termination Date results from a Termination Event:—

    

    

    (1)        One Affected Party.  Subject to clause (3) below, if there is one Affected Party, the Early Termination Amount will be determined in accordance with Section 6(e)(i), except that references to the Defaulting Party and to the
        Non-defaulting Party will be deemed to be references to the Affected Party and to the Non-affected Party, respectively.

    

    

    (2)        Two Affected Parties. Subject to clause (3) below, if there are two Affected Parties, each party will determine an amount equal to the Termination Currency Equivalent of the sum of the Close-out Amount or Close-out Amounts
        (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions, as the case may be, and the Early Termination Amount will be an amount equal to (A) the sum of (I) one-half of the difference between the higher
        amount so determined (by party ‘X’) and the lower amount so determined (by party “Y”) and (II) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to Y.  If
        the Early Termination Amount is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of the Early
        Termination Amount to Y.

    
      
        

    

    

    

    (3)        Mid-Market Events. If that Termination Event is an Illegality or a Force Majeure Event, then the Early Termination Amount will be determined in accordance with clause (1) or (2) above, as appropriate, except
        that, for the purpose of determining a Close-out Amount or Close-out Amounts, the Determining Party will:—

    

    

    (A)       if obtaining quotations from one or more third parties (or from any of the Determining
        Party’s Affiliates), ask each third party or Affiliate (I) not to take account of the current creditworthiness of the Determining Party or any existing Credit Support Document and (II) to provide mid-market quotations; and

    

    

    (B)         in any other case, use mid-market values without regard to the creditworthiness of the
        Determining Party.

    

    

    (iii)       Adjustment for Bankruptcy.  In circumstances where an Early Termination Date occurs because
        Automatic Early Termination applies in respect of a party, the Early Termination Amount will be subject to such adjustments as are appropriate and permitted by applicable law to reflect any payments or deliveries made by one party to the other
        under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii).

    

    

    (iv)       Adjustment for Illegality or Force Majeure Event. The failure by a party or any Credit Support Provider of such party to pay, when due, any Early Termination Amount will not constitute an Event of Default under
        Section 5(a)(i) or 5(a)(iii)(1) if such failure is due to the occurrence  of an event or circumstance which would, if it occurred with respect to payment, delivery or compliance related to a Transaction, constitute or give rise to an Illegality or
        a Force Majeure Event. Such amount will (1) accrue interest and otherwise be treated as an Unpaid Amount owing to the other party if subsequently an Early Termination  Date results from an Event of Default, a Credit Event Upon Merger or an
        Additional Termination Event in respect of which all outstanding Transactions are Affected Transactions and (2) otherwise accrue interest in accordance with Section 9(h)(ii)(2).

    

    

    (v)        Pre-Estimate. The parties agree that an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty.  Such amount is payable for the loss of bargain and the loss of
        protection against future risks, and, except as otherwise provided in this Agreement, neither party will be entitled to recover any additional damages as a consequence of the termination of the Terminated Transactions.

    

    

    (f)         Set-Off.   Any Early Termination Amount payable to one  party (the “Payee”) by the other party (the “Payer”), in circumstances where there is a Defaulting Party or where there is one Affected Party in the case
        where either a Credit Event Upon Merger has occurred or any other Termination Event in respect of which all outstanding Transactions are Affected Transactions has occurred, will, at the option of the Non-defaulting Party or the Non- affected Party,
        as the case may be (“X”) (and without prior notice to the Defaulting Party or the Affected Party, as the case may be), be reduced by its set-off against any other amounts (“Other Amounts”) payable by the Payee to the Payer (whether or not arising
        under this Agreement, matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation). To the extent that any Other Amounts are so set off, those Other Amounts will be discharged promptly and in all
        respects. X will give notice to the other party of any set -off effected under this Section 6(f).

    

    

    For this purpose, either the Early Termination Amount or the Other Amounts (or the relevant portion of
        such amounts) may be converted by X into the currency in which the other is denominated at the rate of exchange at which such party would be able, in good faith and using commercially reasonable procedures, to purchase the relevant amount of such
        currency.

    
      
        

    

    

    

    If an obligation is unascertained, X may in good faith estimate that obligation and
        set off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.

    

    

    Nothing in this Section 6(f) will be effective to create a charge or other security interest. This
        Section 6(f) will be without prejudice and in addition to any right of set-off, offset, combination of accounts, lien, right of retention or withholding or similar right or requirement to which any party is at any time otherwise entitled or subject
        (whether by operation of law, contract or otherwise).

    

    

    7.          Transfer

    

    

    Subject to Section 6(b)(ii) and to the extent permitted by applicable law, neither this Agreement nor
        any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that:—

    

    

    (a)        a party may make such a transfer of this Agreement pursuant to a consolidation or
        amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and

    

    

    (b)        a party may make such a transfer of all or any part of its interest in any Early
        Termination Amount payable to it by a Defaulting Party, together with any amounts payable on or with respect to that interest and any other righ ts associated with that interest pursuant to Sections 8, 9(h) and 11.

    

    

    Any purported transfer that is not in compliance with this Section 7 will be void.

    

    

    8.          Contractual Currency

    

    

    (a)        Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant
        currency specified in this Agreement for that payment (the “Contractual Currency”). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by
        any tender in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party to which payment  is owed, acting in good faith and using commercially reasonable procedures in converting
        the currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement.  If for any reason the amount in the Contractual Currency so received falls short of the
        amount in the Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency as may be necessary
        to compensate for the shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the
        amount of such excess.

    

    

    (b)        Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this
        Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described in clause (i) or (ii) above, the party
        seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency
        received by such party as a consequence of sums paid in such other currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence of sums paid in such other currency if such
        shortfall or such excess arises or results from any variatio n between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purpose of such judgment or order and the rate of exchange
        at which such party is able, acting in good faith and using

    
      
        

    

    

    

    commercially reasonable procedures in converting the currency received into the
        Contractual Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually received by such party.

    

    

    (c)        Separate Indemnities.   To the extent permitted by applicable law, the indemnities in this Section 8 constitute separate and independent obligations from the other obligations in this Agreement, will be
        enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other
        sums payable in respect of this Agreement.

    

    

    (d)        Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made.

    

    

    9.          Miscellaneous

    

    

    (a)        Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter. Each of the parties acknowledges that in entering into this Agreement it has
        not relied on any oral or written representation, warranty or other assurance (except as provided for or referred to in this Agreement) and waives all rights and remedies which might otherwise be available to it in respect thereof, except that
        nothing in this Agreement will limit or exclude any liability of a party for fraud.

    

    

    (b)        Amendments. An amendment, modification or waiver in respect of this Agreement will only be effective if in  writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties
        or confirmed by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system.

    

    

    (c)        Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction.

    

    

    (d)        Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges
        provided by law.

    

    

    (e)        Counterparts and Confirmations.

    

    

    (i)         This Agreement (and each amendment, modification and waiver in respect of it) may be
        executed and delivered in counterparts (including by facsimile transmission and by electronic messaging system), each of which will be deemed an original.

    

    

    (ii)        The parties intend that they are legally bound by the terms of each Transaction from the
        moment they agree to those terms (whether orally or otherwise).  A Confirmation will be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of
        telexes, by an exchange of electronic messages on an electronic messaging system or by an exchange of e-mails, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify
        therein or through another effective means that any such counterpart, telex, electronic message or e-mail constitutes a Confirmation.

    

    

    (f)         No Waiver of Rights.  A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power
        or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege.

    

    

    (g)        Headings. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement.

    
      
        

    

    

    

    (h) Interest and
          Compensation.

    

    

    (i) Prior to Early Termination.Prior to the occurrence or
        effective designation of an Early

    Termination Date in respect of the relevant Transaction:—

    

    

    (1)        Interest on Defaulted Payments. If a party defaults in the performance of any payment obligation, it will, to the extent permitted by applicable law and subject to Section 6(c), pay interest (before as well as
        after judgment) on the overdue amount to the other party on demand in the same currency as the overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment (and excluding any
        period in respect of which interest or compensation in respect of the overdue amount is due pursuant to clause (3)(B) or (C) below), at the Default Rate.

    

    

    (2)        Compensation for Defaulted Deliveries.  If a party defaults in the performance of any obligation required to be settled by delivery, it will on demand (A) compensate the other party to the extent provided for in
        the relevant Confirmation or elsewhere in this Agreement and (B) unless otherwise provided in the relevant Confirmation or elsewhere in this Agreement, to the extent permitted by applicable law and subject to Section 6(c), pay to the other party
        interest (before as well as after judgment) on an amount equal to the fair market value of that which was required to be delivered in the same currency as that amount, for the period from (and including) the originally scheduled date for delivery
        to (but excluding) the date of actual delivery (and excluding any period in respect of which interest or compensation in respect of that amount is due pursuant to clause (4) below), at the Default Rate. The fair market value of any obligation
        referred to above will be determined as of the originally scheduled date for delivery, in good faith and using commercially reasonable procedures, by the party that was entitled to take delivery.

    

    

    (3)        Interest on Deferred Payments. If:—

    

    

    (A)       a party does not pay any amount that, but for Section 2(a)(iii), would have been payable,
        it will, to the extent permitted by applicable law and subject to Section 6(c) and clauses (B) and (C) below, pay interest (before as well as after judgment) on that amount to the other party on demand (after such amount becomes payable) in the
        same currency as that amount, for the period from (and including) the date the amount would, but  for Section  2(a)(iii), have been payable to (but excluding) the date the amount actually becomes payable, at the Applicable Deferral Rate;

    

    

    (B)         a payment is deferred pursuant to Section 5(d), the party which would otherwise have
        been required to make that payment will, to the extent permitted by applicable law, subject to Section 6(c) and for so long as no Event of Default or Potential Event of Default with respect to that party has occurred and is continuing, pay interest
        (before as well as after judgment) on the amount of the deferred payment to the other party on demand (after such amount becomes payable) in the same currency as the deferred payment, for the period from (and including) the date the amount would,
        but for Section 5(d), have been payable to (but excluding) the earlier of the date the payment is no longer deferred pursuant to Section 5(d) and the date during the deferral period upon which an Event of Default or Potential Event of Default with
        respect to that party occurs, at the Applicable Deferral Rate; or

    

    

    (C)        a party fails to make any payment due to the occurrence of an Illegality or a Force
        Majeure Event (after giving effect to any deferral period contemplated by clause (B) above), it will, to the extent permitted by applicable law, subject to Section 6(c) and for so long as the event or circumstance giving rise to that Illegality or
        Force Majeure Event

    
      
        

    

    

    

    continues and no Event of Default or Potential Event of Default with respect to
        that party has occurred and is continuing, pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as the overdue amount, for the period from (and including) the date the party fails
        to make the payment due to the occurrence of the relevant Illegality or Force Majeure Event (or, if later, the date the payment is no longer deferred pursuant to Section 5(d)) to (but excluding) the earlier of the date the event or circumstance
        giving rise to that Illegality or Force Majeure Event ceases to exist and the date during the period upon which an Event of Default or Potential Event of Default with respect to that party occurs (and excluding any period in respect of which
        interest or compensation in respect of the overdue amount is due pursuant to clause (B) above), at the Applicable Deferral Rate.

    

    

    (4)        Compensation for Deferred Deliveries. If:—

    

    

    (A)       a party does not perform any obligation that, but for Section 2(a)(iii), would have been
        required to be settled by delivery;

    

    

    (B)         a delivery is deferred pursuant to Section 5(d); or

    

    

    (C)        a party fails to make a delivery due to the occurrence of an Illegality or a Force

    Majeure Event at a time when any applicable Waiting Period has expired,

    

    

    the party required (or that would otherwise have been required) to make the delivery will, to the
        extent permitted by applicable law and subject to Section 6(c), compensate and pay interest to the other party on demand (after, in the case of clauses (A) and (B) above, such delivery is required) if and to the extent provided for in the relevant
        Confirmation or elsewhere in this Agreement.

    

    

    (ii) Early Termination. Upon

        the occurrence or effective designation of an Early Termination Date in respect of a Transaction:—

    

    

    (1)        Unpaid Amounts.  For the purpose of determining an Unpaid Amount in respect of the relevant Transaction, and to the extent permitted by applicable law, interest will accrue on the amount of any payment
        obligation or the amount equal to the fair market value of any obligation required to be settled by delivery included in such determination in the same currency as that amount, for the period from (and including) the date the relevant obligation
        was (or would have been but for Section 2(a)(iii) or 5(d)) required to have been performed to (but excluding) the relevant Early Termination Date, at the Applicable Close-out Rate.

    

    

    (2)        Interest on Early Termination Amounts. If an Early Termination Amount is due in respect of such Early Termination Date, that amount will, to the extent permitted by applicable law, be paid together with interest
        (before as well as after judgment)  on that amount in the Termination Currency, for the period from (and including) such Early Termination Date to (but ex cluding) the date the amount is paid, at the Applicable Close-out Rate.

    

    

    (iii) Interest Calculation. Any

        interest pursuant to this Section 9(h) will be calculated on the basis of daily compounding and the actual number of days elapsed.

    
      
        

    

    

    

    10.        Offices; Multibranch Parties

    

    

    (a)        If Section 10(a) is specified in the Schedule as applying, each party that enters into a
        Transaction through an Office other than its head or home office represents to and agrees with the other party that, notwithstanding the place of booking or its jurisdiction of incorporation or organization, its obligations are the same in terms of
        recourse against it as if it had entered into the Transaction through its head or home office, except that a party will not have recourse to the head or home office of the other party in respect of any payment or delivery deferred pursuant to
        Section 5(d) for so long as the payment or delivery is so deferred.  This representation and agreement will be deemed to be repeated by each party on each date on which the parties enter into a Transaction.

    

    

    (b)        If a party is specified as a Multibranch Party in the Schedule, such party may, subject to
        clause (c) below, enter into a Transaction through, book a Transaction in and make and receive payments and deliveries with respect to a Transaction through any Office listed in respect of that party in the Schedule (but not any other Office unless
        otherwise agreed by the parties in writing).

    

    

    (c)        The Office through which a party enters into a Transaction will be the Office specified
        for that party in the relevant Confirmation or as otherwise agreed by the parties in writing, and, if an Office for that party is not specified in the Confirmation or otherwise agreed by the parties in writing, its head or home office.  Unless the
        parties otherwise agree in writing, the Office through which a party enters into a Transaction will also be the Office in which it books the Transaction and the Office through which it makes and receives payments and deliveries with respect to the
        Transaction. Subject to Section 6(b)(ii), neither party may change the Office in which it books the Transaction or the Office through which it makes and receives payments or deliveries with respect to a Transaction without the prior written consent
        of the other party.

    

    

    11.        Expenses

    

    

    A Defaulting Party will on demand indemnify and hold harmless the other party for and against all
        reasonable out -of- pocket expenses, including legal fees, execution fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights  under this Agreement or any Credit  Support Document to which the
        Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection.

    

    

    12.        Notices

    

    

    (a)        Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner described below (except that a notice or other communication under Section 5 or 6 may not be given by
        electronic messaging system or e-mail) to the address or number or in accordance with the electronic messaging system or e-mail details provided (see the Schedule) and will be deemed effective as indicated:—

    

    

    (i) if in writing and delivered in person or by courier, on the date it is delivered; (ii) if sent by telex, on the date the recipient’s answerback is received;

    (iii)       if sent by facsimile transmission, on the date it is received by a
        responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender’s facsimile machine);

    

    

    (iv)       if sent by certified or registered mail (airmail, if overseas) or the equivalent (return
        receipt requested), on the date it is delivered or its delivery is attempted;

    

    

    (v)        if sent by electronic messaging system, on the date it is received; or

    
      
        

    

    

    

    (vi)       if sent by e-mail, on the date it is delivered,

    

    

    unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a
        Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication will be deemed given and effective on the first following day
        that is a Local Business Day.

    

    

    (b)        Change of Details. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system or e-mail details at which notices or other communications are to be given
        to it.

    

    

    13.        Governing Law and Jurisdiction

    

    

    (a)        Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule.

    

    

    (b)        Jurisdiction.  With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement (“Proceedings”), each party irrevocably:—

    

    

    (i)         submits:—

    

    

    (1)        if this Agreement is expressed to be governed by English law, to (A) the non-exclusive
        jurisdiction of the English courts if the Proceedings do not involve a Convention Court and (B) the exclusive jurisdiction of the English courts if the Proceedings do involve a Convention Court; or

    

    

    (2)        if this Agreement is expressed to be governed by the laws of the State of New York, to
        the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City;

    

    

    (ii)        waives any objection which it may have at any time to the laying of venue of any
        Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over
        such party; and

    

    

    (iii)       agrees, to the extent permitted by applicable law, that the bringing of Proceedings in
        any one or more jurisdictions will not preclude the bringing of Proceedings in any other jurisdiction.

    

    

    (c)        Service of Process. Each party irrevocably appoints the Process Agent, if any, specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings.  If for any
        reason any party’s Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process
        given in the manner provided for notices in Section l2(a)(i), l2(a)(iii) or 12(a)(iv). Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by applicable law.

    

    

    (d)        Waiver of Immunities.  Each party irrevocably waives, to the extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on
        the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction or order for specific performance or recovery  of property, (iv) attachment of its assets (whether before or after
        judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law,
        that it will not claim any such immunity in any Proceedings.

    
      
        

    

    

    

    14.        Definitions

    

    

    As used in this Agreement:—

    

    

    “Additional Representation” has the meaning specified in Section 3. “Additional Termination Event” has

        the meaning specified in Section 5(b). “Affected Party” has the meaning specified in Section 5(b).

    “Affected Transactions” means (a) with respect to any Termination Event consisting of an Illegality, Force Majeure Event, Tax Event or Tax Event Upon Merger, all Transactions affected by the
        occurrence of such Termination Event (which, in the case of an Illegality under Section 5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2), means all Transactions unless the relevant Credit Support Document references only certain
        Transactions, in which case those Transactions and, if the relevant Credit Support Document constitutes a Confirmation for a Transaction, that Transaction) and (b) with respect to any other Termination Event, all Transactions.

    

    

    “Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly
        or indirectly under common control with the person. For this purpose, “control” of any entity or person means ownership of a majority of the voting power of the entity or person.

    

    

    “Agreement” has the meaning specified in Section 1(c).

    

    

    “Applicable Close-out Rate” means:—

    

    

    (a)        in respect of the determination of an Unpaid Amount:—

    

    

    (i) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii))

    by a Defaulting Party, the Default Rate;

    

    

    (ii) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii))

    by a Non-defaulting Party, the Non-default Rate;

    

    

    (iii) in respect of obligations deferred pursuant to Section 5(d), if there is no Defaulting Party and for so long as the deferral period
        continues, the Applicable Deferral Rate; and

    

    

    (iv) in all other cases following the occurrence of a Termination Event (except where interest accrues pursuant to clause (iii) above), the
        Applicable Deferral Rate; and

    

    

    (b)        in respect of an Early Termination Amount:—

    

    

    (i) for the period from (and including) the relevant Early Termination Date to (but excluding) the date

    (determined in accordance with Section 6(d)(ii)) on which that amount is payable:—

    

    

    (1) if the Early Termination Amount is payable by a Defaulting Party, the Default Rate;

    

    

    (2) if the Early Termination Amount is payable by a Non-defaulting Party, the Non-default

    Rate; and

    

    

    (3) in all other cases, the Applicable Deferral Rate; and

    
      
        

    

    

    

    (ii) for the period from (and including) the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable to
        (but excluding) the date of actual payment:—

    

    

    (1)        if a party fails to pay the Early Termination Amount due to the occurrence of an event or
        circumstance which would, if it occurred with respect to a payment or delivery under a Transaction, constitute or give rise to an Illegality or a Force Majeure Event, and for so long as the Early Termination Amount remains unpaid due to the
        continuing existence of such event or circumstance, the Applicable Deferral Rate;

    

    

    (2)        if the Early Termination Amount is payable by a Defaulting Party (but excluding any period
        in respect of which clause (I) above applies), the Default Rate;

    

    

    (3)        if the Early Termination Amount is payable by a Non-defaulting Party (but excluding any
        period in respect of which clause (1) above applies), the Non-default Rate; and

    

    

    (4)        in all other cases, the Termination Rate.

    

    

    “Applicable Deferral Rate” means:—

    

    

    (a)        for the purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant payer to be a
        rate offered to the payer by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by the payer for the purpose of obtaining a representative rate that will reasonably
        reflect conditions prevailing at the time in that relevant market;

    

    

    (b)        for purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition of Applicable
        Close -out Rate, the rate certified by the relevant payer to be a rate offered to prime banks by a major bank in a relevant interbank market for overnight deposits in the applicable  currency, such bank to be selected in good faith by the payer
        after consultation with the other party, if practicable, for the purpose of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in that relevant market; and

    

    

    (c)        for purposes of Section 9(h)(i)(3)(C) and clauses (a)(iv), (b)(i)(3) and (b)(ii)(1) of the
        definition of Applicable Close-out Rate, a rate equal to the arithmetic mean of the rate determined pursuant to clause (a) above and a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as
        certified by it) if it were to fund or of funding the relevant amount.

    

    

    “Automatic Early Termination” has the meaning specified in Section 6(a).

    

    

    “Burdened Party” has the meaning specified in Section 5(b)(iv).

    

    

    “Change in Tax Law” means the enactment, promulgation, execution or ratification  of, or any change in or amendment to, any law (or in the application or official interpretation of any law) that occurs after the
        parties enter into the relevant Transaction.

    

    

    “Close-out Amount” means, with respect to each Terminated Transaction or each group of Terminated Transactions and a Determining Party, the amount of the losses or costs of the Determining Party that are or wo uld be
        incurred under then prevailing circumstances (expressed as a positive number) or gains of the Determining Party that are or would be realized under then prevailing circumstances (expressed as a negative number) in replacing, or in providing for the
        Determining Party the economic equivalent of, (a) the material terms of that Terminated Transaction or group of Terminated Transactions, including the payments and deliveries by the parties under Section 2(a)(i) in respect of that Terminated
        Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have been required after that date (assuming satisfaction of the conditions precedent in

    
      
        

    

    

    

    Section 2(a)(iii)) and (b) the option rights of the parties in respect of that
        Terminated Transaction or group of

    Terminated Transactions.

    

    

    Any Close-out Amount will be determined by the Determining Party (or its agent), which will act in
        good faith and use commercially reasonable procedures in order to produce a commercially reasonable result.  The Determining Party may determine a Close-out Amount for any group of Terminated Transactions or any individual Terminated Transaction
        but, in the aggregate, for not less than all Terminated Transactions.  Each Close-out Amount will be determined as of the Early Termination Date or, if that would not be commercially reasonable, as of the date or dates following the Early
        Termination Date as would be commercially reasonable.

    

    

    Unpaid Amounts in respect of a Terminated Transaction or group of Terminated Transactions and legal
        fees and out- of-pocket expenses referred to in Section 11 are to be excluded in all determinations of Close-out Amounts.

    

    

    In determining a Close-out Amount, the Determining Party may consider any relevant information,
        including, without limitation, one or more of the following types of information:—

    

    

    (i)         quotations (either firm or indicative) for replacement transactions supplied by one or
        more third parties that may take into account the creditworthiness of the Determining Party at the time the quotation is provided and the terms of any relevant documentation, including credit support documentation, between the Determining Party and
        the third party providing the quotation;

    

    

    (ii)        information consisting of relevant market data in the relevant market supplied by one or
        more third parties including, without limitation, relevant rates, prices, yields, yield curves, volatilities, spreads, correlations or other relevant market data in the relevant market; or

    

    

    (iii)       information of the types described in clause (i) or (ii) above from internal sources
        (including any of the Determining Party’s Affiliates) if that information is of the same type used by the Determining Party in the regular course of its business for the valuation of similar transactions.

    

    

    The Determining Party will consider, taking into account the standards and procedures described in
        this definition, quotations pursuant to clause (i) above or relevant market data pursuant to clause (ii) above unless the Determining Party reasonably believes in good faith that such quotations or relevant market data are not readily available or
        would produce a result that would not satisfy those standards. When considering information described in clause (i), (ii) or (iii) above, the Determining Party may include costs of funding, to the extent costs of funding are not and would not be a
        component of the other information being utilized.  Third parties supplying quotations pursuant to clause (i) above or market data pursuant to clause (ii) above may include, without limitation, dealers in the relevant markets, end-users of the
        relevant product, information vendors, brokers and other sources of market information.

    

    

    Without duplication of amounts calculated based on information described in clause (i), (ii) or (iii)
        above, or other relevant information, and when it is commercially reasonable to do so, the Determining Party may in addition consider in calculating a Close-out Amount any loss or cost incurred in connection with its terminating, liquidating or
        re-establishing any hedge related to a Terminated Transaction or group of Terminated Transactions (or any gain resulting from any of them).

    

    

    Commercially reasonable procedures used in determining a Close-out Amount may include the
        following:—

    

    

    (1)      application to relevant market data from third parties pursuant to clause (ii) above or
        information from internal sources pursuant to clause (iii) above of pricing or other valuation models that are, at the time of the determination of the Close-out Amount, used by the Determining Party in the regular course of its business in pricing
        or valuing transactions between the Determining Party and unrelated third parties that are similar to the Terminated Transaction or group of Terminated Transactions; and

    
      
        

    

    

    

    (2)      application of different valuation methods to Terminated Transactions
        or groups of Terminated Transactions depending on the type, complexity, size or number of the Terminated Transactions or group of Terminated Transactions.

    

    

    “Confirmation”

        has the meaning specified in the preamble.

    

    

    “consent” includes a consent, approval, action, authorization, exemption, notice, filing, registration or exchange control consent.

    

    

    “Contractual

          Currency” has the meaning specified in Section 8(a).

    

    

    “Convention

          Court” means any court which is bound to apply to the Proceedings either Article 17 of the 1968

    Brussels Convention  on Jurisdiction  and the Enforcement  of Judgments in Civil
        and Commercial  Matters or Article 17 of the 1988 Lugano Convention  on Jurisdiction  and the Enforcement  of Judgments in Civil and Commercial Matters.

    

    

    “Credit
          Event Upon Merger” has the meaning specified in Section 5(b).

    

    

    “Credit
          Support Document” means any agreement or instrument that is specified as such in this Agreement.

    

    

    “Credit
          Support Provider” has the meaning specified in the Schedule.

    

    

    “Cross-Default”

        means the event specified in Section 5(a)(vi).

    

    

    “Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum.

    

    

    “Defaulting Party” has the meaning specified in Section 6(a). “Designated Event” has the
        meaning specified in Section 5(b)(v). “Determining Party” means the party determining a Close-out Amount. “Early Termination Amount” has the meaning specified in Section 6(e).

    “Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).

    

    

    “electronic

          messages” does not include e-mails but does include documents expressed in markup languages, and

    “electronic

          messaging system” will be construed accordingly.

    

    

    “English law” means the law of England and Wales, and “English” will be construed
        accordingly. “Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the Schedule. “Force Majeure Event” has the meaning specified in Section 5(b).

    “General Business Day” means a day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits).

    

    

    “Illegality”

        has the meaning specified in Section 5(b).

    
      
        

    

    

    

    “Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the
        government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or
        resident of such jurisdiction, or being or having been organized, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a
        connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document).

    

    

    “law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any relevant governmental revenue authority), and “unlawful” will be construed accordingly.

    

    

    “Local Business Day” means (a) in relation to any obligation under Section 2(a)(i), a General Business Day in the place or places specified in the relevant Confirmation and a day on which a relevant settlement system
        is open or operating as specified in the relevant Confirmation or, if a place or a settlement system is not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in
        this Agreement, (b) for the purpose of determining when a Waiting Period expires, a General Business Day in the place where the event or circumstance that constitutes or gives rise to the Illegality or Force Majeure Event, as the case may be,
        occurs, (c) in relation to any other payment, a General Business Day in the place where the relevant account is located and, if different, in the principal financial center, if any, of the currency of such payment and, if that currency does not
        have a single recognized principal financial center, a day on which the settlement system necessary to accomplish such payment is open, (d) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i),  a 
        General Business Day (or a  day that would have been a  General Business Day but for the occurrence of an event or circumstance which would, if it occurred with respect to payment, delivery or compliance related to a Transaction, constitute or give
        rise to an Illegality or a Force Majeure Event) in the place specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and
        (e) in relation to Section 5(a)(v)(2), a General Business Day in the relevant locations for performance with respect to such Specified Transaction.

    

    

    “Local Delivery Day” means, for purposes of Sections 5(a)(i) and 5(d), a day on which settlement systems necessary to accomplish the relevant delivery are generally open for business so that the delivery is capable of
        being accomplished in accordance with customary market practice, in the place specified in the relevant Confirmation or, if not so specified, in a location as determined in accordance with customary market practice for the relevant delivery.

    

    

    “Master Agreement” has the meaning specified in the preamble.

    

    

    “Merger Without Assumption” means the event specified in Section 5(a)(viii). “Multiple Transaction
          Payment Netting” has the meaning specified in Section 2(c). Non-affected Party” means, so long as there is only
        one Affected Party, the other party.

    “Non-default Rate” means the rate certified by the Non-defaulting Party to be a rate offered to the Non-defaulting Party by a major bank in a relevant interbank market for overnight deposits in the
        applicable currency, such bank to be selected in good faith by the Non-defaulting Party for the purpose of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in that relevant market.

    

    

    “Non-defaulting Party” has the meaning specified in Section 6(a).

    

    

    “Office” means a branch or office of a party, which may be such party’s head or home office.

    

    

    “Other Amounts” has the meaning specified in Section 6(f).

    
      
        

    

    

    

    “Payee” has the meaning specified in Section 6(f).

    

    

    “Payer” has the meaning specified in Section 6(f).

    

    

    “Potential Event of Default” means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

    

    

    “Proceedings” has the meaning specified in Section 13(b).

    

    

    “Process Agent” has the meaning specified in the Schedule.

    

    

    “rate of exchange” includes, without limitation, any premiums and costs of exchange payable in connection with the purchase of or conversion into the Contractual Currency.

    

    

    “Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is incorporated, organized, managed and controlled or considered to have its seat, (b) where an Office through which the
        party is acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which such payment is made.

    

    

    “Schedule” has the meaning specified in the preamble.

    

    

    “Scheduled Settlement Date” means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction.

    

    

    “Specified Entity” has the meaning specified in the Schedule.

    

    

    “Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.

    

    

    “Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement with respect to any such transaction) now existing or hereafter entered into between one party to this Agreement (or
        any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is
        not a Transaction under this Agreement but (i) which is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest
        rate option, foreign exchange transaction,  cap transaction, floor transaction,  collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, credit protection transaction, credit swap, credit default swap,
        credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, weather index transaction or forward purchase or sale of a
        security, commodity or other financial instrument or interest (including any option with respect to any of these transactions) or (ii) which is a type of transaction that is similar to any transaction referred to in clause (i) above that is
        currently, or in the future becomes, recurrently entered into in the financial markets (including terms and conditions incorporated by reference in such agreement) and which is a forward, swap, future, option or other derivative on one or more
        rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, or other benchmarks against which payments or deliveries are to be
        made, (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation.

    

    

    “Stamp Tax” means any stamp, registration, documentation or similar tax.

    

    

    “Stamp Tax Jurisdiction” has the meaning specified in Section 4(e).

    
      
        

    

    

    

    “Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any
        payment under this Agreement other than a stamp, registration, documentation or similar tax.

    

    

    “Tax Event” has the meaning specified in Section 5(b).

    

    

    “Tax Event Upon Merger” has the meaning specified in Section 5(b).

    

    

    “Terminated Transactions” means, with respect to any Early Termination Date, (a) if resulting from an Illegality or a Force Majeure Event, all Affected Transactions specified in the notice given pursuant to Section
        6(b)(iv), (b) if resulting from any other Termination Event, all Affected Transactions and (c) if resulting from an Event of Default, all Transactions in effect either immediately before the effectiveness of the notice designating that Early
        Termination Date or, if Automatic Early Termination applies, immediately before that Early Termination Date.

    

    

    “Termination Currency” means (a) if a Termination Currency is specified in the Schedule and that currency is freely available, that currency, and (b) otherwise, euro if this Agreement is expressed to be governed by
        English law or United States Dollars if this Agreement is expressed to be governed by the laws of the State of New York.

    

    

    “Termination Currency Equivalent” means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other than the
        Termination Currency (the “Other Currency”), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination
        Date, or, if the relevant Close-out Amount is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of
        such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency
        for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by
        the parties.

    

    

    “Termination Event” means an Illegality, a Force Majeure Event, a Tax Event, a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event.

    

    

    “Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such
        amounts.

    

    

    “Threshold Amount” means the amount, if any, specified as such in the Schedule.

    

    

    “Transaction” has the meaning specified in the preamble.

    

    

    “Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable
        but for Section 2(a)(iii) or due but for Section 5(d)) to such party under Section 2(a)(i) or 2(d)(i)(4) on or p rior to such Early Termination Date and which remain unpaid as at such Early Termination Date, (b) in respect of each Terminated
        Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii) or

    5(d)) required to be settled by delivery to such party on or prior to such Early Termination Date and
        which has not been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or would have been) required to be delivered and (c) if the Early Termination Date results from an Event of Default, a
        Credit Event Upon Merger or an Additional Termination Event in respect of which all outstanding Transactions are Affected Transactions, any Early Termination Amount due prior to such Early Termination Date and which remains unpaid as of such Early
        Termination Date, in each case together with any amount of interest accrued or other

    
      
        

    

    
      

      

      compensation in respect of that obligation or deferred obligation, as the case
          may be, pursuant to Section 9(h)(ii)(1) or (2), as appropriate. The fair market value of any obligation referred to in clause (b) above will be determined as of the originally scheduled date for delivery, in good faith and using commercially
          reasonable procedures, by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it will be the average of the Termination Currency Equivalents of the fair market values so determined by both parties.

      

      

      “Waiting Period” means:—

      

      

      (a)        in respect of an event or circumstance under Section 5(b)(i), other than in the case of
          Section 5(b)(i)(2) where the relevant payment, delivery or compliance is actually required on the relevant day (in which case no Waiting Period will apply), a period of three Local Business Days (or days that would have been Local Business Days
          but for the occurrence of that event or circumstance) following the occurrence of that event or circumstance; and

      

      

      (b)        in respect of an event or circumstance under Section 5(b)(ii), other than in the case of
          Section 5(b)(ii)(2) where the relevant payment, delivery or compliance is actually required on the relevant day (in which case no Waiting Period will apply), a period of eight Local Business Days (or days that would have been Local Business Days
          but for the occurrence of that event or circumstance) following the occurrence of that event or circumstance.

      

      

      IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below
          with effect from the date specified on the first page of this document.

      

      

      MUFG Bank Ltd AeroCentury Corp

      

      

      By: By:

      

      

      Its: Its:

      

      

      

      

    

    

    

    
      
        

    

    

    

     

      

     

      

     

      

    ISDA®

    International Swaps and Derivatives Association, Inc.

    

    

    SCHEDULE

    to the

    2002 Master Agreement

    

    

    dated as of March 12, 2019 between

    MUFG BANK, LTD ("Party A")

    

    

    and

    

    

    AEROCENTURY CORP. ("Party B")

    

    

    

    

    PART

          1: Termination Provisions

    

    

    (a)  "Specified Entity" means in relation to Party A for the purpose of Sections 5(a)(v), 5(a)(vi), 5(a)(vii) and 5(b)(v):

     

      

    None;

    

    

    "Specified Entity" means in relation to Party B for the purpose of Sections 5(a)(v) ,5(a)(vi), 5(a)(vii) and 5(b)(v):

    

    

    Any Affiliate

    

    

    (b)  "Specified Transaction" will have the meaning specified in Section 14 of this Agreement.

      

    

    

    (c) The "Cross-Default" provisions of Section 5(a)(vi) will apply to Party A and will apply to Party B

    

    

    The following proviso will be inserted at the end of Section 5(a)(vi) of this Agreement 

      after “period)”

    

    

    “; provided, however, that notwithstanding the foregoing, a Cross Default shall not occur under
        either (1) or (2) above if (aa) the default, event of default or condition referred to in (1) or the default referred to in (2) arises out of a failure to pay caused by an error or omission of an administrative or operational nature, (bb) funds
        were available to such party to enable it to make the relevant payment when due, and (cc) such relevant payment

    
      
        

    

    

    

    is made within three Local Business Days following receipt of written notice from
        an interested party of such failure to pay”

    

    

    "Specified Indebtedness" means any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money (other than indebtedness in respect of deposits
        received in the ordinary course of business),

    

    

    "Threshold Amount" means with respect to Party A, an amount equal to three percent (3%) of the shareholders' equity on a consolidated basis as specified in the latest publicly available audited annual financial
        statements of such party and with respect to Party B, the lower of USD 1,000,000 (or its equivalent in any other currency or currencies) and

    2% of shareholders’ equity on a consolidated basis as specified in the latest publicly

    available audited annual financial statements of such party.

    

    

    (d) The "Credit Event Upon Merger" provisions of Section
        5(b)(v) will apply to Party A

    and will apply to Party B .

    

    

    (e) The "Automatic Early Termination" provision of
        Section 6(a) will not apply to Party A

    or to Party B.

    

    

    (f) "Termination Currency" means United States Dollars.

    

    

    

    

    (g) Additional Termination Event will apply. It shall
        constitute an Additional Termination

    Event hereunder, with respect to which Party B shall be the Affected Party, if at any time:

    

    

    

    

    (i) the Credit Agreement shall for any reason, cease to be in full force and effect. For the purpose
        of the foregoing Termination Event, all Transactions shall be Affected Transactions and Party B shall be the sole Affected Party.

    

    

    (ii) the obligations of Party B with respect to Transactions hereunder are not secured equally and
        ratably and on a pari passu basis with the obligations of Party B under the Credit Agreement. For the purpose of the foregoing Termination Event, all Transactions shall be Affected Transactions and Party B shall be the sole Affected Party.

    

    

    (iii) Party A or an Affiliate of Party A ceases to hold any of the loans or
        commitments under the Credit Agreement acquired by it as initial lender or by joinder or all such loans have been repaid and all such commitments reduced to zero. For the purpose of the foregoing Termination Event, all Transactions shall be
        Affected Transactions and Party B shall be the sole Affected Party.

    

    

    (iv) ; or the Credit Agreement is amended or otherwise modified in a manner that
        would have an adverse effect on the rights of Party A thereunder.

    

    

    As used herein, “Credit Agreement” means the Third Amended and Restated Loan and Security Agreement
        dated as of February 19, 2019 among AeroCentury Corp as Borrower, the lenders named therein and MUFG Union Bank N.A. as Lender and Administrative Agent, as amended or replaced from time to time

    
      
        

    

    

    

    

    

    

    

    PART 2: Tax Representations

    

    

    (a) Payer Tax
          Representations. For the purpose of Section 3(e) of this Agreement, Party A

    and Party B will make the following representation:-

    

    

    It is not required by any applicable law, as modified by the practice of any relevant governmental
        revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of this Agreement) to be made by it to the other party under this Agreement.
        In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this
        Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party

    contained in Section 4(d) of this Agreement, except that it will not be a breach
        of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

    

    

    (b) Payee Tax Representations. For the purpose of Section
        3(f) of this Agreement, Party A

    and Party B will make the following representations specified below, if any:-

    

    

    (i) For the purpose of Section 3(f) of this Agreement, Party A represents that:

    

    

    (1) Party A is a Japanese banking organization, organized under the laws of

    Japan;

    

    

    
      
        	

              	(2)	
                Each payment received or to be received by Party A in connection with this Agreement will be effectively connected with the conduct of a trade or business by
                    it in the United States; and

              

      

    

    

    

    
      
        	

              	(3)	
                It is a “foreign person” as that term is used in section 1.6041-4(a)(4) of the U.S. Treasury Regulations.

              

      

    

    

    

    

    

    

    

    

    

    

    

    (ii) For the purpose of Section 3(f) of this Agreement, Party B represents that:

    

    

    
      
        	

              	(1)	
                Party B is a corporation for U.S. federal income tax purposes and is organized under the laws of the State of Delaware.

              

      

    

    

    

    
      
        	

              	(2)	
                It is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations) for U.S. federal income tax purposes and an
                    exempt recipient under Treasury Regulation Section

              

      

    

    1.6049-4(c)(1)(ii).

    
      
        

    

    

    

    

    

    PART 3: Agreement to Deliver Documents

    

    

    For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees to
        deliver the following documents:

    

    

    (a) Tax forms, documents or certificates to be delivered are:

    

    

    	
            Party A

          	
            For Transactions entered into through Party A’s New
                York  office, a complete,  accurate  and  executed United  States Internal Revenue Service Form W-8ECI, or any successor of such form.

          	
            (i) Upon execution and delivery of this Agreement, (ii) promptly upon reasonable demand by
                Party B, and (iii) promptly upon learning that any such tax form previously provided by Party A has become

            obsolete or incorrect.

          
	
             

            Party B

          	
             

            A correct and complete U.S. Internal Revenue Service Forms W-9, signed in original.

          	
             

            (i) Upon execution and delivery of this Agreement, (ii) promptly upon reasonable demand by
                Party B, and (iii) promptly upon learning that any such tax form previously provided by Party B has become

            obsolete or incorrect.

          

    

    

    

    

    

    

    (b) Other documents to be delivered are:-

    

    

    	
            Party required to deliver document

          	 	
            Form/Document/Certificate

          	 	
            Date by

             

            which to be delivered

          	 	
            Covered by Section 3(d) Representation

          
	
            Party A

          	 	
             

            Annual Report of Mitsubishi

                  UFJ Financial Group containing audited, consolidated financial statements certified by

            independent certified public accountants and prepared in accordance with generally

            accepted accounting principles in the country in which such party is organized

          	 	
             

            Upon request, to the extent not already provided by Party A at its website http://www.mufg

            .jp/english/

          	 	
            Yes

          

    
      
        

    

    

    

    

    

    	
            Party required to deliver document

          	 	
            Form/Document/Certificate

          	 	
            Date by

             

            which to be delivered

          	 	
            Covered by Section 3(d) Representation

          
	
            Party B

          	 	
             

            Annual Report of Party B containing audited, consolidated financial statements certified by
                independent certified public accountants and prepared in accordance with generally accepted accounting principles in the country in which such party and is organized

          	 	
            Upon request,

            to the extent not

            already

            provided by

            Party A at its

            website

             

            http://www.aero century.com/

          	 	
            Yes

          
	
             

             

            Party B

          	 	
             

             

            Quarterly Financial Statements of Party B containing unaudited, consolidated financial
                statements of such party's first three fiscal quarter prepared in accordance

            with generally accepted accounting principles in the country in which such party is organized

          	 	
             

             

            Upon request,

            to the extent not

            already

            provided by

            Party A at its

            website

             

            http://www.aero century.com/

          	 	
             

             

            Yes

          
	
             

             

            Party B

          	 	
             

             

            Certified copies of all corporate, partnership or membership authorizations, as the case may
                be, and any other documents with respect to the execution, delivery and performance of this

            Agreement and any Credit Support

            Document

          	 	
             

             

            Upon execution and delivery of this Agreement

          	 	
             

             

            Yes

          
	
             

            Party A and

            Party B

          	 	
             

            Certificate of authority executed by a duly authorized officer of the party certifying the
                name, authority and specimen signatures of individuals executing this Agreement on its behalf.

          	 	
             

            Upon execution and delivery of this Agreement and thereafter upon request of the other party

          	 	
             

            Yes

          

    
      
        

    

    

    

    PART 4: Miscellaneous

    

    

    
      
        	

              	(a)	
                Address for Notices. For the
                    purpose of Section 12(a) of this Agreement:- Address for notices or communications to Party A:

              

      

    

    

    

    With respect to a Transaction, to the address specified in the relevant Confirmation.  With respect to
        any notice for purposes of Section 5 or Section 6 to:

    

    

    MUFG BANK, LTD.

    1251 Avenue of the Americas

    New York, New York 10020-1104

    

    

    Attn: Managing Director

    Planning

    Global Markets Division for the Americas

    

    

    Email: __________________

    Telephone No: (212) 782-XXXX

    

    

    

    

    Address for notice or communications to Party B:

    

    

    1440 Chapin Avenue, Suite 310

    Burlingame, CA 94010

    Attn: Chief Financial Officer

    

    

    Email:  toni.perazzo@aerocentury.com

    Telephone: 650-XXX-XXXX

    Fax: 650-XXX-XXXX

    

    

    

    

    (b) Process Agent. For the purpose of Section 13(c):

    

    

    Party A appoints as its Process Agent: Not applicable.

    

    

    Each Party B appoints as its Process Agent: Not applicable.

    

    

    (c) Offices. The provisions of Section 10(a) will apply
        to this Agreement.

    

    

    (d) Multibranch Party. For the purpose of Section 10(b)
        of this Agreement:-

    

    

    Party A is not a Multibranch Party and shall act only through its New York Office. Party B is not a
        Multibranch Party.

    (e)       Calculation Agent. The Calculation Agent is Party A. If an Event of Default occurs with respect to Party A, for so long as such event shall be continuing with respect to
        Party A, Party B may designate a reputable third party bank or financial institution or dealer to act as the Calculation Agent. If a calculation, determination, or adjustment is disputed by the party which is not the Calculation Agent, the parties
        shall first endeavor to resolve such

    
      
        

    

    

    

    reasonable time, the parties shall mutually agree on a reputable third party bank
        or financial institution or dealer to act as Calculation Agent with respect to the issue in dispute.

    

    

    (f) Credit Support Document.
        Details of any Credit Support Document: Not Applicable. (g) Credit Support Provider.

    Credit Support Provider means in relation to Party A: Not applicable. Credit Support Provider means in relation to Party B: Not applicable

    
      
        	

              	(h)	
                Governing Law; Jurisdiction.  This Agreement and any and all controversies arising out of or in relation to this Agreement shall be governed by and construed in
                    accordance with the laws of the State of New York (without reference to its conflict of laws doctrine).

              

      

    

    

    

    Section 13 is amended by (i) deleting in Section 13(b)(i)(2) the word “non-exclusive” and replacing
        it with “exclusive” and (ii) deleting Section 13(b)(iii) in its entirety.

    

    

    (i) Netting of Payments. “Multiple Transaction Payment Netting” will not apply. FX Transactions and
        Currency Option Transactions, however, shall be settled in accordance with Part 6(c) of this Schedule.

    

    

    (j) "Affiliate" will have the meaning specified in
        Section 14 of this Agreement.

    

    

    
      
        	

              	(k)	
                Absence of Litigation. For the
                    purpose of Section 3(c):- "Specified Entity" means in relation to Party A, none;

              

      

    

    

    

    "Specified Entity" means in relation to Party B, any Affiliate of Party B. (l) No Agency. The
        provisions of Section 3(g) will apply to this Agreement.

    
      
        	

              	(m)	
                Additional Representation will
                    apply. For the purpose of Section 3 of this Agreement, each of the following will constitute an Additional Representation:-

              

      

    

    

    

    Relationship Between Parties. Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes
        affirmative obligations to the contrary for that Transaction):-

    

    

    (A)      Security and Source of Payment of Obligations. The obligations of Party B to make
        payments to Party A under this Agreement (including any payments upon Early Termination pursuant to Section 6(e) of this Agreement) constitute Obligations under the Credit Agreement.

    

    

    (B)      Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it
        based upon its own judgment and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction, it
        being understood that information and explanations related to the terms and conditions of a Transaction

    
      
        

    

    

    

    Transaction. No communication (written or oral) received from the other party
        will be deemed to be an assurance or guarantee as to the expected results of that Transaction.

    

    

    (C)     Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the
        terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction.

    

    

    (D)      Status of Parties. The other party is not acting as a fiduciary for or an advisor to it in respect of that Transaction.

    

    

    (E)         Eligible Contract Participant. Each party will be deemed to represent to the other party on each date on which a Transaction is entered into that it is an “eligible contract participant” and
        that each guarantor of its Swap Obligations (as defined below), if any, is an “eligible contract participant,” as such term is defined in the U.S. Commodity Exchange Act, as amended. For purposes of this provision, “Swap Obligation” means an obligation incurred with respect to a transaction that is a “swap” as defined in the Section 1a(47) of the Commodity Exchange
        Act and CFTC Regulation 1.3(xxx).

    

    

    (n)       Recording of Conversations.   Each party to this Agreement acknowledges and agrees to the recording of conversations between trading and marketing personnel of the parties to this Agreement
        whether by one or other or both of the parties or their agents.

    

    

    (o)       No Plan Assets. Party B represents and warrants to Party A (which representation and warranty will be deemed to be repeated by Party B at all times until the termination of this Agreement and
        will be deemed a representation and agreement for all purposes of this Agreement, including without limitation Sections 3, 4, 5(a)(ii) and 5(a)(iv)) that the assets of Party B do not and will not constitute the assets of an employee benefit plan
        subject to Title I of the Employee Retirement Income Security Act of 1974, as amended or a “Plan” within the meaning of Section 4975(e)(i) of the Internal Revenue Code of 1986. (included).

    

    

    

    

    

    

    

    

    PART

          5: Other Provisions

    

    

    (a)  Financial Statements. Section 3(d) is hereby amended by adding in the third line thereof

    after the word “respect” and before the period:

    

    

    “or, in the case of financial statements, a fair presentation of the financial condition of the
        relevant party”.

    

    

    (b)  Transfer.  

        Section 7 is hereby amended by adding ““(which consent shall be deemed given in the event that such transfer is required due to any applicable governmental or regulatory requirement and shall not otherwise be unreasonably withheld)” after “prior
        written consent”.

    

    

    (c) Set-off.  Section 6(f) applies to Party A and Party B.

    

    

    (d)  Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL
        BY JURY WITH RESPECT TO ANY LEGAL

    
      
        

    

    

    

    PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY CREDIT SUPPORT
        DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

    

    

    

    

    (e)               2002 Master Agreement Protocol. Annexes 1 to 18 and Section 6 of the ISDA 2002

    Master Agreement Protocol as published by the International Swaps and Derivatives Association, Inc.
        on July 15, 2003 are incorporated into and apply to this Agreement. References in those definitions and provisions to any ISDA Master Agreement will be deemed to be references to this Master Agreement.

    

    

    (f)            Consent to Disclosure. (i) Party B consents to Party A effecting such disclosure as Party A may deem necessary to enable Party A to transfer Party B's records and information to process and execute Party B's
        instructions, to any of its Affiliates. For the avoidance of doubt, Party B's consent to disclosure includes the right on the part of Party A to allow access to any intended recipient of Party B's information, to the records of Party A by any
        means.

    

    

    (g)       Withholding Tax imposed on payments to non-US counterparties under the United States Foreign Account  Tax Compliance Act.   “Tax” as used in Part 2(a) of this Schedule (Payer Tax Representation) and “Indemnifiable Tax” as
        defined in Section 14 of this Agreement shall not include any U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any  current or future  regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or
        regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of this Agreement.

    

    

    

    

    

    

    (h)      Change of Account. The following proviso is inserted at the end of Section 2(b) after

    “change”:

    

    

    “; provided that if such new account shall not be in the same jurisdiction having the power to tax
        as the original account, the party not changing its account shall not be obliged to pay any greater amounts and shall not receive less as a result of such change than would have been the case if such change had not taken place.”

    

    

    

    

    

    

    (i)         USA PATRIOT Act Notice. Party A hereby notifies Party B that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”),
        it is required to obtain, verify and record information that identifies Party B, which information includes the name and address of Party B and other information that will allow Party A to identify Party B in accordance with the Act.

    

    

    (j)         Special Entity.  Party B is not a "Special Entity" as such term is defined in the U.S. Commodity Exchange Act and the rules and regulations promulgated thereunder.

    
      
        

    

    

    

    PART 6: Additional Terms for Foreign Exchange and Foreign Exchange Option Transactions

    

    

    

    

    (a)       Incorporation of Definitions. The 1998 FX and Currency Option Definitions (the "FX Definitions"), published by the International Swaps and Derivatives Association, Inc., the
        Emerging Markets Traders Association and The Foreign Exchange Committee, are hereby incorporated by reference with respect to FX Transactions (as defined in the   FX Definitions) and Currency Option Transactions (as defined in the FX Definitions).
        Terms defined in the FX Definitions shall have the same meanings in this Part 6.

    

    

    (b)       Scope. Unless otherwise agreed in writing by the parties, each FX Transaction and Currency Option Transaction entered into between the parties before, on or after the date of this Agreement
        shall be a Transaction under this Agreement and shall be part of, subject to and governed by this Agreement. FX Transactions and Currency Option Transactions shall be part of, subject to and governed by this Agreement even if the Confirmation in
        respect thereof does not state that such FX Transaction or Currency Option Transaction is subject to or governed by this Agreement or does not otherwise reference this Agreement.

    

    

    (c)       Premium Netting. If, on any date, and unless otherwise mutually agreed by the parties, Premiums would otherwise be payable hereunder in the same Currency between the same respective offices
        of the parties,  then,  on such  date, each party's obligation  to make payment of such Premiums will be automatically satisfied and discharged and, if the aggregate Premiums that would otherwise have been payable by such office of one party
        exceeds the aggregate Premiums that would otherwise have been payable by such office of the other party, replaced by an obligation upon the party by whom the larger aggregate Premiums would have been payable to pay the other party  the excess of
        the larger aggregate Premiums over the smaller aggregate Premiums, and if the aggregate Premiums are equal, no payment shall be made.

    

    

    (d)       Payment Instructions. All payments to be made hereunder in respect of FX and Currency Option Transactions shall be made in accordance with standing payment instructions provided by the
        parties from time to time in writing (or as otherwise specified in a Confirmation).

    

    

    (e) Notice of Exercise.  Article 3, Section 3.5(g) of the
        FX Definitions is amended by the

    deletion of the word “facsimile,” in the fourth line thereof.

    

    

    
      
        	

              	(f)	
                Terms Relating  to  Premium.   Article

                    3,  Section 3.4  of the FX Definitions is hereby amended by the addition of the following as a new paragraph (c) of the FX Definitions.

              

      

    

    

    

    “(c)     Premium: Failure to Pay on Premium Payment Date. If any Premium is not received on the Premium Payment Date, the Seller may elect: (i) to accept a late payment of such Premium; (ii) to give written notice of such non- payment and,
        if such payment shall not be received within one (1) Local Business Day of such notice, treat the related Currency Option as void; or (iii) to give written notice of such non-payment and, if such payment shall not be received within one (2) Local
        Business Days of such notice, treat such non- payment as an Event of Default under Section 5(a)(i). If the Seller elects to act under either clause (i) or (ii) of the preceding sentence, the Buyer shall pay all out-of-pocket costs and actual
        damages incurred in connection with such unpaid or late Premium or void Currency Option, including, without limitation, interest on such Premium in the same currency as such Premium at the then prevailing market rate and any other costs or expenses
        incurred by the Seller in covering its obligations (including, without limitation, a delta hedge) with respect to such Currency Option.”

    
      
        

    

    

    

    

    

    (g)       Netting, Offset and Discharge with Respect to FX Transactions and Currency Option

    Transactions.

    

    

    The following shall be added to Section 2 of this Agreement solely with respect to Currency

    Option Transactions:

    

    

    
      
        	

              	(i)	
                Premium Netting.   Except for Premium netting in
                    respect of (i) the same Transaction, (ii) the same currency or (iii) a pair of Transactions entered into on the same day, there shall be no Premium netting.

              

      

    

    

    

    (ii) Payment Netting.

    

    

    (A)     If on any date, more than one delivery of a particular Currency under
        Currency Obligations is to be made between a pair of Offices, then each Party shall aggregate the amounts of such Currency deliverable by it and only the difference between these aggregate amounts shall be delivered by the Party owing the larger
        aggregate amount to the other Party, and, if the aggregate amounts are equal, no delivery of the Currency shall be made.

    

    

    (B)      The provisions of this Part 6(c) (ii) shall not apply if a Closeout or
        Early Termination Date, as applicable, has occurred, or a voluntary or involuntary  Insolvency  Proceeding  has occurred, without being dismissed in relation to either Party.

    

    

    (C)      The provisions of this Part 6(c) (ii) shall apply notwithstanding that
        either Party may fail to record the new Currency Obligation in its books.

    

    

    (D)      The provisions of this Part 6(c) (ii) are subject to any cutoff date
        and cutoff time agreed upon between the applicable Offices of the Parties.

    

    

    (iii) Payments on Early Termination.In addition to the obligation under Section

    6(d)(i)(1) of this Agreement, the Non-defaulting Party shall also deliver
        additional  back-up  information  relating  to  such  determination  reasonably

    requested by the other party (including without limitation written computations,
        price sources and times of quotations).

    

    

    (h)       Definitions.  Section 14 is hereby amended as follows:

    

    

    “Currency

          Obligation”. “Currency Obligation” means the undertaking of a party hereunder to deliver an amount of currency, including a netted Currency Obligation, and including any Currency Obligation previously entered into between the parties.

    

    

    The definition of "Terminated Transactions" shall be deemed to include Currency Obligations.

    

    

    IN WITNESS WHEREOF, the parties have executed this Schedule by their duly authorized officers as of the date hereof.

    
      
        

    

    

    

    

    

    MUFG BANK, LTD.                  AEROCENTURY CORP.

    By: By:

    Its: Its:

    

    

    
      
        

    

    
      

      

      (MUFG Ref: NY1110-0797660)DDDUSI: 1030453794 PYRAMID000000000000NY11100797660

      

      

      14 March, 2019

      AEROCENTURY CORP.

      

      

      The purpose of this document is to set forth the terms and conditions of the Swap
          Transaction entered into between AEROCENTURY CORP. (the "Counterparty") and MUFG Bank, Ltd.("MUFG" or "MUFG Bank") on the Trade Date specified below (the "Swap Transaction").

      

      

      This document constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below.

      

      

      The definitions and provisions contained in the 2006 ISDA Definitions, as
          published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern.

      

      

      1. This Confirmation supplements, forms a part of, and is
          subject to, the ISDA Master Agreement dated as of 12 March, 2019, as amended and supplemented from time to time (the "Agreement") between AEROCENTURY CORP. and MUFG Bank, Ltd. All provisions contained in the Agreement shall govern this
          Confirmation except as expressly modified below.

      

      

      2. The terms of the particular Swap Transaction to which this Confirmation
          relates are as follows: 

       

        

      Trade Date:        14 March, 2019

       

        

      Effective Date:  29 March, 2019

      

      

      Termination Date: 19 February, 2023, subject to adjustment in accordance with the Modified

             Following Business Day Convention.

       

        

      

        

      Notional
            Amount: USD 30,000,000.00

      

       

        

      Fixed Amounts:

      

      

      Fixed Rate Payer: The Counterparty

       

        

      

        

      

      
        
          	

                	
                  Fixed Rate Payer Payment Dates:

                	
                  The last calendar day of February and the 29th calendar day of March, April, May, June, July, August, September, October, November,
                      December and January in each year from and including 29 April, 2019 up to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

                

        

      

      

      

      Fixed Rate and

      Fixed Rate Day

      Count Fraction:  2.478000% per annum on Actual/360

      

      

      
        
          	

                	Business Day for Fixed Amount Payments:	
                  A day, other than Saturday or Sunday, on which banks and foreign exchange markets are open for business in NEW YORK and LONDON.

                

        

      

      

      

      
        
          	

                	Rounding Convention:	
                  All payments to be rounded to the nearest Cent(with one half of a Cent being rounded up)

                

        

      

      

      

      

      

      Floating Amounts:

       

        

      Floating Rate Payer: MUFG

      

      

       

      
        
          	

                	Floating Rate Payer Payment Dates:	
                  The last calendar day of February and the 29th calendar day of March, April, May, June, July, August, September, October, November,
                      December and January in each year from and including 29 April, 2019 up to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

                

        

      

      

      

      
        
          	

                	Floating Rate Option:	
                  USD-LIBOR-BBA, provided however, the following change is made to the definitions of "USD-LIBOR-BBA" and

                

        

      

      and "USD-LIBOR-Reference Banks" as it appears in the 2006 ISDA Definitions: the
          term "two London Banking Days preceding that Reset Date" shall be replaced with "two New York and London Banking Days preceding that Reset Date"

      

      

      Designated Maturity: 1 Month 

       

        

      Spread: None 

       

        

      Floating Rate Day

      Count Fraction: Actual/360

      

      

      Reset Dates: First day of each Calculation Period

      

      

      Compounding: Not applicable

      

      

      
        
          	

                	Business Day for Floating Amount Payments:	
                  A day, other than Saturday or Sunday, on which banks and foreign exchange markets are open for business in NEW YORK and LONDON.

                

        

      

      

      

      
        
          	

                	RoundingConvention:	
                  All payments to be rounded to the nearest Cent(with one half of a Cent being rounded up)

                

        

      

      

      

      

      

      Calculation Agent: MUFG

      

      

      3. Account Details:

      

      

      Payments to the Counterparty:

      

      

      
        
          	

                	For payments in USD:	
                  Any payments due to yourselves in relation to this Swap Transaction, will be made in accordance with your Standard Settlement
                      Instructions, where these are held by MUFG. If these are not currently held by MUFG or are not relevant to this Swap Transaction, please advise under separate cover.

                

        

      

      

      

      Payments to MUFG:

      

      

      For payments in USD:           Account of MUFG Bank, Ltd., New York Branch

          FEDWIRE, ABA **********, A/C ***********

      

      

      

      

      

      

      4. Offices:

       

        

      The Office of the Counterparty for the Swap Transaction is WILMINGTON. 

       

        

      The Office of MUFG for the Swap Transaction is New York Branch.

       

        

            Address:  
          Harborside 3

         210 Hudson Street,
          Suite 500

                   Jersey City, NJ 07311

                   Attention:  Treasury & Derivative Operations Department

      

      

      SWIFT: BOTKUS33

      

      

      5. Non-Reliance:

      Each party represents and warrants to the other party that, in
          connection with this Transaction, (i) it has and will continue to consult with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it deems necessary, and it has and will continue to make its own
          investment, hedging and trading decisions (including, without limitation, decisions regarding the appropriateness and/or suitability of this Transaction) based upon its own independent judgment and upon any advice or recommendation from such
          advisors as it deems necessary, and not in reliance upon the other party hereto or any of its Affiliates or any of their respective officers, directors or employees, or any view expressed by any of them, (ii) it has

      evaluated and it fully understands all the terms, conditions and risks of this
          Transaction, and it is willing to assume (financially and otherwise) all such risks, (iii) it has and will continue to act as principal and not agent of any person, and the other party hereto and its Affiliates have not and will not be acting as
          a

      fiduciary or financial investment, commodity trading or other advisor to it, (iv)
          it is entering into this Transaction in connection with its line of business, and (v) Eligible Contract Participant. It is an eligible contract participant within the meaning of the U.S. Commodity Exchange Act, as amended.

      

      

      6. Other Provisions:

      You are kindly requested to check the details with your records
          for correctness and send a signed copy via email to Documentation Section at the email address provided in the body of the email you've received from us for this document. If you are not a "swap dealer", "major swap participant" or "financial
          entity", each as defined in the Commodity Exchange Act, as amended, and we do not receive the signed copy within two business days of this date, then it shall be deemed that you have accepted the details given herein. If you are a "swap dealer",
          "major swap participant" or "financial entity" and we do not receive the signed copy within one business day of this date, then it shall be deemed that you have accepted the details given herein.

      

      

      This Confirmation may be executed in one or more counterparts, either in
          original, telecopy or other electronic form, all of which together shall constitute one and the same agreement. This Confirmation shall be governed by the laws of the State of New York without regard to conflicts of law principles.

      

      

      Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy
          this

      Confirmation enclosed for that purpose and returning it to us.

      

      

      This transmission is the only written documentation in respect of this Swap
          Transaction and accordingly no hard copy Confirmation will be followed.

      

      

      

      

      

      

      
        
          	

                	DDDDD	
                  Very truly yours, MUFG Bank, Ltd.

                

        

      

      

      

      

      

      

      

      

      

      By  Name:

      Title:

      

      

      Accepted and confirmed as of the date first written:

      

      

      AEROCENTURY CORP.

      

      

      

      

      

      

      

      

      By  Name:

      Title:

       

        

    

    
      

      

      
        
          

      

      

      

      (MUFG Ref: NY1110-0797658)DDDUSI: 1030453794 PYRAMID000000000000NY11100797658

      

      

      14 March, 2019

      AEROCENTURY CORP.

      

      

      The purpose of this document is to set forth the terms and conditions of the Swap
          Transaction entered into between AEROCENTURY CORP. (the "Counterparty") and MUFG Bank, Ltd.("MUFG" or "MUFG Bank") on the Trade Date specified below (the "Swap Transaction").

      

      

      This document constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below.

      

      

      The definitions and provisions contained in the 2006 ISDA Definitions, as
          published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern.

      

      

      1. This Confirmation supplements, forms a part of, and is subject to, the ISDA Master Agreement dated as
          of

      12 March, 2019, as amended and supplemented from time to
          time (the "Agreement") between AEROCENTURY CORP. and MUFG Bank, Ltd. All provisions contained in the Agreement shall govern this Confirmation except as expressly modified below.

      

      

      2. The terms of the particular Swap Transaction to which this Confirmation
          relates are as follows: 

       

        

      Trade Date:       14  14 March, 2019

       

        

      Effective Date:   14 March, 2019

       

        

       Termination Date:  19 February, 2023, subject to adjustment in accordance with the Modified  Following Business Day Convention. 

       

        

         Notional Amount: USD 20,000,000.00

       

        

       Fixed
          Amounts:

       

        

       Fixed Rate Payer: The Counterparty

       

        

      

        

      

      

      
        Fixed Rate Payer Payment Dates:  14 April, 14 May, 14 June, 14 July, 14 August, 14 September, 14 October,14 November, 14 December, 14 January, 14 February and 14 March in each  year from and including 14
            April, 2019 up to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

      

       

        

      Fixed Rate and

      Fixed Rate Day

      Count Fraction: 2.479000% per annum on Actual/360

       

        

      

      

      
        
          	

                	Business Day for Fixed Amount Payments:	
                  A day, other than Saturday or Sunday, on which banks and foreign exchange markets are open for business in NEW YORK and LONDON.

                

        

      

      

      

      
        
          	

                	Rounding Convention:	
                  All payments to be rounded to the nearest Cent(with one half of a Cent being rounded up)

                

        

      

      

      

      Floating Amounts:

      

      

      Floating Rate Payer:   MUFG

       

        

      Floating Rate Payer Payment Dates     14 April, 14 May, 14 June, 14 July, 14 August, 14 September, 14
          October, 14 November, 14 December, 14 January, 14 February, 14 March in each year from and including 14 April, 2019 up to and including the Termination Date, subject to adjustment in
            accordance with the Modified Following Business Day Convention.  

      

      

      
        
          	

                	Floating Rate Option:	
                  USD-LIBOR-BBA, provided however, the following change is made to the definitions of "USD-LIBOR-BBA" and and "USD-LIBOR-Reference Banks" as it appears in the 2006
                      ISDA Definitions: the term "two London Banking Days preceding that Reset Date" shall be replaced with "two New York and London
                      Banking Days preceding thatReset Date"

                

        

      

      

      

      

      Designated Maturity: 1 Month 

       

        

      Spread: None

        

       

        

      Floating Rate Day Count Fraction:  Actual/360

      

      

      Reset Dates:  First day of each Calculation Period

      

      

      Compounding:  Not applicable

      

      

      
        
          	

                	Business Day forFloating Amount Payments:	
                  A day, other than Saturday or Sunday, on which banks and foreign exchange markets are open for business in NEW YORK and LONDON.

                

        

      

      

      

      
        
          	

                	Rounding Convention:	
                  All payments to be rounded to the nearest Cent(with one half of a Cent being rounded up)

                

        

      

      

      

      

      

      Calculation Agent: MUFG

      

      

      3. Account Details:

      

      

      Payments to the Counterparty:

      

      

      
        
          	

                	For payments in USD:	
                  Any payments due to yourselves in relation to this Swap Transaction, will be made in accordance with your Standard Settlement
                      Instructions, where these are held by MUFG. If these are not currently held by MUFG or are not relevant to this Swap Transaction, please advise under separate cover.

                

        

      

      

      

      Payments to MUFG:

      

      

      For payments in USD:  Account of MUFG Bank, Ltd., New York Branch  FEDWIRE, ABA ***********, A/C ***********

      

      

      

      

      

      

      4. Offices:

      The Office of the Counterparty for the Swap Transaction is WILMINGTON. 

       

        

      The Office of MUFG for the Swap Transaction is New York Branch. Address: Harborside 3

      210 Hudson Street, Suite 500

               Jersey City, NJ 07311

               Attention:  Treasury & Derivative Operations Department

      

      

      SWIFT: BOTKUS33

      

      

      

      

      5. Non-Reliance:

      Each party represents and warrants to the other party that, in connection with
          this Transaction, (i) it has and will continue to consult with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it deems necessary, and it has and will continue to make its own investment,
          hedging and trading decisions (including, without limitation, decisions regarding the appropriateness and/or suitability of this Transaction) based upon its own independent judgment and upon any advice or recommendation from such advisors as it
          deems necessary, and not in reliance upon the other party hereto or any of its Affiliates or any of their respective officers, directors or employees, or any view expressed by any of them, (ii) it has evaluated and it fully understands all the
          terms, conditions and risks of this Transaction, and it is willing to assume (financially and otherwise) all such risks, (iii) it has and will continue to act as principal and not agent of any person, and the other party hereto and its Affiliates
          have not and will not be acting as a fiduciary or financial investment, commodity trading or other advisor to it, (iv) it is entering into this Transaction in connection with its line of business, and (v) Eligible Contract Participant. It is an
          eligible contract participant within the meaning of the U.S. Commodity Exchange Act, as amended.

      

      

      6. Other Provisions:

      You are kindly requested to check the details with your records
          for correctness and send a signed copy via email to Documentation Section at the email address provided in the body of the email you've received from us for this document. If you are not a "swap dealer", "major swap participant" or "financial
          entity", each as defined in the Commodity Exchange Act, as amended, and we do not receive the signed copy within two business days of this date, then it shall be deemed that you have accepted the details given herein. If you are a "swap dealer",
          "major swap participant" or "financial entity" and we do not receive the signed copy within one business day of this date, then it shall be deemed that you have accepted the details given herein.

      

      

      This Confirmation may be executed in one or more counterparts, either in
          original, telecopy or other electronic form, all of which together shall constitute one and the same agreement. This Confirmation shall be governed by the laws of the State of New York without regard to conflicts of law principles.

      

      

      Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy
          this

      Confirmation enclosed for that purpose and returning it to us.

      

      

      This transmission is the only written documentation in respect of this Swap
          Transaction and accordingly no hard copy Confirmation will be followed.

      

      

      

      

      
        
          	

                	DDDDD	
                  Very truly yours, 

                  MUFG Bank, Ltd.

                

        

      

      

      

      

      

      

      

      

      

      By
        

        

        Name:

      Title:

      

      

      Accepted and confirmed as of the date first written:

      

      

      AEROCENTURY CORP.

      

      

      

      

      

      

      

      

      By :: 

      Name:

      Title:ex_137868.htm

Exhibit 10.7

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is effective as of September 12, 2018 (“Effective Date”), by and between DiaMedica USA, Inc. a Delaware corporation (the “Company”), and Scott Kellen, an individual (“Executive”). The Company and Executive are sometimes referred to as the “Parties” or “Party” in this Agreement, and the Company may designate the parent company of the Company or a subsidiary to be the employer of the Executive.

 

In consideration of the mutual promises, covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

	
			1.

				
			EMPLOYMENT AND DUTIES.

			

 

A.     Job Title and Responsibilities. The Company hereby employs Executive, and Executive hereby agrees to be employed, as Chief Financial Officer (together with such other position or positions consistent with Executive’s title as the Company’s Chief Executive Officer may specify from time to time), reporting to the Company’s Chief Executive Officer and will have such duties and responsibilities commensurate with such title. The Parties understand, acknowledge and agree that Executive may also serve in similar positions with the parent company of the Company or any subsidiary.

 

B.     Full-Time Best Efforts. Executive agrees to devote Executive’s full professional time and attention to the business of the Company (and its subsidiaries, affiliates, or related entities) and the performance of Executive’s obligations under this Agreement, and will at all times faithfully, industriously and to the best of Executive’s ability, experience and talent, perform all of Executive’s obligations hereunder. Executive shall not, at any time during Executive’s employment by the Company, directly or indirectly, act as a partner, officer, director, consultant or Executive, or provide services in any other capacity to any other business enterprise that conflicts with the Company’s business or Executive’s duty of loyalty to the Company. Executive shall seek the written consent of the Company prior to accepting any outside board positions.

 

C.     Duty of Loyalty. Executive acknowledges that during Executive’s employment with the Company, Executive has participated in and will participate in relationships with existing and prospective clients, customers, partners, suppliers, service providers and vendors of the Company that are essential elements of the Company’s goodwill. The parties acknowledge that Executive owes the Company a fiduciary duty to conduct all affairs of the Company in accordance with all applicable laws and the highest standards of good faith, trust, confidence and candor, and to endeavor, to the best of Executive’s ability, to promote the best interests of the Company.

 

D.     Conflict of Interest. Executive agrees that while employed by the Company, and except with the advance written consent of the Board, Executive will not enter into, on behalf of the Company, or cause the Company or any of its affiliates to enter into, directly or indirectly, any transactions with any business organization in which Executive or any member of Executive’s immediate family may be interested as a shareholder, partner, member, trustee, director, officer, employee, consultant, lender or guarantor or otherwise; provided, however, that nothing in this Agreement shall restrict transactions between the Company and any company whose stock is listed on a national securities exchange or actively traded in the over-the-counter market and over which Executive does not have the ability to control or significantly influence policy decisions.

 

 

 

 

	
			2.

				
			COMPENSATION. 

			

 

A.     Base Pay. The Company agrees to pay Executive gross annual compensation of $240,000 (“Base Salary”), less usual and customary withholdings, which shall be payable in arrears in accordance with the Company’s customary payroll practices. The Base Salary will be subject to normal periodic review, and such review will consider Executive’s contributions to the Company and the Company’s overall performance.

 

B.     Bonus and Incentive Compensation. Executive shall be eligible for discretionary bonus and incentive based compensation approved by the Board of Directors of the Company (or a committee thereof) (the “Board”) from time to time at its sole discretion as to eligibility and timing of payments.

 

C.     Equity Award. Subject to approval by the Board (or a committee thereof), Executive shall be eligible to receive equity-based compensation awards from time to time as determined by the Board pursuant to the DiaMedica Therapeutics Inc. Stock Option Plan, or any successor plan thereto (such plan, the “Plan”). The type of equity award(s), grant timing and vesting terms will be in the sole discretion of the Board (or a committee thereof).

 

D.     Benefits. During Executive’s employment, Executive will be eligible to participate in the Company’s benefit programs, as governed by the terms of the official plan documents. Executive acknowledges that the Company may amend or terminate any of its benefit plans or programs at any time and for any reason. Executive will be eligible for paid time off or PTO per year, in accordance with the Company’s policies in effect from time to time.

 

E.     Clawback. Executive agrees that any incentive or other compensation or benefits provided by the Company under this Agreement or otherwise will be subject to recoupment or clawback by the Company under any applicable clawback or recoupment policy of the Company as may be in effect from time to time or as required by applicable law, regulation or stock exchange listing requirement.

 

	
			3.

				
			CONFIDENTIAL INFORMATION.

			

 

A.     Non-Disclosure, Non-Use and Definition of Confidential Information. Executive understands that during Executive’s employment relationship with the Company, the Company intends to provide Executive with information, including Confidential Information (as defined herein), without which Executive would not be able to perform Executive’s duties to the Company. Executive agrees, at all times during the term of Executive’s employment relationship and thereafter, to hold in strictest confidence, and not to use or disclose, except for the benefit of the Company to the extent necessary to perform Executive’s obligations to the Company, any Confidential Information that Executive obtains, accesses or creates during the term of the relationship, whether or not during working hours, until such Confidential Information becomes publicly and widely known and made generally available through no wrongful act of Executive or of others under confidentiality obligations as to the information involved. Executive understands that “Confidential Information” means information and physical material not generally known or available outside the Company and information and physical material entrusted to the Company by third parties under an obligation of non-disclosure or non-use or both. “Confidential Information” includes, without limitation, inventions, technical data, trade secrets, know-how, clinical data, regulatory information and strategies, marketing ideas or plans, research, product or service ideas or plans, business strategies, investments, investment opportunities, potential investments, market studies, industry studies, historical financial data, financial information and results, budgets, identity of customers, forecasts (financial or otherwise), possible or pending transactions, customer lists and domain names, price lists, and pricing methodologies. Any information that Executive knows or should reasonably know is Confidential Information, or that Employer treats as Confidential Information, will be presumed to be Confidential Information.

 

2

 

 

B.     Exceptions. At all times, both during Executive’s employment and after its termination, Executive will keep and hold all such Confidential Information in strict confidence and trust. Executive will not use or disclose any Confidential Information without the prior written consent of the Company, except as may be necessary to perform Executive’s duties as an Executive of the Company for the benefit of the Company. Executive may disclose information that Executive is required to disclose by valid order of a government agency or court of competent jurisdiction, provided that Executive will:

 

1.     Notify the Company in writing immediately upon learning that such an order may be sought or issued,

 

2.     Cooperate with the Company as reasonably requested if the Company seeks to contest such order or to place protective restrictions on the disclosure pursuant to such order, and

 

3.     Comply with any protective restrictions in such order and disclose only the information specified in the order.

 

C.      Return of Confidential Information. Upon termination of employment with the Company, Executive will promptly deliver to the Company all documents and materials of any nature pertaining to Executive’s work with the Company.

 

D.     Copyright Information. Executive agrees not to infringe the copyrights of the Company, its customers or third parties (including, without limitation, Executive’s previous employers, customers, etc.) by unauthorized or unlawful copying, modifying or distributing of copyrighted material, including plans, drawings, reports, financial analyses, market studies, computer software and the like.

 

3

 

 

	
			4.

				
			COVENANT NOT TO COMPETE. 

			

 

A.     Non-Competition Covenant. Executive agrees that during the Restricted Period (as defined below), without the prior written consent of the Company, Executive shall not, directly or indirectly within the Territory (as defined below): (i) personally, by agency, as an Executive, independent contractor, consultant, officer, director, manager, agent, associate, investor (other than as a passive investor holding less than five percent (5%) of the outstanding equity of an entity), or by any other artifice or device, engage in any Competitive Business (as defined below), (ii) assist others, including but not limited to Executives of the Company, to engage in any Competitive Business, or (iii) own, purchase, finance or organize a Competitive Business.

 

B.     Definitions.

 

1.     “Competitive Business” means (i) any person, entity or organization which is engaged in, consulting regarding or engaged in the development, production, marketing or selling of any pharmaceutical-based product, process, technology, invention or service which resembles, competes with or is intended to resemble or compete with a product, process, technology, device, invention or service under or being considered for research or development or being promoted, marketed, sold or serviced by the Company or any subsidiary; or (ii) any other line of business that the Company or any subsidiary, is actively preparing to pursue at any time during the term of Executive’s employment with the Company and in which Executive is involved.

 

2.     “Territory” means the United States of America or locations where the Company is directly or indirectly developing or selling products or services.

 

3.     “Restricted Period” means the period of Executive’s employment with the Company and for a period of twelve (12) months following the termination of Executive’s employment.

 

	
			5.

				
			NON-SOLICITATION AND NON-INTERFERENCE COVENANTS. 

			

 

A.     Non-Solicitation of Employees and Others. During the Restricted Period, (i) Executive shall not, directly or indirectly, solicit, recruit, or induce, or attempt to solicit, recruit or induce any employee, consultant, independent contractor, vendor, supplier, or agent to terminate or otherwise adversely affect his or her employment or other business relationship (or prospective employment or business relationship) with the Company, and (ii) Executive shall not, directly or indirectly, solicit, recruit, or induce, or attempt to solicit, recruit or induce any employee to work for Executive or any other person or entity, other than the Company or its affiliates or related entities.

 

B.     Non-Solicitation of Customers. During the Restricted Period, Executive shall not, directly or indirectly, solicit, recruit, or induce any Customer (as defined below) for the purpose of (i) providing any goods or services related to a Competitive Business, or (ii) interfering with or otherwise adversely affecting the contracts or relationships, or prospective contracts or relationships, between the Company (including any related or affiliated entities) and such Customers. “Customer” means a person or entity with which Executive had contact or about whom Executive gained information while an employee of the Company, and to which the Company was selling or providing products or services, was in active negotiations for the sale of its products or services, or was otherwise doing business as of the date of the cessation of Executive’s employment with the Company or for whom the Company had otherwise done business within the twelve (12) month period immediately preceding the cessation of Executive’s employment with the Company.

 

4

 

 

	
			6.

				
			ACKNOWLEDGEMENTS. Executive acknowledges and agrees that: 

			

 

A.     The geographic and duration restrictions contained in Sections 4 and 5 of this Agreement are fair, reasonable, and necessary to protect the Company’s legitimate business interests and trade secrets, given the geographic scope of the Company’s business operations, the competitive nature of the Company’s business, and the nature of Executive’s position with the Company;

 

B.     Executive’s employment creates a relationship of confidence and trust between Executive and the Company with respect to the Confidential Information, and Executive will have access to Confidential Information (including but not limited to trade secrets) that would be valuable or useful to the Company’s competitors;

 

C.     The Company’s Confidential Information is a valuable asset of the Company, and any violation of the restrictions set forth in this Agreement would cause substantial injury to the Company;

 

D.     The restrictions contained in this Agreement will not unreasonably impair or infringe upon Executive’s right to work or earn a living after Executive’s employment with the Company ends; and

 

E.     This Agreement is a contract for the protection of trade secrets under applicable law and is intended to protect the Confidential Information (including trade secrets) identified above.

 

	
			7.

				
			“BLUE PENCIL” AND SEVERABILITY PROVISION. 

			

 

If a court of competent jurisdiction declares any provision of this Agreement invalid, void, voidable, or unenforceable, the court shall reform such provision(s) to render the provision(s) enforceable, but only to the extent absolutely necessary to render the provision(s) enforceable and only in view of the parties’ express desire that the Company be protected to the greatest possible extent under applicable law from improper competition and the misuse or disclosure of trade secrets and Confidential Information. To the extent such a provision (or portion thereof) may not be reformed so as to make it enforceable, it may be severed and the remaining provisions shall remain fully enforceable.

 

5

 

 

	
			8.

				
			INVENTIONS. 

			

 

A.     Inventions Retained and Licensed. Executive acknowledges and agrees that Executive has no rights in any Inventions (as that term is defined below) other than inventions and information created, discovered or developed by Executive, whether or not patentable or registrable under patent, copyright or similar statutes, made or conceived or reduced to practice or learned by Executive, either alone or with others before Executive’s employment with the Company, which list of inventions Executive has provided the Company in writing on or prior to the Effective Date (“Prior Inventions”). Executive shall not incorporate, or permit to be incorporated, any Prior Invention owned by Executive or in which he has an interest in a Company product, process or machine without the Company’s prior written consent. Notwithstanding the foregoing, if, in the course of Executive’s employment with the Company, Executive directly or indirectly incorporates into a Company product, process or machine a Prior Invention owned by Executive or in which Executive has an interest, the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, world-wide license to make, have made, modify, use, create derivative works from and sell such Prior Invention as part of or in connection with such product, process or machine.

 

B.     Assignment of Inventions. Executive shall promptly make full, written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby irrevocably transfers and assigns, and agrees to transfer and assign, to the Company, or its designee, all Executive’s right, title and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks (and all associated goodwill), mask works, or trade secrets, whether or not they may be patented or registered under copyright or similar laws, which Executive may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during Executive’s employment by the Company (the “Inventions”). Executive further acknowledges that all original works of authorship which are made by Executive (solely or jointly with others) within the scope of and during the period of Executive’s employment with the Company and which may be protected by copyright are “Works Made For Hire” as that term is defined by the United States Copyright Act. Executive understands and agrees that the decision whether to commercialize or market any Invention developed by Executive solely or jointly with others is within the Company’s sole discretion and the Company’s sole benefit and that no royalty will be due to Executive as a result of the Company’s efforts to commercialize or market any such invention.

 

Executive recognizes that Inventions relating to Executive’s activities while working for the Company and conceived or made by Executive, whether alone or with others, within one (1) year after cessation of Executive’s employment, may have been conceived in significant part while employed by the Company. Accordingly, Executive acknowledges and agrees that such Inventions shall be presumed to have been conceived during Executive’s employment with the Company and are to be, and hereby are, assigned to the Company unless and until Executive has established the contrary.

 

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The requirements of this Section 8B do not apply to any intellectual property for which no equipment, supplies, facility or trade secret information of the Company was used, and which was developed entirely on the Executive’s own time, and (i) which does not relate (x) directly to the Company’s business or (y) to the Company’s actual or demonstrably anticipated research and development or (ii) which does not result from any work the Executive performed for the Company.

 

C.     Maintenance of Records. Executive agrees to keep and maintain adequate and current written records of all Inventions made by Executive (solely or jointly with others) during Executive’s employment with the Company. The records will be in the form of notes, sketches, drawings and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times.

 

D.     Patent, Trademark and Copyright Registrations. Executive agrees to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, trademarks, service marks, mask works, or any other intellectual property rights in any and all countries relating thereto, including, but not limited to, the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments the Company reasonably deems necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title, and interest in and to such inventions, and any copyrights, patents, trademarks, service marks, mask works, or any other intellectual property rights relating thereto. Executive further agrees that Executive’s obligation to execute or cause to be executed, when it is in Executive’s power to do so, any such instrument or paper shall continue after termination or expiration of this Agreement or the cessation of Executive’s employment with the Company. If the Company is unable because of Executive’s mental or physical incapacity or for any other reason, after reasonably diligent efforts, to secure Executive’s signature to apply for or to pursue any application for any United States or foreign patents, trademarks or copyright registrations covering inventions or original works of authorship assigned to the Company as above, then Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact to act for and in Executive’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, trademarks or copyright registrations thereon with the same legal force and effect as if executed by Executive; this power of attorney shall be a durable power of attorney which shall come into existence upon Executive’s mental or physical incapacity.

 

	
			9.

				
			SURVIVAL AND REMEDIES. 

			

 

Executive’s obligations of nondisclosure, non-solicitation, non-interference, and non-competition under this Agreement shall survive the cessation of Executive’s employment with the Company and shall remain enforceable. In addition, Executive acknowledges that upon a breach or threatened breach of any obligation of nondisclosure, non-solicitation, non-interference, or non-competition of this Agreement, the Company may suffer irreparable harm and damage for which money alone cannot fully compensate the Company. Executive therefore agrees that upon such breach or threat of imminent breach of any such obligation, the Company shall be entitled to seek a temporary restraining order, preliminary injunction, permanent injunction or other injunctive relief, without posting any bond or other security, barring Executive from violating any such provision. This Section 9 shall not be construed as an election of any remedy, or as a waiver of any right available to the Company under this Agreement or the law, including the right to seek damages from Executive for a breach of any provision of this Agreement and the right to require Executive to account for and pay over to the Company all profits or other benefits derived or received by Executive as the result of such a breach, nor shall this Section 9 be construed to limit the rights or remedies available under state law for any violation of any provision of this Agreement.

 

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			10.

				
			TERMINATION.

			

 

A.     Termination By Either Party. Either Party may terminate the Executive’s at-will employment at any time with or without notice, and with or without cause. Except as provided in this Section 10, upon termination of employment, Executive shall only be entitled to Executive’s accrued but unpaid Base Salary, any earned but unpaid bonus for the year prior to the date of termination, and other benefits earned under any Company-provided plans, policies and arrangements for the period preceding the effective date of the termination of employment. With respect to any earned but unpaid bonus for the year prior to the date of termination, the terms of which bonus plan require Executive to be an employee of the Company as of the date of payment, no payment will be made to Executive (or if applicable, the Executive’s beneficiary) if Executive’s employment with the Company terminates voluntarily by Executive, other than for Good Reason pursuant to Section 10C, or if Executive’s employment with the Company is terminated by the Company for Cause, but will be paid if Executive’s employment with the Company terminates due to Executive’s death or disability.

 

B.     Termination Without Cause. If the Company terminates Executive’s employment without Cause (defined below), Executive shall be entitled to receive, in addition to the amounts due under Section 10A, as continuing severance pay at a rate equal to Executive’s Base Salary, as then in effect, for nine (9) months from the date of termination of employment, plus a lump-sum payment equal to a pro rata portion of Executive’s target annual bonus for the year in which the date of termination occurs (based on the date of termination), in each case, less all required tax withholdings and other applicable deductions, payable in accordance with the Company’s standard payroll procedures, commencing on the effective date of a Separation Agreement and Release of claims against the Company and after the end of any applicable rescission or revocation period, and provided that Executive has not revoked or rescinded (or attempted to revoke or rescind) any claims under such Release, in substantially the form of Exhibit A attached hereto, the timely execution and performance by Executive of which is specifically a condition to Executive’s receipt of any of the payments and benefits provided under this Section 10B; provided that (1) such Separation Agreement and Release shall be executed and be fully effective within sixty (60) days of the Executive’s termination of employment; (2) the first payment shall include any amounts that would have been paid to Executive if payment had commenced on the date of termination of employment; and (3) Executive shall not be required to execute a release of any claims arising from the Company’s failure to comply with its obligations under Section 10A. Subject to Executive’s execution and non-revocation of the Separation Agreement and Release, if Executive timely and effectively elects continuation coverage under the Company’s group health plan pursuant to COBRA or similar state law, the Company will pay or reimburse the premiums for such coverage of Executive (and Executive’s dependents, as applicable) at the same rate it pays for active employees for a period for nine (9) months from the date of termination of employment; provided that the Company’s obligation to make such payments shall immediately expire if Executive ceases to be eligible for continuation coverage under COBRA or similar state law or otherwise terminates such coverage. Notwithstanding the foregoing, any of the foregoing payments due under this Section 10B shall commence within seventy (70) days of Executive’s termination of employment, provided that if such seventy (70)-day period spans two (2) calendar years, payments shall commence in the latter calendar year. In addition to the foregoing and subject to Executive’s timely execution of a Separation Agreement and Release that has been executed and not revoked within any applicable rescission period that has expired within sixty (60) days of the Executive’s termination of employment, Executive shall be entitled to the immediate vesting of all outstanding equity awards then held by Executive.

 

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C.     Termination Upon a Change in Control. If the Company or any successor in interest to the Company terminates Executive’s employment without Cause in connection with or within twelve (12) months after a Change in Control (defined below) or if Executive terminates Executive’s employment for Good Reason (defined below) within twelve (12) months after a Change in Control, Executive shall be entitled to receive, in addition to the amounts due under Section 10A, a lump-sum payment equal to twelve (12) months of Executive’s Base Salary, as then in effect or as in effect immediately prior to a material reduction of Executive’s Base Salary which was the reason Executive resigned for Good Reason, plus a lump-sum payment equal to a pro rata portion of Executive’s target annual bonus for the year in which the date of termination occurs (based on the date of termination), in each case, less all tax withholdings and other applicable deductions the Company reasonably determines are required to be made, payable on the first regular payroll date after the effective date of a Separation Agreement and Release that has been executed and not revoked within any applicable rescission period that has expired within sixty (60) days of the Executive’s termination of employment, in substantially the form of Exhibit A attached hereto, the execution and performance by Executive of which is specifically a condition to Executive’s receipt of any of the payments and benefits provided under this Section 10C; provided that Executive shall not be required to execute a release of any claims arising from the Company’s failure to comply with its obligations under Section 10A. Subject to Executive’s execution and non-revocation of the Separation Agreement and Release, if Executive timely and effectively elects continuation coverage under the Company’s group health plan pursuant to COBRA or similar state law, the Company will pay or reimburse the premiums for such coverage of Executive (and Executive’s dependents, as applicable) at the same rate it pays for active employees for a period for twelve (12) months from the date of termination of employment; provided that the Company’s obligation to make such payments shall immediately expire if Executive ceases to be eligible for continuation coverage under COBRA or similar state law or otherwise terminates such coverage. Notwithstanding the previous provisions of this Section 10C, any payments due under this Section 10C shall commence within seventy (70) days of Executive’s termination of employment, provided that if such seventy (70)-day period spans two calendar years, payments shall commence in the latter calendar year. In addition to the foregoing and subject to Executive’s timely execution of a Separation Agreement and Release that has been executed and not revoked within any applicable rescission period that has expired within sixty (60) days of the Executive’s termination of employment, Executive shall be entitled to the immediate vesting of all outstanding equity awards then held by Executive. The payments and benefits described in this Section 10C are in lieu of, and not in addition to, the payments and benefits described in Section 10B, it being understood by Executive that he shall be paid and receive only one set of severance payments and benefits.

 

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Notwithstanding any other provisions of this Agreement, if any “payments” (including, without limitation, any benefits or transfers of property or the acceleration of the vesting of any benefits) in the nature of compensation under any arrangement that is considered contingent on a “change in control” for purposes of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), together with any other payments that Executive has the right to receive from the Company or any corporation that is a member of an “affiliated group” (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), such “payments” may, at Executive’s sole election, be reduced to the largest amount as will result in no portion of such “payments” being subject to the excise tax imposed by Section 4999 of the Code. Any reduction of the payments shall be made in the following order: (1) options with an exercise price above the fair market value of the stock, provided the options give rise to a payment; (2) pro rata among amounts that constitute deferred compensation under Code Section 409A; and (3) reduction of any remaining payments in the manner determined at the discretion of Executive.

 

The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the change in control shall perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting firm shall provide its calculations to the Company and Executive within sixty (60) calendar days after the date on which Executive’s right to a payment is triggered and the payment will be paid to Executive within seventy-four (74) calendar days of the date on which Executive’s right to a payment is triggered. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.

 

D.     Termination for Cause, Death or Disability, or Resignation. If Executive’s employment with the Company terminates voluntarily by Executive, other than for Good Reason pursuant to Section 10C above, or if Executive’s employment with the Company is terminated by the Company for Cause or due to Executive’s death or disability, then payments of compensation by the Company to Executive hereunder will terminate immediately, except that Executive (or the Executive’s beneficiary if Executive’s termination is on account of death) will be entitled to the amounts due under Section 10A.

 

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E.     Definitions.

 

1.     “Cause.” For all purposes under this Agreement, “Cause” is defined as (a) gross negligence or willful failure to perform Executive’s duties and responsibilities to the Company; (b) commission of any act of fraud, theft, embezzlement, financial dishonesty or any other willful misconduct that has caused or is reasonably expected to result in injury to the Company; (c) conviction of, or pleading guilty or nolo contendere to, any felony or a lesser crime involving dishonesty or moral turpitude; (d) material breach by Executive of any of Executive’s obligations under this Agreement or any written agreement or covenant with the Company, including the policies adopted from time to time by the Company applicable to all Executives, that has not been cured within thirty (30) days of notice of such breach or (e) the Company terminates the employment of Executive in connection with a liquidation, dissolution or winding down of the Company.

 

2.     “Good Reason.” For all purposes under this Agreement, “Good Reason” is defined as Executive’s resignation within thirty (30) days following the expiration of any Company cure period (discussed below) following the occurrence of one or more of the following, without Executive’s express written consent: (a) a material reduction of Executive’s duties, authority, reporting level, or responsibilities, relative to Executive’s duties, authority, reporting level, or responsibilities in effect immediately prior to such Change in Control; (b) a material reduction in Executive’s base compensation; or (c) the Company’s requiring of Executive to change the principal location at which Executive is to perform Executive’s services by more than fifty (50) miles. Executive will not resign for Good Reason without first providing the Company with written notice within thirty (30) days of the initial occurrence of the event that Executive believes constitutes “Good Reason” specifically identifying the acts or omissions constituting the grounds for Good Reason and providing Company a reasonable cure period of not less than thirty (30) days following the date of such notice and during which such condition has not been cured.

 

3.     “Change in Control.” For all purposes under this Agreement, a “Change in Control” will mean the occurrence of any of the following:

 

a.     the acquisition, other than from the Company or Parent (as defined below), by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of either the then outstanding common shares, no par value (“Common Shares”), of DiaMedica Therapeutics Inc., a company organized under the laws of Canada (“Parent”), or the combined voting power of the then outstanding voting securities of Parent entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by Parent or any of its subsidiaries, or any employee benefit plan (or related trust) of Parent or its subsidiaries, or any entity with respect to which, following such acquisition, more than fifty percent (50%) of, respectively, the then outstanding equity of such entity and the combined voting power of the then outstanding voting equity of such entity entitled to vote generally in the election of all or substantially all of the members of such entity’s governing body is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, respectively, of the Common Shares and voting securities of Parent immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding Common Shares or the combined voting power of the then outstanding voting securities of Parent entitled to vote generally in the election of directors, as the case may be; or

 

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b.     the consummation of a reorganization, merger or consolidation of Parent, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Common Shares and voting securities of Parent immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding Common Shares and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation; or

 

c.     the sale or other disposition of all or substantially all of the assets of Parent; provided the occurrence under (a), (b) or (c), constitutes a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portions of the assets of a corporation” under Section 409A of the Code.

 

F.     No Other Benefits. In the event of a termination of Executive’s employment with the Company, the provisions of this Section 10 are Executive’s exclusive right to severance benefits and are in lieu of participation in any other severance policy or plan to which Executive might otherwise be entitled.

 

G.     Termination from any Offices Held. Upon Executive’s termination of employment with the Company, Executive agrees that and any and all offices held with Parent or any subsidiary, including the Company, if applicable, shall be automatically terminated. Executive agrees to cooperate with the Company and execute any documents reasonably required by the Company or competent authorities to effect this provision.

 

H.    Return of Company Property. All devices, records, reports, data, notes, compilations, lists, proposals, correspondence, specifications, equipment, drawings, blueprints, manuals, planners, calendars, schedules, discs, financial plans and information, or other recorded matter, whether in hard copy, electronic media or otherwise (including all copies or reproductions made or maintained, whether on the Company’s premises or otherwise), pertaining to Executive’s work for the Company, or relating to the Company or the Company’s Confidential Information, whether created or developed by Executive alone or jointly during Executive’s employment with the Company, are the exclusive property of the Company. Executive shall surrender the same (as well as any other property of the Company) to the Company upon its request or promptly upon the cessation of employment.

 

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			11.

				
			NO CONFLICTING AGREEMENTS OR IMPROPER USE OF THIRD-PARTY INFORMATION. 

			

 

During Executive’s employment with the Company, Executive shall not improperly use or disclose any Confidential information or trade secrets of any former employer or other person or entity, and Executive shall not bring on to the premises of the Company any unpublished document or Confidential information belonging to any such former employer, person or entity, unless consented to in writing by the former employer, person or entity. Executive represents that he has not improperly used or disclosed any Confidential information or trade secrets of any other person or entity during the application process or while employed or affiliated with the Company. Executive also acknowledges and agrees that he is not subject to any contract, agreement, or understanding that would prevent Executive from performing Executive’s duties for the Company or otherwise complying with this Agreement. To the extent Executive violates this provision, or Executive’s employment with the Company constitutes a breach or threatened breach of any contract, agreement, or obligation to any third party, Executive shall indemnify and hold the Company harmless from all damages, expenses, costs (including reasonable attorneys’ fees) and liabilities incurred in connection with, or resulting from, any such violation or threatened violation.

 

	
			12.

				
			GENERAL PROVISIONS.

			

 

A.     Governing Law; Consent To Personal Jurisdiction. The laws of the State of Minnesota shall govern the Executive’s employment and this Agreement without regard to conflict of laws principles. Executive and the Company each hereby consents to the personal jurisdiction of the state courts located in Hennepin County, State of Minnesota, and the federal district court sitting in Hennepin County, State of Minnesota, if that court otherwise possesses jurisdiction over the matter, for any legal proceeding concerning Executive’s employment or termination of employment, or arising from or related to this Agreement or any other agreement executed between Executive and the Company.

 

B.     Entire Agreement. This Agreement, together with the Exhibits hereto, sets forth this entire Agreement between the Company (and any of its related or affiliated entities, officers, agents, owners or representatives) and Executive relating to the subject matter herein, and supersedes any and all prior discussions and agreements, whether written or oral, on the subject matter hereof, including without limitation that certain offer letter agreement dated as of January 2, 2018. To the extent that this Agreement may conflict with the terms of another written agreement between Executive and the Company, the terms of this Agreement will control.

 

C.     Modification. No modification of or amendment to this Agreement will be effective unless in writing and signed by Executive and an authorized representative of the Company.

 

D.     Waiver. The Company’s failure to enforce any provision of this Agreement shall not act as a waiver of its ability to enforce that provision or any other provision. The Company’s failure to enforce any breach of this Agreement shall not act as a waiver of that breach or any future breach. No waiver of any of the Company’s rights under this Agreement will be effective unless in writing. Any such written waiver shall not be deemed a continuing waiver unless specifically stated, and shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

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E.     Successors and Assigns. This Agreement shall be assignable to, and shall inure to the benefit of and bind, the Company’s, affiliates, subsidiaries, successors and assigns. Executive shall not have the right to assign Executive’s rights or obligations under this Agreement.

 

F.     Construction. The language used in this Agreement will be deemed to be language chosen by Executive and the Company to express their mutual intent, and no rules of strict construction will be applied against either Party.

 

G.     Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable, and all of which together shall constitute one agreement. Signatures of the parties that are transmitted in person or by facsimile or e-mail shall be accepted as originals.

 

H.     Further Assurances. Executive agrees to execute any proper oath or verify any document required to carry out the terms of this Agreement.

 

I.     Title and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement.

 

J.     Notices. All notices and communications that are required or permitted to be given under this Agreement shall be in writing and shall be sufficient in all respects if given and delivered in person, by electronic mail, by facsimile, by overnight courier, or by certified mail, postage prepaid, return receipt requested, to the receiving Party at such Party’s address shown in the signature blocks below or to such other address as such Party may have given to the other by notice pursuant to this Section. Notice shall be deemed given (i) on the date of delivery in the case of personal delivery, electronic mail or facsimile, or (ii) on the delivery or refusal date as specified on the return receipt in the case of certified mail or on the tracking report in the case of overnight courier.

 

K.     Code Section 409A. The amounts payable under this Agreement are intended to be exempt from the requirements of Section 409A of the Code (“Section 409A”). For purposes of Section 409A, any right to a series of installment payments is to be treated as a right to a series of separate payments. Any payments due under this Agreement on account of a termination of employment shall only be payable if the termination constitutes a “separation from service” within the meaning of Section 409A. To the extent that any such payments are determined to be deferred compensation subject to Section 409A, (i) the terms of this Agreement shall be interpreted to avoid incurring any penalties under Section 409A, and (ii) any payments due to a “specified Executive” of a publicly-traded company upon a separation from service shall be delayed until the first day of the seventh month following such separation from service. Notwithstanding the foregoing, in no event shall the Company be responsible for any taxes or penalties due under Section 409A.

 

	
			13.

				
			EXECUTIVE’S ACKNOWLEDGMENTS. 

			

 

Executive acknowledges that he is executing this Agreement voluntarily and without duress or undue influence by the Company or anyone else and that Executive has carefully read this Agreement and fully understands the terms, consequences, and binding effect of this Agreement.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, and intending to be legally bound, the Parties have executed this Employment Agreement as of the date first written above.

 

	EXECUTIVE	
			 

				
			DIAMEDICA USA, INC.

			
	 	
			 

				
			 

				
			 

				
			 

			
	 	 	 	 	 
	 	 	 	 	 
	/s/ Scott Kellen	 	Print Name:	Rick Pauls 
	
			Scott Kellen

				
			 

				
			 

				
			 

			
	 	 	Signature:	/s/ Rick Pauls
	Date:	
			9/14/2018

				
			 

				
			Title:

				
			President & CEO

			
	Address:	2 Carlson Parkway, Suite 260	 	Date:	9/14/2018
	Minneapolis, MN 55447	 	 	 
	 	 	 	 	 

 

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EXHIBIT A

 

FORM OF SEPARATION AGREEMENT AND RELEASE

 

This Separation Agreement (“Agreement”) and the Release, which is attached and incorporated by reference as Exhibit A (“Release”), are made by and between Scott Kellen (“Executive”), and DiaMedica USA, Inc., its affiliates, related or predecessor corporations, parent, subsidiaries, successors and assigns (“Employer”).

 

Employer and Executive (collectively, “Parties”) wish to end their employment relationship in an honorable, dignified and orderly fashion. Toward that end, the Parties have agreed to separate according to the following terms.

 

IN CONSIDERATION OF THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS:

 

1.     Termination. Executive’s employment shall end on a date and time Employer shall determine (“Termination Date”).

 

2.     Consideration. Employer shall, (1) after receipt of a fully executed Agreement and Release; (2) after expiration of all applicable rescission periods; and (3) provided Executive complies with Executive’s obligations under this Agreement, provide Executive with separation benefits (“Consideration”) in compliance with Executive’s Employment Agreement attached as Exhibit B:

 

3.     Termination of Benefits. Except as otherwise provided by this Agreement, Executive’s participation in Employer’s employee benefits, bonus, and all other compensation or commission plans, will terminate on the Termination Date, unless otherwise provided by law, or benefit plan. Executive shall receive no compensation or benefits under such plans, except as specifically provided in Section 2 of this Agreement.

 

4.     Execution of Agreement and Release of all Claims. Executive agrees to fully execute this Agreement, and the Release attached as Exhibit A, releasing any and all actual or potential claims which may have arisen at any time during Executive’s employment with or termination from employment with Employer. Executive’s failure to execute this Agreement and/or Release, or any attempt to rescind this Agreement or that Release, shall terminate this Agreement, and the Parties’ respective rights and obligations under this Agreement.

 

5.     Satisfactory Performance and Cooperation During Transition. Executive shall fully cooperate with Employer in responding to questions, providing assistance and information, and defending against claims of any type, and will otherwise assist Employer as Employer may request through Executive’s Termination Date (“Transition Period”). More specifically:

 

a.     During the Transition Period, Executive shall reasonably cooperate with Employer as it meets and otherwise communicates/works, with Employer’s employees, customers, strategic relationships, consultants, and vendors on the transition of Executive’s duties to other individuals. Executive shall be available, upon reasonable notice, during business hours to respond to Employer’s questions and electronic communications. Employer shall reimburse Executive for Executive’s reasonable out-of-pocket expenses (such reimbursement shall not include compensation for any such time or Executive’s attorney’s fees) incurred in accordance with this Section upon submission of receipts to Employer for such expenses.

 

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b.     Executive shall not, absent Employer’s specific approval, initiate any form of communication with Employer’s employees, customers or strategic partners regarding Employer, Employer’s products or employees, and shall communicate with such persons in the above capacity only in conjunction with person(s) who Employer has designated to participate in such communications.

 

6.     Stipulation of No Charges. Executive affirmatively represents that Executive has not filed nor caused to be filed any charges, claims, complaints, or actions against Employer before any federal, state, or local administrative agency, court, or other forum. Except as expressly provided in this Agreement or required by law, Executive acknowledges and agrees that Executive has been paid all wages, bonuses, compensation, benefits and other amounts that are due, with the exception of any vested right under the terms of a written ERISA-qualified benefit plan. Executive waives any right to any form of recovery or compensation from any legal action, excluding any action claiming this Agreement and Release violate the Age Discrimination in Employment Act (“ADEA”) and/or the Older Workers Benefit Protection Act (“OWBPA”), filed or threatened to be filed by Executive or on Executive’s behalf based on Executive’s employment, terms of employment, or separation from, Employer. Executive understands that any Consideration paid to Executive pursuant to this Agreement may be deducted from any monetary award Executive may receive as a result of a successful ADEA and/or OWBPA claim or challenge to this Agreement and Release. This does not preclude Executive from eligibility for unemployment benefits, and does not preclude or obstruct Executive’s right to file a Charge with the Equal Employment Opportunity Commission (“EEOC”).

 

7.     Return of Property. Executive shall return, on or before the Termination Date, all Employer property in Executive’s possession or control, including but not limited to any drawings, orders, files, documents, notes, computers, laptop computers, fax machines, cell phones, smart devices, access cards, fobs, keys, reports, manuals, records, product samples, correspondence and/or other documents or materials related to Employer’s business that Executive has compiled, generated or received while working for Employer, including all electronically stored information, copies, samples, computer data, disks, or records of such materials. Executive must return to Employer, and Executive shall not retain, any Employer property as previously defined in this section.

 

8.    Agreement Not to Seek Future Employment. Executive agrees that Executive will never knowingly seek nor accept employment or a consulting/independent contractor relationship with Employer, nor any other entity owned by Employer, either directly or through a consulting firm.

 

17

 

 

9.      Withholding for Amounts Owed to Employer. Execution of this Agreement shall constitute Executive’s authorization for Employer to make deductions from Executive’s Consideration, for Executive’s indebtedness to Employer, or to repay Employer for unaccrued vacation or other Paid Time Off already taken, Executive purchases, wage or benefit overpayment, or other Employer claims against Executive, to the extent permitted by applicable law.

 

10.     Non-Disparagement. Executive agrees that, unless it is in the context of an EEOC or other civil rights or other government enforcement agency investigation or proceeding, Executive will make no critical, disparaging or defamatory comments regarding Employer or any Released Party, as defined in the Release, in any respect or make any comments concerning the conduct or events which precipitated Executive’s separation. Furthermore, Executive agrees not to assist or encourage in any way any individual or group of individuals to bring or pursue a lawsuit, charge, complaint, or grievance, or make any other demands against Employer or any Released Party. This provision does not prohibit Executive from participating in an EEOC or other civil rights or other government enforcement agency charge, investigation or proceeding, or from providing testimony or documents pursuant to a lawful subpoena or as otherwise required by law.

 

11.     Compliance with Employment Agreement and Protection of Confidential Information. Executive agrees to comply with the provisions of and the restrictions set forth in Executive’s Employment Agreement (Exhibit B), including without limitation the obligation not to use or disclose Confidential Information (as defined in the Employment Agreement).

 

12.     Confidentiality. It is the intent of Employer and Executive that the terms of this Agreement be treated as Confidential Information (as defined in the Employment Agreement), except to the extent this Agreement is required to be disclosed under applicable federal securities laws, as determined by Employer. Executive warrants that Executive has not and agrees that Executive will not in the future disclose the terms of this Agreement, or the terms of the Consideration to be paid by Employer to Executive as part of this Agreement, to any person other than Executive’s attorney, tax advisor, spouse, or representatives of any state or federal regulatory agency, who shall be bound by the same prohibitions against disclosure as bind Executive, and Executive shall be responsible for advising those individuals or agencies of this confidentiality provision. Executive shall not provide or allow to be provided to any person this Agreement, or any copies thereof, nor shall Executive now or in the future disclose the terms of this Agreement to any person, with the sole exception of communications with Executive’s spouse, attorney and tax advisor, unless otherwise ordered to do so by a court or agency of competent jurisdiction.

 

13.     Invalidity. In case any one or more of the provisions of this Agreement or Release shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in this Agreement and Release will not in any way be affected or impaired thereby.

 

14.     Non-Admissions. The Parties expressly deny any and all liability or wrongdoing and agree that nothing in this Agreement or the Release shall be deemed to represent any concession or admission of such liability or wrongdoing or any waiver of any defense.

 

18

 

 

15.     Governing Law. The laws of the State of Minnesota shall govern this Agreement without regard to conflict of laws principles. The Parties each hereby consent to the personal jurisdiction of the state courts located in Hennepin County, State of Minnesota, and the federal district court sitting in Hennepin County, State of Minnesota, if that court otherwise possesses jurisdiction over the matter, for any legal proceeding concerning or related to this Agreement.

 

16.     Voluntary and Knowing Action. Executive acknowledges that Executive has had sufficient opportunity to review the terms of this Agreement and attached Release, and that Executive has voluntarily and knowingly entered into this Agreement. Employer shall not be obligated to provide any Consideration to Executive pursuant to this Agreement in the event Executive elects to rescind/revoke the Release. The Release becomes final and binding on the Parties upon expiration of the rescission/revocation period, provided Executive has not exercised Executive’s option to rescind/revoke the Release. Any attempt by Executive to rescind any part of the Release obligates Executive to immediately return all Consideration under this Agreement to counsel for Employer.

 

17.     Legal Counsel and Fees. Except as otherwise provided in this Agreement and the Release, the Parties agree to bear their own costs and attorneys’ fees, if any. Executive acknowledges that Employer, by this Agreement, has advised him that Executive may consult with an attorney of Executive’s choice prior to executing this Agreement and the Release. Executive acknowledges that Executive has had the opportunity to be represented by legal counsel during the negotiation and execution of this Agreement and the Release, and that Executive understands Executive will be fully bound by this Agreement and the Release.

 

18.     Modification. This Agreement may be modified or amended only by a writing signed by both Employer and Executive.

 

19.     Successors and Assigns. This Agreement is binding on and inures to the benefit of the Parties’ respective successors and assigns.

 

20.     Notices. All notices and communications that are required or permitted to be given under this Agreement shall be in writing and shall be sufficient in all respects if given and delivered in person, by electronic mail, by facsimile, by overnight courier, or by certified mail, postage prepaid, return receipt requested, to the receiving Party at such Party’s address below or to such other address as such Party may have given to the other by notice pursuant to this Section. Notice shall be deemed given (i) on the date of delivery in the case of personal delivery, electronic mail or facsimile, or (ii) on the delivery or refusal date as specified on the return receipt in the case of certified mail or on the tracking report in the case of overnight courier.

 

19

 

 

	 	If to Employer:	 	DIAMEDICA USA, INC.	 
	 	 	 	Attention: Chief Executive Officer	 
	 	 	 	Two Carlson Parkway, Suite 260	 
	 	 	 	Minneapolis, MN 55447	 
	 	 	 	 	 
	 	With a copy to: 	 	Amy E. Culbert	 
	 	 	 	Fox Rothschild LLP	 
	 	 	 	Campbell Mithun Tower - Suite 2000	 
	 	 	 	222 South Ninth Street	 
	 	 	 	Minneapolis, MN 55402-3338	 
	 	 	 	 	 
	 	If to Executive:	 	
			Scott Kellen

				 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

     

21.     Waivers. No failure or delay by either Party in exercising any right or remedy under this Agreement will waive any provision of this Agreement.

 

22.     Miscellaneous. This Agreement may be executed simultaneously in counterparts, each of which shall be an original, but all of which shall constitute but one and the same agreement.

 

23.     Entire Agreement. Except for any continuing, post-employment, obligations under Exhibit B, or employment related Employer policy, or as otherwise provided in this Agreement, this Agreement, the attached Release, and Exhibit B are the entire Agreement between Employer and Executive relating to Executive’s employment and separation. Executive understands that this Agreement and the Release cannot be changed unless it is done in writing and signed by both Employer and Executive.   

 

[Remainder of page intentionally left blank]

 

20

 

 

EXECUTIVE

 

                                                                   

Scott Kellen

 

 

Dated: ___________, 20____

 

 

DIAMEDICA USA, INC.

 

 

By:                                                             

 

Its:                                                              

 

Dated: ___________, 20____

 

 

21

 

 

EXHIBIT A

 

RELEASE

 

	
			I.

				
			Definitions. I, Scott Kellen, intend all words used in this release (“Release”) to have their plain meanings in ordinary English. Technical legal words are not needed to describe what I mean. Specific terms I use in this Release have the following meanings:

			

 

	 	
			A.

				
			“I,” “Me,” and “My” individually and collectively mean Scott Kellen and anyone who has or obtains or asserts any legal rights or claims through Me or on My behalf.

			

 

	 	
			B.

				
			“Employer” as used in this Release, shall at all times mean DiaMedica USA, Inc. and any affiliates, related or predecessor corporations, parent corporations or subsidiaries, successors and assigns.

			

 

	 	
			C.

				
			“Released Party” or “Released Parties” as used in this Release, shall at all times mean DiaMedica USA, Inc. and its affiliates, related or predecessor corporations, parent corporations, subsidiaries, successors and assigns, present or former officers, directors, shareholders, agents, employees, representatives and attorneys, whether in their individual or official capacities, and its affiliates, related or predecessor corporations, parent corporations or subsidiaries, successors and assigns, present or former officers, directors, shareholders, agents, employees, representatives and attorneys, whether in their individual or official capacities, benefit plans and plan administrators, and insurers, insurers’ counsel, whether in their individual or official capacities, and the current and former trustees or administrators of any pension, 401(k), or other benefit plan applicable to the employees or former employees of Employer, in their official and individual capacities.

			

 

	 	
			D.

				
			“My Claims” mean any and all of the actual or potential claims of any kind whatsoever I may have had, or currently may have against Employer or any Released Party, whether known or unknown, that are in any way related to My employment with or separation from employment with Employer, including, but not limited to any claims for: invasion of privacy; breach of written or oral, express or implied, contract; fraud; misrepresentation; violation of the Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. § 626, as amended; the Genetic Information Nondiscrimination Act of 2008 (“GINA”), 42 U.S.C. § 2000, et seq., the Older Workers Benefit Protection Act of 1990 (“OWBPA”), 29 U.S.C. § 626(f), Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e, et seq., the Americans with Disabilities Act (“ADA”), 29 U.S.C. § 2101, et seq., and as amended (“ADAAA”), the Executive Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C. § 1001, et seq., Equal Pay Act (“EPA”), 29 U.S.C. § 206(d), the Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101, et seq., the Family and Medical Leave Act (“FMLA”), 29 U.S.C. § 2601, et seq.; National Labor Relations Act, 29 U.S.C. § 141, et seq., the False Claims Act, 31 U.S.C. § 3729, et seq., Anti-Kickback Statute, 42 U.S.C. § 1320a, et seq., the Minnesota Human Rights Act, Minn. Stat. § 363A.01, et seq., Minn. Stat. § 181, et seq., the Minnesota Whistleblower Act, Minn. Stat. § 181.931, et seq., or any and all other Minnesota, and other state human rights or fair employment practices statutes, administrative regulations, or local ordinances, and any other Minnesota or other federal, state, local or foreign statute, law, rule, regulation, ordinance or order, all as amended. This includes, but is not limited to, claims for violation of any civil rights laws based on protected class status; claims for assault, battery, defamation, intentional or negligent infliction of emotional distress, breach of the covenant of good faith and fair dealing; promissory estoppel; negligence; negligent hiring; retention or supervision; retaliation; constructive discharge; violation of whistleblower protection laws; unjust enrichment; violation of public policy; and, all other claims for unlawful employment practices, and all other common law or statutory claims.

			

 

 

	 	 
	 	 
	 	EXECUTIVE INITIALS

 

Ex. A-1

 

 

	
			II.

				
			Agreement to Release My Claims. Except as stated in Section V of this Release, I agree to release all My Claims and waive any rights to My Claims. I also agree to withdraw any and all of My charges and lawsuits against Employer; except that I may, but am not required to, withdraw or dismiss, or attempt to withdraw or dismiss, any charges that I may have pending against Employer with the Employment Opportunity Commission (“EEOC”) or other civil rights enforcement agency. In exchange for My agreement to release My Claims, I am receiving satisfactory Consideration from Employer to which I am not otherwise entitled by law, contract, or under any Employer policy. The Consideration I am receiving is a full and fair consideration for the release of all My Claims. Employer does not owe Me anything in addition to what I will be receiving according to the Separation Agreement which I have signed.

			

 

	
			III.

				
			Unknown Claims. In waiving and releasing any and all actual, potential, or threatened claims against Employer, whether or not now known to me, I understand that this means that if I later discover facts different from or in addition to those facts currently known by me, or believed by me to be true, the waivers and releases of this Release will remain effective in all respects – despite such different or additional facts and my later discovery of such facts, even if I would not have agreed to the Separation Agreement and this Release if I had prior knowledge of such facts.

			

 

	
			IV.

				
			Confirmation of No Claims, Etc. I am not aware of any other facts, evidence, allegations, claims, liabilities, or demands relating to alleged or potential violations of law that may give rise to any claim or liability on the part of any Released Party under the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the False Claims Act, the Anti-kickback Statute. I understand that nothing in this Release interferes with My right to file a complaint, charge or report with any law enforcement agency, with the Securities and Exchange Commission (“SEC”) or other regulatory body, or to participate in any manner in an SEC or other governmental investigation or proceeding under any such law, statute or regulation, or to require notification or prior approval by Employer of any such a complaint, charge or report.  I understand and agree, however, that I waive My right to recover any whistleblower award under the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or other individual relief in any administrative or legal action whether brought by the SEC or other governmental or law enforcement agency, Me, or any other party, unless and to the extent that such waiver is contrary to law.  I agree that the Released Parties reserve any and all defenses which they might have against any such allegations or claims brought by Me or on My behalf. I understand that Employer is relying on My representations in this Release and related Separation Agreement.

			

 

 

	 	 
	 	 
	 	EXECUTIVE INITIALS

 

Ex. A-2

 

 

	
			V.

				
			Exclusions from Release.

			

 

	 	
			A.

				
			The term “Claims” does not include My rights, if any, to claim the following: unemployment insurance benefits; workers compensation benefits; claims for My vested post-termination benefits under any 401(k) or similar retirement benefit plan; My rights to group medical or group dental insurance coverage pursuant to section 4980B of the Internal Revenue Code of 1986, as amended (“COBRA”); My rights to enforce the terms of this Release; or My rights to assert claims that are based on events occurring after this Release becomes effective.

			

 

	 	
			B.

				
			Nothing in this Release interferes with My right to file or maintain a charge with the Equal Employment Opportunity Commission or other local civil rights enforcement agency or participate in any manner in an EEOC or other such agency investigation or proceeding. I, however, understand that I am waiving My right to recover individual relief including, but not limited to, back pay, front pay, reinstatement, attorneys’ fees, and/or punitive damages, in any administrative or legal action whether brought by the EEOC or other civil rights enforcement agency, Me, or any other party.

			

 

	 	
			C.

				
			Nothing in this Release interferes with My right to challenge the knowing and voluntary nature of this Release under the ADEA and/or OWBPA.

			

 

	 	
			D.

				
			I agree that Employer reserves any and all defenses, which it has or might have against any claims brought by Me. This includes, but is not limited to, Employer’s right to seek available costs and attorneys’ fees as allowed by law, and to have any monetary award granted to Me, if any, reduced by the amount of money that I received in consideration for this Release.

			

 

 

	 	 
	 	 
	 	EXECUTIVE INITIALS

 

Ex. A-3

 

 

	
			VI.

				
			Older Workers Benefit Protection Act. The Older Workers Benefit Protection Act applies to individuals age 40 and older and sets forth certain criteria for such individuals to waive their rights under the Age Discrimination in Employment Act in connection with an exit incentive program or other employment termination program. I understand and have been advised that, if applicable, the above release of My Claims is subject to the terms of the OWBPA. The OWBPA provides that a covered individual cannot waive a right or claim under the ADEA unless the waiver is knowing and voluntary. If I am a covered individual, I acknowledge that I have been advised of this law, and I agree that I am signing this Release voluntarily, and with full knowledge of its consequences. I understand that Employer is giving Me twenty-one (21) days from the date I received a copy of this Release to decide whether I want to sign it. I acknowledge that I have been advised to use this time to consult with an attorney about the effect of this Release. If I sign this Release before the end of the twenty-one (21) day period it will be My personal, voluntary decision to do so, and will be done with full knowledge of My legal rights. I agree that material and/or immaterial changes to the Separation Agreement or this Release will not restart the running of this consideration period. I also acknowledge that the Separation Agreement, this Release and any other attachments or exhibits have each been written in a way that I understand.

			

 

	
			VII.

				
			Right to Rescind and/or Revoke. I understand that insofar as this Release relates to my rights under the Age Discrimination in Employment Act, it shall not become effective or enforceable until seven (7) days after I sign it. I also have the right to rescind (or revoke) this Release insofar as it extends to potential claims under the ADEA by written notice to Employer within seven (7) calendar days following my signing this Release, and within fifteen (15) calendar days as to waiver of claims under the Minnesota Human Rights Act (the “Rescission Period”). Any such rescission (or revocation) must be in writing and hand-delivered to Employer or, if sent by mail, postmarked within the applicable time period, sent by certified mail, return receipt requested, and addressed as follows:

			

 

	 	
			A.

				
			post-marked within the seven (7) day Rescission Period or, if applicable, fifteen (15) day Rescission Period;

			

 

	 	
			B.

				
			properly addressed to DiaMedica USA, Inc., Attention: Chief Executive Officer, Two Carlson Parkway, Suite 260, Minneapolis, MN 55447; and

			

 

	 	
			C.

				
			sent by certified mail, return receipt requested.

			

 

	
			 

				
			I understand that the Consideration I am receiving for settling and releasing my Claims is contingent upon my agreement to be bound by the terms of this Release. Accordingly, if I decide to revoke this Release as provided herein, I understand that I am not entitled to the Consideration offered in the Separation Agreement. I further understand that if I attempt to revoke my release of ADEA, MHRA or any other claims, I must immediately return to the Employer any Consideration that I may have received under my Separation Agreement.

			

 

	
			VIII.

				
			I Understand the Terms of this Release. I have had the opportunity to read this Release carefully and understand all its terms. I have had the opportunity to review this Release with My own attorney. In agreeing to sign this Release, I have not relied on any oral statements or explanations made by Employer, including its employees or attorneys. I understand and agree that this Release and the attached Agreement contain all the agreements between Employer and Me. We have no other written or oral agreements.

			

 

 

                                                                              

Scott Kellen

 

Dated: ____________, 20____

 

 

 

	 	 
	 	 
	 	EXECUTIVE INITIALS

 

Ex. A-4

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