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MANAGEMENT’S DISCUSSION AND ANALYSIS This discussion and analysis of financial condition and results of operations of Ballard Power Systems Inc. (“Ballard”, “the Company”, “we”, “us” or “our”) is prepared as at August 2, 2011 and should be read in conjunction with the unaudited consolidated condensed financial statements and accompanying notes for the three and six months ended June 30, 2011 and with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2010. The results reported herein are presented in U.S dollars unless otherwise stated and have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Additional information relating to the Company, including our Annual Information Form, are filed with Canadian (www.sedar.com) and U.S. securities regulatory authorities (www.sec.gov) and are also available on our website at www.ballard.com. BUSINESS OVERVIEW At Ballard, we are building a clean energy growth company. We are recognized as a world leader in proton exchange membrane (“PEM”) fuel cell development and commercialization. Our principal business is the design, development, manufacture, sale and service of fuel cell products for a variety of applications, focusing on motive power (material handling and buses) and stationary power (backup power and distributed generation) markets. A fuel cell is an environmentally clean electrochemical device that combines hydrogen fuel with oxygen (from the air) to produce electricity. The hydrogen fuel can be obtained from natural gas, kerosene, methanol or other hydrocarbon fuels, or from water through electrolysis. Ballard fuel cell products feature high fuel efficiency, low operating temperature, low noise and vibration, compact size, quick response to changes in electrical demand, modular design and environmental cleanliness. At the heart of each Ballard PEM fuel cell product lies a stack of unit cells embedded with our proprietary esenciaTM technology which draws on intellectual property from over 2,000 patents and patent applications together with unmatched years of "know-how" in key areas of fuel cell stack operation, system integration, and fuel processing. We provide our customers with the positive economic and environmental benefits unique to fuel cell power. We plan to build value for our shareholders by developing, manufacturing, selling and servicing industry-leading fuel cell products to meet the needs of our customers in select target markets. We are focused on our core competencies of PEM fuel cell design, development, manufacture, sales and service. Over the past five years, we have refined the Company’s business strategy to establish a sharp focus on what we believe to be key growth opportunities with near-term commercial prospects in our core fuel cell markets. To support this strategy, we have focused on bolstering our cash reserves to strengthen our capability to execute on our clean energy growth priorities. Page 1 of 29 In March 2010, we completed a sale and leaseback agreement whereby we sold our head office building in Burnaby, British Columbia in return for gross cash proceeds of $20.4 million and then leased this property back for an initial 15-year term plus two renewal options. In December 2009 and July 2010, we completed agreements with a financial institution to monetize our rights under a Share Purchase Agreement with Ford Motor Company relating to our 19.9% equity investment in AFCC Automotive Fuel Cell Cooperation Corp. (“AFCC”) for an initial cash payment in 2009 of $37 million and a subsequent cash payment in 2010 of $5.0 million. In March 2011, we completed a sub-lease agreement with Daimler AG (“Daimler”) for the rental of 21,000 square feet of surplus production space in our specialized fuel cell manufacturing facility located in Burnaby, British Columbia. This sub-lease will be effective from August 1, 2011 until July 31, 2019 and is expected to result in annual savings of approximately $1 million in real estate and related overhead costs. In June 2011, we obtained a $7.0 million Canadian award agreement from Sustainable Development Technology Canada (“SDTC”) for the period from 2011 to 2013 to be used to extend the operating life and lower the product cost of FCgen™-1300, the fuel cell product that powers Ballard’s CLEARgen™ distributed generation system. This award is in addition to a $4.8 million Canadian award agreement from SDTC announced in 2010 for the period from 2010 to 2012 to be used to further develop fuel cell power module technology for the transit bus market. These awards are recorded primarily as a cost offset against our research and product development expenses as the expenses are incurred on these programs. We are based in Canada, with head office, research and development, testing and manufacturing facilities in Burnaby, British Columbia. In addition, we have sales, research and development and manufacturing facilities in Lowell, Massachusetts and Hobro, Denmark. We report our results in the following reporting units: 1. Fuel Cell Products (core segment): fuel cell products and services for motive power (material handling and bus markets) and stationary power (backup power and distributed generation markets) applications; 2. Contract Automotive (supporting segment): contract technical and manufacturing services provided primarily for Daimler, Ford and AFCC. 3. Material Products (supporting segment): carbon fiber products primarily for automotive transmissions and gas diffusion layers (“GDLs”) for fuel cells. Page 2 of 29 RESULTS OF OPERATIONS – Second Quarter of 2011 Revenue and gross margin (Expressed in thousands of U.S. dollars)

EXHIBIT 10.18 PHOENIX INVESTMENT PARTNERS 2002 ASSOCIATE INCENTIVE PLAN «NAME» Exhibit 10.18 PHOENIX INVESTMENT PARTNERS 2002 ASSOCIATE INCENTIVE PLAN «NAME» Exhibit 10.18 2002 Associates Incentive Plan PURPOSE Phoenix Investment Partners' 2002 Management Incentive Plan provides an opportunity for Company non-officers to enhance their compensation if Phoenix Investment Partners meets or exceeds its profitability objectives. PLAN SUMMARY Target and maximum incentive awards are established for each individual as a percentage of base salary at the beginning of each year. Performance relative to cash operating earnings and revenue goals are measured and payouts are made in the first quarter after final results are known. PERFORMANCE MATRIX 115% 125% 135% 150% 165% 175% 200% 200% 200% 200% 110% 100% 110% 125% 140% 150% 175% 200% 200% 200% 105% 75% 85% 100% 115% 125% 150% 175% 200% 200% Revenue* 100% 55% 65% 75% 85% 100% 125% 150% 175% 200% 96% 40% 50% 60% 75% 85% 115% 140% 165% 190% 92% 30% 40% 50% 60% 75% 100% 125% 150% 175% 88% 20% 30% 40% 50% 65% 90% 115% 140% 165% (% of Plan) 85% 90% 95% 100% 104% 112% 120% 128% 136% Cash Operating Earnings** * Operating revenue including management fees, ancillary fees and other operating income fees ** Pre-tax income before MIP, IIP, amortization of intangibles and net interest expense Exhibit 10.18 INCENTIVE TARGET Incentive targets are expressed as a percent of base salary and are based on exempt and non-exempt status. Target and maximum incentives are as follows: Incentive as Percent of Salary Target Maximum Exempt 5% 10% Non-exempt 2.5% 5% ELIGIBILITY Eligibility is limited to all Corporate and Retail non-officers who do not participate in the Management Incentive Plan, Investment Incentive Plan or sales related plans. Participants who leave the company during the plan year will not receive an incentive payment. In addition, participants must be employed by the company on the day the bonus is paid. In the event of a termination during the plan year due to disability, death, or retirement, a pro-rata payment will be made. New employees will receive a pro-rata award. Any employees who become eligible for participation after the end of the third quarter will not be eligible for an award in that year. PROCESS FOR DETERMINING INCENTIVE PLAN AWARDS Following the close of the plan year, overall results will be determined. The Compensation Committee of the Board of Directors may at its discretion, modify awards. Regardless of eligibility criteria stated above, employees have no right or entitlement to any incentive award or calculation until conditions stated in the plan are met, approvals are received and payments are made. The Company may amend or terminate this plan at any time without advance notice. No consent of any employee is required to terminate, modify or change this plan. After the approval by the Compensation Committee of the Board of Directors, incentives will be paid subject to normal withholdings and plan deferrals. All incentive awards are paid at the discretion of the Company. IMPACT ON BENEFITS Incentive payments made under the Plan will not be used for determining pay-related benefits under the qualified benefit plans maintained by the company.

Title: HIRING INTERNS Question:I have started a small game development company. More like a small project that i have started in college and i have hired 2 interns over the internet. Different city, same country. I have also agreed to share 30% of my profits with them forever. Have got it signed aswell on the internship offer. My company is not registered. I don't know if we can call it a company too. Is this legal? If it's illegal, how bad am i fucked up? Topic: Business Law Answer #1: You've formally, in writing, promised to give 30% of your profits to people who haven't yet done anything for you, no matter what they do in the future and regardless of their future involvement with your enterprise? Ditch this enterprise. Start again. Don't sign stuff without a lawyer's involvement.Answer #2: Odds are heavily in favor of this going nowhere and never making a cent but if you are successful you've given away a third of your profits in exchange for nothing.

Name: Commission Regulation (EEC) No 2669/85 of 23 September 1985 amending Regulation (EEC) No 147/85 laying down, for the 1984/85 wine year, detailed implementing rules for the distillation referred to in Article 41 of Regulation (EEC) No 337/79 Type: Regulation Date Published: nan No L 253/6 Official Journal of the European Communities 24. 9 . 85 COMMISSION REGULATION (EEC) No 2669/85 of 23 September 1985 amending Regulation (EEC) No 147/85 laying down, for the 1984/85 wine year, detailed implementing rules for the distillation referred to in Article 41 of Regu ­ lation (EEC) No 337/79 THE COMMISSION OF THE EUROPEAN COMMUNITIES, adjusted in order to ensure the smooth implementa ­ tion of the distillation measure ; Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Wine, Having regard to the Treaty establishing the European Economic Community, HAS ADOPTED THIS REGULATION : Having regard to Council Regulation (EEC) No 337/79 of 5 February 1979 on the common organization of the market in wine ('), as last amended by Regulation (EEC) No 798/85 (2), and in particular Articles 41 (7) and 65 thereof, Whereas, under Article 7 of Commission Regulation (EEC) No 147/85 (3), as last amended by Regulation (EEC) No 2024/85 (4), the competent authorities may calculate and notify to producers the quantities to be delivered by each ; whereas such notifications must be made before 15 May 1985 ; whereas during this, the first year of the application of compulsory distillation, some authorities were, because of technical and administrative problems, unable to meet that deadline ; whereas it is therefore advisable to remove the reference to that date and specify that notification should be made in good time, in such a way as to allow the persons concerned to meet their obligations ; Article 1 Regulation (EEC) No 147/85 is hereby amended as follows : 1 . The second subparagraph of Article 7 ( 1 ) is replaced by the following : The competent authorities may, however, calculate and notify to producers the quantities to be delivered by each . Such notifications shall be made in good time, in such a way as to allow the persons covered by the measure to meet their obligations with regard to delivery.' 2 . The following Article 1 3a is inserted : 'Article 13a 1 . The competent authorities concerned may enforce the obligations laid down in this Regula ­ tion even where the period specified in Article 10 (5) for delivery of the table wine has expired. 2. In cases where the provisions of paragraph 1 are applied, the deadlines specified in Articles 10 (6), 11 , 12 and 13 which must be met by the distiller and, where applicable, the fortifier of wine for distillation shall be adjusted on an individual basis by the competent authorities in the light of the date on which the wine is delivered to the distillery.' Whereas the time limits for delivery of the table wine and for distillation are laid down in Article 10 (5) of Regulation (EEC) No 147/85 ; whereas it should be specified that the competent authorities may enforce the obligations concerned even after expiry of the said time limits, in particular by way of administrative measures of constraint or after the matter has been referred to the courts ; whereas the deadlines which the distiller and, where applicable, the fortifier of wine for distillation must meet in such cases should be Article 2 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. It shall apply with effect from 19 January 1985 . (>) OJ No L 54, 5 . 3 . 1979, p. 1 . 0 OJ No L 89, 29 . 3 . 1985, p. 1 . 0 OJ No L 16, 19 . 1 . 1985, p. 25. (4) OJ No L 191 , 22. 7. 1985, p. 39 . 24. 9. 85 Official Journal of the European Communities No L 253/7 This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 23 September 1985. For the Commission Frans ANDRIESSEN Vice-President

Exhibit 10.3   LOGO [g681103exa_pg01.jpg]   Commerzbank AG, Breite Str. 25, 40213 Düsseldorf      Mittelstand UTi Deutschland GmbH      Christian Herget Jacqueline Olivier      Postanschrift: Rather Str. 78-80      Breite Str. 25, 40213 Düsseldorf 40476 Düsseldorf      Telefon 0211/827-2528      Fax 069 136-51902      [email protected] February 21, 2014 Waiver Request Dear Ms. Olivier, Reference is made to the Agreement Relating to a Credit Facility, dated January 25/28, 2013 (the “Facility Agreement”) between UTi Deutschland GmbH (the “Company”) and Commerzbank Aktiengesellschaft (“us”). For the period beginning on January 31, 2014 and ending on April 15, 2014, we hereby waive any failure of the Company to be in compliance with the covenants set forth in clause 5.1 of the Facility Agreement, and with any other provision of the Facility Agreement as a result of the Company’s failure to be in compliance with clause 5.1 of the Facility Agreement. This waiver is subject to the conditions precedent that (i) a waiver in substantially the form provided herein will also be declared by the holders of the U.S.$ 150,000,000 4.10% Senior Unsecured Guaranteed Notes, Series A, due February 1, 2022 and the U.S.$ 50,000,000 3.50% Senior Unsecured Guaranteed Notes, Series B, due February 1, 2020 under the Note Purchase Agreement dated January 25, 2013 as the same is amended by First Amendment Agreement, the Second Amendment Agreement and the Third Amendment Agreement, a draft of which has been received by us, (ii) waivers in substantially the form provided herein will also be declared by Royal Bank of Scotland N.V. for its 2011 Facility, Nedbank for its 2011 Facility, and Bank of the West for its 2011 Facility. These Facilities are further described in the Global Credit Lines section in Note II of the Form 10-Q Report ended October 31, 2013 for UTi Worldwide Inc., (iii) said waivers have become effective. This waiver, furthermore, becomes null and void if any drawdown from any additional secured financing will be used other than to reduce the outstanding credit lines specified under (ii) on a pro rata basis. Yours sincerely Commerzbank AG   /s/ Thomas Groth     /s/ Christian Herget   Thomas Groth     Christian Herget     Vorsitzender des Aufsichtsrats: Klaus-Peter Müller Vorstand: Martin Blessing (Vorsitzender), Frank Annuscheil, Markus Beumer, Stephan Engels, Michael Reuther, Stefan Schmittmann, Martin Zielke    Commerzbank Akliengesellshaft, Frankfurt am Main Handelsregister Amlsgericht Frankfurt am Main, HRB 32000 USt-ldNr.. DE 114 103 514

Title: Criminal/Legal Help Texas Question:A very dear friend/penpal from Denmark very strongly urged me to write this... otherwise I wouldn't be writing here. So I am going to lay it all down and we will see where this goes. Any and all help is more than welcome but I am quite despaired so... okay. I am basically a disabled individual due to psychotic major depression, post-traumatic stress, generalized anxiety, and carpal tunnel syndrome (possibly other conditions but these are the most commonly diagnosed up to this point). I have been trying to get student aid but I have been obstructed by the fact that my parent wouldn't sign the paperwork for the FASA. I tried to get disability but they found that without consistent treatment they didn't consider my conditions disabling, more or less, I tried to get a lawyer but many pointed out that post 21 disability cases are just very difficult and many flat out refused to take my case. I tried to find and keep work during that time too but many jobs I did get ended badly due to mental health complications and also my carpal tunnel syndrome making my hands very literally unusable, I've sat in a parking lot unable to use my hands after work more than once. So I lived with family, namely my mom (who has a lot of problems... to summarize even though not diagnosed because she resists doctors urges to get diagnostic treatment shes very antisocial, delusional, senile, and paranoid). My dad passed when I was 19 from aggressive cancer he developed when I was 17 which is when my mental health became quite bad. So for the past eleven years or so... my parent has been quite paranoid, aggressive, and also deluded into thinking that the ONLY reason I am not on disability is that I was obstructing it for reasons that are best described as incoherent rambling from her. But I have a so-called brother and sister who are heavy drug abusers and addicts, who are quite able to work (they have held stable jobs when shes not paying them to exist) have always kinda hated me... and have encouraged her to be paranoid and hateful to me. And encouraged her to call the police on the extremely misguided though that the justice system would FIX these problems by giving me disability, welfare, housing, and everything else. I will admit it wasn't all ideal between her and me... but the worst that could be said about it in all candor and forwardness is that she found me annoying, she distrusted me, and she was paranoid about me (for reasons that are very unfounded). SO shes been calling the police for the past eleven years and despite them shouting at me that I was 'a pathetic excuse for human garbage' and 'not deserving or requiring their protection or the protection of law'. Sometimes shooing me out of the house so I got to wander the streets for a week or so till I went back to the police to inform them that I wasn't being allowed back in my home and they would inform my parent that unless there is a valid eviction order she can't just prevent me from going home (at very least to get my things). So she did this increasingly lying to try to get the police's attention. She alleged I was going to pistol whip her on one occasion. The police after questioning me quite brutally asking if I had a gun, I told them no. Asked if I said anything to that extent, I said no. They tore everything inside out looking for a gun. Found none. They went to her and asked where I kept my gun. She assured them I didn't have a gun. So they asked how the hell would I pistol whip her if I didn't have a gun. She said that wasn't the point. The police left in extreme frustration... this was a pretty common happening. So early January of this year the police were called out again (a second time for this year actually). This time something kinda did happen, though unrelated to me, she accidentally slipped as we were having an argument. I won't bore you with the details but basically she was refusing to get me anti-anxiety medicine that regulated my anxiety, stress, argumentativeness, and symptoms from my trauma (for more than ten days she refused) and I had no means to get it. I could of asked someone else to help but she kept assuring me she would get it 'tomorrow'. And she gets quite angry when I let other people get my medicine because she thinks they will steal it (like I said paranoid). SO she said she wanted to see some letters that social security sent me, I offered to let her see it before but she refused, I made a kinda big frustrated 'this has nothing to do with getting my medicine' and 'you refused to look at it before'... but she insisted... so I got it... then she said she didn't want to see it because I was 'forcing her'. I left it on the counter next to her and said she could do whatever she wanted with it. She then said I was 'threatening her'. Like I said shes extremely paranoid and irrational... So... at some point it just became an argument because I had it way up above whereever I can reach with my hand and I needed my medicine. She slipped on the floor. I freaked out and ran. In a car that was recently bought for me, without plates/stickers/insurance (at least so I was told and could see) I left... with the full intention of killing myself. I thought that she would tell the police she fell because of me and that she was injured because of me... and that surely these was some indication of evidence this time. But thinking about it... I didn't do anything wrong... she got a slight cut on her arm (how I am literally not sure even till today and neither is she, and from what I read and am told this is irrelevant to the charges I later faced). So... I decided 'before I run and kill myself, this could just be me overreacting, the police will come out and do what they always do.' So... I went and sat in the front yard... upset that my mom that despite my unpleasant feelings for I care for... upset that when she fell my first reaction was to run... I wasn't even sure if she was okay. I was kind of afraid to go in the house. I didn't know for sure if the police were coming but I was pretty sure. The police came. I was in tears. Paramedics came out (which I later learned they found no indication of injury moreover not caused by a fight on her) saying she was just fine. The police went in and poked around (I later found out that the police in their opinion found no indication of a fight). But she lied saying I punched her in the face. The police asked why she would say that. I said shes a liar, maybe not the most diplomatic of answers. They told me they were tired of coming out and I was under arrest. I said I wanted to say goodbye to her before I left. They said no. I was sobbing uncontrollably having difficulty breathing and walking, I was trying to walk and I made sure to tell them I was trying. When I got to the police car they smashed my head into a seat giving me a nasty headache and eyepain that still is now and gave me a very nasty black eye which made everyone in jail assume I came in fighting. I cried out for the entire trip to the jail that I wanted to die and to please kill me. That I made a mistake not killing myself that night. The officer ignored this. When taken to the jail I was still quite suicidal and in a lot of pain. When checking in I told them that my eye/head was injured but they glazed over it saying 'it looked okay'. I had to beg for medicine for my pain that kept me in quite bitter pain which they just kept me in quasi-isolation for. At one point they said I was clearly lying because if I had a head injury I would of reported it coming in, I said I did, which they just accused me of lying again and said they would however look into it. Spoiler... they didn't. I was transferred to the county jail where I again told them about my suicidal ideation (and my concerns about it) as well as my head/eye pain... and not getting any of my medicine that I needed. They glazed over all of it. Saying that they would get around to it. They said that unless I wanted to be in solitary and naked that I might want to rephrase, I didn't... however MHMR decided that I wasn't so suicidal that they felt I needed solitary so they put me in general population. It took a month of writing requests (called kites) to MHMR to get any kind of mental health treatment... and another week to get medication. I had been to Medical more than a few times and they dismissed a lot of symptoms like my head/eye pain (refusing to do any scans), the release of blood in my stool (large amounts of blood, that is still happening), and I could go on and on. First time being in jail was quite the life experience, lots of stories but I don't think most of them are quite relevant to here. The magistrate put my bond at the lowest possible, but it was arbitrarily bumped up a thousand dollars by the time I got to the county jail (no explanation ever given). My charge was also increased from a Class A Misdemeanor to a State Jail Felony by the police then to a Third Degree Felony by the DA, all arbitrary and no explanation given. I wasn't even aware it was bumped to a third degree felony a lot later and got into an argument with my court appointed lawyer when he said it was a third degree felony. This triggered a competency evaluation, which the psychologist said that I had no idea what was going on but he felt like I may be able to so he was finding me competent for trial. I kinda fond that very disturbing so I wrote my lawyer who said there wasn't anything he was willing to do about it. It took me some time but I figured out a way to send a letter to a man who is like an adoptive father to me since my father's death. It took three weeks to get the letter to him. I was actually planning to kill myself in jail the day before he came. I truly and really thought the guards were playing a horrible joke on me. I even kept telling them that if I know its a joke well before its not a good joke. But in an almost brutal jail comedy I just got pushed forward and a (filtered) joke that 'maybe its your boyfriend'. Hes Taiwanese and his English isn't so good... and thats kinda putting it nicely. I don't think he fully understood what was going on. But he said he would bond me out soon as possible. BUT apparently there was a psych hold put on me for the competency evaluation that was never lifted. I wrote the court, judge, my lawyer, and everyone else I could think of... and no luck. I went for my next court date and the lawyer assigned to me said that I could get out on an MHMR bond (which he later said he wouldn't try) but I said I just wanted the hold to be lifted. He said okay... so... after a month of being illegally held I sent a letter and apparently my mom told him not to bond me out because she wanted me to take a plea deal and felt that the longer I was in jail the more likely I would take a deal. He being the honorable, parental authority, family-oriented man felt this was sufficient reason to do so despite understanding I would pay him for the bond amount I just didn't have access to my accounts in jail. Which is quite vicious and wrong in my opinion. So I wrote my lawyer my concerns about my mental health that was getting quite worse and I was becoming increasingly suicidal. Starting to make attempts in jail from trying to strangle myself to trying to hang myself. To trying to stockpile the betablocker they gave me for my medicine to try to overdose on it which was unsuccessful. Including I was having some quite vivid auditory hallucinations and delusions. I told the jail MHMR about it and said I wanted ambilify or some other antipsychotic but they refused my request (repeatedly). I filed complaints and learned they were just saying everything was 'fine' on their reports and that I was allegedly happy with treatment. I complained more but they were for some insane reason not sending me the replies but sending it to my mom. Really... that baffles me absolutely. So my lawyer said that if I was saying I was just wanting to get out to commit suicide he couldn't let me sign and if I was saying I was beyond a shadow of doubt in my mind innocent he also couldn't let me sign. I kept telling him that since he was telling me my situation was hopeless even though there was no physical evidence and that it was unlikely I could prevail in court. He kept telling me I was stupid for not taking the plea deal and that I was very frustrating. He said he contacted my mom and explained the situation to her, that she could file an affidavit of non-prosecution, and that he contacted several of my friends who know my mom and could testify to how she is and that ALL OF THEM said no. I pointed out things like the indictment didn't make sense to me (literally it still doesn't). I pointed out that I didn't even understand what they are saying I did exactly. So four months into this, I demanded my lawyer tell me, he said he didn't go and he went to ask the prosecution, he came back and said "their saying you punched her in the face". I said 'don't you think its odd that I a grown man could punch someone in the face and not leave any kind of marking? That paramedics checked her out fine?' He said that didn't matter. He said because of the threshold of injury in Texas moreover for the elderly is so low that any claim of injury is evidence of injury. And that before a jury that unless I had a convincing explanation to why my mom was trying to send me to prison I was going to prison. He also pointed out that me as a disabled, crazy, unemployed, living-at-home man and my mom working past retirement age and supporting me the jury's sympathy was not going to be in my favor and was more likely going to be against me. So I went to court again, he wasn't there but a few lawyers from the firm that work for him came, and I told them the same. They said they wanted to get my competency evaluated again. I told them I just want to die. They kept insisting so I said "I don't care. do whatever you want." They came back and said the judge was telling them to let me sign. They asked if that is what I wanted. They said a few of my trigger words (related to abuse/hypnosis/psychosis in the past) which made me more suggestible. I tried to point this out but they kept pressing it quickly. They explained the plea deal (which I later learned they lied about). So I said "So this means I am done. I can go die?" The man said "yes". So I signed. I did the whole thing. I asked a few questions during the process before the judge which I found very confusing and disorienting. To the point that my lawyer had to pull me aside and told me that he just wanted to be done with me and stop being so difficult. He walked away from me after pulling me aside he got so angry and frustrated with me. So I got back to the holding tank before being taken back to my cellblock. Everyone in there (mostly repeat offenders most going to prison for a few years at least) saw my several years probation as a god-send joking that they would be doing back flips and cartwheels if that was for them. They said I was 'going home'. But I couldn't. The probation officer in the court said that was apart of the plea deal, which the lawyer said was not (explicitly and repeatedly he said it wasn't). There was also a protective order (two years) which I was not allowed to attend despite my begging and mailing the judge telling him I couldn't attend. I was given a default judgment because I didn't show up. Which is also very grossly wrong but whatever. I just kept looking at the papers wondering why the hell I did what I did... did I really want to die? I loved life... from sitting on the toilet to sitting in traffic. It was just what happened to me. I signed my death warrant. I was right in front of MHMR and started to sob. Other inmates in the holding cell said I was just wanting 'attention'. And kind of goated me on. I decided I needed to kill myself right there so I tried to repeatedly split my head open on a square metal pipe on the edge. MHMR who had overlooked my past attempts before couldn't really deny what was happening right in front of them. It took three sheriffs to pin me to the ground and make me stop. Then I just burst uncontrollably into tears because I couldn't even kill myself. I was thrown in solitary for a day where I was naked, cold, without a mat, or anything else... I sobbed and had panic attacks... and no one did a thing. They released me to probation the next day. They asked if I was suicidal. I told them the truth. Very. They asked if I told anyone. I told them the judge, the prosecutor, and my lawyer. They seemed kinda shocked. They asked if MHMR knew. I said yes I did it right in front of them. They asked if the jail knew about it. I said yes I was in solitary before release. They asked when my last attempt was... I told them less than 24 hours ago. Needless to say they rearrested me, put me in shackles, and put me back in solitary for a week. They rearranged me on the same charge, when they asked if I understood I very clearly told them no. Then they transferred me to the county hospital where after telling them what was going on they opted to keep me for about a month, assuring me that because I was homeless they would charge me virtually nothing for my stay they charged me $49 thousand. I told them upon release I was going to go to the library, say goodbye to some friends, and kill myself. They more or less said 'okay'. And I did. When they got the taxi to take me to a shelter I told him to take me to the library. I went in to say goodbye. But... A very dear friend of mine insisted I not and asked I come stay with her for a bit. During that time my mom started to learn what happened and she was quite distraught that her lie got her nothing that she wanted. I told her that she needed to come forward and tell them the truth. I told my lawyer about this that she was willing to say she lied and that I was angry that he didn't contact anyone that I asked him to asking wtf did he do as my lawyer aside from occasionally show up and not remember my name. He called her but my parent who is crazy and indecisive said she wasn't willing to say she lied. So... I went to my adoptive father's home and I told my friend it was really good knowing her that I had no idea what was about to happen next. I was told the DA had filed to revoke my probation. My lawyer said there was a warrant out for my arrest. I called the probation office and they said because I filed a motion for new trial, which my lawyer said he wasn't going to defend or try to aruge for, they couldn't supervise my case. They said they didn't see any revocation or arrest warrant on their system but asked me to call my probation officer attached to the court. So I called her and when her mailbox wasn't full I left messages. I also left messages for the court about how my lawyer was really messed up and I wanted a new lawyer. So the probation office and my law office gave me mixed messages about what I should be doing. Finally they got tired of me calling saying they would call me and to stop bothering them. I did... Its now been a few weeks... and no answer... and that makes me quite uncomfortable. Though I will be candid I am looking for a way to die this second. I have three bottles of benadryl maximum strength and amounts... and a rope tied into a slip knot ready to go... Its only my stupidity I imagine that I am not dead this very second. So... not even sure what I am asking for. My friend kept insisting I write this so here it is. I imagine I am missing tons and tons of details that are likely relevant to some extent or at least offensive to me. Like my lawyer saying he would send me a summary of the evidence in my case but never doing so saying he would send me a copy of what the indictment meant but never doing so... I could go on and on and on and on and on till this was a small novel. Answer #1: No one here is reading it. I got half way though and got pissed off, asking myself how long till the part that mattered, only to find there weren't just a few more paragraphs. Your relational issues are not pertinent to this inquiry. Either delete the post and try again or edit this into a specific and readable *legal* inquiry. Answer #2: > I could go on and on and on and on and on till this was a small novel. Ever thought about writing? Its not a bad read. That said all you can do is talk to your probation officer. Also, I would find a PCP you trust and get some mental health and take control of your life. I would put your mom in review and focus on you. r/suicide to talk to people who probably can point you to resources to deal with your suicidal thoughts. Not sure why you wanted a new trial, and doubt you can get one cause its a plea deal. If you weren't mentally compentant that might be a way but you won't get that till you can get on a treatment plan. Google Federally Qualified Health Center and see if you can find one you like. Also, you can file for disability yourself, they review your records.You can file for foodstamps and w/e. You have a friend across the world, you can get some forms filled out. Good luck to you, and truly consider writing you have good flow.Answer #3: Nobody is going to read that. Far, far, too long. Answer #4: > So I signed. The author of this tract plead guilty and received probation. (To what? Who knows, that information was not forthcoming.) During the course of their probation, they _repeatedly_ experienced suicidal ideation, and made at least one sincere attempt. If this person is still in danger of suicide, _please_ get them in touch with a [suicide crisis line](https://suicidepreventionlifeline.org/), and help them get medical and psychiatric help. Suicide is one of the leading causes of death for people with schizophrenia and psychosis disorders. This is serious, and your friend may well die. If your friend's mother is not his legal guardian, ending or limiting his relationship with his mother may help in the long run. Their frequent conflicts and antagonistic relationship are not doing him any good, either legally or psychologically. Getting there may be difficult if he's under probation, but local charities that work with mental illnesses are probably a good place to start looking for advice and help.Answer #5: Oh, sweetheart, you need to be in hospital, love. Please go to an ER and get yourself some help. ASk for a social worker to help you, and tell the worker all of this. It's pretty obvious from reading your post that you are in an active crisis - I've been in exactly the same place mentally - and I really hope you are able to the help you need. Please call the suicide prevention lifeline if you can't get to a hospital - that number is 1-800-273-talk. For longer term support, get in touch with [NAMI Texas](https://namitexas.org/) - they'll know what local resources are available to you. Take care of yourself, please. It would be a shame to lose you.Answer #6: There's no TL;DR and no question.

Name: Commission Regulation (EEC) No 223/87 of 26 January 1987 altering the export refunds on white sugar and raw sugar exported in the natural state Type: Regulation Date Published: nan No L 24/14 Official Journal of the European Communities 27. 1 . 87 COMMISSION REGULATION (EEC) No 223/87 of 26 January 1987 altering the export refunds on white sugar and raw sugar exported in the natural state present in force should be altered to the amounts set out in the Annex hereto, THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to the Act of Accession of Spain and Portugal, Having regard to Council Regulation (EEC) No 1785/81 of 30 June 1981 on the common organization of the markets in the sugar sector ('), as last amended by Regula ­ tion (EEC) No 3666/86 (2), and in particular the second subparagraph of Article 19 (4) thereof, Whereas the refunds on white sugar and raw sugar exported in the natural state were fixed by Commission Regulation (EEC) No 1 57/87 (3); Whereas it follows from applying the detailed rules contained in Regulation (EEC) No 157/87 to the informa ­ tion known to the Commission that the export refunds at HAS ADOPTED THIS REGULATION : Article 1 The export refunds on the products listed in Article 1 ( 1 ) (a) of Regulation (EEC) No 1785/81 , undenatured and exported in the natural state, as fixed in the Annex to Regulation (EEC) No 157/87 are hereby altered to the amounts shown in the Annex hereto. Article 2 This Regulation shall enter into force on 27 January 1987. This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels, 26 January 1987. For the Commission Frans ANDRIESSEN Vice-President ( ») OJ No L 177, 1 . 7. 1981 , p . 4. (2) OJ No L 339, 2. 12 . 1986, p . 10 . V) OJ No L 20, 22. 1 . 1987, p . 20 . 27. 1 . 87 Official Journal of the European Communities No L 24/15 ANNEX to the Commission Regulation of 26 January 1987 altering the export refunds on white sugar and raw sugar exported in the natural state (ECU) CCT heading No Description Amount of refund per 100 kg per percentage point of sucrose content and per 100 kg net of the product in question 17.01 Beet sugar and cane sugar, solid : I A. White sugar ; flavoured or coloured sugar : l (I) White sugar : \ (a) Candy sugar 44,09 I (b) Other 42,00 \ (II) Flavoured or coloured sugar l 0,4409 B. Raw sugar : l II . Other : l (a) Candy sugar 40,56 (') (b) Sugar with added anti-caking agent l 0,4409 (c) Raw sugar in immediate packing not exceeding 5 kilograms net of product 38,64 (') (d) Other raw sugar 0 (') Applicable to raw sugar with a yield of 92 % ; if the yield is other than 92 % , the refund applicable is calculated in accordance with the provisions of Article 5 (3) of Regulation (EEC) No 766/68 . (*) Fixing suspended by Commission Regulation (EEC) No 2689/85 (OJ No L 255, 26. 9 . 1985, p. 12), as amended by Regulation (EEC) No 3251 /85 (OJ No L 309, 21 . 11 . 1985, p. 14).

UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTEREDMANAGEMENT INVESTMENT COMPANY Investment Company Act file number: (811- 02608) Exact name of registrant as specified in charter: Putnam Money Market Fund Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 Name and address of agent for service: Robert T. Burns, Vice PresidentOne Post Office SquareBoston, Massachusetts 02109 Copy to: John W. Gerstmayr, Esq.Ropes & Gray LLP800 Boylston StreetBoston, Massachusetts 02199-3600 Registrant’s telephone number, including area code: (617) 292-1000 Date of fiscal year end: September 30, 2013 Date of reporting period: June 30, 2013 Item 1. Schedule of Investments: Putnam Money Market Fund The fund's portfolio 6/30/13 (Unaudited) REPURCHASE AGREEMENTS (25.2%) (a) Principal amount Value Interest in $45,850,000 joint tri-party repurchase agreement dated 6/28/13 with BNP Paribas Securities Corp. due 7/1/13 - maturity value of $11,700,127 for an effective yield of 0.13% (collateralized by various corporate bonds and notes with coupon rates ranging from zero % to 9.875% and due dates ranging from 1/30/14 to 7/1/42, valued at $48,142,501) $11,700,000 $11,700,000 Interest in $281,429,000 joint tri-party repurchase agreement dated 6/28/13 with Citigroup Global Markets, Inc./Salomon Brothers due 7/1/13 - maturity value of $96,001,120 for an effective yield of 0.14% (collateralized by various mortgage backed securities with coupon rates ranging from 1.847% to 6.033% and due dates ranging from 9/1/15 to 9/1/44, valued at $287,057,580) 96,000,000 96,000,000 Interest in $71,600,000 joint tri-party repurchase agreement dated 6/28/13 with Credit Suisse Securities (USA), LLC due 7/1/13 - maturity value of $18,900,205 for an effective yield of 0.13% (collateralized by various corporate bonds and notes with coupon rates ranging from 2.90% to 9.00% and due dates ranging from 3/23/15 to 12/15/66, valued at $75,181,484) 18,900,000 18,900,000 Interest in $25,000,000 joint tri-party repurchase agreement dated 6/28/13 with Deutsche Bank Securities, Inc. due 7/1/13 - maturity value of $8,820,184 for an effective yield of 0.25% (collateralized by a U.S. Treasury note with a coupon rate of 0.375% and a due date of 6/15/15, valued at $25,500,000) 8,820,000 8,820,000 Interest in $176,426,000 joint tri-party repurchase agreement dated 6/28/13 with Merrill Lynch, Pierce, Fenner and Smith, Inc. due 7/1/13 - maturity value of $96,001,200 for an effective yield of 0.15% (collateralized by various mortgage backed securities with coupon rates ranging from 2.50% to 6.00% and due dates ranging from 10/1/18 to 6/1/43, valued at $179,954,521) 96,000,000 96,000,000 Interest in $273,658,000 joint tri-party repurchase agreement dated 6/28/13 with RBC Capital Markets, LLC due 7/1/13 - maturity value of $95,862,038 for an effective yield of 0.13% (collateralized by a mortgage backed security with a coupon rate of 4.00% and a due date of 5/20/42, valued at $279,134,184) 95,861,000 95,861,000 Interest in $52,225,000 joint tri-party term repurchase agreement dated 4/18/13 with RBC Capital Markets, LLC due 7/18/13 - maturity value of $14,255,700 for an effective yield of 0.16% (collateralized by various mortgage backed securities with coupon rates ranging from 3.00% to 4.00% and due dates ranging from 10/1/32 to 2/1/42, valued at $53,286,783) 14,250,000 14,250,000 Interest in $81,750,000 joint tri-party term repurchase agreement dated 4/9/13 with RBC Capital Markets, LLC due 7/10/13 - maturity value of $14,505,498 for an effective yield of 0.15% (collateralized by various mortgage backed securities with coupon rates ranging from 2.50% to 3.50% and due dates ranging from 4/1/28 to 5/1/43, valued at $83,413,491) 14,500,000 14,500,000 Interest in $80,050,000 joint tri-party term repurchase agreement dated 5/29/13 with RBC Capital Markets, LLC due 8/28/13 - maturity value of $14,203,905 for an effective yield of 0.11% (collateralized by various mortgage backed securities with coupon rates ranging from 2.10% to 6.50% and due dates ranging from 4/1/20 to 6/1/43, valued at $81,658,985) 14,200,000 14,200,000 Total repurchase agreements (cost $370,231,000) COMMERCIAL PAPER (22.6%) (a) Yield (%) Maturity date Principal amount Value Bank of Nova Scotia (Canada) 0.230 9/9/13 $16,000,000 $15,992,844 Barclays Bank PLC 144A, Ser. 10-1 (United Kingdom) 0.160 7/22/13 7,500,000 7,499,300 Canada (Government of) (Canada) 0.170 10/9/13 7,350,000 7,346,529 Chevron Corp. 0.090 8/29/13 14,200,000 14,197,906 COFCO Capital Corp. (Rabobank Nederland, NY Branch (LOC)) 0.210 7/11/13 9,200,000 9,199,463 Commonwealth Bank of Australia 144A (Australia) 0.294 3/28/14 9,200,000 9,200,000 DnB Bank ASA (Norway) 0.285 7/8/13 13,100,000 13,099,274 DnB Bank ASA 144A (Norway) 0.270 8/7/13 9,000,000 8,997,503 Export Development Canada (Canada) 0.150 11/21/13 5,500,000 5,496,723 General Electric Capital Corp. 0.230 7/22/13 17,300,000 17,297,679 HSBC USA, Inc. (United Kingdom) 0.371 8/16/13 9,175,000 9,170,662 HSBC USA, Inc. (United Kingdom) 0.290 7/10/13 5,155,000 5,154,626 HSBC USA, Inc. (United Kingdom) 0.280 10/2/13 3,925,000 3,922,161 ICICI Bank, Ltd./Hong Kong (Hong Kong) 0.664 7/23/13 4,275,000 4,274,164 ICICI Bank, Ltd./Hong Kong (Hong Kong) 0.220 7/24/13 3,000,000 2,999,578 JPMorgan Chase & Co. 0.250 11/7/13 15,000,000 14,986,563 Lloyds TSB Bank PLC (United Kingdom) 0.140 8/1/13 7,500,000 7,499,096 National Australia Funding Delaware, Inc. 0.190 8/26/13 7,300,000 7,297,842 National Australia Funding Delaware, Inc. 0.165 8/21/13 14,000,000 13,996,728 President and Fellows of Harvard College 0.110 7/8/13 11,675,000 11,674,750 Prudential PLC 144A (United Kingdom) 0.230 9/20/13 15,450,000 15,442,005 RBS Holdings USA, Inc. 0.140 7/17/13 6,400,000 6,399,602 Roche Holdings, Inc. (Switzerland) 0.107 7/16/13 21,500,000 21,499,046 Standard Chartered Bank/New York 0.260 7/1/13 5,350,000 5,350,000 Standard Chartered Bank/New York 144A 0.220 8/7/13 8,900,000 8,897,988 State Street Corp. 0.200 8/8/13 14,000,000 13,997,044 Sumitomo Mitsui Banking Corp. (Japan) 0.230 7/17/13 2,250,000 2,249,770 Sumitomo Mitsui Banking Corp. (Japan) 0.230 7/9/13 6,725,000 6,724,656 Sumitomo Mitsui Banking Corp. (Japan) 0.190 8/5/13 4,750,000 4,749,123 Sumitomo Mitsui Banking Corp. (Japan) 0.190 7/11/13 1,700,000 1,699,910 Svenska Handelsbanken, Inc. 144A (Sweden) 0.250 10/2/13 7,025,000 7,020,463 Toyota Credit Canada, Inc. (Canada) 0.180 9/12/13 14,365,000 14,359,757 Toyota Motor Credit Corp. 0.200 11/25/13 6,795,000 6,789,451 Wal-Mart Stores, Inc. 0.110 7/30/13 14,200,000 14,198,742 Westpac Banking Corp. 144A (Australia) 0.591 8/12/13 12,400,000 12,395,732 Total commercial paper (cost $331,076,680) MUNICIPAL BONDS AND NOTES (19.9%) (a) Yield (%) Maturity date Rating (RAT) Principal amount Value California (0.3%) California Educational Facilities Authority Commercial Paper (Stanford University), Ser. STAN 0.100 8/6/13 P-1 $4,500,000 $4,500,000 Connecticut (1.4%) State of Connecticut Health & Education Facilities Authority Commercial Paper (Yale University), Ser. S-2 0.110 9/3/13 VMIG1 1,625,000 1,625,000 State of Connecticut Health & Education Facilities Authority Commercial Paper (Yale University), Ser. S-2 0.110 7/2/13 VMIG1 19,600,000 19,600,000 District of Columbia (0.8%) American University Commercial Paper, Ser. A 0.170 7/17/13 A-1 3,675,000 3,674,722 American University Commercial Paper, Ser. A 0.120 7/8/13 A-1 8,000,000 7,999,813 Illinois (0.3%) Illinois State Educational Facilities Authority VRDN (University of Chicago), Ser. B (M) 0.060 7/1/33 VMIG1 4,625,000 4,625,000 Indiana (0.4%) Indiana Finance Authority Commercial Paper (Trinity Health Credit Group), Ser. 08D-2 0.150 9/5/13 VMIG1 5,100,000 5,100,000 Kentucky (0.8%) Kentucky State Economic Development Finance Authority VRDN (Catholic Health Initiatives), Ser. C (M) 0.050 5/1/34 VMIG1 11,000,000 11,000,000 Maryland (1.9%) Howard County Commercial Paper, Ser. 11 0.130 7/8/13 P-1 6,850,000 6,850,000 Johns Hopkins University Commercial Paper, Ser. B 0.150 7/16/13 P-1 5,000,000 5,000,000 Johns Hopkins University Commercial Paper, Ser. B 0.110 10/1/13 P-1 5,773,000 5,773,000 Johns Hopkins University Commercial Paper, Ser. C 0.140 9/17/13 P-1 5,000,000 5,000,000 Johns Hopkins University Commercial Paper, Ser. C 0.130 9/10/13 P-1 5,540,000 5,540,000 Michigan (0.6%) Trinity Health Corporation Commercial Paper 0.140 9/18/13 P-1 9,100,000 9,097,204 Minnesota (0.5%) Rochester Health Care Facilities VRDN (Mayo Clinic), Ser. B (M) 0.050 11/15/38 VMIG1 6,830,000 6,830,000 Nevada (0.9%) Reno Sales Tax VRDN (Reno Transportation Rail Access Corridor (ReTRAC)) (Bank of New York Mellon (The) (LOC)) (M) 0.060 6/1/42 VMIG1 13,250,000 13,250,000 New Jersey (0.8%) Princeton University Commercial Paper 0.140 8/1/13 P-1 11,600,000 11,600,000 North Carolina (1.0%) Duke University Commercial Paper, Ser. B-98 0.150 9/19/13 P-1 11,250,000 11,246,250 Wake County VRDN, Ser. A (M) 0.050 3/1/26 VMIG1 2,000,000 2,000,000 Wake County VRDN, Ser. B (M) 0.050 3/1/24 VMIG1 1,500,000 1,500,000 Ohio (0.5%) Ohio State VRDN (Infrastructure Improvement), Ser. B (M) 0.050 8/1/17 VMIG1 6,660,000 6,660,000 Texas (5.9%) Board of Regents of Texas Tech University Revenue Financing System Commercial Paper 0.140 8/1/13 P-1 7,500,000 7,500,000 Board of Regents of Texas Tech University Revenue Financing System Commercial Paper, Ser. A 0.140 7/3/13 P-1 2,502,000 2,502,000 Board of Regents of Texas Tech University Revenue Financing System Commercial Paper, Ser. A 0.130 9/10/13 P-1 3,850,000 3,850,000 Harris County Cultural Education Facilities Finance Corporation VRDN (The Methodist Hospital), Ser. C-1 (M) 0.050 12/1/24 A-1+ 10,400,000 10,400,000 Harris County Health Facilities Development Authority VRDN (Texas Childrens Hospital), Ser. B-1 (M) 0.070 10/1/29 VMIG1 3,665,000 3,665,000 Texas Public Finance Authority Commercial Paper, Ser. 03 0.180 7/9/13 P-1 4,925,000 4,925,000 Texas State TRAN 2.500 8/30/13 MIG1 14,250,000 14,304,480 The Board of Regents of The Texas A&M University System Commercial Paper 0.140 7/3/13 P-1 6,875,000 6,875,000 The Board of Regents of The Texas A&M University System Commercial Paper, Ser. B 0.140 7/3/13 P-1 9,000,000 9,000,000 The Board of Regents of The Texas A&M University System Commercial Paper, Ser. B 0.120 7/3/13 P-1 5,000,000 5,000,000 University of Texas System Board of Regents Revenue Finance System Commercial Paper 0.150 9/3/13 P-1 3,000,000 3,000,000 University of Texas System Board of Regents Revenue Finance System Commercial Paper, Ser. A 0.150 9/4/13 P-1 15,998,000 15,998,000 Utah (1.3%) Murray City Hospital VRDN (IHC Health Services, Inc.), Ser. C (M) 0.050 5/15/36 A-1+ 18,550,000 18,550,000 Virginia (1.3%) Regents of University of Virginia Commercial Paper, Ser. 03-A 0.160 9/4/13 P-1 3,950,000 3,950,000 The Rector and Visitors of The University of Virginia Commercial Paper, Ser. 03-A 0.110 10/2/13 P-1 15,500,000 15,500,000 Wisconsin (1.2%) Wisconsin State Health & Educational Facilities Authority VRDN (Wheaton Franciscan Services), Ser. B (U.S. Bank, NA (LOC)) (M) 0.060 8/15/33 VMIG1 17,880,000 17,880,000 Total municipal bonds and notes (cost $291,370,469) ASSET-BACKED COMMERCIAL PAPER (12.7%) (a) Yield (%) Maturity date Principal amount Value Alpine Securitization Corp. (Switzerland) 0.140 7/19/13 $7,375,000 $7,374,484 Bedford Row Funding Corp. 0.180 9/9/13 7,600,000 7,597,340 Chariot Funding, LLC 144A 0.250 11/5/13 7,100,000 7,093,738 Chariot Funding, LLC 144A 0.240 12/18/13 15,000,000 14,983,000 CHARTA, LLC 0.220 8/1/13 7,305,000 7,303,616 CIESCO, LP 0.170 7/9/13 7,250,000 7,249,726 Fairway Finance, LLC (Canada) 0.180 7/22/13 2,400,000 2,399,748 Fairway Finance, LLC 144A (Canada) 0.215 10/9/13 9,825,000 9,825,000 Gotham Funding Corp. (Japan) 0.190 9/16/13 8,350,000 8,346,607 Gotham Funding Corp. (Japan) 0.190 8/15/13 13,715,000 13,711,743 Jupiter Securitization Co., LLC 0.240 12/11/13 5,700,000 5,693,806 Jupiter Securitization Co., LLC 0.240 11/25/13 16,400,000 16,383,928 Manhattan Asset Funding Co., LLC (Japan) 0.200 7/11/13 5,250,000 5,249,708 Old Line Funding, LLC 0.210 8/1/13 15,300,000 15,297,233 Old Line Funding, LLC 144A 0.160 8/5/13 6,875,000 6,873,931 Regency Markets No. 1, LLC 144A 0.170 7/22/13 22,115,000 22,112,807 Sheffield Receivables Corp. (United Kingdom) 0.150 7/18/13 7,250,000 7,249,486 Thunder Bay Funding, LLC 0.200 8/23/13 14,250,000 14,245,804 Working Capital Management Co. (Japan) 0.180 7/8/13 7,200,000 7,199,748 Total asset-backed commercial paper (cost $186,191,453) CERTIFICATES OF DEPOSIT (9.2%) (a) Interest rate (%) Maturity date Principal amount Value Australia & New Zealand Banking Group, Ltd. (Australia) 0.220 9/3/13 $22,500,000 $22,500,000 Bank of America NA 0.190 7/22/13 7,400,000 7,400,000 Bank of Montreal/Chicago, IL (Canada) 0.170 9/23/13 9,900,000 9,900,000 Bank of Nova Scotia/Houston FRN 0.623 9/17/13 5,500,000 5,503,777 Canadian Imperial Bank of Commerce/New York, NY FRN (Canada) 0.423 9/16/13 6,500,000 6,502,799 Citibank, NA 0.180 8/1/13 7,500,000 7,500,000 JPMorgan Chase Bank NA 0.250 9/18/13 6,360,000 6,360,000 Nordea Bank Finland PLC/New York 0.250 9/12/13 19,525,000 19,525,000 Royal Bank of Canada/New York, NY FRN (Canada) 0.303 6/24/14 14,350,000 14,350,000 Svenska Handelsbanken/New York, NY (Sweden) 0.255 7/15/13 14,750,000 14,750,200 Toronto-Dominion Bank/NY (Canada) 0.305 7/19/13 8,000,000 8,000,299 Toronto-Dominion Bank/NY FRN (Canada) 0.276 10/21/13 12,500,000 12,500,000 Total certificates of deposit (cost $134,792,075) SHORT-TERM INVESTMENT FUND (4.0%) (a) Shares Value Putnam Money Market Liquidity Fund 0.06% (AFF) 58,000,000 $58,000,000 Total short-term investment fund (cost $58,000,000) U.S. GOVERNMENT AGENCY OBLIGATIONS (3.1%) (a) Interest rate (%) Maturity date Principal amount Value Federal Home Loan Bank sr. unsec. bonds 0.170 9/20/13 $14,900,000 $14,899,835 Federal Home Loan Bank unsec. bonds 0.400 7/9/13 7,000,000 7,000,382 Federal Home Loan Mortgage Corp. unsec. notes, MTN 0.130 2/7/14 14,570,000 14,568,410 Federal National Mortgage Association unsec. notes 0.500 8/9/13 9,000,000 9,003,298 Total U.S. government agency obligations (cost $45,471,925) U.S. TREASURY OBLIGATIONS (2.8%) (a) Yield (%) Maturity date Principal amount Value U.S. Treasury Bills 0.153 6/26/14 $7,500,000 $7,488,375 U.S. Treasury Bills 0.147 1/9/14 18,100,000 18,085,520 U.S. Treasury Bills 0.137 6/26/14 7,500,000 7,489,500 U.S. Treasury Bills 0.129 8/22/13 7,300,000 7,298,629 Total u.s. treasury obligations (cost $40,362,024) CORPORATE BONDS AND NOTES (1.4%) (a) Interest rate (%) Maturity date Principal amount Value HSBC Bank PLC 144A sr. unsec. notes (United Kingdom) 1.625 8/12/13 $3,490,000 $3,495,197 Toronto-Dominion Bank (The) sr. unsec. unsub. notes FRN, Ser. MTN (Canada) 0.456 7/26/13 1,700,000 1,700,269 Wachovia Corp. sr. unsec. notes MTN, Ser. G 5.700 8/1/13 3,803,000 3,820,278 Wells Fargo Bank, NA sr. unsec. notes FRN, Ser. MTN (M) 0.323 7/15/19 11,000,000 11,000,002 Total corporate bonds and notes (cost $20,015,746) TIME DEPOSITS (1.4%) (a) Interest rate (%) Maturity date Principal amount Value Australia & New Zealand Banking Group, Ltd. (Cayman Islands) 0.080 7/1/13 $20,000,000 $20,000,000 Total time deposits (cost $20,000,000) TOTAL INVESTMENTS Total investments (cost $1,497,511,372) (b) Key to holding's abbreviations FRN Floating Rate Notes: the rate shown is the current interest rate at the close of the reporting period LOC Letter of Credit MTN Medium Term Notes TRAN Tax Revenue Anticipation Notes VRDN Variable Rate Demand Notes, which are floating-rate securities with long-term maturities, that carry coupons that reset every one or seven days. The rate shown is the current interest rate at the close of the reporting period. Notes to the fund's portfolio Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from October 1, 2012 through June 30, 2013 (the reporting period). Within the following notes to the portfolio, references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures , references to “Putnam Management” represent Putnam Investment Management, LLC, the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “OTC”, if any, represent over-the-counter. (a) Percentages indicated are based on net assets of $1,467,099,986. (RAT) The Moody's, Standard & Poor's or Fitch ratings indicated are believed to be the most recent ratings available at the close of the reporting period for the securities listed. Ratings are generally ascribed to securities at the time of issuance. While the agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings do not necessarily represent what the agencies would ascribe to these securities at the close of the reporting period. Securities rated by Putnam are indicated by “/P.” Securities rated by Fitch are indicated by “/F.” The rating of an insured security represents what is believed to be the most recent rating of the insurer's claims-paying ability available at the close of the reporting period, if higher than the rating of the direct issuer of the bond, and does not reflect any subsequent changes. Security ratings are defined in the Statement of Additional Information. (b) The aggregate identified cost on a financial reporting and tax basis is the same. (AFF) Affiliated company. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. Transactions during the period with Putnam Money Market Liquidity Fund, which is under common ownership and control, were as follows: Name of affiliate Market value at the beginning of the reporting period Purchase cost Sale proceeds Investment income Market value at the end of the reporting period Putnam Money Market Liquidity Fund * $171 $58,000,000 $171 $11,674 $58,000,000 * Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management. (M) The security's effective maturity date is less than one year. Debt obligations are considered secured unless otherwise indicated. 144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The dates shown on debt obligations are the original maturity dates. DIVERSIFICATION BY COUNTRY Distribution of investments by country of risk at the close of the reporting period, excluding collateral received, if any (as a percentage of Portfolio Value): United States 75.8% Canada 7.2 United Kingdom 4.0 Japan 3.3 Australia 3.0 Switzerland 1.9 Norway 1.5 Sweden 1.5 Cayman Islands 1.3 Hong Kong 0.5 Total 100.0% Security valuation: The valuation of the fund’s portfolio instruments is determined by means of the amortized cost method (which approximates market value) as set forth in Rule 2a-7 under the Investment Company Act of 1940. The amortized cost of an instrument is determined by valuing it at its original cost and thereafter amortizing any discount or premium from its face value at a constant rate until maturity and is generally categorized as a Level 2 security. Investments in open-end investment companies (excluding exchange traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares. Repurchase agreements: The fund, or any joint trading account, through its custodian, receives delivery of the underlying securities, the market value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. Collateral for certain tri-party repurchase agreements is held at the counterparty’s custodian in a segregated account for the benefit of the fund and the counterparty. Putnam Management is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. In the event of default or bankruptcy by the other party to the agreement, retention of the collateral may be subject to legal proceedings. ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows: Level 1: Valuations based on quoted prices for identical securities in active markets. Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement. The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period: Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Asset-backed commercial paper $— $186,191,453 $— Certificates of deposit — 134,792,075 — Commercial paper — 331,076,680 — Corporate bonds and notes — 20,015,746 — Municipal bonds and notes — 291,370,469 — Repurchase agreements — 370,231,000 — Short-term investment fund 58,000,000 — — Time deposits — 20,000,000 — U.S. government agency obligations — 45,471,925 — U.S. treasury obligations — 40,362,024 — Totals by level $— For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com Item 2. Controls and Procedures: (a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 3. Exhibits: Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Putnam Money Market Fund By (Signature and Title): /s/ Janet C. SmithJanet C. SmithPrincipal Accounting OfficerDate: August 29 2013 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ Jonathan S. HorwitzJonathan S. HorwitzPrincipal Executive OfficerDate: August 29, 2013 By (Signature and Title): /s/ Steven D. KrichmarSteven D. KrichmarPrincipal Financial OfficerDate: August 29, 2013

Exhibit 32.1 Section 1350 Certification In connection with the quarterly report of Sunwin Stevia International, Inc. (the “Company”) on Form 10-Q for the period ended October 31, 2014 as filed with the Securities and Exchange Commission (the “Report”), I, Dongdong Lin, Chief Executive Officer of the Company, and I, Fanjun Wu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. December 22, 2014 /s/ Dongdong Lin Dongdong Lin, Chief Executive Officer December 22, 2014 /s/ Fanjun Wu Fanjun Wu, Chief Financial Officer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

FORM 6-K SECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549 Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of
 athe Securities Exchange Act of 1934 For period endingMarch 2015 GlaxoSmithKline plc (Name of registrant)
 980 Great West Road, Brentford, Middlesex, TW8 9GS (Address of principal executive offices)
 Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F
 Form 20-F x Form 40-F
 
 Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 Yes No x  Issued: 2 March 2015, London UK - LSE Announcement GSK completes major three-part transaction with Novartis £4 billion to be returned to shareholders Q1 Results & Investor Meeting to be held on 6 May 2015 GlaxoSmithKline plc (LSE/NYSE: GSK) announces that its three-part transaction with Novartis has completed today. As a result of this transaction, GSK has acquired Novartis's global Vaccines business (excluding influenza vaccines) for an initial cash consideration of $5.25 billion; has created a new world-leading Consumer Healthcare joint venture with Novartis in which GSK will have majority control and an equity interest of 63.5%; and has divested its Oncology business for an aggregate cash consideration of $16 billion. The net after tax proceeds of the transaction received by GSK today are estimated to be $7.8 billion. This reflects the full consideration of $16 billion paid today by Novartis for GSK's Oncology portfolio and related assets. Under the terms of the transaction, up to $1.5 billion of that purchase price may have to be returned to Novartis if certain conditions relating to the COMBI-d Trial are not met. Following the positive results from this study announced on 6 February 2015, GSK believes these conditions will be satisfied. As a result, following today's completion, GSK plans to use the transaction proceeds to fund the full amount of the previously announced capital return of £4 billion to shareholders. Subject to shareholder approval, the capital return is expected to be implemented through a B share scheme, which will provide capital treatment for all UK tax-resident shareholders. Further details on the capital return will be sent to shareholders in due course. In light of the timing of closing the transaction, the Company intends to report its first quarter results for 2015 and hold an Investor Meeting on 6 May 2015, at which it will provide 2015 earnings guidance and profile the medium and long-term shape and opportunities for the enlarged Group. Sir Andrew Witty, CEO, GSK said: "Completion of this transaction represents a major step forward in the Group's strategy to create a stronger and more balanced set of businesses across Pharmaceuticals, Consumer Healthcare and Vaccines. We will now be focused on rapidly implementing our integration plans to realise the growth and synergy opportunities we see in the new Consumer Healthcare and Vaccines businesses. We look forward to sharing more details of this with our shareholders on 6 May." GSK - one of the world's leading research-based pharmaceutical and healthcare companies - is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For further information please visit www.gsk.com.
 GSK enquiries: UK Media enquiries: David Mawdsley +44 (0) 20 8047 5502 (London) Simon Steel +44 (0) 20 8047 5502 (London) Sarah Spencer +44 (0) 20 8047 5502 (London) US Media enquiries: Stephen Rea +1 (Philadelphia) Sarah Alspach +1 (Washington, DC) Mary Anne Rhyne +1 (North Carolina) Analyst/Investor enquiries: Ziba Shamsi +44 (0) 20 8047 5543 (London) Tom Curry + 1 (Philadelphia) Gary Davies +44 (0) 20 8047 5503 (London) James Dodwell +44 (0) 20 8047 2406 (London) Jeff McLaughlin +1 (Philadelphia) Additional information Whilst completion of the transaction with Novartis has taken place today, there are certain jurisdictions in which the transfer of relevant assets to or by GSK will only take place following receipt of additional market-specific approvals or other matters relevant to those jurisdictions. The arrangements in relation to these jurisdictions are considered immaterial in the context of the transaction. Terms defined in GSK's shareholder circular of 20 November 2014 have the same meaning where used in this announcement.
 Information regarding forward-looking statements This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding GSK's intentions, beliefs or current expectations concerning, among other things, GSK's business, results of operations, financial position, prospects, growth, strategies and the industry in which it operates as well as those of the Novartis businesses that are the subject of the transaction. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the actual results of GSK's operations and financial position, and the development of the markets and the industry in which GSK operates, may differ materially from those described in, or suggested by, the forward-looking statements contained in this announcement. The same applies in respect of the Novartis Businesses that are the subject of the transaction. In addition, even if the results of operations, financial position and the development of the markets and the industry in which GSK operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation, currency fluctuations, changes in its business strategy, political and economic uncertainty and other factors discussed in this announcement. Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this announcement speak only as of their respective dates, reflect GSK's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to GSK's operations, results of operations and growth strategy. You should specifically consider the factors identified in this document, in addition to the risk factors that may affect GSK's operations which are described under "Risk Factors" in the Company's 2014 Annual Report on Form 20-F, which could cause actual results to differ before making any decision in relation to the Transaction as well as those of the Novartis businesses that are the subject of the transaction. Subject to the requirements of the FCA, the London Stock Exchange, the Listing Rules and the Disclosure and Transparency Rules (and/or any regulatory requirements) or applicable law, GSK explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in GSK's expectations or to reflect events or circumstances after the date of this announcement. Registered in England & Wales: No. 3888792 Registered Office: 980 Great West Road Brentford, Middlesex TW8 9GS SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.
 GlaxoSmithKline plc (Registrant)
 Date:March 02,2015 By:VICTORIA WHYTE VictoriaWhyte Authorised Signatory for and on behalf of GlaxoSmithKline plc

EXECUTION VERSIONExhibit 10.31   HOTEL PURCHASE AND SALE AGREEMENT     dated as of December 13, 2017   by and between   RP/HH ROSSLYN HOTEL OWNER, LP   as Seller,     and     SOTHERLY HOTELS LP   as Purchaser           Hyatt Centric Arlington               THIS HOTEL PURCHASE AND SALE AGREEMENT (this “Agreement”) is dated as of the 13th day of December, 2017 (the “Effective Date”), by and between RP/HH Rosslyn Hotel Owner, LP, a Delaware limited partnership (“Seller”), and Sotherly Hotels LP, a Delaware limited partnership and its permitted assigns (“Purchaser”).  Seller and Purchaser are sometimes referred to herein individually as a “Party” and collectively as the “Parties.” RECITALS: WHEREAS, Seller is the owner of a leasehold interest in the hotel property commonly known as the Hyatt Centric Arlington, located at 1325 Wilson Boulevard in Arlington County, Virginia (the “Hotel”), and more particularly described on Exhibit A hereto. WHEREAS, Seller desires to sell, and Purchaser desires to purchase, the Property, as defined below, in exchange for cash, pursuant and subject to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants, conditions and agreements contained herein, and other acknowledged, the Parties hereby agree as follows: BASIC INFORMATION: A.Basic Terms.  The following defined terms shall have the meanings set forth below:   Seller: RP/HH Rosslyn Hotel Owner, LP, a Delaware limited partnership     Purchaser: Sotherly Hotels LP, a Delaware limited partnership and its permitted assigns   Purchase Price:$81,000,000     Deposit: $2,000,000 to be deposited in accordance with Section 2.2(a) (including any and all interest thereon, collectively, the “Deposit”).  The Deposit is to be delivered, maintained and released in accordance with Section 2.2(c).       Title CompanyMulti-State Title Agency, LLC And Escrow Agent301 East Fourth Street Great American Tower, Suite 3300 Cincinnati, Ohio 45202 Attention:Lynn O. Hughes Telephone:(513) 651-6498 Facsimile:(513) 651-6777 Email:[email protected]   Effective Date:The first date shown in the first paragraph on Page 1 of this Agreement.   Due Diligence   Period: The period starting on the Effective Date and ending at 11:59 p.m. Eastern Standard Time on January 12, 2018.     Closing Date: February 12, 2018, subject to extension as provided herein.   B.Notice Addresses.The following are notice addresses for purposes of Section 10.3 of this Agreement: Purchaser:SOTHERLY Hotels Inc. 410 West Francis Street Williamsburg, Virginia 23185 Attention:Andrew M. Sims Telephone:(757) 229-5648 Email:[email protected]   copy to:Frost Brown Todd LLC 400 West Market Street, Suite 3200 Louisville, Kentucky 40202 Attention:Geoffrey White, Esq. Telephone:(502) 568-0202 Email:[email protected]   Seller:RP/HH Rosslyn Hotel Owner, LP c/o Fortress Credit Opportunities I LP 1345 Avenue of the Americas, 46th Floor New York, NY 10105 Attention:Constantine Dakolias Telephone:(202) 798-6050 Email:[email protected]   copy to:Fortress Investment Group Attention: Michael Polidoro 2     Telephone:(212) 515-7792 Email:[email protected]   copy to:Fortress Investment Group 5221 N. O'Connor Boulevard, Suite 700 Irving, TX 75039 Attention: Scott Tolbert Telephone:(972) 532-4313 Email:[email protected]   copy to:Andrews Kurth Kenyon LLP 450 Lexington Avenue New York, New York 10017 Attention:Jack P. Flanagan Telephone:(212) 850-2855 Email:[email protected]   C.Closing Costs.Closing costs shall be allocated and paid as follows: Cost Responsible Party Premium for standard form Title Policy required to be delivered pursuant to Section 7.1(d) Purchaser Premium for any upgrade of Title Policy for extended or additional coverage and any endorsements desired by Purchaser, any inspection fee charged by the Title Company, tax certificates, municipal and utility lien certificates, and any other Title Company charges Purchaser Costs of any revisions, modifications, updates or recertifications of/to the Existing Survey Purchaser Costs for UCC Searches Purchaser Recording fees and grantee’s recordation taxes Purchaser Grantor’s Taxes and Regional Congestion Relief Fee Seller Any escrow fee charged by Escrow Agent for holding the Deposit or conducting the Closing Purchaser ½ Seller ½       ARTICLE 1 PURCHASE AND SALE 1.1Purchase and Sale.  Subject to the terms and conditions of this Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, all of the following items (collectively, the “Property”): (a)Seller’s right, title and interest in and to the leasehold interest in and under that certain Indenture of Lease dated as of June 1, 1973, as amended by that certain First Amendment to Agreement of Lease dated as of September 9, 1975, as further amended by that that certain Second Amendment to Agreement of Lease dated as of April 1, 1976, as further 3     amended by that certain Third Amendment to Agreement of Lease dated as of June 30, 1976, as assigned by that certain Assignment of Lease dated as of March 5, 1984, as further amended by that certain Landlord's Consent Agreement dated as of September 30, 1997 (the “Consent”), as further amended by that certain Fourth Amendment to Agreement of Lease dated as of October 1, 1997, and as assigned by that certain Assignment and Assumption of Ground Lease dated as of December 1, 2006 (as amended, the “Ground Lease”) as to the land described on Exhibit A hereto with all rights, privileges and easements appurtenant thereto (the “Real Property”); (b)Seller’s right, title, and interest in and to the Hotel and all other buildings, improvements, and other items of real estate located on the Real Property (collectively, the “Improvements,” and together with the Real Property, the “Premises”); (c)Seller’s right, title, and interest in and to all of the following (collectively, the “Personal Property”): (i)items of tangible personal property consisting of all furniture, fixtures, equipment, machinery, and other tangible personal property located at the Hotel and owned or leased by Seller as of the Closing Date, including all inventories of food and beverage in opened or unopened containers and all in-use or stock of linens, china, glassware, silver, uniforms, towels, paper goods, stationery, soaps, cleaning supplies and the like with respect to the Hotel on hand as of the Closing Date, but specifically excluding (x) any and all tangible or intangible personal property and/or trade fixtures listed on Schedule 1.1(c) hereto and owned or leased by tenants, and/or occupants, concessionaires, licensees, guests, or employees of Seller, Seller’s existing hotel brand franchisor (“Existing Franchisor”), or Highgate Hotels, L.P. (“Hotel Manager”) or any of their respective affiliates, (y) any and all alcoholic beverages, to the extent that any applicable law prohibits the transfer of alcoholic beverages from Seller to Purchaser, and (z) except as contemplated by Section 3.1 hereof, any and all cash-on-hand, FF&E reserves, and petty cash funds; and (ii)all intangible personal property owned or possessed by Seller and used exclusively in connection with the ownership or operation of the Hotel (and not in connection with any other hotel or property), including, without limitation, (1) utility and development rights and privileges, (2) restaurant names and other trade names and general intangibles pertaining to the Real Property and the Personal Property related to the Hotel (e.g., phone numbers, internet addresses and domain names); including, without limitation, the marks “Cityhouse” and “Cityhouse Stylized” (the “Restaurant Marks”) as such marks are described in that certain First Amended and Restated Trademark License Agreement, dated as of 2014, by and between Hotel Manager and Seller (the “Restaurant Marks Agreement”) in the event Purchaser elects to assume the same in accordance with Section 5.9 hereof, (3) the share of the final night’s room revenue for the Hotel of registered guests (who have not checked out and who were occupying rooms as of the Adjustment Point, as defined herein), including any sales taxes, room taxes or other taxes thereon (the “Rooms Ledger”) determined pursuant to Article 3, (4) reservations and agreements made or entered into prior to Closing for rooms at the Hotel to be utilized on or after the Closing Date, or for catering services or other hotel services to be provided on or after the Closing Date at or by the Hotel, in each case, consistent with Seller’s historical operations (any such reservations and agreements, the “Advance Bookings”), and (5) 4     all licenses, permits, concessions and approvals required by any Governmental Authority, as defined herein, or otherwise appropriate with respect to the construction, ownership, operation, leasing, maintenance, or use of the Property or any part thereof (the “Authorizations”), but specifically excluding any and all liquor licenses and permits or rights relating to the sale of liquor at the Hotel (subject to Section 1.2), any proprietary information concerning Seller, Hotel Manager or any of their respective affiliates or their properties or other assets (e.g., sales training manuals and interfacing software), and any software licenses for business center computers; (d)Seller’s interest as lessor pursuant to all leases, concessions, license agreements, and occupancy agreements with respect to the Property under which any tenants (other than registered guests) or concessionaires occupy space at the Property (collectively, the “Leases”) that are in effect on the Closing Date and that Purchaser elects to assume and treat as an Assumed Lease in accordance with Section 5.2 hereof; and (e)Seller’s right, title, and interest in all written service, supply, trash removal, maintenance, construction, capital improvement and other similar contracts (including any agreements pertaining to facilities not located at the Property, but which are required and presently used for the operation of the Property) in effect with respect to the Property related to the construction, operation, or maintenance of the Property (collectively, the “Contracts”) that Purchaser elects to assume and treat as an Assumed Contract in accordance with Section 5.2, specifically excluding any management agreements, hotel franchise agreements, trademark agreements, and any and all contracts or rights relating to the sale of liquor at the Hotel.   Notwithstanding anything contained in this Section 1.1 to the contrary, the following is specifically excluded from the Property, and none of the following shall be transferred to Purchaser: (a) Seller’s cash in bank accounts and invested with financial or other institutions, (b) any accounts receivable accruing prior to the Adjustment Point (collectively, the “Accounts Receivable”), (c) any credit card merchant numbers of Seller, (d) except as contemplated by Section 4.4 hereof, any insurance policies related to the Property including, without limitation, general liability, operational liability, business interruption, fire and casualty policies, and all proceeds and claims thereunder, (e) any asset management services provided for the benefit of Seller or the Property by any affiliate of Seller, (f) any refunds (including, without limitation, refunds of real estate taxes) attributable to the period prior to the Closing Date, (g) the items described in subsection (x), (y), and (z) of Section 1.1(c)(i), and (h) any other item expressly excluded from the transactions contemplated herein as provided in this Agreement. 1.2Liquor License.  Seller shall make commercially reasonably efforts to cooperate with Purchaser’s application for a liquor license from the Virginia Alcoholic Beverage Control Board.  Notwithstanding the foregoing, upon prior notice delivered to Seller on or before the expiration of the Due Diligence Period, Purchaser shall have the option to require Seller countersign the Application for Continuation of Operations Permit (the “Application”) provided by the Virginia Department of Alcoholic Beverage Control (“VA ABC”) for the purpose of obtaining the General Continuation of Operations Permit providing for the continued purchase, sale and service of alcoholic beverages at the Property by Purchaser after the Closing, which Seller shall provide within five (5) Business Days after notice thereof from Purchaser.  To the extent Purchaser makes such election, Purchaser shall countersign and deliver (providing copies 5     therewith to Seller) such completed Application to the VA ABC at least three (3) weeks prior to Closing.  Thereafter, Seller shall have no liability or responsibility for transfer of the liquor license.  Purchaser shall indemnify and hold Seller, Hotel Manager or the applicable licensee/manager from any and all liabilities, damages, or claims, costs, unpaid operating expenses, penalties, citations, enforcement actions, losses, or expenses (including reasonable attorneys’ fees) incurred by Seller from any violations of the liquor license arising from and after the Closing, except to the extent pertaining to the period prior to the Closing date, which shall survive Closing, except to the extent such liabilities, damages, or claims, costs, penalties, citations, enforcement actions, losses, or expenses arise from the gross negligence or willful misconduct of Seller, Hotel Manager or the applicable licensee/manager. ARTICLE 2 PURCHASE PRICE 2.1Purchase Price.  The Purchase Price (as such amount may be adjusted as provided for herein) shall be payable in cash by wire transfer of immediately available funds (made in accordance with the wiring instructions provided by Escrow Agent) to a bank account designated by Title Company, in its capacity as Escrow Agent as further provided herein. 2.2Deposit.   (a)Payment of Deposit.  Within two (2) Business Days after the Effective Date, Purchaser shall deliver to Escrow Agent the Deposit, which will be held in accordance with the terms and conditions as set forth herein and on Exhibit I. The Deposit shall be paid in cash by wire transfer of immediately available funds (made in accordance with the wiring instructions provided by the Escrow Agent) to the Escrow Agent.  As used in this Agreement, the term “Business Day” means any day of the year, other than Sunday, Saturday or any other day that the Federal Reserve Bank of Richmond, Virginia recognizes as a federal holiday. (b)Intentionally Omitted. (c)Disposition of Deposit.  If the Closing occurs, the Deposit shall be applied as a credit to the Purchase Price at Closing.  In all other cases, the Deposit shall be disbursed in accordance with the terms of this Agreement. The provisions of this Section 2.2(c) shall survive any termination of this Agreement. Purchaser hereby acknowledges and agrees that after the expiration of the Due Diligence Period, if Purchaser has not terminated this Agreement, the Deposit shall be non-refundable to Purchaser, except as specifically set forth herein. 2.3Allocation of Purchase Price.  The Parties shall use reasonable efforts to agree, prior to Closing Date, upon an allocation of the Purchase Price among the Real Property, the Improvements and the Personal Property for federal, state and local tax purposes.  If the Parties cannot agree upon such allocation of the Purchase Price, each Party shall file federal, state and local tax returns based on each Party’s own determination of the proper allocation of the Purchase Price, each bearing its own consequences with respect to any discrepancies. 6     ARTICLE 3 APPORTIONMENTS AND OTHER ADJUSTMENTS 3.1General.  All items of revenue and expense with respect to the Property, and applicable to the period of time before and after Closing Date, shall be allocated between Seller and Purchaser as provided herein. Pursuant to such allocation, Seller shall be entitled to all revenue and shall be responsible for all expenses for the period of time up to 11:59 P.M. (Eastern Standard Time) on the day immediately preceding the Closing Date (the “Adjustment Point”), and Purchaser shall be entitled to all revenue and shall be responsible for all expenses for the period of time after the Adjustment Point.  Such adjustments shall be shown on the closing statement or settlement statement prepared by the Escrow Agent at the Closing (the “Closing Statement”).  All prorations shall be made on the basis of the actual number of days in the year and month in which the Closing occurs or in the period of computation.  Without limiting the generality of the foregoing, the following items shall be allocated and prorated as of the Adjustment Point: (a)Real Estate Taxes, Personal Property Taxes and Assessments.  Real estate taxes, personal property taxes, and assessments (and refunds thereof) on the basis of the fiscal year or fiscal years for which assessed.  If the Closing shall occur before a new real property tax rate, personal property tax rate, or assessed valuation is fixed, the apportionment of such tax at Closing shall be upon the basis of the old tax rate for the preceding fiscal year applied to the latest assessed valuation. Promptly after the actual real estate taxes and personal property taxes have been fixed, the apportionment of taxes shall be recomputed and Seller or Purchaser, as the case may be, promptly upon demand shall make a payment to the other based upon the recomputed apportionment. In addition, if any real property assessment or personal property assessment affects the Hotel as of the Closing Date and such real property assessment or personal property assessment is payable in annual or other installments (whether at the election of Seller or otherwise), only the installment relating to, or payable over, the fiscal period of the assessing authority, part of which is included within the period prior to the Closing Date and part of which is included in the period after the Closing Date, shall be apportioned between Seller and Purchaser as of the Adjustment Point.  The provisions of this paragraph shall survive the Closing.   (b)Utilities.  Utilities and fuel charges, including, without limitation, water, sewer, steam, electricity, gas and oil charges, on the basis of meter readings made as contemporaneously as possible to the Adjustment Point (or, if not possible, on the basis of the most recent previous bills and readings); provided, that upon the taking of subsequent meter readings that are closer in time to the Adjustment Point, then such adjustment shall be recalculated based upon the subsequent readings, and Seller or Purchaser, as the case may be, promptly upon demand, shall make any necessary compensating payments to the other Party. (c)Escrows and Deposits.  All escrows or similar deposits, if any, made by Seller as security under any public service contracts or other Contracts which will remain on deposit for the benefit of Purchaser after the Closing to the extent such escrows or similar deposits are assigned to Purchaser for which Seller will receive a credit at Closing. 7     (d)Ground Lease Payments.  All amounts prepaid, accrued or due and payable under the Ground Lease shall be prorated as of the Adjustment Point.  Seller shall be given a credit on the closing statement for any unapplied security deposit held by the ground lessor. (e)Rents.  Rents, including prepaid Rents and unpaid Rents as and when collected.  As used in this Agreement, “Rents” shall exclude any amounts owed under the Ground Lease and shall include, without limitation, (A) fixed monthly rents and other fixed charges payable by tenants and occupants (including former tenants and occupants) of the Premises pursuant to the Leases relating to the Hotel that are assigned to Purchaser, (B) percentage or overage rents and other charges and amounts payable by tenants based upon their sales or receipts at or from the Hotel, (C) amounts payable by tenants on account of real estate taxes and assessments or increases therein, operating costs or increases therein, insurance charges and the like, and (D) rents or other charges payable by tenants for services of any kind provided to them (including, without limitation, the furnishing of heat, electricity, gas, water, other utilities and air-conditioning and the construction of store enclosures, capital improvements or repairs or other items) for which a separate charge is made. (f)Construction Contracts.  Purchaser shall receive a credit at Closing for the full amount of any progress payments which have not yet been paid by Seller as vendee under the contracts listed on Schedule 3.1(f), subject to any claims Seller is contesting in good faith (the “Construction Contracts”). (g)Accounts Receivable.  Seller shall receive a credit at Closing for all Accounts Receivable.  After Closing, Purchaser shall be responsible for and have the right to collect and apply any such Accounts Receivable.   (h)Security Deposits.  Any security deposits held by Seller on the Closing Date (together with the interest, if any, earned thereon for the account of any tenant) shall be delivered to Purchaser or credited in full to Purchaser against the Purchase Price. (i)Contracts.  Fees and regular charges payable under, or prepaid amounts under, the Contracts to which Seller is a party and relating to Seller’s operations at the Hotel if such Contracts are being assigned to Purchaser and are to continue after the Closing.   (j)Annual Fees for Authorizations.  Annual fees for Authorizations, if any, on the basis of the fiscal year for which levied, if the rights with respect thereto continue for the benefit of Purchaser following the Closing. (k)Rooms Ledger.  The Rooms Ledger for the Hotel for registered guests (who have not checked out and were occupying rooms as of the Adjustment Point), including any sales taxes, room taxes, occupancy taxes or other taxes thereon for nights prior to the Adjustment Point shall be credited to Seller at Closing. The room’s revenue and applicable taxes for the night preceding Closing shall be apportioned equally between Purchaser and Seller. (l)Food and Beverage Revenue; Vending Machine Revenue.  All revenue in connection with (i) food and beverage services, if any, at the Hotel (including amounts due 8     from any registered guest of the Hotel), and (ii) vending machines located at the Hotel. All vending machine proceeds shall be counted as close to the Adjustment Point as possible. (m)Meeting Room Revenue.  To the extent held by (or for the account of) Seller, all revenue generated from meeting rooms at the Hotel. (n)Sundry Shop Revenue. To the extent held by (or for the account of) Seller, all revenue generated from the sundry shop at the Hotel. (o)Advance Bookings and Advance Expenses.  Purchaser shall receive a credit at Closing for revenue received by Seller prior to the Adjustment Point for Advance Bookings made during Seller’s period of ownership of the Property. Seller shall receive a credit at Closing for prepaid expenses for goods or services actually paid (including travel agency or travel service commissions) for rooms at the Hotel to be utilized on or after the Closing. (p)Petty Cash.  All petty cash funds in connection with the guest operations at the Hotel, for which Seller shall receive a credit at Closing in the amount of the total of all petty cash funds on hand and transferred to Purchaser at Closing. (q)[Intentionally Omitted] (r)Sales Taxes.  Seller shall be responsible for any and all sales taxes due prior to the Closing and indemnifies and holds Purchaser harmless for any failure to pay or remit any such taxes to the appropriate governmental authority. Purchaser shall be responsible for any sales taxes due after Closing and indemnifies and holds Seller harmless from any failure to pay or remit such taxes to the appropriate governmental authority.  This Section survives Closing. (s)Restaurants, Bars and Banquets.  Seller shall close out the transactions in the restaurants and bars and any banquets in the Hotel that remain open after Adjustment Point as of such time as such facilities are closed on the Closing Date and retain all monies collected as of such closing, and Purchaser shall be entitled to any monies collected from the restaurants and bars and any banquets thereafter. (t)Trade Payables.  Except to the extent an adjustment or proration is made under another subsection of this Section 3.1, (i) Seller shall pay in full all amounts payable to vendors or other suppliers of goods or services to the Property (the “Trade Payables”) for only such goods or services which have been delivered to the Hotel prior to Closing, and (ii) Purchaser shall be responsible for the amount of such Trade Payables for items not yet delivered to the Hotel and incurred consistent with Seller’s historical operations and Purchaser shall pay all such Trade Payables accrued (but not due and payable) as of the Closing Date when such Trade Payables become due and payable; provided, however, Seller and Purchaser shall include any known amounts in the closing statements and shall true up the amount for any Trade Payables and pay any deficiency in the original amounts due or paid as otherwise outlined herein promptly upon receipt of the actual bill for such goods or services.  The true up obligation in this Section 3.1(r) shall survive the Closing. 9     (u)Other Items.  Any other operating expenses and any other items relating to the Property which are ordinarily adjusted between sellers and purchasers of commercial real estate comparable to the Property. 3.2Accounting.  Except as otherwise expressly provided in this Agreement, all apportionments and adjustments shall be made in accordance with the Uniform System of Accounts for the Lodging Industry, Eleventh Edition, as published by the Educational Institute, and to the extent not inconsistent therewith, generally accepted accounting principles.  The computation of the adjustments shall be jointly prepared by Seller and Purchaser. 3.3Employees. (a)Compensation.  Seller shall cause Hotel Manager to terminate all employees of the Hotel (collectively, “Employees”), except for those employees that Purchaser elects to retain or any employee working for the Hotel Manager in accordance with Section 3.3(c) below, as of or before Closing, and Seller shall be responsible for and shall cause the payment of, on or before the Closing Date, any existing liability to or with respect to Employees having accrued through the Adjustment Point, including but not limited to liability for payment of all Employees’ wages, bonuses, commissions, and other forms of compensation or benefits earned by and due and owing to Employees as of the Adjustment Point, together with F.I.C.A., unemployment and other taxes and benefits due from any employer of such Employees, payment of all costs and expenses associated with accrued but unpaid salary, earned but unpaid vacation pay, accrued but unused sick leave, accrued but unearned vacation pay, pension and welfare benefits, the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) benefits, employee fringe benefits, employee termination payments or any other employee benefits due to Employees as of the Adjustment Point. (b)WARN Act.  Seller agrees that in no event shall Purchaser have any liability pursuant to the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C. § 2101 et seq. or any other similar federal, state or local law or regulation (the “WARN Act”) as a result of the termination of employment of the Employees by Hotel Manager as of the Closing.  Seller alone shall be responsible for giving such notices as may be required by the WARN Act and shall be solely liable for the payment of any amounts that may become due under the WARN Act for termination of Employees as of the Closing Date. Seller shall indemnify, defend and hold Purchaser harmless from and against any liability, loss, damage, fines, penalty, back pay, back benefits, costs or expenses (including, without limitation, attorney’s fees and expenses) that may result to Purchaser based on Seller’s failure to comply with this Section 3.3(b). If the WARN Act is applicable following the Closing and unrelated to the termination of employees as of the Closing Date, however, Purchaser shall comply with all provisions of the WARN Act with respect to all Employees and shall be solely liable for the payment of any amounts that may become due under the WARN Act.  If the WARN Act is applicable following the Closing, as part of its obligations under this Section 3.3(b), Purchaser shall indemnify, defend and hold Seller and Hotel Manager harmless from and against any liability, loss, damage, fines, penalty, back pay, back benefits, costs or expenses (including, without limitation, attorneys’ fees and expenses) that may result to Seller or Hotel Manager based on Purchaser’s failure to comply with this Section 3.3(b). 10     (c)Solicitation of Employees. None of Purchaser, Purchaser’s Representatives, any entity in which Purchaser owns a direct or indirect interest, or any person or entity engaged by Purchaser to manage or operate the Hotel, shall solicit for employment any employees of Hotel Manager or any of its affiliates (including corporate or regional employees).   3.4Post-Closing Adjustments.  Other than with respect to taxes and assessments, which shall be governed by Section 3.1(a) hereof, to the extent that any of the prorations made on the Closing Date pursuant to this Article 3 are based upon estimates of payments to be made to and/or expenses to be paid by Purchaser or Seller subsequent to the Closing Date which later prove inaccurate or otherwise are determined by either Party to have been erroneously made, and the aggrieved Party has notified the other Party hereto of the specific inaccuracy or other error on or before that date which is ninety (90) days after the Closing Date, Seller and Purchaser agree to adjust such prorations promptly upon receipt by Seller or Purchaser, as the case may be, of bills or other documentation setting forth the actual and/or correct amount of such payments or expenses. Notwithstanding the foregoing, Seller and Purchaser agree to cooperate in good faith to determine any pre-closing estimates as close as possible to their expectations about the actual items, with a view toward minimizing as much as practical the need for post-closing adjustments. 3.5Inspection of Books and Records.  For a period of one (1) year subsequent to the Closing Date, Seller and its employees, agents, affiliates and representatives will be entitled to access during business hours on Business Days to examine and audit, at its sole cost and expense, so much of the books and records of Purchaser (or any property manager therefor) as may relate to any items of income or expense or any other items that are the subject of adjustments pursuant to this Agreement in order to verify the proper treatment thereof, or for tax and audit purposes, regulatory compliance, any litigation, and cooperation with governmental investigations upon reasonable prior written notice to Purchaser, and will have the right to make copies of such documents, books and records. 3.6Safe Deposit Boxes.  On the date which is two (2) Business Days prior to the Closing Date, Seller shall cause a notice to be sent to all the Hotel’s guests who have items in the Hotel’s safe/safety deposit boxes advising them of the pending sale of the Hotel and requesting their removal and verification of their property within such boxes on the day which is one (1) day prior to the Closing Date. As part of the Closing, the Parties shall jointly inventory the contents of the safety boxes, and on the Closing Date, Seller shall make available to Purchaser at the Hotel all receipts and agreements in Seller’s possession or control relating to all safe deposit boxes in use at the Hotel, other than safes or lockboxes, if any, located inside individual guest rooms in the Hotel.  From and after the Closing, Seller shall be relieved of any and all responsibility in connection with each said box, and Purchaser shall indemnify and defend Seller and its affiliates and hold Seller harmless from and against any claim, liability, cost or expense (including reasonable attorneys’ fees) incurred by Seller, to the extent relating to items in such safety deposit boxes as of the Closing Date. Seller shall indemnify, defend and hold harmless Purchaser and its affiliates from any other liability, claim, cost or expense (including reasonable attorneys’ fees) to the extent relating to any such safety deposit box arising or attributable to the period prior to the Closing Date. 11     3.7Inventory of Baggage.  The representatives of Seller and of Purchaser shall prepare an inventory of baggage at the Hotel as of the Closing Date (which inventory of baggage shall be binding on all Parties) of (i) all luggage, valises and trunks checked in or left in the care of the Hotel by registered guests then or formerly in the Hotel, (ii) parcels, laundry, valet packages and other property of guests checked or left in the care of the Hotel by registered guests then or formerly in the Hotel (excluding, however, property in Hotel’s safe deposit boxes), and (iii) all items contained in the Hotel’s “lost and found.”  Purchaser shall be responsible from and after the Closing Date for all baggage and other items listed in such inventory of baggage, and Purchaser shall indemnify, defend and hold Seller and its affiliates harmless from and against any claim, liability, cost or expense (including reasonable attorneys’ fees) relating thereto.  Seller shall indemnify, defend and hold harmless Purchaser and its affiliates from any liability, claim cost or expense to the extent relating to guest baggage, package and other property of guests checked or left in the care of the Hotel by registered guests then or formerly in the Hotel arising or attributable to the period prior to the Closing Date and not noted on the inventory provided in this Section 3.7. 3.8Assumption.  At Closing, Purchaser shall assume and honor all (i) Advance Bookings, (ii) liabilities specifically assumed by Purchaser pursuant to this Agreement, (iii) obligations pursuant to the Permitted Exceptions which accrue to the period from and after the Closing Date, and (iv) all other obligations appertaining to the Hotel and the Property arising on or after the Closing Date, to the extent not expressly retained by Seller or otherwise set forth in this Agreement. 3.9Survival.  The provisions of this Article 3 shall survive the Closing. ARTICLE 4 TITLE AND PROPERTY RELATED MATTERS 4.1Delivery of Seller Materials.  To the extent not previously delivered or made available, within five (5) Business Days following the Effective Date, Seller shall deliver to Purchaser copies of the items on Schedule 4.1 hereto (to the extent in Seller’s possession or control). 4.2Title and Survey Review.   (a)Purchaser shall review title to the Property as disclosed by a title commitment for the Property issued by the Title Company, to be obtained by Purchaser (the “Title Commitment”) and Seller’s existing survey (the “Survey”).  No later than five (5) Business Days prior to the expiration of the Due Diligence Period, Purchaser may, at its option, notify Seller in writing of any title matters to which Purchaser objects in Purchaser’s sole discretion (“Purchaser’s Objections”).  Seller shall have the right, but not the obligation (except as to Mandatory Cure Items, as defined below), to attempt to remove, satisfy or otherwise cure any one or more of Purchaser’s Objections prior to Closing.  If Seller gives notice to Purchaser that Seller will cure any one or more of such Purchaser’s Objections prior to Closing, then Seller shall exercise reasonable efforts to cure such Objection(s) to Purchaser’s reasonable satisfaction on or before the Closing Date, and such cure shall be a condition precedent to 12     Purchaser’s obligations under this Agreement.  Seller shall give Purchaser notice of its intent to cure (or not to cure) Purchaser’s Objections (the “Seller’s Title Cure Notice”) on or before the date that is three (3) Business Days after the receipt of Purchaser’s Objections (the “Seller’s Cure Notice Date”); it being understood and agreed that the failure of Seller to give such notice shall be deemed an election by Seller not to cure Purchaser’s Objections (other than Mandatory Cure Items).  If Seller fails to timely give Purchaser the Seller’s Title Cure Notice on or before the Seller’s Cure Notice Date, or if Seller notifies Purchaser in writing on or before the Seller’s Title Cure Notice Date that Seller will not satisfy or remedy any one or more of Purchaser’s Objections (other than the Mandatory Cure Items) prior to Closing, then, in either event, Purchaser shall have the option, exercisable by no later than the expiration of the Due Diligence Period, to either (a) waive the unsatisfied Purchaser’s Objections (other than Mandatory Cure Items), in which event those unsatisfied Purchaser’s Objections shall become Permitted Exceptions (other than Mandatory Cure Items), or (b) terminate this Agreement by the giving of written notice thereof to Seller, in which event, the Deposit shall be refunded to Purchaser and neither party shall have any further rights or obligations hereunder, except for obligations which explicitly survive the termination.  If Purchaser does not timely elect to terminate this Agreement as provided above, then Purchaser shall be deemed to have waived any unsatisfied Purchaser’s Objection (other than any Mandatory Cure Items) and any such unsatisfied Purchaser’s Objection shall become a Permitted Exception (other than any Mandatory Cure Items).  As used herein, “Mandatory Cure Items” shall mean exceptions to title arising from (1) any deed of trust, mortgage or other security interest in the Property granted by Seller or (2) any other monetary lien or encumbrance on the Property not to exceed $200,000 and voluntarily placed or permitted by Seller other than real estate taxes not yet due and payable.  Notwithstanding anything herein to the contrary, Seller shall be responsible for paying off or otherwise removing the Mandatory Cure Items at or prior to Closing.  As used herein, “Permitted Exceptions” shall mean (1) real estate taxes not yet due and payable (or for which Purchaser is otherwise responsible in accordance with the terms of this Agreement); (2) rights of tenants, licensees or other third parties under any Assumed Leases or Assumed Contracts (each, as defined herein); (3) the Ground Lease; (4) any rights of Existing Franchisor under the New Franchise Agreement; and (5) items to which Purchaser has not objected, or which have been waived or deemed waived by Purchaser, in accordance with the above. (b)If, prior to Closing, Seller or the Title Company notifies Purchaser or Purchaser discovers that title to the Property is subject to defects, limitations or encumbrances other than Permitted Exceptions other than contained in Purchaser’s Objections, then Purchaser shall give Seller written notice of any objection thereto within three (3) Business Days after Purchaser received Seller’s or the Title Company’s notice thereof or Purchaser otherwise discovers the same.  In such event, Seller may elect to postpone the Closing for up to ten (10) days and attempt to cure such objection by notice given to Purchaser within two (2) Business Days following Seller’s receipt of any such objection notice from Purchaser.  Any failure by Seller to provide such notice to Purchaser within such two (2) Business Day period shall be deemed an election by Seller not to cure any such title objection.  If Purchaser fails to waive any such title objection within three (3) Business Days after Purchaser receives notice from Seller that Seller will not cure such title objection (or the date on which Seller is deemed to have elected not to cure such title objection), this Agreement shall terminate automatically and the Title Company shall promptly return the Deposit to Purchaser, and neither party shall have 13     any liability to the other except for Purchaser’s obligations which expressly survive any termination.   4.3Condemnation.  In the event that any Governmental Authority commences condemnation proceedings, taking by power of eminent domain or any similar action from and after the date hereof (such action, a “Condemnation”) with respect to the entire Property or any Material Portion (as defined herein) thereof, Purchaser may, at its option, by written notice to Seller given by the earlier of (i) the Closing Date, and (ii) five (5) Business Days after Seller notifies Purchaser of such Condemnation, either: (x) terminate this Agreement, in which case the Deposit shall be returned to Purchaser and the Parties hereto shall have no further rights or obligations, other than those that by their terms survive the termination of this Agreement, or (y) proceed under this Agreement, in which event Seller shall, at the Closing, assign to Purchaser its entire right, title and interest in and to any condemnation award, or credit the Purchase Price in the amount of any award actually received by Seller between the Effective Date and the Closing Date less any collection costs, and Purchaser shall have the sole right after the Closing to negotiate and otherwise deal with the condemning authority in respect of such matter.  If Purchaser does not give Seller written notice of its election within the time required above, then Purchaser shall be deemed to have elected option (x) above, For the purpose of this Agreement, “Material Portion” means a taking of the Property which, as a result of the taking, will interfere with Purchaser’s ability to access or use the Property for Purchaser’s intended use, or will result in a decrease in value of the Property equal to or exceeding twenty percent (20%) of the Purchase Price. 4.4Casualty.   (a)Casualty Notice.  If prior to Closing, the Property is damaged by fire or other casualty, Seller shall estimate the cost to repair and the time required to complete repairs and will provide Purchaser written notice of Seller’s estimation (the “Casualty Notice”) as soon as reasonably possible after the occurrence of the casualty. (b)Material.  In the event of any Material Damage, as defined herein, to or destruction of the Property or any portion thereof prior to Closing, either Seller or Purchaser may, at its option, terminate this Agreement by delivering written notice to the other on or before the expiration of five (5) Business Days after the date Seller delivers the Casualty Notice to Purchaser (and if necessary, the Closing Date shall be extended to give the Parties the full five (5) Business Day period to make such election and to obtain insurance settlement agreements with Seller’s insurers).  Upon any such termination, the Deposit shall be returned to Purchaser and the Parties shall have no further rights or obligations hereunder, other than those that by their terms survive the termination of this Agreement. If neither Seller nor Purchaser so terminates this Agreement within said five (5) Business Days, then the Parties shall proceed under this Agreement and close on schedule (subject to extension of Closing as provided above), and as of Closing, Seller shall assign to Purchaser, without representation or warranty by or recourse against Seller, all of Seller’s rights in and to any resulting insurance proceeds due Seller as a result of such damage or destruction, including without limitation, any business interruption or lost revenues insurance proceeds (the “Insurance Proceeds”) and Purchaser shall assume full responsibility for all needed repairs, and Purchaser shall receive a credit at Closing for any deductible amount under such insurance policies.  For the purposes of 14     this Agreement, “Material Damage” and “Materially Damaged” means damage which will interfere with Purchaser’s ability to access or use the Property for Purchaser’s intended use, or which equals or exceeds twenty percent (20%) of the Purchase Price. (c)Immaterial.  If the Property is not Materially Damaged, then neither Purchaser nor Seller shall have the right to terminate this Agreement, and Seller shall, at its option, either (i) repair the damage before the Closing, or (ii) assign any insurance claims to Purchaser for the  cost to complete the repair (in which case Purchaser shall retain all Insurance Proceeds, Purchaser policies, there shall be no other reduction in the Purchase Price and Purchaser shall assume full responsibility for all needed repairs). ARTICLE 5 COVENANTS 5.1Exclusivity.  Seller shall not, directly or indirectly: (a) solicit, initiate, seek, or support any inquiry, proposal or offer from, (b) furnish any non-public information to, (c) participate in any discussions or negotiations with, or (d) enter into any agreement with, any third party regarding any acquisition of the Property or any interest therein or, during the pendency of this Agreement enter into any agreement, arrangement or understanding requiring it to abandon, terminate or fail to consummate the proposed transaction with the Purchaser.   5.2Conduct of Business.  Seller agrees that during the period from the Effective Date to the Closing Date Seller shall: (a)operate the Hotel in substantially the same manner in which Seller operated the Hotel prior to the Effective Date; (b)not enter into any new Leases, Contracts or any other new material agreements affecting the Hotel or modify, extend, renew, terminate, replace or otherwise change the terms, covenants or conditions of, or waive the performance of any other party under, any Leases, Contracts or any other material contract or agreement affecting the Hotel, in each case without Purchaser’s prior written consent, which consent shall be in Purchaser’s sole discretion, except not to be unreasonably withheld, conditioned or delayed prior to the expiration of the Due Diligence Period, unless such new Leases, Contracts or any other new material agreements affecting the Hotel are month-to-month contracts or are terminable by Seller or Purchaser without any termination fee upon not more than thirty (30) days' notice; (c)maintain, or, if applicable, renew or replace with comparable coverage, the insurance coverage currently in effect for the Property; (d)continue to cause to be performed, in a commercially reasonable manner, the work in connection with the Construction Contracts and to make all progress payments related thereto owed by Seller under such Construction Contracts, provided that Seller shall not be permitted to terminate, modify, replace or expand or generally enforce any rights or remedies regarding such contracts until the Closing occurs (i.e., upon assumption by Purchaser of such contracts) without Purchaser’s prior written consent, which consent shall be in 15     Purchaser’s sole discretion, except not to be unreasonably withheld, conditioned or delayed by Purchaser prior to the expiration of the Due Diligence Period, in respect of such work.  Notwithstanding the foregoing, Seller shall have the right to authorize change orders without Purchaser’s approval provided same to do not materially expand the scope of work described in the Construction Contracts or materially increase the price thereof;   (e)except as provided in (d) above, not cause any material and discretionary work to be done at the Property without Purchaser’s prior written consent, other than regular and customary maintenance work, which consent shall be in Purchaser’s sole discretion after the expiration of the Due Diligence Period and not to be unreasonably withheld, conditioned or delayed prior to the expiration of the Due Diligence Period; (f)not intentionally encumber title to the Property except for Permitted Encumbrances (i.e., mechanic’s liens, lis pendens or similar claims shall be deemed unintentional, provided Purchaser shall maintain its rights to object thereof and Seller shall remain obligated to remove any Mandatory Cure Items, each pursuant to Section 4.2 herein); (g)not modify, cancel or surrender any Authorizations now in Seller’s name without Purchaser’s prior written consent, which consent shall be in Purchaser’s sole discretion, except not to be unreasonably withheld, conditioned or delayed prior to the expiration of the Due Diligence Period; (h)subject to conditions outside of Seller’s reasonable control, not cause or consent to Hotel Manager taking any actions which would result in the failure to maintain inventories at levels consistent with the ordinary course of business in line with the historical operation of the Hotel and in accordance with the Hotel’s present standards; (i)subject to conditions outside of Seller’s reasonable control, not cause or permit the removal of the Property except as consistent with the ordinary course of business in line with the historical operation of the Hotel and in accordance with the Hotel’s present standards; (j)not allow any Permits now in Seller’s name to be cancelled or otherwise expire; (k)use commercially reasonable efforts to cause the Hotel Manager to continue to collect Accounts Receivable prior to Closing; (l)not enter into, and not consent to Hotel Manager entering to, any new employment agreements that would be binding on Purchaser or, following the Closing, the Hotel and (2) not change, modify, extend, renew or terminate any employment agreement in effect as of the date hereof that would be binding on Purchaser or, following the Closing, the Hotel; and (m)From the Effective Date until one (1) year after the Closing or earlier termination of this Agreement, to the extent in its possession (and not otherwise covered by information which Hotel Manager may possess or is obligated to provide pursuant to the Manager Representation Letter (hereinafter defined), Seller shall make the books and records of 16     the Property for the years ending December 31, 2015, 2016 and 2017 available to Purchaser and Purchaser’s independent accountants for inspection, copying and audit by Purchaser designated accountants at the sole cost and expense of Purchaser. From and after the date hereof, Seller shall exercise commercially reasonable efforts to cause the Hotel Manager to provide Purchaser’s independent accountants with a management representation letter with respect to the historical financial statements of the Property for the years ending December 31, 2015, 2016 and 2017 in the form attached hereto as Exhibit K (the “Management Representation Letter”), at no out-of-pocket cost or expense to Seller. Notwithstanding the foregoing, Purchaser acknowledges and agrees that, except to the extent expressly set forth in Section 4.1, Section 6.2(g), Section 8.2(n) or its continuing cooperation pursuant to the immediately prior sentence, Seller is making no representations, covenants or warranties regarding any of the books and records being delivered or made available to Purchaser pursuant to this Section 5.2(m), including by Hotel Manager, or elsewhere in this Agreement nor regarding the truth or accuracy, performance or non-performance of Hotel Manager’s obligations under the Management Representation Letter.  This Section 5.2(m) shall survive the Closing, but solely with respect to Seller’s continued cooperation to make any books or records of the Property in its physical possession (i.e., electronically) available to Purchaser for up to one (1) year, and only to the extent not previously delivered or made available to Purchaser.   Prior to the expiration of the Due Diligence Period, Purchaser will advise Seller in writing of which Contracts it wants Seller to assign to Purchaser at Closing (the “Assumed Contracts”) and which Leases it wants Seller to assign to Purchaser (the “Assumed Leases”); provided, however that Purchaser shall be required to assume that certain Parking Service Management Agreement dated May 1, 2017 by and between Seller and Towne Park, LLC, a Maryland limited liability company and the Construction Contracts (to the extent outstanding) (which are hereby deemed Assumed Contracts).  Seller shall terminate any Contract or Lease that is not an Assumed Contract or Assumed Lease, at Seller’s cost and expense, prior to Closing.   5.3Access.   (a)During the Due Diligence Period and prior to Closing, Seller and Hotel Manager shall grant Purchaser and its employees, agents, representatives, contractors and lenders access to the Premises to permit Purchaser to make such inspections as it deems appropriate in its sole discretion to complete the due diligence review described in Section 5.4(a), and to coordinate the turnover of the Property in anticipation of Closing.  Purchaser shall notify Seller verbally or by electronic mail of its intention to enter the Hotel for any such purposes at least one (1) Business Day prior to such intended entry and shall coordinate with Seller and its agents to carry out any such entry and related investigation so as to minimize, to the greatest extent possible, interference with Seller’s business (without limiting any of the provisions of Section 5.3(b)) and otherwise in a manner reasonably acceptable to Seller.  At Purchaser’s sole cost and expense, Purchaser shall be entitled to do a peer review (the “Peer Review”) of all work performed in scope consistent with that described in Schedule 5.3 (provided such work is otherwise subject to the restrictions and requirements of this Agreement and as Seller or Hotel Manager may reasonably require from Purchaser) and to be performed in connection with the Construction Contracts, which review may include a structural engineering report.  Except as expressly contemplated in the scope for the Peer Review as set forth in Schedule 5.3,Purchaser 17     shall not conduct any invasive testing, sampling or drilling (including any phase II environmental testing) without Seller’s prior written consent, in its sole and absolute discretion.  Purchaser may not meet or contact any tenant, hotel manager, parking garage manager or any employees of same in connection with the transaction contemplated by this Agreement without the prior written consent of Seller, which consent shall not be unreasonably withheld or delayed, and conditioned upon giving Seller at least two (2) Business Days in advance by telephone or electronic mail to inform Seller of Purchaser’s intended meeting or contact and to allow Seller the opportunity to attend such meeting or monitor such contact if Seller desires. (b)In conducting any inspections, investigations or tests of the Property, Purchaser and its agents and representatives shall: (i) not unreasonably disturb (1) the tenants or unreasonably interfere with their use of the Premises, or (2) the guests at the Hotel; (ii) not unreasonably interfere with the operation or maintenance of the Hotel;  (iii) comply with all applicable laws, and (iv) provide evidence to Hotel Manager or Seller of commercially reasonable insurance coverage prior to accessing the Premises. (c)Purchaser shall indemnify and hold Seller harmless from and against any and all liens, claims, causes of action, damages, liabilities and expenses (including reasonable attorneys’ fees and court costs) arising out of Purchaser’s inspections or tests or other entry onto the Property by Purchaser or its employees, agents, representatives, contractors and lenders and shall maintain the insurance reasonably required by Seller or Hotel Manager as a condition precedent to its entry on the Property for such purposes; provided, however, that the foregoing indemnity shall not apply to any conditions that are merely discovered on, under or about the Property by Purchaser or its employees, agents, representatives, contractors and lenders, and not as a result of any damage caused by Purchaser or its employees, agents, representatives, contractors and lenders.  Except to the extent included in any claims or causes of action from third parties other than Seller, in no event will Purchaser be responsible for Seller’s claim of any indirect, consequential, punitive or exemplary damages, regardless of the cause or claim.  This indemnity shall survive the Closing or any earlier termination of this Agreement. 5.4Due Diligence Period. (a)At any time prior to the expiration of the Due Diligence Period, Purchaser may, in its sole and absolute discretion, terminate this Agreement by written notice to Seller (the “Termination Notice”) delivered on or prior to expiration of the Due Diligence Period. (b)If Purchaser delivers a Termination Notice to Seller pursuant to Section 5.4(a), this Agreement shall automatically terminate, the Deposit shall be returned to and retained by Purchaser and thereafter Seller and Purchaser shall have no further rights, obligations or liabilities hereunder, other than those which by their terms expressly survive termination of this Agreement. 5.5Expenses.   (a)Costs and expenses shall be allocated as provided in Basic Information, Section C. Except as otherwise expressly provided in Basic Information, Section C or 18     elsewhere in this Agreement, each Party agrees to pay its own expenses (including the fees and expenses of its own attorneys, accountants and other advisors) in connection with its due diligence activities, negotiating this Agreement and any related agreements, obtaining any required approvals and otherwise preparing for the Closing. (b)Purchaser agrees to pay all costs associated with the application for the New Franchise Agreement with Existing Franchisor or any other party, including costs of any new Property Improvement Plans required by the Existing Franchisor in order to enter into the New Franchise Agreement (“PIP”), including, without limitation, any costs, fees or expenses payable to Existing Franchisor for preparation of the PIP related to the New Franchise Agreement, and any and all costs to be incurred after the Closing in implementing the PIP.   (c)The Parties agree to cooperate with one another to prepare and file, or cause to be prepared and filed, with the relevant Governmental Authorities all transfer tax returns, affidavits and other similar instruments, if any, required in connection with the payment of the foregoing expenses.  If and to the extent Purchaser receives a credit at Closing with respect to any obligation or liability of Seller, Purchaser shall indemnify, defend and hold Seller harmless from and against any further obligation or liability with respect to same, which indemnification shall survive the Closing.   (d)Franchise Agreement.  Within five (5) Business Days after the Effective Date, Purchaser shall submit its application and $50,000 application fee to Existing Franchisor for approval of Purchaser as its new franchisee at the Hotel (“Franchise Approval”) pursuant to a New Franchise Agreement (as defined below), and shall contemporaneously provide a true, correct and complete copy thereof to Seller which may be partially redacted due to confidentiality concerns (together, thereafter, with any other correspondence and documentation from Existing Franchisor) and shall comply with all other requirements pursuant to the Existing Franchise Agreement (as defined below) in connection with Franchise Approval (and shall provide evidence thereof to Seller).  Seller agrees to cooperate in a commercially reasonable manner with Purchaser in its pursuit of Franchise Approval. Anything herein to the contrary notwithstanding, Franchise Approval is not a condition to Purchaser’s obligation to close (although Seller’s release from its Existing Franchise Agreement without material cost to Seller is a condition to Seller’s obligation to close); provided, however, Purchaser acknowledges and agrees that provided it has complied with its obligations herein to seek and obtain the Franchise Approval, Purchaser’s sole remedy in the event it does not secure Franchise Approval by no later than sixty (60) days after Existing Franchisor’s deemed receipt of the application, application fee and any other requirements to Franchise Approval required by Existing Franchisor, which date can be extended for an additional thirty (30) days at Purchaser’s written request to Seller in the event of no definitive approval or disapproval from Existing Franchisor (provided it has otherwise extended the Closing in accordance with Section 6.1(a) herein, including by delivering any Extension Deposit to Escrow Agent), but solely to obtain Franchise Approval (the “Franchisor Response Date”), shall be to terminate this Agreement on the earlier to occur of within five (5) Business Days after the earlier of: (i) the Franchisor Response Date or (ii) Existing Franchisor delivers notice categorically denying Franchise Approval (the “Franchisor Disapproval Termination Date”).  Notwithstanding anything contained herein, Purchaser acknowledges that, except as otherwise expressly set forth in this Agreement, it shall only have the right to terminate this 19     Agreement after the expiration of the Due Diligence Period and receive a return of the Deposit based solely on the failure of the Existing Franchisor to approve the New Franchise Agreement pursuant to this paragraph; provided, however, that Purchaser shall have provided the application, application fee and all other requested information to Existing Franchisor within all required timeframes.  Should Purchaser not terminate this Agreement and Purchaser fails to obtain the approval of Existing Franchisor for a new franchise agreement for the Hotel for the same flag or brand (the “New Franchise Agreement”) by no later than the Franchisor Disapproval Termination Date, then, at Seller’s sole option, the Closing may nonetheless occur, and in such event Purchaser shall be responsible for all termination fees, liquidated and other damages payable under Seller’s currently-existing franchise agreement with Existing Franchisor (the “Existing Franchise Agreement”) and Purchaser shall perform all de-identification obligations under the Existing Franchise Agreement (the “De-Identification Obligations”), and Purchaser shall be responsible for any and all De-Identification Obligations regardless of whether or not Purchaser enters into the New Franchise Agreement or otherwise continues a franchise arrangement with Existing Franchisor or enters into a new agreement with another franchisor.  Seller agrees to indemnify and hold Purchaser harmless for any claims brought by Existing Franchisor pursuant to the Seller’s obligations under the Existing Franchise Agreement, which relate to and arise from its obligations 5.6Sales, Use and Occupancy Tax.   (a)Seller shall be responsible for, and shall pay in full when due, all sales, use and occupancy taxes due with respect to the Property prior to the Closing Date, and shall make all required filings in connection therewith.  Seller shall indemnify Purchaser for any and all damages, liabilities and expenses (including reasonable attorneys’ fees and court costs) incurred by Purchaser as a result of the breach of the preceding sentence. (b)Purchaser shall be responsible for, and shall pay in full when due, all sales, use and occupancy taxes due with respect to the Property from and after the Closing Date, and shall make all required filings in connection therewith.  Purchaser shall indemnify Seller for any and all damages, liabilities and expense (including reasonable attorneys’ fees and court costs) incurred by Seller as a result of the breach of the preceding sentence. 5.7Ground Lease. (a)At least five (5) Business Days before the Closing Date, Seller shall obtain on behalf of Purchaser from the Ground Lessor an estoppel certificate, completed and duly executed by Ground Lessor, in such form required by this paragraph.  The Parties acknowledge and agree that the current form of the Consent Agreement and Estoppel attached hereto as Exhibit H (“Ground Lease Estoppel”) is the form that the Seller shall initially present to Ground Lessor and the Purchaser will be provided with true, correct and complete copies of any and all correspondence to Ground Lessor pertaining solely to obtaining such estoppel. Purchaser acknowledges, however, that an executed Ground Lease Estoppel containing only the provisions in (1), (2), (3), (4), (5), (6), (7), (12) and (13) thereon as of the Effective Date (the “Acceptable Ground Lease Estoppel”) is acceptable.  Notwithstanding the foregoing, Purchaser’s only remedy for any failure to receive the Acceptable Ground Lease Estoppel on or before five (5) Business Days prior to Closing shall be to terminate this Agreement by the giving of written 20     notice thereof to Seller within two (2) Business Days prior to the Closing, in which event, the Deposit shall be refunded to Purchaser and neither party shall have any further rights or obligations hereunder, except for obligations which explicitly survive the termination. (b)Prior to the Closing Date, without the prior written consent of Purchaser (such consent not to be unreasonably withheld or delayed), Seller shall not modify or amend any material provision of the Ground Lease. 5.8Notices.  For the period pertaining from and after the Effective Date of this Agreement until Closing, Seller shall promptly provide to Purchaser, after Seller’s receipt (or delivery thereof, as applicable) copies of any written notice: (A) of violations with respect to the Property from any applicable governmental authority; (B) of any fire, flood or other similar material casualty to the Property; (C) of any actual or threatened condemnation (or proceeding in lieu thereof); (D) from any applicable governmental authority claiming that the Property or the use and operation thereof fails to comply with applicable laws; (E) claiming that Seller or any counterparty is in material default under any Contract or under any Lease; and (F) concerning any pending or threatened litigation regarding the Property. 5.9Restaurant Marks.  On or before the expiration of the Due Diligence Period, Purchaser shall deliver notice to Seller whether it will assume the Restaurant Marks pursuant to that certain First Amended and Restated Trademark License “Restaurant Marks Agreement”), subject to the terms and conditions described therein, including Sections 2 and 4 thereof.  In the event it timely elects to so assume the Restaurant Marks, then Purchaser shall, at closing, deliver to Seller and Hotel Manager the executed certificate required by Section 4 of the Restaurant Marks Agreement (the “Restaurant Marks Certificate”), upon which Seller and Hotel Manager shall be permitted to rely.   Purchaser acknowledges and agrees that if it either elects not to assume the Restaurant Marks or fails to comply with the requirements of this paragraph (i.e., timely notice to assume and delivery of the Restaurant Marks Certificate), Seller shall be authorized to instruct Hotel Manager to remove the Restaurant Marks prior to or in connection with the Closing, and Purchaser shall be deemed to waive all rights in respect thereof. 5.10Survival.  The provisions of this Article 5 shall survive the Closing or the termination of this Agreement. ARTICLE 6 CLOSING 6.1Closing.  Subject to the terms and conditions of this Agreement, the Parties shall conduct an escrow-style closing through the Escrow Agent so that it will not be necessary for any party to physically attend the Closing, at and as of no later than 5:00 P.M. (Eastern Time) on the Closing Date.  As used in this Agreement, “Closing” shall mean the transfer and assignment of the Property to Purchaser and the performance by each Party of the obligations on its part then to be performed under and in accordance with this Agreement. 21     (a)Notwithstanding anything in this Agreement to the contrary, Purchaser shall have the right to extend the Closing Date for two (2) additional thirty (30) day periods upon written notice from Purchaser to Seller, provided that prior to the commencement of each such additional thirty (30) day period, Purchaser deposits with Escrow Agent the sum of ONE MILLION AND 00/100 DOLLARS ($1,000,000) (in each chase, together with all interest earned thereon, the “Extension Deposit”) in good funds, by certified bank or cashier’s check or by federal wire transfer.  Once received by Escrow Agent, the Extension Deposit shall be deemed part of the Deposit and the aggregate amount of the Deposit shall be increased to $3,000,000 (upon the exercise of the first extension option) and $4,000,000 (upon the exercise of the second extension option). 6.2Closing Deliveries by Seller.  At or prior to the Closing, Seller shall execute and deliver or cause to be executed and delivered to Escrow Agent each of the following instruments and documents with respect to each Property: (a)Assignment of Ground Lease.  Two originals of an assignment and assumption of the Ground Lease conveying Seller’s interest under the Ground Lease in the form of Exhibit B attached hereto (the “Assignment of Ground Lease”), duly executed by Seller. (b)Bill of Sale.  A bill of sale for the Personal Property in the form of Exhibit C attached hereto (the “Bill of Sale”), duly executed by Seller; (c)Assignment of Leases.  An assignment and assumption of the Assumed Leases, in the form of Exhibit D attached hereto (the “Assignment of Leases”), duly executed by Seller; (d)Assignment of Contracts, Advance Bookings and Intangibles.  An assignment and assumption of the Assumed Contracts, Advance Bookings and Intangibles, in the form of Exhibit E attached hereto (the “Assignment of Contracts”), duly executed by Seller; (e)Tenant Notices.  A notice signed by Seller advising the tenant under each of the Assumed Leases in force at the Closing Date and each party to an Assumed Contract of the consummation of the transactions contemplated by this Agreement, the address for notices to and other communications with Purchaser and, in the case of each Lease, directing the tenant to pay rent to, or as otherwise directed by, Purchaser, in the form of Exhibit F attached hereto (the “Tenant Notice Letter”); (f)Termination of Franchise Agreement.  A termination and release in connection with the Existing Franchise Agreement, to be provided by Existing Franchisor; (g)Books and Records.  All books and records relating to the Property in the possession of Seller, including all property management and maintenance records, it being understood that (x) leaving such records at the Property shall satisfy Seller’s obligations hereunder and (y) “books and records” shall specifically exclude any item specifically excluded from the definition of Property; 22     (h)FIRPTA Affidavit.  An affidavit from Seller, in the form of Exhibit G attached hereto, stating that it is not a ‘‘foreign person” under Section 1445 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”; (i)Seller’s Affidavit.  A Seller’s affidavit as to liens and possession in a form reasonably acceptable to Seller and the Title Company; (j)Management Agreement.  Evidence of (1) termination as of the Closing of the existing hotel management agreement between Seller and Hotel Manager and (2) payment of all management fees and employee compensation related thereto; (k)R-5 Tax Form.  To the extent required by applicable law to transfer the Property to Purchaser, Virginia Form R-5 for the conveyance of the Property (the “State Tax Form”), duly executed by Seller; (l)Form W-9.  A completed form W-9, duly executed by Seller; (m)Closing Statement.  The Closing Statement, duly executed by Seller; (n)Ground Lease Estoppel.  Subject to the terms of Section 5.7(a), the Acceptable Ground Lease Estoppel duly executed by Ground Lessor, which shall be delivered to Escrow Agent no later than the date that is two (2) Business Days before the Closing Date; (o)Construction Work at Property.  Evidence reasonably acceptable to the Title Company and Purchaser (which will include interim lien waivers, to the extent available, for any work performed through the date of most recent invoice received by Seller) that all bills and claims for labor performed and services and materials furnished to or for the benefit of the Property in connection with the Construction Contracts prior to the Closing Date for which invoices have been provided will be paid or otherwise satisfied by Seller; (p)Sales Tax.  Evidence reasonably acceptable to Purchaser that all sales taxes for the operations of the Hotel have been paid to the Adjustment Point; (q)Termination of Restaurant Marks Agreement.  In the event that Purchaser either elects not to assume the Restaurant Marks Agreement or fails to comply with the requirements of Section 5.9 to assume same, evidence reasonably acceptable to Purchaser that the Restaurant Marks Agreement is terminated and the Restaurant Marks removed from the Hotel; and (r)Other Documents.  Such other documents or instruments contemplated by this Agreement or as Purchaser or Title Company reasonably may request to effect the transactions contemplated in this Agreement without further expense or liability to Seller. 6.3Closing Deliveries by Purchaser.  At the Closing, Purchaser shall deliver to Escrow Agent the following agreements, instruments and payments: (a)Purchase Price.  The Purchase Price, payable in the manner provided for in Section 2.1 of this Agreement less the Deposit, and adjusted as provided for herein; 23     (b)Assignment of Ground Lease.  Two originals of the Assignment of Ground Lease, duly executed by Purchaser; (c)Assignment of Leases.  The Assignment of Leases, duly executed by Purchaser; (d)Assignment of Contracts.  The Assignment of Contracts, duly executed by Purchaser; (e)Closing Statement.  A counterpart of the Closing Statement, duly executed by Purchaser; (f)Tenant Notice Letter.  A counterpart of the Tenant Notice Letter, duly executed by Purchaser; (g)New Franchise Agreement.  Such documents and instruments that are required to be executed and delivered by Purchaser under the New Franchise Agreement (if applicable) including, without limitation, any guarantees; (h)Restaurant Marks Certificate.  If Purchaser elects to assume the Restaurant Marks Agreement, the Restaurant Marks Certificate required pursuant to the Section 5.8 hereunder. (i)Other Documents.  Such other documents or instruments contemplated by this Agreement or as Seller or Title Company reasonably may request to effect the transactions contemplated in this Agreement. ARTICLE 7 CONDITIONS PRECEDENT TO CLOSING 7.1Conditions Precedent to Obligation of Purchaser.  The obligation of Purchaser to consummate the transactions contemplated herein shall be subject to the fulfillment on or before the Closing Date, as applicable, of all of the following conditions and obligations of Seller, any or all of which may be waived by Purchaser in its sole discretion: (a)Delivery of Documents.  Seller shall have delivered all of the items required to be delivered to Purchaser pursuant to Section 6.2. (b)Accuracy of Representations and Warranties.  The representations and warranties of Seller in Section 8.2 shall be true and correct in all material respects as of the Effective Date and deemed remade by Seller on the Closing Date, except to the extent specifically set forth in such representation and warranty being made only as of the Effective Date. (c)Observance of Covenants.  Seller shall have performed and observed, in all material respects, all covenants and agreements in this Agreement to be performed and observed by Seller as of the Closing Date. 24     (d)Title.  The Title Company shall have issued or shall be prepared to issue, upon payment of the applicable premiums therefor, a leasehold owner’s title policy with respect to the leasehold interest in the Real Property, showing title to vested in Purchaser, subject only to the Permitted Exceptions (the “Title Policy”). 7.2Conditions Precedent to Obligation of Seller. The obligation of Seller to consummate the transactions contemplated herein shall be subject to the fulfillment on or before the Closing Date of all of the following conditions, any or all of which may be waived by Seller in its sole discretion: (a)Delivery of Documents.  Purchaser shall have delivered all of the items required to be delivered to Seller pursuant to Section 6.3. warranties of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Effective Date and as of the Closing Date. (c)Observance of Covenants.  Purchaser shall have performed and observed, in all performed and observed by Purchaser as of the Closing Date. 7.3Failure of Condition.  So long as a Party is not in default hereunder, if any condition to such Party’s obligation to proceed with the Closing hereunder has not been satisfied as of the Closing Date (or such earlier date as provided herein), such Party may, in its sole discretion: (i) terminate this Agreement by delivering written notice to the other Party on or before the Closing Date (in which event the Deposit shall be returned to Purchaser and neither Party shall have any further obligation or liability under this Agreement except as otherwise expressly provided herein; (ii) to the extent such failure of a condition consists of a failure to (1) cure all Mandatory Cure Items, (2) execute the Application by Seller, (3) pay all applicable progress payments under the Construction Contracts, when and as owed, (4) deliver the executed Acceptable Ground Lease Estoppel (the “Controllable Seller Conditions”), Purchaser shall be permitted to proceed under Article 9 hereunder subject to the limitation thereunder; or (iii) elect to close notwithstanding the non-satisfaction of such condition, and in that event said Party shall be deemed to have waived said condition, and there shall be no liability on the part of the other Party hereto; provided, however, that after the Due Diligence Period, before Purchaser shall be permitted to exercise its termination rights hereunder, Purchaser shall deliver notice of such failure of a condition to Seller and such failure of a condition remains uncured by Seller for more than ten (10) Business Days following written notice from Purchaser. ARTICLE 8 REPRESENTATIONS AND WARRANTIES 8.1Representations and Warranties of Purchaser.  Purchaser hereby makes the following representations and warranties: (a)Duly Authorized, Executed, and Delivered.  Purchaser is a limited partnership duly organized and validly existing and in good standing under the laws of the 25     State of Delaware.  This Agreement and all documents executed by Purchaser that are to be delivered to Seller at Closing (i) are, or at the time of Closing will be, duly authorized, executed and delivered by Purchaser, (ii) do not, and at the time of Closing will not, violate any provision of any agreement or judicial order to which Purchaser is a party or to which Purchaser or any property or other assets owned by Purchaser is subject and (iii) constitutes (or in the case of Closing Documents, will constitute) valid and legally binding obligations of Purchaser, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights. (b)No Bankruptcy.  Purchaser has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Purchaser’s creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Purchaser’s assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Purchaser’s assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally. (c)Power and Authority. Purchaser has the power and authority to enter into this Agreement and to perform its obligations hereunder. (d)OFAC.  Purchaser is in compliance with the requirements of Executive Order No. 133224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the “Order”) and other similar requirements contained in the rules and regulations of the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) and in any enabling legislation or other Executive Orders or regulations in respect thereof (the Order and such other rules, regulations, legislation, or orders are collectively called the “Orders”). Purchaser is not: (i)listed on the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to the Order and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Orders (such lists are collectively referred to as the “Lists”); (ii)a person or entity who has been determined by competent authority to be subject to the prohibitions contained in the Orders; or (iii)owned or controlled by, or acts for or on behalf of, any person or entity on the Lists or any other person or entity who has been determined by competent authority to be subject to the prohibitions contained in the Orders. Each of the representations and warranties of Purchaser contained herein (i) is made on the Effective Date, and (ii) shall be deemed remade by Purchaser and/or its assignee(s), as applicable, and shall be true and correct as of the Closing Date. 8.2Representations and Warranties of Seller. Seller hereby makes the following representations and warranties: 26     (a)No Bankruptcy.  Seller has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Seller’s creditors, (iii) suffered the appointment of a receiver to take possession of any of the Property or all, or substantially all, of Seller’s other assets, (iv) suffered the attachment or other judicial seizure of any of the Property or all, or substantially all, of Seller’s other assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally. (b)Not Foreign Person.  Seller is not a “foreign person” as defined in Section 1445(f)(3) of the Internal Revenue Code. (c)Organization and Good Standing.  Seller is a limited partnership duly organized and validly existing and in good standing under the laws of the State of Delaware and is qualified to transact business in the state where the Property is located. (d)Duly Authorized, Executed, and Delivered.  This Agreement and all documents executed by Seller that are to be delivered to Purchaser before or at Closing (i) are, or at the Closing will be, duly authorized, executed and delivered by Seller, (ii) do not, or at the Closing will not, violate any provision of any agreement or judicial order to which Seller is a party or to which Seller or any Property owned by Seller is subject, and (iii) constitute (or in the case of Closing Documents, will constitute) valid and legally binding obligations of (e)Power and Authority.  Seller has full and complete power and authority to enter into this Agreement and to perform its obligations hereunder and under all documents executed by Seller that are to be delivered to Purchaser before or at Closing.  The individual(s) executing this Agreement and the instruments referenced herein on behalf of Seller have the legal power, right and actual authority to bind Seller to the terms hereof and thereof. (f)No Conflict.  Neither the execution and delivery by Seller of this Agreement or the closing deliveries by Seller pursuant to Section 6.2 herein (the “Seller Documents”, nor the performance by Seller of any of its obligations under any of Seller Documents, nor the consummation by Seller of the transactions described in this Agreement will violate any provision of Seller’s organizational or governing documents. (g)Consents and Approvals.  Except for the approval of the appropriate Governmental Authorities in connection with the transfer of the applicable Authorizations, and the recordation of any applicable Seller Documents, to Seller’s Knowledge no filing with, and no permit, Authorization, consent or approval of, any Governmental Authority is necessary for the execution or delivery by Seller of the Seller Documents, or the consummation by Seller of the transactions described in this Agreement, except to the extent the failure to obtain such permit, Authorization, consent or approval would not have a material adverse effect on the Hotel, or Seller’s ability to consummate the transactions described in this Agreement. 27     (h)Litigation. As of the Effective Date, to Seller’s knowledge, there are no actions, suits, proceedings (including condemnation proceedings), arbitrations, investigations or other legal, administrative or other proceedings pending or, to Seller’s knowledge, threatened against Seller that (i) seeks restraint, prohibition, damages or other relief in connection with this Agreement or Seller’s authority to convey the Hotel, or (ii) would delay consummation of the transactions contemplated hereby.  This representation shall be deemed remade upon the expiration of the Due Diligence Period, except to the extent Seller delivers notice of any such proceedings for which it has knowledge to Purchaser prior thereto. (i)Service Contracts. To Seller’s knowledge, as of the Effective Date, the Service Contracts described on Schedule E attached hereto and made a part hereof comprise all of the service contracts which affect the ownership, maintenance, operation, provisioning or equipping of the Hotel, other than the Management Agreement, the Construction Contracts, or the agreement for any ATM or similar machine (collectively, the “ATM Agreement”) and various month-to-month parking agreements with respect to the parking garage located at the Hotel.  This representation shall be deemed remade upon the expiration of the Due Diligence Period, except to the extent Seller delivers notice of any such contracts for which it has knowledge to Purchaser prior thereto, in accordance with this Agreement. (j)Leases; Equipment Leases. Other than the ATM Agreement and various month-to-month parking agreements with respect to the parking garage located at the Hotel, as of the Effective Date, there are no Leases that affect any portion of the Land or the Improvements. To Seller’s knowledge, the Equipment Leases described on Schedule D attached hereto and made a part hereof comprise all of the equipment leases that affect any portion of the Land or the Improvements. To Seller’s knowledge, as of the Effective Date, Seller has neither received nor delivered any notice to any tenant of a material default which remains uncured.  This representation shall be deemed remade upon the expiration of the Due Diligence Period, except to the extent Seller delivers notice of any such agreements for which it has knowledge to Purchaser prior thereto, in accordance with this Agreement. (k)Permits; Liquor License. (i) As of the Effective Date, to Seller’s knowledge, the Permits described on Exhibit J attached hereto and made a part hereof comprise all of the Permits. Except as may be otherwise specified on Exhibit J, to Seller’s knowledge as of the Effective Date, (y) the Permits are in full force and effect, and have not been expired, lapsed, terminated or revoked, and (z) no violation of any Permit exists. Seller shall provide, or shall request that Hotel Manager provide, true, correct and complete copies of all Permits to Buyer within five (5) Business Days following the Effective Date. (ii) To Seller’s knowledge, Seller has title to the liquor license for the Hotel, and has paid all fees pertaining to such liquor license which are now due and payable.  This representation shall be deemed remade upon the expiration of the Due Diligence Period, except to the extent Seller delivers notice thereof for which it has knowledge to Purchaser prior thereto. (l)Employees. Seller does not have any employees. All persons employed in the management of the Hotel are employees of Hotel Manager. (m)Violations of Law. To Seller’s knowledge as of the Effective Date, there are no violations of applicable law relating to the Hotel, including, but not limited to any 28     environmental laws or building codes. This representation shall be deemed remade delivers notice of any such violations for which it has knowledge to Purchaser prior thereto. (n)Operating Statements.  To Seller’s actual knowledge, copies of the books and records for the Property delivered or made available by Seller to Purchaser pursuant to Section 5.2(m) herein are true and complete copies of such books and records used by Seller in the ordinary course of business as of the date of delivery of same. Each of the representations and warranties of Seller contained herein is made on the Effective Date, and deemed remade by Seller on the Closing Date, except to the extent specifically set forth in such representation and warranty that it shall be deemed remade as of the expiration of the Due Diligence Period. Purchaser acknowledges and agrees that the Hotel and the Property are being sold to Purchaser in an “AS IS, WHERE IS” condition as of the Closing with no representations or warranties from Seller, either express or implied, except as expressly set forth in this Agreement.  Purchaser is not relying upon, and has not received or been given, any representations, statements or warranties, oral or written, implied or express (except as expressly set forth in this Agreement), of or by any officer, employee, agent or representative of Seller or Hotel Manager as to the Hotel or the Property or any part or component thereof in any respect, including, but not limited to, any representations, statements or warranties as to the physical or environmental condition of the Hotel, the fitness of the Hotel for use as such, the financial performance or potential of the Hotel, the compliance of the Hotel with applicable building, zoning, subdivision, environmental, life safety or land use laws, codes, ordinances, rules, orders, or regulations, or the state of repair of the Hotel, and Purchaser, for itself and its successors and assigns, waives any right to assert any claim or demand against Seller or Hotel Manager at law or in equity relating to any such matter, whether latent or patent, disclosed or undisclosed, known or unknown, now existing or hereafter arising.  Purchaser represents that it is a knowledgeable, experienced and sophisticated purchaser of real estate and that it is relying solely on its own expertise and that of Purchaser’s consultants in purchasing the Property and shall make an independent verification of the accuracy of any documents and information provided by Seller or Hotel Manager.  Purchaser will conduct such inspections and investigations of the Property as Purchaser deems necessary, including, but not limited to, the physical and environmental conditions thereof, and shall rely upon same.  By failing to terminate this Agreement prior to the expiration of the Due Diligence Period, Purchaser acknowledges that Seller has afforded Purchaser a full opportunity to conduct such investigations of the Property, the Hotel and the Ground Lease as Purchaser deemed necessary to satisfy itself as to the condition of the Property, the Hotel and the Ground Lease and the existence or non-existence or curative action to be taken with respect to any hazardous materials on or discharged from the Property, and will rely solely upon same and not upon any information provided by or on behalf of Seller or its agents or employees with respect thereto.  Upon Closing, Purchaser shall assume the risk that adverse matters, including, but not limited to, adverse physical or construction defects, adverse environmental, health or safety conditions, or adverse matters existing or arising in respect of the Property, the Hotel or under the Ground Lease may not have been revealed by Purchaser’s inspections and investigations and neither Seller nor Hotel Manager shall have any liability or obligation therefor except to the extent such 29     matter constitutes a breach of a representation or warranty of Seller under Section 8.2, as limited by the terms and conditions of this Agreement, including Section 8.3 below. Subject in all events to the last sentence of this paragraph, Purchaser hereby releases Seller, and each Seller Party (defined below), from any and all present or future claims, demands, causes of actions, losses, damages, including, without limitation, exemplary, punitive, indirect or consequential, special or other damages, liabilities, costs and expenses (including attorney’s fees whether suit is initiated or not) whether known or unknown, liquidated or contingent (hereinafter collectively called the “Claims”) arising from or relating to the Property, including, without limitation, any of the matters set forth in this paragraph, as well as (i) any defects, errors or omissions in the design, construction, repair, or maintenance of the Property, or (ii) any environmental and other physical conditions affecting the Property whether the same are a result of negligence or otherwise.  The release set forth in this paragraph specifically includes, without limitation, any Claims arising in connection with the presence or alleged presence of asbestos or harmful or toxic substances in, on, under or about the Property including, without limitation, any claims under or on account of (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as the same may have been amended or may be amended from time to time and similar state statutes and any regulations promulgated thereunder; (ii) any other federal, state or local law, ordinance, rule or regulation, now or hereafter in effect, that deals with or otherwise in any manner relates to, environmental matters of any kind; or (iii) this Agreement or the common law.  The release set forth in this paragraph specifically includes, without limitation, any claims under the Americans with Disabilities Act of 1990 or similar state or local laws, as any of those laws may be amended from time to time and any regulations, orders, rules of procedure or guidelines promulgated in connection with such laws, regardless of whether they were in existence on the date of this Agreement.  This release includes Claims of which Purchaser is presently unaware or which Purchaser does not presently suspect to exist in its favor which, if known by Purchaser, would materially affect Purchaser’s release of the Seller.  Purchaser acknowledges that Purchaser has been represented by independent legal counsel of Purchaser’s selection and Purchaser is granting this release of its own volition and after consultation with Purchaser’s counsel.  The waiver and release of claims by Purchaser in this Section does not obligate Purchaser to indemnify Seller or any Seller Party against any such claims brought by third parties. Notwithstanding the foregoing or anything to the contrary contained in this Agreement, the release set forth in this paragraph does not apply to Seller’s indemnification for any alleged breach of representations and warranties pursuant to Section 8.3 herein.   INITIALS: PURCHASER: ____/s/_DRF___________     8.3Additional Provisions Regarding Representations and Warranties. (a)Limitation on Liability and Survivability.  Notwithstanding any provision to the contrary herein or in any document or instrument (including any assignment) delivered in connection with the transaction contemplated hereby (collectively, “Closing Documents”), the representations and warranties contained herein or in any Closing Document shall survive the Closing for a period of nine (9) months (the “Survival Period”). No claim for a breach of 30     any representation or warranty shall be actionable or payable if the breach in question results from or is based on a condition, state of facts or other matter which was known to the other party prior to Closing. (b)Representation or Warranty Untrue.  Prior to Closing, if any representation or warranty of any party is discovered to have been false, in any material respect, when made, then such discovery shall be a Seller default or a Purchaser default (as applicable), subject to any cure rights if applicable under Article 9.  If, after the end of the Due Diligence Period and before the Closing, (a) such false representation or warranty shall constitute a condition that such defaulting party is capable of curing and (b) such defaulting party notifies the non-defaulting party in writing that it intends to cure such false representation or warranty, then such defaulting party shall have the right to cure such false representation or warranty prior to Closing and, if such condition is not cured by Closing (or if such defaulting party notifies the non-defaulting party that such condition cannot be cured), then the non-defaulting party shall have all of the rights set forth in Article 9, except no additional cure right for the defaulting party shall apply.  However, if the non-defaulting party consummates the Closing with actual knowledge of a false representation or warranty by the defaulting party, such non-defaulting party shall be conclusively deemed to have waived such default and accepted such uncured condition, in which event the non-defaulting party shall have no rights or remedies after the Closing under this Agreement regarding such default and such representation and warranty shall automatically be deemed amended to fully and accurately state the actual facts and conditions then known or existing so that no fact or condition first discovered or notice received or events occurring after the Effective Date can or will constitute a breach by the defaulting party of any of the warranties or representations.  Anything to the contrary contained in this Agreement notwithstanding, Purchaser acknowledges that for representations and warranties of Seller first discovered by Purchaser during the Due Diligence Period to have been false when made, after expiry of Seller’s cure right described above, Purchaser’s sole and exclusive remedy is to terminate this Agreement in accordance with its right of termination during the Due Diligence Period, following which Seller shall then be required to compensate Purchaser for One Hundred Percent (100%) of its actual and reasonable costs incurred to date (subject to the limitations described in Section 9.2 herein), in addition to the return of the Deposit.   (c)The aggregate liability of the Seller with respect to all claims arising after the Closing in connection with any indemnification obligations of Seller hereof or a breach by Seller of any representations and warranties of Seller which survive the Closing shall not exceed THREE MILLION TWO HUNDRED FORTY THOUSAND DOLLARS ($3,240,000.00) (the “Cap”), and in no event shall Seller be responsible with respect to claims by Purchaser after the Closing with respect to any indemnification obligations hereof or a breach of any representations and warranties of Seller unless the Losses by reason of all such claims, collectively, exceed FIFTY THOUSAND DOLLARS ($50,000) (the “Basket”), at which point Seller shall be liable from the first dollar of such Losses.  In no event shall either party be liable to the other party for any consequential, exemplary, punitive, or any other type of damages (other than direct damages).  Purchaser shall provide written notice (a “Claim Notice”) to Seller prior to the expiration of the Survival Period of any alleged indemnification obligations of Seller pursuant to Section 10.5 hereof or breach by Seller of any warranties or representations; it being agreed that in all cases any action that may be brought for any alleged 31     indemnification obligations of Seller pursuant to Section 10.5 hereof or breach by Seller of any warranties or representations will be forever barred unless, no later than the expiration of the Survival Period, Purchaser shall deliver a Claim Notice to Seller regarding the same, in which event Seller’s liability for any such claim shall survive the Survival Period.  Seller’s total liability with respect to a default by Seller for refusal or failure to convey the Property shall not be governed by this Section but shall instead be governed by the terms and provisions of Section 10.2 of this Agreement.  “Losses” shall be defined as losses, damages, liabilities, deficiencies, claims, interest, awards, judgments, fines, penalties, costs and expenses (including reasonable attorneys’ fees,) but excluding incidental, consequential and punitive damages (except in the case of fraud).   ARTICLE 9 TERMINATION AND DEFAULT 9.1Purchaser’s Default; Liquidated Damages - Deposit.  If Purchaser fails to perform its obligations pursuant to this Agreement at or prior to Closing (for any reason except failure by Seller to perform hereunder), or if prior to Closing any one or more of Purchaser’s representations or warranties are breached in any material respect, which, in either case, is not cured by Purchaser within the earlier of five (5) Business Days after notice thereof or Closing, whichever is sooner, Seller shall be entitled, as its sole and exclusive remedy (except with respect to any covenant of indemnity by Purchaser set forth in this Agreement), to terminate this Agreement (except the provisions hereof and thereof which expressly survive termination) and recover or retain the Deposit as liquidated damages and not as penalty, in full satisfaction of claims against Purchaser hereunder (except as otherwise expressly provided). Seller and Purchaser agree that Seller’s damages resulting from Purchaser’s default would be impractical and extremely difficult, if not impossible, to estimate and determine, and that the Deposit is a fair and reasonable estimate of those damages which has been agreed to in an effort to cause the amount of such damages to be certain, and that the payment of the Deposit to Seller as liquidated damages under the circumstances provided for herein is not intended as a forfeiture or penalty, but is intended to constitute liquidated damages to Seller. 9.2Seller’s Default.  Prior to Closing (or if at Closing, provided Purchaser is ready, willing and able to close the transactions contemplated hereunder and Seller intentionally fails to close), if Seller shall breach or default under this Agreement in any material respect (which shall  not include a failure of a condition pursuant to Section 7.1 except for Controllable Seller Conditions hereunder and such breach remains uncured for more than ten (10) Business Days following written notice from Purchaser of such default (provided that no such notice and cure shall be applicable to the failure to timely deliver the matters required for Closing hereunder) (for any reason except failure by Purchaser to perform hereunder), or prior to Closing any one or more of Seller’s representations or warranties are breached in any material respect and such breach remains uncured for more than ten (10) Business Days following written notice from Purchaser of such default, then Purchaser, as its sole and exclusive remedy, shall have the right to either: (i) terminate this Agreement by giving Seller written notice thereof, whereupon the Deposit shall be returned to Purchaser and Seller shall reimburse Purchaser’s One Hundred 32     Percent (100%) of its actual expenses in connection with this Agreement, including without limitation, reasonable attorneys’ fees and third party reports on the Property but in no event in excess of $150,000, or (ii) solely as a remedy for failure to close on the part of Seller on the Closing Date, specifically enforce to convey the Property to Purchaser in accordance with this Agreement provided such action seeking specific performance is initiated within one hundred twenty (120) days of the scheduled Closing Date.  Purchaser hereby expressly waives all other remedies available at law or at equity with regard to a Seller default occurring prior to the Closing and matters which do not, by the express terms of this Agreement, survive termination of this Agreement and further provided that no action in specific performance shall seek to require Seller to do anything other than to convey the Property to Purchaser in accordance with this Agreement.  As a condition precedent to Purchaser exercising any right it may have to bring an action for specific performance for Seller to convey the Property hereunder, Purchaser must commence such an action within one hundred twenty (120) days after the occurrence of Seller’s failure to close in accordance with the terms and conditions of this Agreement.  Purchaser agrees that its failure to timely commence such an action for specific performance within such one hundred twenty (120) day period shall be deemed a waiver by it of its right to commence an action for specific performance as well as a waiver by it of any right it may have to file or record a notice of lis pendens or notice of pendency of action or similar notice against any portions of the Property.  In no event shall Seller’s direct or indirect partners, shareholders, owners or affiliates, any officer, director, employee or agent of the foregoing, or any affiliate or controlling person thereof, or Existing Franchisor or Hotel Manager, have any liability for any claim, cause of action or other liability arising out of or relating to this Agreement or the property, whether based on contract, common law, statute, equity or otherwise.   9.3The provisions of this Section 9  shall survive any termination of this Agreement. ARTICLE 10 MISCELLANEOUS 10.1Broker.  Each of Seller and Purchaser represents and warrants to the other that it has not dealt with any broker in connection with this transaction except for Berkadia Real Estate Advisors LLC, for which Seller is responsible for paying and each agrees to hold harmless the other and indemnify the other from and against any and all damages, costs or expenses (including, but not limited to, reasonable attorneys’ fees and disbursements) suffered by the indemnified Party as a result of acts of the indemnifying Party that would constitute a breach of its representation and warranty in this Section 10.1.  The provisions of this Section 10.1 shall survive the Closing or termination of this Agreement. 10.2Further Instruments.  Each Party will, whenever and as often as it shall be reasonably requested to do so by the other, cause to be executed, acknowledged or delivered any and all such further instruments and documents as may be necessary or proper, in the reasonable opinion of the requesting Party and in accordance with industry custom or standard, in order to carry out the intent and purpose of this Agreement; provided, however, that neither Party shall be obligated to incur any cost, expense or liability not expressly contemplated by this Agreement. 33     10.3Notices. Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by a commercial overnight courier that guarantees next day delivery and provides a receipt, or (c) by electronic mail transmission, and shall be served on the parties at the addresses set forth in Basic Information, Section B. Any of the Parties may change its address for the receipt of notices, demands, consents, requests and other communications by giving written notice to the other Party in the manner provided for above.  Any notice shall be effective only upon receipt (or refusal by the intended recipient to accept delivery). 10.4Assignment.  Purchaser shall have the right to assign this Agreement without the need for Seller’s consent; provided, however, that any such assignee shall be controlled by or under the control of, Purchaser or its wholly owned affiliate.  Control for this purpose shall mean having the majority of membership interests in any Person that is the assignee and/or the power (exclusive or in conjunction with any debt providers, investors and/or partners or other Persons) to cause the direction or management of such Person, directly or indirectly.   10.5Third Party Beneficiaries.  The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns, but shall not inure to the benefit of, or be enforceable by, the Title Company or any other person or entity. 10.6Waiver.  Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Party against whom the enforcement of the change, waiver, discharge or termination is sought or, in the case of a default waiver, by the non-defaulting Party. 10.7Incorporation of Recitals, Exhibits and Schedules.  The Recitals to this Agreement and the Exhibits and Schedules attached hereto are hereby incorporated by reference into the body of this Agreement and made a part hereof. 10.8Confidentiality.  Subject to the requirements of any applicable laws (including, but not limited to federal securities regulations and rules), Purchaser shall not make any public announcement or other similar public statement about this Agreement or the transaction contemplated hereby without the written consent of the Seller and the form and content of any public announcement by Purchaser will be subject to the prior approval of Seller.  The Purchaser agrees to keep all correspondence, discussions or other information related to the transaction contemplated hereby strictly confidential and to not disclose any such information to third parties except (a) as required by applicable law; (b) to the Purchaser’s professional advisors, counsel, employees, agents, partners, members, officers, directors, shareholders, franchisors, investors or lenders, and (c) to Purchaser’s third party vendors engaged in performing due diligence with respect to the Property, including without limitation, the Title Company and Escrow Agent, surveyors, contractors and other agents and employees. 10.9Merger.  All understandings and agreements heretofore had between the Parties are merged in this Agreement and the instruments and documents referred to herein, which fully and completely express their agreements with respect to the transactions contemplated herein, and supersede all prior agreements, written or oral, with respect thereto. 34     10.10Governing Law.  This Agreement shall be governed by, interpreted under, and construed and enforced in accordance with, the laws of the Commonwealth of Virginia without regard to its conflict of laws principles. 10.11Captions.  The captions and Article headings included in this Agreement and the table of contents are for convenience only, do not constitute part of this Agreement and shall not be considered or referred to in interpreting the provisions of this Agreement. 10.12Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.  The submission of a signature page transmitted by electronic transmission facility, including PDF, via email, shall be considered as an “original” signature page for purposes of this Agreement. 10.13Severability. If any provision hereof is held invalid or not enforceable to its fullest extent, such provision shall be enforced to the extent permitted by law, and the validity of the remaining provisions hereof shall not be affected thereby. 10.14Prior Negotiations; Construction.  No negotiations concerning or modifications made to prior drafts of this Agreement shall be construed in any manner to limit, reduce or impair the rights, remedies, duties and obligations of the Parties under this Agreement or to restrict or expand the meaning of any of the provisions of this Agreement or to construe any of the provisions of this Agreement in any Party’s favor. The Parties acknowledge that each Party and its counsel have reviewed and prepared this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement or any amendment, Schedule or Exhibit hereto. 10.15Litigation Expenses.  In the event that either Seller or Purchaser is required to employ an attorney because any litigation arises out of this Agreement between the Parties, the non-prevailing Party shall pay the prevailing Party all reasonable fees and expenses, including attorneys’ fees and expenses, incurred in connection with such litigation. 10.16WAIVER OF TRIAL BY JURY.  SELLER AND PURCHASER HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM FILED BY SELLER OR PURCHASER, WHETHER IN CONTRACT, TORT OR OTHERWISE, WHICH RIGHT OR CLAIM RELATES DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, ANY MATTER RELATED HERETO, OR ANY ACTS OR OMISSIONS IN CONNECTION WITH THIS AGREEMENT. THIS WAIVER HAS BEEN AGREED TO AFTER CONSULTATION WITH LEGAL COUNSEL SELECTED BY PURCHASER AND SELLER. 10.171031 Exchange.  Seller acknowledges that Purchaser may be acquiring the Property as part of a multi-property transaction attempting to qualify as a tax-free exchange (“1031 Exchange”) under Section 1031 or 1033 of the Internal Revenue Code, as amended.  Seller shall, to the extent provided below, cooperate with Purchaser’s reasonable request to allow Purchaser to attempt to qualify for the 1031 Exchange; provided, however, that Seller’s 35     obligation to cooperate with Purchaser shall be limited and conditioned as follows: (i) Seller shall receive written notice from Purchaser at least five (5) Business Days prior to the Date of Closing of Purchaser’s intent to effect the 1031 Exchange, which notice shall identify the parties involved in such 1031 Exchange and shall be accompanied by all documents for which Seller’s signature will be required; (ii) Purchaser shall effectuate the 1031 Exchange through an assignment of its rights under this Agreement to a qualified intermediary (the “QI”); (iii) Seller shall not be required to execute any further documents or instruments (except to those sent as referenced above) beyond a simple consent to an assignment by Purchaser of its rights under this Agreement to the qualified intermediary identified by Purchaser; provided, however, that in no event shall Seller be required to execute any document or instrument which, in Seller’s reasonable discretion and judgment, may (A) subject Seller to any additional liability or obligation to Purchaser or any other individual, entity or governmental agency; (B) diminish or impair Purchaser’s obligations or Seller’s rights under this Agreement; or (C) may delay the Closing; (iv) Purchaser shall pay for any and all additional actual and reasonable costs and expenses (including reasonable attorney’s fees) incurred by Seller in connection with accommodating the 1031 Exchange as evidenced by invoices up to $5,000.00 and Seller shall be entitled to a credit at Closing to reimburse Seller for such costs and expenses; (v) the 1031 Exchange shall not be structured to require (A) Seller to convey the Property to any third party, except for the QI or (B) Seller to take title to or accept a security interest in any other property; (vi) Purchaser shall not assign or transfer any of Purchaser’s rights under this Agreement except as provided under Section 10.4 and in this Section 10.17; (vii) Purchaser shall not be relieved of any of its obligations under this Agreement by reason of the 1031 Exchange; (viii) Seller makes no representation or warranty concerning the 1031 Exchange; and (ix) Purchaser agrees to indemnify, defend, and hold Seller, Seller’s officers, directors, shareholders, beneficiaries, members, partners, agents, employees and attorneys, and their respective successors and assigns (each, an “Seller Indemnified Party”) harmless from and against any claims, costs, damages, expenses (including, but not limited to, attorney’s fees and costs), liabilities and losses incurred by, claimed against or suffered by any Seller Indemnified Party arising in connection with the 1031 Exchange.  The foregoing indemnity shall survive the Closing or any termination of this Agreement.  Purchaser’s failure to effectuate any intended 1031 Exchange shall not relieve Purchaser from its obligations to consummate the purchase and sale transaction contemplated by this Agreement and the consummation of the 1031 Exchange shall not be a condition precedent to Purchaser’s obligations under this Agreement. 10.18Business Day Convention.  If the date on which, or time period by which, any right, option, election or other matter provided under this Agreement must be exercised, or by which any act required hereunder must be performed, or by which the Closing shall occur, falls or expires on a day that is not a Business Day, then such date or time period shall be automatically deterred or extended   [Signature Pages to Follow] 36     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.   SELLER:   RP/HH ROSSLYN HOTEL OWNER, LP, a Delaware limited partnership   By:  DBD Harlington GP LLC, its general partner   By:/s/ Marc K. Furstein Name:Marc K. Furstein Title:Chief Operating Officer     PURCHASER:   SOTHERLY HOTELS LP, a Delaware limited partnership   By:Sotherly Hotels Inc. a Maryland corporation Its: General Partner     By:/s/ David R. Folsom David R. Folsom, President & Chief Operating Officer       37     RECEIPT BY ESCROW AGENT This Agreement fully executed by both Seller and Purchaser, has been received by Escrow Agent as of this 13th day of December, 2017, and by its execution hereof. Escrow Agent hereby covenants and agrees to be bound by Sections 2.1, 2.2, 2.3, 4.2, 4.3, 4.4(b), 5.4(b), 6.1(a), 9.1, 9.2 and Exhibit I, and any other terms of this Agreement that are applicable to Escrow Agent in its role as escrow agent pursuant to this Agreement.     ESCROW AGENT:   MULTI-STATE TITLE AGENCY, LLC     By:/s/ Ann D. Jennings Name:Ann D. Jennings Title:Executive Manager       38     EXHIBITS AND SCHEDULES   EXHIBITS:   EXHIBIT A – Legal Description of Real Property EXHIBIT B – Form of Assignment of Ground Lease EXHIBIT C– Form of Bill of Sale EXHIBIT D– Form of Assignment of Leases EXHIBIT E – Form of Assignment of Contracts and Advance Bookings EXHIBIT F – Form of Tenant Notice Letter EXHIBIT G – Form of FIRPTA Certificate EXHIBIT H – Form of Ground Lease Estoppel EXHIBIT I – Deposit Escrow Provisions EXHIBIT J – Permits   39       1     EXHIBIT K--Management Representation Letter   SCHEDULES:   SCHEDULE 1.1(c) – List of Excluded Property SCHEDULE 3.1(f) – Construction Contracts SCHEDULE 4.1 – Due Diligence Materials SCHEDULE 5.3 – Peer Review Scope SCHEDULE D – Equipment Leases SCHEDULE E – List of Service Contracts         1       EXHIBIT A Legal Description of Real Property   [g2018030522074019539577.jpg]   A-1     EXHIBIT B   ASSIGNMENT OF GROUND LEASE       ________________________________________________________________________________________________________ (Space above line for recorder’s use only) RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: ASSIGNMENT AND ASSUMPTION OF GROUND LEASE THIS ASSIGNMENT AND ASSUMPTION OF GROUND LEASE (“Assignment”) is executed as of _________________, 201_ (“Effective Date”), by and between RP/HH ROSSLYN HOTEL OWNER, LP, a Delaware limited partnership (“Assignor”), and _________________, a Delaware limited liability company (“Assignee”). RECITALS: A.Assignor leases certain real property described on Exhibit A attached hereto (“Real Property”), together with the buildings, structures and other improvements located thereon (“Improvements”), from Snell Construction Corporation, a Virginia corporation (“Landlord”), on the terms and subject to the conditions of the following (collectively, “Ground Lease”):  that certain Indenture of Lease dated as of June 1, 1973, as amended by that certain First Amendment to Agreement of Lease dated as of September 9, 1975, as further amended by that that certain Second Amendment to Agreement of Lease dated as of April 1, 197 6, as further amended by that certain Third Amendment to Agreement of Lease dated as of June 30, 1976, as assigned by that certain Assignment of Lease dated as of March 5, 1984, as further amended by that certain Landlord’s Consent Agreement dated as of September 30, 1997 (the “Consent”), as further amended by that certain Fourth Amendment to Agreement of Lease dated as of October 1, 1997, and as assigned by that certain Assignment and Assumption of Ground Lease dated as of December 1, 2006. B.Pursuant to the Agreement of Purchase and Sale dated as of ___________________ 201__ (as amended, the “Purchase Agreement”), by and between Assignor and Assignee, Assignor has agreed to assign all of Assignor’s right, title and interest as tenant under the Ground Lease to Assignee, and Assignee has agreed to accept such assignment B-1     and to assume and perform all of Assignor’s liabilities and obligations under or otherwise associated with the Ground Lease on the terms and subject to the conditions contained herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows: 1.Assignment.  Assignor hereby assigns, sells and transfers to Assignee as of the Effective Date, (i) Assignor’s right, title and interest as tenant under the Ground Lease (including, without limitation, any and all rights or interests of Assignor in or to the Real Property or the Improvements, or any part thereof or interest therein, arising under the Ground Lease) and (ii) Assignor’s interest in any tenant security deposit held by Landlord in connection with the Ground Lease on the terms and subject to the conditions contained in the Ground Lease.  Assignee hereby accepts the foregoing assignment. 2.Assumption.  Assignee hereby assumes and agrees to be bound by and to fully perform, observe, pay and discharge each and every term, covenant, obligation, duty, liability, undertaking and agreement of Assignor under or pursuant to the Ground Lease, in each case whether absolute, accrued, contractual, contingent or otherwise, arising from and after the Effective Date. 3.Encumbrances.  THIS ASSIGNMENT IS SUBJECT TO: A.Taxes and assessments for tax year 201__ and subsequent years; B.Conditions, easements and restrictions of record; C.Zoning and/or restrictions and prohibitions imposed by any governmental or quasi-governmental authorities; and D.The exceptions described on Exhibit B attached hereto. Other than the matters described on Exhibit B attached hereto, Assignor does hereby covenant with Assignee that, except as noted above, at the time of delivery of this Assignment, Assignor’s leasehold interest in the Real Property was free from all encumbrance made by Assignor, and that Assignor will warrant and defend the same against the lawful claims and demands of all persons claiming by, through and under Assignor.   4.Successors and Assigns.  This Assignment shall be binding upon and shall inure to the benefit of Assignor and Assignee and their respective successors and assigns. 5.Counterparts.  This Assignment may be executed in counterparts, each of which the same instrument. 6.Governing Law.  This Assignment shall be governed by, and construed and enforced in accordance with, the laws of the State of Virginia, without reference to principles of conflicts of law. B-2     7.Exhibits.  All exhibits and schedules attached hereto are incorporated herein by this reference. B-3     IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be signed and delivered by their respective duly authorized officers or agents, to be effective as of the Effective Date. ASSIGNOR: Delaware limited partnership By: Name: Title:   STATE OF _______________) ) ss: COUNTY OF ________________) This instrument was acknowledged before me on this ____ day of _____________, 20__, by _____________________, the ____________________ of _________________________, a _________________________, which is the _________________ of _________________, a _________________. Notary Public [Notarial Seal] My commission expires: ______________________ B-4     ASSIGNEE: _______________________, a Delaware limited liability company   By: Name: Title:   STATE OF _______________) ) ss: COUNTY OF ________________) Notary Public [Notarial Seal]                     B-5     Exhibit A to Assignment and Assumption of Ground Lease Legal Description [g2018030522074024939578.jpg] B-6     Exhibit B Permitted Exceptions   B-7     EXHIBIT C BLANKET BILL OF SALE   THIS BLANKET BILL OF SALE AND ASSIGNMENT (this “Assignment”) made this ___ day of __________________, 2017, by and between RP/HH ROSSLYN HOTEL OWNER, LP, a Delaware limited partnership (the “Seller”) and _____________________, a Delaware limited liability company (the “Purchaser”), recites and provides as follows:   WITNESSETH:   WHEREAS, Seller has conveyed to Purchaser by assignment of Ground Lease (the “Conveyance”) of even date herewith, Seller’s leasehold interest in that certain parcel of real property located at 1325 Wilson Boulevard, Arlington, Virginia, in the County of Arlington, Virginia, being more particularly described on Exhibit A attached hereto, together with all rights and appurtenances pertaining thereto and all buildings and all other improvements, structures and fixtures (including all affixed signs) placed, constructed or installed thereon (collectively, the “Real Estate”); and WHEREAS, in connection with the Conveyance, Seller desires to transfer certain personal property to Purchaser. NOW, THEREFORE, in consideration of the premises and the sum of $10.00 and other acknowledged, it is agreed as follows: 1.Seller hereby sells, transfers, assigns, releases and conveys to Purchaser all of the following (collectively, the “Property”): A.To the extent not deemed to be a part of the Real Estate, all improvements, signs, structures, oil, gas and other minerals, air and development rights, roads, alleys, easements, streets and ways adjacent to the Real Estate, rights of ingress and egress thereto, any strips and gores within or bounding the Real Estate and in profits or rights or appurtenances pertaining to the Real Estate. B.All tangible personal property consisting of all furniture, fixtures, equipment, machinery and other tangible personal property (collectively, the “Personal Property”) placed or installed on or about the Real Estate and used as part of or in connection with the Real Estate, including without limitation the Personal Property listed on Exhibit B attached hereto. C.All right, title and interest of Seller in and to all intangible personal property owned by Seller that benefits the Real Estate or the Property, including but not limited to all Seller’s right, title and interest in and to any trade or business name for the Real Estate and/or Personal Property (including the name “Hyatt Centric Arlington”), all telephone exchanges for the Real Estate, all rights to any claims, settlements, proceeds or awards for defective materials which may have been incorporated into the Improvements, all property C-1     management and operations data on Seller’s (or its property manager’s) computers, and all rights to any award made or to be made or settlement in lieu thereof for damage to the Real Estate by reason of condemnation, eminent domain, exercise of police power or change of grade of any street (collectively, the “Intangible Personal Property”). 2.Seller represents and warrants to Purchaser that Seller is the sole owner of the Personal Property and Intangible Personal Property, free and clear of all monetary liens and encumbrances.  Except as provided above and in the Hotel Purchase and Sale Agreement dated ______________, 2017 between Seller and Purchaser’s assignor, Seller makes no representations or warranties with respect to the Property.   3.This Assignment and the provisions herein contained shall be binding upon and inure to the benefit of Seller and Purchaser and their respective successors, legal representatives and assigns.   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURES APPEAR ON FOLLOWING PAGES.] C-2     IN WITNESS WHEREOF, each of the undersigned have caused this Assignment to be executed by its duly authorized representatives effective as of the date and SELLER:   Delaware limited partnership     By: Name: Title:   C-3     PURCHASER:   ___________________, a Delaware limited liability company   By: Name: Title:   C-4     EXHIBIT A   Description of Property     [g2018030522074029239579.jpg] C-5     EXHIBIT B   List of Personal Property         C-6     EXHIBIT D ASSIGNMENT AND ASSUMPTION OF LEASES _________________ by and between RP/HH ROSSLYN HOTEL OWNER, LP, a Delaware limited partnership (“Assignor”) and ________________, a Delaware limited liability company (“Assignee”). WHEREAS, Assignor or Assignor’s predecessors in title heretofore entered into certain leases (the “Leases”) with tenants covering a portion of the real property situated at 420 Dominion Boulevard, Arlington, Virginia, in the County of Arlington, Virginia (the “Property”) and described on EXHIBIT A attached hereto and incorporated herein by reference, known as Hyatt Centric Arlington. WHEREAS, Assignee has purchased the Property from Assignor pursuant to a Hotel Purchase and Sale Agreement dated ___________________, 2017 (the “Purchase Agreement”), between Assignor and ______________________________, a _____________________ and in connection therewith, Assignor desires to assign to Assignee and Assignee desires to assume from Assignor, the Leases, and all of the rights, benefits and privileges of the lessor thereunder. NOW THEREFORE, in consideration of the foregoing and the agreements and covenants herein set forth, the sum of TEN AND NO/100 DOLLARS ($10.00), and other good and valuable consideration paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby ASSIGN, TRANSFER, SET OVER and DELIVER unto Assignee all of the lessor’s and landlord’s interest in the Leases pertaining to the Property effective as of the date hereof, and all security deposits held by Assignor in connection therewith, but subject to all terms, conditions, reservations and limitations set forth in the Leases (Assignor’s interest in and to all such Leases, properties, rights and interests, subject as aforesaid, being hereinafter collectively referred to as the “Assigned Leases”). TO HAVE AND TO HOLD all and singular the Assigned Leases, unto Assignee, and Assignee’s legal representatives, successors and assigns forever, and Assignor does hereby bind Assignor, and Assignor’s successors, to warrant and forever defend all and singular the Assigned Leases unto Assignee, and Assignee’s legal representatives, successors and assigns, against every person whomsoever lawfully claiming or to claim the same, or any part thereof by, through or under Assignor, but not otherwise. 1.Assignor hereby warrants and covenants to Assignee that Assignor is the owner of all of the Leases, a true and correct list of the Leases presently in force being attached hereto as EXHIBIT B and incorporated herein by reference, and all prepayments of rent assigned hereunder; and, that this Assignment conveys all of the interest of Assignor and lessor in the Leases and to Assignor’s knowledge conveys the total amount of unapplied security deposits and prepaid rents held by Assignor in connection with the Leases. 2.Assignor shall not be responsible to the lessees under the Leases for the discharge or performance of any duties or obligations to be performed or discharged by the lessor thereunder after the date hereof.  By accepting this Assignment of Leases and by its execution D-1     hereof, Assignee hereby assumes and agrees to perform all of the terms, covenants and conditions of the Leases on the part of the lessor therein required to be performed arising thereunder, from and after the date hereof including but not limited to the obligation to repay, in accordance with the terms of the Leases, to the lessees thereunder any and all security and prepaid rental deposits delivered or credited to Assignee. 3.Assignee hereby agrees to indemnify and hold harmless Assignor from and against any and all loss, cost or expense (including, without limitation, reasonable attorney’s fees) resulting by reason of Assignee’s failure to perform any of the obligations of lessor under the Leases after the date hereof.  Assignor hereby agrees to indemnify and hold harmless Assignee from and reasonable attorney’s fees) resulting by reason of the failure of Assignor to perform any of the obligations of the lessor under the Leases on or prior to the date hereof. 4.All of the covenants, terms and conditions set forth herein shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns.   D-2     ASSIGNOR: Delaware limited partnership   By: Name: Title:       [SIGNATURE OF ASSIGNEE APPEARS ON FOLLOWING PAGE.] D-6     ACCEPTED BY ASSIGNEE: ____________________, a Delaware limited liability company By: Name: Title:         D-6   EXHIBIT A LEGAL DESCRIPTION [g2018030522074034939580.jpg] D-6   EXHIBIT B LEASES     D-6   EXHIBIT E   ASSIGNMENT AND ASSUMPTION OF CONTRACTS, ADVANCE BOOKINGS AND INTANGIBLES   This ASSIGNMENT AND ASSUMPTION OF CONTRACTS, ADVANCE BOOKINGS AND INTANGIBLES (this “Assignment”) is made as of the ___ day of ______________,  2017, between RP/HH ROSSLYN HOTEL OWNER, LP, a Delaware limited partnership (“Assignor”), and ____________________, a Delaware limited liability company (“Assignee”).   For and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration to it in hand paid by Assignee to Assignor, and the mutual covenants herein contained, the receipt and sufficiency of the foregoing consideration being hereby acknowledged by the parties hereto, Assignor hereby assigns, transfers, sets over and conveys to Assignee all of Assignor’s right, title and interest, to the extent assignable, in, to and under any and all of the following, to wit:       (i) the contracts and agreements listed and described on EXHIBIT B attached hereto and incorporated herein by this reference (the “Contracts”), which are associated with that certain real property being particularly described on EXHIBIT A attached hereto and incorporated herein by this reference, more commonly known as Hyatt Centric Arlington, located at 1325 Wilson Boulevard, Arlington, Virginia, in the County of Arlington, Virginia (the ”Property”),     (ii) all Advance Bookings (as defined in that certain Hotel Purchase and Sale Agreement between Assignor and Assignee, dated as ____________, 2017);   (iii) all assignable existing warranties and guaranties (express or implied) issued to Assignor in connection with the improvements located on the Property or the personal property that is being conveyed to Assignee by a bill of sale dated as of the same date hereof;[ and]      (iv) all assignable existing permits, licenses, approvals and authorizations issued by any governmental authority in connection with the Property[.][; and   (v) the Restaurant Marks Agreement.]   All items described in (iii) [and][,] (iv) [and (v)] above are hereinafter collectively referred to as “Intangible Property.”   Assignee does hereby assume and agree to perform all of Assignor’s obligations under the Contracts, Advance Bookings and Intangible Property accruing from and after the date hereof.  Assignee agrees to indemnify, protect, defend and hold harmless Assignor from and against any and all liabilities, losses, costs, damages and expenses (including reasonable attorneys’ fees) directly or indirectly arising out of or related to any breach or default in Assignee’s obligations hereunder.   E-1   Assignor agrees to indemnify, protect, defend and hold harmless Assignee from and against any and all liabilities, losses, costs, damages and expenses (including reasonable attorneys’ fees) directly or indirectly arising out of or related to any breach or default in Assignor’s obligations under the Contracts, Advance Bookings or Intangible Property accruing on or prior to the date hereof.   This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective heirs, executors, administrators, successors and assigns.   This Assignment may be executed in two or more counterparts, each of which shall same instrument.     E-2   IN WITNESS WHEREOF, Assignor and Assignee have each executed this Assignment as of the date first written above.     ASSIGNOR:   Delaware limited partnership     By: Name: Title:   E-3       ASSIGNEE:     By: Name: Title:       E-4     EXHIBIT A   Description of Property   [g2018030522074072739581.jpg] E-5     EXHIBIT B   Contracts     E-6     EXHIBIT F   TENANT NOTICE LETTER   To ______________________ Please be advised that effective ________________, 2017, RP/HH Rosslyn Hotel Owner, LP, a Delaware limited partnership, has sold its interest in the property known as Hyatt Centric Arlington located at 1325 Wilson Boulevard, Arlington (Arlington County), Virginia to _______________, a Delaware limited liability company. Please make all rent checks for the month of __________________, 2017, and in the future, payable to _______________________ and mail them to the following address:         Any payments of rent or other charges or expenses which are already due to RP/HH Rosslyn Hotel Owner, LP should be paid directly to RP/HH Rosslyn Hotel Owner, LP at _________________ ______________________________________.   The new owners will be maintaining a leasing office at ________________________ with the following telephone number: ___-___-____.     F-1       Sincerely, Delaware limited partnership     By: Name: Title: F-2     New Landlord/Purchaser:   __________________, a Delaware limited liability company   By: Name: Title:   F-3     EXHIBIT G CERTIFICATION OF NON‑FOREIGN STATUS AND REAL ESTATE REPORTING INFORMATION Section 1445 of the Internal Revenue Code provides that the owner of a disregarded entity (which has legal title to a United States real property interest under local law) will be the Transferor of the property and not the disregarded entity.  To inform the transferee, _________________, a Delaware limited liability company (“Transferee”), that withholding tax is not required upon the disposition of a United States real property interest by RP/HH ROSSLYN HOTEL OWNER, LP, a Delaware limited partnership (“Owner”), _______________________, a ______________________________ (“Transferor”), the sole member of Owner, hereby certifies the following:   1. Transferor is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations promulgated pursuant thereto). 2.Transferor’s United States Employer Identification Number is: _____________ 3.Transferor’s office address is:_____________________________ _____________________________ _____________________________     4. Address or description of property conveyed:  See Exhibit A attached hereto.   5.Total Sales Price:$______________ 6.Please check one:(X) Sale or (  ) Gift 7.Settlement Date:_______________ __, 2017 8.At the time of settlement, was the Property the Transferor’s principal residence?                  Yes       X       No   9. Transferor is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii) of the Federal Income Tax Regulations. 10.Settlement Agent’s Name:______________________ Address:______________________ ______________________ Attn: ________________ Settlement Agent’s Taxpayer ID No.:____________________   G-1       Transferor understands that this Certification may be disclosed to the Internal Revenue Service by Transferee or the settlement agent and that any false statement contained herein could be punished by fine, imprisonment or both. Under penalties of perjury, I declare that I have examined this Certification and, to the best of my knowledge and belief, it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Transferor. [Signature Page Follows.] G-2     SELLER: Delaware limited partnership     By: Name: Title:       STATE OF ______________________, CITY/COUNTY OF _______________, to-wit:   This instrument was acknowledged before me on the ____ day of_______________, 2017, by ____________________________________, as _____________________________ of RP/HH ROSSLYN HOTEL OWNER, LP, a Delaware limited partnership, on behalf of the company.     My commission expires:  ___________________________. My registration number is:  .     [SEAL]_________________________________ Notary Public   G-3     EXHIBIT A   LEGAL DESCRIPTION   [g2018030522074097039582.jpg]     G-4     EXHIBIT H   CONSENT AGREEMENT AND ESTOPPEL     This CONSENT AGREEMENT AND ESTOPPEL (this “Agreement”)  is made this ____ day of ___________, 20___ by SNELL CONSTRUCTION CORPORATION, a Virginia corporation (“Landlord”), in favor of ___________________, a _______________________ (“Tenant”) , and ___________________, a _______________________ (“Mortgage Lender”)  and their respective designees, nominees, successors and assigns.     A. Pursuant to that certain Indenture of Lease dated as of June 1, 1973 (the “Indenture of Lease”), between R-V Development Company (“Original Tenant”) and Murphy & Ames, Inc. (“Original Landlord”), Original Tenant leased from Original Landlord those certain premises more particularly described on Exhibit A hereto (the “Premises”). The Indenture of Lease has been (i) amended by that certain First Amendment to Agreement of Lease dated as of September 9, 1975, (ii) April 1, 1976, (iii) amended by that certain Third Amendment to Agreement of Lease dated as of June 30, 1976, (iv) assigned by that certain Assignment of Lease dated as of March 5, 1984, (v) amended by that certain Landlord's Consent Agreement dated as of September 30, 1997 (the “Consent”),  (vi) amended by that certain Fourth Amendment to Agreement of Lease dated as of October 1, 1997, (vii) assigned by that certain Assignment and Assumption of Ground Lease dated as of December 1, 2006, and (viii) amended pursuant to that certain Fifth Amendment to Indenture of Lease dated November 6, 2015 (the Indenture of Lease, as amended and assigned, hereafter referred to as the “Lease”). All capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Lease.     B. RP/HH ROSSLYN HOTEL OWNER, LP, a Delaware limited partnership (“Seller”) is the ultimate successor in interest to Original Tenant under the Lease and Landlord is the ultimate successor in interest to Original Landlord under the Lease.     C. Pursuant to that certain [Assignment and Assumption of Lease] dated on or about the date hereof between Seller and Tenant, Tenant has acquired all of Seller’s leasehold interest in and to the Lease and the Premises (the “Acquisition”).     D. In order to finance the acquisition, Mortgage Lender has agreed to make a mortgage loan to Tenant in the maximum principal amount of approximately $_________________ (the “Loan”)     of which are hereby acknowledged, Landlord hereby certifies to and agrees with Tenant and Mortgage Lender as follows:     1. Landlord hereby consents to (i) the Acquisition and (ii) the Loan. Furthermore, Landlord consents to the deed of trust securing the Loan and encumbering Tenant's leasehold H-1       interest in the Premises (the “Deed of Trust”). The foregoing consent by Landlord in no way constitutes an approval or agreement by Landlord to any of the terms, conditions or agreements set forth in the Deed of Trust (other than the mortgage and pledge of the leasehold interest) or any documentation securing or evidencing the Loan, but rather is solely intended to provide Landlord's consent to the Loan and the mortgage and pledge of Tenant's interest in the Lease.   2. Landlord acknowledges and agrees that (i) the Deed of Trust is a Leasehold Mortgage in accordance with the terms and conditions of the Lease and (ii) Mortgage Lender is an approved Leasehold Mortgagee in accordance with the terms and conditions of the Lease and is entitled to all benefits of a Leasehold Mortgagee as set forth in the Lease.   3. Landlord hereby certifies that the lease is unmodified, except as to the amendments related above, and is in full force and effect.   4. Landlord hereby certifies that Fixed Rent payable during the balance of the original term of the Lease (ending June 30, 2025) is $50,000 per annum.   5. Landlord hereby certifies that the most current amount of monthly Percentage Rent for the month of _____________, 2018 was $_____________.   6. Landlord hereby certifies that Net Rent has been paid through ____________ and Additional Rent has been paid for the period through _________________, such payment being due ________________________.   7. Landlord hereby certifies that, to the best of Landlord’s knowledge following due inquiry, Tenant is not in default in keeping, observing or performing any of the terms of the Lease.   8. Landlord hereby consents to the exercise by Tenant of the following renewal options as set forth in Section 21.01 of the Lease:  Second Renewal Term and Third Renewal Term, hereby extending the term of the Lease until June 30, 2055.   9. Landlord hereby certifies that it has not encumbered its fee interest in the Premises with a Fee Mortgage, and that any future Fee Mortgage shall be subject and subordinate to the terms and conditions of the Lease and any Leasehold Mortgage.   10. Landlord hereby agrees that in the event of any exercise of remedies by Mortgage Lender under the Deed of Trust, Mortgage Lender shall be permitted, without the consent of Landlord, to acquire leasehold title to the Premises and to the Lease by foreclosure, assignment in lieu of foreclosure, or other exercise of remedies and shall thereafter be permitted to assign its interest in the Lease without Landlord’s consent.   11. Landlord hereby agrees that a Leasehold Mortgagee’s right to a New Lease shall without limiting the rights under the Lease, also expressly apply in the event the Lease is rejected or disaffirmed in a bankruptcy proceeding, or pursuant to H-2       12. Landlord acknowledges that both Tenant and Mortgage Lender are relying upon the certifications contained herein in connection with (i) the Acquisition and (ii) the making of the Loan.   13. For purposes of notices delivered pursuant to the Lease, the current address of Tenant, Mortgage Lender and Landlord are as follows: If to Tenant: c/o Sotherly Hotels Inc. 410 West Francis Street Williamsburg, Virginia 23185 Attn: Scott Kucinski   If to Mortgage Lender:       If to Landlord:                     H-3     EXHIBIT I   DEPOSIT ESCROW PROVISIONS   Escrow Agent shall hold, manage and disburse the Deposit subject to the provisions set forth in the Agreement and the following:     1. Escrow Agent undertakes to perform only such duties as are expressly set forth and are limited to the safekeeping of the Deposit in accordance with the terms of this Agreement.   2. Escrow Agent shall place the Deposit in an interest-bearing account.  Any interest earned shall be included in the Deposit.  The Purchaser shall provide tax identification number, W-9, and any additional bank required forms, including signature card to Escrow Agent in order to establish such interest bearing account.   3. Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine, assume the validity and accuracy of any statement or assertion contained in such a writing or instrument and assume that any person purporting to give any writing, notice, advice or instructions in connection with the provisions hereof has been fully authorized to do so.  Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to the form, manner and execution or validity of any document delivered to the Escrow Agent, any notice received relative to this Agreement or the identity, authority or right of any person executing the same.   4. Provided that Escrow Agent is not guilty of willful misconduct or gross negligence or otherwise breaches this Agreement, Purchaser and Seller release Escrow Agent, its officers, managers, directors and agents, from any and all claims, liabilities, suits or proceedings at law or in equity and any other expenses, fees or charges which they may incur by reason of the subject matter of this Agreement.   5. negligence or otherwise breaches this Agreement, Purchaser and Seller jointly and severally agree to indemnify Escrow Agent, its officers, managers, directors and agents, from any and all claims, liabilities, suits or proceedings at law or in equity and any other expenses, fees or charges which Escrow Agent may incur by reason of the subject matter of this Agreement and shall promptly reimburse Escrow Agent for the same upon written demand from Escrow Agent.   6. Escrow Agent shall be discharged of any responsibility hereunder at such time Escrow Agent has disposed of the Deposit as provided for in this Agreement.   7. Escrow Agent shall not be liable for loss or impairment of the Deposit in the course of collection or while on deposit with a bank due to bank failure, insolvency or suspension, except as shall result from failure of the Escrow Agent to comply with provisions of this Escrow Agreement or with joint written instructions requiring deposit of the Deposit in a bank designated by name.   8. If Escrow Agent determines that Purchaser and Seller are in disagreement about the J-1       propriety of any action contemplated by Escrow Agent hereunder, Escrow Agent may (without limitation) withhold disposition of the Deposit pending resolution of such disagreement. In the event that conflicting demands are made upon Escrow Agent, Purchaser and Seller expressly agree and consent that Escrow Agent shall have the absolute right to do the following:   a. withhold and stop all disbursements for a period of thirty (30) days; and   b. at any time after such 30-day period, file a suit in interpleader in a court of competent jurisdiction seeking to require the parties to interplead and litigate in such court their several claims and rights among themselves.  Upon the filing of such a suit and a deposit of the Deposit to such court, Escrow Agent shall ipso facto be fully released and discharged from all obligations to further perform any and all duties imposed upon it by this Agreement.  Purchaser and Seller shall reimburse Escrow Agent for any expenses, fees or charges that Escrow Agent may incur by reason of the interpleader promptly upon written demand from Escrow Agent.     9. Escrow Agent may, in its sole discretion, elect to resign in its capacity as Escrow Agent under this Agreement upon not less than thirty (30) days written notice to Purchaser and Seller.   10. The original principal amount of the Deposit shall be applied as a credit to the Purchase Price at Closing.  Escrow Agent shall pay to Purchaser all interest earned as soon as practicable after the Closing.  Except for disbursements made at the joint direction of Purchaser and Seller and any payment of the Deposit to Seller at the direction of Purchaser, Escrow Agent shall notify Seller and Purchaser of any intended disbursement of the Deposit not less than three (3) Business Days prior to any actual disbursement of the Deposit.  Purchaser and Seller shall be deemed to have consented to such proposed disbursement unless such party has notified Escrow Agent and the other party to the Contract of its objection to such proposed disbursement by the end of such period of three (3) Business Days.   11. All notices permitted or required under this Agreement will be in writing and will be given by (a) United States Certified Mail, return receipt requested, postage prepaid, (b) personal delivery, (c) overnight courier delivery service for next business day delivery, charges prepaid, or (b) fax transmission, and addressed to the applicable party at the address set forth below or to such other address as a party may specify from time to time by giving notice in accordance with this Section.  All notices will be effective upon the date of receipt or, if applicable, refusal.  Notice shall be sent pursuant to Notice Addresses set forth in Section B of this Agreement and to Title Company and Escrow Agent as set forth in Section A of this Agreement.     J-2     EXHIBIT J     List of Permits   VA Dept of ABC LIQUOR LICENSE LICENSE VA Dept of Taxation SALES & USE TAX LICENSE Arlington County OCCUPANCY LICENSE LICENSE Arlington County RESTAURANT CAPACITY LICENSE Arlington County Fire Dept FIRE SYSTEM TESTING LICENSE Arlington County Elevator Inspection ELEVATOR LICENSE Arlington County Comm of Revenue BUSINESS LICENSE LICENSE Arlington County FOOD & FOOD HANDLING LICENSE LICENSE VA Dept of Labor & Industry BOILER PERMIT LICENSE       J-1     EXHIBIT K   Management Representation Letter   [Date of Audit Report Issuance]     ABC Auditors 123 Main Street Richmond, VA 23122       We are providing this letter in connection with your audit of the financial statements of Your Hotels Limited Partnership (the “Entity”), which comprise the balance sheet as of December 31, 2017 and the related statement of operations, changes in member’s equity, and cash flows for the year then ended, and the related notes to the financial statements. We understand that your audit was made for the purpose of expressing an opinion as to whether the financial statements are presented fairly, in all material respects, in accordance with GAAP”).  We confirm that we are responsible for the preparation and fair presentation of the hotel entity financial statements of financial position and results of operations, for accounts under our control as Operator of the Hyatt Centric (the “Hotel”) in conformity with the accounting principles generally accepted in the United States of America, for the year ended December 31, 2017.   Certain representations in this letter are described as being limited to matters that are material.  Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.   We confirm, to the best of our knowledge and belief, as of the date of this representation letter, as entered on the first page, the following representations made to you during your audit as they relate to the Hotel during the year ended December 31, 2017:   (1) The internal financial statements of the Hotel are fairly presented in conformity with accounting principles generally accepted in the United States of America.   (2) We are responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.   (3) We have made available to you all:     (a) Financial records and related data. K-1       (4) We are unaware of any communications from regulatory agencies concerning noncompliance with or deficiencies in financial reporting practices.     (5) There are no material transactions that have not been properly recorded in the accounting records of the Hotel.   (6) We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.  We have disclosed to you the results of our assessment of the risk that the consolidated financial statements may be materially misstated as a result of fraud.  We have no knowledge of any:     (a) Fraud or suspected fraud involving management or involving employees who have significant roles in internal control, whether or not perceived to have a material effect on the consolidated financial statements.     (b) Fraud or suspected fraud involving others where the fraud could have a material effect on the consolidated financial statements.     (c) Allegations of fraud or suspected fraud affecting the Entity received in communications from employees, former employees, regulatory agencies, law firms, predecessor accounting firms, or other professionals.   (7) We have no plans or intentions that may materially affect the carrying value or classification of assets and liabilities.   (8) We are unaware of any:     (a) Violations or possible violations of laws or regulations (including the failure to file reports required by regulatory bodies (e.g., EPA, OCC, FDIC, DOL, Medicare, U.S. Customs Service, HIPAA, IRS, Dept. of Commerce, state and municipal authorities when the effects of failing to file could be material to the consolidated financial statements whose effects should be considered for disclosure in the consolidated financial statements or as a basis for recording a loss contingency.     (b) Unasserted claims or assessments that our lawyer has advised us are probable of assertion and must be disclosed in accordance with FASB ASC 450.   (9) Receivables recorded in the Hotel financial statements represent valid claims against debtors for sales or other charges arising on or before the balance sheet date and have been appropriately reduced to their estimated net realizable value.   (10) We have complied with all aspects of contractual agreements relating to the Hotel operations that would have a material effect on the consolidated financial statements in the event of noncompliance. (11) All related costs, management fees, and incentive management fees are properly reflected in the hotel financial statements in accordance with the Highgate Hotels L.P. management agreement. K-2     (12) No discussions have taken place with your firm’s personnel regarding employment with the Entity. (13) There are no known actual or threatened litigation, claims, or assessments that are probable of assertion whose effects should be considered when preparing the financial statements. (14) We have no knowledge of concentrations existing at the date of the financial statements that make the Company vulnerable to the risk of severe impact that have not been disclosed to you. (15) We have disclosed to you all known related-party relationships and transactions, including sales, purchases, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties. (16) We have disclosed to you all known guarantees, whether written or oral, under which the Company is contingently liable. (17) We have disclosed to you all known liabilities and known gain or loss contingencies.   To the best of our knowledge and belief, no events have occurred subsequent to the balance sheet date and through the date of this representation letter, as entered on the first page that would require adjustment to or disclosure in the aforementioned consolidated financial statements.   Very truly yours,         Joe Smith, Corporate Controller Highgate Hotels, L.P.       K-3       SCHEDULE 1.1(c)   List of Excluded Property     1. AV Equipment   Schedule 1.1(c)     SCHEDULE 3.1(f)   Construction Contracts     1. Vertical Transportation Equipment Specification dated May 23, 2017, and all change orders related thereto between ThyssenKrupp Elevator Corporation and Seller   2. A101-2007 dated May 22, 2017 between C.A. Lindman, Inc. and Seller   3. Vertical Transportation Consulting Services Modernization Proposal, dated October 27, 2015, between Barbre Consulting, Inc. and Seller     Schedule 3.1(f)     SCHEDULE 4.1     Due Diligence Materials   To the extent in Seller’s possession (and not previously delivered to Purchaser prior to the date hereof), if any:   (1)Statements of profit and loss, and financial and operating statements, including monthly income statements, for the past full calendar or fiscal year (if available), together with year-to-date statements for the portion of the year ending with the last monthly reporting period available to Seller prior to the Effective Date; (2)Copies of all Contracts and any other material agreements affecting the Hotel, except for Seller’s management agreement and the Existing Franchise Agreement which will be terminated as of Closing with respect to the Property; (3)A schedule of all employee positions at the Hotel; (4)Copies of certificates of occupancy, permits, licenses and other approvals issued by Governmental Authorities having jurisdiction over the Hotel and any certificates or reports issued by the local board of fire underwriters or other body exercising similar functions (may be made available on-site); (5)Copies of utility bills or other evidence of the cost for utility service for the months in the calendar year 2015 that have ended prior to the Effective Date; (6)Copies of the most recent ALTA survey of the Property and Seller’s existing title policy for the Property; (7)Copies of any monthly STAR reports prepared in respect of the Hotel for the twelve (12) month period preceding the Effective Date; (8)The latest available monthly occupancy and average hotel rates; (9)Copies of real estate tax bills and personal property tax bills for the most recent assessment period; and (10) Copies of all environmental and engineering reports related to the Property   Schedule 4.1       Schedule 5.3   Peer Review Scope     • Review of architectural and structural drawings for the building, as well as the repair and maintenance files, past reports and testing results, and current specs/drawings for the ongoing garage repairs.   • Review available warranty documents pertaining to the existing roofs.   • Perform a visual survey of the garage to identify structural defects and other evidence of deterioration, and observe the overall condition of the slabs, foundation walls, storage areas, stairwells, etc.    • Structural defects, leakage (or evidence thereof), and generally deteriorated elements observed during the survey will be documented and photographed.   • The exposed structural columns and foundation walls within the garage that support the hotel building will be visually inspected for signs of structural deterioration or distress that may compromise the building’s structural integrity.   • The survey must be performed when vehicle occupancy is minimal.    • In addition to the visual survey, perform a 20% chain drag and soffit sounding survey to determine an order of magnitude quantity for concrete delamination and spalling.   • Observe garage foundation walls, bottom level slab and elevator pits to check for signs of active water infiltration.    • The garage will be observed after a heavy rainfall.   • Perform concrete chloride ion content extraction and testing at the elevated garage slab levels. Dust samples will be extracted from the elected garage slabs with a small diameter drill bit for a depth of 1”-2” for testing. The drill holes will be sealed with sealant after completion of the sample extraction. It is expected that approximately 8 samples will be taken.   Schedule 5.3     Schedule D   Equipment Leases   None Schedule D     Schedule E   List of Service Contracts PITNEY BOWES POSTAGE METER CONTRACT SERVICE Towne Park PARKING GARAGE CONTRACT SERVICE HOBART SERVICES KITCHEN SERVICE CONTRACT SERVICE CINTAS FIRE PROTECTION FIRE SUPPRESSION INSPECT CONTRACT SERVICE HOBART SERVICES KITCHEN SERVICE CONTRACT SERVICE INTERNAL PLANT DESIGN INTERIOR & EXTERIOR LANDSC CONTRACT SERVICE IESI WASTE REMOVAL WASTE REMOVAL - Land fill CONTRACT SERVICE IESI WASTE REMOVAL WASTE REMOVAL CONTRACT SERVICE NEWMARKET NETWORK MAINTENANCE CONTRACT SERVICE NOR1 AWARD REVENUE CONTRACT SERVICE OPEN TABLE READER BOARD SERVICES CONTRACT SERVICE OPEN TABLE RESTAURANT CONTRACT SERVICE INTENT MEDIA E COMMERCE SERVICE CONTRACT SERVICE ONE SAFE ELECTRONIC STORAGE CONTRACT SERVICE PM HOOD & DUCT KITCHEN & LAUNDRY EXHAUST CONTRACT SERVICE QUANTUM CLEANERS CLEANING CONTRACT SERVICE SHARP BUSINESS SYSTEMS COPIER MAINTAINCE CONTRACT SERVICE SHRED -IT SHREDDING SERVICE CONTRACT SERVICE SIEMENS FIRE ALARM SYSTEM CONTRACT SERVICE STANLEY FIRE SYSTEM CONTRACT SERVICE TTI TECHNOLOGIES TTI SUPPORT CONTRACT SERVICE AAA ADVERTSING CONTRACT SERVICE Air Aroma Air Frashner CONTRACT SERVICE ADP CORPORATE CONTRACT PAYROLL SERVICE CONTRACT SERVICE AT&T PHONE CONTRACT SERVICE Schedule E   ATM SYSTMS ATM CONTRACT CONTRACT SERVICE BMI BROADCAST MUSIC CONTRACT SERVICE BOOKING.COM MONTHLY COMMISSION CONTRACT SERVICE Broadsoft Hospitality JAZZ CALL CONTRACT SERVICE CENDYN Eproposal CONTRACT SERVICE CENDYN E-Concierge CONTRACT SERVICE CENTRADA IT SUPPORT CONTRACT SERVICE CleanThe World Foundacion, INC Hopitality Recycling Program CONTRACT SERVICE CINTAS CORPORATION UNIFORM LAUNDRY CONTRACT SERVICE COSTAR REALTY INFORMATION TENTANT WEB FOR LOCAL CONTRACT SERVICE DESIGN COMMUNICATIONS INC (DCI) HOTEL PHONES CONTRACT SERVICE DESTINATION DC MEMBERSHIP DUES CONTRACT SERVICE DIGITAL ALCHEMY E MARKETING CONTRACT SERVICE DIRECT TV CABLE CONTRACT SERVICE DMX, INC DMX SERVICE CONTRACT SERVICE DOW JONES NEWSPAPERS CONTRACT SERVICE Dominion Textile Service Cleaning Commpany CONTRACT SERVICE DUNBAR ARMOR CONTRACT SERVICE EXPEDIA E COMMERCE SERVICE CONTRACT SERVICE HOTEL REV UP REVENUE SUPPORT CONTRACT SERVICE KNOWLAND GROUP READER BOARD SERVICES CONTRACT SERVICE MERCHANTS INFORMATION CHECK BACKGROUND CONTRACT SERVICE MICROS SYSTEMS/Oracle RESTARUANT SYSTEM MAINT CONTRACT SERVICE NATIONAL HOTEL-MOTEL ASS. HOTEL DIRECTORY CONTRACT SERVICE PAETEC COMMUNICATIONS LONG DISTANCE CONTRACT SERVICE PERFORMIC PAID SEARCH CONTRACT SERVICE Schedule E   PURE SOLUTION REVENUE BUILDING CONTRACT SERVICE Ripple Point Comm. Manag. Services CONTRACT SERVICE ROBERTS OXYGEN CO2 CONTRACT SERVICE SESAC MUISC CONTRACT SERVICE ST. MORITZ SECURITY STAFF CONTRACT SERVICE STFTN ( HOTEL PRO) STAFFING SERVICE CONTRACT SERVICE THE R MARTIN GROUP AV SERVICE CONTRACT SERVICE TrustWave Holdings,Inc TrustWave hotel security CONTRACT SERVICE TRAVEL CLICK RUBICON CONTRACT SERVICE TRAVELPORT DCA READER CONTRACT SERVICE TRAVELZOO ADVERTSING CONTRACT SERVICE TRIPADVISOR ECOMMERCE CONTRACT SERVICE THE TYSSENKRUPP ELEVATOR CONTRACT SERVICE UPS SHIPPING& HANDLING CONTRACT SERVICE US DIRECTORY ASSISTANCE DIRECTORY ASSISTANCE CONTRACT SERVICE WASHINGTON POST NEWSPAPERS CONTRACT SERVICE WORLD CINEMA, INC HD CHANNEL CONTRACT SERVICE AMADEUS HOSPITALITY HOT.Sos CONTRACT SERVICE Lightower INTERNET SERVICE CONTRACT SERVICE       0110570.0629622   4831-3403-8356v6   Schedule E  

Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park 112 Worcester Street Wellesley Hills, MA 02481 February 22, 2012 Securities and Exchange Commission treet, N.W. Washington, D.C. 20549-8629 Re: Sun Life Insurance and Annuity Company of New York and Sun Life Assurance Company of Canada (U.S.) (the “Registrants”) Post-Effective Amendment No. 2 to Registration Statement on Form S-3 Pertaining to Regatta Gold NY and Futurity NY Contracts and Related Subordinated Guarantee File Nos. 333-169559 and 333-169559-01 Commissioners: Enclosed for filing, pursuant to Item 512(a)(3) of Regulation S-K under the Securities Act of 1933, as amended, is a post-effective amendment to the above-captioned Registration Statement on Form S-3 (the “Amendment”).The purpose of Amendment is to remove from registration those securities of Sun Life Insurance and Annuity Company of New York and the related Subordinated Guarantee provided by Sun Life Assurance Company of Canada (U.S.), that were previously registered by the Registration Statement and that were not sold in the offering. Registrants and the principal underwriter, Clarendon Insurance Agency, Inc., intend to make an oral request for acceleration of the effective date of the Amendment to a date on or about March 28, 2012.The Registrants and the principal underwriter are aware of their obligations under the 1933 Act.Specifically, the Registrants acknowledge and represent that: ● the action of the Commission or the Staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Registrants from their full responsibility for the adequacy and accuracy of the disclosure in the filing; ● should the Commission or the Staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to any aspect of the filing, including the request for acceleration cited above; and ● the Registrants may not assert this action to accelerate as defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. In addition, the Registrants acknowledge and represent that: ● the Registrants are fully responsible for the adequacy and accuracy of the disclosure in the filing, regardless of any comments made by the Staff of the Commission with respect to the disclosure or any changes in the disclosure in response to the Staff’s comments; ● any comments made by the Staff of the Commission with respect to the disclosure in the filing, or any changes in the disclosure in response to the Staff’s comments, do not foreclose the Commission from taking any action with respect to any aspect of the filing; and ● the Registrants may not assert, as defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States, any comments made by the Staff of the Commission with respect to the disclosure in the filing or any changes in the disclosure in response to the Staff’s comments. Should you have any questions regarding this correspondence or the Amendment, please contact the undersigned at (781) 263-6402 or Patrice M. Pitts, Esquire, at (202) 383-0548. Respectfully yours, /s/Sandra M. DaDalt Sandra M. DaDalt Assistant Vice President & Senior Counsel cc: Rebecca A. Marquigny, Esquire Patrice M. Pitts, Esquire

Title: [Kansas] My Significant Other would like to move in with me. My lease says I can't have anybody else living with me. What would happen if we got caught? Question:The title is the TL;DR. My significant other has a rude roommate that keeps being a nuisance. The significant other works early mornings starting at 6am, and has night classes as well. She does her homework before and after her night classes and goes straight to bed. Her roommate is a bum that keeps playing music throughout the day, slams doors, and consistently wakes up my significant other in the middle of the night while loudly playing video games. She talked to her roommate of course, but they haven't stopped. She talked to her landlord, but because her roommate isn't breaking anything in contract her landlord won't help her. The landlord did say she could move out if she could find a replacement for her lease, but we have been looking and have received no offers over the past month. She wants to move in with me and just wait out the contract, however my contract says I can't have any other residents in my apartment without their knowledge. I've hinted at this idea before to my landlord, but they said they'll raise the rent by $100 if I have somebody move in with me. My sign other can't afford to pay her rent and help me split my rent, likewise I don't want to carry the new fee all by myself. We're thinking about just moving her in and hope that he doesn't find out. So, what could happen if I have a resident stay with me if I'm not on the lease? Edit: Thanks guys for the responses. Answer #1: You'd get evicted. To violate a lease is to get evicted. Answer #2: You would get evicted, which would make it hard for you to find a new place. On top of he could sue you for the extra cost of having her there. Your best bet would be to just tell the landlord, sign something and move her in, and have her go ahead and look for someone to take over her lease. Or only charge her the extra 100 a month that your rent would go up until she finds someone else for her lease. Answer #3: Notify landlord, have gf move in, have her pay the extra 100.Answer #4: Dumb question: can your significant other afford to pay the $100 extra while they wait for their lease to expire. Then start paying half afterward?Answer #5: Yeah that's a horrible idea. You did the right thing asking about this before running into problems. Don't risk your own eviction just to resolve your gf non legal issue.

Exhibit 5 [Letterhead of Carlton Fields, P.A.] June 25, Imaging Diagnostic Systems, Inc. 5307 NW 35 Terrace Fort Lauderdale, Florida 33309 Re:Imaging Diagnostic Systems, Inc. Registration Statement on Form S-1/A filed June 25, 2009, SEC File No. 333-159641 Ladies and Gentlemen: We have acted as counsel to Imaging Diagnostic Systems, Inc., a Florida corporation (the “Company”), in connection with the preparation and filing by the Company of a registration statement on Form S-1/A (the “Registration Statement”) with the United States Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the registration of an aggregate of 62,000,000 shares of the Company’s common stock, no par value per share (the “Common Stock”), that are issuable upon exercise of a put option (the “Option”) granted to the Company pursuant to the terms and conditions of the Sixth Private Equity Credit Agreement, dated April 21, 2008, by and between the Company and Charlton Avenue, LLC. (the “Private Equity Agreement”).The shares of Common Stock issuable upon exercise of the Option are referred to herein as the “Option Shares.” This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act. In connection with this opinion, we have examined and relied upon the originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, and other instruments as we have deemed necessary or appropriate for the purpose of this opinion, including, without limitation, the following:(a) the Articles of Incorporation of the Company; (b) the Bylaws of the Company; (c)resolutions adopted by the Board of Directors of the Company relating to the authorization and issuance of the Option Shares by the Company; (d) the Registration Statement, including all exhibits thereto; and (e) the Private Equity Agreement. In our examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such documents, and the accuracy and completeness of the corporate records made available to us by the Company. Imaging Diagnostic Systems, Inc. June 25, Page 2 As to any facts material to the opinions expressed below, with your permission we have relied solely upon, without independent verification or investigation of the accuracy or completeness thereof: (a) the representations and warranties contained in the Private Equity Agreement; and (b) certificates and oral or written statements and other information of or from public officials, officers or other representatives of the Company and others.With your permission, we have assumed compliance on the part of all parties to the Private Equity Agreement with their covenants and agreements contained therein. Based upon the foregoing, and in reliance thereon, we are of the opinion that the Option Shares covered by the Registration Statement when issued, sold, delivered, and paid for as contemplated by the Registration Statement, will be validly issued, fully paid, and non-assessable shares of common stock of the Company. The opinion expressed herein is limited to the laws of the State of Florida.This opinion is limited to the laws in effect as of the date hereof and is provided exclusively in connection with the public offering contemplated by the Registration Statement and may be relied on solely by you and by persons purchasing Option Shares pursuant to such offering. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference of this firm under the caption “Legal Matters” in the prospectus which is made part of the Registration Statement.In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the United States Securities and Exchange Commission thereunder. Very truly yours, CARLTON FIELDS, P.A. By: /s/ Robert B.

Title: Money Burning Question:My best friend has problems at home, specifically with his father. Shit's gotten bad to the point that he's had to spend nights with me, but now it seems like he's moving out for good because his father is aggressive and starts problems with him, but he doesnt want to leave without burning his father's stash of money, specifically in the thousands. Legally, what's the most trouble he can get in? Answer #1: It's theft. The exact charges would depend on the amount. And it certainly wouldn't make shit any better.

▪ Ernst & Young LLP 8484 Westpark Drive McLean, VA 22102 ▪ Phone:(703) 747-1000 www.ey.com Report of Independent Registered Public Accounting Firm Board of Directors GreenPoint Mortgage Funding, Inc. We have examined management's assertion included in the accompanying report of Certification Regarding Compliance with Applicable Servicing Criteria, that GreenPoint Mortgage Funding, Inc. (the "Company") complied with the servicing criteria set forth in Item 1122 (d) of the Securities and Exchange Commission's Regulation AB for the residential mortgage loan servicing platform as of and for the year ended December 31, 2007, and except for criteria 1122(d)(l)(iii), 1122(d)(4)(xi), 1122(d)(4)(xii), and 1122(d)(4)(xv), which the Company has determined are not applicable to the activities performed by them with respect to the servicing platform covered by this report. Management is responsible for the Company's compliance with the applicable servicing criteria. Our responsibility is to express an opinion on management's assertion about the Company's compliance with the applicable servicing criteria based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants, as adopted by the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the applicable servicing criteria and performing such other procedures as we considered necessary in the circumstances. Our examination included testing of less than all of the individual asset backed transactions and securities that comprise the platform, testing of less than all of the servicing activities related to the Platform, and determining whether the Company processed those selected transactions and performed those selected activities in compliance with the servicing criteria and as permitted by the Interpretation 17.06 of the SEC Division of Corporation Finance Manual of Publicly Available Telephone Interpretations ("Interpretation 17.06"). Furthermore, our procedures were limited to the selected transactions and servicing activities performed by the Company during the period covered by this report. Our procedures were not designed to determine whether errors may have occurred either prior to or subsequent to our tests that may have affected the balances or amounts calculated or reported by. the Company during the period covered by this report for the selected transactions or any other transactions. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the servicing criteria. As described in management's assertion, for servicing criteria 1122(d)(2)(i) and 1122(d)(4)(iv), the Company has engaged various vendors to perform the activities required by these servicing criteria. The Company has determined that these vendors are not considered a "servicer" as defined in Item 1101(j) of Regulation AB, and the Company has elected to take responsibility for assessing compliance with the applicable servicing criteria applicable to each vendor as permitted by Interpretation 17.06. As permitted by Interpretation 17.06, the Company has asserted that it has policies and procedures in place designed to provide reasonable assurance that the vendors' activities comply in all material respects with servicing criteria applicable to each vendor. The Company is solely responsible for determining that it meets the SEC requirements to apply Interpretation 17.06 for the vendors and related criteria as described in its assertion, and we performed no procedures with respect to the Company's eligibility to apply Interpretation In our opinion, management's assertion that the Company complied with the aforementioned servicing criteria, including servicing criteria 1122(d)(2)(i) and 1122(d)(4)(iv) for which compliance is determined based on Interpretation 17.06 as described above, as of and for the year ended December 31, 2007 for the residential mortgage loan servicing platform, is fairly stated, in all material respects. /s/ Ernst & Young LLP February

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): July 16, 2012 ALLIANCE DATA SYSTEMS CORPORATION (Exact Name of Registrant as Specified in Charter) DELAWARE 001-15749 31-1429215 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 7, SUITE 700 PLANO, TEXAS 75024 (Address and Zip Code of Principal Executive Offices) (214) 494-3000 (Registrant’s Telephone Number, including Area Code) NOT APPLICABLE (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions: [] Written communications pursuant to Rule 425 under the Securities Act [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act [] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act Item 7.01 Regulation FD Disclosure. On July 16, 2012, Alliance Data Systems Corporation issued a press release providing an update on its Private Label segment. A copy of this press release is attached hereto as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Document Description Press release dated July 16, 2012 providing an update for the Private Label segment. The information contained in this report (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Alliance Data Systems Corporation Date: July 16, 2012 By: /s/ Charles L. Horn Charles L. Horn Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit No. Document Description Press release dated July 16, 2012 providing an update for the Private Label segment.

[***] = Certain information contained in this document, marked by brackets, has been omitted because it is both not material and would be competitively harmful if publicly disclosed. Exhibit 10.8 AMENDMENT NO. 1 TO THE amended and restated CREDIT AGREEMENT This AMENDMENT NO. 1 TO THE amended and restated CREDIT AGREEMENT, dated as of July 28, 2020 (this “Amendment”), is entered into by and among SUNRUN INC., a Delaware corporation (“Sunrun”), AEE SOLAR, INC., a California corporation (“AEE Solar”), SUNRUN SOUTH LLC, a Delaware limited liability company (“Sunrun South”), and SUNRUN INSTALLATION SERVICES INC., a Delaware corporation (“Sunrun Installation Services” and, together with Sunrun, AEE Solar and Sunrun South, each, a “Borrower” and, collectively, the “Borrowers”), CLEAN ENERGY EXPERTS, LLC, a California limited liability company (“CEE” and, together with the Borrowers, each, a “Loan Party” and, collectively, the “Loan Parties”), each of the Persons identified as a “Lender” on the signature pages hereto (each, a “Lender”), and KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent (the RECITALS WHEREAS, the Borrowers entered into the Credit Agreement, dated as of April 1, 2015 (as amended prior to November 12, 2019, the “Original Credit Agreement”), by and among the Borrowers, CLEAN ENERGY EXPERTS, LLC, a California limited liability company (“CEE” and, together with the Borrowers, each, a “Loan Party” and, collectively, the “Loan Parties”), the Lenders party thereto, Credit Suisse, AG, Cayman Islands Branch, as the Administrative Agent and SILICON VALLEY BANK, as the Collateral Agent (the “Collateral Agent”) and L/C Issuer; WHEREAS, pursuant to that certain Resignation and Appointment of Administrative Agent, dated as of November 12, 2019, by and among Credit Suisse, AG, Cayman Islands Branch, as the resigning administrative agent, KeyBank National Association, as the successor administrative agent, the Borrowers, the Lenders party thereto and Silicon Valley Bank, as Collateral Agent and as the L/C Issuer, KeyBank National Association was appointed as Administrative Agent and accepted such appointment; WHEREAS, pursuant to that certain Amendment No. 7 to the Credit Agreement, the Borrowers, CEE, the Lenders party thereto, the Collateral Agent and the Administrative Agent amended and restated the Original Credit Agreement in its entirety as set forth in Annex 1 to Amendment No. 7 (such Amended and Restated Credit Agreement, the “Credit Agreement”); WHEREAS, pursuant to Section 11.01 of the Credit Agreement, no amendment to the Credit Agreement is effective unless executed by the Borrowers or the applicable Loan Party, as the case may be, and at least two (2) Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders and acknowledged by the Administrative Agent; WHEREAS, the Required Lenders are a party to this Amendment; WHEREAS, this Amendment is not otherwise prohibited by Section 11.01 of the Credit Agreement; and WHEREAS, the Administrative Agent by execution of this Amendment is providing its acknowledgement required under Section 11.01 of the Credit Agreement; NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending ARTICLE 1 DEFINITIONS 1.01Definitions. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement. 1.02Rules of Interpretation. The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall apply to this Amendment. ARTICLE 2 AMENDMENTS; ACKNOWLEDGMENTS 2.01Amendment to Section 5.20(a) of the Credit Agreement. On the Amendment Effective Date, the last sentence of Section 5.20(a) of the Credit Agreement is amended in its entirety to read as follows: “There are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors’ qualifying shares) of any nature relating to the Equity Interests of any Loan Party (other than Sunrun), except as contemplated in connection with the Loan Documents.” 2.02Amendment to Section 7.03 of the Credit Agreement. On the Amendment Effective Date, Section 7.03 of the Credit Agreement shall be amended by deleting the word “and” at the end of clause (i) thereof, deleting “.” at the end of clause (j) thereof and replacing it with “; and” and adding the following clause (k) after clause (j): “(k) Investments made with proceeds from substantially concurrent issuances of new Equity Interests in Sunrun in an aggregate amount not to exceed [***].” ARTICLE 3 REPRESENTATIONS AND WARRANTIES Each Loan Party represents and warrants to each of the Lenders and the Administrative Agent, on the date hereof, that the following statements are true and correct: 3.01Existence. Such Loan Party is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization. 2 3.02Power and Authority. Such Loan Party has the requisite power and authority to execute and deliver this Amendment. 3.03Due Authorization. The execution, delivery and performance of this Amendment have been duly authorized by all necessary corporate or limited liability company action on the part of such Loan Party. The applicable resolutions of such Loan Party authorize the execution, delivery and performance of this Amendment by such Loan Party and are in full force and effect without modification or amendment. 3.04Binding Obligation. This Amendment has been duly executed and delivered by such Loan Party, and this Amendment and the Credit Agreement, as amended by this Amendment, constitute the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with the terms of this Amendment and the Credit Agreement, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law. 3.05No Default or Event of Default. As of the date hereof, no event has occurred and is continuing or would result from the consummation of the amendments contemplated by this Amendment that would constitute a Default or an Event of Default. 3.06Representations and Warranties. The representations and warranties of the Borrowers and each other Loan Party contained in the Credit Agreement or any other Loan Document, are (i) with respect to representations and warranties that contain a materiality qualification, true and correct in all respects, and (ii) with respect to representations and warranties that do not contain a materiality qualification, true and correct in all material respects, in each case, on and as of the date hereof (or if such representations and warranties expressly relate to an earlier date, as of such earlier date), and the representations and warranties contained in Sections 5.05(a) and (b) of the Credit Agreement are deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b) of the Credit Agreement, respectively. 3.07Material Adverse Effect. No Material Adverse Effect has occurred or is continuing since the date of the last audited financial statements furnished pursuant to Section 6.01(a) of the Credit Agreement. ARTICLE 4 CONDITIONS PRECEDENT 4.01Conditions Precedent to Effectiveness. The amendments contained in Article 2 of this Amendment shall not be effective until the date (such date, the “Amendment Effective Date”) that the Administrative Agent shall have received copies of this Amendment executed by the Loan Parties and the Required Lenders, and acknowledged by the Administrative Agent. 3 ARTICLE 5 GENERAL PROVISIONS 5.01Notices. All notices and other communications given or made pursuant hereto shall be made as provided in the Credit Agreement. 5.02Severability. In case any one or more of the provisions contained in this Amendment should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the parties hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision. 5.03Headings. Section headings have been inserted in this Amendment as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Amendment and shall not be used in the interpretation of any provision of this Amendment. 5.04Governing Law. This Amendment shall be governed by and construed in accordance with the law of the State of New York. 5.05Counterparts. This Amendment may be signed in any number of counterparts and each counterpart shall represent a fully executed original as if signed by all of the parties listed below. Each party to this Amendment represents and warrants to each of the other parties to this Amendment that it has the corporate or limited liability company capacity and authority to execute this Amendment through electronic means and there are no restrictions for doing so in that party’s constitutive documents. 5.06Ratification. Except as amended hereby, the Credit Agreement and the other Loan Documents remain in full force and effect. 5.07Amended Terms. On and after the Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by this Amendment. The execution, delivery and performance of this Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Lenders, the Administrative Agent, the Collateral Agent or an Arranger under the Credit Agreement or any other Loan Document. Nothing contained in this Amendment shall be construed as a substitution or novation of the obligations (including the Obligations) of the Loan Parties outstanding under the Credit Agreement or instruments securing or evidencing any of the Obligations, which shall continue and remain in full force and effect, except to the extent that the terms thereof are modified by this Amendment. Nothing expressed or implied in this Amendment shall be construed as a release or other discharge of the Loan Parties from any of their obligations or liabilities under the Credit Agreement or any other Loan Document. 5.08Loan Document. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement. 4 5.09Costs and Expenses; Indemnification; Reimbursement. The parties hereto agree that this Amendment is subject to the costs and expenses, indemnification, reimbursement and related provisions set forth in Section 11.04 of the Credit Agreement. 5.10Submission to Jurisdiction; Waiver of Venue; Service of Process; Waiver of Jury Trial. The submission to jurisdiction, waiver of venue, service of process and waiver of jury trial provisions set forth in Sections 11.14(b), (c) and (d) and 11.15 of the Credit Agreement, respectively, are hereby incorporated by reference, mutatis mutandis. 5.11Reaffirmation of Guarantees and Security Interests. Each Loan Party hereby (a) affirms and confirms its guarantees, pledges, grants and other undertakings under the Credit Agreement, the Security Agreement and the other Loan Documents to which it is a party, and (b) agrees that all guarantees, pledges, grants and other undertakings thereunder shall continue to be in full force and effect and shall accrue to the benefit of the Secured Parties, including the Lenders. 5 IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above. BORROWERS: SUNRUN INC., a Delaware corporation By: /s/ Tom vonReichbauer     Name: Tom vonReichbauerTitle: Chief Financial Officer AEE SOLAR, INC., a California corporation SUNRUN SOUTH LLC, SUNRUN INSTALLATION SERVICES INC., a Delaware corporation By: /s/ Jeanna Steele     Name: Jeanna SteeleTitle: Secretary GUARANTOR: CLEAN ENERGY EXPERTS, LLC, a California limited liability company By: /s/ Lynn Jurich     Name: Lynn JurichTitle: President [Signature Page to Amendment No. 1 to the Amended and Restated Credit Agreement] KEYBANK NATIONAL ASSOCIATION, as Administrative Agent and as a Lender By: /s/ Richard Gerling      Name: Richard GerlingTitle: Senior Vice President SILICON VALLEY BANK, as a Lender By: /s/ Jackson Morrow      Name: Jackson MorrowTitle: Vice President MORGAN STANLEY SENIOR FUNDING, INC., as a Lender By: /s/ Marisa Moss     Name: Marisa MossTitle: Vice President ROYAL BANK OF CANADA, as a Lender By: /s/ Frank Lambrinos     Name: Frank LambrinosTitle: Authorized Signatory CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender By: /s/ Mikhail Faybusovich     Name: Mikhail FaybusovichTitle: Authorized Signatory By: /s/ Komal Shah     Name: Komal ShahTitle: Authorized Signatory NY GREEN BANK,a division of the New York State Energy Research & Development Authority,as a Lender By: /s/ Alfred Griffin     Name: Alfred GriffinTitle: President as a Lender By: /s/ Jeremy Eisman     Name: Jeremy EismanTitle: Managing Director By: /s/ Kyle Hatzes     Name: Kyle HatzesTitle: Director

Name: Commission Regulation (EEC) No 2661/87 of 1 September 1987 re-establishing the levying of customs duties on camphor, synthetic, falling within subheading 29.13 B I ex b), originating in China to which the tariff preferences set out in Council Regulation (EEC) No 3924/86 apply Type: Regulation Subject Matter: plant product; tariff policy; Asia and Oceania Date Published: nan 3 . 9 . 87 Official Journal of the European Communities No L 252/5 COMMISSION REGULATION (EEC) No 2661/87 of 1 September 1987 re-establishing the levying of customs duties on camphor, synthetic , falling within subheading 29 .13 B I ex b), originating in China to which the tariff prefe ­ rences set out in Council Regulation (EEC) No 3924/86 apply THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 3924/86 of 16 December 1986 applying generalized tariff prefe ­ rences for 1987 in respect of certain industrial products originating in developing countries ('), and in particular Article 15 thereof, Whereas, pursuant to Articles 1 and 12 of Regulation (EEC) No 3924/86, suspension of customs duties shall be accorded to each of the countries or territories listed in Annex III other than those listed in column 4 of Annex I, within the framework of the preferential tariff ceiling fixed in column 9 of Annex I ; Whereas, as provided for in Article 13 of that Regulation, as soon as the individual ceilings in question are reached at Community level, the levying of customs duties on imports of the products in question originating in each of the countries and territories concerned may at any time be re-established ; Whereas, in the case of camphor, synthetic, falling within subheading 29.13 B I ex b),, the individual ceiling was fixed at 280 000 ECU ; whereas, on 21 August 1987, imports of these products into the Community origina ­ ting in China reached the ceiling in question after being charged thereagainst ; Whereas it is appropriate to re-establish the levying of customs duties in respect of the products in question against China, HAS ADOPTED THIS REGULATION : Article 1 As from 6 September 1987, the levying of customs duties, suspended pursuant to Regulation (EEC) No 3924/86, shall be re-established on imports into the Community of the following products originating in China : Order No CCT heading No and NIMEXE-code Description 10.0165 29.13 B I ex b) (29.13 -ex 23) Borman-2-one (camphor, synthetic) Article 2 This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 1 September 1987. For the Commission Willy DE CLERCQ Member of the Commission ') OJ No L 373, 31 . 12 . 1986, p. 1 .

Title: Trying to donate my salary to an employee that has to self quarantine, but company won't let me. Question:Without too many details, I had an employee who had an unexpected loss in his family. He's going back home for services. Our company policy is to self quarantine if you go on travel. Self quarantine is minimum 14 days and is unpaid. I told HR that I would donate my paycheck to cover the time he was self quarantined. HR flipped out and called an emergency meeting with me and my manager and VP for HR. I was later told that I was wrong in my thought process that I could donate part of my paycheck to another employee in need. Alright. Seriously WTF. Can I get some help here? I'm in Michigan, btw. Answer #1: Why don't you just give him money after you're paid? Your employer doesn't have to help you donate your pay.

This preliminary prospectus supplement is subject to completion and amendment without notice.This preliminary prospectus supplement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be a sale of the notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.The definitive terms of the transactions described herein will be described in the final prospectus supplement. Subject to Completion, dated August 5, 2014 Prospectus Supplement to Base Prospectus dated August 5, 2014 Navient Student Loan Trust 2014-7 Issuing Entity Navient Funding, LLC Depositor Navient Solutions, Inc. Sponsor, Master Servicer and Administrator Student Loan-Backed Notes On or about August 14, 2014, the trust will issue: Class Principal Interest Rate Maturity Floating Rate Class A Notes 1-month LIBOR plus% March 25, 2043 Floating Rate Class B Notes 1-month LIBOR plus% June 25, 2054 The trust will make payments primarily from collections on a pool of consolidation FFELP student loans.Interest on and principal of the notes will be payable monthly on the 25th day (or if such day is not a business day, the next business day) of each calendar month, beginning in October 2014.In general, the trust will pay principal to the class A notes until paid in full, and then to the class B notes until paid in full.Interest on the class B notes will be subordinate to interest on the class A notes and principal of the class B notes will be subordinate to both principal of and interest on the class A notes.Credit enhancement for the notes consists of excess interest on the trust student loans, subordination of the class B notes to the class A notes, overcollateralization and the reserve account.The interest rates on the notes will be determined by reference to LIBOR.A description of how LIBOR is determined appears under “Additional Information Regarding the Notes—Determination of Indices—LIBOR” in the base prospectus. Some or all of the class B notes may be retained by the depositor or an affiliate of the depositor.This prospectus supplement also covers the resale of any such retained class B notes from time to time by the depositor or an affiliate of the depositor. We are offering the notes through the underwriters at the prices shown below when and if issued. We are not offering the notes in any state or other jurisdiction where the offer is prohibited. You should consider carefully the risk factors on page S-19 of this prospectus supplement and on page15 of the base prospectus. The notes are asset-backed securities issued by and are obligations of the issuing entity, which is a trust. They are not obligations of or interests in Navient Corporation, the sponsor, administrator, master servicer, depositor, any seller, any underwriter or any of their affiliates. The notes are not guaranteed or insured by the United States or any governmental agency. Per Floating Rate Class A Note Per Floating Rate Class B Note* PricetoPublic % % Underwriting Discount % % Proceedsto theDepositor

Exhibit 10.20 EXECUTION COPY EMPLOYMENT AGREEMENT This Employment Agreement (the “Agreement”) is made as of February 23, 2015 effective as of March 1, 2015 among Domino’s Pizza, Inc., a Delaware corporation (the “Company”), and Domino’s Pizza LLC, a Michigan limited liability company (“DPLLC” or the “Principal Subsidiary”) and J. Patrick Doyle (the “Executive”). Recitals 1. The operations of the Company and its Affiliates (as defined in Sub-Section 11.1) are a complex matter requiring direction and leadership in a variety of areas. 2. The Executive has experience and expertise that qualify him to provide the direction and leadership required by the Company and its Affiliates. 3. Subject to the terms and conditions set forth below, the Company and DPLLC wish to employ the Executive as its President and Chief Executive Officer and the Executive wishes to accept such employment. Agreement Now, therefore, the parties agree as follows: 1. Employment. Subject to the terms and conditions set forth in this Agreement, the Company hereby offers and the Executive hereby accepts continuing employment as President and Chief Executive Officer of the Company, effective as of March 1, 2015 (the “Effective Date”). 2. Term. Subject to earlier termination as hereafter provided, the Executive shall be employed hereunder for a term commencing on the Effective Date and ending on December 31, 2018. The term of the Executive’s employment under this Agreement is hereafter referred to as “the term of this Agreement” or “the term hereof.” 3. Capacity and Performance. 3.1. Offices. During the term hereof, the Executive shall serve the Company in the office of President and Chief Executive Officer. In such capacity, the Executive shall be responsible for the Company’s operations and financial performance and the coordination of the Company’s strategic direction. In addition, for as long as the Executive is employed by the Company and without further compensation, the Executive shall, if so elected or appointed from time to time, serve as a member of the Company’s Board of Directors (the “Board”) and as   1 a director and officer of DPLLC and of one or more of the Company’s other Affiliates. The Executive shall be subject to the direction of the Board and shall have such other powers, duties and responsibilities consistent with the Executive’s position as President and Chief Executive Officer as may from time to time be prescribed by the Board. 3.2. Performance. During the term hereof, the Executive shall be employed by the Company on a full-time basis and shall perform and discharge, faithfully, diligently and to the best of his ability, his duties and responsibilities hereunder. During the term hereof, the Executive shall devote his full business time exclusively to the advancement of the business and interests of the Company and its Affiliates and to the discharge of his duties and responsibilities hereunder. The Executive shall not engage in any other business activity or serve in any industry, trade, professional, governmental, political, charitable or academic position during the term of this Agreement, except for such directorships or other positions which he currently holds and has disclosed to the Company on Exhibit 3.2 hereof and except as otherwise may be approved in advance by the Board, which approval shall not be unreasonably withheld. 4. Compensation and Benefits. As compensation for all services performed by the Executive under this Agreement and subject to performance of the Executive’s duties and obligations to the Company and its Affiliates, pursuant to this Agreement or otherwise: 4.1. Base Salary. During the term hereof, the Company shall pay the Executive a base salary at the rate of $975,000 per year, payable in accordance with the payroll practices of the Company for its executives and subject to increase from time to time by the Board in its sole discretion. Such base salary, as from time to time increased, is hereafter referred to as the “Base Salary”. 4.2. Bonus Compensation. During the term hereof, the Executive shall participate in the Company’s Senior Executive Annual Incentive Plan, as it may be amended from time to time pursuant to the terms thereof (the “Plan,” a current copy of which is attached hereto as Exhibit 4.2) and shall be eligible for a bonus award thereunder (the “Bonus”). For purposes of the Plan, the Executive shall be eligible for a Bonus (as defined in the Plan), and the Executive’s Specified Percentage (as defined in the Plan) shall be 200% of Base Salary. Whenever any Bonus payable to the Executive is stated in this Agreement to be prorated for any period of service less than a full year, such Bonus shall be prorated by multiplying (x) the amount of the Bonus otherwise payable for the applicable fiscal year in accordance with this Sub-Section 4.2 by (y) a fraction, the denominator of which shall be 365 and the numerator of which shall be the number of days during the applicable fiscal year for which the Executive was employed by the Company. Any compensation paid to the Executive as Bonus shall be in addition to the Base Salary.   2 4.3. Equity and Other Incentive Compensation Awards. The Executive shall be eligible for stock and other incentive compensation awards under the Company’s 2004 Equity Incentive Plan, attached hereto as Exhibit A-1, as it may be amended from time to time (the “Stock Plan”). 4.4. Vacations. During the term hereof, the Executive shall be entitled to four (4) weeks of vacation per annum, to be taken at such times and intervals as shall be determined by the Executive, subject to the reasonable business needs of the Company. The Executive may not accumulate or carry over from one (1) calendar year to another any unused, accrued vacation time. The Executive shall not be entitled to compensation for vacation time not taken. 4.5. Other Benefits. 4.5.1. During the term hereof and subject to any contribution therefor generally required of executives of the Company or the Principal Subsidiary, as applicable, the Executive shall be entitled to participate in all employee benefit plans, including without limitation any 401(k) plan, from time to time adopted by the Board and in effect for executives of the Company or the Principal Subsidiary, as applicable, generally (except to the extent such plans are in a category of benefit otherwise provided the Executive hereunder and in any event excluding any incentive, stock option, stock purchase (except for any stock purchase plan under Code Section 423), profit sharing, deferred compensation, bonus compensation or severance programs). Such participation shall be subject to (i) the terms of the applicable plan documents and (ii) generally applicable policies of the Company or the Principal Subsidiary, as applicable. Both the Company and the Principal Subsidiary may alter, modify, add to or delete their employee benefit plans at any time as the Board, in its sole judgment, determines to be appropriate. 4.5.2. Notwithstanding anything set forth in Sub-Section 4.5.1, as of the execution date of this Agreement, during the term hereof and subject to any contribution therefor generally required of executives of the Company or the Principal Subsidiary, as applicable, the Executive and his spouse shall be entitled to participate in the Company’s health plan in accordance with the terms of the applicable plan documents. 4.6. Business Expenses. The Company shall pay or reimburse the Executive for all reasonable business expenses, including without limitation the cost of first class air travel, incurred or paid by the Executive in the performance of his duties and responsibilities hereunder, subject to (i) any expense policy of the Company or the Principal Subsidiary, as applicable, set by the Board from time to time, other than with respect to first class air travel, and (ii) such reasonable substantiation and documentation requirements as may be specified by the Board from time to time. All Business Expenses shall be reimbursed by the end of the   3 calendar year in which the expenses are incurred. Pursuant to Code Section 409A, the amount of expenses eligible for reimbursement during a calendar year shall not affect expenses eligible for reimbursement in another calendar year, and the Executive’s right to reimbursement shall not be subject to liquidation or 4.7. Miscellaneous. 4.7.1. The Company shall pay or reimburse the Executive for his business association dues and expenses up to $11,000 per year, with Board approval of any material increase in cost above such amount. Such reimbursement shall occur no later than the end of the calendar year in which the dues and expenses are incurred. 4.7.2. The Company shall provide the Executive with directors and officers insurance and personal liability protection described on Exhibit B. 4.7.3. The Company acknowledges its obligation to furnish the Executive (which for purposes of this Sub-Section 4.7.3 includes the Executive’s spouse, family and guests when accompanying him), with transportation during the term hereof that provides him with security to address bona fide business-oriented security concerns, and shall, at the Company’s expense, make available to the Executive, Company or other private aircraft for business and personal use at his discretion, provided that any such personal use shall be limited to forty-five (45) hours per calendar year (the “Yearly Aircraft Hours”). The Company shall provide additional payments to the Executive on a fully grossed up basis to cover applicable federal, state and local income and excise taxes, when and to the extent, if any, that such taxes are payable by the Executive, including, without limitation, any tax imposed by Section 4999 of the Code or any similar tax, with respect to the Yearly Aircraft Hours. Such reimbursement for taxes shall be paid to the Executive by the Company within five (5) business days after receipt of acceptable substantiation by the Company; provided, that the tax payments or reimbursements to the Executive shall in all events be paid no later than the end of the Executive’s taxable year next following the taxable year in which the taxes are remitted by the Executive to the Internal Revenue Service or any other applicable taxing authority. For personal use of the Company or other private aircraft in excess of the Yearly Aircraft Hours, the Executive shall be subject to a usage level and cost to be negotiated with the Board from time to time at rates in accordance with Standard Industrial Fare Level rates stipulated by the U.S. Department of Transportation or in the Time Sharing Agreement dated February 23, 2015, as may be amended from time to time, between the Executive and Domino’s Pizza LLC or any subsequent Time Sharing Agreement between the Executive and Domino’s Pizza LLC. 4.7.4. The Company shall pay or reimburse the Executive for his reasonable legal fees and expenses incurred in connection with the review of this Agreement and other agreements referred to herein in an aggregate amount not to exceed $10,000. Such payment or reimbursement shall occur no later than the last day of the calendar year in which such fees and expense were incurred.   4 5. Termination of Services and Severance Benefits. Notwithstanding the provisions of Section 2 hereof, the Executive’s services hereunder shall terminate prior to the expiration of the term of this Agreement under the circumstances set forth below: The Company and the Executive shall take all steps necessary (including with regard to any post-termination services by the Executive) to ensure that any termination described in this Section 5 constitutes a “separation from service” within the meaning of Code Section 409A. 5.1. Death. In the event of the Executive’s death during the term hereof, the Executive’s employment hereunder shall immediately and automatically terminate, and the Company shall pay to the Executive’s designated beneficiary (or, if no beneficiary has been designated by the Executive, to his estate) within thirty (30) days following death, any Base Salary earned but unpaid through the date of death, any Bonus for the fiscal year preceding the year in which death occurs that was earned but has not yet been paid and, at the times the Company pays its executives bonuses in accordance with its general payroll policies, but not to exceed two and one half (2 1⁄2) months following the calendar year in which earned, an amount equal to that portion of any Bonus earned but unpaid during the fiscal year of the Executive’s death (pro-rated in accordance with Sub-Section 4.2). 5.2. Disability. 5.2.1. In the event the Executive incurs a disability that prevents him from performing his duties as President and Chief Executive Officer during the term of the Agreement, the Executive shall continue to receive his Base Salary in accordance with Sub-Section 4.1 and to receive benefit plan coverage in accordance with Sub-Section 4.5, to the extent permitted by the then-current terms of the applicable benefit plans, until the Executive becomes eligible for commencement of disability income benefits under any disability income plan maintained by the Company or the Principal Subsidiary, as applicable (a “Disability Plan”), or until the termination of his employment, whichever first occurs. Within thirty (30) days after commencement of Disability Plan benefits to the Executive, or upon his termination of employment, whichever first occurs, the Company shall pay to the Executive any Base Salary earned but unpaid through the date Disability Plan benefits commence or employment termination and any Bonus for the fiscal year preceding the year Disability Plan benefits commence or employment termination that was earned but unpaid. While still employed and covered by the long-term Disability Plan of the Company or the   5 Principal Subsidiary and for a period not to exceed eighteen (18) months or termination as an employee under the long-term Disability Plan, whichever occurs first, the Company shall pay the Executive, at its regular pay periods, an amount equal to the difference between the Base Salary and the amount of disability income benefits that the Executive receives pursuant to the long-term Disability Plan with respect to such period. At the times the Company pays its executive bonuses generally, but no later than two and one half (2 1⁄2) months after the end of the fiscal year to which a Bonus relates, the Company shall pay the Executive an amount equal to that portion of any Bonus earned but unpaid during the fiscal year of Disability Plan payments or employment termination (pro-rated in accordance with Sub-Section 4.2). Notwithstanding the foregoing, if all or a portion of the disability benefits provided herein are deemed to constitute nonqualified deferred compensation that is not exempt under Code Section 409A or does not qualify under the Code Section 409A disability definition, such disability amounts shall be aggregated and delayed until the Executive satisfies the disability definition requirements under Code Section 409A, or separates from service with the Company and its Principal Subsidiary, whichever occurs first, and at such time, the Executive shall receive a lump sum payment equal to the aggregate delayed disability benefit amounts, and any remaining amounts shall be paid in accordance with the regularly scheduled payment dates. 5.2.2. The intent of Sub-Section 5.2 is to ensure that through the aggregate provision of Base Salary, Bonus and Disability Plan benefits, the Executive’s cash compensation shall not be diminished during a disability that prevents him from performing his duties as President and Chief Executive Officer during the term of this Agreement. Provided, however, that in no event shall the Executive receive aggregate cash compensation from Base Salary, Bonus and Disability Plan benefits that exceeds the cash compensation that he otherwise would have received under this Agreement had he not incurred a disability. Therefore, except as provided in Sub-Section 5.2.1, if the Executive is still employed while receiving disability income payments under any Disability Plan, the Executive shall not be entitled to receive any Base Salary under Sub-Section 4.1 or Bonus payments under Sub-Section 4.2 but shall continue to participate in benefit plans of the Company or the Principal Subsidiary, as applicable, in accordance with Sub-Section 4.5 and the terms of such plans, until the termination of his employment and, solely with respect to benefits provided under Sub-Section 4.5.2, thereafter. 5.2.3. If any question shall arise as to whether during any period the Executive is disabled through any illness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform his duties and responsibilities hereunder as President and Chief Executive Officer, the Executive may, and at the request of the Company shall, submit to a medical examination by a physician selected by the Company to whom the Executive or his duly appointed guardian, if any, has no   6 reasonable objection to determine whether the Executive is so disabled and such determination shall for the purposes of this Agreement be conclusive of the issue, subject to any requirements under Code Section 409A, if applicable. If such question shall arise and the Executive shall fail to submit to such medical examination, the Board’s determination of the issue shall be binding on the Executive. In the event that the Executive’s employment is terminated due to disability pursuant to this Sub-Section 5.2, the Executive shall be entitled to the vested, outstanding equity grants under the Company’s Stock Plan and the compensation set forth in Sub-Section 5.4 below, provided that the Executive shall be entitled to no duplicative benefits between Sub-Sections 5.2 and 5.4. 5.3. By the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause at any time upon notice to the Executive setting forth in reasonable detail the nature of such Cause. The following events or conditions shall constitute “Cause” for termination: (i) the Executive’s willful failure to perform (other than by reason of disability), or gross negligence in the performance of, his duties to the Company or any of its Affiliates, and the Executive does not cure such failure or negligence within the twenty-five (25) day period immediately following his receipt of such written allegations from the Board, (ii) the commission of fraud, embezzlement or theft by the Executive with respect to the Company or any of its Affiliates; or (iii) the conviction of the Executive of, or plea by the Executive of nolo contendere to, any felony or any other crime involving dishonesty or moral turpitude. Upon the giving of notice of termination of the Executive’s employment hereunder for Cause, the Company shall have no further obligation or liability to the Executive hereunder, other than for Base Salary earned but unpaid through the date of termination and vested, outstanding equity grants under the Company’s Stock Plan. Without limiting the generality of the foregoing, the Executive shall not be entitled to receive any Bonus amounts which have not been paid prior to the date of termination. 5.4. By the Company other than for Cause. The Company may terminate the Executive’s employment hereunder other than for Cause at any time upon notice to the Executive. In the event of such termination, the Company shall pay the Executive (i) Base Salary earned but unpaid through the date of termination, plus (ii) twenty-four (24) monthly severance payments, each in an amount equal to the Executive’s monthly base compensation in effect at the time of such termination (i.e., 1/12th of the Base Salary), plus (iii) any unpaid portion of any Bonus for the fiscal year preceding the year in which such termination occurs that was earned but has not been paid, plus (iv) at the times the Company pays its executives bonuses generally, but no later than two and one half (2 1⁄2) months after the end of the fiscal year in which the bonus is earned, an amount equal to that portion of any Bonus earned but unpaid during the fiscal year of such termination (pro-rated in accordance with Sub-Section 4.2), plus (v) vested, outstanding equity grants under the Company’s Stock Plan.   7 5.5. By the Executive for Good Reason. The Executive may terminate his employment hereunder for Good Reason, upon notice to the Company setting forth in reasonable detail the nature of such Good Reason. The following shall constitute “Good Reason” for termination by the Executive: (i) failure of the Company to continue the Executive in the position of President and Chief Executive Officer; (ii) material diminution in the nature and scope of the Executive’s responsibilities, duties or authority, including without limitation the failure to continue the Executive as a member of the Board of the Company or the Principal Subsidiary; provided, however, that the failure to so continue the Executive shall not constitute Good Reason if such failure occurs in connection with the sale or other disposition of the corporation as to which he has ceased to have board membership; and provided, further, that the Company’s failure to continue the Executive’s appointment or election as a director or officer of any of its Affiliates (exclusive of DPLLC) and any diminution of the business of the Company or any of its Affiliates shall not constitute Good Reason; (iii) material failure of the Company to provide the Executive the Base Salary and benefits (including Company-sponsored fringe benefits) in accordance with the terms of Section 4 hereof; or (iv) relocation of the Executive’s office to an area outside a fifty (50) mile radius of the Company’s current headquarters in Ann Arbor, Michigan. In the event of termination in accordance with this Sub-Section 5.5, then the Company shall pay the Executive the amounts specified in Sub-Section 5.4. 5.6. By the Executive Other than for Good Reason. The Executive may terminate his employment hereunder at any time upon ninety (90) days’ notice to the Company. In the event of termination of the Executive pursuant to this Sub-Section 5.6, the Board may elect to waive the period of notice, or any portion thereof. The Company will pay the Executive his Base Salary for the notice period, except to the extent so waived by the Board. Upon the giving of notice of termination of the Executive’s employment hereunder pursuant to this Sub-Section 5.6, the Company shall have no further obligation or liability to the Executive, other than (i) payment to the Executive of his Base Salary for the period (or portion of such period) indicated above and (ii) at the times the Company pays its executives bonuses generally, not to exceed two and one-half (2 1⁄2) months after the end of the year in which earned, an amount equal to that portion of any Bonus earned but unpaid during the fiscal year of such termination (pro-rated in accordance with Sub-Section 4.2), plus any vested, outstanding equity grants under the Company’s Stock Plan. 5.7. Post-Agreement Employment. In the event the Executive remains in the employ of the Company or any of its Affiliates following termination of this Agreement, by the expiration of the term hereof or otherwise, then such employment shall be at will.   8 6. Effect of Termination. The provisions of this Section 6 shall apply in the event of termination due to the expiration of the term, pursuant to Section 5 or otherwise. 6.1. Delayed Payments for Specified Employees. Notwithstanding the provisions of Section 5 above, if the Executive is a “specified employee” as defined in Code Section 409A, determined in accordance with the methodology established by the Company as in effect on the Executive’s termination (a “Specified Employee”), amounts not then exempt from Code Section 409A that otherwise would have been payable and benefits not then exempt from Code Section 409A that otherwise would have been provided under Section 5 during the six (6) month period following the Executive’s termination, shall instead be paid, with interest at the applicable federal rate, determined under Code Section 7872(f)(2)(A) (“Interest”), and the delayed payments shall be aggregated and paid in a lump sum (or provided in the case of non-exempt benefits) on the first business day after the date that is six months following the Executive’s “separation from service” within the meaning of Code Section 409A, or upon the Executive’s death, if earlier (the “Delayed Payment Date”). Thereafter the Executive shall receive any remaining payments and benefits as if there had been no earlier delay. 6.2. Payment in Full. Payment by the Company of any Base Salary, Bonus or other specified amounts that are due the Executive under the applicable termination provision of Section 5 shall constitute the entire obligation of the Company and its Affiliates to the Executive, except that nothing in this Sub-Section 6.2 is intended or shall be construed to affect the rights and obligations of the Company and its Affiliates, on the one hand, and the Executive, on the other, with respect to any option plans, option agreements, subscription agreements, stockholders agreements or other agreements to the extent said rights or obligations survive termination of employment under the provision of documents relating thereto. 6.3. Termination of Benefits. Except for any right of continuation of health coverage at the Executive’s cost to the extent provided by Sections 601 through 608 of ERISA, benefits shall terminate pursuant to the terms of the applicable benefit plans based on the date of termination of the Executive’s employment without regard to any continuation of Base Salary or other payments to the Executive following termination of his employment. 6.4. Survival of Certain Provisions. Provisions of this Agreement shall survive any termination if so provided herein or if necessary or desirable fully to accomplish the purpose of other surviving provisions, including, without limitation, the obligations of the Executive under Sections 7 and 8 hereof. The obligation of the Company to make payments to or on behalf of the Executive under Sub-Sections 5.2, 5.4 or 5.5 hereof is expressly conditioned upon the Executive’s continued full performance of obligations under Sections 7 and 8 hereof. The Executive recognizes that, except as expressly provided in Sub-Sections 5.2, 5.4 or 5.5, no compensation is earned after termination of employment.   9 7. Confidential Information; Intellectual Property. 7.1. Confidentiality. The Executive acknowledges that the Company and its Affiliates continually develop Confidential Information; that the Executive may develop Confidential Information for the Company or its Affiliates and that the Executive may learn of Confidential Information during the course of employment. The Executive will comply with the policies and procedures of the Company and its Affiliates for protecting Confidential Information and shall never use or disclose to any Person (except as required by applicable law or for the proper performance of his duties and responsibilities to the Company and its Affiliates) any Confidential Information obtained by the Executive incident to his employment or other association with the Company or any of its Affiliates. The Executive understands that this restriction shall continue to apply after his employment terminates, regardless of the reason for such termination. 7.2. Return of Documents. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its Affiliates and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of the Company and its Affiliates. The Executive shall safeguard all Documents and shall surrender to the Company at the time his employment terminates, or at such earlier time or times as the Board or its designee may specify, all Documents then in the Executive’s possession or control. 7.3. Assignment of Rights to Intellectual Property. The Executive shall promptly and fully disclose all Intellectual Property to the Company. The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) the Executive’s full right, title and interest in and to all Intellectual Property. The Executive agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. The Executive will not charge the Company for time spent in complying with these obligations. All copyrightable works that the Executive creates shall be considered “work made for hire.” 8. Restricted Activities. 8.1. Agreement not to Compete with the Company. The Executive agrees that during the Executive’s employment hereunder and for a period of twenty-four (24) months following the date of termination thereof (the “Non-Competition Period”), he will not, directly or indirectly, own, manage, operate, control or participate in any manner in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director, principal, consultant, agent or otherwise with, or have any financial interest in, or aid or assist   10 anyone else in the conduct of, any business, venture or activity which competes with, any business, venture or activity being conducted or actively being planned to be conducted by the Company or being conducted or known by the Executive to be actively being planned to be conducted by a group or division of the Company or by any of its Affiliates, at or prior to the date (the “Date of Termination”) on which the Executive’s employment under this Agreement is terminated, in the United States or any other geographic area where such business is being conducted or actively being planned to be conducted at or prior to the Date of Termination. Notwithstanding the foregoing, ownership of not more than five percent (5%) of any class of equity security of any publicly held corporation shall not, of itself, constitute a violation of this Section 8. 8.2. Agreement Not to Solicit Employees or Customers of the Company. The Executive agrees that during employment and during the Non-Competition Period he will not, directly or indirectly, (a) recruit or hire or otherwise seek to induce any employees of the Company or any of the Company’s Affiliates to terminate their employment or violate any agreement with or duty to the Company or any of the Company’s Affiliates, or (b) solicit or encourage any franchisee or vendor of the Company or of any of the Company’s Affiliates to terminate or diminish its relationship with any of them or to violate any agreement with any of them, or, in the case of a franchisee, to conduct with any Person any business or activity that such franchisee conducts or could conduct with the Company or any of the Company’s Affiliates. 9. Enforcement of Covenants. The Executive acknowledges that he has carefully read and considered all the terms and conditions of this Agreement, including without limitation the restraints imposed upon him pursuant to Sections 7 and 8 hereof. The Executive agrees that said restraints are necessary for the reasonable and proper protection of the Company and its Affiliates and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area. The Executive further acknowledges that, were he to breach any of the covenants or agreements contained in Sections 7 or 8 hereof, the damage to the Company and its Affiliates could be irreparable. The Executive therefore agrees that the Company and its Affiliates, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Executive of any of said covenants or agreements. The parties further agree that in the event that any provision of Section 7 or 8 hereof shall be determined by any Court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law. 10. Conflicting Agreements. The Executive hereby represents and warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which or by which the Executive is a party or is bound and that the Executive is not now subject to any covenants against competition or solicitation or similar covenants or other obligations that would affect the performance of his obligations hereunder. The Executive will not disclose to or use on behalf of the Company or any of its Affiliates any proprietary information of a third party without such party’s consent.   11 11. Definitions. Words or phrases which are initially capitalized or are within quotation marks shall have the meanings provided in this Section 11 and as provided elsewhere herein. For purposes of this Agreement, the following definitions apply: 11.1. Affiliates. “Affiliates” means the Principal Subsidiary and all other persons and entities controlling, controlled by or under common control with the Company, where control may be by management authority or equity interest. 11.2. Code. “Code” means the Internal Revenue Code of 1986, as amended. 11.3. Confidential Information. “Confidential Information” means any and all information of the Company and its Affiliates that is not generally known by others with whom they compete or do business, or with whom they plan to compete or do business, and any and all information the disclosure of which would otherwise be adverse to the interests of the Company or any of its Affiliates. to (i) the products and services sold or offered by the Company or any of its Affiliates (including without limitation recipes, production processes and heating technology), (ii) the costs, sources of supply, financial performance and strategic plans of the Company and its Affiliates, (iii) the identity of the suppliers of the Company and its Affiliates and (iv) the people and organizations with whom the Company and its Affiliates have business relationships and those relationships. Confidential Information also includes information that the Company or any of its Affiliates have received belonging to others with any understanding, express or implied, that it would not be disclosed. 11.4. ERISA. “ERISA” means the federal Employee Retirement Income Security Act of 1974, as amended, or any successor statute, and the rules and regulations thereunder, and, in the case of any referenced section thereof, any successor section thereto, collectively and as from time to time amended and in effect. discoveries, developments, methods, processes, compositions, works, concepts, recipes and ideas (whether or not patentable or copyrightable or constituting trade secrets or trade marks or service marks) conceived, made, created, developed or reduced to practice by the Executive (whether alone or with others, whether or not during normal business hours or on or off Company premises) during the Executive’s employment that relate to either the Business or any prospective activity of the Company or any of its Affiliates. 11.6. Person. “Person” means an individual, a corporation, an association, a partnership, a limited liability company, an estate, a trust and any other entity or organization.   12 12. Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law. 13. Code Section 409A. Payments and benefits provided under this Agreement are intended to be exempt from or in compliance with Code Section 409A and are to be interpreted and construed accordingly. For purposes of Code Section 409A, each installment of payments and benefits provided hereunder is intended to be treated as a separate payment, and any references in this Agreement to “employment termination,” “termination from employment” or phrases of like kind are intended to mean “separation from service” as defined under Code Section 409A. Notwithstanding any other provision of this Agreement, the parties hereto agree to take all actions (including adopting amendments to this Agreement) as are required to comply with or minimize any potential additional taxes and/or interest charges to the Executive as may be imposed under Code Section 409A with respect to any payment or benefit due the Executive hereunder (including the delay in some or all payments until the seventh month after the Executive’s termination of employment). 14. Miscellaneous. 14.1. Assignment. Neither the Company nor DPLLC nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company or DPLLC may assign its rights and obligations under this Agreement without the consent of the Executive in the event that the Company or such Principal Subsidiary shall hereafter affect a reorganization, consolidate with, or merge into, any other Person or transfer all or substantially all of its properties or assets to any other Person, in which event such other Person shall be deemed the “Company” or the “Principal Subsidiary” hereunder, as applicable, for all purposes of this Agreement; provided, further, that nothing contained herein shall be construed to place any limitation or restriction on the transfer of the Company’s Common Stock in addition to any restrictions set forth in any stockholder agreement applicable to the holders of such shares. This Agreement shall inure to the benefit of and be binding upon the Company, the Principal Subsidiary and the Executive, and their respective successors, executors, administrators, heirs and permitted assigns. 14.2. Severability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the application of such provision in such circumstances shall be deemed modified to permit its enforcement to the maximum extent permitted by law, and both the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable and the remainder of this Agreement shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 14.3. Waiver; Amendment. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of either party to require   13 the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent breach. This Agreement may be amended or modified only by a written instrument signed by the Executive and any expressly authorized representative of the Company and the Principal Subsidiary. 14.4. Notices. Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person or deposited in the United States mail, postage prepaid, registered or certified, and addressed (a) in the case of the Executive, to: Mr. J. Patrick Doyle Domino’s Pizza, Inc. 30 Frank Lloyd Wright Drive Ann Arbor, MI 48105 Ms. Margaret A. Hunter Dykema Gossett PLLC 39577 Woodward Avenue, Suite 300 Bloomfield Hills, MI 48304 or, (b) in the case of the Company, at its principal place of business and to the attention of Board of Directors, with a copy to the General Counsel or to such other address as either party may specify by notice to the other actually received. 14.5. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior communications, agreements and understandings, written or oral, with the Company, its Affiliates or any of their predecessors, with respect to the terms and conditions of the Executive’s employment. 14.6. Headings. The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement. 14.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall   14 14.8. Joint and Several Liability. The Company and the Principal Subsidiary shall be jointly and severally liable for all payment obligations of the Company 14.9. Governing Law. This Agreement shall be governed by and construed in accordance with the domestic substantive laws of the State of Michigan without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction. 14.10. Consent to Jurisdiction. Each of the Company and the Executive by its or his execution hereof, (i) hereby irrevocably submits to the jurisdiction of the state courts of the State of Michigan for the purpose of any claim or action arising out of or based upon this Agreement or relating to the subject matter hereof and (ii) hereby waives, to the extent not prohibited by applicable law, and agrees not to assert by way of motion, as a defense or otherwise, in any such claim or action, any claim that it or he is not subject personally to the jurisdiction of the above-named courts, that its or his property is exempt or immune from attachment or execution, that any such proceeding brought in the above-named courts is improper, or that this Agreement or the subject matter hereof may not be enforced in or by such court. Each of the Company and the Executive hereby consents to service of process in any such proceeding in any manner permitted by Michigan law, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Sub-Section 14.4 hereof is reasonably calculated to give actual notice.   15 IN WITNESS WHEREOF, this Agreement has been executed on behalf of the Company and the Principal Subsidiary by their respective duly authorized representatives, and by the Executive, as of the date first above written.   THE COMPANY: DOMINO’S PIZZA, INC. By: /s/ David A. Brandon Name: David A. Brandon Title: Chairman of the Board of Directors PRINCIPAL SUBSIDIARY: DOMINO’S PIZZA LLC By: /s/ Michael T. Lawton Name: Michael T. Lawton Title: Executive Vice President, Supply Chain Services and Chief Financial Officer THE EXECUTIVE: /s/ J. Patrick Doyle Name: J. Patrick Doyle   16 Exhibit 3.2 J. PATRICK DOYLE CURRENT ACTIVITIES February 2015   •   Best Buy Co., Inc.   •   Business Leaders of Michigan – Board of Directors   17 Exhibit 4.2 DOMINO’S PIZZA SENIOR EXECUTIVE ANNUAL INCENTIVE PLAN   18 Exhibit A-1 STOCK PLAN Exhibit A-2 FORM OF OPTION AGREEMENT Exhibit A-3 FORM OF PERFORMANCE SHARE AWARD AGREEMENT Exhibit B D&O INSURANCE AND PERSONAL LIABILITY PROTECTION The Company shall provide the Executive with the coverage described in this Exhibit B or such other coverage as the Company shall from time to time select that shall be not substantially less favorable to the Executive than the coverage described herein.

Exhibit 5.2 [Letterhead of Skadden, Arps, Slate, Meagher& Flom LLP] May4, 2015 Aflac Incorporated 1932 Wynnton Road Columbus, Georgia 31999 Re: Aflac Incorporated Registration Statement on Form S-3 Ladies and Gentlemen: We have acted as special counsel to Aflac Incorporated, a Georgia corporation (the “Company”), in connection with the shelf registration statement on Form S-3, to be filed on the date hereof by the Company (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”). The Registration Statement relates to the issuance and sale from time to time by the Company, pursuant to Rule 415 of the General Rules and Regulations promulgated under the Act, of an unspecified amount of the following securities of the Company for unspecified aggregate proceeds: (i)senior unsecured debt securities of the Company (the “Senior Debt Securities”), which may be issued in one or more series under the senior indenture (the “Senior Debt Indenture”), dated as of May21, 2009, between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and (ii)subordinated unsecured debt securities of the Company (the “Subordinated Debt Securities” and, together with the Senior Debt Securities, the “Debt Securities”), which may be issued in one or more series under the subordinated indenture (the “Subordinated Debt Indenture” and, together with the Senior Debt Indenture, the “Indentures”), dated as of September 26, 2012, between the Company, as issuer, and the Trustee. This opinion is being delivered in accordance with the requirements of Item601(b)(5) of Regulation S-K under the Act. In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement relating to the Debt Securities; (ii) the Senior Debt Indenture, filed as Exhibit 4.1 to the Registration Statement; (iii) the Subordinated Debt Indenture, filed as Exhibit 4.13 to the Registration Statement; (iv) the Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), of the Trustee under the Senior Debt Indenture, filed as Exhibit 25.1 to the Registration Statement; and (v) the Statement of Eligibility on Form T-1 under the Trust Indenture Act, of the Trustee under the Subordinated Debt Indenture, filed as Exhibit 25.2 to the Registration Statement. We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein. Aflac Incorporated May 4, 2015 Page 2 In our examination, we have assumed the legal capacity and competency of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified, conformed or photostatic copies, and the authenticity of the originals of such copies.As to any facts material to the opinions expressed herein which were not independently established or verified, we have relied upon oral or written statements and representations of officers and other representatives of the Company and others and of public officials.In making our examination of executed documents or documents to be executed, we have assumed (i) that the parties thereto (including the Company) had or will have the power, corporate or other, to enter into and perform all obligations thereunder and (ii) the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents, and the validity and binding effect thereof on such parties.We have also assumed that the Indentures and any respective supplemental indenture thereto have been or will be duly authorized, executed and delivered by the Trustee, and that any Debt Securities that may be issued will be manually authenticated by duly authorized officers of the Trustee.In addition, we have assumed that the terms of the Debt Securities will have been established so as not to, and that the execution and delivery by the Company of, and the performance of its obligations under, the Indentures and any respective supplemental indenture thereto and the Debt Securities, will not violate, conflict with or constitute a default under, (i) the articles of incorporation or the bylaws of the Company, (ii) any agreement or instrument to which the Company or its properties is subject, (iii)any law, rule or regulation to which the Company or its properties is subject (except that we do not make the assumption set forth in this clause (iii) with respect to the Opined on Law (as defined below)), (iv)any judicial, administrative or regulatory order or decree of any governmental authority (except that we do not make the assumption set forth in this clause (iv) with respect to the Opined on Law); or (v)any consent, approval, license, authorization or validation of, or filing, recording or registration with, any governmental authority (except that we do not make the assumption set forth in this clause (v) with respect to the Opined on Law).We have also assumed that the Company has been duly organized and is and will continue to be validly existing and in good standing under the laws of the State of Georgia and that (i)the Company has duly authorized the filing of the Registration Statement under the laws of the State of Georgia; (ii)prior to the issuance of any Debt Securities, the Company will have duly authorized the issuance and terms of the Debt Securities under the laws of the State of Georgia; (iii)prior to the issuance of any Debt Securities, each certificate or other executed document evidencing the Debt Securities will be duly authorized, executed and delivered by the Company under the laws of the State of Georgia; (iv)the Indentures and any respective supplemental indenture thereto have been or will be duly authorized, executed and delivered by the Company under the laws of the State of Georgia; (v)the choice of New York law in the Indentures is legal and valid under the laws of other applicable jurisdictions; (vi)the execution and delivery by the Company of, and the performance by the Company of its respective obligations under, the Indentures and any respective supplemental indenture thereto, and the Debt Securities, will not violate, conflict with or constitute a default under, any laws of the State of Georgia and (vii)the Company has and will have complied with all aspects of the laws of the State of Georgia in connection with the issuance of the Debt Securities as contemplated by the Registration Statement.As to any facts material to the opinions expressed herein which were not independently established or verified, we have relied upon oral or written statements and representations of officers and other representatives of the Company and others. Our opinions set forth herein are limited to the laws of the State of New York that, in our experience, are normally applicable to securities of the type contemplated by the Registration Statement and, to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as “Opined on Law”).We do not express any opinion with respect to the law of any jurisdiction other than Opined on Law or as to the effect of any such non-Opined on Law on the opinions herein stated.The Debt Securities may be issued from time to time on a delayed or continuous basis, and this opinion is limited to the laws, including the rules and regulations, as in effect on the date hereof, which laws are subject to change with possible retroactive effect. Based upon and subject to the foregoing and to the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that: Aflac Incorporated May 4, 2015 Page 3 With respect to any series of Debt Securities offered by the Company pursuant to the Registration Statement(the “Offered Debt Securities”), when (i)the Registration Statement, as finally amended (including all necessary post-effective amendments), has become effective under the Act and the Indentures and any respective supplemental indenture related to such Offered Debt Securities have been qualified under the Trust Indenture Act; (ii)an appropriate prospectus supplement with respect to any Offered Debt Securities has been prepared, delivered and filed in compliance with the Act and the applicable rules and regulations thereunder; (iii)if the Offered Debt Securities are to be sold pursuant to a firm commitment underwritten offering, the underwriting agreement with respect to the Offered Debt Securities has been duly authorized, executed and delivered by the Company and the other parties thereto; (iv) any supplemental indenture relating to the Offered Debt Securities has been duly authorized, executed and delivered by the Company and the other parties thereto; (v) the board of directors of the Company, including any appropriate committee appointed thereby, and appropriate officers of the Company have taken all necessary corporate action to approve the issuance, sale and terms of the Offered Debt Securities and related matters; (vi)the terms of the Offered Debt Securities and of their issuance and sale have been duly established in conformity with theapplicable Indenture and any respective supplemental indenture to be entered into in connection with the issuance of such Offered Debt Securities so as not to violate the articles of incorporation or the bylaws of the Company; and (vii)the Offered Debt Securities, in the form to be filed on a Current Report on Form 8-K or other applicable periodic report, have been duly executed and authenticated in accordance with the provisions of the applicable Indenture and any respective supplemental indenture relating to the Offered Debt Securities and have been duly delivered to the purchasers thereof upon payment of the agreed-upon consideration therefor, the Offered Debt Securities, when issued and sold or otherwise distributed in accordance with the applicable Indenture and any respective supplemental indenture relating to the Offered Debt Securities and any officers’ certificate or board resolution adopted in connection with the issuance of such Offered Debt Securities and the applicable underwriting agreement, if any, or any other duly authorized, executed and delivered valid and binding agreement, will be valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except to the extent that enforcement thereof may be limited by (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity), (c) public policy considerations which may limit the rights of parties to obtain remedies, (d) waivers of any usury defense contained in the Indentures, any respective supplemental indenture or the Offered Debt Securities which may be unenforceable, (e) requirements that a claim with respect to any Offered Debt Securities denominated in a currency, currency unit or composite currency other than United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law, and (f) governmental authority to limit, delay or prohibit the making of payments outside the United States or in foreign currencies, currency units or composite currencies. Aflac Incorporated May 4, 2015 Page 4 We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement.We also hereby consent to the use of our name under the heading “Legal Matters” in the prospectus which forms a part of the Registration Statement.In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section7 of the Act or the rules and regulations of the Commission promulgated thereunder.This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable laws. Very truly yours, /s/ Skadden, Arps, Slate, Meagher & Flom LLP

Name: Commission Regulation (EC) No 417/2001 of 1 March 2001 establishing the standard import values for determining the entry price of certain fruit and vegetables Type: Regulation Subject Matter: plant product; prices; agricultural policy Date Published: nan nan

Exhibit 10.1   SINGER CHILDREN’S MANAGEMENT TRUST c/o 212 Vaccaro Drive Cresskill, NJ 07626   December 11, 2009   VIA FEDERAL EXPRESS AND EMAIL Evolving Systems, Inc. 9777 Pyramid Court, Suite 100 Englewood, CO 80112   Attention:                                         Mr. Thad Dupper, President and Chief Executive Officer   Gentlemen/Ladies:   As Trustee of the Singer Children’s Management Trust (the “Trust”), the undersigned is writing about the Trust’s investment in Evolving Systems, Inc. (the “Company”). Specifically, the Trust is providing formal notice of the following matters:   Based upon discussions with Mr. Philip Neches, Chairman of the Company’s Nominating and Governance Committee (the “Committee”), the Trust understands that the Committee has interviewed Mr. John Spirtos as a candidate to fill the vacancy on the Board of Directors resulting from Mr. Hallenbeck’s recent resignation and has recommended Mr. Spirtos for appointment. We further understand that the Board of Directors appointed Mr. Spirtos to the Board of Directors on December 10, 2009, with a term of office that will expire at the Annual Stockholders’ Meeting in 2012. We have reviewed Mr. Spirtos’ qualifications and support his appointment.   As a general matter, as a significant Company stockholder the Trust favors good governance practices. The Trust retains the option to engage in ongoing communications with the Company regarding stockholder protections and reforms.   Furthermore, we understand that on December 10, 2009, the Board of Directors adopted appropriate resolutions amending the Company’s Rights Agreement, dated as of March 4, 2009, so that the threshold at which a person becomes an “Acquiring Person” under the Rights Agreement is increased from 22.5% to 25%. In consideration of that amendment, the Trust agrees that it will vote its shares in favor of the re-election of Messrs. Philip Neches and Richard Ramlall (whose terms expire in 2010) to the Board of Directors of the Company, if such persons choose to run for     re~election at the Company’s 2010 annual meeting of stockholders, and it will not seek or otherwise support additional stockholder protections or reforms at the 2010 annual stockholders meeting.     Very truly yours,       SINGER CHILDREN’S MANAGEMENT   TRUST           /s/ Karen Singer   By: Karen Singer, Trustee   2

  Exhibit 10.17   [WEST LOGO TO APPEAR HERE]   To:   Michael E. Mazour     From:   Nancee R. Berger     Date:   February 10, 2003               Re:   2003 Compensation Plan       Your 2003 compensation plan (“Plan Year”) for your employment as Executive Vice President for West Telemarketing Corporation Outbound (the “Company”) is as follows:   1.   Your base salary will be $200,000. Should you elect to voluntarily terminate your employment, you will be compensated for your services through the date of your actual termination per your Employment Agreement.   2.   The rate factors used to calculate your pre-tax, pre-corporate allocation profit bonus are outlined on the schedule below. You are eligible to receive a quarterly performance bonus based on each quarter’s pre-tax, pre-corporate allocation profit margin. The bonus will be calculated by multiplying the year-to-date pre-tax, pre-corporate allocation profit times the rate factor from the table below minus bonuses paid year-to-date for the respective calendar year.   Rate Factor .008   3.   In addition, if the Company’s pre-tax, pre-corporate allocation profit margin in each quarter is equal to or greater than the agreed upon plan, you will receive an additional quarterly bonus of $25,000. You will be paid the amount due for the quarterly bonus within thirty (30) days after the end of the quarter.   4.   In addition, if West Corporation achieves 2003 net income of $.05 per share greater than its stated expected 2003 EPS, you will be eligible to receive an additional one-time bonus of $50,000.00. You will be paid the amount due for the quarterly bonus within thirty (30) days after the end of the quarter. Your annual bonus will be paid within thirty (30) days after the financial statements for December 2003 are prepared, but in no event will be paid later than February 28, 2004.   5.   All pre-tax, pre-corporate allocation profit and net income objectives are based upon the Company’s operations and will not include profit and income derived from mergers, acquisitions, joint ventures or other non-operating income unless specifically and individually included upon completion of the transaction.   6.   The benefit plans, as referenced in Section 7(i), shall include insurance plans based upon eligibility pursuant to the plans. If the insurance plans do not provide for continued participation, the continuation of benefits shall be pursuant to COBRA. In the event Employee’s benefits continue pursuant to COBRA and Employee accepts new employment during the consulting term, Employee may continue benefits thereafter to the extent allowed under COBRA. In no event shall benefits plans include the 401K Plan or the 1996 Stock Incentive Plan.   By:   /s/    MICHAEL E. MAZOUR     Employee—Michael E. Mazour

Name: Commission Regulation (EC) No 995/2006 of 30 June 2006 fixing the refunds applicable to cereal and rice sector products supplied as Community and national food aid Type: Regulation Subject Matter: economic policy; plant product; trade policy; cooperation policy Date Published: nan 1.7.2006 EN Official Journal of the European Union L 179/24 COMMISSION REGULATION (EC) No 995/2006 of 30 June 2006 fixing the refunds applicable to cereal and rice sector products supplied as Community and national food aid THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 1784/2003 of 29 September 2003 on the common organisation of the market in cereals (1) and in particular Article 13(3) thereof, Having regard to Council Regulation (EC) No 1785/2003 of 29 September 2003 on the common organisation of the market in rice (2) and in particular Article 14(3) thereof, Whereas: (1) Article 2 of Council Regulation (EEC) No 2681/74 of 21 October 1974 on Community financing of expenditure incurred in respect of the supply of agricultural products as food aid (3) lays down that the portion of the expenditure corresponding to the export refunds on the products in question fixed under Community rules is to be charged to the European Agricultural Guidance and Guarantee Fund, Guarantee Section. (2) In order to make it easier to draw up and manage the budget for Community food aid actions and to enable the Member States to know the extent of Community participation in the financing of national food aid actions, the level of the refunds granted for these actions should be determined. (3) The general and implementing rules provided for in Article 13 of Regulation (EC) No 1784/2003 and in Article 13 of Regulation (EC) No 1785/2003 on export refunds are applicable mutatis mutandis to the abovementioned operations. (4) The specific criteria to be used for calculating the export refund on rice are set out in Article 14 of Regulation (EC) No 1785/2003. (5) The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Cereals, HAS ADOPTED THIS REGULATION: Article 1 For Community and national food aid operations under international agreements or other supplementary programmes, and other Community free supply measures, the refunds applicable to cereals and rice sector products shall be as set out in the Annex. Article 2 This Regulation shall enter into force on 1 July 2006. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 30 June 2006. For the Commission J. L. DEMARTY Director-General for Agriculture and Rural Development (1) OJ L 270, 21.10.2003, p. 78. Regulation as amended by Commission Regulation (EC) No 1154/2005 (OJ L 187, 19.7.2005, p. 11). (2) OJ L 270, 21.10.2003, p. 96. Regulation as last amended by Commission Regulation (EC) No 797/2006 (OJ L 144, 31.5.2006, p. 1). (3) OJ L 288, 25.10.1974, p. 1. ANNEX to the Commission Regulation of 30 June 2006 fixing the refunds applicable to cereal and rice sector products supplied as Comunity and national food aid (EUR/t) Product code Refund 1001 10 00 9400 0,00 1001 90 99 9000 0,00 1002 00 00 9000 0,00 1003 00 90 9000 0,00 1005 90 00 9000 0,00 1006 30 92 9100 0,00 1006 30 92 9900 0,00 1006 30 94 9100 0,00 1006 30 94 9900 0,00 1006 30 96 9100 0,00 1006 30 96 9900 0,00 1006 30 98 9100 0,00 1006 30 98 9900 0,00 1006 30 65 9900 0,00 1007 00 90 9000 0,00 1101 00 15 9100 0,00 1101 00 15 9130 0,00 1102 10 00 9500 0,00 1102 20 10 9200 54,64 1102 20 10 9400 46,84 1103 11 10 9200 0,00 1103 13 10 9100 70,25 1104 12 90 9100 0,00 NB: The product codes are defined in Commission Regulation (EEC) No 3846/87 (OJ L 366, 24.12.1987, p. 1), amended.

American Century Growth Funds, Inc. Prospectuses Supplement Supplement dated July 28, 2014 ■ Prospectus dated December 1, 2013 Legacy Focused Large Cap Fund ■ Legacy Large Cap Fund ■ Legacy Multi Cap Fund The following replaces the Modifying or Canceling a Transaction section under Additional Policies Affecting Your Investment . Canceling a Transaction American Century Investments will use its best efforts to honor your request to revoke a transaction instruction if your revocation request is received prior to the close of trading on the New York Stock Exchange (NYSE) (generally 4 p.m. Eastern time) on the trade date of the transaction. Once processing has begun, or the NYSE has closed on the trade date, the transaction can no longer be canceled. Each fund reserves the right to suspend the offering of shares for a period of time and to reject any specific investment (including a purchase by exchange). Additionally, we may refuse a purchase if, in our judgment, it is of a size that would disrupt the management of a fund. ©2014 American Century Proprietary Holdings, Inc. All rights reserved. CL-SPL-830041407

NETWORK-1 TECHNOLOGIES, INC. Filed Pursuant to Rule 424(b)(3) Registration No. 333-190719 PROSPECTUS SUPPLEMENT NO. 2 (To Prospectus dated October 1, 2014) This is a prospectus supplement to our prospectus dated October1, 2014 (the “Prospectus”) relating to the resale from time to time by selling stockholders of up to 4,329,186 shares of our common stock, including shares issuable upon exercise of outstanding warrants.On October 20, 2014, we filed with the Securities and Exchange Commission a Current Report on Form 8-K.The text of the Current Report on Form 8-K is attached to and a part of this supplement. This prospectus supplement should be read in conjunction with the Prospectus and may not be delivered or utilized without the Prospectus.This prospectus supplement is qualified by reference to the Prospectus, except to the extent that the information provided by this prospectus supplement supersedes the information contained in the Prospectus. The securities offered by the Prospectus involve a high degree of risk.You should carefully consider the “Risk Factors” beginning on page 8 of the Prospectus in determining whether to purchase the common stock. The date of this prospectus supplement is October 20, 2014. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 16, 2014 Network-1 Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 29, 2012 Commission File Number: 1-5273-1 Sterling Bancorp (Exact name of Registrant as specified in its charter) New York 13-2565216 (State of other jurisdiction of incorporation) (IRS Employer Identification No.) 650 Fifth Avenue ,New York, New York 10019-6108 (Address of principal executive offices) (Zip Code) (212) 757-3300 (Registrant’s telephone number, including area code) NA (Former name, former address and former fiscal year, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c) TABLE OF CONTENTS ITEM 7.01 REGULATION FD DISCLOSURE ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS SIGNATURE EXHIBIT INDEX PRESS RELEASE ITEM 7.01 REGULATION FD DISCLOSURE On October 29, 2012, the Company issued a press release announcing that it has rescheduled the release of its third quarter financial results and related conference call to Friday, November 2, 2012, due to Hurricane Sandy and the associated closure of the financial markets. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (d)Exhibits Press release dated October 29, 2012 (furnished pursuant to Item 7.01). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DATE: October 30, 2012 BY: /s/ JOHN W. TIETJEN JOHN W. TIETJEN Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit Number Press Release dated October 29, 2012

Exhibit 32.1 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION -OXLEY ACT OF 2002 In connection with the Quarterly Report of CorMedix Inc., a Delaware corporation (the “Company”), on Form 10-Q for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Randy Milby, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 13, 2014 By: /s/ Randy Milby Name: Randy Milby Title: Chief Executive Officer (Principal Executive Officer)

Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: Cash Portfolio Term Portfolio Meeting of the Board of Trustees July 27, 2006 Pursuant to prior written notice given to all Trustees, a meeting of the Board of Trustees of The North Carolina Capital Management Trust (the “Trust”) was held on July 27, 2006 at 10:30 a.m. at the Mint Room of the Charlotte City Club, 121 W. Trade Street, Charlotte, North Carolina. The following Trustees were present: Boyce Greer Thomas Hollowell James G. Martin William O. McCoy constituting a quorum. Also present were: Kenneth Berman, Debevoise & Plimpton LLP (“Debevoise”) Lee Carter, Capital Management of the Carolinas (“CMC”) Cindy Collins, Fidelity Investments (“Fidelity” or “FMR”) Janet Erickson, Fidelity John Farinacci, Fidelity Joseph Fleming, Dechert LLP David A. Forman, Fidelity Bob Litterst, Fidelity Jay Rivers, CMC Kenneth Robins, Fidelity Charles Senatore, Fidelity Mike Volo, Fidelity Mr. McCoy presided, and Mr. Forman recorded the minutes. It was noted that Ms. Erickson and Messrs. Farinacci and Robins were participating in the meeting via conference telephone and that each could hear and be heard by all present. The Board approved the minutes of its April 28, May 22, and June 28, 2006 meetings, and Fidelity was instructed to put them into final form for execution. Performance Review of Cash and Term Portfolios Mr. Litterst provided a review of the investment performance of Cash and Term Portfolios during the year ended June 30, 2006. Mr. Litterst’s presentation, copies of which were distributed to the Trustees, and a copy of which will be filed in the Exhibit Book to the #434829 1 of 10 Fidelity Confidential Information meeting, covered the Portfolios’ performance and composition, as well as Mr. Litterst 's outlook on the market. Mr. Litterst reviewed the presentation with the Board. A lengthy discussion ensued. Annual Renewal of Management Contracts Mr. McCoy noted that the Board had received materials on June 23, 2006 in connection with the Board’s proposed renewal of the Portfolios’ management contracts and sub-advisory agreements, and that a special telephonic meeting of the Board was held on June 28, 2006 to review and discuss the materials. He noted that the Independent Trustees received FMR’s responses to the Independent Trustees’ questions on July 20, 2006, a copy of which will be filed in the Exhibit Book to the meeting. He also noted that the Independent Trustees had received a memorandum from Debevoise & Plimpton LLP summarizing the Board’s responsibilities with respect to the review of the management contracts. Mr. Forman provided an overview of the materials previously provided to, and discussed with, the Trustees. He stated that the Portfolios’ management fees and total expenses are substantially lower than those of competitors, the Portfolios’ investment performance is strong, and that no changes to the management contracts are proposed, as detailed in the June 22, 2006 Board materials and the minutes to the June 28, 2006 Board meeting. At the request of Mr. McCoy, Messrs. Farinacci and Forman discussed FMR’s written answers to the Independent Trustees’ written questions. A general discussion ensued. Mr. McCoy asked the Independent Trustees if they had any further questions. The Independent Trustees stated that there were none. The Independent Trustees determined to consider the proposal to renew the management contracts in Executive Session. Annual Renewal of Sub-Advisory Agreements Mr. Forman stated that the Board had also previously received materials regarding the renewal of the Portfolios’ sub-advisory agreements between FMR and Fidelity Investments Money Management, Inc. (“FIMM”), and had discussed the materials at the June 28, 2006 meeting, as detailed in the June 22, 2006 Board materials and the minutes to the June 28, 2006 Board meeting. #434829 2 of 10 Fidelity Confidential Information Mr. McCoy asked the Independent Trustees if they had any further questions. The Independent Trustees stated that there were none. The Independent Trustees determined to consider the proposal to renew the sub-advisory agreements in Executive Session. Annual Review and Renewal of Rule 12b-1 Distribution and Service Plans and Plan-Related Agreements Mr. Forman reviewed the information provided in the July 17, 2006 Board memorandum regarding the annual review and renewal of each Portfolio’s Rule 12b-1 Distribution and Service Plan and Plan-related Agreements. He stated that copies of each Plan and Agreement are included as Attachments to the Board memorandum, and that no changes to the Plans or Agreements are proposed. Mr. Forman stated that pursuant to Rule 12b-1, the Trustees must annually approve each Portfolio’s Distribution and Service Plan and any related Agreement. He stated that in order to approve the continuation of each Plan, the Trustees must, after considering all relevant factors, find that there is a reasonable likelihood that the Plan will benefit each Portfolio and its shareholders. He stated that the SEC has suggested nine factors that trustees should consider in making such a determination, noting that these factors are included as Attachment I to the Board memorandum. Mr. Forman stated that pursuant to each Portfolio’s Plan, FMR pays a monthly distribution and service fee to Fidelity Distributors Corporation (“FDC”) from the management fees FMR receives from each Portfolio. He stated that under Distribution and Service Agent Agreements between FDC and CMC, FDC pays its entire fee to CMC. He reviewed the fee schedule pursuant to which distribution and service fees are paid by FMR to FDC, and, in turn to, CMC. Mr. Forman stated that FMR believes the fees paid to CMC are reasonable and competitive given the services CMC performs and the expenses it assumes, and that an asset-based fee is an appropriate method of compensating CMC. He stated that CMC’s presence in North Carolina provides the local identity, promotional effort, educational and training activities, communication and service that FMR considers necessary. In response to a request from Mr. Hollowell, Mr. Forman stated that FMR would consider what data could be #434829 3 of 10 Fidelity Confidential Information gathered to further support and quantify FMR’s belief that the fee CMC receives for its services are reasonable. The Board reviewed the operation and results of, and amounts paid under, the Portfolios’ Distribution and Service Plans and related Agreements, as detailed in Attachment II. A general discussion ensued, after which the Independent Trustees determined to consider the proposal to renew the Distribution and Service Plans and related Agreements in Executive Session. Rule 12b-1 Quarterly Distribution Report and Marketing Review Mr. Carter stated that the net assets of Cash Portfolio were down 13.3% to $3,823 million and Term Portfolio up 0.5% to $56 million, over the three-month period ended May 31, 2006. He stated that the reduction in Cash Portfolio’s assets was due primarily to “seasonality,” where few tax proceeds are collected during this three-month period, and the rising interest rate environment. He stated that banks have offered higher rates to capture deposits, and have aggressively pursued larger bond issues and are very active in the 90- to 180-day maturity range, leading to withdrawals in Cash Portfolio. Mr. Carter stated that at the end of the period, Cash Portfolio had 638 participants holding 1,824 accounts (an increase of 10 participants and decrease of one account), and Term Portfolio remained stable at 32 participants with 38 accounts. Review of Minimal Credit Risk and Comparable Quality Determinations Under Rule 2a-7 Mr. Forman reviewed FMR’s report that states that FIMM, Fidelity International Investment Advisors, and Fidelity International Investment Advisors (U.K.) Limited, operating pursuant to delegated authority, make the required determinations of minimal credit risk and comparable quality for securities purchased by Cash Portfolio. He stated that as of June 30, 2006, Cash Portfolio had no exposure to unrated issuers, and that the securities held by the Portfolio have been determined to present minimal credit risk. #434829 4 of 10 Fidelity Confidential Information Quarterly Review of Amortized Cost Monitor Mr. Forman reviewed the amortized cost monitor and reported that all valuations were within the established limits previously approved by the Board. Quarterly Review of Portfolio Holdings The Board reviewed the portfolio holdings of Cash Portfolio and Term Portfolio as of June 30, 2006. Annual Review and Approval of Rule 2a-7 Procedures Mr. Forman stated that FMR proposes to renew, without modification, the procedures used by Cash Portfolio to stabilize the Portfolio’s NAV at $1.00. He stated that Rule 2a-7 permits money market funds to use the amortized cost method of valuation, rather than market values of portfolio securities, to calculate a fund’s NAV provided certain requirements are satisfied. He stated that the Board has adopted detailed procedures covering this and other aspects of money market fund management. He stated that the procedures have worked well and that no corrective action has been required by the Board in order to stabilize Cash Portfolio’s NAV. After a general discussion, upon motion duly made and seconded, it was unanimously VOTED: That the amortized cost method of valuation of the current price per share of Cash Portfolio continues to fairly reflect the market-based net asset value per share of the Portfolio. FURTHER VOTED: That the procedures to stabilize the Portfolio’s net asset value per share, substantially in the form detailed in the July 17, 2006 Board memorandum, are reasonably designed, taking into account current market conditions and the Portfolio’s investment objectives, to stabilize the Portfolio’s net asset value per share, as computed for the purpose of distribution, redemption and repurchase, at a single value; and that they be, and hereby are, approved. Annual Review and Approval of Joint Trading Accounts Procedures Mr. Forman reviewed the proposal to renew, without modification, the procedures used by Cash and Term Portfolios to commingle uninvested cash balances each trading day. He stated that each Portfolio is permitted by an SEC exemptive order to use a joint trading account to purchase repurchase agreements. He stated that this allows each Portfolio to commingle its uninvested cash balances in one or more sub-accounts. He stated that the #434829 5 of 10 Fidelity Confidential Information use of this facility results in lower transaction costs for the Portfolios, and provides them with greater flexibility for investing cash later in the trading day. After a general discussion, upon motion duly made and seconded, it was unanimously VOTED: That, upon review of the procedures governing the Trust’s use of a joint trading account or accounts for repurchase transactions in accordance with an exemptive order granted by the Securities and Exchange Commission on November 27, 1981, as amended, the Board finds that such procedures continue to be appropriate and hereby are approved. Annual Renewal of Insurance Programs Mr. Forman reviewed the proposed annual renewals of the Trust’s fidelity bond and professional liability/management liability insurance programs. He stated that the fidelity bond insurance program covers the Trust for loss through larceny or embezzlement, and is required pursuant to Rule 17g-1 of the 1940 Act. He stated that $2,500,000 in coverage is required based on the Trust’s gross assets, and that FMR recommends that the total coverage of $2,500,000 be continued through Chubb. He stated that the annual premium for the July 1, 2006 to July 1, 2007 coverage period is $23,290, unchanged from the prior year, and was paid by FMR pursuant to its all-inclusive management contract. Mr. Forman stated that the Trust's professional liability/management liability insurance coverage provides for payment of losses that the Trust, Trustees, directors and officers become legally obligated to pay by reason of any negligent breach of duty, error, misstatement, misleading statement, omission or other negligent breach of duty, committed in the rendering of, or failure to render, professional services in the operation of the Trust. He stated that the current program, underwritten by Chubb, provides a $10,000,000 limit of liability. He reviewed the deductibles under the program. He stated that the professional liability/management liability insurance program was renewed with Chubb on July 1, 2006 for the coverage period through July 1, 2007, at an annual premium of $93,266, which is unchanged from last year and paid by FMR. He stated that FMR requests ratification of the renewal of the fidelity bond and professional liability/management liability insurance programs. #434829 6 of 10 Fidelity Confidential Information After a general discussion, upon motion duly made and seconded, and by the vote of the full Board, including a majority of those Trustees who are not “interested persons” of the Trust as defined in the Investment Company Act of 1940, as amended, it was unanimously VOTED: That the terms and cost of the Trust’s bond coverage for the period July 1, 2006 through July 1, 2007, as detailed in the July 17, 2006 Board memorandum, be, and it hereby is, approved, after being determined to be reasonable in form and amount, taking into consideration all relevant factors, including, among others, the value of the aggregate assets of the Trust to which any covered person may have access, the arrangements for the custody and safekeeping of such assets, the nature of the securities in the Portfolios of the Trust, and the number of covered parties and the nature of their business activities; and that the officers of the Trust be, and they hereby are, authorized to take all appropriate steps to place said bond coverage, subject to review of the form by counsel to the Trust and counsel to the Independent Trustees. FURTHER VOTED: That the portion of the total premium to be paid by the Trust for the Portfolio’s bond coverage be, and it hereby is, approved. FURTHER VOTED: That Thomas Wronski and any additional party the Trust’s Treasurer should designate be, and they hereby are, designated as the individuals responsible for making all necessary filings and giving notices with respect to said bond required by Paragraph (g) of Rule 17(g)-1 under the Investment Company Act of 1940. FURTHER VOTED: That the terms and cost of the Trust’s professional liability/management liability insurance program for the period July 1, 2006 through July 1, 2007, as detailed in the July 17, 2006 Board memorandum, be, and it hereby is, approved, after being determined to be reasonable in form and amount, taking into consideration all relevant factors, including, among others, the value of the aggregate assets of the Trust to which any covered person may have access, the arrangements for the custody and safekeeping of such assets, the nature of the securities in the Portfolios of the Trust, and the number of parties named as insureds and the nature of their business activities; and that the officers of the Trust be, and they hereby are, authorized to take all appropriate steps to place said policies established under the insurance program, subject to review of the form of policy by counsel to the Trust and counsel to the Independent Trustees. FURTHER VOTED: That the portion of the total premium to be paid by the Trust for the Portfolios’ professional liability/management liability insurance program be, and it hereby is, approved. FURTHER VOTED: That Thomas Wronski and any additional party the Trust’s Treasurer should designate be, and they hereby are, authorized and directed to execute and deliver such documents and to take such actions in the name of the Trust, or on its behalf, as they may determine to be necessary or desirable in connection with the furtherance of the foregoing resolutions. #434829 7 of 10 Fidelity Confidential Information Approval of Revisions to Trade Allocation Policy Mr. Forman stated that FMR has one fixed-income trade allocation policy for all of the funds that it manages. He stated that the policy is designed to achieve fairness among all funds and accounts (collectively referred to as “funds”) when buy or sell orders for a particular security exceed the available supply or demand. He stated that the current policy generally allocates purchases based on fund net assets, and allocates sales based on fund total position in the security being sold. He stated that FMR proposes that the policy be revised to simplify and clarify certain provisions and eliminate others that are not used, as detailed in the July 17, 2006 Board memorandum. He stated that FMR believes that the proposed modifications will continue to help achieve fairness among the funds. After further discussion, upon motion duly made and seconded, by vote of the Board, it was unanimously VOTED: That the revisions to the fixed-income trade allocation policy applicable to all Fidelity funds, as described in the Board memorandum dated July 17, 2006, be, and they hereby are, approved. Executive Session The Independent Trustees met in Executive Session with fund counsel and counsel to the Independent Trustees. Mr. Berman recorded the minutes. The Independent Trustees discussed the proposals to the renew the management contracts, subadvisory contracts and Rule 12b-1 Distribution and Service Plans and plan-related agreements. The Independent Trustees determined to recommend that such contracts, agreements and Plans be renewed. The Independent Trustees also discussed the proposed annual Board self-evaluation and reviewed a draft questionnaire prepared by Mr. Berman. After the Executive Session, Mr. Greer and representatives of FMR and CMC rejoined the meeting. A brief discussion ensued, and upon motion duly made and seconded, by vote of the full Board, including a majority of those Trustees who are not “interested persons” of the Trust, as defined in the Investment Company Act of 1940, as amended, cast in person, it was unanimously #434829 8 of 10 Fidelity Confidential Information VOTED: That PricewaterhouseCoopers LLP (“PwC”) be, and it hereby is, selected as independent public accountant, pursuant to and subject to the provisions of Section 32(a) of the Investment Company Act of 1940, to certify every financial statement of the Trust required by any law or regulation to be certified by any independent public accountant and filed with the Securities and Exchange Commission, with respect to all or any part of the Trust’s fiscal year. FURTHER VOTED: That said employment of PwC be, and it hereby is, conditioned upon the right of the Trust, by vote of a majority of outstanding voting securities at any meeting called for the purpose, to terminate said employment forthwith without any penalty. Upon motion duly made and seconded, by vote of the full Board, including a majority of those Trustees who are not “interested persons” of the Trust, as defined in the Investment Company Act of 1940, as amended, cast in person, at a meeting called for such purpose, it was unanimously VOTED: That, in accordance with the terms of the Management Contracts between Fidelity Management & Research Company (“FMR”) and the Trust, on behalf of Cash Portfolio and Term Portfolio, respectively, said Contracts be, and each hereby is, confirmed and re-approved, without modification, to continue for the maximum period permitted under the Investment Company Act of 1940, as the same may be amended from time to time, unless terminated or amended according to its terms. FURTHER VOTED: That, in accordance with the terms of the Sub-Advisory Agreements between FMR and Fidelity Investments Money Management, Inc., on behalf of Cash Portfolio and Term Portfolio, respectively, said Agreements be, and each hereby is, confirmed and re-approved, without modification, to continue for the maximum period permitted under the Investment Company Act of 1940, as the same may be amended from time to time, unless terminated or amended according to its terms. Upon motion duly made and seconded, and by vote of the full Board, including a majority of those Trustees who are not “interested persons” of the Trust, as defined in the Investment Company Act of 1940, as amended, and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan, cast in person, at a meeting called for such purpose, it was unanimously VOTED: That the continuation of the existing Plans of The North Carolina Capital Management Trust: Cash Portfolio and Term Portfolio, pursuant to Rule 12b-1 under the Investment Company Act of 1940 through July 31, 2007, and the agreements related thereto presented at this meeting, be, and they hereby are, approved by the Board, after consideration, among others, of the following factors: the purposes for which the Trust was organized and the Plans were adopted, the degree to which the Plans have addressed the circumstances that led to the organization of the Trust and adoption of the Plans, the information #434829 9 of 10 Fidelity Confidential Information provided to the Board at this and prior meetings, the level of payments provided for under the Plans, and the benefits afforded by the Plans to each Portfolio and its shareholders. FURTHER VOTED: That the Board hereby determines, in the exercise of its fiduciary duties, that there is a reasonable likelihood that continuation of the Plans will benefit Cash Portfolio and Term Portfolio and their shareholders. Mr. McCoy then reported on the approach that the Independent Trustees suggested be taken with respect to the Board annual self-evaluation. There being no further business to come before the Board, upon motion duly made and seconded, the Board unanimously VOTED: To adjourn. ADJOURNED. A TRUE RECORD. Attest: David A. Forman Assistant Secretary #434829 10 of 10 Fidelity Confidential Information

  Exhibit 10.1   SECURITIES PURCHASE AGREEMENT   This Securities Purchase Agreement (this “Agreement”) is dated as of January 6, 2020, between Edesa Biotech, Inc., a British Columbia corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).   WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to (i) an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”) as to the Shares and (ii) an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulation D thereunder as to the Warrants, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.   NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:   ARTICLE I. DEFINITIONS   1.1  Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:   “Action” shall have the meaning ascribed to such term in Section 3.1(j).   “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.   “Board of Directors” means the board of directors of the Company.     “Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.   “Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading Day following the date hereof.   “Commission” means the United States Securities and Exchange Commission.       1     “Common Shares” means the common shares of the Company, no par value per share, and any other class of securities into which such securities may hereafter be reclassified or changed.   “Common Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Shares, including, without limitation, any debt, preferred shares, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Shares.   “Company Canadian Counsel” means Fasken Martineau DuMoulin LLP, with offices located at 333 Bay Street, Suite 2400, Toronto, ON, M5H 2T6, Canada.   “Company U.S. Counsel” means Stubbs Alderton & Markiles, LLP, with offices located at 15260 Ventura Blvd., 20th Floor, Sherman Oaks, California, 91403.   “Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.   “Disclosure Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent.   “Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).      “FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.   “FDA” shall have the meaning ascribed to such term in Section 3.1(hh).   “FDCA” shall have the meaning ascribed to such term in Section 3.1(hh).   “GAAP” shall have the meaning ascribed to such term in Section 3.1(h).   “Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).   “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).   “Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).       2     “Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.   “Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).   “Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).   “Per Share Purchase Price” equals (i) $3.20 for each Purchaser other than Purchasers that are officers, directors, employees or consultants of the Company and (ii) $4.11 for each Purchaser that is an officer, director, employee or consultant of the Company (other than issuances to certain entities controlled by an officer, director, employee, or consultant of the Company where such issuances would not be considered equity compensation under applicable Nasdaq Listing Rules), subject, in each case, to adjustment for reverse and forward share splits, share dividends, share combinations and other similar transactions of the Common Shares that occur after the date of this Agreement.   “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint share company, government (or an agency or subdivision thereof) or other entity of any kind.   “Pharmaceutical Product” shall have the meaning ascribed to such term in Section 3.1(hh).   “Placement Agent” means Brookline Capital Markets.   “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.   “Prospectus” means the final base prospectus filed for the Registration Statement.   “Prospectus Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the Commission and delivered by the Company to each Purchaser at the Closing.   “Purchaser Party” shall have the meaning ascribed to such term in Section 4.6.   “Registration Statement” means the effective registration statement with Commission file No. 333-233567 which registers the sale of the Shares to the Purchasers.     3     “Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).   “Rule 144” means Rule 144 promulgated by the Commission pursuant to the any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.   “Rule 424” means Rule 424 promulgated by the Commission pursuant to the   “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).   “Securities” means, collectively, the Shares, the Warrants and the Warrant Shares.   regulations promulgated thereunder.   “Shares” means the Common Shares issued or issuable to each Purchaser pursuant to this Agreement.   “Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Common Shares).     “Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.    “Subsidiary” means any subsidiary of the Company as set forth on Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the nine-month period ended September 30, 2019 filed with the Commission on December 12, 2019.   trading.   Common Shares are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).       4         “Transaction Documents” means this Agreement and the Warrants.   “Transfer Agent” means Computershare Investor Services Inc., the current transfer agent of the Company, with a mailing address of 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1, and any successor transfer agent of the Company.   “Variable Rate Transaction” shall have the meaning ascribed to such term in Section 4.9.   clauses that applies: (a) if the Common Share is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Share for Common Share is then listed or quoted as reported by Bloomberg L.P. (based on a time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Share for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Share is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Share are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Share so reported, or (d) in all other cases, the fair market value of a share of Common Share as determined by an independent appraiser selected in good faith by the Company, the fees and expenses of which shall be paid by the Company.   “Warrants” means, collectively, the Common Shares purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)(v) and Section 2.2(a)(vi) hereof. The Common Shares purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)(v) hereof (the “Class A Warrants”) shall be exercisable following the six month anniversary of the Closing Date and have a term of exercise equal to three years, in the form of Exhibit A attached hereto. The Common Shares purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)(vi) hereof (the “Class B Warrants”) shall be exercisable following the six month anniversary of the Closing Date and have a term of exercise equal to four months, in the form of Exhibit B attached hereto.   “Warrant Shares” means the Common Shares issuable upon exercise of the Warrants.       5         ARTICLE II. PURCHASE AND SALE   2.1 Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $3,215,000 of Shares and Warrants. Each Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available for “Delivery Versus Payment” settlement with the Company or its designees. The Company shall deliver to each Purchaser its respective Shares and Warrants as determined pursuant to Section 2.2(a)(v) and Section 2.2(a)(vi), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of the Placement Agent or such other location as the parties shall mutually agree. Unless otherwise directed by the Placement Agent, settlement of the Shares shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date, the Company shall issue the Shares registered in the Purchasers’ names and addresses upon receipt of payment).   2.2 Deliveries.   (a)            On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:   (i) this Agreement duly executed by the Company;   (ii) a legal opinion of Company Canadian Counsel and Company U.S. Counsel, in a form acceptable to the Placement Agent and Purchasers;   (iii) the Company shall have provided each Purchaser or its designee with the Company’s wire instructions, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer;   (iv) subject to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Direct Registration System (“DRS”) Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser;   (v) a Class A Warrant registered in the name of such Purchaser to purchase up to a number of Common Shares equal to 75% of such Purchaser’s Shares, with an exercise price equal to $4.80, subject to adjustment therein (such Warrant certificate may be delivered within three Trading Days of the Closing Date);   (vi) a Class B Warrant registered in the name of such Purchaser to purchase up to a number of Common Shares equal to 50% of such Purchaser’s Shares, with an exercise price per share, equal to $4.00, subject, in each case, to adjustment therein (such Warrant certificate may be delivered within three Trading Days of the Closing Date);     6     (vii) the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).   (b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:   (i) this Agreement duly executed by such Purchaser; and   (ii) such Purchaser’s Subscription Amount, which shall be made available for “Delivery Versus Payment” settlement with the Company or its designees.   2.3 Closing Conditions.   (a)           The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:   (i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);   (ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and   (iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.   (b) The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:   warranties of the Company contained herein (unless as of a specific date therein   (ii) all obligations, covenants and agreements of the Company required to be   (iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;       7     (iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and   (v) from the date hereof to the Closing Date, trading in the Common Shares shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.   ARTICLE III. REPRESENTATIONS AND WARRANTIES   3.1 Representations and Warranties of the Company. Except as set forth in the SEC Reports, which SEC Reports shall qualify any representation or warranty made herein, the Company hereby makes the following representations and warranties to each Purchaser:   (a)     Subsidiaries. The Company owns, directly or indirectly, all of the capital share or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital share of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.   (b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.       8     (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.   (d) No Conflicts or Breach. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect. Neither the Company, its subsidiaries nor, to its knowledge, any other party is in violation, breach or default of any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or other instrument that is reasonably likely to result in a Material Adverse Effect.       9     (e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.3 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) application(s) to each applicable Trading Market for the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws, and (v) such consents, waivers and authorizations that shall be obtained prior to Closing (collectively, the “Required Approvals”).   (f) Issuance of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital shares the maximum number of Common Shares issuable pursuant to this Agreement and the Warrants. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on September 12, 2019 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Company was at the time of the filing of the Registration Statement eligible to use Form S-3. The Company is eligible to use Form S-3 under the Securities Act and it meets the transaction requirements with respect to the aggregate market value of securities being sold pursuant to this offering and during the twelve (12) calendar months prior to this offering as set forth in General Instruction I.B.6 of Form S-3. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus Supplement with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any therein not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not circumstances under which they were made, not misleading.       10     (g) Capitalization. The Company has not issued any capital share since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of share options under the Company’s share option plans and pursuant to the conversion and/or exercise of Common Share Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities and as set forth in the Prospectus Supplement, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Shares or the capital share of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Common Shares or Common Share Equivalents or capital share of any Subsidiary. Except as set forth in the Prospectus Supplement, the issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue Common Shares or other securities to any Person (other than the Purchasers and the Placement Agent). There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any share appreciation rights or “phantom share” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital share of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s capital share to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.       11     (h) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Registration Statement, Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.   (i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital share and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company share option plans. The Company does not have pending before the Commission any request for confidential treatment of information.   (j) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.       12     (k) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and to the knowledge of the Company the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate,   (l) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or   (m) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes authorizations, codes, decrees, demands, or demand letters, injunctions, regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.       13     (n) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.   (o) Title to Assets. The Company and the Subsidiaries do not own any real property and have good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially made and proposed to be made of such property by the Company and the Subsidiaries, and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance, except where the failure to be in compliance would not reasonably be expected to result in a Material Adverse Effect.   (p) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports except where the failure to so have would not have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). To the knowledge of the Company, there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights, except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as described in the SEC Reports, the Company has no knowledge of any facts that would preclude it from having valid license rights or clear title to the Intellectual Property Rights. The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property Rights that are necessary to conduct its business.   (q) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.       14     (r) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary is than for services as employees, officers and directors), including any contract, by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge has a substantial interest or is an officer, director, trustee, shareholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including share option agreements under any share option plan of the Company.   (s) Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are applicable to the Company and the Subsidiaries, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.       15     (t) Certain Fees. Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.   (u) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.   (v) Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities   (w) Listing and Maintenance Requirements. The Common Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Shares are currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.   (x) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.       16     (y) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of the Warrants or Warrant Shares under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.   (z) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.  For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.   (aa) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.       17     (bb) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA.   (cc) Accountants. The Company’s independent registered public accounting firm is MNP, LLP. To the knowledge and belief of the Company, such accounting firm is a registered public accounting firm as required by the Exchange Act.   (dd)  Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.   (ee) Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.11 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Shares, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing shareholders' equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.       18     (ff) Regulation M Compliance.  The Company has not, and to its knowledge no one Securities, (ii) sold, bid for, purchased, or, paid any compensation for to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities; provided further that the Company makes no representation regarding any activities undertaken by the Placement Agent.   (gg) FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.       19     (hh) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).   (ii) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.   (jj) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.   (kk) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in material compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.   (ll) Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Warrants or the Warrant Shares by the Company to the Purchasers as contemplated hereby.   (mm) No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Warrant or Warrant Shares by any form of general solicitation or general advertising. The Company has offered the Warrants and Warrant Shares for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.       20     (nn) No Disqualification Events. With respect to the Warrant and Warrant Shares to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an "Issuer Covered Person") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.   (oo) Other Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.   (pp) Notice of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, reasonably be expected to become a Disqualification Event relating to any Issuer Covered Person, in each case of which it is aware.   3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):   (a)            Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.       21         (b)                 Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser understands that the Warrants and the Warrant Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring such Securities as principal for his, her or its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell such Securities pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws).   (c)                 Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.   (d)            Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.   (e)            Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.  Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired.  Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it.  In connection with the issuance of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.       22         (f)                 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a communication from the Company or the Placement Agent or any other Person representing the Company setting forth the terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).   (g)                 General Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.   The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby.   ARTICLE IV. OTHER AGREEMENTS OF THE PARTIES   4.1 Removal of Legends.   (a) The Warrants and Warrant Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Warrants or Warrant Shares other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Warrant under the Securities Act.       23     (b)  The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Warrants or Warrant Shares in the following form:   NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.   The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Warrants or Warrant Shares to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Warrants or Warrant Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Warrants and Warrant Shares may reasonably request in connection with a pledge or transfer of the Warrants or Warrant Shares.       24     (c) Certificates evidencing the Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such Warrant Shares pursuant to Rule 144 (assuming cashless exercise of the Warrants), or (iii) if such Warrant Shares are eligible for sale under Rule 144 (assuming cashless exercise of the Warrants), or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Purchaser promptly if required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Purchaser, respectively; provided, however, that if any such legal opinion relates to legend removal, or sale of Securities, pursuant to Rule 144, such opinion may be qualified in the event that the Company then fails for any reason to satisfy the current public information requirement under Rule 144(c). If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares, or if such Warrant Shares may be sold under Rule 144 (assuming cashless exercise of the Warrants) or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Warrant Shares shall be issued free of all legends. The Company agrees that following such time as such legend is no longer required under this Section 4.1(c), the Company will, no later than the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent (with notice to the Company) of a certificate representing Warrant Shares, as applicable, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends. Warrant Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date of delivery of a certificate representing Warrant Shares issued with a restrictive legend.       25     (d) In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated damages and not as a penalty, for each $1,000 of Warrant Shares (based on the VWAP of the Common Shares on the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Securities so delivered to the Company by such Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal Date such Purchaser purchases (in an open market transaction or otherwise) Common Shares to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of Common Shares, or a sale of a number of Common Shares equal to all or any portion of the number of Common Shares, that such Purchaser anticipated receiving from the Company without any restrictive legend, then an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the Common Shares so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of Warrant Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Shares on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Warrant Shares (as the case may be) and ending on the date of such delivery and payment under this Section 4.1(d).       26     (e) The Shares shall be issued free of legends.   4.2    Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Warrants or Warrant Shares or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.   4.3 Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate (other than with respect to Purchasers that are officers, directors, employees or Affiliates of the Company). The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market or FINRA regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).   4.4 Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. foregoing covenant in effecting transactions in securities of the Company.   4.5 Use of Proceeds. The Company shall use the net proceeds from the sale of the Shares hereunder as described in the Prospectus Supplement.       27     4.6 Indemnification of Purchasers. Subject to the provisions of this Section 4.6, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any shareholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such shareholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct) or (c) in connection with any registration statement of the Company providing for the resale by the Purchasers of the Warrant Shares issued and issuable upon exercise of the Warrants, the Company will indemnify each Purchaser Party, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses, as incurred, arising out of or relating to (i) any untrue or alleged untrue statement of a material fact contained in such registration statement, any prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Purchaser Party furnished in writing to the Company by such Purchaser Party expressly for use therein, or (ii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder in connection therewith. If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement or any other Transaction Document, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ one separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (x) the employment thereof has been specifically authorized by the Company in writing, (y) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (z) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (1) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (2) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.       28         4.7 Reservation of Common Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of Common Shares for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.   4.8 Listing of Common Shares. The Company hereby agrees to use reasonable best efforts to maintain the listing or quotation of the Common Shares on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Shares traded on any other Trading Market, it will then include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Shares on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Shares for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.       29         4.9  Subsequent Equity Sales. From the date hereof until the six (6) month year anniversary of the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Shares or Common Share Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional Common Shares either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Shares at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Shares or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.   4.10 Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties to this Agreement. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.   4.11 Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.3.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.3, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.3, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.3 and (iii) no Purchaser (other than Purchaser’s that are officers, directors, employees and Affiliates of the Company) shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.3.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.       30     4.12 Exercise Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise the Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.   4.13 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Warrant and Warrant Shares as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company order to obtain an exemption for, or to qualify the Warrant and Warrant Shares for, sale to the Purchasers at the Closing under applicable securities or “Blue actions promptly upon request of any Purchaser.   4.14 Registration Statement. Within 45 calendar days of the date of this Agreement), the Company shall file a registration statement on Form S-3 (or other appropriate form if necessary to comply with General Instruction I.B.6. of Form S-3 and Commission interpretations thereof) providing for the resale by the Purchasers of the Warrant Shares issued and issuable upon exercise of the Warrants. The Company shall use commercially reasonable efforts to cause such registration to become effective within 75 days of the Closing Date, or in the case of review by the SEC, within 105 days of the Closing Date, and to keep such registration statement effective at all times until no Purchaser owns any Warrants or Warrant Shares issuable upon exercise thereof.   4.15 Furnishing of Information.   (a) Until the earlier of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.   (b) At any time during the period commencing from the date hereof and ending at such time that all of the Warrant Shares (assuming cashless exercise) may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Warrant Shares, an amount in cash equal to two percent (2.0%) of the aggregate Exercise Price of such Purchaser’s Warrants on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required for the Purchasers to transfer the Warrant Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or injunctive relief.       31       ARTICLE V. MISCELLANEOUS   5.1 Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).   5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.   5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.       32     5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd)Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.   5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares based on the initial Subscription Amounts hereunder or, waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.   5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.   5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”   5.8 No Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.6 and this Section 5.8.       33     5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.   5.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.   5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.   5.12 Severability. If any term, provision, covenant or restriction of this to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.       34     5.13 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.   5.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.   5.15 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through the legal counsel of the Placement Agent. The legal counsel of the Placement Agent does not represent any of the Purchasers and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.   5.16 Saturdays, Sundays, Holidays, etc.                                                                            If right required or granted herein shall not be a Business Day, then such action       35     5.17 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and Common Shares in any Transaction Document shall be subject to adjustment for reverse and forward   5.18 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.             36   IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.     EDESA BIOTECH, INC. Address for Notice:   By:__________________________________________      Name:      Title:     With a copy to (which shall not constitute notice): Fax: E-mail:     Stubbs Alderton & Markiles, LLP 15260 Ventura Blvd., 20th Floor Sherman Oaks, CA 91403 Attention: Jonathan Friedman Email: [email protected] Business: 818-444-4514           [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR PURCHASER FOLLOWS]     37   [PURCHASER SIGNATURE PAGES TO EDSA SECURITIES PURCHASE AGREEMENT]   IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase   Name of Purchaser: ______________________________________________________ Signature of Authorized Signatory of Purchaser: _________________________________ Name of Authorized Signatory: _______________________________________________ Title of Authorized Signatory: ________________________________________________ Email Address of Authorized Signatory:_________________________________________ Facsimile Number of Authorized Signatory: __________________________________________ Address for Notice to Purchaser:       Address for Delivery of Warrants to Purchaser (if not same as address for notice):       DWAC for Shares:     Subscription Amount: $_________________ Shares: _________________ Class A Warrant Shares Pursuant to Section 2.2(a)(v): __________________ Class B Warrant Shares Pursuant to Section 2.2(a)(vi): __________________ EIN Number: ____________________ ☐ Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the Closing shall occur by the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.     [SIGNATURE PAGES CONTINUE]     38

Exhibit 10.8 a123a01.gif [a123a01.gif] December 23, 2019 To: Anand Eswaran     Re: Offer Letter Dear Anand, It is my pleasure to offer you a full-time position with RingCentral, Inc. (“Company”) as President, reporting to Vlad Shmunis, CEO. Your responsibilities in this role will include direct reporting responsibility for the Company's go-to-market, product, and human resources functions, as well as other responsibilities and functions reasonably assigned to you by the CEO. Pending satisfactory completion of our pre-employment checks and your satisfaction of the other terms and conditions described herein, your employment start date (the “Start Date”) shall be January 13, 2020 or a sooner date if mutually agreed. Base Salary. Your initial annualized base salary will be $600,000, which will be paid on a semi-monthly basis, subject to applicable withholdings. Your base salary may be adjusted from time to time in the Company’s sole discretion. Bonus. On a quarterly basis, you may be eligible to receive a management-by-objective bonus (“MBO”) in the target gross amount of 100% of your quarterly base salary ($150,000 per quarter; $600,000 per year) based upon achievement of the performance objectives established by the Company’s board of directors or a committee of the board (in either case, the “Board”) and the Board’s assessment of achievement of those objectives, as well as satisfying the other terms and conditions of the bonus plan approved by the Board. More information about the MBO is available in the RingCentral Executive Incentive Plan. As a member of the executive team, the achieved portion of your MBO currently will be paid in accordance with the Company’s Key Employee Equity Bonus Plan, in which the achieved portion of your MBO is paid on a quarterly basis in the form of fully-vested restricted stock units that cover shares of the Company’s Class A common stock (“RSUs”). Equity Award. Subject to approval of the Board, you will be granted RSUs with an initial value of $16,000,000 (the “Initial Value”) (the “Initial Equity Grant”). The actual number of RSUs granted to you will equal the Initial Value divided by the monthly average closing price of a share of the Company’s Class A common stock (as quoted on the New York Stock Exchange) during the calendar month in which your Start Date occurs. The RSUs will be granted to you only if you remain an employee of the Company through the grant date. Your RSUs shall be subject to the terms of the Company’s 2013 Equity Incentive Plan (the “2013 Plan”) and an RSU agreement between you and the Company (together with the 2013 Plan, the “Equity Documents”). Subject to the paragraph below, your RSUs shall vest over a 4-year period as follows: provided you remain a service provider of the Company, 1/16th of the RSUs shall vest on each Quarterly RSU Vesting Date beginning on February 20, 2020. The “Quarterly RSU Vesting Dates” are February 20, May 20, August 20, and November 20 of each year. No right to any stock is earned or accrued until such time that vesting occurs, nor does the grant confer any right to continue vesting or employment. You will be eligible to participate in the Company’s Equity Acceleration Policy, as amended (“EAP”). As more fully set forth therein, if you experience a “Qualified Termination” (as defined in the EAP), one hundred percent (100%) of your then-outstanding unvested RSUs shall vest if you satisfy the terms and conditions set forth in the EAP. Beginning in 2021, you are eligible for annual Company equity awards commensurate with your position and the approval of the Board and subject to any terms and conditions approved by the Board (each, an “Additional Equity Award”). Beginning in 2021, and subject to Board approval, your performance and your remaining an employee in good standing with the Company, it is anticipated that your Additional Equity Award may have a target value of approximately fifty percent (50%) of the Initial Equity Grant. The Additional Equity Award shall be subject to the terms of the Equity Documents and shall vest over a 4-year period as follows: provided you remain a service provider of the Company, 1/16th of the RSUs shall vest on each Quarterly RSU Vesting Date beginning on February 20, 2021. For clarity, the Initial Equity Grant and the Additional Equity Awards shall be deemed time-based RSUs. Notwithstanding anything to the contrary contained herein with respect to the Additional Equity Award, if the Company introduces and implements performance-based RSUs as part of the Company’s 2021 executive compensation, then some or all of the Additional Equity Award shall be subject to performance-based vesting on substantially similar terms and conditions as the performance-based vesting terms of other similarly-situated Company executives. Severance. In the event of (a) a termination of your employment by the Company other than for “Cause” (as defined below), death or “Disability” (as defined in the EAP), or (b) your termination of employment for “Good Reason” (as defined in the EAP), then, subject to your satisfying the conditions set forth in Exhibit A attached hereto, you will be entitled to the following: (a)Cash. Cash severance equal to twelve (12) months of your then-current base salary, payable in semi-monthly installments in accordance with the Company’s payroll procedures, (b)COBRA. If you elect continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) within the time period prescribed pursuant to COBRA for you and your eligible dependents, then the Company will reimburse you for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to your termination) until the earlier of (i) a period of 12 months from the date of termination or (ii)) the date upon which you and/or your eligible dependents are no longer eligible for COBRA continuation coverage. or, in the event providing such benefit would result in a violation of applicable law as determined by the Company, in its discretion, a lump sum payment of $30,000, less applicable withholding, in lieu of such COBRA reimbursement, (c)Acceleration of Vesting. 1)Pursuant to the EAP, if such termination occurs during the Change in Control Period (as defined in the EAP, as amended to begin 90 days prior to a Change in Control (as defined in the EAP)), 100% accelerated vesting of your then-outstanding and unvested Company equity awards that are subject to time-based vesting conditions (including, without limitation, time-based RSUs granted to you) subject to the terms and conditions of the EAP; and 2)If such termination occurs outside of the Change in Control Period (as defined above), accelerated vesting of the portion of each of your then-outstanding and unvested Company equity awards that are subject to time-based vesting conditions (including, without limitation, time-based RSUs granted to you) that would have vested had you remained employed with the Company through the date that is twelve (12) months following your effective last day with the Company. For purposes of this letter, “Cause” has the meaning set forth in the EAP, as amended to (a) include your failure to satisfy the Relocation Condition (as defined below), and (b) with respect to Section 16(a)(ii) of the EAP, allow you at least thirty (30) days to cure any such breach or failure after receiving written notice from Company of such breach or failure. Benefits.  You will be eligible to participate in the Company’s employee benefits plans generally available to the Company’s senior executives subject to their terms, including any eligibility requirements.  You will be provided with Company-wide paid holiday days and paid-time off in accordance with the Company’s paid time off policy, as may be amended from time to time. You should note that the Company may modify job titles, job duties, compensation, and benefits from time to time as it deems necessary and in its sole discretion. Relocation.   (a)The Company will pay or reimburse you for the expenses that you reasonably incur on or before September 8, 2020 (the “Relocation Date”), in connection with your permanent relocation from the Seattle, Washington to the San Francisco-Bay Area, California by the Relocation Date (such condition referred to herein as the “Relocation Condition”), including: 1) temporary housing, air travel and ground transportation in the San Francisco Bay Area beginning on your Start Date and ending on the earlier of the Relocation Date or the date you satisfy the Relocation Condition, 2) two relocation round-trip visits for you and your family prior to April 30, 2020 ((1) and (2) together, the “Transition Expenses”), and 3) other moving-related expenses (but excluding any costs or other expenses to the sale or purchase of your permanent residence) (the “Moving Expenses” and, together with the Transition Expenses, the “Relocation Expenses”). For clarity, Transition Expenses are separate from Moving Expenses. For clarity, all Relocation Expenses must be incurred during calendar year 2020. The Company will not reimburse you for Moving Expenses in excess of $45,000 in the aggregate. (b) You must submit written documentation (e.g., itemized receipts) of the Relocation Expenses within 45 days after the Relocation Expenses are incurred in order to receive any reimbursement for such Relocation Expenses. Reimbursements will be paid to you, grossed up for applicable tax withholding, within 30 days after the Company receives written documentation of the Relocation Expenses in accordance with the previous sentence. (c) In the event that you are terminated by the Company for Cause or you voluntarily resign (without Good Reason) from your employment with the Company, in either case, within a year of your Start Date, you agree to reimburse the Company for the total amount actually received by you as reimbursement made to you by the Company under this provision within 30 days following your employment termination date. Legal Expenses. You are eligible to receive reimbursement for reasonable legal expenses related to this letter and affiliated documents up to $5,000 (“Legal Expenses”). You must submit written documentation of the Legal Expenses within 45 days after the Legal Expenses are incurred in order to receive any reimbursement for such Legal Expenses. Reimbursements will be paid to you, grossed up for applicable tax withholdings (if any), within 30 days after the Company receives written documentation of the Legal Expenses in accordance with the previous sentence. Guidelines for Employment. If you accept this offer and become an employee of the Company, you will be subject to our employment policies. In addition to those employment policies, this offer is contingent upon its approval by the Board and the following: • Execution by you of the Company’s standard Confidential Information and Invention Assignment Agreement on or as soon as possible following the date you sign this letter, but in no event later than your Start Date; and • Execution by you of the Company’s standard Arbitration Agreement on or as soon as possible following the date you sign this letter, but in no event later than your Start Date; and • Successful completion of a background investigation, consistent with applicable law. This offer will be withdrawn (whether or not you have already signed it) if any of the above conditions set forth in this section “Guidelines for Employment” is not satisfied. On your Start Date, please be sure to bring your identification card(s) to establish your identity and eligibility for employment in the United States. Failure to provide such verification within three business days of your Start Date will result in the withdrawal of this offer. Restrictions on Employment. By signing this offer letter, you represent and warrant that you are not party to any agreement or subject to any policy that would prevent or restrict your from engaging in activities competitive with the activities of your former employer or from directly or indirectly soliciting any employee, client or customer to leave the employ of, or transfer its business away from, your former employer, or if you are subject to such an agreement or policy, you have complied and will comply with it, and your employment with the Company does not violate any such agreement or policy. You further confirm that you will not remove or take any documents or proprietary data or materials of any kind, electronic or otherwise, with you from your current or former employer to the Company without written authorization from your current or former employer. If you have any questions about the ownership of particular documents or other information, discuss such questions with your former employer before removing or copying the documents or information. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or become involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company; provided that you may request approval for such other business activities that do not compete, directly or indirectly, with the Company or its subsidiaries (e.g., serving as a board member or advisor for up to one other public company) from the Board and such approval shall not be unreasonably withheld or delayed. For clarity, nothing in this letter shall restrict your ability to engage in any work with non-profit and/or community organizations. At-Will Employment. Your employment with the Company is “at will.” This means that you may terminate your employment with the Company at any time for any reason. Likewise, the Company may terminate your employment or this offer any time and for any reason. Location. You will be primarily working in the Company’s offices in Belmont, California. You may be requested to travel as part of your job duties. Prior Agreements. This letter, together with the Equity Documents and Confidential Information and Invention Assignment Agreement, supersedes and replaces any prior understandings or agreements, whether oral, written, or implied, between you and the Company regarding the matters described in this letter. Choice of Law. The validity, interpretation, construction, and performance of this letter, all acts and transactions pursuant hereto, and the rights and obligations of the parties shall be governed, construed, and interpreted in accordance with the laws of the state of California without giving effect to principles of conflicts of law. Any disputes dispute arising from this letter shall be decided only in a state or federal court sitting in San Mateo County, California, which the parties expressly agree shall be the exclusive venue for any such action. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents or notices related to this Agreement by email or any other electronic means. You hereby consent to (i) conduct business electronically, (ii) receive such documents and notices by such electronic delivery, and (iii) sign documents electronically and agree to participate through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. Acceptance. If not accepted by 5:00 pm PST on December 24, 2019, this offer will expire in its entirety. Anand, I really look forward to working with you. We have high hopes that you will contribute in a very tangible and visible manner to our continued success. Sincerely,     ACCEPTED         /s/ Vlad Shmunis     /s/ Anand Eswaran Vlad Shmunis     Anand Eswaran Chief Executive Officer       RingCentral, Inc.                         Exhibit A Terms Applicable to Severance The receipt of any severance under this letter is subject to you signing and not revoking a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter (the “Release”); provided that such Release is effective within sixty (60) days following your termination of employment (the “Release Deadline”).  No severance payment will be made until the Release becomes effective. Moreover, as a condition precedent to receiving COBRA premiums, you must complete and return a Form W-9 to RingCentral within sixty (60) days following the termination of your employment. If the Release is not effective by the Release Deadline, you forfeit your right to any severance benefits under this letter. Subject to any payment delay necessary to comply with Section 409A (as defined below), your severance under this letter will be paid on, or, in the case of installments, will not commence until, the first Company payroll date following the effective date of the Release (or, in the case of payments that qualify as Deferred Compensation, on the sixty-first (61st) day following your separation from service). If you die before all amounts have been paid, such unpaid amounts will be paid to your designated beneficiary, if living, or otherwise to your personal representative in a lump-sum payment (less any withholding taxes) as soon as possible following your death. It is the intent of this letter that all payments and benefits hereunder comply with or be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder and any applicable state law requirements (“Section 409A”) so that none of the payments and benefits to be provided under this letter will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or so comply. Each payment and benefit payable under this letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. You and the Company agree to work together in good faith to consider amendments to this letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A. Notwithstanding anything to the contrary in this letter, no separation pay or benefits will be paid or provided to you, if any, pursuant to this letter that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A (together, “Deferred Compensation”) or otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) until you have a “separation from service” within the meaning of Section 409A. Further, if at the time of your termination of employment, you are a “specified employee” within the meaning of Section 409A, payment of such Deferred Compensation will be delayed to the extent necessary to avoid the imposition of the additional tax imposed under Section 409A, which generally means that you will receive payment on the first payroll date that occurs on or after the date that is six (6) months and one (1) day following your termination of employment, or your death, if earlier (the “Six-Month Delay”). All subsequent Deferred Compensation, if any, will be benefit. Notwithstanding anything herein to the contrary, if you die following your termination but prior to the six (6) month anniversary of your termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Compensation will be payable in accordance with the payment schedule applicable to each payment or benefit.

Exhibit 10.44   CERTAIN IMMATERIAL PROVISIONS OF THIS DOCUMENT THAT WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED (INDICATED BY AN ASTERISK [***]) HAVE BEEN OMITTED PURSUANT TO ITEM 601(b)(2) OF REGULATION S-K. A COPY OF THE UNREDACTED DOCUMENT WILL BE FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST.   AMENDMENT NO.7 TO THE DESIGN AND DEVELOPMENT AGREEMENT (STEP 2) This Amendment No.7 to the Design and Development Agreement (Step2) (“Amendment”) is entered into as of the date of last signature below by and between HAPSMobile Inc. (“HAPSMobile”) and AeroVironment, Inc. (“AV”) to amend the Design and Development Agreement (Step2) originally executed as of December 27, 2017 (as amended by Amendment No.1 as of March 30, 2018, Amendment No.2 as of June 25, 2018, Amendment No.3 as of August 28, 2018, Amendment No.4 as of December 5, 2018, Amendment No.5 as of March 19, 2019, and Amendment No.6 as of March 29, 2019, between HAPSMobile and AV) (the “DDA”). Background The Parties hereby agree to amend the total fees of Design and Development for Step 2 due to the material changes of the project schedule and the Statement of Work as set forth herein (the “Change”). Therefore, to formalize and reflect both the Changes and Program Management Improvement, the Parties hereby agree with the amendments to the DDA as follows: Amendments 1. The following new defined term is hereby inserted after subarticle 1.38 “Work Product” of Section “1. DEFINITIONS” in the DDA body: 1.39 “Project” means collectively all Work to carry out the detailed design and development work for the Solar HAPS which comprises DDA Step 2 of the business relationship between AV and HAPSMobile. 2. Section 1.1.1 (Subsection of “1.1 [***]”) of Attachment C (AeroVironment Statement of Work (SOW) for Hawk30 Prototype Program) to the DDA (as amended by the Amendment No.5) is hereby deleted in its entirety and replaced with the following clauses: 1.1.1     [***] Objective:  [***]. Approach:  [***]: [***] 1   [***] Information has been omitted pursuant to Item 601(b)(2) of Regulation S-K. [***]; (i)[***] (ii)[***] (iii)[***] (iv)[***] [***]: Ø [***] Ø Ø     2     Reporting Process diagramｃ Picture 1 [avav20190430ex10443bb1c001.jpg]   Exit Criteria:  [***] Task Output: REMARK:  [***]. 3. The following Section 1.1.6 is hereby newly inserted after Section1.1.5 “[***]” (Subsection of “1.1 [***]”) of Attachment C (AeroVironment Statement of Work (SOW) for Hawk30 Prototype Program) to the DDA: 1.1.6[***] Approach:  [***]. Exit Criteria:  [***]. Task Output: 1   [      ] = [***] 4. The following Section 1.2.6 is hereby newly inserted after Section1.2.5 “[***]” (Subsection of “1.2  [***]”) of Attachment C (AeroVironment Statement of 1.2.6      [***] Task Output: 5. Section 2.2.1 (Subsection of “[***]”) of Attachment C (AeroVironment Statement of Work (SOW) for Hawk30 Prototype Program) to the DDA is hereby deleted in its entirety and replaced with the following clauses: 2.2.1      [***] Approach:  AeroVironment shall perform the following tasks as a part of this element: Task Output: [***]. 6. Section 2.2.5 (Subsection of “2.2 [***]”) of Attachment C (AeroVironment 2   2.2.5      [***] Task Output: 7. The following Section 2.2.8 is hereby newly inserted after Section 2.2.7 “[***]” (Subsection of “2.2 [***]”) of Attachment C (AeroVironment Statement of 2.2.8      [***] Task Output: 8. Section 3.1 of Attachment C (AeroVironment Statement of Work (SOW) for Hawk30 Prototype Program) to the DDA is hereby deleted in its entirety and replaced with the following clauses: 3.1        [***] 3   Task Output: 9. Section 3.2 of Attachment C (AeroVironment Statement of Work (SOW) for Hawk30 3.2         [***] Task Output: 10. Attachment A (DELIVERABLES) to the DDA is hereby deleted in its entirety and replaced with the attached new attachment herein, AttachmentA, entitled (DELIVELABLES). 11. Attachment E (FLIGHT TEST) to the DDA is hereby deleted in its entirety and replaced with the attached new attachment herein, Attachment E, entitled (FLIGHT TEST). 4   12. Attachment H (PROJECT MILESTONE) to the DDA (as amended by the Amendments No.2, and 4) is hereby deleted in its entirety and replaced with the attached new attachment herein, Attachment H, entitled (PROJECT MILESTONE). 13. Attachment I (PROJECT MANAGEMENT) to the DDA is hereby deleted in its entirety and replaced with the attached new attachment herein, Attachment I, entitled (PROJECT MANAGEMENT). 14. Attachment F (INVOICE AND INCURRED COSTS DOCUMENTATION) to the DDA (as amended by the Amendments No.1 and 5) is hereby deleted in its entirety and replaced with the attached new attachment herein, Attachment F, entitled (INVOICE AND INCURRED COSTS DOCUMENTATION). 15. All other terms and conditions not specifically modified or amended herein remain in full force and effect as provided for in the DDA and its Attachments, including Amendments 1 through 6. Capitalized terms, unless otherwise defined herein, shall have the meaning set forth in the DDA. This Amendment may only be modified or amended by a written document executed by the parties hereto. IN WITNESS WHEREOF the Parties hereto have signed and executed this Amendment on the date(s) below.     SIGNED for and on behalf of HAPSMobile Inc. AeroVironment, Inc.     By: /s/ Junichi Miyakawa By: /s/ Trace Stevenson Name: Junichi Miyakawa Name: Trace Stevenson Title: Board of Director, Senior Vice President Title: Vice President and Deputy General Date: 4/17/2019 Date: 4/24/2019   5   ATTACHMENT A DELIVERABLES (This Attachment A is revised in its entirety by the Amendment No. 7 to the DDA) 1. Hardware Deliverables 1.1 Aircraft Deliverables           Deliverables Name Deliverable Description Relevant WBS Milestone No. Estimated Completion Date Hawk30 Prototype [***] 2.3.2.3 2.3.2.6   *1. [***]. *2. [***]. 1.2 Ground Control System           Deliverables Name Deliverable Description Relevant WBS Milestone No. Estimated Completion Date Ground Control Stations and Misc. Equipment Ground Control Station [***] of the Hawk30 Prototype [***] 2.2.6 Hawk30 Prototype Operating Manuals Technical Data Package 1.2.4.1 Hawk30 Prototype Training Manuals Technical Data Package 1.2.4.2   6   1.3 Motor Development Deliverables Name Deliverable Description Relevant WBS Milestone No. Estimated Completion Date [***] Project Data Memo 2.2.1 2.2.1 Technical data package of [***] 2.2.1 2.2.1   *  [***]. ** [***]. 2. Document Deliverables           Deliverables Name Deliverable Description Relevant WBS Milestone No. Estimated Completion Date CDR & Component Engineering Technical Data Package Technical Data Package. RFPs, RFIs, and RFQs. 2.2 Update Component Engineering Technical Data Package 2.2 Fab & Test First Wing Panel Technical Data Package. Recorded measurement data aerodynamic test data. 2.2.3.1 Functional Test Reports Acceptance test reports for components and assemblies 2.3 Initial Integrated Test Reports ([***]) Initial Acceptance test reports for aircraft & Ground Control Station 2.3.2.3 Integrated Test Reports ([***]) Acceptance test reports for aircraft & Ground Control Station 2.3.2.3 Acceptance test reports for aircraft 2.3.2.6   7             [***] of the Hawk30 Solar Aircraft System 1.1.5 Low Altitude Flight Test Report Descriptive test report, Ships logs, maintenance report. Recorded flight data 3.1 High Altitude Flight Test Report Descriptive test report, Ships logs, maintenance report. Recorded flight data. 3.2 [***]. 3.2 Long Duration Flight Test Report Descriptive test report, Ships logs, maintenance report. Recorded flight data (All command and telemetry stream data between the ground control station as Raw Data). 3.2 Final Engineering Technical Data Package Technical Data Package. Hawk30 Solar Aircraft System controlling specifications and requirements. Various Logistics Instruction Document Package Logistics Instruction Manuals for Assembly/Disassembly, Packaging, Transporting, etc. for management purpose. Various All Corresponding Milestone Completion Date   As used in this Attachment A, and as limited by Section 4.8 in the IPLA, “Technical Data Package” means: 1.[***] 2.[***] 3.System specifications 4.System description documents 5.System performance data 6.[***] 7.[***].   “Technical Data Package” transfer could be in various forms, for example: 1.Agile database export in PDX file which will include PDF files for assembly drawings, DOC for procedures and test plans, and EXE files for executable code. 2.Specifications, descriptions, Program Data Memos, test data in a ZIP file which can include a combination of DOC, XLS, and other data formats.     8     Exhibit A Source Code to be Provided by AV to HAPSMobile 1.Software and Firmware Tabular View Picture 2 [avav20190430ex10443bb1c002.jpg] 1   ATTACHMENT E FLIGHT TEST (This Attachment E is revised in its entirety by the Amendment No. 7 to the DDA) AV will perform a flight test plan which will optimize data collection efficiency during the Flight Tests. A build-up approach to the flight test campaign will be conducted which efficiently demonstrates aircraft handling and performance at low altitude prior to transitioning to high altitude. Ref. PDM AV 55266-1019. Data will be collected to verify that the final aircraft configuration meets the requirements defined for FAA basis of certification as detailed in PDM AV55266-1020-FAA Standards Development and Coordination. The details of the flight test program pertain to the prototype version of the Hawk30 Prototype with the goal of demonstrating [***] flight endurance. Prior to the beginning of the initial Flight Test, the AV team will accomplish exhaustive build-up testing in venues such as environmental qualification laboratories, the HAP System Integration Laboratory, and HAP flight deck and flight test control room simulation environments. The Ground Test and Flight Test Plan listed in PDM AV 55266-1019 list the following test elements to be successfully completed for the Hawk30 Prototype flight test program. Ground test campaign: oAircraft functional tests with motor runs oGround handling oAirfield operations Low altitude flight test campaign (with Flight Test Instrumentation System) oBaseline location is primarily an airfield in [***] and [***] oThis phase consists of notionally [***] on [***] and [***] oFlight Test events are planned to be executed at the rate of [***] oTest objectives include: Basic controllability and maneuverability data Subsystem performance (power, thermal, efficiency, etc.) Flight data for correlation of analysis and design tools High altitude and endurance test campaign (with Flight Test Instrumentation System) o[***] oTest objectives: § § § 2   Payload Test Campaign oTest objectives: 3   AV will coordinate with HAPSMobile and provide a test flight schedule for Payload test. HAPSMobile will have full responsibility to operate its Payload during the Payload test. AV will conduct airport survey, selection and perform all maintenance on the Hawk30 Prototype Aircraft system during the Flight Test program. The following Table E-1 sets forth the key achievement requirement per each Flight Test campaign, and in case inconsistency occurring with other condition defined anywhere in the Agreement including Attachments, then the content defined in Table E-1 shall prevail. Table E-1 Flight Test campaign key achievement requirement           Flight Test Campaign Type Low Altitude Flight Test High Altitude Flight Test Long Duration Flight Demonstration     4   ATTACHMENT H PROJECT MILESTONE (This Attachment H is revised in its entirety by the Amendment No. 7 to the DDA) # Milestone Criteria Date 1     Milestone Objective:       Completion Criteria   2   Milestone Objective:       Completion Criteria   3     Milestone Objective:       Completion Criteria   4   5       Milestone Objective:                      Completion Criteria Organize Flight Readiness Review.   5     Milestone Objective:       Completion Criteria   6     Milestone Objective:       Completion Criteria   7     Milestone Objective:       Completion Criteria [***], to include:   8     Milestone Objective:     6       Completion Criteria   9     Milestone Objective:       Completion  Criteria [***], for:   10     Milestone Objective:       Completion Criteria     7   ATTACHMENT I PROJECT MANAGEMENT (This Attachment I is revised in its entirety bythe Amendment No. 7 to the DDA) For the all Work AV shall have overall responsibility for the design, development, manufacturing, assemble, integration, testing, and implementation of the Aircrafts, in such capacity, will provide to HAPSMobile Project Management work and resource in accordance with the terms herein defined. 1. Project Roles & Responsibilities 1.1 Project Organization. Figure I-1 below illustrates the basic organizational structure and high-level roles that will be used in the project. Detailed project roles & responsibilities are described in “ATTACHMENT C SOW”. Figure I-1 Picture 5 [avav20190430ex10443bb1c003.jpg] 8   A List of Project key persons for AV (Key Persons List) is as follows. AV   1.2Project Methodology. AV’s methodology for large scale complex projects will be used to ensure that all elements of the project are appropriately considered and aligned. The major components of the design approach are: Development, design, build and test the Hawk30 Prototype Solar Stratospheric Aircraft System testing cellular connectivity @ 20km altitude station keeping and 6-month endurance through Flight Test and engineering analysis. 2. Project Governance 2.1 Project Management. Project Management organizes and delivers the support and supervision to deliver an integrated design capability. It includes: (1) Establishing work plans, resources and disciplines to get the project activities initiated and progressed to work towards achieving on-time delivery. (2) Directing, coordinating and monitoring the activities of the entire project to assist in achieving desired project outcomes. (3) Managing the integration of the various components of the project so that they support the overall business architecture.The detailed scope of these activities is defined in “ATTACHMENT C SOW”. 2.2 Project Management Office (PMO) PMO will execute the project management approach. In PMO, project management operations will be handled by both HAPSMobile and AV. Project management of external projects and external systems is beyond the scope of work for PMO. PMO will coordinate design activities with other external systems and/or projects. 2.3 Project/Organization Definition. AV defines the project organization and schedule, and HAPSMobile reviews them at the beginning of the project. Mutually agreed changes can be made. 2.4 Define Project Management Processes and Training. 9   (a)AV defines the project management processes and HAPSMobile reviews them. Mutually agreed changes can be made. (b)AV will provide highly skilled PMO and Project Management personnel.  Additional training with HAPSMobile support will be initiated as required.  An official training session for each project management area will be scheduled for the project members. The PMO office will be responsible for arranging any follow-up session for absent/new people. HAPSMobile and AV will be responsible for follow-up activities for their own members. 2.5 Human Resource Management. (a)AV and HAPSMobile create and maintain their own resource plans respectively. (b)AV and HAPSMobile should provide enough people, based on respective resource plans, in order to complete project deliverables in line with the schedule. (c)Resource shortage and/or personnel problems will be mutually resolved according to the Agreement. 2.6 Progress Management (a)AV defines the progress management processes and HAPSMobile reviews them. Mutually agreed changes on the format of such progress reports can be made. (b)A PMO member participates in the PMO meeting once a month or as needed and the Project operational meeting once a week or as needed. HAPSMobile and AV will provide and input accurate data in a timely manner. (c)AV and HAPSMobile will undertake the following activities in cooperation: i.Collection of progress information ii.Preparing progress materials iii.Participating in progress meeting 2.7 Scope Management/Change Control Process One of the key activities for Project Management will closely manage the scope so that delivery commitments and schedule milestones can be met. All scope changes will be handled through the Change Procedures described in the Agreement. The scope of events that fall under a Change request and the detailed Change request process to be used in the project must be in accordance with the Change Procedures described in the Agreement. 2.8 Issue Management Processes (a)Issue management will follow a defined process with appropriate issues escalated to PMO. (b)PMO or operational meeting issues which are HAPSMobile's responsibility should be resolved by the designated due dates. If HAPSMobile in-charge person cannot resolve the issue, it should be escalated to a higher level in a timely manner so as not to jeopardize the overall project schedule, quality and cost. i.Collection of issues ii.Making issue management materials 2.9 Risk Management Processes (a)Risk management will follow a defined process with appropriate risks escalated to PMO. 10   (b)PMO or operational meeting risks, which are HAPSMobile's responsibility, should be mitigated by the due dates. If HAPSMobile in-charge person cannot mitigate the risks, it should be escalated to a higher level in a timely manner so as not to impact the overall project schedule, quality and cost. i.Collection of risks ii.Prepare risk management materials iii.Planning the approach for risk mitigation iv.Leading meetings/taking minutes 2.10 Business Management Processes (a)Coordinate that each area/office develops the standards according to the project plan, and undertakes designs, developments, and reviews in accordance with the standards. (b)Appropriate area/office develops standards and each office undertakes compliance activities in accordance with the business management standards. 2.11 Communication Management (a)Communication management will follow a defined process, and each office member should participate and operate meetings in line with the meeting purpose. (b)Steering Committee will be held on a monthly basis. (c)The following communication management tasks will be undertaken: (1) Steering Committee i.Preparing materials ii.Preparing and Arranging iii.Facilitating iv.Taking Minutes (2) Create and maintain a stakeholder list in cooperation 2.12 Vendor Management. Vendor management will occur as described in the Agreement. 2.13 Deliverables Management (a)PMO is responsible, at the appropriate points in the project, to track and report that all defined Deliverables are developed and reviewed. (b)The Deliverables are defined in Attachment A. (c)Acceptance of Deliverables will follow the acceptance process defined in Attachment B. 2.14 Support Activities (a)HAPSMobile internal activities having no direct relation to the project will not be supported. (b)AV translators, interpreters and secretaries will work only for AV under the instruction of AV. 11   ATTACHMENT F INVOICE AND INCURRED COSTS DOCUMENTATION (This Attachment F is revised in its entirety by the Amendment No. 7 to the DDA) PRICING AND PAYMENT SCHEDULE 1.  Payment for Work Step2 1.1  Total Contract Value The total amount of Design and Development Fees payable for Step 2 is Not-to-Exceed USD $131,691,051 based on Best Efforts. The Contract Value may be modified by the Parties as a result of Change Control or by any other amendment to the Agreement (the current contract value at any time under this Agreement shall be the “Contract Value”). The Parties agree to account for payment of USD $5,988,678 already made by SoftBank to AV as payment for the consideration of Step 2 Bridge Contract as partial payment for commencing Step 2. The Parties shall pay to AV the remaining balance of USD $125,702,373, consists from USD $69,800,624 as Initial Contract Value, and incremental amount by Amendment No.1, USD $17,226,306 as additional cost by Amendment No.5, and further additional funding of USD $38,675,443 subject to EAC adjustment activity done on [***], in accordance with Exhibit A to this Attachment F Project Funds Status Report accompanied by a combined Milestone & Monthly Invoice approach as detailed further in this Attachment F. Each Milestone payment shall be payable after completion of the applicable Milestone according to Completion criteria on Attachment H. 1.2  Contract Value Growing Transition The Initial Contract Value may be modified by the Parties as a result of Change Control or by any other amendment to the Agreement (the current contract value at any time under this Agreement shall be the “Contract Value”). Each Party recognizes the total Project Cost has grown as follows; a.SoftBank and AV concluded Step 2 Bridge Contract for preliminary development activity for Step2, and payment of USD $5,988,678 was made to AV by SoftBank; b.SoftBank, HM, and AV agree to account for payment of USD $5,988,678 already made by SoftBank to AV as defined as above as partial payment ("Taken-Over c.Initial contract value for DDA was USD $65,011,481 (“Initial Value”), and USD $71,000,159 in case including Taken-Over Value; d.USD $4,789,143 was added to Initial value by the execution of the Amendment No.1 and total value was modified to USD $69,800,624 (“Amendment 1 Value”), and USD $75,789,302 in case including Taken-Over Value; e.USD $17,226,306 was added to Amendment 1 Value by the execution of the Amendment No.5 and total value was modified to USD $87,026,930, and USD $93,015.608 in case including Taken-Over Value; f.USD $38,675,443 as further incremental funding subject to EAC adjustment activity done on [***] and caused by the [***]Project Milestones extension as defined in detail in Section V herein, SoW and 12   technical requirement changes as defined in detail in Section Z herein; and the the contract value reaches USD $125,702,373, in case including Taken-Over Value then USD $ 131,691,051. 1.3  Work Order Issuance Schedule HAPSMobile agrees to issue five (5) scheduled separate Orders and may issue three (3) optional separate Orders (“Optional Orders”)to AV for authorization of Work. The Orders shall be issued as follows: a.initial Order [***]; b.second Order [***]; c.the third Order [***]; d.the fourth Order [***]; e.the fifth Order [***]; and f.three more optional Orders will be defined further more in detail in 5.1 herein. Each Order will be issued pursuant to the terms and conditions of this Agreement including the attachments thereto. Work performed under the Orders will be in support of the entire Statement of Work, up to the value funded on the Order. 1.4  Milestone Target Budget Values & Forecast Revisions Exhibit A (Project Funds Status Report) to this Attachment F assigns Initial Target Budget values for [***] Milestones identified in Attachment H. AV will provide updates and revisions to the Initial Target Budget values for each Milestone and revised and updated forecasts for such Milestones to HAPSMobile on a monthly basis. Milestone values are subject to Change Control based on updated forecasts of program resource requirements to complete the Work required under this Agreement, including the SOW(Attachment C). Milestone values will be based on the AV labor projected spend plan forecasted for each AV fiscal month. 1.5  Milestone Invoicing & Payment Upon AV’s written notification to HAPSMobile of AV’s completion of a Milestone, AV will provide an invoice for all AV labor Incurred Costs and [***]% fee. Invoices will include all program labor expenses incurred by AV up through the date of the Milestone acceptance, less any labor already paid for in prior Milestone invoices.  Milestones completed before the [***] of the calendar month will be based on actuals from the prior AV fiscal month end. Milestones completed after the [***] of the calendar month will be invoiced upon completion of that fiscal month. [***]. 1.6  Non-Milestone Invoicing & Payment (Monthly Invoices) Program expenses for material, subcontract and other direct costs will be invoiced by AV to HAPSMobile on a monthly basis based on actual Incurred Cost and [***]% fee. Invoices to be submitted within 4 Business Days after each calendar month end. HAPSMobile agrees to pay each such invoice within the same calendar month. Invoices for material related Cost will be provided with applicable level of detailed description for HAPSMobile’s book keeping purpose. 13   1.7  Currency All payments under this Agreement shall be made in United States dollars. 1.8  Excess Incurred Costs a.In the event that AV identifies a projected increase in Incurred Costs by AV for the performance of its obligations under the Agreement as identified in the Monthly Status Report, in excess of the Not-to-Exceed Value of the Order as identified in Article 2.3 then the Parties agree the excess of the amount and continue to proceed the Project subject to the process set forth in the Section 4 of this ATTACHMENT F, HAPSMobile may, (1) agree to authorize AV to incur the excess costs and provide a modification to increase the Contract Value, provided however that both Parties shall follow the Change Control set forth in Article 2.4 of the Agreement or Amendment of Agreement set forth in Article 13. Should HAPSMobile authorize additional spending, all of AV’s Incurred Costs must be paid to AV with the applicable [***]% fee; (2)agree in accordance with the Change Control or Amendment of Agreement to reduce the Scope of Agreement so that AV’s performance of the Scope of Agreement will be projected to fall within the amount of the then current Contract Value; or (3)Terminate the Agreement for convenience as contemplated by Article 12.3 of the Agreement and pay AV all Termination Liability as defined in paragraph 1.7 of this attachment. 1.9   Unutilized Consideration In the event of a projected cost underrun as identified in a Monthly Status Report, any amounts from the Order which remain after completion of the Scope of Agreement may be reimbursed or, if authorized by HAPSMobile separately and specifically, utilized for AV’s risk reduction or additional scope to be defined through written mutual agreement subject to the terms of this Agreement. To avoid confusion, the total amount as identified in paragraph 1 of this Attachment and any portion thereof, to the extent that it is utilized, must be utilized only for matters or items within the Scope of Agreement and any additional scope as agreed. Incurred Costs shall be inclusive of any applicable consumption, value added tax or any other applicable sales/use tax. For the avoidance of doubt, the Incurred Costs shall be exclusive of any and all import duties. 1.10   Termination Liability AV’s Termination Liability (defined as: all of AV’s Step 2 Incurred Costs incurred prior to the date of the ramp down period specified in Article 12.5 of the Agreement plus the applicable [***]% fee, less all payments received by AV from HAPSMobile under this Agreement, plus all material, subcontract, other direct costs including open commitments and other wind down costs outstanding as of the start of the ramp down period, plus 60 days of AV labor costs incurred during the ramp down period) will be billed to HAPSMobile 30 days after the end of ramp down period and Termination Liability shall not exceed then current Contract Value but AV labor cost may be compensated exceeding then current Contract Value based upon actual Work performed. Schedule delays may occur and be resolved subject to Article 3.2 of the Agreement. 2.   Fee Assumptions 2.1 Exclusion 1.Range Fees for the High Altitude and Endurance Flight Tests shall be borne by, and be the sole responsibility of, HAPSMobile. AV and HAPSMobile will mutually consult to set up an appropriate 14   implementation plan for High Altitude and Endurance Flight Tests minimizing such Range Fees in accordance with Attachment C and D. 2. Payload Integration is based on the [***] payload only, any changes to Payload Supplier and/or integration will be subject change control process. 3. Labor, shipping and other costs are not included, however is inclusive of labor for obtaining the clearance and permission under EAR or related export regulations for delivery of [***],  [***] and GCS at other than the [***] flight test location. Any changes to the final delivery location will be subject to change control process. 2.2 [***] Process The Parties agree to set the assumption of development process for [***] as provided below: 1.1[***] 1.2[***] 2.[***]. 3. Change Control & Agreement Amendments Payment Schedule HAPSMobile agrees to pay to AV all additional Incurred Costs resulting from any fee adjustments for the Work pursuant to any Change Control per Attachment G or any other amendments to the Agreement, but in any case subject to the terms set forth in Section 1.9 in this ATTACHMENT F. After being provided with a request or providing a Change Control Proposal as provided on Attachment G or any other amendment to the Agreement. AV will provide HAPSMobile with a Change Assessment (as contemplated by Attachment G) or a similar assessment or other proposed amendments to the Agreement with estimated additional or reduced Incurred Costs plus the applicable fee for the applicable Change Control Proposal or other proposed Agreement amendment along with the costs estimation documentation. In the event of a projected increase in Incurred Costs by AV in performance of the Agreement pursuant to Change Control Proposal or other proposed Agreement amendment would result in a total Contract Value that exceeds the then-current Contract Value, HAPSMobile will agree to authorize AV to incur the excess costs (thus increasing the Contract Value) or the Parties will agree in the Change Control (or pursuant to any other Agreement amendment) to reduce the Scope of Agreement so that AV’s performance of the Scope of Agreement will fall within the then-current Contract Value. Any increase in Contract Value that exceeds causes the value of this Agreement to exceed the Initial Contract Value shall require approval by HAPSMobile's board of directors. The tables below provide the basis for calculating the additional Fees applicable for Change Controls and other Agreement amendments as a result of a Change or other Agreement amendment that may be required from time to time in accordance with relevant clauses of the Agreement. Cost Element Description Labor Labor Total Cost w/[***]% Fee Material Total Cost w/[***]% Fee 15   Subcontract Total Cost w/[***]% Fee Other Direct Costs (ODC) Total Cost w/[***]% Fee   4. Fifth Work Order and Optional Order 4.1 Order Schedule The Fifth Work Order and the following Optional Order will be organized as follows; Name Covered SoW Covered Milestone WO value (USD) WO due date The fifth Work Order Optional Order #1 Optional Order #2   *remark Definition Meaning Decision Due Date   HM shall issue the fifth Work Order as defined above, and HM may issue the Optional Order by fully HM’s option considering [***] but until WO due date defined as the above. 4.2 Effect of No Issuance of Optional Order In case HM does not issue the Optional Order before or on the due date, AV may suspend the entrance of the equivalent Milestone and covered Works until AV receives the Optional Order. In the event of Optional Work Orders are not exercised, AV will transfer all assets to HAPSMobile. Exhibit A – Project Funds Status Report Exhibit B – Monthly Status Report (Example) Exhibit C – Milestone Invoice (Example)     16     Exhibit A to Attachment F – Project Funds Status Report 1. Estimate at Completion on Dec.10,2017 Picture 6 [avav20190430ex10443bb1c004.jpg]     1     2. Estimate at Completion on Dec.10,2018 Picture 7 [avav20190430ex10443bb1c005.jpg]     1     Picture 12 [avav20190430ex10443bb1c006.jpg]     1     3. Estimate at Completion on March 4,2019 Picture 15 [avav20190430ex10443bb1c007.jpg]   1   Exhibit B to Attachment F – Monthly Status Report (Example)       Description: AV_DIGITAL_Red_Box [avav20190430ex10443bb1c008.jpg] AeroVironment Inc. 980 Enchanted Way Simi Valley, California 93065 – U.S.A. Telephone 1(805) 581-2187 – FAX 1(805) 584-6922 2   Approvals:                <Enter Name here> Originator   Date                      Project Manager   Date                      Program Manager   Date   3   Revision History REV EDIT DATE AUTHOR DESCRIPTION A MM/DD/YYYY                                                                                               4   TABLE OF CONTENTS Table of Contents Approvals: 3 Revision History 4 Introduction 6 Technical Accomplishments 6 Schedule Update 7 Spend Plan 9 Cost Performance Report 10 Schedule Performance Report 10 Monthly Invoice 11       5     Introduction <<HIGH LEVEL PROGRAM OVERVIEW>> <<STOPLIGHT CHART>> Picture 4 [avav20190430ex10443bb1c009.jpg]   Technical Accomplishments What efforts were started this period? <<Description of work started and performed during the reporting month>> Task 5 Task 6 Task 7 Task …X What efforts were completed this period? <<Description of work completed and performed during the reporting month>> Task 1 Task 2 Task 3 Task 4 Key Subcontract Status: Subcontractor A: Subcontractor B: Subcontractor C: 6 Schedule Update Integrated Master Schedule Update <<EXAMPLE>> Picture 19 [avav20190430ex10443bb1c010.jpg] Milestone Status Update     7   Reference to Attachment H 8 Spend Plan Spend Plan Update Picture 22 [avav20190430ex10443bb1c011.jpg] 9 Picture 23 [avav20190430ex10443bb1c012.jpg] Cost Performance Report Cost Performance Update Picture 25 [avav20190430ex10443bb1c013.jpg]   Schedule Performance Report <<Schedule Performance Report>> Critical Path Analysis 10 Schedule Performance Index (if applicable) Near term upcoming milestones (30 – 60 days ) oMilestone 1 = oMilestone 2 = oMilestone X = Monthly Invoice – (Non-Labor) Picture 26 [avav20190430ex10443bb1c014.jpg]     11   Exhibit C to Attachment F Picture 30 [avav20190430ex10443bb1c015.jpg] 12

Exhibit 10.5 Pebblebrook Hotel Trust 7315 Wisconsin Avenue, Suite 1100 West Bethesda, Maryland 20814      September 18, 2018 Alfred L. Young, Jr. c/o LaSalle Hotel Properties 7550 Wisconsin Ave, 10th Floor Bethesda, Maryland 20814 Re: Additional Payment Guarantee Dear Al, Reference is made to that certain Change in Control Severance Agreement dated as of November 3, 2009 (as amended, restated, supplement or modified, the “CIC Severance Agreement”) by and between LaSalle Hotel Properties, a Maryland real estate investment trust (together with its successors and assigns permitted under the CIC Severance Agreement, the “Company”), and Alfred L. Young, Jr. (“you”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the CIC Severance Agreement. You are expected to receive payments under your CIC Severance Agreement and in connection with previously granted equity awards of the Company, each in connection with the transactions contemplated by the Agreement and Plan of Merger, by and among, the Company, LaSalle Hotel Operating Partnership, L.P., Pebblebrook Hotel Trust (“Parent”), Pebblebrook Hotel, L.P., Ping Merger Sub, LLC and Ping Merger OP, LP, dated as of September 6, 2018, as amended on September 18, 2018 (as the same may be amended from time to time, the “Merger Agreement”). In connection with the execution of the Merger Agreement, the Company retained KPMG LLP (“KPMG”) to prepare an analysis taking into account a valuation of restrictive covenants to which you will be subject following termination of your employment with the Company, and a copy of such draft report dated September 14, 2018, using an assumed change in control date of November 30, 2018, is attached as Exhibit A hereto (the “KPMG Report”). Section 16 of your CIC Severance Agreement contains a provision obligating the Company to make payment to you of the Additional Amount within 30 days of each written request made by you. Based on the analysis and valuation set forth in the KPMG Report the Company and Parent have determined that the Additional Amount may be reduced or eliminated. Actual results at the time of the Closing (as defined in the Merger Agreement) may differ. The purpose of this letter is to confirm our agreement with you that you will not dispute the analysis and valuation set forth in the KPMG Report and that the determination of your “tax counsel” under Section 16 of your CIC Severance Agreement will be made consistent with Scenario 2 in the KPMG Report. The foregoing agreement was made by you in consideration of the benefits (from this agreement) which will be realized by the shareholders of Parent following the Merger (as defined in the Merger Agreement), to provide certainty to the Company and its executives, and for other good and valuable consideration, the receipt of which is hereby acknowledged and agreed. Notwithstanding the foregoing, Parent hereby confirms its obligations pursuant to Section 16 of your CIC Severance Agreement following the Closing (as defined in the Merger Agreement), and Parent shall pay the Additional Amount, if required under Section 16 of your CIC Severance Agreement and the KPMG Report, and/or upon a determination by the Internal Revenue Service that your liability for tax under Section 4999 of the Internal Revenue Code is greater than the amount, if any, shown in the KPMG Report, to you within 30 days of your written request for payment of such amount. The foregoing shall be contingent upon occurrence of the Closing (as defined in the Merger Agreement) and shall be null and void in the event the Closing does not occur. Sincerely, PEBBLEBROOK HOTEL TRUST /s/ Raymond D. Martz         Name: Raymond D. Martz Title: Chief Financial Officer Acknowledged & Agreed: /s/ Alfred L. Young, Jr.         Exhibit A KPMG Report

EXHIBIT 99.02 AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com AllianceBernstein.com

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 12, 2011 IDT CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-16371 22-3415036 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 520 Broad Street Newark, New Jersey (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (973)438-1000 Not Applicable (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 8.01 Other Events. On October 12, 2011, IDT Corporation (the “Registrant”) and its subsidiary IDT Domestic Telecom, Inc. (“IDT Telecom”) entered into a binding term sheet with T-Mobile USA, Inc. (“T-Mobile”) to settle litigation related to a complaint filed by T-Mobile on May15, 2009, against IDT Telecom in the Superior Court of the State of Washington, King County (the “Complaint”).As previously disclosed by the Registrant in its annual and quarterly reports on Form 10-K and Form 10-Q respectively, the Complaint alleged that IDT Telecom breached a wholesale supply agreement entered into between T-Mobile and IDT Telecom in February 2005, as amended, by failing to purchase at least $75 million in services from T-Mobile. The Complaint sought approximately $55 million for alleged damages and interest. In consideration of the settlement of all disputes between the parties, on October 13, 2011, IDT Telecom paid T-Mobile $10 million. The parties will execute a formal settlement agreement containing standard mutual releases and covenants not to sue and at such time will also execute and file a stipulation of dismissal of the Complaint with the Court. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IDT CORPORATION By: /s/ Howard S. Jonas Name: Howard S. Jonas Title: Chairman and Chief Executive Officer Dated: October 17, 2011 3

Exhibit (10)(a) Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm We consent to the reference to our firm under the caption “Independent Registered Public Accounting Firm” in Post-Effective Amendment No. 18 to the 1933 Act Registration Statement (Form N-4 No. 333-170897) and Amendment No. 530 to the 1940 Act Registration Statement (Form N-4 No. 811-08517), and to the use therein of our reports dated (a) March 31, 2016, with respect to the consolidated financial statements of The Lincoln National Life Insurance Company and (b) April 12, 2016, with respect to the financial statements of Lincoln Life Variable Annuity Account N for the interests in a separate account under individual flexible payment deferred variable annuity contracts. /s/ Ernst & Young LLP Philadelphia, Pennsylvania November 16, 2016

Title: Canada: Divorce question. Is it fraud? Question:Separated for two years, business related cell phones still in my name, Ex still uses our joint account. He has stopped paying the cell bill, affecting my credit. Is it legal for me to log into joint account and pay said bill? All of the money in this joint account is money he has deposited. edit: Thank you for your answers :) Answer #1: So, he has the cell phone, and the bill, and the money to pay it, but the account with AT-Sprinrizon is in your name? And you have access to the bank account to pay the bill with his money for his usage? I think you'd be better served just canceling the account, if you want to be passive aggressive about it.

ACCELERA INOVATIONS, INC. 20511 Abbey Drive Frankfort, Illinois 60423 September 10, 2012 VIA EDGAR United States Securities and Exchange Commission Division of Corporate Finance treet, N.E. Washington, D.C. 20549 Attn: Mara Ransom, Assistant Director Re: Accelera Innovations, Inc. Registration Statement on Form S-1 Filed May 22, 2012 File No. 333-181591 Ladies and Gentlemen: On behalf of the Company, we are responding to comments contained in the Staff letter, dated September 4, 2012 addressed to Mr. John Wallin, the Company’s President, Secretary and Treasures, with respect to the Company’s filing of its Registration Statement on Form S-1. The Company has replied below on a comment-by-comment basis, with each response following a repetition of the Staff’s comment to which it applies (the “Comments”). The responses to the Comments are numbered to relate to the corresponding Comments in your letter. Given the nature of the comments, the Company has amended the registration statement. Where applicable, the revised pages or sections of the Form S-1 have been referenced. Registration Statement on Form S-1 General 1. We note your response to comment 12 in our letter dated August 9, 2012. Please supplementally confirm that you will revise future periodic reports to explain or delete the terms “high/low stratification” and “best-of-breed tools.” Company Response TheCompany confirms that it will revise future periodic reports to explain or delete the terms “high/low stratification” and “best-of-breed tools.” Mara Ransom, Assistant Director September 10, 2012 Page 2 Prospectus Cover Page, page 2 2. We note your response to comment 5 in our letter dated August 9, 2012 and the revision to your disclosure in the second paragraph on page 2 stating that Mr. Wallin is under a lock-up agreement "for the duration of the offering." We further note your disclosure in the same paragraph that the duration of the offering is 16 months. However, we note that the lock-up agreement indicates that the lock-up period extends for six months from the date the registration statement is declared effective. Please revise your disclosure to bring it into agreement with the text of the lock-up agreement. Company Response We have modified the disclosure to state that Mr. Wallin is under a 180 day lock-up agreement and will not sell his shares until the Company completes the sale of the 5,000,000 shares being offered by the Company. Dilution, page 37 3. Please revise your dilution table and shares outstanding to reflect your recent update of the financial statements included in this registration statement. Company Response We have updated the dilution table to reflect the recent updated financial statements included in the registration statement. Description of Business, page 43 Software Description, page 47 4. We note your response to comment 15 in our letter dated August 9, 2012 and the corresponding revisions to your disclosure. However, we note your continued reference to the following third-party sources: · Healthcare Informatics: (April, 2007) in the last paragraph on page 57, · May 2012 Health and Human Services Archive in the fourth paragraph on page 58, and · Federal Business Opportunities (May 2rchives) in the sixth paragraph on page 58. As stated in our prior comment, please provide a copy of the source materials to us, appropriately marked to highlight the sections relied upon and cross-referenced to your prospectus. Please also tell us supplementally whether you are affiliated with Healthcare Informatics. Alternatively, please remove these statements. Mara Ransom, Assistant Director September 10, 2012 Page 3 To the extent you make revisions based on this comment, please supplementally confirm that you will revise future periodic reports accordingly. Company Response We have no affiliation with the groups mentioned above and have removed all statements regarding them and confirm that we revise future periodic reports accordingly. Management’s Discussion and Analysis of Financial Condition…, page 64 Results of Operations, page 69 Liquidity and Capital Resources, page 69 5. Please expand your discussion to include the interim period ended June 30, 2012. See Item 303 of Regulation S-K. Company Response We have expended our discussion to include the interim period ended June 30, 2012. Condensed Statements of Cash Flows, page F-13 6. We note you have reflected shareholder advances as cash provided by both operating and financing cash flows. Further, we note you have credited paid-in capital for the advances and also show Accrued expenses due shareholder in the same amount of $20,307 as of June 30, 2012. Please explain to us your rationale for how you recorded the shareholder advances of $20,307 and include the related journal entries in your response. Company Response Our financials were in error. The amount of accrued expense should have been $0. Our amended statements have the have corrected this amount of accrued expense. Our journal entry should have been: Debit Accrued Expense Credit Additional Paid in Capital Mara Ransom, Assistant Director September 10, 2012 Page 4 Additionally, our updated financial statements will reflect an increase in loss, due to a change in the recognized expense of the vested options. Our disclosures have also been amended to include a table of outstanding options and the assumptions in the calculation of the option values. Notes to Financial Statements, page F-16 1. Organization and Basis of Presentation, page F-16 7. We note your response to comment 2 in our letter dated August 9, 2012; however, we again note that you have not revised your disclosure to clarify the statement "for the advancement of its licensed technology…it may lose its rights to our technology" in the last sentence of the third paragraph on page F-16. As stated in our prior comment, it is unclear whether the term "advancement" refers to a development of technology, a payment to the licensor of the technology, or otherwise. Additionally, the disclosure does not define the terms "it" and "our." Please revise your disclosure in the passage identified above to clarify the terms advancement, it and our. Please also confirm that you will revise future periodic reports accordingly. Company Response We have modified the disclosure accordingly and confirm that we will revise future periodic reports accordingly. Recent Sales of Unregistered Securities, page 85 8. We note your response to comment 24 in our letter dated August 9, 2012 and the corresponding revisions to your disclosure in the last paragraph on page 85. Please revise your disclosure further to state (1) whether you distributed informational materials to investors and (2) whether the investors agreed not to sell or distribute the securities to the public. Company Response We have modified the disclosures to state (1) whether we distributed informational materials to investors and (2) whether the investors agreed not to sell or distribute the securities to the public. Mara Ransom, Assistant Director September 10, 2012 Page 5 On behalf of the Company, we acknowledge that: · should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing; · the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and · the company may not assert staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. Very truly yours, John F. Wallin ACCELERA INOVATIONS, INC. By: /S/ John F. Wallin John F. Wallin

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: (811- ) Exact name of registrant as specified in charter: Putnam Funds Trust Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 Name and address of agent for service: Beth S. Mazor, Vice President One Post Office Square Boston, Massachusetts 02109 Copy to: John W. Gerstmayr, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199-3600 Registrant’s telephone number, including area code: (617) 292-1000 Date of fiscal year end: October 31, 2011 Date of reporting period: January 31, 2011 Item 1. Schedule of Investments: Putnam Absolute Return 100 and 300 Funds The funds' portfolios 1/31/11 (Unaudited) 100 FUND 300 FUND MORTGAGE-BACKED SECURITIES(a) 100 Fund 33.8% 300 Fund 44.1% Principal amount Value Principal amount Value Adjustable Rate Mortgage Trust FRB Ser. 06-1, Class 2A1, 3.476s, 2036 $2,171,658 $1,422,436 $8,202,501 $5,372,638 FRB Ser. 05-12, Class 2A1, 3.133s, 2036 9,758,325 6,904,018 Banc of America Commercial Mortgage, Inc. Ser. 08-1, Class A3, 6.152s, 2051 289,000 315,332 2,923,000 3,189,327 FRB Ser. 07-4, Class A3, 5.809s, 2051 965,000 1,005,434 4,015,000 4,183,229 Ser. 07-2, Class A2, 5.634s, 2049 2,773,000 2,885,014 9,211,000 9,583,073 Ser. 07-5, Class A3, 5.62s, 2051 184,000 193,885 596,000 628,019 Ser. 06-4, Class A2, 5.522s, 2046 732,031 738,340 2,687,249 2,710,411 FRB Ser. 06-1, Class A2, 5.334s, 2045 1,358,000 1,359,343 4,889,000 4,893,834 Ser. 06-5, Class A2, 5.317s, 2047 1,583,832 1,625,319 5,495,253 5,639,194 Ser. 06-6, Class A2, 5.309s, 2045 1,621,000 1,644,138 5,667,600 5,748,499 Ser. 07-1, Class XW, IO, 0.284s, 2049 1,607,075 21,494 7,629,696 102,044 Banc of America Commercial Mortgage, Inc. 144A Ser. 02-PB2, Class XC, IO, 0.733s, 2035 3,718,610 23,405 15,495,431 97,528 Ser. 04-4, Class XC, IO, 0.288s, 2042 2,139,951 33,604 10,159,507 159,535 Banc of America Funding Corp. FRB Ser. 07-6, Class A1, 0.55s, 2037 408,850 304,981 1,668,638 1,244,721 Bear Stearns Alt-A Trust FRB Ser. 06-2, Class 24A1, 5.599s, 2036 161,193 104,776 3,056,784 1,986,910 FRB Ser. 05-9, Class 11A1, 0.52s, 2035 3,111,555 1,789,144 Bear Stearns Alt-A Trust 144A FRB Ser. 06-7, Class 1AE4, 5.794s, 2046 559,795 377,862 1,661,157 1,121,281 Bear Stearns Alt-A Trust II FRB Ser. 07-1, Class 1A1, 5.145s, 2047 501,578 320,070 3,164,288 2,019,211 Bear Stearns Asset Backed Securities Trust FRB Ser. 07-AC4, Class A1, 0.56s, 2037 184,393 93,118 914,927 462,038 Bear Stearns Commercial Mortgage Securities, Inc. Ser. 07-PW17, Class A3, 5.736s, 2050 403,000 422,179 1,479,000 1,549,386 FRB Ser. 07-PW16, Class A2, 5.665s, 2040 2,072,000 2,157,988 7,422,000 7,730,013 Ser. 06-PW13, Class A2, 5.426s, 2041 372,000 376,699 3,407,000 3,450,038 Ser. 06-PW11, Class A2, 5.406s, 2039 313,000 314,633 747,000 750,896 Ser. 07-PW15, Class A4, 5.331s, 2044 662,000 688,199 2,938,000 3,054,273 Ser. 06-PW14, Class A2, 5.123s, 2038 622,000 632,335 2,320,000 2,358,547 Ser. 05-PWR9, Class A2, 4.735s, 2042 124,425 124,882 590,375 592,543 Citigroup FRB Ser. 07-AR5, Class 1A2A, 5.402s, 2037 76,205 53,725 387,466 273,164 Citigroup Commercial Mortgage Trust FRB Ser. 08-C7, Class A2B, 6.099s, 2049 1,165,000 1,223,825 3,189,000 3,350,025 FRB Ser. 07-C6, Class A3, 5.698s, 2049 875,000 914,571 4,328,000 4,523,731 Citigroup Mortgage Loan Trust, Inc. FRB Ser. 07-6, Class 1A3A, 5.347s, 2046 93,757 49,691 331,984 175,951 Citigroup/Deutsche Bank Commercial Mortgage Trust Ser. 06-CD3, Class A2, 5.56s, 2048 966,605 1,002,422 3,389,849 3,515,458 Ser. 06-CD2, Class A2, 5.408s, 2046 292,227 291,956 1,559,430 1,557,982 Ser. 07-CD4, Class A2B, 5.205s, 2049 3,745,000 3,856,004 Commercial Mortgage Pass-Through Certificates FRB Ser. 07-C9, Class A2, 5.811s, 2049 989,000 1,021,234 Ser. 06-C8, Class A3, 5.308s, 2046 1,423,000 1,480,134 6,639,000 6,905,559 Ser. 06-C8, Class A2B, 5.248s, 2046 793,796 810,540 3,657,344 3,734,488 Countrywide Alternative Loan Trust Ser. 06-45T1, Class 2A5, 6s, 2037 936,000 711,360 Ser. 06-41CB, Class 1A7, 6s, 2037 237,101 174,269 1,062,214 780,727 Ser. 06-2CB, Class A11, 6s, 2036 43,778 29,318 173,362 116,099 Ser. 05-80CB, Class 2A1, 6s, 2036 38,837 29,249 256,640 193,282 Ser. 05-50CB, Class 3A1, 6s, 2035 168,050 112,308 802,700 536,445 FRB Ser. 07-HY4, Class 4A1, 5.568s, 2047 858,885 619,593 FRB Ser. 06-24CB, Class A13, 0.61s, 2036 843,495 540,891 FRB Ser. 06-OC8, Class 2A2A, 0.38s, 2036 2,374,642 1,381,835 Countrywide Asset Backed Certificates FRB Ser. 06-IM1, Class A2, 0.5s, 2036 1,222,132 612,178 9,387,805 4,702,446 Countrywide Home Loans FRB Ser. 06-HYB2, Class 2A1B, 3.918s, 2036 541,823 379,276 2,451,445 1,716,011 FRB Ser. 05-HYB7, Class 3A1, 3.133s, 2035 542,014 355,019 4,133,047 2,707,146 Countrywide Home Loans 144A Ser. 04-R2, Class 1AS, IO, 5.665s, 2034 992,255 120,913 Ser. 05-R3, Class AS, IO, 5.517s, 2035 401,448 50,181 234,094 29,262 FRB Ser. 04-R2, Class 1AF1, 0.68s, 2034 977,626 855,423 FRB Ser. 05-R3, Class AF, 0.66s, 2035 394,624 339,377 230,115 197,899 Credit Suisse Mortgage Capital Certificates FRB Ser. 08-C1, Class A2, 6.211s, 2041 1,499,000 1,561,214 6,138,800 6,393,582 FRB Ser. 06-C3, Class A2, 5.826s, 2038 671,000 676,307 FRB Ser. 07-C4, Class A2, 5.804s, 2039 816,256 836,482 2,582,693 2,646,689 FRB Ser. 07-C3, Class A2, 5.72s, 2039 511,711 526,786 2,419,432 2,490,706 Ser. 07-C5, Class A3, 5.694s, 2040 1,000,000 1,042,091 Ser. 07-C5, Class AAB, 5.62s, 2040 1,392,000 1,451,768 4,896,000 5,106,220 Ser. 07-C5, Class A2, 5.589s, 2040 344,000 354,475 2,089,000 2,152,610 Ser. 07-C2, Class A2, 5.448s, 2049 1,729,000 1,760,263 6,146,000 6,257,131 Ser. 07-C1, Class AAB, 5.336s, 2040 1,148,000 1,219,061 4,596,000 4,880,492 CS First Boston Mortgage Securities Corp. FRB Ser. 05-C4, Class A3, 5.12s, 2038 284,583 292,589 1,631,257 1,677,148 CS First Boston Mortgage Securities Corp. 144A Ser. 03-C3, Class AX, IO, 1.733s, 2038 19,612,249 615,405 69,903,679 2,193,480 Ser. 04-C4, Class AX, IO, 0.539s, 2039 1,730,857 38,550 7,552,829 168,220 Ser. 05-C1, Class AX, IO, 0.141s, 2038 31,456,151 293,263 116,158,871 1,082,938 CWCapital Cobalt Ser. 07-C3, Class A2, 5.736s, 2046 1,169,000 1,216,284 4,163,000 4,331,386 Ser. 07-C2, Class A2, 5.334s, 2047 37,254 38,441 Deutsche Alternative Securities, Inc. FRB Ser. 06-AR6, Class A6, 0.45s, 2037 1,146,370 693,554 10,504,038 6,354,943 Federal Home Loan Mortgage Corp. IFB Ser. 2976, Class LC, 23.462s, 2035 59,408 83,196 272,712 381,910 IFB Ser. 3072, Class SM, 22.839s, 2035 746,856 1,013,632 IFB Ser. 3072, Class SB, 22.692s, 2035 669,161 903,788 IFB Ser. 3249, Class PS, 21.413s, 2036 623,726 848,016 IFB Ser. 2990, Class LB, 16.278s, 2034 619,785 764,213 IFB Ser. 3149, Class SE, IO, 6.889s, 2036 851,983 158,120 3,754,050 696,714 IFB Ser. 3151, Class SI, IO, 6.889s, 2036 150,494 25,962 731,776 126,239 IFB Ser. 3157, Class SA, IO, 6.889s, 2036 1,076,911 199,272 4,764,793 881,677 IFB Ser. 3208, Class PS, IO, 6.839s, 2036 2,208,283 338,035 11,174,561 1,710,554 IFB Ser. 3398, Class SI, IO, 6.389s, 2036 5,166,714 641,964 IFB Ser. 3145, Class GI, IO, 6.339s, 2036 903,083 141,719 3,997,472 627,315 IFB Ser. 3055, Class MS, IO, 6.339s, 2035 1,657,177 257,791 6,725,188 1,046,170 IFB Ser. 3677, Class KS, IO, 6.289s, 2040 8,083,837 1,185,589 IFB Ser. 3346, Class SC, IO, 6.289s, 2033 2,122,143 310,385 10,950,778 1,601,661 IFB Ser. 3346, Class SB, IO, 6.289s, 2033 763,746 111,614 3,477,948 508,267 IFB Ser. 3753, Class SK, IO, 5.789s, 2038 10,423,015 1,513,109 Ser. 3707, Class IK, IO, 5s, 2040 460,571 80,195 Ser. 3645, Class ID, IO, 5s, 2040 129,415 21,198 851,773 139,520 Ser. 3680, Class KI, IO, 5s, 2038 3,248,969 560,382 18,736,007 3,231,586 Ser. 3632, Class CI, IO, 5s, 2038 157,530 27,013 1,034,547 177,404 Ser. 3626, Class DI, IO, 5s, 2037 112,788 14,215 741,924 93,505 Ser. 3653, Class CI, IO, 5s, 2036 3,119,071 399,958 13,616,766 1,746,078 Ser. 3623, Class CI, IO, 5s, 2036 100,923 12,817 664,244 84,359 Ser. 3663, Class BI, IO, 4 1/2s, 2024 2,226,390 207,054 12,264,252 1,140,575 Ser. 3736, Class QI, IO, 4s, 2034 16,273,176 2,193,700 Ser. 3707, Class HI, IO, 4s, 2023 215,060 24,065 1,136,365 127,159 Ser. T-8, Class A9, IO, 0.503s, 2028 249,280 3,624 713,061 10,368 Ser. T-59, Class 1AX, IO, 0.272s, 2043 549,279 4,463 1,570,974 12,764 Ser. T-48, Class A2, IO, 0.212s, 2033 752,623 5,590 2,152,958 15,990 FRB Ser. T-54, Class 2A, IO, zero %, 2043 314,887 900,821 FRB Ser. 3238, Class LK, zero %, 2036 320,847 326,350 Federal National Mortgage Association IFB Ser. 04-10, Class QC, 27.56s, 2031 527,742 767,164 2,579,548 3,749,817 IFB Ser. 05-74, Class NK, 26.2s, 2035 140,495 200,660 IFB Ser. 07-53, Class SP, 23.247s, 2037 672,401 924,912 IFB Ser. 06-86, Class SY, 23.063s, 2036 453,941 593,302 2,316,060 3,027,098 IFB Ser. 05-75, Class GS, 19.47s, 2035 706,149 904,486 741,669 949,984 IFB Ser. 03-W6, Class 4S, IO, 7.34s, 2042 1,237,347 237,694 IFB Ser. 04-W2, Class 1A3S, IO, 6.89s, 2044 26,925 2,221 77,127 6,363 IFB Ser. 05-104, Class SI, IO, 6.44s, 2033 329,927 43,716 1,596,473 211,538 IFB Ser. 10-27, Class BS, IO, 6.19s, 2040 1,028,253 145,653 9,862,154 1,396,979 IFB Ser. 07-30, Class OI, IO, 6.18s, 2037 3,534,184 550,272 IFB Ser. 10-35, Class SG, IO, 6.14s, 2040 20,254,563 3,366,106 IFB Ser. 09-71, Class XS, IO, 5.94s, 2036 13,434,151 1,361,046 Ser. 06-W2, Class 1AS, IO, 5.803s, 2036 240,693 27,078 481,386 54,156 Ser. 06-W3, Class 1AS, IO, 5.786s, 2046 281,230 34,263 711,376 86,668 IFB Ser. 10-136, Class SG, IO, 5.74s, 2030 8,586,691 1,239,918 IFB Ser. 11-3, Class SA, IO, 5.56s, 2041 (F) 15,021,000 1,765,557 Ser. 07-W1, Class 1AS, IO, 5.539s, 2046 452,506 50,904 904,581 101,760 Ser. 10-98, Class DI, IO, 5s, 2040 138,624 23,282 733,554 123,200 Ser. 10-21, Class IP, IO, 5s, 2039 1,455,055 247,359 Ser. 09-31, Class PI, IO, 5s, 2038 8,650,650 1,421,908 IFB Ser. 05-W2, Class A2, IO, 4.95s, 2035 497,045 48,861 1,864,268 183,262 Ser. 10-100, Class AI, IO, 4 1/2s, 2025 3,097,220 278,844 16,752,771 1,508,258 Ser. 03-W12, Class 2, IO, 2.228s, 2043 337,808 27,447 911,698 74,075 Ser. 03-W12, Class 1IO2, IO, 1.986s, 2043 2,852,912 211,852 11,335,302 841,738 Ser. 03-W10, Class 1, IO, 1.606s, 2043 128,025 7,682 649,442 38,966 Ser. 98-W5, Class X, IO, 1.237s, 2028 180,550 7,828 516,479 22,393 Ser. 98-W2, Class X, IO, 1.203s, 2028 430,946 19,812 1,232,773 56,675 Ser. 03-W17, Class 12, IO, 1.136s, 2033 687,161 28,738 3,485,483 145,770 FRB Ser. 07-80, Class F, 0.96s, 2037 12,772 12,740 Ser. 03-W1, Class 2A, IO, zero %, 2042 651,280 1,862,915 Ser. 07-44, Class CO, PO, zero %, 2037 237,706 210,493 GE Capital Commercial Mortgage Corp. Ser. 07-C1, Class A3, 5.481s, 2049 973,000 1,007,147 3,126,000 3,235,706 FRB Ser. 06-C1, Class A2, 5.336s, 2044 317,000 317,447 1,496,000 1,498,109 GE Capital Commercial Mortgage Corp. 144A Ser. 05-C2, Class XC, IO, 0.124s, 2043 11,154,003 89,965 48,921,731 394,588 Ser. 05-C3, Class XC, IO, 0.069s, 2045 77,656,464 381,975 Government National Mortgage Association IFB Ser. 10-98, Class CS, IO, 6.439s, 2038 174,904 29,445 925,616 155,827 IFB Ser. 10-98, Class SA, IO, 6.439s, 2038 168,628 27,363 894,119 145,089 IFB Ser. 10-32, Class SP, IO, 6.439s, 2036 230,768 29,402 1,217,372 155,105 IFB Ser. 10-125, Class CS, IO, 6.389s, 2040 8,674,692 1,491,640 IFB Ser. 10-85, Class AS, IO, 6.389s, 2039 239,398 38,696 1,265,388 204,537 IFB Ser. 10-85, Class SD, IO, 6.389s, 2038 159,263 24,767 841,956 130,933 IFB Ser. 10-98, Class QS, IO, 6.339s, 2040 226,494 36,502 1,198,164 193,096 IFB Ser. 10-98, Class YS, IO, 6.339s, 2039 234,326 37,490 1,239,281 198,273 IFB Ser. 10-47, Class HS, IO, 6.339s, 2039 108,359 17,923 575,657 95,214 IFB Ser. 10-68, Class SD, IO, 6.319s, 2040 12,145,075 1,917,140 IFB Ser. 10-162, Class SC, IO, 6.289s, 2039 10,349,487 1,707,665 IFB Ser. 10-42, Class SP, IO, 6.289s, 2039 9,816,121 1,532,694 IFB Ser. 10-3, Class MS, IO, 6.289s, 2038 3,235,724 505,708 IFB Ser. 10-31, Class PS, IO, 6.289s, 2038 2,260,490 371,781 11,675,194 1,920,207 IFB Ser. 10-53, Class SA, IO, 6.239s, 2039 670,021 107,518 3,583,770 575,084 IFB Ser. 10-31, Class GS, IO, 6.239s, 2039 9,318,622 1,450,630 IFB Ser. 10-2, Class SA, IO, 6.239s, 2037 253,323 34,566 1,341,011 182,981 IFB Ser. 10-24, Class BS, IO, 6.169s, 2038 5,616,490 847,081 33,521,940 5,055,790 IFB Ser. 09-103, Class SW, IO, 6.139s, 2037 22,021,563 2,904,864 Ser. 10-85, Class JS, IO, 6.08s, 2040 9,577,560 1,518,235 IFB Ser. 10-108, Class CS, IO, 5.889s, 2036 9,729,964 1,215,954 IFB Ser. 10-158, Class SA, IO, 5.789s, 2040 3,444,992 539,038 14,011,027 2,192,305 IFB Ser. 10-113, Class SM, IO, 5.789s, 2040 9,203,669 1,277,929 IFB Ser. 10-98, Class ST, IO, 5.739s, 2040 25,251,230 3,461,944 IFB Ser. 10-50, Class YS, IO, 5.739s, 2038 3,612,491 446,721 20,830,095 2,575,850 IFB Ser. 10-116, Class SA, IO, 5.639s, 2040 6,599,068 955,329 IFB Ser. 10-68, Class MS, IO, 5.589s, 2040 6,541,226 839,066 IFB Ser. 10-20, Class SD, IO, 5.419s, 2040 7,668,885 1,061,604 IFB Ser. 10-35, Class DX, IO, 5.419s, 2035 6,090,554 681,168 Ser. 10-58, Class VI, IO, 5s, 2038 8,706,948 1,116,721 44,892,792 5,757,783 Ser. 10-85, Class PI, IO, 5s, 2036 9,471,137 1,315,257 Ser. 10-137, Class PI, IO, 4 1/2s, 2039 6,138,740 1,183,231 Ser. 10-158, Class IP, IO, 4 1/2s, 2039 2,755,383 493,489 11,204,960 2,006,808 Ser. 2010-129, Class PI, 4 1/2s, 2039 4,842,478 891,984 20,538,152 3,783,128 Ser. 10-103, Class IN, IO, 4 1/2s, 2039 28,060,625 4,481,282 Ser. 10-120, Class AI, IO, 4 1/2s, 2038 11,287,159 1,947,035 33,445,883 5,769,415 Ser. 10-87, Class ID, IO, 4 1/2s, 2035 725,506 96,401 2,845,923 378,150 Greenwich Capital Commercial Funding Corp. Ser. 07-GG9, Class A2, 5.381s, 2039 853,211 875,514 3,178,091 3,261,168 Ser. 05-GG5, Class A2, 5.117s, 2037 1,184,704 1,198,646 GS Mortgage Securities Corp. II Ser. 06-GG6, Class A3, 5.576s, 2038 803,000 840,002 1,756,000 1,836,916 Ser. 06-GG6, Class A2, 5.506s, 2038 744,109 747,912 2,884,389 2,899,131 GS Mortgage Securities Corp. II 144A Ser. 03-C1, Class X1, IO, 0.843s, 2040 1,684,680 23,090 7,996,442 109,599 GSMPS Mortgage Loan Trust 144A Ser. 05-RP1, Class 1AS, IO, 5.949s, 2035 765,141 109,989 465,691 66,943 Ser. 06-RP2, Class 1AS1, IO, 5.688s, 2036 1,022,438 143,141 IFB Ser. 04-4, Class 1AS, IO, 5.419s, 2034 385,005 55,344 1,164,640 167,417 Ser. 98-2, IO, 0.789s, 2027 69,711 1,426 199,480 4,082 FRB Ser. 06-RP2, Class 1AF1, 0.66s, 2036 1,022,438 869,072 FRB Ser. 04-4, Class 1AF, 0.66s, 2034 385,005 325,329 1,164,640 984,121 FRB Ser. 05-RP1, Class 1AF, 0.61s, 2035 765,141 650,370 465,691 395,838 Ser. 98-3, IO, 0.486s, 2027 85,464 1,414 244,397 4,044 Ser. 98-4, IO, 0.034s, 2026 93,766 2,387 268,282 6,829 Ser. 99-2, IO, zero %, 2027 119,029 1,247 340,353 3,565 IndyMac Inda Mortgage Loan Trust FRB Ser. 07-AR7, Class 1A1, 5.876s, 2037 29,731 25,327 IndyMac Indx Mortgage Loan Trust FRB Ser. 06-AR5, Class 1A2, 5.33s, 2036 211,687 25,402 505,912 60,709 FRB Ser. 07-AR5, Class 1A1, 5.056s, 2037 2,219,527 1,116,200 FRB Ser. 05-AR15, Class A1, 5.046s, 2035 710,300 575,343 FRB Ser. 07-AR7, Class 2A1, 4.873s, 2037 780,083 444,647 1,740,638 992,164 FRB Ser. 06-AR3, Class 2A1A, 4.725s, 2036 1,706,631 938,647 FRB Ser. 06-AR11, Class 3A1, 4.598s, 2036 124,112 66,315 654,500 349,708 FRB Ser. 06-AR41, Class A3, 0.44s, 2037 746,773 377,120 2,478,592 1,251,689 FRB Ser. 06-AR29, Class A2, 0.34s, 2036 (F) 1,793,670 955,129 9,476,698 5,046,342 JPMorgan Chase Commercial Mortgage Securities Corp. Ser. 06-LDP7, Class A2, 5.861s, 2045 846,119 853,678 3,312,394 3,341,983 Ser. 07-C1, Class ASB, 5.857s, 2051 1,073,000 1,131,148 5,268,000 5,553,485 Ser. 07-LD12, Class A2, 5.827s, 2051 1,470,000 1,529,501 3,343,000 3,478,314 FRB Ser. 07-LD11, Class A3, 5.818s, 2049 820,000 864,630 3,172,000 3,344,644 FRB Ser. 07-LD11, Class A2, 5.803s, 2049 999,000 1,034,865 4,090,000 4,236,833 Ser. 07-C1, Class A3, 5.79s, 2051 577,000 600,673 2,217,000 2,307,960 FRB Ser. 07-CB19, Class ASB, 5.728s, 2049 1,725,000 1,840,445 Ser. 07-C1, Class A4, 5.716s, 2051 987,000 1,043,606 4,175,000 4,414,444 Ser. 06-CB16, Class A3B, 5.579s, 2045 385,000 399,910 1,272,000 1,321,262 Ser. 06-CB16, Class A2, 5.45s, 2045 659,585 667,746 Ser. 06-CB17, Class A3, 5.45s, 2043 1,519,000 1,572,034 7,419,000 7,678,027 Ser. 06-LDP8, Class A3B, 5.447s, 2045 70,000 73,128 543,000 567,261 Ser. 06-LDP9, Class A2S, 5.298s, 2047 1,668,000 1,705,397 6,560,000 6,707,075 Ser. 06-LDP8, Class A2, 5.289s, 2045 1,612,970 1,669,012 4,472,759 4,628,162 Ser. 05-CB13, Class A2, 5.247s, 2043 1,397,745 1,397,171 5,182,466 5,180,339 Ser. 05-LDP5, Class A2, 5.198s, 2044 943,000 978,054 3,714,000 3,852,060 Ser. 06-LDP9, Class X, IO, 0.451s, 2047 49,709,070 945,317 197,425,537 3,754,441 Ser. 06-CB16, Class X1, IO, 0.129s, 2045 3,652,692 47,940 17,338,510 227,561 LB Commercial Conduit Mortgage Trust Ser. 07-C3, Class A2, 5.84s, 2044 668,000 694,651 1,949,000 2,026,757 LB Commercial Conduit Mortgage Trust 144A FRB Ser. 07-C3, Class A2FL, 5.84s, 2044 1,051,000 1,099,902 3,764,000 3,939,135 LB-UBS Commercial Mortgage Trust Ser. 07-C6, Class A2, 5.845s, 2040 16,877 17,432 Ser. 07-C7, Class A2, 5.588s, 2045 1,660,000 1,709,003 8,382,000 8,629,437 Ser. 06-C3, Class A2, 5.532s, 2032 410,985 411,556 2,517,908 2,521,403 Ser. 07-C1, Class A2, 5.318s, 2040 1,254,000 1,283,825 3,378,000 3,458,341 Ser. 05-C7, Class A2, 5.103s, 2030 45,248 45,248 230,700 230,700 Ser. 06-C1, Class A2, 5.084s, 2031 381,891 383,246 2,228,401 2,236,308 Ser. 07-C2, Class XW, IO, 0.559s, 2040 1,085,799 22,502 5,155,119 106,835 LB-UBS Commercial Mortgage Trust 144A Ser. 03-C5, Class XCL, IO, 0.762s, 2037 1,194,883 20,087 5,672,394 95,357 Ser. 05-C3, Class XCL, IO, 0.297s, 2040 68,631,671 1,287,530 Lehman XS Trust FRB Ser. 07-8H, Class A1, 0.39s, 2037 (F) 4,874,773 2,443,480 Merit Securities Corp. 144A FRB Ser. 11PA, Class 3A1, 0.88s, 2027 1,069,605 1,001,356 Merrill Lynch Mortgage Trust FRB Ser. 07-C1, Class A3, 5.826s, 2050 796,000 839,776 1,657,000 1,748,128 FRB Ser. 07-C1, Class A2, 5.722s, 2050 901,824 929,831 3,219,092 3,319,067 Ser. 08-C1, Class A2, 5.425s, 2051 550,000 570,943 1,597,022 1,657,834 Ser. 05-MCP1, Class XC, IO, 0.187s, 2043 58,263,580 634,700 172,418,097 1,878,254 Merrill Lynch/Countrywide Commercial Mortgage Trust Ser. 07-7, Class ASB, 5.744s, 2050 868,000 907,851 3,398,000 3,554,007 Ser. 06-1, Class A2, 5.439s, 2039 699,892 700,825 1,557,368 1,559,444 Ser. 07-5, Class A3, 5.364s, 2048 850,000 874,520 2,856,000 2,938,386 Ser. 07-6, Class A2, 5.331s, 2051 1,651,000 1,690,758 6,684,000 6,844,957 Ser. 2006-3, Class A2, 5.291s, 2046 1,369,136 1,384,655 4,996,420 5,053,056 Ser. 06-4, Class A2, 5.112s, 2049 34,290 34,823 181,248 184,062 FRB Ser. 06-4, Class A2FL, 0.381s, 2049 1,549,916 1,509,230 5,897,419 5,742,611 Morgan Stanley Capital I FRB Ser. 07-IQ15, Class A2, 5.839s, 2049 1,419,000 1,471,996 5,186,000 5,379,685 FRB Ser. 06-T23, Class A2, 5.737s, 2041 1,026,000 1,084,780 4,672,000 4,939,659 Ser. 07-HQ13, Class A2, 5.649s, 2044 1,535,000 1,591,739 5,869,000 6,085,938 Ser. 2006-HQ9, Class A2, 5.618s, 2044 552,000 563,210 2,822,000 2,879,307 Ser. 07-IQ14, Class A2, 5.61s, 2049 1,601,000 1,658,022 6,542,000 6,775,005 FRB 5.597s, 2049 454,674 462,527 2,001,152 2,035,716 FRB Ser. 06-HQ8, Class A3, 5.442s, 2044 1,420,000 1,461,393 5,346,863 5,502,724 Ser. 07-IQ13, Class A3, 5.331s, 2044 676,000 714,070 1,889,000 1,995,382 Ser. 06-T21, Class A2, 5.09s, 2052 12,232 12,220 29,357 29,329 Ser. 05-HQ6, Class A2A, 4.882s, 2042 613,513 621,531 2,536,226 2,569,373 Ser. 03-IQ4, Class X1, IO, 0.528s, 2040 14,972,625 465,660 61,085,490 1,899,805 FRB Ser. 07-HQ12, Class A2FL, 0.511s, 2049 208,799 193,473 1,053,752 976,406 Morgan Stanley Mortgage Loan Trust FRB Ser. 06-3AR, Class 3A1, 5.564s, 2036 254,597 182,037 1,236,946 884,416 Ser. 06-6AR, Class 2A, 3.037s, 2036 168,782 106,333 Morgan Stanley ReREMIC Trust 144A FRB Ser. 10-C30A, Class A3B, 10.236s, 2043 574,000 605,392 843,571 889,706 Nomura Asset Acceptance Corp. FRB Ser. 06-AR4, Class A4A, 0.5s, 2036 2,843,113 1,421,556 Residential Accredit Loans, Inc. Ser. 06-QS17, Class A4, 6s, 2036 208,238 127,025 1,032,136 629,603 Ser. 06-QS13, Class 1A5, 6s, 2036 50,887 31,804 216,376 135,235 Residential Asset Securitization Trust Ser. 06-A13, Class A1, 6 1/4s, 2036 (F) 1,417,079 999,041 FRB Ser. 05-A2, Class A1, 0.76s, 2035 145,500 112,692 599,862 464,601 Structured Adjustable Rate Mortgage Loan Trust FRB Ser. 07-10, Class 1A1, 6s, 2037 618,633 335,802 2,525,723 1,370,994 FRB Ser. 06-9, Class 1A1, 5.297s, 2036 138,915 84,981 762,753 466,612 FRB Ser. 07-4, Class 1A1, 0.5s, 2037 1,940,020 1,008,810 Structured Adjustable Rate Mortgage Loan Trust 144A Ser. 04-NP2, Class A, 0.61s, 2034 477,877 382,302 Structured Asset Securities Corp. IFB Ser. 07-4, Class 1A3, IO, 5.99s, 2045 342,056 46,155 1,734,058 234,008 Ser. 07-4, Class 1A4, IO, 1s, 2045 756,059 23,725 3,568,721 111,984 Structured Asset Securities Corp. 144A FRB Ser. 05-RF2, Class A, 0.61s, 2035 1,637,031 1,387,384 3,810,502 3,229,401 Vericrest Opportunity Loan Transferee 144A Ser. 10-NPL1, Class M, 6s, 2039 441,388 439,181 2,986,092 2,971,161 Wachovia Bank Commercial Mortgage Trust Ser. 06-C26, Class A2, 5.935s, 2045 359,647 371,495 1,343,997 1,388,273 FRB Ser. 07-C33, Class A3, 5.899s, 2051 870,000 923,867 2,043,000 2,169,494 FRB Ser. 07-C32, Class APB, 5.746s, 2049 842,000 890,377 3,297,000 3,486,430 FRB Ser. 07-C32, Class A2, 5.741s, 2049 1,588,000 1,661,712 6,002,000 6,280,600 Ser. 06-C25, Class A2, 5.684s, 2043 202,074 202,731 552,099 553,895 Ser. 06-C28, Class A3, 5.679s, 2048 455,000 480,673 1,571,000 1,659,643 Ser. 06-C27, Class A2, 5.624s, 2045 2,362,242 2,391,687 6,614,643 6,697,094 Ser. 07-C34, Class A2, 5.569s, 2046 345,000 355,565 1,716,000 1,768,549 Ser. 2006-C28, Class A2, 5 1/2s, 2048 1,127,817 1,144,097 3,647,175 3,699,822 Ser. 07-C30, Class APB, 5.294s, 2043 688,000 704,937 3,965,000 4,062,609 Ser. 06-C29, Class A2, 5.275s, 2048 1,614,000 1,642,357 7,641,000 7,775,249 Wachovia Bank Commercial Mortgage Trust 144A Ser. 03-C3, Class IOI, IO, 1.107s, 2035 37,139,130 638,852 6,301,813 108,401 Wachovia Mortgage Loan Trust, LLC FRB Ser. 06-AMN1, Class A1, 0.31s, 2036 4,226,612 2,229,538 Total mortgage-backed securities (cost $114,923,087 and $510,475,217) CORPORATE BONDS AND NOTES(a) 100 Fund 8.8% 300 Fund 18.6% Principal amount Value Principal amount Value Advertising and marketing services 0.1% 0.1% Omnicom Group, Inc. sr. unsec. unsub. notes 4.45s, 2020 $315,000 $308,284 $1,675,000 $1,639,286 Automotive 0.2% 0.3% BMW US Capital, LLC company guaranty sr. unsec. unsub. notes Ser. EMTN, 4 1/4s, 2011 120,000 123,236 510,000 523,755 Daimler Finance North America, LLC company guaranty sr. unsec. unsub. notes 5 7/8s, 2011 (Germany) 315,000 316,941 Daimler Finance North America, LLC company guaranty unsec. unsub. notes 7.3s, 2012 (Germany) 310,000 328,947 1,085,000 1,151,313 Daimler Finance North America, LLC company guaranty unsec. unsub. notes Ser. MTN, 5 3/4s, 2011 (Germany) 115,000 118,439 200,000 205,981 Lear Corp. company guaranty sr. unsec. bond 7 7/8s, 2018 1,015,000 1,101,275 Banking 1.3% 2.1% Citigroup, Inc. unsec. sub. notes 5 5/8s, 2012 650,000 684,382 3,650,000 3,843,070 Lloyds TSB Bank PLC bank guaranty sr. unsec. unsub. notes 4 7/8s, 2016 (United Kingdom) 510,000 510,436 60,000 60,051 Lloyds TSB Bank PLC company guaranty sr. unsec. sub. notes Ser. MTN, 6 1/2s, 2020 (United Kingdom) 3,600,000 3,360,780 National Australia Bank, Ltd. 144A sr. unsec. notes 2 1/2s, 2013 (Australia) 690,000 703,872 2,830,000 2,886,897 Royal Bank of Scotland PLC (The) 144A company guaranty sr. unsec. unsub. notes 4 7/8s, 2014 (United Kingdom) 430,000 441,110 1,620,000 1,661,855 Royal Bank of Scotland PLC company guranty sr. unsec. unsub. notes Ser. 2, 3.4s, 2013 (United Kingdom) 325,000 328,651 2,560,000 2,588,756 Shinhan Bank 144A sr. unsec. bond 6s, 2012 (South Korea) 200,000 210,457 425,000 447,222 Sumitomo Mitsui Banking Corp. 144A sr. unsec. notes 2.15s, 2013 (Japan) 685,000 693,213 3,610,000 3,653,284 UBS AG/ Jersey Branch jr. unsec. sub. FRB 4.28s, 2015 (Cayman Islands) EUR 40,000 47,804 VTB Bank OJSC Via VTB Capital SA sr. notes 6 1/4s, 2035 (Russia) $ $500,000 515,625 VTB Bank OJSC Via VTB Capital SA 144A sr. unsec. notes 6 7/8s, 2018 (Russia) 1,000,000 1,067,100 VTB Bank OJSC Via VTB Capital SA 144A sr. unsec. notes 6 1/4s, 2035 (Russia) 200,000 206,250 1,850,000 1,907,813 Westpac Banking Corp. sr. unsec. unsub. bonds 2 1/4s, 2012 (Australia) 720,000 733,763 2,665,000 2,715,941 Beverage 0.3% 0.5% Anheuser-Busch InBev Worldwide, Inc. 144A company guaranty sr. unsec. unsub. notes 5 3/8s, 2014 565,000 626,753 2,775,000 3,078,302 Constellation Brands, Inc. company guaranty sr. unsec. unsub. notes 7 1/4s, 2016 400,000 425,500 2,105,000 2,239,194 Biotechnology % % Talecris Biotherapeutics Holdings Corp. company guaranty sr. unsec. notes 7 3/4s, 2016 336,000 367,920 Broadcasting 0.1% 0.4% Belo Corp. sr. unsec. unsub. notes 8s, 2016 500,000 545,000 DISH DBS Corp. company guaranty 7 1/8s, 2016 977,000 1,020,965 Turner Broadcasting System, Inc. sr. unsec. unsub. note company quaranty 8 3/8s, 2013 360,000 414,302 2,365,000 2,721,734 Building materials % 0.1% Building Materials Corp. 144A sr. notes 7s, 2020 1,010,000 1,060,500 Cable television 0.2% 0.4% CCO Holdings, LLC/CCO Holdings Capital Corp. company guaranty sr. unsec. notes 7 7/8s, 2018 1,020,000 1,073,550 Comcast Cable Holdings LLC debs. 9.8s, 2012 58,000 62,735 290,000 313,675 Comcast Corp. company guaranty sr. unsec. unsub. notes 6 1/2s, 2015 447,000 507,983 2,205,000 2,505,822 CSC Holdings LLC sr. unsec. unsub. notes 8 1/2s, 2014 1,215,000 1,357,763 Chemicals 0.2% 0.4% Airgas, Inc. sr. unsec. unsub. notes 2.85s, 2013 255,000 259,074 1,145,000 1,163,292 Dow Chemical Co. (The) sr. unsec. FRN 2.536s, 2011 80,000 80,901 340,000 343,829 Dow Chemical Co. (The) sr. unsec. notes 7.6s, 2014 355,000 412,478 1,270,000 1,475,627 Ineos Finance PLC 144A company guaranty sr. notes 9 1/4s, 2015 (United Kingdom) EUR 195,000 290,959 Lyondell Chemical Co. 144A company guaranty sr. notes 8s, 2017 $ $904,000 1,009,090 Coal % 0.2% Arch Western Finance, LLC company guaranty sr. notes 6 3/4s, 2013 481,000 485,810 CONSOL Energy, Inc. 144A company guaranty sr. unsec. notes 8s, 2017 985,000 1,068,725 Peabody Energy Corp. company guaranty 7 3/8s, 2016 945,000 1,058,400 Combined utilities % 0.1% El Paso Corp. sr. unsec. notes 7s, 2017 1,140,000 1,228,806 Commercial and consumer services % 0.3% Corrections Corporation of America company guaranty sr. notes 7 3/4s, 2017 415,000 453,906 Lender Processing Services, Inc. company guaranty sr. unsec. unsub. notes 8 1/8s, 2016 3,000,000 3,097,500 Computers 0.3% 0.4% Seagate Technology International 144A company guaranty sr. sec. notes 10s, 2014 (Cayman Islands) 482,000 562,735 2,168,000 2,531,140 Xerox Corp. sr. unsec. notes 6 7/8s, 2011 435,000 448,035 1,615,000 1,663,393 Xerox Corp. sr. unsec. unsub. notes 4 1/4s, 2015 120,000 126,981 Consumer % 0.1% Jarden Corp. company guaranty sr. unsec. sub. notes 7 1/2s, 2017 980,000 1,031,450 Consumer goods 0.1% 0.1% Fortune Brands, Inc. sr. unsec. unsub. notes 3s, 2012 435,000 441,567 1,635,000 1,659,682 Electric utilities 1.0% 1.8% AES Corp. (The) sr. unsec. unsub. notes 8s, 2017 1,005,000 1,087,913 Aguila 3 SA company guaranty sr. notes Ser. REGS, 7 7/8s, 2018 (Luxembourg) CHF 315,000 341,979 Allegheny Energy Supply 144A sr. unsec. bonds 8 1/4s, 2012 $820,000 876,159 $4,180,000 4,466,271 CMS Energy Corp. sr. notes 8 1/2s, 2011 439,000 445,105 1,924,000 1,950,757 CMS Energy Corp. sr. unsec. unsub. notes FRN 1.253s, 2013 130,000 127,888 760,000 747,650 FirstEnergy Corp. notes Ser. B, 6.45s, 2011 291,000 302,354 1,081,000 1,123,178 KCP&L Greater Missouri Operations Co. sr. unsec. unsub. notes 11 7/8s, 2012 631,000 712,772 3,439,000 3,884,663 Power Receivable Finance, LLC 144A sr. notes 6.29s, 2012 409,388 409,494 2,776,385 2,777,107 Texas-New Mexico Power Co. 144A 1st mtge. sec. 9 1/2s, 2019 654,000 822,588 3,816,000 4,799,686 Electronics % % NXP BV/NXP Funding, LLC company guaranty sr. notes FRN Ser. EXCH, 3.053s, 2013 (Netherlands) 500,000 495,000 Energy (oil field) % 0.1% Expro Finance Luxemburg 144A sr. notes 8 1/2s, 2016 (Luxembourg) 884,000 870,740 Financial 0.4% 0.9% American Express Travel Related Services Co., Inc. sr. unsec. unsub. notes FRN Ser. EMTN, 0.461s, 2011 300,000 298,593 1,400,000 1,393,434 Berkshire Hathaway Finance Corp. company guaranty sr. notes 4s, 2012 85,000 88,332 415,000 431,266 CIT Group, Inc. sr. bonds 7s, 2014 1,000,000 1,018,750 Erac USA Finance Co. 144A company guaranty notes 2 1/4s, 2014 390,000 390,354 3,185,000 3,187,890 Erac USA Finance LLC 144A company guaranty sr. unsec. unsub. notes 2 3/4s, 2013 445,000 453,418 2,315,000 2,358,793 GATX Corp. notes 4 3/4s, 2012 180,000 188,821 750,000 786,754 Icahn Enterprises LP/Icahn Enterprises Finance Corp. company guaranty sr. unsec. notes 7 3/4s, 2016 400,000 412,500 Leucadia National Corp. sr. unsec. notes 7 1/8s, 2017 1,027,000 1,068,080 Food 0.3% 0.6% Dean Foods Co. company guaranty 7s, 2016 365,000 350,400 Kraft Foods, Inc. sr. unsec. notes 2 5/8s, 2013 730,000 751,127 3,270,000 3,364,636 Smithfield Foods, Inc. company guaranty sr. notes 10s, 2014 905,000 1,064,506 Tyson Foods, Inc. sr. unsec. unsub. notes 10 1/2s, 2014 400,000 476,000 1,960,000 2,332,400 Forest products and packaging 0.5% 1.2% Georgia-Pacific Corp. 144A company guaranty 7 1/8s, 2017 965,000 1,027,725 Georgia-Pacific, LLC sr. unsec. unsub. notes 8 1/8s, 2011 575,000 590,813 2,600,000 2,671,500 PE Paper Escrow GmbH 144A sr. notes 12s, 2014 (Austria) 890,000 1,037,003 Sappi Papier Holding AG 144A company guaranty 6 3/4s, 2012 (Austria) 675,000 693,583 Sealed Air Corp. sr. notes 7 7/8s, 2017 265,000 296,122 1,385,000 1,547,659 Sealed Air Corp. 144A notes 5 5/8s, 2013 1,442,000 1,523,438 Verso Paper Holdings, LLC/Verso Paper, Inc. sr. notes 11 1/2s, 2014 1,415,000 1,560,038 Weyerhaeuser Co. sr. unsec. unsub. notes 7 1/4s, 2013 825,000 871,275 4,175,000 4,409,180 Gaming and lottery % 0.1% Lottomatica SpA sub. notes FRN Ser. REGS, 8 1/4s, 2066 (Italy) EUR 100,000 136,385 MGM Resorts International sr. notes 10 3/8s, 2014 $ $340,000 385,050 Health-care services % 0.4% CHS/Community Health Systems, Inc. company guaranty sr. unsec. sub. notes 8 7/8s, 2015 1,000,000 1,056,250 Fresenius US Finance II, Inc. 144A sr. unsec. notes 9s, 2015 900,000 1,033,875 HCA, Inc. company guaranty sr. notes 9 5/8s, 2016 (PIK) 920,000 992,450 Tenet Healthcare Corp. sr. notes 9s, 2015 785,000 867,425 Tenet Healthcare Corp. sr. notes 8 7/8s, 2019 130,000 148,850 Insurance 0.8% 1.1% Hartford Financial Services Group, Inc. (The) jr. unsec. sub. debs. FRB 8 1/8s, 2038 235,000 255,181 1,075,000 1,167,317 MetLife Global Funding I 144A sr. sec. unsub. notes 5 1/8s, 2013 100,000 107,546 350,000 376,412 MetLife Global Funding I 144A sr. unsec. notes 2 7/8s, 2012 270,000 276,526 1,030,000 1,054,895 MetLife Global Funding I 144A sr. unsub. notes 5 1/8s, 2014 100,000 109,003 200,000 218,005 MetLife, Inc. sr. unsec. unsub. notes 2 3/8s, 2014 500,000 506,445 4,000,000 4,051,556 New York Life Global Funding 144A notes 3s, 2015 930,000 950,029 4,560,000 4,658,209 Prudential Financial, Inc. sr. notes 6.2s, 2015 425,000 469,342 1,595,000 1,761,414 Investment banking/Brokerage 0.3% 0.4% Goldman Sachs Group, Inc. (The) sr. notes 3 5/8s, 2012 194,000 200,969 791,000 819,413 TD Ameritrade Holding Corp. company guaranty sr. unsec. unsub. notes 2.95s, 2012 770,000 788,025 4,250,000 4,349,488 Lodging/Tourism % 0.1% Host Hotels & Resorts LP company guaranty sr. unsec. unsub. notes Ser. Q, 6 3/4s, 2016 (R) 1,000,000 1,032,500 Media 0.1% 0.2% Interpublic Group of Companies, Inc. (The) sr. unsec. notes 10s, 2017 895,000 1,065,050 Viacom, Inc. sr. unsec. notes 4 3/8s, 2014 310,000 332,808 1,571,000 1,686,583 Metals 0.6% 0.9% FMG Resources August 2006 Pty, Ltd. 144A sr. notes 7s, 2015 (Australia) 1,000,000 1,030,774 Freeport-McMoRan Copper & Gold, Inc. sr. unsec. notes 8 3/8s, 2017 400,000 446,000 1,836,000 2,047,140 Rio Tinto Finance USA, Ltd. company guaranty sr. unsec. notes 8.95s, 2014 (Australia) 505,000 613,541 2,495,000 3,031,258 Steel Dynamics, Inc. company guaranty sr. unsec. unsub. notes 7 3/8s, 2012 269,000 284,468 1,386,000 1,465,695 Teck Resources Limited sr. unsec. unsub. notes 7s, 2012 (Canada) 630,000 671,823 3,190,000 3,401,768 Natural gas utilities 0.4% 0.6% Energy Transfer Partners LP sr. unsec. unsub. notes 5.65s, 2012 740,000 782,498 3,780,000 3,997,085 Kinder Morgan, Inc. sr. notes 6 1/2s, 2012 490,000 516,950 2,510,000 2,648,050 Oil and gas 0.2% 1.2% Chesapeake Energy Corp. company guaranty sr. unsec. notes 9 1/2s, 2015 935,000 1,093,950 Denbury Resources, Inc. company guaranty sr. unsec. sub. notes 8 1/4s, 2020 955,000 1,048,113 Gazprom OAO Via White Nights Finance BV notes 10 1/2s, 2014 (Russia) 1,000,000 1,193,880 Petrobras International Finance Co. company guaranty sr. unsec. notes 3 7/8s, 2016 (Brazil) 5,000,000 5,052,993 Petrohawk Energy Corp. company guaranty sr. unsec. notes 10 1/2s, 2014 1,000,000 1,150,000 Plains Exploration & Production Co. company guaranty 7 3/4s, 2015 985,000 1,031,788 Ras Laffan Liquefied Natural Gas Co., Ltd. 144A company guaranty sr. notes 4 1/2s, 2012 (Qatar) 250,000 261,247 1,000,000 1,044,986 Total Capital SA company guaranty sr. unsec. unsub. notes 3s, 2015 (France) 500,000 513,116 2,900,000 2,976,071 Pharmaceuticals % 0.1% ConvaTec Healthcare E SA 144A sr. notes 7 3/8s, 2017 (Luxembourg) EUR 510,000 719,924 Power producers % 0.2% GenOn Energy, Inc. sr. unsec. unsub. notes 7 5/8s, 2014 1,500,000 1,575,000 NRG Energy, Inc. sr. notes 7 3/8s, 2016 1,025,000 1,060,875 Railroads % % RailAmerica, Inc. company guaranty sr. notes 9 1/4s, 2017 305,000 336,644 Real estate 0.2% 0.5% Omega Healthcare Investors, Inc. 144A sr. notes 6 3/4s, 2022 (R) 1,730,000 1,708,375 Simon Property Group LP sr. unsec. unsub. notes 5.1s, 2015 (R) 700,000 765,419 3,900,000 4,264,475 Simon Property Group LP sr. unsec. unsub. notes 4.2s, 2015 (R) 70,000 73,822 300,000 316,381 Regional Bells 0.4% 0.7% Frontier Communications Corp. sr. unsec. notes 8 1/4s, 2017 1,005,000 1,125,600 Frontier Communications Corp. sr. unsec. notes 7 7/8s, 2015 605,000 671,550 2,835,000 3,146,850 Qwest Communications International, Inc. company guaranty Ser. B, 7 1/2s, 2014 1,000,000 1,015,000 Verizon Pennsylvania, Inc. sr. unsec. unsub. bonds 5.65s, 2011 645,000 669,786 3,150,000 3,271,048 Retail 0.4% 0.8% Autonation, Inc. company guaranty sr. unsec. notes 6 3/4s, 2018 465,000 480,113 2,560,000 2,643,200 Macy's Retail Holdings, Inc. company guaranty sr. unsec. notes 6 5/8s, 2011 60,000 60,522 170,000 171,479 QVC Inc. 144A sr. notes 7 1/8s, 2017 215,000 225,750 965,000 1,013,250 Sears Holdings Corp. 144A sr. notes 6 5/8s, 2018 725,000 695,094 Staples, Inc. sr. unsec. notes 9 3/4s, 2014 505,000 615,408 2,495,000 3,040,482 SUPERVALU, Inc. sr. unsec. notes 8s, 2016 985,000 960,375 Toys R Us Property Co., LLC company guaranty sr. notes 8 1/2s, 2017 950,000 1,035,500 Telecommunications 0.2% 0.8% Inmarsat Finance PLC 144A company guaranty sr. notes 7 3/8s, 2017 (United Kingdom) 210,000 223,125 Intelsat Subsidiary Holding Co., Ltd. company guaranty sr. unsec. notes 8 7/8s, 2015 (Bermuda) 973,000 1,004,623 NII Capital Corp. company guaranty sr. unsec. unsub. notes 10s, 2016 920,000 1,030,400 SBA Tower Trust 144A company guaranty mtge. notes 4.254s, 2015 625,000 653,521 2,900,000 3,032,336 Sprint Capital Corp. notes 8 3/8s, 2012 1,036,000 1,100,750 Wind Acquisition Finance SA 144A company guaranty sr. notes 7 3/8s, 2018 (Netherlands) EUR 850,000 1,194,553 Windstream Corp. company guaranty 8 5/8s, 2016 $ $995,000 1,054,700 Windstream Corp. company guaranty sr. unsec. unsub. notes 7 7/8s, 2017 1,000,000 1,072,500 Telephone 0.2% 0.3% CenturyLink, Inc. sr. unsec. unsub. notes Ser. L, 7 7/8s, 2012 610,000 659,783 3,010,000 3,255,652 Textiles % 0.1% Hanesbrands, Inc. company guaranty sr. unsec. notes FRN Ser. B, 3.831s, 2014 1,500,000 1,501,875 Total corporate bonds and notes (cost $30,077,412 and $217,100,993) U.S. GOVERNMENT AND AGENCY MORTGAGE OBLIGATIONS(a) 100 Fund 6.3% 300 Fund 8.2% Principal amount Value Principal amount Value U.S. Government Guaranteed Mortgage Obligations 1.2% 3.4% Government National Mortgage Association Pass-Through Certificates 4s, TBA, February 1, 2041 $4,000,000 $4,010,625 $40,000,000 $40,106,248 U.S. Government Agency Mortgage Obligations 5.1% 4.8% Federal National Mortgage Association Pass-Through Certificates 4s, TBA, February 1, 2041 18,000,000 17,839,688 58,000,000 57,483,440 Total U.S. government and agency mortgage obligations (cost $21,774,610 and $97,329,532) U.S. GOVERNMENT AGENCY OBLIGATIONS(a) 100 Fund 0.7% 300 Fund 0.4% Principal amount Value Principal amount Value Goldman Sachs Group, Inc (The) 1 5/8s, FDIC guaranteed notes, July 15, 2011 $925,000 $930,921 $2,025,000 $2,037,962 Morgan Stanley 2s, FDIC guaranteed notes, September 22, 2011 700,000 707,851 1,500,000 1,516,823 Wells Fargo & Co. 3s, FDIC guaranteed notes, December 9, 2011 308,000 314,960 660,000 674,915 Wells Fargo & Co. 2 1/8s, FDIC guaranteed notes, June 15, 2012 392,000 400,285 840,000 857,753 Total U.S. government agency obligations (cost $2,330,599 and ASSET-BACKED SECURITIES(a) 100 Fund 4.7% 300 Fund 9.3% Shares Value Shares Value Accredited Mortgage Loan Trust FRB Ser. 07-1, Class A3, 0.39s, 2037 1,019,000 $749,281 3,079,000 $2,264,019 Citigroup Mortgage Loan Trust, Inc. FRB Ser. 06-NC2, Class A2B, 0.42s, 2036 1,228,928 614,464 5,354,215 2,677,108 Conseco Finance Securitizations Corp. Ser. 00-4, Class A6, 8.31s, 2032 (F) 1,192,948 942,429 6,216,458 4,911,002 Ser. 00-5, Class A6, 7.96s, 2032 461,397 378,345 4,259,456 3,492,754 Ser. 00-6, Class A5, 7.27s, 2031 1,248,797 1,286,261 6,874,384 7,080,615 Ser. 01-1, Class A5, 6.99s, 2031 (F) 473,520 485,358 3,837,099 3,933,027 Ser. 01-3, Class A4, 6.91s, 2033 469,021 487,782 2,129,206 2,214,374 Countrywide Asset Backed Certificates FRB Ser. 07-9, Class 2A3, 0.44s, 2047 7,440,000 3,349,510 FRB Ser. 06-23, Class 2A3, 0.43s, 2037 701,000 379,984 6,329,000 3,430,698 FRB Ser. 06-24, Class 2A3, 0.41s, 2047 1,275,000 656,625 First Franklin Mortgage Loan Asset Backed Certificates FRB Ser. 06-FF13, Class A2D, 0.5s, 2036 1,594,000 828,953 FRB Ser. 06-FF18, Class A2C, 0.42s, 2037 1,301,000 630,985 5,634,000 2,732,490 FRB Ser. 06-FF13, Class A2C, 0.42s, 2036 1,879,000 939,500 FRB Ser. 06-FF11, Class 2A3, 0.41s, 2036 1,556,000 918,040 Green Tree Financial Corp. Ser. 99-5, Class A5, 7.86s, 2029 346,416 315,239 3,538,698 3,220,215 Ser. 96-8, Class M1, 7.85s, 2027 366,000 354,082 1,337,000 1,293,463 FRN Ser. 96-9, Class M1, 7.63s, 2027 1,252,000 1,234,501 4,575,000 4,511,057 Ser. 99-4, Class A7, 7.41s, 2031 2,374,301 2,208,100 Ser. 1997-5, Class M1, 6.95s, 2029 1,306,000 1,292,940 5,010,000 4,959,900 GSAA Home Equity Trust FRB Ser. 05-11, Class 3A4, 0.51s, 2035 1,620,194 1,381,216 FRB Ser. 06-11, Class 2A2, 0.42s, 2036 2,086,156 1,126,524 FRB Ser. 07-4, Class A1, 0.36s, 2037 110,430 53,964 539,137 263,462 FRB Ser. 06-17, Class A1, 0.32s, 2036 994,983 507,441 4,180,141 2,131,872 FRB Ser. 06-16, Class A1, 0.32s, 2036 526,559 302,771 2,395,355 1,377,329 FRB Ser. 06-12, Class A1, 0.31s, 2036 707,138 368,348 7,938,884 4,135,364 GSAMP Trust FRB Ser. 07-HE2, Class A2A, 0.38s, 2047 26,215 24,688 80,496 75,807 FRB Ser. 07-NC1, Class A2B, 0.36s, 2046 11,562,000 5,202,900 HSI Asset Securitization Corp. Trust FRB Ser. 06-HE1, Class 2A1, 0.31s, 2036 28,102 22,482 119,487 95,590 Lehman XS Trust FRB Ser. 06-8, Class 2A1, 0.44s, 2036 4,655,649 2,746,833 FRB Ser. 06-19, Class A2, 0.43s, 2036 11,335,842 6,801,505 FRB Ser. 07-3, Class 1BA1, 0.42s, 2037 (F) 3,466,773 1,516,713 Long Beach Mortgage Loan Trust FRB Ser. 06-WL1, Class 2A3, 0.5s, 2046 1,576,234 1,150,651 Madison Avenue Manufactured Housing Contract FRB Ser. 02-A, Class B1, 3.51s, 2032 1,459,000 1,327,690 5,001,000 4,550,910 Merrill Lynch First Franklin Mortgage Loan Asset Backed Certificates FRB Ser. 07-1, Class A2C, 0.51s, 2037 1,635,000 792,975 FRB Ser. 07-1, Class A2B, 0.43s, 2037 1,681,876 924,612 5,372,713 2,953,649 Morgan Stanley Capital, Inc. FRB Ser. 06-WMC2, Class A2C, 0.41s, 2036 2,830,406 1,018,946 Morgan Stanley IXIS Real Estate Capital FRB Ser. 06-2, Class A3, 0.41s, 2036 11,310,000 4,170,563 Oakwood Mortgage Investors, Inc. Ser. 00-D, Class A4, 7.4s, 2030 521,000 359,490 3,569,000 2,462,610 Ser. 02-B, Class A4, 7.09s, 2032 2,996,170 2,905,099 Ser. 02-A, Class A4, 6.97s, 2032 2,660,157 2,700,059 Ser. 98-A, Class M, 6.825s, 2028 1,324,000 1,229,490 2,176,000 2,020,672 Ser. 02-B, Class A2, 5.19s, 2019 1,348,478 1,185,920 2,337,152 2,055,410 Securitized Asset Backed Receivables, LLC FRB Ser. 06-FR4, Class A2B, 0.43s, 2036 2,272,118 969,626 FRB Ser. 07-BR4, Class A2A, 0.35s, 2037 171,862 117,296 677,454 462,362 WAMU Asset-Backed Certificates FRB Ser. 07-HE2, Class 2A1, 0.37s, 2037 66,497 44,207 314,398 209,012 FRB Ser. 07-HE1, Class 2A1, 0.31s, 2037 88,630 83,755 348,408 329,245 Total asset-backed securities (cost $15,948,009 and $108,183,225) FOREIGN GOVERNMENT BONDS AND NOTES(a) 100 Fund 0.4% 300 Fund 1.8% Principal amount Value Principal amount Value Argentina (Republic of) sr. unsec. bonds Ser. VII, 7s, 2013 $ $ $1,175,000 $1,204,963 Argentina (Republic of) sr. unsec. unsub. bonds 7s, 2015 400,000 374,800 13,520,000 12,668,240 Argentina (Republic of) sr. unsec. unsub. bonds FRB 0.469s, 2012 2,130,000 504,810 14,010,000 3,320,370 Ontario (Province of) sr. unsec. unsub. bonds 1 7/8s, 2012 600,000 611,682 2,100,000 2,140,887 Ukraine (Government of) 144A sr. unsec. unsub. notes 7.65s, 2013 1,700,000 1,763,750 Total foreign government bonds and notes (cost $1,448,097 and $21,204,381) PURCHASED OPTIONS OUTSTANDING(a) 100 Fund 0.2% 300 Fund 0.3% Expiration date/ Contract Contract strike price amount Value amount Value Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to pay a fixed rate of 4.22% versus the three month USD-LIBOR-BBA maturing February 16, 2041. Feb-11/4.22 $2,189,400 $53,071 12,660,000 $306,878 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to receive a fixed rate of 4.22% versus the three month USD-LIBOR-BBA maturing February 16, 2041. Feb-11/4.22 2,189,400 17,428 12,660,000 100,774 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to pay a fixed rate of 3.04% versus the three month USD-LIBOR-BBA maturing February 9, 2021. Feb-11/3.04 5,440,300 210,920 31,457,300 1,219,600 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to receive a fixed rate of 3.04% versus the three month USD-LIBOR-BBA maturing February 9, 2021. Feb-11/3.04 5,440,300 109 31,457,300 629 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to pay a fixed rate of 3.11% versus the three month USD-LIBOR-BBA maturing February 9, 2021. Feb-11/3.11 5,440,300 177,952 31,457,300 1,028,969 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to receive a fixed rate of 3.11% versus the three month USD-LIBOR-BBA maturing February 9, 2021. Feb-11/3.11 5,440,300 326 31,457,300 1,887 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to receive a fixed rate of 3.59% versus the three month USD-LIBOR-BBA maturing April 28, 2021. Apr-11/3.59 6,329,045 118,290 24,052,563 449,542 Option on an interest rate swap with Barclays Bank PLC for the right to receive a fixed rate of 3.7375% versus the three month USD-LIBOR-BBA maturing March 9, 2021. Mar-11/3.7375 5,836,600 138,444 22,181,100 526,136 Option on an interest rate swap with Credit Suisse International for the right to pay a fixed rate of 1.578% versus the six month CHF-LIBOR-BBA maturing December 24, 2013. Dec-11/1.578 CHF 2,290,000 6,667 15,020,000 43,730 Option on an interest rate swap with Credit Suisse International for the right to pay a fixed rate of 1.602% versus the six month CHF-LIBOR-BBA maturing December 22, 2013. Dec-11/1.602 CHF 2,290,000 6,289 15,020,000 41,251 Option on an interest rate swap with UBS AG for the right to pay a fixed rate of 1.722% versus the six month CHF-LIBOR-BBA maturing January 23, 2014. Jan-12/1.722 CHF 2,290,000 4,853 15,020,000 31,834 Option on an interest rate swap with Credit Suisse International for the right to pay a fixed rate of 1.70175% versus the six month CHF-LIBOR-BBA maturing January 23, 2014. Jan-12/1.70175 CHF 2,290,000 6,810 15,020,000 44,665 Total purchased options outstanding (cost $912,488 and $4,850,866) SENIOR LOANS(a)(c) 100 Fund % 300 Fund 1.8% Principal amount Value Principal amount Value Advantage Sales & Marketing, LLC bank term loan FRN 5 1/4s, 2017 $ $ $1,000,000 $1,005,171 Affinion Group, Inc. bank term loan FRN 5s, 2016 997,487 1,003,722 Amscan Holdings, Inc. bank term loan FRN 6 3/4s, 2017 997,500 1,010,956 Armstrong World Industries, Inc. bank term loan FRN Ser. B, 5s, 2017 285,000 288,776 Atlantic Broadband Finance, LLC bank term loan FRN Ser. B, 5s, 2015 642,835 647,254 Centage Learning Acquisitions, Inc. bank term loan FRN Ser. B, 2.55s, 2014 997,423 980,378 Cenveo Corp. bank term loan FRN Ser. B, 6 1/4s, 2016 800,000 810,500 Clubcorp Club Operations, Inc. bank term loan FRN Ser. B, 6s, 2016 250,000 252,969 CNO Financial Group, Inc. bank term loan FRN 7 1/2s, 2016 420,000 424,200 CommScope, Inc. bank term loan FRN Ser. B, 5s, 2018 355,000 362,100 DaVita, Inc. bank term loan FRN Ser. B, 4 1/2s, 2016 1,000,000 1,013,386 Green Mountain Coffee Roasters, Inc. bank term loan FRN Ser. B, 5 1/2s, 2016 666,000 668,498 Gymboree Corp. bank term loan FRN 5 1/2s, 2017 1,583,000 1,602,045 Harrah's Operating Co., Inc. bank term loan FRN Ser. B1, 3.303s, 2015 1,000,000 928,906 Intelsat Jackson Holdings, Ltd. bank term loan FRN Ser. B, 5 1/4s, 2018 (Bermuda) 1,000,000 1,012,250 Multiplan, Inc. bank term loan FRN Ser. B, 6 1/2s, 2017 970,497 979,293 Neiman Marcus Group, Inc. (The) bank term loan FRN Ser. B, 4.303s, 2016 1,000,000 1,004,856 Novelis, Inc. bank term loan FRN Ser. B, 5 1/4s, 2016 285,000 289,809 Petco Animal Supplies, Inc. bank term loan FRN 6s, 2017 833,000 843,413 Sequa Corp. bank term loan FRN 3.56s, 2014 1,000,000 985,000 ServiceMaster Co. (The) bank term loan FRN Ser. B, 2.779s, 2014 1,091,321 1,074,756 ServiceMaster Co. (The) bank term loan FRN Ser. DD, 2.77s, 2014 108,679 107,030 Spectrum Brands, Inc. bank term loan FRN 5s, 2016 1,000,000 1,008,750 Styron Corp. bank term loan FRN 6s, 2017 500,000 507,709 Swift Transportation Co., LLC bank term loan FRN 6s, 2016 943,354 955,146 Syniverse Holdings, Inc. bank term loan FRN 5 1/4s, 2017 666,000 675,990 TransDigm Group, Inc. bank term loan FRN Ser. B, 5s, 2016 222,000 225,275 Tronox Worldwide bank term loan FRN Ser. B, 7s, 2015 500,000 504,375 Total senior loans (cost $ and $ SHORT-TERM INVESTMENTS(a) 100 Fund 53.1% 300 Fund 24.8% Principal amount/shares Value Principal amount/shares Value Egypt Treasury Bills for an effective yield of 10.10%, March 8, 2011 EGP $ 17,900,000 $2,963,256 Egypt Treasury Bills for an effective yield of 9.79%, April 5, 2011 EGP 4,625,000 759,542 Federal Farm Credit Bank for an effective yield of 0.27%, February 28, 2011 $500,000 500,000 $1,300,000 1,300,000 U.S. Treasury Bills for an effective yield of 0.28%, December 15, 2011 (SEG) (SEGSF) 60,000,000 59,852,040 57,000,000 56,859,438 U.S. Treasury Bills for effective yields from 0.25% to 0.27%, June 2, 2011 (SEG) (SEGSF) 9,000,000 8,991,846 760,000 759,311 U.S. Treasury Bills for effective yields from 0.22% to 0.24%, 07/28/2011 (SEG) (SEGSF) 919,000 917,850 U.S. Treasury Bills for effective yields from 0.20% to 0.25%, October 20, 2011 (SEG) (SEGSF) 64,700,000 64,605,732 87,000,000 86,873,241 U.S. Treasury Bills for an effective yield of 0.20%, September 22, 2011 15,000,000 14,980,095 20,000,000 19,973,460 U.S. Treasury Bills for effective yields from 0.19% to 0.24%, August 25, 2011 (SEG) (SEGSF) 13,000,000 12,982,008 5,602,000 5,594,247 U.S. Treasury Bills for an effective yield of 0.15%, May 19, 2011 25,000,000 24,988,525 U.S. Treasury Bills for an effective yield of 0.23%, May 5, 2011 8,000,000 7,995,328 U.S. Treasury Bills for effective yields from 0.20% to 0.31%, March 10, 2011 (SEG) 70,000 69,977 332,000 331,911 U.S. Treasury Bills zero%, September 22, 2011 (i) 39,000 38,957 U.S. Treasury Bills zero%, June 16, 2011 (i) 1,012,000 1,011,393 Putnam Money Market Liquidity Fund 0.17% (e) 14,482,420 14,482,420 92,848,687 92,848,687 Total short-term investments (cost $184,451,333 and $295,398,014) TOTAL INVESTMENTS Total investments (cost $371,865,635 and $1,280,426,147) (b) Putnam Absolute Return 100 Fund FORWARD CURRENCY CONTRACTS at 1/31/11 (aggregate face value $895,124) (Unaudited) Unrealized Contract Delivery Aggregate appreciation/ Counterparty Currency type date Value face value (depreciation) Bank of America, N.A. Australian Dollar Sell 2/16/11 $4,879 $4,977 $98 British Pound Sell 2/16/11 26,277 25,399 (878) Canadian Dollar Buy 2/16/11 7,589 7,656 (67) Euro Buy 2/16/11 67,912 66,305 1,607 Japanese Yen Sell 2/16/11 5,189 5,223 34 Barclays Bank PLC British Pound Sell 2/16/11 60,244 58,252 (1,992) Canadian Dollar Buy 2/16/11 12,981 13,109 (128) Swiss Franc Sell 2/16/11 27,344 27,664 320 Citibank, N.A. Australian Dollar Buy 2/16/11 5,974 6,090 (116) British Pound Sell 2/16/11 46,465 44,912 (1,553) Canadian Dollar Buy 2/16/11 12,482 12,606 (124) Euro Buy 2/16/11 6,846 6,684 162 Japanese Yen Buy 2/16/11 2,229 2,243 (14) Swiss Franc Buy 2/16/11 318 322 (4) Credit Suisse AG Australian Dollar Sell 2/16/11 1,693 1,727 34 British Pound Sell 2/16/11 19,708 19,043 (665) Euro Sell 2/16/11 8,763 8,559 (204) Swiss Franc Buy 2/16/11 12,294 12,436 (142) Deutsche Bank AG Australian Dollar Buy 2/16/11 100 101 (1) Canadian Dollar Buy 2/16/11 9,985 10,079 (94) Euro Sell 2/16/11 27,932 27,292 (640) Goldman Sachs International British Pound Sell 2/16/11 801 774 (27) Euro Sell 2/16/11 36,695 35,833 (862) Swiss Franc Sell 2/16/11 22,681 22,941 260 HSBC Bank USA, National Association British Pound Buy 2/16/11 155,097 154,513 584 Euro Buy 2/16/11 6,709 6,552 157 Swiss Franc Buy 2/16/11 27,980 28,270 (290) JPMorgan Chase Bank, N.A. Australian Dollar Buy 2/16/11 8,165 8,326 (161) British Pound Sell 2/16/11 160 155 (5) Euro Buy 2/16/11 31,492 30,747 745 Japanese Yen Sell 2/16/11 904 909 5 Swiss Franc Sell 2/16/11 22,151 22,150 (1) Royal Bank of Scotland PLC (The) British Pound Sell 2/16/11 5,448 5,266 (182) Swiss Franc Sell 2/16/11 32,961 33,348 387 State Street Bank and Trust Co. Euro Buy 2/16/11 4,655 4,547 108 Swedish Krona Buy 2/16/11 10,167 10,110 57 Swiss Franc Buy 2/16/11 4,769 4,824 (55) UBS AG British Pound Sell 2/16/11 65,531 63,348 (2,183) Euro Sell 2/16/11 5,203 5,081 (122) Westpac Banking Corp. Australian Dollar Sell 2/16/11 1,593 1,599 6 British Pound Buy 2/16/11 13,939 13,471 468 Euro Buy 2/16/11 83,658 81,681 1,977 Total Putnam Absolute Return 100 Fund FUTURES CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Unrealized Number of Expiration appreciation/ contracts Value date (depreciation) Australian Government Treasury Bond 10 yr (Short) 3 $282,645 Mar-11 $(1,286) Canadian Government Bond 10 yr (Long) 27 3,270,096 Mar-11 (2,908) Euro-Bund 10 yr (Long) 6 1,016,734 Mar-11 (88) Japanese Government Bond 10 yr (Short) 2 3,414,497 Mar-11 (8,085) Japanese Government Bond 10 yr Mini (Short) 3 512,101 Mar-11 242 U.K. Gilt 10 yr (Long) 48 9,024,460 Mar-11 (8,965) U.S. Treasury Bond 20 yr (Short) 75 9,046,875 Mar-11 114,928 U.S. Treasury Bond 30 yr (Long) 149 18,350,281 Mar-11 (549,682) U.S. Treasury Note 5 yr (Short) 24 2,841,938 Mar-11 28,103 U.S. Treasury Note 10 yr (Short) 169 20,414,672 Mar-11 666,804 Total Putnam Absolute Return 100 Fund WRITTEN OPTIONS OUTSTANDING at 1/31/11 (premiums received $7,068,759) (Unaudited) Contract Expiration date/ amount strike price Value Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.49% versus the three month USD-LIBOR-BBA maturing August 17, 2021. $3,714,000 Aug-11/4.49 $270,899 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.49% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 3,714,000 Aug-11/4.49 25,998 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.475% versus the three month USD-LIBOR-BBA maturing August 19, 2021. 2,926,000 Aug-11/4.475 210,058 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.475% versus the three month USD-LIBOR-BBA maturing August 19, 2021. 2,926,000 Aug-11/4.475 30,255 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.55% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 1,857,000 Aug-11/4.55 143,360 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.55% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 1,857,000 Aug-11/4.55 16,862 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.70% versus the three month USD-LIBOR-BBA maturing August 8, 2021. 1,266,000 Aug-11/4.70 112,206 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.70% versus the three month USD-LIBOR-BBA maturing August 8, 2021. 1,266,000 Aug-11/4.70 8,267 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 7,211,000 Jul-11/4.52 548,035 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 7,211,000 Jul-11/4.52 54,515 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 3,605,500 Jul-11/4.5475 281,229 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 3,605,500 Jul-11/4.5475 25,239 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.80% versus the three month USD-LIBOR-BBA maturing January 17, 2022. 9,007,500 Jan-12/4.80 771,655 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.80% versus the three month USD-LIBOR-BBA maturing January 17, 2022. 9,007,500 Jan-12/4.80 142,000 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.375% versus the three month USD-LIBOR-BBA maturing August 10, 2045. 4,204,800 Aug-15/4.375 314,687 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.375% versus the three month USD-LIBOR-BBA maturing August 10, 2045. 4,204,800 Aug-15/4.375 711,957 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.46% versus the three month USD-LIBOR-BBA maturing August 7, 2045. 4,204,800 Aug-15/4.46 332,978 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.46% versus the three month USD-LIBOR-BBA maturing August 7, 2045. 4,204,800 Aug-15/4.46 680,253 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.04% versus the three month USD-LIBOR-BBA maturing September 11, 2025. 4,829,800 Sep-15/4.04 163,392 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.04% versus the three month USD-LIBOR-BBA maturing September 11, 2025. 4,829,800 Sep-15/4.04 547,844 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 5.27% versus the three month USD-LIBOR-BBA maturing February 12, 2025. 91,380 Feb-15/5.27 6,789 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 5.27% versus the three month USD-LIBOR-BBA maturing February 12, 2025. 91,380 Feb-15/5.27 5,456 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.8675% versus the three month USD-LIBOR-BBA maturing April 12, 2022. 189,400 Apr-12/4.8675 16,147 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.8675% versus the three month USD-LIBOR-BBA maturing April 12, 2022. 189,400 Apr-12/4.8675 3,830 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.72% versus the three month USD-LIBOR-BBA maturing January 19, 2022. 5,404,500 Jan-12/4.72 434,900 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.72% versus the three month USD-LIBOR-BBA maturing January 19, 2022. 5,404,500 Jan-12/4.72 94,633 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.665% versus the three month USD-LIBOR-BBA maturing March 8, 2021. 5,836,600 Mar-11/4.665 117 Option on an interest rate swap with Barclays Bank PLC for the obligation to receive a fixed rate of 4.7375% versus the three month USD-LIBOR-BBA maturing March 9, 2021. 5,836,600 Mar-11/4.7375 117 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.578% versus the six month CHF-LIBOR-BBA maturing December 24, 2013. 2,290,000 Dec-11/0.578 754 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.602% versus the six month CHF-LIBOR-BBA maturing December 22, 2013. 2,290,000 Dec-11/0.602 896 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 3.89% versus the three month USD-LIBOR-BBA maturing April 28, 2021. 2,531,618 April-11/3.89 24,344 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.70175% versus the six month CHF-LIBOR-BBA maturing January 23, 2014. CHF 2,290,000 Jan-12/0.70175 1,672 Option on an interest rate swap with UBS AG for the obligation to pay a fixed rate of 0.722% versus the six month CHF-LIBOR-BBA maturing January 23, 2014. CHF 2,290,000 Jan-12/0.722 4,368 Total Putnam Absolute Return 100 Fund INTEREST RATE SWAP CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Payments Payments Unrealized Swap counterparty / premium Termination made by received by appreciation/ Notional amount received (paid) date fund per annum fund per annum (depreciation) Bank of America, N.A. GBP 350,000 (E) $ 12/7/30 6 month GBP-LIBOR-BBA 4.93% $1,038 GBP 220,000 12/8/20 3.685% 6 month GBP-LIBOR-BBA 2,217 GBP 340,000 (E) 12/8/30 6 month GBP-LIBOR-BBA 4.9675% 2,092 GBP 501,000 12/9/20 3.63% 6 month GBP-LIBOR-BBA 8,896 GBP 1,000,000 (E) 12/9/30 6 month GBP-LIBOR-BBA 4.85643% (3,269) AUD 460,000 12/21/20 6.0975% 6 month AUD-BBR-BBSW (3,555) AUD 910,000 9/17/15 6 month AUD-BBR-BBSW 5.38% (9,311) AUD 400,000 9/17/20 5.5725% 6 month AUD-BBR-BBSW 11,320 AUD 410,000 9/22/20 5.685% 6 month AUD-BBR-BBSW 8,494 AUD 920,000 9/22/15 6 month AUD-BBR-BBSW 5.56% (3,075) AUD 1,310,000 9/29/15 6 month AUD-BBR-BBSW 5.5275% (6,648) AUD 660,000 9/29/20 5.63% 6 month AUD-BBR-BBSW 16,653 GBP 1,320,000 6/15/15 2.59% 6 month GBP-LIBOR-BBA 8,895 GBP 2,820,000 1/21/13 1.815% 6 month GBP-LIBOR-BBA (7,371) Barclays Bank PLC AUD 410,000 (E) 2/4/20 6 month AUD-BBR-BBSW 6.8% 6,072 AUD 530,000 10/1/15 6 month AUD-BBR-BBSW 5.43% (4,789) $3,618,700 (E) 3/9/21 4.2375% 3 month USD-LIBOR-BBA (224,034) AUD 470,000 5/24/15 5.505% 6 month AUD-BBR-BBSW 2,434 AUD 1,200,000 7/27/15 5.435% 6 month AUD-BBR-BBSW 10,271 $6,879,100 76,657 10/28/30 3 month USD-LIBOR-BBA 3.38% (613,706) AUD 700,000 8/26/15 6 month AUD-BBR-BBSW 5.025% (17,156) GBP 1,600,000 1/18/21 3.7875% 6 month GBP-LIBOR-BBA 3,988 GBP 1,130,000 1/25/13 1.61625% 6 month GBP-LIBOR-BBA 4,375 GBP 2,820,000 1/25/13 1.61% 6 month GBP-LIBOR-BBA 11,466 GBP 650,000 1/25/21 6 month GBP-LIBOR-BBA 3.72% (8,267) $8,351,800 661 1/28/16 2.17% 3 month USD-LIBOR-BBA 5,112 5,673,800 843 1/28/21 3.41% 3 month USD-LIBOR-BBA 29,550 3,834,700 (2,046) 1/28/41 3 month USD-LIBOR-BBA 4.21% (63,068) AUD 920,000 12/8/20 6 month AUD-BBR-BBSW 5.93% (4,407) AUD 920,000 12/22/15 5.895% 6 month AUD-BBR-BBSW (7,698) Citibank, N.A. GBP 8,420,000 7/1/12 6 month GBP-LIBOR-BBA 1.43% (1,810) GBP 6,740,000 7/1/15 2.45% 6 month GBP-LIBOR-BBA 124,775 GBP 2,000,000 7/1/20 6 month GBP-LIBOR-BBA 3.3675% (95,213) $6,961,800 9/24/20 2.5875% 3 month USD-LIBOR-BBA 428,568 2,173,700 11/8/15 3 month USD-LIBOR-BBA 1.305% (73,570) 3,243,000 11/8/20 2.635% 3 month USD-LIBOR-BBA 205,344 SEK 4,210,000 11/23/20 3.25% 3 month SEK-STIBOR-SIDE 24,290 $58,322,100 (16,048) 12/10/12 0.81% 3 month USD-LIBOR-BBA (142,176) 2,300,000 12/14/20 3.3975% 3 month USD-LIBOR-BBA 1,598 7,264,300 22,360 1/28/16 3 month USD-LIBOR-BBA 2.17% 18,488 6,728,300 (39,857) 1/28/21 3.41% 3 month USD-LIBOR-BBA (5,814) 3,165,700 33,997 1/28/41 3 month USD-LIBOR-BBA 4.21% (16,379) Credit Suisse International 2,049,600 49 3/19/11 3 month USD-LIBOR-BBA 0.5% 3,608 CHF 820,000 12/14/20 2.1075% 6 month CHF-LIBOR-BBA 5,962 $3,400,000 12/17/40 4.334% 3 month USD-LIBOR-BBA (34,787) CHF 3,930,000 1/28/13 0.675% 6 month CHF-LIBOR-BBA (165) $202,000 (819) 2/1/21 3.47% 3 month USD-LIBOR-BBA (761) CHF 1,200,000 7/28/15 1.27% 6 month CHF-LIBOR-BBA (954) $11,379,600 10/7/40 3.377% 3 month USD-LIBOR-BBA 1,693,244 4,512,500 (4,444) 10/27/14 3 month USD-LIBOR-BBA 1.06% (84,200) 21,147,300 (5,813) 11/3/12 0.50% 3 month USD-LIBOR-BBA 53,878 2,173,700 11/8/15 3 month USD-LIBOR-BBA 1.31125% (72,909) 3,162,400 11/17/40 3.95% 3 month USD-LIBOR-BBA 168,590 CHF 3,930,000 5/20/12 0.62833% 6 month CHF-LIBOR-BBA (28,468) GBP 1,730,000 7/9/15 2.425% 6 month GBP-LIBOR-BBA 36,553 GBP 960,000 7/9/20 6 month GBP-LIBOR-BBA 3.3725% (46,042) Deutsche Bank AG $46,946,800 (1,332) 11/3/12 0.50% 3 month USD-LIBOR-BBA 133,562 21,772,800 11/5/20 3 month USD-LIBOR-BBA 2.6675% (1,307,600) 40,983,900 11/5/15 1.3855% 3 month USD-LIBOR-BBA 1,212,269 44,576,500 104,425 7/27/20 3 month USD-LIBOR-BBA 2.94% (1,562,095) 78,469,100 202,252 5/6/15 2.68% 3 month USD-LIBOR-BBA (2,880,366) 1,237,400 281 12/31/20 3 month USD-LIBOR-BBA 3.55% 13,939 1,518,400 5,462 12/31/40 4.28% 3 month USD-LIBOR-BBA 5,315 1,500,000 12/31/40 3 month USD-LIBOR-BBA 4.1342% (37,874) 1,901,100 12/3/15 1.905% 3 month USD-LIBOR-BBA 14,233 EUR 3,420,000 12/23/20 3.325% 6 month EUR-EURIBOR-REUTERS 39,169 Goldman Sachs International AUD 197,500 (E) 2/23/20 6 month AUD-BBR-BBSW 6.6925% 2,182 AUD 680,000 (E) 2/23/20 6 month AUD-BBR-BBSW 6.7% 7,684 SEK 2,300,000 12/10/20 3.5775% 3 month SEK-STIBOR-SIDE 4,102 CHF 3,450,000 12/15/12 0.538% 6 month CHF-LIBOR-BBA 4,790 $2,328,500 7/20/40 3.7275% 3 month USD-LIBOR-BBA 226,521 19,206,500 7/23/14 3 month USD-LIBOR-BBA 1.5475% 40,978 64,059,200 (7,131) 10/1/12 0.59% 3 month USD-LIBOR-BBA (53,327) 2,536,700 (625) 10/1/13 0.84% 3 month USD-LIBOR-BBA 10,449 8,707,700 8/12/15 3 month USD-LIBOR-BBA 1.665% (59,704) 2,796,400 8/12/40 3.68% 3 month USD-LIBOR-BBA 251,892 AUD 920,000 9/20/15 6 month AUD-BBR-BBSW 5.39% (9,147) AUD 410,000 9/20/20 5.5775% 6 month AUD-BBR-BBSW 11,506 AUD 380,000 (E) 2/5/20 6 month AUD-BBR-BBSW 6.71% 4,468 GBP 800,000 1/21/21 3.81% 6 month GBP-LIBOR-BBA (75) $4,686,400 (3,593) 1/27/41 4.29% 3 month USD-LIBOR-BBA 5,572 JPMorgan Chase Bank, N.A. AUD 470,000 3/1/15 5.6% 6 month AUD-BBR-BBSW (1,554) AUD 352,500 3/2/15 5.6515% 6 month AUD-BBR-BBSW (1,763) JPY 140,000,000 12/7/20 1.25% 6 month JPY-LIBOR-BBA (3,424) $7,098,100 12/10/15 3 month USD-LIBOR-BBA 2.06625% (3,178) 5,145,200 (E) 2/9/21 3.56% 3 month USD-LIBOR-BBA (33,753) 3,618,700 (E) 3/8/21 4.165% 3 month USD-LIBOR-BBA (201,706) GBP 655,500 12/23/20 6 month GBP-LIBOR-BBA 3.6245% (13,545) AUD 130,000 6/26/19 6 month AUD-BBR-BBSW 6.05% 913 JPY 193,710,000 5/25/15 0.674375% 6 month JPY-LIBOR-BBA (12,014) AUD 352,500 6/11/15 5.545% 6 month AUD-BBR-BBSW 1,328 AUD 900,000 9/3/15 5.075% 6 month AUD-BBR-BBSW 20,312 $4,800,000 10/28/20 3 month USD-LIBOR-BBA 2.72175% (257,437) 43,449,400 11/5/15 3 month USD-LIBOR-BBA 1.42% (1,212,966) 40,815,700 11/12/15 3 month USD-LIBOR-BBA 1.435% (1,139,315) 17,060,000 5,276 1/6/13 0.79% 3 month USD-LIBOR-BBA (8,370) JPY 50,000,000 1/24/21 6 month JPY-LIBOR-BBA 1.3025% 2,876 $2,372,800 560 1/27/13 0.84% 3 month USD-LIBOR-BBA (1,887) 5,796,300 (789) 1/31/15 3 month USD-LIBOR-BBA 1.79% 10,579 8,954,000 6,652 1/31/21 3 month USD-LIBOR-BBA 3.51% 39,952 1,920,100 (3,551) 1/31/41 4.33% 3 month USD-LIBOR-BBA (13,212) JPY 193,170,000 9/16/15 6 month JPY-LIBOR-BBA 0.59125% 380 AUD 60,000 9/16/15 6 month AUD-BBR-BBSW 5.375% (628) AUD 10,000 9/16/20 5.549% 6 month AUD-BBR-BBSW 301 CAD 590,000 9/21/20 3.105% 3 month CAD-BA-CDOR 14,881 $11,614,000 10/5/12 0.62125% 3 month USD-LIBOR-BBA (13,991) JPY 8,800,000 (E) 7/28/29 6 month JPY-LIBOR-BBA 2.67% (89) JPY 11,800,000 (E) 7/28/39 2.40% 6 month JPY-LIBOR-BBA 314 $17,842,900 12/6/12 0.805% 3 month USD-LIBOR-BBA (39,066) UBS, AG 3,800,700 12/9/40 4.1075% 3 month USD-LIBOR-BBA 107,561 Total (E) See Interest rate swap contracts note regarding extended effective dates. Putnam Absolute Return 100 Fund TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Fixed payments Total return Unrealized Swap counterparty / premium Termination received (paid) by received by appreciation/ Notional amount received (paid) date fund per annum or paid by fund (depreciation) Barclays Bank PLC $6,456,899 $ 1/12/38 (6.50%) 1 month Synthetic TRS $(9,856) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 1,380,971 1/12/39 5.50% (1 month Synthetic TRS (4,660) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 5,246,333 1/12/39 5.50% (1 month Synthetic TRS (17,705) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 5,658,596 1/12/38 (6.50%) 1 month Synthetic TRS (8,637) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 1,929,463 1/12/38 6.50% (1 month Synthetic TRS 2,945 USD-LIBOR) Index 6.50% 30 year Fannie Mae pools 1,591,077 1/12/39 5.50% (1 month Synthetic TRS (5,369) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 1,707,558 1/12/38 (6.50%) 1 month Synthetic TRS (2,606) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 2,066,120 1/12/39 5.50% (1 month Synthetic TRS (6,972) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 2,219,755 1/12/38 (6.50%) 1 month Synthetic TRS (3,388) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 4,554,650 1/12/38 (6.50%) 1 month Synthetic TRS (6,952) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 4,205,024 1/12/39 5.50% (1 month Synthetic TRS (14,191) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 4,205,024 1/12/39 5.50% (1 month Synthetic TRS (14,191) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 4,554,650 1/12/38 (6.50%) 1 month Synthetic TRS (6,952) USD-LIBOR Index 6.50% 30 year Fannie Mae pools Citibank, N.A. GBP 1,050,000 5/18/13 (3.38%) GBP Non-revised 28,080 UK Retail Price Index Goldman Sachs International $525,000 7/28/11 (0.685%) USA Non Revised 5,032 Consumer Price Index- Urban (CPI-U) 525,000 7/29/11 (0.76%) USA Non Revised 4,636 Consumer Price Index- Urban (CPI-U) 525,000 7/30/11 (0.73%) USA Non Revised 4,791 Consumer Price Index- Urban (CPI-U) 3,276,774 1/12/39 5.50% (1 month Synthetic TRS (11,058) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 5,967,388 1/12/39 5.50% (1 month Synthetic TRS (20,138) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 6,436,313 1/12/38 (6.50%) 1 month Synthetic TRS (9,825) USD-LIBOR Index 6.50% 30 year Fannie Mae pools JPMorgan Chase Bank, N.A. EUR 295,000 8/10/12 (1.435%) Eurostat 4,422 Eurozone HICP excluding tobacco Total Putnam Absolute Return 100 Fund CREDIT DEFAULT CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Fixed payments premium Termi- received Unrealized Swap counterparty / received Notional nation (paid) by fund appreciation/ Referenced debt* Rating*** (paid)** amount date per annum (depreciation) Bank of America, N.A. France, Gov't of, 4.25%, 04/25/2019 $(97,593) $2,370,000 12/20/15 (25 bp) $(20,020) Credit Suisse International Bonos Y Oblig Del Estado, 5 1/2%, 7/30/17 (1,513) 170,000 12/20/19 (100 bp) 15,753 Deutsche Bank AG France, Gov't of, 4.25%, 04/25/2019 1,870 2,000,000 6/20/15 (100 bp) (7,919) JPMorgan Chase Bank, N.A. Spain Gov't, 5.5%, 7/30/2017 (105,116) 1,400,000 6/20/15 (100 bp) (26,218) Spain Gov't, 5.5%, 7/30/2017 (109,345) 1,200,000 6/20/16 (100 bp) (25,830) Total * Payments related to the referenced debt are made upon a credit default event. ** Upfront premium is based on the difference between the original spread on issue and the market spread on day of execution. *** Ratings are presented for credit default contracts in which the fund has sold protection on the underlying referenced debt. Ratings for an underlying index represent the average of the ratings of all the securities included in that index. The Moody's, Standard & Poor's or Fitch ratings are believed to be the most recent ratings available at January 31, 2011. Securities rated by Putnam are indicated by "/P." Securities rated by Fitch are indicated by "/F." Putnam Absolute Return 300 Fund FORWARD CURRENCY CONTRACTS at 1/31/11 (aggregate face value $426,627,316) (Unaudited) Unrealized Contract Delivery Aggregate appreciation/ Counterparty Currency type date Value face value (depreciation) Bank of America, N.A. Australian Dollar Sell 2/16/11 $526,616 $537,235 $10,619 Brazilian Real Buy 2/16/11 1,942,514 1,940,076 2,438 British Pound Sell 2/16/11 642,337 641,444 (893) Canadian Dollar Sell 2/16/11 2,647,942 2,645,932 (2,010) Chilean Peso Buy 2/16/11 1,320,489 1,319,880 609 Czech Koruna Buy 2/16/11 2,189,969 2,140,231 49,738 Euro Sell 2/16/11 8,751,809 8,544,692 (207,117) Japanese Yen Sell 2/16/11 1,164,417 1,157,156 (7,261) Mexican Peso Buy 2/16/11 757,461 748,898 8,563 Norwegian Krone Buy 2/16/11 4,523,837 4,456,800 67,037 Singapore Dollar Sell 2/16/11 2,068,915 2,046,941 (21,974) South Korean Won Buy 2/16/11 3,116,493 3,125,334 (8,841) Swedish Krona Buy 2/16/11 539,992 520,342 19,650 Swiss Franc Sell 2/16/11 7,750,868 7,661,657 (89,211) Taiwan Dollar Sell 2/16/11 825,142 818,520 (6,622) Turkish Lira (New) Sell 2/16/11 1,094,433 1,094,745 312 Barclays Bank PLC Australian Dollar Buy 2/16/11 3,153,919 3,216,698 (62,779) Brazilian Real Buy 2/16/11 1,638,272 1,631,441 6,831 British Pound Sell 2/16/11 4,834,590 4,782,726 (51,864) Canadian Dollar Sell 2/16/11 3,452,570 3,480,397 27,827 Chilean Peso Buy 2/16/11 50,628 49,880 748 Czech Koruna Buy 2/16/11 1,509,827 1,499,773 10,054 Euro Sell 2/16/11 4,206,602 4,211,140 4,538 Hungarian Forint Sell 2/16/11 1,716,952 1,644,399 (72,553) Indian Rupee Buy 2/17/11 1,069,512 1,078,386 (8,874) Japanese Yen Sell 2/16/11 5,980,637 5,949,805 (30,832) Mexican Peso Buy 2/16/11 1,560,781 1,560,664 117 New Zealand Dollar Sell 2/16/11 569,616 570,497 881 Norwegian Krone Sell 2/16/11 534,846 534,958 112 Philippines Peso Buy 2/16/11 1,099,081 1,100,504 (1,423) Polish Zloty Buy 2/16/11 2,239,878 2,184,320 55,558 Singapore Dollar Sell 2/16/11 43,837 43,435 (402) South Korean Won Buy 2/16/11 2,766,483 2,772,010 (5,527) Swedish Krona Buy 2/16/11 3,570,243 3,437,651 132,592 Swiss Franc Sell 2/16/11 4,154,810 4,064,279 (90,531) Taiwan Dollar Buy 2/16/11 70,770 70,563 207 Thai Baht Buy 2/16/11 1,068,338 1,065,358 2,980 Turkish Lira (New) Buy 2/16/11 598,542 599,178 (636) Citibank, N.A. Australian Dollar Buy 2/16/11 2,978,580 3,036,193 (57,613) Brazilian Real Buy 2/16/11 2,265,478 2,256,973 8,505 British Pound Buy 2/16/11 916,960 886,310 30,650 Canadian Dollar Buy 2/16/11 993,852 1,004,414 (10,562) Chilean Peso Sell 2/16/11 411,469 403,910 (7,559) Czech Koruna Buy 2/16/11 740,768 740,709 59 Euro Sell 2/16/11 4,278,075 4,167,359 (110,716) Hungarian Forint Sell 2/16/11 125,212 120,088 (5,124) Japanese Yen Sell 2/16/11 4,385,585 4,365,086 (20,499) Mexican Peso Buy 2/16/11 1,697,075 1,696,724 351 New Zealand Dollar Buy 2/16/11 61,826 60,971 855 Norwegian Krone Buy 2/16/11 3,295,782 3,270,364 25,418 Polish Zloty Buy 2/16/11 2,111,231 2,080,640 30,591 Singapore Dollar Sell 2/16/11 2,075,244 2,058,986 (16,258) South African Rand Buy 2/16/11 204,751 215,514 (10,763) South Korean Won Buy 2/16/11 3,205,267 3,195,492 9,775 Swedish Krona Buy 2/16/11 318,375 319,307 (932) Swiss Franc Sell 2/16/11 3,760,759 3,804,316 43,557 Taiwan Dollar Buy 2/16/11 54,329 54,078 251 Turkish Lira (New) Buy 2/16/11 187,569 195,133 (7,564) Credit Suisse AG Australian Dollar Buy 2/16/11 4,340,771 4,301,835 38,936 Brazilian Real Buy 2/16/11 1,324,520 1,318,761 5,759 British Pound Sell 2/16/11 3,503,772 3,498,906 (4,866) Canadian Dollar Sell 2/16/11 3,618,628 3,614,160 (4,468) Czech Koruna Buy 2/16/11 2,634,258 2,625,591 8,667 Euro Sell 2/16/11 1,146,434 1,147,654 1,220 Indian Rupee Buy 2/17/11 1,087,244 1,086,979 265 Japanese Yen Sell 2/16/11 7,693,403 7,738,213 44,810 Malaysian Ringgit Buy 2/16/11 1,639,275 1,634,559 4,716 Norwegian Krone Buy 2/16/11 2,190,010 2,186,653 3,357 Polish Zloty Buy 2/16/11 1,312,805 1,302,448 10,357 South African Rand Buy 2/16/11 220,812 236,281 (15,469) South Korean Won Buy 2/16/11 3,381,464 3,384,316 (2,852) Swedish Krona Buy 2/16/11 491,109 471,256 19,853 Swiss Franc Sell 2/16/11 3,389,601 3,428,823 39,222 Taiwan Dollar Buy 2/16/11 25,964 26,004 (40) Turkish Lira (New) Sell 2/16/11 1,145,261 1,145,586 325 Deutsche Bank AG Australian Dollar Buy 2/16/11 11,490,466 11,605,653 (115,187) Brazilian Real Buy 2/16/11 1,327,930 1,320,350 7,580 Canadian Dollar Buy 2/16/11 64,606 65,208 (602) Chilean Peso Buy 2/16/11 430,936 430,630 306 Czech Koruna Buy 2/16/11 2,008,740 1,994,383 14,357 Euro Buy 2/16/11 239,884 237,951 1,933 Hungarian Forint Sell 2/16/11 1,523,462 1,517,497 (5,965) Malaysian Ringgit Buy 2/16/11 1,549,038 1,542,825 6,213 Mexican Peso Buy 2/16/11 770,384 764,276 6,108 New Zealand Dollar Sell 2/16/11 766,580 756,987 (9,593) Norwegian Krone Buy 2/16/11 4,413,038 4,366,008 47,030 Philippines Peso Buy 2/16/11 1,081,613 1,077,658 3,955 Polish Zloty Buy 2/16/11 1,235,332 1,225,615 9,717 Singapore Dollar Sell 2/16/11 2,085,012 2,066,831 (18,181) South Korean Won Buy 2/16/11 2,157,859 2,164,419 (6,560) Swedish Krona Buy 2/16/11 682,921 657,313 25,608 Swiss Franc Sell 2/16/11 3,592,031 3,532,367 (59,664) Taiwan Dollar Buy 2/16/11 7,135 7,082 53 Turkish Lira (New) Buy 2/16/11 803,468 830,120 (26,652) Goldman Sachs International Australian Dollar Buy 2/16/11 2,763,911 2,817,289 (53,378) British Pound Sell 2/16/11 559,661 558,475 (1,186) Canadian Dollar Buy 2/16/11 874,825 882,778 (7,953) Chilean Peso Buy 2/16/11 44,681 44,021 660 Euro Sell 2/16/11 7,979,989 7,792,566 (187,423) Hungarian Forint Sell 2/16/11 2,336,104 2,314,909 (21,195) Japanese Yen Sell 2/16/11 4,076,789 4,073,455 (3,334) Norwegian Krone Sell 2/16/11 149,594 148,353 (1,241) Polish Zloty Buy 2/16/11 340,299 331,133 9,166 South African Rand Buy 2/16/11 203,015 212,915 (9,900) Swedish Krona Buy 2/16/11 4,226,677 4,055,604 171,073 Swiss Franc Sell 2/16/11 4,209,816 4,102,646 (107,170) HSBC Bank USA, National Association Australian Dollar Buy 2/16/11 3,341,705 3,408,221 (66,516) British Pound Sell 2/16/11 3,583,243 3,551,884 (31,359) Euro Sell 2/16/11 360,922 352,470 (8,452) Norwegian Krone Sell 2/16/11 504,734 500,467 (4,267) Philippines Peso Buy 2/16/11 1,081,613 1,077,900 3,713 Singapore Dollar Sell 2/16/11 2,096,889 2,075,294 (21,595) South Korean Won Buy 2/16/11 2,140,157 2,148,045 (7,888) Swiss Franc Sell 2/16/11 2,911,716 2,945,219 33,503 Taiwan Dollar Buy 2/16/11 113,877 113,976 (99) JPMorgan Chase Bank, N.A. Australian Dollar Buy 2/16/11 7,051,015 7,144,149 (93,134) Brazilian Real Buy 2/16/11 1,675,181 1,667,187 7,994 British Pound Sell 2/16/11 136,831 134,864 (1,967) Canadian Dollar Buy 2/16/11 455,337 459,777 (4,440) Chilean Peso Buy 2/16/11 1,164,354 1,163,288 1,066 Czech Koruna Buy 2/16/11 2,170,514 2,125,530 44,984 Euro Sell 2/16/11 2,867,933 2,786,285 (81,648) Hungarian Forint Sell 2/16/11 943,215 904,443 (38,772) Japanese Yen Sell 2/16/11 8,303,949 8,350,597 46,648 Malaysian Ringgit Buy 2/16/11 2,069,768 2,060,796 8,972 Mexican Peso Buy 2/16/11 1,242,860 1,243,331 (471) New Zealand Dollar Sell 2/16/11 552,733 545,114 (7,619) Norwegian Krone Sell 2/16/11 805,063 798,141 (6,922) Polish Zloty Buy 2/16/11 2,261,203 2,203,388 57,815 Singapore Dollar Sell 2/16/11 1,867,860 1,850,656 (17,204) South African Rand Sell 2/16/11 520,082 520,119 37 South Korean Won Buy 2/16/11 4,083,260 4,084,355 (1,095) Swedish Krona Buy 2/16/11 151,299 145,612 5,687 Swiss Franc Sell 2/16/11 3,421,926 3,455,964 34,038 Taiwan Dollar Sell 2/16/11 802,310 799,149 (3,161) Thai Baht Buy 2/16/11 1,097,418 1,101,290 (3,872) Turkish Lira (New) Buy 2/16/11 597,422 619,109 (21,687) Royal Bank of Scotland PLC (The) Australian Dollar Buy 2/16/11 2,917,047 2,973,895 (56,848) Brazilian Real Buy 2/16/11 2,036,609 2,028,917 7,692 British Pound Buy 2/16/11 1,342,354 1,341,150 1,204 Canadian Dollar Buy 2/16/11 1,005,335 1,015,759 (10,424) Czech Koruna Buy 2/16/11 2,264,593 2,212,667 51,926 Euro Sell 2/16/11 973,503 951,816 (21,687) Hungarian Forint Sell 2/16/11 2,316,723 2,265,334 (51,389) Japanese Yen Sell 2/16/11 7,941,167 7,947,784 6,617 Malaysian Ringgit Buy 2/16/11 1,639,340 1,634,252 5,088 Norwegian Krone Buy 2/16/11 7,086,127 6,981,135 104,992 Polish Zloty Buy 2/16/11 1,859,224 1,835,967 23,257 Singapore Dollar Sell 2/16/11 1,650,631 1,634,183 (16,448) South African Rand Sell 2/16/11 369,225 374,619 5,394 South Korean Won Buy 2/16/11 3,434,061 3,445,326 (11,265) Swedish Krona Buy 2/16/11 775,650 777,963 (2,313) Swiss Franc Buy 2/16/11 355,684 357,225 (1,541) Taiwan Dollar Sell 2/16/11 755,612 755,904 292 Turkish Lira (New) Buy 2/16/11 58,853 60,236 (1,383) State Street Bank and Trust Co. Australian Dollar Buy 2/16/11 2,861,189 2,872,939 (11,750) Brazilian Real Buy 2/16/11 2,173,117 2,161,317 11,800 British Pound Sell 2/16/11 5,051,052 4,988,424 (62,628) Canadian Dollar Buy 2/16/11 969,687 978,547 (8,860) Euro Buy 2/16/11 196,754 195,172 1,582 Hungarian Forint Sell 2/16/11 2,743,359 2,710,954 (32,405) Japanese Yen Sell 2/16/11 8,375,307 8,387,480 12,173 Malaysian Ringgit Buy 2/16/11 1,542,543 1,536,756 5,787 Mexican Peso Buy 2/16/11 781,571 775,381 6,190 Norwegian Krone Buy 2/16/11 3,568,126 3,553,187 14,939 Philippines Peso Buy 2/16/11 1,081,613 1,078,143 3,470 Polish Zloty Buy 2/16/11 3,199,860 3,160,989 38,871 Swedish Krona Buy 2/16/11 283,441 284,272 (831) Swiss Franc Sell 2/16/11 4,239,385 4,225,234 (14,151) Taiwan Dollar Sell 2/16/11 801,386 795,962 (5,424) Thai Baht Buy 2/16/11 1,097,418 1,100,932 (3,514) UBS AG Australian Dollar Buy 2/16/11 3,024,680 3,072,887 (48,207) British Pound Sell 2/16/11 5,052,334 4,995,428 (56,906) Canadian Dollar Buy 2/16/11 652,250 656,799 (4,549) Czech Koruna Buy 2/16/11 1,273,910 1,270,602 3,308 Euro Buy 2/16/11 4,292,041 4,270,182 21,859 Hungarian Forint Sell 2/16/11 2,167,437 2,115,859 (51,578) Indian Rupee Buy 2/17/11 1,069,512 1,077,913 (8,401) Japanese Yen Sell 2/16/11 3,348,639 3,329,350 (19,289) Mexican Peso Buy 2/16/11 1,726,984 1,724,989 1,995 Norwegian Krone Sell 2/16/11 463,621 463,720 99 Polish Zloty Buy 2/16/11 4,257,215 4,249,551 7,664 South African Rand Sell 2/16/11 307,926 307,961 35 Swedish Krona Buy 2/16/11 171,757 165,406 6,351 Swiss Franc Sell 2/16/11 3,698,228 3,636,762 (61,466) Thai Baht Buy 2/16/11 1,068,338 1,067,771 567 Westpac Banking Corp. Australian Dollar Buy 2/16/11 4,653,713 4,656,434 (2,721) British Pound Sell 2/16/11 1,566,347 1,558,040 (8,307) Canadian Dollar Sell 2/16/11 4,240,522 4,290,614 50,092 Euro Sell 2/16/11 6,407,049 6,365,622 (41,427) Japanese Yen Sell 2/16/11 4,426,904 4,454,545 27,641 New Zealand Dollar Sell 2/16/11 1,994,619 1,981,969 (12,650) Norwegian Krone Sell 2/16/11 267,605 265,625 (1,980) Swedish Krona Buy 2/16/11 8,279,365 7,978,374 300,991 Swiss Franc Sell 2/16/11 3,368,616 3,408,618 40,002 Total Putnam Absolute Return 300 Fund FUTURES CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Unrealized Number of Expiration appreciation/ contracts Value date (depreciation) Australian Government Treasury Bond 10 yr (Short) 14 $1,319,009 Mar-11 $(5,975) Canadian Government Bond 10 yr (Long) 170 20,589,493 Mar-11 (19,172) Euro-Bund 10 yr (Long) 38 6,439,318 Mar-11 (690) Euro-Schatz 2 yr (Short) 19 2,812,063 Mar-11 15,177 Japanese Government Bond 10 yr (Short) 17 29,023,227 Mar-11 (54,612) U.K. Gilt 10 yr (Long) 277 52,078,657 Mar-11 36,070 U.S. Treasury Bond 20 yr (Short) 21 2,533,125 Mar-11 17,898 U.S. Treasury Bond 30 yr (Long) 861 106,037,531 Mar-11 (3,160,839) U.S. Treasury Note 5 yr (Short) 97 11,486,164 Mar-11 120,706 U.S. Treasury Note 10 yr (Short) 1,362 164,525,344 Mar-11 5,446,482 Total Putnam Absolute Return 300 Fund WRITTEN OPTIONS OUTSTANDING at 1/31/11 (premiums received $34,337,619) (Unaudited) Contract Expiration date/ amount strike price Value Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.49% versus the three month USD-LIBOR-BBA maturing August 17, 2021. $12,332,000 Aug-11/4.49 $86,324 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.49% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 12,332,000 Aug-11/4.49 899,496 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.475% versus the three month USD-LIBOR-BBA maturing August 19, 2021. 9,548,000 Aug-11/4.475 98,726 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.475% versus the three month USD-LIBOR-BBA maturing August 19, 2021. 9,548,000 Aug-11/4.475 685,451 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.55% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 6,166,000 Aug-11/4.55 55,987 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.55% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 6,166,000 Aug-11/4.55 476,015 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.70% versus the three month USD-LIBOR-BBA maturing August 8, 2021. 3,412,000 Aug-11/4.70 22,280 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.70% versus the three month USD-LIBOR-BBA maturing August 8, 2021. 3,412,000 Aug-11/4.70 302,406 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 16,967,000 Jul-11/4.52 128,271 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 16,967,000 Jul-11/4.52 1,289,492 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 8,483,500 Jul-11/4.5475 59,385 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 8,483,500 Jul-11/4.5475 661,713 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.375% versus the three month USD-LIBOR-BBA maturing August 10, 2045. 15,321,700 Aug-15/4.375 2,594,270 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.375% versus the three month USD-LIBOR-BBA maturing August 10, 2045. 15,321,700 Aug-15/4.375 1,146,676 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.46% versus the three month USD-LIBOR-BBA maturing August 7, 2045. 15,321,700 Aug-15/4.46 2,478,745 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.46% versus the three month USD-LIBOR-BBA maturing August 7, 2045. 15,321,700 Aug-15/4.46 1,213,325 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.80% versus the three month USD-LIBOR-BBA maturing January 17, 2022. 38,426,000 Jan-12/4.80 605,774 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.80% versus the three month USD-LIBOR-BBA maturing January 17, 2022. 38,426,000 Jan-12/4.80 3,291,880 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.72% versus the three month USD-LIBOR-BBA maturing January 19, 2022. 23,055,600 Jan-12/4.72 403,704 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.72% versus the three month USD-LIBOR-BBA maturing January 19, 2022. 23,055,600 Jan-12/4.72 1,855,284 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.04% versus the three month USD-LIBOR-BBA maturing September 11, 2025. 86,207,400 Sep-15/4.04 9,778,507 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.04% versus the three month USD-LIBOR-BBA maturing September 11, 2025. 86,207,400 Sep-15/4.04 2,916,396 Option on an interest rate swap with Barclays Bank PLC for the obligation to receive a fixed rate of 5.36% versus the three month USD-LIBOR-BBA maturing February 13, 2025. 795,340 Feb-15/5.36 45,334 Option on an interest rate swap with Barclays Bank PLC for the obligation to pay a fixed rate of 5.36% versus the three month USD-LIBOR-BBA maturing February 13, 2025. 795,340 Feb-15/5.36 62,116 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 5.27% versus the three month USD-LIBOR-BBA maturing February 12, 2025. 5,042,460 Feb-15/5.27 301,085 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 5.27% versus the three month USD-LIBOR-BBA maturing February 12, 2025. 5,042,460 Feb-15/5.27 374,604 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.8675% versus the three month USD-LIBOR-BBA maturing April 12, 2022. 5,758,100 Apr-12/4.8675 116,437 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.8675% versus the three month USD-LIBOR-BBA maturing April 12, 2022. 5,758,100 Apr-12/4.8675 490,900 Option on an interest rate swap with Barclays Bank PLC for the obligation to receive a fixed rate of 4.7375% versus the three month USD-LIBOR-BBA maturing March 9, 2021. 22,181,100 Mar-11/4.7375 444 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.665% versus the three month USD-LIBOR-BBA maturing March 8, 2021. 22,181,100 Mar-11/4.665 444 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 3.89% versus the three month USD-LIBOR-BBA maturing April 28, 2021. 9,621,025 Apr-11/3.89 92,517 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.70175% versus the six month CHF-LIBOR-BBA maturing January 23, 2014. CHF 15,020,000 Jan-12/0.70175 10,964 Option on an interest rate swap with UBS AG for the obligation to pay a fixed rate of 0.722% versus the six month CHF-LIBOR-BBA maturing January 23, 2014. CHF 15,020,000 Jan-12/0.722 28,650 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.578% versus the six month CHF-LIBOR-BBA maturing December 24, 2013. CHF 15,020,000 Dec-11/0.578 4,948 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.602% versus the six month CHF-LIBOR-BBA maturing December 22, 2013. CHF 15,020,000 Dec-11/0.602 5,877 Total Putnam Absolute Return 300 Fund INTEREST RATE SWAP CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Payments Payments Unrealized Swap counterparty / premium Termination made by received by appreciation/ Notional amount received (paid) date fund per annum fund per annum (depreciation) Bank of America, N.A. $127,000,900 $(8,620) 12/6/12 0.79% 3 month USD-LIBOR-BBA $(245,337) GBP 2,180,000 (E) 12/7/30 6 month GBP-LIBOR-BBA 4.93% 6,462 GBP 1,390,000 12/8/20 3.685% 6 month GBP-LIBOR-BBA 14,009 GBP 2,200,000 (E) 12/8/30 6 month GBP-LIBOR-BBA 4.9675% 13,537 GBP 3,247,000 12/9/20 3.63% 6 month GBP-LIBOR-BBA 57,658 GBP 5,000,000 (E) 12/9/30 6 month GBP-LIBOR-BBA 4.85643% (16,344) AUD 3,040,000 12/21/20 6.0975% 6 month AUD-BBR-BBSW (23,497) AUD 4,110,000 9/17/15 6 month AUD-BBR-BBSW 5.38% (42,055) AUD 1,760,000 9/17/20 5.5725% 6 month AUD-BBR-BBSW 49,806 AUD 1,800,000 9/22/20 5.685% 6 month AUD-BBR-BBSW 37,291 AUD 4,160,000 9/22/15 6 month AUD-BBR-BBSW 5.56% (13,903) AUD 5,930,000 9/29/15 6 month AUD-BBR-BBSW 5.5275% (30,092) AUD 2,930,000 9/29/20 5.63% 6 month AUD-BBR-BBSW 73,929 GBP 6,680,000 6/15/15 2.59% 6 month GBP-LIBOR-BBA 45,016 GBP 14,260,000 1/21/13 1.815% 6 month GBP-LIBOR-BBA (37,271) Barclays Bank PLC AUD 1,820,000 (E) 2/4/20 6 month AUD-BBR-BBSW 6.8% 26,954 AUD 2,450,000 10/1/15 6 month AUD-BBR-BBSW 5.43% (22,138) $13,752,300 (E) 3/9/21 4.2375% 3 month USD-LIBOR-BBA (851,405) AUD 1,830,000 5/24/15 5.505% 6 month AUD-BBR-BBSW 9,476 AUD 6,760,000 7/27/15 5.435% 6 month AUD-BBR-BBSW 57,861 $44,520,500 62,708 10/22/15 1.35% 3 month USD-LIBOR-BBA 1,361,142 31,664,100 352,849 10/28/30 3 month USD-LIBOR-BBA 3.38% (2,824,852) 11,815,500 (8,773) 10/28/12 0.52% 3 month USD-LIBOR-BBA 8,837 AUD 4,500,000 8/26/15 6 month AUD-BBR-BBSW 5.025% (110,286) GBP 8,760,000 1/18/21 3.7875% 6 month GBP-LIBOR-BBA 21,832 GBP 5,700,000 1/25/13 1.61625% 6 month GBP-LIBOR-BBA 22,070 GBP 14,250,000 1/25/13 1.61% 6 month GBP-LIBOR-BBA 57,942 GBP 3,280,000 1/25/21 6 month GBP-LIBOR-BBA 3.72% (41,716) $67,458,900 5,336 1/28/16 2.17% 3 month USD-LIBOR-BBA 41,291 31,496,800 4,677 1/28/21 3.41% 3 month USD-LIBOR-BBA 164,040 14,984,200 (7,995) 1/28/41 3 month USD-LIBOR-BBA 4.21% (246,439) AUD 5,820,000 12/8/20 6 month AUD-BBR-BBSW 5.93% (27,881) AUD 5,820,000 12/22/15 5.895% 6 month AUD-BBR-BBSW (48,698) Citibank, N.A. GBP 42,520,000 7/1/12 6 month GBP-LIBOR-BBA 1.43% (9,140) GBP 34,020,000 7/1/15 2.45% 6 month GBP-LIBOR-BBA 629,798 GBP 10,100,000 7/1/20 6 month GBP-LIBOR-BBA 3.3675% (480,824) $23,824,600 11/8/20 2.635% 3 month USD-LIBOR-BBA 1,508,556 1,781,200 11/9/15 3 month USD-LIBOR-BBA 1.345% (56,897) 2,240,700 11/9/20 2.67% 3 month USD-LIBOR-BBA 135,125 SEK 26,320,000 11/23/20 3.25% 3 month SEK-STIBOR-SIDE 151,857 $43,268,800 (11,906) 12/10/12 0.81% 3 month USD-LIBOR-BBA (105,479) 15,200,000 12/14/20 3.3975% 3 month USD-LIBOR-BBA 10,561 15,268,600 46,998 1/28/16 3 month USD-LIBOR-BBA 2.17% 38,860 39,448,600 (233,683) 1/28/21 3.41% 3 month USD-LIBOR-BBA (34,087) 683,100 7,336 1/28/41 3 month USD-LIBOR-BBA 4.21% (3,534) Credit Suisse International CHF 5,310,000 12/14/20 2.1075% 6 month CHF-LIBOR-BBA 38,608 $16,800,000 12/17/40 4.334% 3 month USD-LIBOR-BBA (171,887) CHF 19,760,000 1/28/13 0.675% 6 month CHF-LIBOR-BBA (829) $180,600 746 2/1/21 3 month USD-LIBOR-BBA 3.47% 694 CHF 6,270,000 7/28/15 1.27% 6 month CHF-LIBOR-BBA (4,985) $67,439,400 10/7/40 3.377% 3 month USD-LIBOR-BBA 10,034,743 32,059,000 (8,813) 11/3/12 0.50% 3 month USD-LIBOR-BBA 81,678 15,964,600 11/8/15 3 month USD-LIBOR-BBA 1.31125% (535,473) 18,482,000 11/17/40 3.95% 3 month USD-LIBOR-BBA 985,292 CHF 19,760,000 5/20/12 0.62833% 6 month CHF-LIBOR-BBA (143,138) GBP 8,110,000 7/9/15 2.425% 6 month GBP-LIBOR-BBA 171,357 GBP 4,490,000 7/9/20 6 month GBP-LIBOR-BBA 3.3725% (215,344) Deutsche Bank AG $263,218,000 (7,466) 11/3/12 0.50% 3 month USD-LIBOR-BBA 748,848 68,687,000 11/5/20 3 month USD-LIBOR-BBA 2.6675% (4,125,108) 129,293,600 11/5/15 1.3855% 3 month USD-LIBOR-BBA 3,824,396 278,565,000 652,565 7/27/20 3 month USD-LIBOR-BBA 2.94% (9,761,757) 132,317,000 341,043 5/6/15 2.68% 3 month USD-LIBOR-BBA (4,856,962) 3,899,900 887 12/31/20 3 month USD-LIBOR-BBA 3.55% 43,933 19,191,000 69,031 12/31/40 4.28% 3 month USD-LIBOR-BBA 67,181 8,500,000 12/31/40 3 month USD-LIBOR-BBA 4.1342% (214,618) 141,912,400 (67,293) 11/12/12 0.59% 3 month USD-LIBOR-BBA 115,483 24,001,700 12/3/15 1.905% 3 month USD-LIBOR-BBA 179,690 EUR 22,470,000 12/23/20 3.325% 6 month EUR-EURIBOR-REUTERS 257,347 Goldman Sachs International AUD 877,500 (E) 2/23/20 6 month AUD-BBR-BBSW 6.6925% 9,696 AUD 2,950,000 (E) 2/23/20 6 month AUD-BBR-BBSW 6.7% 33,333 SEK 14,700,000 12/10/20 3.5775% 3 month SEK-STIBOR-SIDE 26,220 CHF 22,260,000 12/15/12 0.538% 6 month CHF-LIBOR-BBA 30,909 $118,916,800 (13,238) 10/1/12 0.59% 3 month USD-LIBOR-BBA (98,995) 123,796,300 132,282 5/12/15 2.52% 3 month USD-LIBOR-BBA (3,807,824) 19,620,900 8/12/15 3 month USD-LIBOR-BBA 1.665% (134,529) 6,250,500 8/12/40 3.68% 3 month USD-LIBOR-BBA 563,027 AUD 4,130,000 9/20/15 6 month AUD-BBR-BBSW 5.39% (41,064) AUD 1,770,000 9/20/20 5.5775% 6 month AUD-BBR-BBSW 49,670 AUD 1,690,000 (E) 2/5/20 6 month AUD-BBR-BBSW 6.71% 19,871 GBP 4,720,000 1/21/21 3.81% 6 month GBP-LIBOR-BBA (444) $33,238,800 (25,481) 1/27/41 4.29% 3 month USD-LIBOR-BBA 39,521 JPMorgan Chase Bank, N.A. AUD 1,830,000 3/1/15 5.6% 6 month AUD-BBR-BBSW (6,050) AUD 1,372,500 3/2/15 5.6515% 6 month AUD-BBR-BBSW (6,865) JPY 897,000,000 12/7/20 1.25% 6 month JPY-LIBOR-BBA (21,939) $45,512,100 12/10/15 3 month USD-LIBOR-BBA 2.06625% (20,376) 29,750,900 (E) 2/9/21 3.56% 3 month USD-LIBOR-BBA (195,166) 13,752,300 (E) 3/8/21 4.165% 3 month USD-LIBOR-BBA (766,553) GBP 3,309,700 12/23/20 6 month GBP-LIBOR-BBA 3.6245% (68,388) AUD 520,000 6/26/19 6 month AUD-BBR-BBSW 6.05% 3,652 JPY 979,460,000 5/25/15 0.674375% 6 month JPY-LIBOR-BBA (60,745) AUD 1,372,500 6/11/15 5.545% 6 month AUD-BBR-BBSW 5,170 MXN 63,220,000 8/19/20 1 month MXN-TIIE-BANXICO 6.615% (357,963) AUD 5,020,000 9/3/15 5.075% 6 month AUD-BBR-BBSW 113,298 $40,400,000 10/28/20 3 month USD-LIBOR-BBA 2.72175% (2,166,758) 131,454,200 11/5/15 3 month USD-LIBOR-BBA 1.42% (3,669,773) 80,415,000 11/12/15 3 month USD-LIBOR-BBA 1.435% (2,244,675) 25,882,800 8,005 1/6/13 0.79% 3 month USD-LIBOR-BBA (12,699) JPY 340,000,000 1/24/21 6 month JPY-LIBOR-BBA 1.3025% 19,556 $4,292,200 1,013 1/27/13 0.84% 3 month USD-LIBOR-BBA (3,413) 7,209,300 (981) 1/31/15 3 month USD-LIBOR-BBA 1.79% 13,158 5,616,400 4,172 1/31/21 3 month USD-LIBOR-BBA 3.51% 25,060 16,630,500 31,355 1/31/41 3 month USD-LIBOR-BBA 4.33% 115,037 JPY 976,750,000 9/16/15 6 month JPY-LIBOR-BBA 0.59125% 1,922 CAD 3,390,000 9/21/20 3.105% 3 month CAD-BA-CDOR 85,505 JPY 36,800,000 (E) 7/28/29 6 month JPY-LIBOR-BBA 2.67% (372) JPY 49,400,000 (E) 7/28/39 2.40% 6 month JPY-LIBOR-BBA 1,313 MXN 40,760,000 11/4/20 1 month MXN-TIIE-BANXICO 6.75% (205,242) $81,189,500 12/3/12 0.8025% 3 month USD-LIBOR-BBA (181,636) 57,021,800 12/6/12 0.805% 3 month USD-LIBOR-BBA (124,844) UBS, AG 17,786,900 12/9/40 4.1075% 3 month USD-LIBOR-BBA 503,373 Total (E) See Interest rate swap contracts note regarding extended effective dates. Putnam Absolute Return 300 Fund TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Fixed payments Total return Unrealized Swap counterparty / premium Termination received (paid) by received by appreciation/ Notional amount received (paid) date fund per annum or paid by fund (depreciation) Barclays Bank PLC $3,523,272 $ 1/12/39 5.50% (1 month Synthetic TRS $(11,890) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 25,275,971 1/12/38 (6.50%) 1 month Synthetic TRS (38,582) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 5,823,274 1/12/39 5.50% (1 month Synthetic TRS (19,652) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 4,590,588 1/12/38 (6.50%) 1 month Synthetic TRS (7,007) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 11,486,421 1/12/39 5.50% (1 month Synthetic TRS (38,763) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 12,340,541 1/12/38 (6.50%) 1 month Synthetic TRS (18,837) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 7,940,108 1/12/38 6.50% (1 month Synthetic TRS 12,120 USD-LIBOR) Index 6.50% 30 year Fannie Mae pools 6,586,059 1/12/39 5.50% (1 month Synthetic TRS (22,226) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 7,068,535 1/12/38 (6.50%) 1 month Synthetic TRS (10,790) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 8,552,221 1/12/39 5.50% (1 month Synthetic TRS (28,861) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 9,188,851 1/12/38 (6.50%) 1 month Synthetic TRS (14,026) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 23,330,109 1/12/38 (6.50%) 1 month Synthetic TRS (35,612) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 21,540,922 1/12/39 5.50% (1 month Synthetic TRS (72,693) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 21,540,922 1/12/39 5.50% (1 month Synthetic TRS (72,693) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 23,330,109 1/12/38 (6.50%) 1 month Synthetic TRS (35,612) USD-LIBOR Index 6.50% 30 year Fannie Mae pools Citibank, N.A. GBP 5,330,000 5/18/13 (3.38%) GBP Non-revised 142,539 UK Retail Price Index Goldman Sachs International $2,665,000 7/28/11 (0.685%) USA Non Revised 25,541 Consumer Price Index- Urban (CPI-U) 2,665,000 7/29/11 (0.76%) USA Non Revised 23,531 Consumer Price Index- Urban (CPI-U) 2,665,000 7/30/11 (0.73%) USA Non Revised 24,318 Consumer Price Index- Urban (CPI-U) 12,828,089 1/12/39 5.50% (1 month Synthetic TRS (43,290) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 24,554,700 1/12/39 5.50% (1 month Synthetic TRS (82,864) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 26,484,241 1/12/38 (6.50%) 1 month Synthetic TRS (40,426) USD-LIBOR Index 6.50% 30 year Fannie Mae pools JPMorgan Chase Bank, N.A. EUR 1,090,000 8/10/12 (1.435%) Eurostat 16,338 Eurozone HICP excluding tobacco Total Putnam Absolute Return 300 Fund CREDIT DEFAULT CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Fixed payments premium Termi- received Unrealized Swap counterparty / received Notional nation (paid) by fund appreciation/ Referenced debt* Rating*** (paid)** amount date per annum (depreciation) Bank of America, N.A. France, Gov't of, 4.25%, 04/25/2019 $(721,448) $17,520,000 12/20/15 (25 bp) $(147,994) Credit Suisse International Bonos Y Oblig Del Estado, 5 1/2%, 7/30/17 (5,786) 650,000 12/20/19 (100 bp) 60,231 Deutsche Bank AG France, Gov't of, 4.25%, 04/25/2019 9,480 10,140,000 6/20/15 (100 bp) (40,150) JPMorgan Chase Bank, N.A. Spain Gov't, 5.5%, 7/30/2017 (533,086) 7,100,000 6/20/15 (100 bp) (132,962) Spain Gov't, 5.5%, 7/30/2017 (546,723) 6,000,000 6/20/16 (100 bp) (129,149) Total * Payments related to the referenced debt are made upon a credit default event. ** Upfront premium is based on the difference between the original spread on issue and the market spread on day of execution. *** Ratings are presented for credit default contracts in which the fund has sold protection on the underlying referenced debt. Ratings for an underlying index represent the average of the ratings of all the securities included in that index. The Moody's, Standard & Poor's or Fitch ratings are believed to be the most recent ratings available at January 31, 2011. Securities rated by Putnam are indicated by "/P." Securities rated by Fitch are indicated by "/F." Key to holding's currency abbreviations AUD Australian Dollar CAD Canadian Dollar CHF Swiss Franc EGP Egyptian Pound GBP British Pound JPY Japanese Yen MXN Mexican Peso SEK Swedish Krona USD / $ United States Dollar Key to holding's abbreviations EMTN Euro Medium Term Notes FDIC Guaranteed Federal Deposit Insurance Corp. Guaranteed FRB Floating Rate Bonds FRN Floating Rate Notes IFB Inverse Floating Rate Bonds IO Interest Only MTN Medium Term Notes OJSC Open Joint Stock Company PO Principal Only TBA To Be Announced Commitments Notes to the funds' portfolios Unless noted otherwise, the notes to the funds' portfolios are for the close of the funds' reporting period, which ran from November 1, 2010 through January 31, 2011 (the reporting period). (a) Percentages indicated are based on net assets as follows: 100 Fund $347,407,560 300 Fund 1,191,138,874 (b) The aggregate identified cost on a tax basis is as follows: Cost for federal Unrealized Unrealized Net unrealized income tax purposes appreciation depreciation appreciation 100 Fund $372,029,329 $4,634,060 $1,449,616 $3,184,444 300 Fund 1,281,317,306 26,992,228 7,618,839 19,373,389 (PIK) Income may be received in cash or additional securities at the discretion of the issuer. (SEG) These securities, in part or in entirety, were pledged and segregated with the broker to cover margin requirements for futures contracts, for one or both of the funds, at the close of the reporting period. (SEGSF) These securities, in part or in entirety, were pledged and segregated with the custodian for collateral on certain derivatives contracts, for one or both of the funds, at the close of the reporting period. (c) Senior loans are exempt from registration under the Securities Act of 1933, as amended, but contain certain restrictions on resale and cannot be sold publicly. These loans pay interest at rates which adjust periodically. The interest rates shown for senior loans are the current interest rates at the close of the reporting period. Senior loans are also subject to mandatory and/or optional prepayment which cannot be predicted. As a result, the remaining maturity may be substantially less than the stated maturity shown. Senior loans are purchased or sold on a when-issued or delayed delivery basis and may be settled a month or more after the trade date, which from time to time can delay the actual investment of available cash balances; interest income is accrued based on the terms of the securities. Senior loans can be acquired through an agent, by assignment from another holder of the loan, or as a participation interest in another holder’s portion of the loan. When the fund invests in a loan or participation, the fund is subject to the risk that an intermediate participant between the fund and the borrower will fail to meet its obligations to the fund, in addition to the risk that the borrower under the loan may default on its obligations. (e)Each fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Investment Management, LLC (Putnam Management), the funds' manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned byeach fund are recorded as interest income and totaled $8,695 and $31,853 (for 100 Fund and 300 Fund, respectively) for the reporting period. During the reporting period, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated as follows: Purchases Sales 100 Fund $111,481,064 $123,744,752 300 Fund 292,165,797 252,099,546 Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. (F) Is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) based on the securities' valuation inputs. (i) Securities purchased with cash or securities received, that were pledged, to one or both of the funds, for collateral on certain derivatives contracts. (R) Real Estate Investment Trust. At the close of the reporting period, the funds maintained liquid assets totaling $105,601,161 and $570,389,607 (for 100 Fund and 300 Fund, respectively) to cover certain derivatives contracts. Debt obligations are considered secured unless otherwise indicated. 144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The rates shown on FRB and FRN are the current interest rates at the close of the reporting period. The dates shown on debt obligations are the original maturity dates. IFB are securities that pay interest rates that vary inversely to changes in the market interest rates. As interest rates rise, inverse floaters produce less current income. The interest rates shown are the current interest rates at the close of the reporting period. Security valuation: Market quotations are not considered to be readily available for certain debt obligations; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which considers such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs. Such valuations and procedures are reviewed periodically by the Trustees. Certain securities may be valued on the basis of a price provided by a single source. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount. Stripped securities: Each fund may invest in stripped securities which represent a participation in securities that may be structured in classes with rights to receive different portions of the interest and principal. Interest-only securities receive all of the interest and principal-only securities receive all of the principal. If the interest-only securities experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, principal-only securities increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. The market value of these securities is highly sensitive to changes in interest rates. Futures contracts: Each fund uses futures contracts to gain exposure to interest rates. The potential risk to each fund is that the change in value of futures contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” The funds had average contract amounts of approximately 452 and 2,684 (for 100 Fund and 300 Fund, respectively) on futures contracts for the reporting period. Options contracts: Each fund uses options contracts to hedge duration, convexity and prepayment risk and hedge against changes in values of securities it owns, owned or expects to own. The potential risk to each fund is that the change in value of options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments. Exchange traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. The funds had average contract amounts of approximately $75,000,000 and $342,400,000 on purchased options contracts for the reporting period. Outstanding contracts on written options contracts at the close of the reporting period are indicative of the volume of activity during the period for 100 Fund and 300 Fund. Forward currency contracts: Each fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to hedge foreign exchange risk. The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Outstanding contracts on forward currency contracts at the close of the reporting period are indicative of the volume of activity during the period for 100 Fund and 300 Fund. Total return swap contracts: Each fund enters into total return swap contracts, which are arrangements to exchange a market linked return for a periodic payment, both based on a notional principal amount to hedge sector exposure and manage exposure to specific sectors or industries. To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. Total return swap contracts are marked to market daily based upon quotations from market makers and the change, if any, is recorded as an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain total return swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. The fund’s maximum risk of loss from counterparty risk is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Outstanding notional on total return swap contracts at the close of the reporting period are indicative of the volume of activity during the period for 100 Fund and 300 Fund. Interest rate swap contracts: Each fund enters into interest rate swap contracts, which are arrangements between two parties to exchange cash flows based on a notional principal amount, to hedge interest rate risk and hedge prepayment risk. An interest rate swap can be purchased or sold with an upfront premium. An upfront payment received by the fund is recorded as a liability on the fund's books. An upfront payment made by the fund is recorded as an asset on the fund's books. Interest rate swap contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain interest rate swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or if the counterparty defaults on its obligation to perform. The fund’s maximum risk of loss from counterparty risk is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Outstanding notional on interest rate swap contracts at the close of the reporting period are indicative of the volume of activity during the period for 100 Fund and 300 Fund. Credit default contracts: Each fund enters into credit default contracts to to hedge credit risk and gain exposure on individual names and baskets of securities. In a credit default contract, the protection buyer typically makes an up front payment and a periodic stream of payments to a counterparty, the protection seller, in exchange for the right to receive a contingent payment upon the occurrence of a credit event on the reference obligation or all other equally ranked obligations of the reference entity. Credit events are contract specific but may include bankruptcy, failure to pay, restructuring and obligation acceleration. An upfront payment received by the fund, as the protection seller, is recorded as a liability on the fund’s books. An upfront payment made by the fund, as the protection buyer, is recorded as an asset on the fund’s books. Periodic payments received or paid by the fund are recorded as realized gains or losses. The credit default contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as an unrealized gain or loss. Upon the occurrence of a credit event, the difference between the par value and market value of the reference obligation, net of any proportional amount of the upfront payment, is recorded as a realized gain or loss. In addition to bearing the risk that the credit event will occur, each fund could be exposed to market risk due to unfavorable changes in interest rates or in the price of the underlying security or index or the possibility that the fund may be unable to close out its position at the same time or at the same price as if it had purchased the underlying reference obligations. In certain circumstances, the fund may enter into offsetting credit default contracts which would mitigate its risk of loss. The fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Where the fund is a seller of protection, the maximum potential amount of future payments the fund may be required to make is equal to the notional amount of the relevant credit default contract. The funds had average notional amounts of approximately $6,500,000 and $37,000,000 (for 100 Fund and 300 Fund, respectively) on credit default swap contracts for the reporting period. Master agreements: Each fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern over the counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio. Collateral posted to the fund which cannot be sold or repledged totaled $2,889,469 and $11,257,046 (for 100 Fund and 300 Fund, respectively) at the close of the reporting period. Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund's future derivative activity. At the close of the reporting period, the funds had net liability positions of $13,107,793 and $57,651,637 (for 100 Fund and 300 Fund, respectively) on derivative contracts subject to the Master Agreements. Collateral posted by the funds totaled $11,378,908 and $51,503,914 (for 100 Fund and 300 Fund, respectively). TBA purchase commitments: Each fund may enter into “TBA” (to be announced) commitments to purchase securities for a fixed unit price at a future date beyond customary settlement time. Although the unit price has been established, the principal value has not been finalized. However ,it is anticipated that the amount of the commitments will not significantly differ from the principal amount. The fund holds, and maintains until settlement date, cash or high-grade debt obligations in an amount sufficient to meet the purchase price, or the fund may enter into offsetting contracts for the forward sale of other securities it owns. Income on the securities will not be earned until settlement date. TBA purchase commitments may be considered securities themselves, and involve a risk of loss if the value of the security to be purchased declines prior to the settlement date, which risk is in addition to the risk of decline in the value of the fund’s other assets. Unsettled TBA purchase commitments are valued at fair value of the underlying securities, according to the procedures described under “Security valuation” above. The contract is marked to market daily and the change in market value is recorded by the fund as an unrealized gain or loss. Although each fund will generally enter into TBA purchase commitments with the intention of acquiring securities for its portfolio or for delivery pursuant to options contracts it has entered into, the fund may dispose of a commitment prior to settlement if Putnam Management deems it appropriate to do so. Dollar rolls: To enhance returns, each fund may enter into dollar rolls (principally using TBAs) in which the fund sells securities for delivery in the current month and simultaneously contracts to purchase similar securities on a specified future date. During the period between the sale and subsequent purchase, the fund will not be entitled to receive income and principal payments on the securities sold. The fund will, however, retain the difference between the initial sales price and the forward price for the future purchase. The fund will also be able to earn interest on the cash proceeds that are received from the initial sale on settlement date. The fund may be exposed to market or credit risk if the price of the security changes unfavorably or the counterparty fails to perform under the terms of the agreement. ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows: Level 1 – Valuations based on quoted prices for identical securities in active markets. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement. The following is a summary of the inputs used to value the funds' net assets as of the close of the reporting period : 100 Fund Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Asset-backed securities $ $16,360,430 $ Corporate bonds and notes 30,695,509 Foreign government bonds and notes 1,491,292 Mortgage-backed securities 117,261,607 Purchased options outstanding 741,159 U.S. Government Agency Obligations 2,354,017 U.S. Government and Agency Mortgage Obligations 21,850,313 Short-term investments 14,482,420 169,977,026 Totals by level $ Valuation inputs Other financial instruments: Level 1 Level 2 Level 3 Forward currency contracts $ $(3,501) $ Futures contracts 239,063 Written options (5,985,712) Interest rate swap contracts (5,735,316) Total return swap contracts (92,594) Credit default contracts 247,463 Totals by level $ At the start and/or close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund's portfolio. Market Values of Derivative Instruments as of the close of the reporting period Asset derivatives Liability derivatives Derivatives not accounted for as hedging instruments under ASC 815 Market value Market value Credit contracts $257,252 $9,789 Foreign exchange contracts 7,009 10,510 Interest rate contracts 6,700,905 17,534,305 Total 300 Fund Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Asset-backed securities $ $110,571,729 $ Corporate bonds and notes 221,096,987 Foreign government bonds and notes 21,098,210 Mortgage-backed securities 523,292,845 1,765,557 Purchased options outstanding 3,795,895 Senior loans 21,172,513 U.S. Government Agency Obligations 5,087,453 U.S. Government and Agency Mortgage Obligations 97,589,688 Short-term investments 92,848,687 202,371,131 Totals by level Valuation inputs Other financial instruments: Level 1 Level 2 Level 3 Forward currency contracts $ $(593,325) $ Futures contracts 2,395,045 Written options (32,584,427) Interest rate swap contracts (18,072,592) Total return swap contracts (349,437) Credit default contracts 1,407,539 Totals by level $ At the start and/or close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund's portfolio. Market Values of Derivative Instruments as of the close of the reporting period Asset derivatives Liability derivatives Derivatives not accounted for as hedging instruments under ASC 815 Market value Market value Credit contracts $1,457,169 $49,630 Foreign exchange contracts 2,039,004 2,632,329 Interest rate contracts 32,531,599 77,347,115 Total For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com Item 2. Controls and Procedures: (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 3. Exhibits: Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Putnam Funds Trust By (Signature and Title): /s/ Janet C. Smith Janet C. Smith Principal Accounting Officer Date: March 31, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer Date: March 31, 2011 By (Signature and Title): /s/ Steven D. Krichmar Steven D. Krichmar Principal Financial Officer Date: March 31, 2011 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: (811- ) Exact name of registrant as specified in charter: Putnam Funds Trust Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 Name and address of agent for service: Beth S. Mazor, Vice President One Post Office Square Boston, Massachusetts 02109 Copy to: John W. Gerstmayr, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199-3600 Registrant’s telephone number, including area code: (617) 292-1000 Date of fiscal year end: October 31, 2011 Date of reporting period: January 31, 2011 Item 1. Schedule of Investments: Putnam Absolute Return 500 and 700 Funds The funds' portfolio January 31, 2011 (Unaudited) 500 Fund 700 Fund MORTGAGE-BACKED SECURITIES(a) 500 Fund 25.7% 700 Fund 24.1% Principal amount Value Principal amount Value Adjustable Rate Mortgage Trust FRB Ser. 07-1, Class 2A1, 5.676s, 2037 $488,430 $309,237 $1,088,911 $689,417 FRB Ser. 06-1, Class 2A1, 3.476s, 2036 3,822,386 2,503,663 5,107,984 3,345,730 FRB Ser. 05-12, Class 2A1, 3.133s, 2036 1,094,737 774,526 Banc of America Commercial Mortgage, Inc. Ser. 08-1, Class A3, 6.152s, 2051 983,000 1,072,565 FRB Ser. 07-4, Class A3, 5.809s, 2051 1,695,000 1,766,021 Ser. 07-2, Class A2, 5.634s, 2049 3,961,000 4,121,002 Ser. 07-5, Class A3, 5.62s, 2051 392,000 413,059 Ser. 06-4, Class A2, 5.522s, 2046 892,927 900,623 FRB Ser. 06-1, Class A2, 5.334s, 2045 1,958,000 1,959,936 1,244,000 1,245,230 Ser. 06-6, Class A2, 5.309s, 2045 1,531,000 1,552,853 958,000 971,674 Ser. 07-1, Class XW, IO, 0.284s, 2049 5,261,118 70,365 4,670,684 62,469 Banc of America Commercial Mortgage, Inc. 144A Ser. 02-PB2, Class XC, IO, 0.733s, 2035 5,823,446 36,653 4,859,979 30,589 Ser. 04-4, Class XC, IO, 0.288s, 2042 7,005,573 110,009 6,218,278 97,646 Banc of America Funding Corp. FRB Ser. 07-6, Class A1, 0.55s, 2037 831,660 620,377 1,033,093 770,636 Barclays Capital, LLC Trust FRB Ser. 07-AA1, Class 2A1, 0.44s, 2037 776,565 480,985 1,655,985 1,025,676 Bear Stearns Alt-A Trust Ser. 06-4, Class 22A1, 5.602s, 2036 638,048 333,827 1,465,712 766,861 FRB Ser. 06-2, Class 24A1, 5.599s, 2036 1,233,317 801,656 1,375,232 893,901 FRB Ser. 05-9, Class 11A1, 0.52s, 2035 911,536 524,133 Bear Stearns Alt-A Trust 144A FRB Ser. 06-7, Class 1AE4, 5.794s, 2046 650,939 439,383 924,956 624,345 Bear Stearns Asset Backed Securities Trust FRB Ser. 07-AC4, Class A1, 0.56s, 2037 491,949 248,434 681,269 344,041 FRB Ser. 06-IM1, Class A1, 0.49s, 2036 391,692 205,639 400,724 210,380 Bear Stearns Commercial Mortgage Securities, Inc. FRB Ser. 07-PW16, Class A2, 5.665s, 2040 2,013,000 2,096,540 Ser. 06-PW13, Class A2, 5.426s, 2041 1,614,000 1,634,389 1,897,000 1,920,963 Ser. 07-PW15, Class A4, 5.331s, 2044 1,097,000 1,140,414 Ser. 06-PW14, Class A2, 5.123s, 2038 542,000 551,005 Ser. 05-PWR9, Class A2, 4.735s, 2042 277,167 278,185 486,544 488,331 Citigroup FRB Ser. 07-AR5, Class 1A2A, 5.402s, 2037 272,622 192,198 269,402 189,928 Citigroup Commercial Mortgage Trust FRB Ser. 08-C7, Class A2B, 6.099s, 2049 331,000 347,713 166,000 174,382 FRB Ser. 07-C6, Class A3, 5.698s, 2049 1,477,000 1,543,796 Citigroup Mortgage Loan Trust, Inc. FRB Ser. 05-10, Class 1A5A, 5.588s, 2035 356,181 243,984 FRB Ser. 07-AR5, Class 1A1A, 5.426s, 2037 539,092 336,161 FRB Ser. 06-AR7, Class 2A2A, 5.389s, 2036 554,444 332,666 670,040 402,024 FRB Ser. 07-6, Class 1A3A, 5.347s, 2046 229,381 121,572 199,308 105,633 Citigroup/Deutsche Bank Commercial Mortgage Trust Ser. 06-CD3, Class A2, 5.56s, 2048 941,475 976,361 Ser. 06-CD2, Class A2, 5.408s, 2046 665,924 665,305 926,271 925,411 Commercial Mortgage Pass-Through Certificates FRB Ser. 07-C9, Class A2, 5.811s, 2049 231,000 238,529 Ser. 06-C8, Class A3, 5.308s, 2046 2,578,000 2,681,508 Ser. 06-C8, Class A2B, 5.248s, 2046 1,004,496 1,025,683 Countrywide Alternative Loan Trust Ser. 07-16CB, Class 3A1, 6 3/4s, 2037 489,318 310,325 657,176 416,781 Ser. 07-16CB, Class 4A7, 6s, 2037 328,739 259,704 760,574 600,854 Ser. 06-45T1, Class 2A5, 6s, 2037 418,494 318,055 551,171 418,890 Ser. 06-41CB, Class 1A7, 6s, 2037 469,182 344,849 615,348 452,281 Ser. 06-2CB, Class A11, 6s, 2036 127,833 85,608 121,996 81,699 Ser. 05-80CB, Class 2A1, 6s, 2036 200,483 150,989 191,037 143,874 Ser. 05-50CB, Class 3A1, 6s, 2035 539,865 360,792 797,206 532,773 FRB Ser. 07-HY4, Class 4A1, 5.568s, 2047 611,780 441,333 837,061 603,849 FRB Ser. 06-24CB, Class A13, 0.61s, 2036 379,658 243,455 476,267 305,406 FRB Ser. 06-OC8, Class 2A2A, 0.38s, 2036 1,187,321 690,918 1,406,941 818,717 Countrywide Asset Backed Certificates FRB Ser. 06-IM1, Class A2, 0 1/2s, 2036 3,452,893 1,729,589 Countrywide Home Loans FRB Ser. 06-HYB3, Class 2A1A, 5.389s, 2036 775,526 571,574 889,263 655,400 FRB Ser. 06-HYB2, Class 2A1B, 3.918s, 2036 1,096,887 767,821 1,436,035 1,005,225 FRB Ser. 05-HYB7, Class 3A1, 3.133s, 2035 2,921,786 1,913,770 FRB Ser. 04-HYB6, Class A2, 3.095s, 2034 614,358 516,060 1,384,284 1,162,798 Countrywide Home Loans 144A Ser. 05-R3, Class AS, IO, 5.517s, 2035 453,096 56,637 214,978 26,872 FRB Ser. 05-R3, Class AF, 0.66s, 2035 445,395 383,040 211,324 181,738 Credit Suisse Mortgage Capital Certificates FRB Ser. 08-C1, Class A2, 6.211s, 2041 2,546,000 2,651,668 290,000 302,036 Ser. 07-1, Class 1A4, 6.131s, 2037 388,188 254,263 780,127 510,983 FRB Ser. 06-C3, Class A2, 5.826s, 2038 319,000 321,523 550,000 554,350 FRB Ser. 07-C4, Class A2, 5.804s, 2039 693,084 710,258 Ser. 07-C5, Class AAB, 5.62s, 2040 1,788,000 1,864,771 Ser. 07-C5, Class A2, 5.589s, 2040 1,089,000 1,122,160 Ser. 07-C2, Class A2, 5.448s, 2049 2,234,000 2,274,395 2,278,000 2,319,190 CS First Boston Mortgage Securities Corp. FRB Ser. 05-C4, Class A3, 5.12s, 2038 960,136 987,147 CS First Boston Mortgage Securities Corp. 144A Ser. 03-C3, Class AX, IO, 1.733s, 2038 8,350,915 262,040 9,086,997 285,137 Ser. 04-C4, Class AX, IO, 0.539s, 2039 3,712,743 82,692 3,200,438 71,281 Ser. 05-C1, Class AX, IO, 0.141s, 2038 26,939,968 251,159 25,830,361 240,814 CWCapital Cobalt Ser. 07-C3, Class A2, 5.736s, 2046 2,174,000 2,261,934 Ser. 07-C2, Class A2, 5.334s, 2047 24,533 25,315 Deutsche Alternative Securities, Inc. FRB Ser. 06-AR6, Class A6, 0.45s, 2037 1,512,981 915,354 476,708 288,408 Federal Home Loan Mortgage Corp. IFB Ser. 2990, Class LB, 16.278s, 2034 276,937 341,472 387,712 478,060 IFB Ser. 3151, Class SI, IO, 6.889s, 2036 502,900 86,755 429,534 74,099 IFB Ser. 3157, Class SA, IO, 6.889s, 2036 2,853,814 528,070 3,392,270 627,706 IFB Ser. 3208, Class PS, IO, 6.839s, 2036 2,922,821 447,413 2,934,868 449,257 IFB Ser. 3727, Class PS, IO, 6.439s, 2038 3,474,361 557,203 4,365,551 700,128 IFB Ser. 3398, Class SI, IO, 6.38875s, 2036 2,490,030 309,386 3,201,467 397,782 IFB Ser. 3762, Class SA, IO, 6.339s, 2040 1,906,929 309,354 2,307,208 374,290 IFB Ser. 3145, Class GI, IO, 6.339s, 2036 2,390,515 375,139 2,815,495 441,830 IFB Ser. 3055, Class MS, IO, 6.339s, 2035 3,307,949 514,585 3,785,154 588,819 IFB Ser. 3677, Class KS, IO, 6.289s, 2040 2,468,636 362,054 3,377,062 495,286 IFB Ser. 3346, Class SC, IO, 6.289s, 2033 7,081,964 1,035,808 6,986,379 1,021,828 IFB Ser. 3346, Class SB, IO, 6.289s, 2033 2,426,565 354,618 2,108,794 308,179 IFB Ser. 3116, Class AS, IO, 5.839s, 2034 3,498,120 420,817 4,256,822 512,087 IFB Ser. 3753, Class SK, IO, 5.789s, 2038 6,757,984 981,057 IFB Ser. 3725, Class CS, IO, 5.739s, 2040 6,514,133 883,447 16,998,860 2,305,385 Ser. 3672, Class PI, IO, 5 1/2s, 2039 1,693,826 321,437 2,265,182 429,864 Ser. 3707, Class IK, IO, 5s, 2040 282,978 49,272 304,445 53,010 Ser. 3645, Class ID, IO, 5s, 2040 587,021 96,154 890,682 145,894 Ser. 3707, Class EI, IO, 5s, 2038 16,809,189 3,122,139 Ser. 3687, Class CI, IO, 5s, 2038 3,770,640 643,347 Ser. 3680, Class KI, IO, 5s, 2038 8,707,655 1,501,896 12,094,494 2,086,058 Ser. 3632, Class CI, IO, 5s, 2038 713,429 122,339 1,082,261 185,586 Ser. 3626, Class DI, IO, 5s, 2037 511,784 64,500 776,478 97,859 Ser. 3653, Class CI, IO, 5s, 2036 7,759,786 995,037 9,268,675 1,188,522 Ser. 3623, Class CI, IO, 5s, 2036 457,781 58,138 694,587 88,213 Ser. 3663, Class BI, IO, 4 1/2s, 2024 5,724,621 532,390 7,559,060 702,993 Ser. 3738, Class MI, IO, 4s, 2034 26,036,015 3,304,503 35,201,403 4,467,778 Ser. 3736, Class QI, IO, 4s, 2034 6,626,996 893,350 Ser. 3707, Class HI, IO, 4s, 2023 697,395 78,039 750,496 83,981 Ser. T-8, Class A9, IO, 0.503s, 2028 394,223 5,732 334,794 4,868 Ser. T-59, Class 1AX, IO, 0.272s, 2043 868,643 7,058 737,616 5,993 Ser. T-48, Class A2, IO, 0.212s, 2033 1,190,379 8,841 1,010,842 7,507 Ser. 3206, Class EO, PO, zero %, 2036 173,571 146,918 Ser. 3175, Class MO, PO, zero %, 2036 119,593 97,955 FRB Ser. T-54, Class 2A, IO, zero %, 2043 498,093 423,011 FRB Ser. 3047, Class BD, zero %, 2035 1,199 1,196 Federal National Mortgage Association IFB Ser. 05-74, Class NK, 26.2s, 2035 96,172 137,357 95,336 136,162 IFB Ser. 05-45, Class DA, 23.467s, 2035 517,828 759,886 IFB Ser. 05-122, Class SE, 22.19s, 2035 504,149 685,551 IFB Ser. 03-W6, Class 4S, IO, 7.34s, 2042 1,173,794 225,486 1,842,904 354,022 IFB Ser. 04-W2, Class 1A3S, IO, 6.89s, 2044 42,706 3,523 36,196 2,986 IFB Ser. 05-104, Class SI, IO, 6.44s, 2033 1,089,855 144,409 927,758 122,931 IFB Ser. 10-76, Class MS, IO, 6.39s, 2036 23,405,256 3,380,962 IFB Ser. 10-27, Class BS, IO, 6.19s, 2040 4,001,122 566,761 5,690,921 806,122 IFB Ser. 07-30, Class OI, IO, 6.18s, 2037 2,157,067 335,855 3,162,803 492,448 IFB Ser. 10-35, Class SG, IO, 6.14s, 2040 6,799,331 1,129,981 6,759,388 1,123,343 IFB Ser. 09-71, Class XS, IO, 5.94s, 2036 3,924,194 397,569 Ser. 06-W2, Class 1AS, IO, 5.803s, 2036 722,079 81,234 1,444,530 162,510 Ser. 06-W3, Class 1AS, IO, 5.786s, 2046 211,899 25,816 496,059 60,436 IFB Ser. 10-136, Class SG, IO, 5.74s, 2030 2,533,436 365,828 IFB Ser. 11-3, Class SA, IO, 5.56s, 2041 (F) 6,727,000 790,687 8,488,000 997,673 Ser. 07-W1, Class 1AS, IO, 5.539s, 2046 1,357,086 152,664 1,809,161 203,520 IFB Ser. 10-70, Class SI, IO, 5.24s, 2040 5,333,772 657,992 6,701,248 826,689 Ser. 10-98, Class DI, IO, 5s, 2040 450,529 75,666 484,222 81,325 Ser. 10-21, Class IP, IO, 5s, 2039 1,380,479 234,682 2,166,839 368,363 Ser. 09-31, Class PI, IO, 5s, 2038 2,704,809 444,590 2,687,206 441,696 IFB Ser. 05-W2, Class A2, IO, 4.95s, 2035 561,270 55,174 959,534 94,325 Ser. 10-100, Class AI, IO, 4 1/2s, 2025 7,909,362 712,083 10,883,445 979,841 Ser. 03-W12, Class 2, IO, 2.228s, 2043 489,108 39,740 664,476 53,989 Ser. 03-W12, Class 1IO2, IO, 1.986s, 2043 5,545,468 411,796 7,337,142 544,842 Ser. 03-W10, Class 1, IO, 1.606s, 2043 348,280 20,897 473,201 28,392 Ser. 98-W5, Class X, IO, 1.237s, 2028 285,548 12,380 242,484 10,513 Ser. 98-W2, Class X, IO, 1.203s, 2028 681,597 31,335 578,809 26,610 Ser. 03-W17, Class 12, IO, 1.136s, 2033 1,864,344 77,971 2,533,665 105,963 FRB Ser. 07-80, Class F, 0.96s, 2037 21,148 21,095 Ser. 03-W1, Class 2A, IO, zero %, 2042 1,029,935 874,741 Ser. 08-36, Class OV, PO, zero %, 2036 63,779 47,193 FRB Ser. 06-115, Class SN, zero %, 2036 318,201 317,256 736,635 734,448 FRB Ser. 06-104, Class EK, zero %, 2036 95,550 90,185 136,394 128,735 FRB Ser. 05-117, Class GF, zero %, 2036 49,229 48,308 GE Capital Commercial Mortgage Corp. Ser. 07-C1, Class A3, 5.481s, 2049 914,000 946,077 FRB Ser. 06-C1, Class A2, 5.336s, 2044 942,000 943,328 1,127,000 1,128,589 GE Capital Commercial Mortgage Corp. 144A Ser. 05-C2, Class XC, IO, 0.124s, 2043 24,660,011 198,900 21,311,526 171,892 Government National Mortgage Association IFB Ser. 10-98, Class CS, IO, 6.439s, 2038 567,947 95,614 720,251 121,254 IFB Ser. 10-114, Class NS, IO, 6.439s, 2038 8,026,700 1,343,830 11,858,922 1,985,421 IFB Ser. 10-98, Class SA, IO, 6.439s, 2038 549,020 89,090 590,197 95,771 IFB Ser. 10-32, Class SP, IO, 6.439s, 2036 746,493 95,111 803,484 102,372 IFB Ser. 10-113, Class PS, IO, 6.439s, 2035 3,133,965 505,164 IFB Ser. 10-125, Class CS, IO, 6.389s, 2040 4,113,213 707,280 IFB Ser. 10-85, Class AS, IO, 6.389s, 2039 776,821 125,565 835,449 135,042 IFB Ser. 10-85, Class SD, IO, 6.389s, 2038 516,633 80,342 654,531 101,786 IFB Ser. 10-98, Class QS, IO, 6.339s, 2040 735,371 118,512 791,259 127,519 IFB Ser. 10-98, Class YS, IO, 6.339s, 2039 905,930 144,940 817,690 130,822 IFB Ser. 10-47, Class HS, IO, 6.339s, 2039 353,134 58,408 380,224 62,889 IFB Ser. 10-31, Class HS, IO, 6.339s, 2039 2,453,888 388,500 IFB Ser. 10-68, Class SD, IO, 6.319s, 2040 3,915,355 618,052 3,112,479 491,315 IFB Ser. 10-58, Class LS, IO, 6.289s, 2039 7,993,529 1,242,020 6,093,228 946,754 IFB Ser. 10-162, Class SC, IO, 6.289s, 2039 4,616,375 761,702 5,857,636 966,510 IFB Ser. 10-42, Class SP, IO, 6.289s, 2039 3,318,722 518,187 3,996,190 623,967 IFB Ser. 10-31, Class PS, IO, 6.289s, 2038 5,719,011 940,600 8,445,829 1,389,077 IFB Ser. 10-158, Class SB, IO, 6.239s, 2039 3,262,343 525,661 3,495,509 563,231 IFB Ser. 10-53, Class SA, IO, 6.239s, 2039 1,941,614 311,569 2,428,463 389,693 IFB Ser. 10-31, Class GS, IO, 6.239s, 2039 2,650,929 412,670 2,484,646 386,785 IFB Ser. 10-2, Class SA, IO, 6.239s, 2037 823,064 112,307 885,218 120,788 IFB Ser. 10-24, Class BS, IO, 6.169s, 2038 15,622,346 2,356,167 21,718,107 3,275,532 IFB Ser. 09-103, Class SW, IO, 6.139s, 2037 10,473,807 1,381,600 10,538,132 1,390,085 Ser. 10-85, Class JS, IO, 6.08s, 2040 4,623,223 732,873 4,652,283 737,480 IFB Ser. 10-108, Class CS, IO, 5.889s, 2036 2,587,746 323,391 2,795,070 349,300 IFB Ser. 10-113, Class DS, IO, 5.839s, 2039 8,407,708 1,170,942 5,587,780 778,210 IFB Ser. 10-151, Class SB, IO, 5.839s, 2039 2,198,729 325,918 2,519,791 373,509 IFB Ser. 10-151, Class SM, IO, 5.819s, 2040 2,440,980 384,235 8,392,482 1,321,061 IFB Ser. 10-116, Class SL, IO, 5.789s, 2039 2,059,087 306,330 IFB Ser. 10-158, Class BS, IO, 5.759s, 2040 2,480,505 386,165 2,658,111 413,815 IFB Ser. 10-98, Class ST, IO, 5.739s, 2040 11,528,167 1,580,512 IFB Ser. 10-50, Class YS, IO, 5.739s, 2038 9,680,562 1,197,098 13,447,180 1,662,878 IFB Ser. 10-116, Class SA, IO, 5.639s, 2040 3,018,908 437,039 IFB Ser. 10-68, Class MS, IO, 5.589s, 2040 3,533,073 453,200 4,800,606 615,791 IFB Ser. 10-20, Class SD, IO, 5.419s, 2040 2,237,587 309,749 1,897,792 262,711 IFB Ser. 10-35, Class DX, IO, 5.419s, 2035 1,740,418 194,648 1,616,881 180,832 Ser. 10-58, Class VI, IO, 5s, 2038 10,219,213 1,310,678 14,060,047 1,803,290 Ser. 10-158, Class MI, IO, 4 1/2s, 2039 2,923,550 487,473 3,385,216 564,451 Ser. 10-137, Class PI, IO, 4 1/2s, 2039 2,158,329 416,014 2,266,444 436,853 Ser. 2010-129, Class PI, 4 1/2s, 2039 7,995,835 1,472,833 7,740,237 1,425,752 Ser. 10-103, Class IN, IO, 4 1/2s, 2039 11,002,758 1,757,140 13,427,361 2,144,350 Ser. 10-120, Class AI, IO, 4 1/2s, 2038 16,364,752 2,822,920 12,474,398 2,151,834 Ser. 10-109, Class CI, IO, 4 1/2s, 2037 4,569,006 781,300 Ser. 10-87, Class ID, IO, 4 1/2s, 2035 2,214,552 294,257 1,943,557 258,249 Ser. 10-165, Class IP, IO, 4s, 2038 3,495,824 568,071 Greenwich Capital Commercial Funding Corp. Ser. 07-GG9, Class A2, 5.381s, 2039 741,963 761,358 258,320 265,073 Ser. 05-GG5, Class A2, 5.117s, 2037 1,056,014 1,068,441 GS Mortgage Securities Corp. II Ser. 06-GG6, Class A3, 5.576s, 2038 707,000 739,579 Ser. 06-GG6, Class A2, 5.506s, 2038 1,192,763 1,198,860 1,630,475 1,638,808 GS Mortgage Securities Corp. II 144A Ser. 03-C1, Class X1, IO, 0.843s, 2040 5,513,884 75,573 4,894,463 67,084 GSMPS Mortgage Loan Trust 144A Ser. 05-RP1, Class 1AS, IO, 5.949s, 2035 355,218 51,063 452,904 65,105 Ser. 06-RP2, Class 1AS1, IO, 5.688s, 2036 580,601 81,284 580,601 81,284 IFB Ser. 04-4, Class 1AS, IO, 5.419s, 2034 680,075 97,761 836,182 120,201 Ser. 98-2, IO, 0.789s, 2027 110,282 2,257 93,639 1,916 FRB Ser. 06-RP2, Class 1AF1, 0.66s, 2036 580,601 493,511 580,601 493,511 FRB Ser. 04-4, Class 1AF, 0.66s, 2034 680,075 574,663 836,182 706,574 FRB Ser. 05-RP1, Class 1AF, 0.61s, 2035 355,218 301,936 452,904 384,968 Ser. 98-3, IO, 0.486077s, 2027 135,157 2,236 114,737 1,898 Ser. 98-4, IO, 0.034s, 2026 148,331 3,776 126,006 3,208 Ser. 99-2, IO, zero %, 2027 188,231 1,972 159,811 1,674 IndyMac Inda Mortgage Loan Trust FRB Ser. 07-AR7, Class 1A1, 5.876s, 2037 414,178 352,828 851,936 725,743 IndyMac Indx Mortgage Loan Trust FRB Ser. 06-AR19, Class 1A2, 5.489s, 2036 1,175,262 610,209 2,880,220 1,495,442 FRB Ser. 06-AR5, Class 1A2, 5.33s, 2036 333,067 39,968 301,993 36,239 FRB Ser. 07-AR5, Class 2A1, 5.083s, 2037 504,527 292,626 1,089,377 631,839 FRB Ser. 06-AR3, Class 3A1B, 5.072s, 2036 408,463 265,501 475,502 309,076 FRB Ser. 07-AR5, Class 1A1, 5.056s, 2037 621,467 312,536 FRB Ser. 05-AR15, Class A1, 5.046s, 2035 1,028,026 832,701 2,036,703 1,649,730 FRB Ser. 07-AR7, Class 2A1, 4.873s, 2037 809,508 461,419 880,781 502,045 FRB Ser. 06-AR3, Class 2A1A, 4.725s, 2036 1,373,671 755,519 2,887,356 1,588,046 FRB Ser. 06-AR11, Class 3A1, 4.598s, 2036 355,112 189,741 654,500 349,708 FRB Ser. 06-AR41, Class A3, 0.44s, 2037 1,056,529 533,547 1,058,154 534,368 FRB Ser. 06-AR35, Class 2A1A, 0.43s, 2037 880,609 485,091 880,071 484,794 FRB Ser. 06-AR29, Class A2, 0.34s, 2036 (F) 1,477,140 786,577 JPMorgan Chase Commercial Mortgage Securities Corp. Ser. 06-LDP7, Class A2, 5.861s, 2045 1,016,030 1,025,106 1,303,504 1,315,148 Ser. 07-C1, Class ASB, 5.857s, 2051 1,899,000 2,001,911 Ser. 07-LD12, Class A2, 5.827s, 2051 1,785,000 1,857,251 Ser. 07-C1, Class A3, 5.79s, 2051 515,000 536,130 Ser. 07-C1, Class A4, 5.716s, 2051 1,558,000 1,647,354 Ser. 06-CB16, Class A3B, 5.579s, 2045 751,000 780,085 Ser. 06-CB16, Class A2, 5.45s, 2045 336,205 340,365 561,563 568,511 Ser. 06-LDP8, Class A3B, 5.447s, 2045 368,000 384,442 Ser. 06-LDP9, Class A2S, 5.298s, 2047 1,624,000 1,660,410 1,179,000 1,205,433 Ser. 06-LDP8, Class A2, 5.289s, 2045 1,826,955 1,890,431 Ser. 05-CB13, Class A2, 5.247s, 2043 2,077,004 2,076,152 2,866,285 2,865,109 Ser. 06-LDP9, Class X, IO, 0.450953s, 2047 51,980,579 988,515 23,674,759 450,223 Ser. 06-CB16, Class X1, IO, 0.129s, 2045 11,956,101 156,919 10,611,941 139,277 LB Commercial Conduit Mortgage Trust Ser. 07-C3, Class A2, 5.84s, 2044 363,000 377,482 LB Commercial Conduit Mortgage Trust 144A FRB Ser. 07-C3, Class A2FL, 5.84s, 2044 1,666,000 1,743,517 LB-UBS Commercial Mortgage Trust Ser. 07-C6, Class A2, 5.845s, 2040 290,888 300,445 2,012,392 2,078,505 Ser. 07-C7, Class A2, 5.588s, 2045 2,688,000 2,767,350 356,000 366,509 Ser. 06-C3, Class A2, 5.532s, 2032 1,233,955 1,235,668 2,136,922 2,139,888 Ser. 05-C7, Class A2, 5.103s, 2030 154,862 154,862 130,645 130,645 Ser. 07-C2, Class XW, IO, 0.559s, 2040 3,554,585 73,665 3,156,394 65,413 LB-UBS Commercial Mortgage Trust 144A Ser. 03-C5, Class XCL, IO, 0.762s, 2037 3,911,379 65,753 3,471,764 58,363 Ser. 05-C3, Class XCL, IO, 0.297s, 2040 22,749,052 426,772 22,952,629 430,591 Lehman XS Trust FRB Ser. 07-8H, Class A1, 0.39s, 2037 (F) 3,351,737 1,680,058 3,452,115 1,730,373 Luminent Mortgage Trust FRB Ser. 06-7, Class 1A1, 0.44s, 2036 665,843 419,481 972,488 612,667 Merrill Lynch Mortgage Investors Trust FRB Ser. 06-A4, Class 3A1, 5.077s, 2036 944,333 601,277 1,113,497 708,988 Merrill Lynch Mortgage Trust FRB Ser. 07-C1, Class A2, 5.722s, 2050 1,353,731 1,395,773 Ser. 05-MCP1, Class XC, IO, 0.187s, 2043 18,782,594 204,610 Merrill Lynch/Countrywide Commercial Mortgage Trust Ser. 07-5, Class A3, 5.364s, 2048 1,416,000 1,456,847 Ser. 2006-3, Class A2, 5.291s, 2046 308,056 311,547 Ser. 06-4, Class A2, 5.112s, 2049 124,424 126,356 121,485 123,372 Morgan Stanley Capital I FRB Ser. 07-IQ15, Class A2, 5.839s, 2049 2,119,000 2,198,140 Ser. 07-HQ13, Class A2, 5.649s, 2044 1,357,000 1,407,159 Ser. 07-IQ14, Class A2, 5.61s, 2049 2,158,000 2,234,861 FRB 5.597s, 2049 811,779 825,800 1,086,925 1,105,698 FRB Ser. 06-HQ8, Class A3, 5.442s, 2044 2,205,000 2,269,276 Ser. 06-T21, Class A2, 5.09s, 2052 22,018 21,996 20,387 20,367 Ser. 05-HQ6, Class A2A, 4.882s, 2042 1,423,125 1,441,725 Ser. 03-IQ4, Class X1, IO, 0.528s, 2040 21,655,229 673,494 23,119,483 719,033 FRB Ser. 07-HQ12, Class A2FL, 0.511s, 2049 373,692 346,263 499,556 462,889 Morgan Stanley Mortgage Loan Trust FRB Ser. 06-3AR, Class 3A1, 5.564s, 2036 503,577 360,058 649,128 464,126 FRB Ser. 07-14AR, Class 6A1, 5.271s, 2037 2,021,010 1,374,287 2,856,297 1,942,282 FRB Ser. 07-15AR, Class 2A1, 5.149s, 2037 946,759 666,719 1,204,087 847,932 FRB Ser. 06-5AR, Class A, 0.51s, 2036 397,032 226,308 Morgan Stanley ReREMIC Trust 144A FRB Ser. 10-C30A, Class A3B, 10.236s, 2043 439,000 463,009 Nomura Asset Acceptance Corp. FRB Ser. 06-AR4, Class A4A, 0 1/2s, 2036 1,420,416 710,208 1,679,710 839,855 FRB Ser. 06-AR4, Class A1A, 0.43s, 2036 2,562,325 1,268,351 Residential Accredit Loans, Inc. Ser. 06-QS17, Class A4, 6s, 2036 674,509 411,451 660,425 402,860 Ser. 06-QS13, Class 1A5, 6s, 2036 123,582 77,239 111,609 69,756 FRB Ser. 07-QA4, Class A1B, 0.47s, 2037 572,355 274,730 Residential Asset Securitization Trust Ser. 06-A13, Class A1, 6 1/4s, 2036 (F) 1,708,205 1,204,284 2,761,089 1,946,568 Ser. 06-A5CB, Class A6, 6s, 2036 597,570 369,373 704,401 435,408 FRB Ser. 05-A13, Class 1A1, 0.96s, 2035 591,263 396,146 FRB Ser. 05-A2, Class A1, 0.76s, 2035 294,721 228,266 351,284 272,074 Structured Adjustable Rate Mortgage Loan Trust FRB Ser. 07-8, Class 1A2, 6 1/4s, 2037 364,158 260,373 FRB Ser. 07-10, Class 1A1, 6s, 2037 1,606,824 872,204 1,648,649 894,907 FRB Ser. 06-9, Class 1A1, 5.297s, 2036 546,948 334,593 452,116 276,580 FRB Ser. 05-18, Class 6A1, 2.821s, 2035 819,283 655,426 FRB Ser. 07-4, Class 1A1, 0 1/2s, 2037 783,905 407,631 835,004 434,202 Structured Asset Securities Corp. IFB Ser. 07-4, Class 1A3, IO, 5.99s, 2045 924,003 125,548 1,263,960 170,588 Ser. 07-4, Class 1A4, IO, 1s, 2045 1,851,125 58,087 2,592,551 81,353 Vericrest Opportunity Loan Transferee 144A Ser. 10-NPL1, Class M, 6s, 2039 1,813,376 1,804,309 2,533,744 2,521,075 Wachovia Bank Commercial Mortgage Trust Ser. 06-C26, Class A2, 5.935s, 2045 313,337 323,659 FRB Ser. 07-C32, Class A2, 5.741s, 2049 2,425,000 2,537,563 2,478,000 2,593,024 Ser. 06-C25, Class A2, 5.684s, 2043 43,724 43,866 385,949 387,205 Ser. 06-C28, Class A3, 5.679s, 2048 922,000 974,023 Ser. 06-C27, Class A2, 5.624s, 2045 630,358 638,215 Ser. 07-C34, Class A2, 5.569s, 2046 1,039,000 1,070,817 Ser. 2006-C28, Class A2, 5 1/2s, 2048 1,623,298 1,646,730 Ser. 07-C30, Class APB, 5.294s, 2043 787,000 806,374 Ser. 06-C29, Class A2, 5.275s, 2048 291,000 296,113 Wachovia Bank Commercial Mortgage Trust 144A Ser. 03-C3, Class IOI, IO, 1.107s, 2035 15,134,001 260,329 3,857,541 66,356 Wachovia Mortgage Loan Trust, LLC FRB Ser. 06-AMN1, Class A1, 0.31s, 2036 1,159,833 611,812 Total mortgage-backed securities (cost $172,285,683 and $135,876,466) COMMON STOCKS(a) 500 Fund 23.0% 700 Fund 26.1% Shares Value Shares Value Advertising and marketing services 0.1% 0.1% Omnicom Group, Inc. 18,605 $834,992 18,049 $810,039 Aerospace and defense 1.0% 1.1% L-3 Communications Holdings, Inc. 12,927 1,011,538 12,542 981,412 Lockheed Martin Corp. 23,018 1,832,233 22,330 1,777,468 Northrop Grumman Corp. 21,751 1,507,344 21,102 1,462,369 Raytheon Co. 28,827 1,441,062 27,968 1,398,120 Rockwell Collins, Inc. 16,789 1,076,846 16,287 1,044,648 Airlines 0.2% 0.2% Copa Holdings SA Class A (Panama) 7,768 436,950 7,536 423,900 Southwest Airlines Co. 77,909 923,222 75,582 895,647 Banking 0.6% 0.7% Bank of Hawaii Corp. 11,079 519,273 10,748 503,759 Hudson City Bancorp, Inc. 70,769 777,044 68,656 753,843 M&T Bank Corp. 12,899 1,115,377 12,516 1,082,259 New York Community Bancorp, Inc. 53,308 976,603 51,716 947,437 People's United Financial, Inc. 56,765 732,836 55,071 710,967 Biotechnology 0.2% 0.2% Biogen Idec, Inc. (NON) 20,991 1,374,281 20,366 1,333,362 Broadcasting 0.1% 0.1% Discovery Communications, Inc. Class A (NON) 13,043 508,677 12,653 493,467 Building materials 0.1% 0.1% Sherwin-Williams Co. (The) 8,849 749,776 8,585 727,407 Cable television 0.1% 0.1% IAC/InterActiveCorp. (NON) 24,314 687,843 23,588 667,305 Chemicals 0.4% 0.4% International Flavors & Fragrances, Inc. 9,307 530,964 9,029 515,104 PPG Industries, Inc. 10,816 911,572 10,494 884,434 Sigma-Aldrich Corp. 10,326 657,250 10,018 637,646 Valspar Corp. 13,071 488,463 12,680 473,852 Commercial and consumer services 1.1% 1.3% Automatic Data Processing, Inc. 46,477 2,226,248 45,089 2,159,763 Ecolab, Inc. 16,521 820,928 16,029 796,481 Equifax, Inc. 19,164 684,538 18,592 664,106 Expedia, Inc. 23,047 579,863 22,360 562,578 Gartner, Inc. (NON) 24,376 863,398 23,650 837,683 Moody's Corp. 31,811 934,289 30,860 906,358 Priceline.com, Inc. (NON) 2,576 1,103,868 2,499 1,070,871 Verisk Analytics, Inc. Class A (NON) 21,125 714,659 20,494 693,312 Communications equipment 0.2% 0.2% Harris Corp. 23,802 1,107,745 23,092 1,074,702 Computers 1.5% 1.6% ANSYS, Inc. (NON) 18,960 994,452 18,393 964,713 Compuware Corp. (NON) 61,951 664,115 60,102 644,293 Hewlett-Packard Co. 37,793 1,726,762 36,665 1,675,224 IBM Corp. 31,007 5,023,134 30,081 4,873,122 Micros Systems, Inc. (NON) 19,075 872,491 18,507 846,510 Solera Holdings, Inc. 16,747 876,371 16,247 850,206 Conglomerates 0.1% 0.1% AMETEK, Inc. 20,342 829,547 19,737 804,875 Consumer 0.1% 0.1% Scotts Miracle-Gro Co. (The) Class A 8,856 457,590 8,591 443,897 Tupperware Brands Corp. 8,465 387,274 8,212 375,699 Consumer goods 0.4% 0.4% Kimberly-Clark Corp. 39,965 2,586,934 38,771 2,509,647 Containers 0.1% 0.1% Ball Corp. 8,658 615,844 8,399 597,421 Distribution 0.1% 0.2% W.W. Grainger, Inc. 7,250 953,158 7,033 924,629 Electric utilities 0.7% 0.8% Alliant Energy Corp. 14,940 555,170 14,494 538,597 DPL, Inc. 18,360 480,665 17,812 466,318 DTE Energy Co. 16,813 777,769 16,312 754,593 Entergy Corp. 13,742 991,760 13,332 962,170 Pinnacle West Capital Corp. 14,099 573,970 13,678 556,831 Public Service Enterprise Group, Inc. 34,970 1,134,077 33,926 1,100,220 Westar Energy, Inc. 18,096 461,448 17,555 447,653 Electronics 0.2% 0.3% Analog Devices, Inc. 40,275 1,563,878 39,071 1,517,127 Energy (oil field) 0.5% 0.5% Core Laboratories NV (Netherlands) 7,710 703,615 7,479 682,534 Dresser-Rand Group, Inc. (NON) 15,483 711,134 15,022 689,960 FMC Technologies, Inc. (NON) 12,734 1,196,996 12,354 1,161,276 Oceaneering International, Inc. (NON) 9,386 724,881 9,104 703,102 Energy (other) 0.1% 0.1% Covanta Holding Corp. 30,533 516,618 29,621 501,187 Engineering and construction 0.1% 0.1% KBR, Inc. 23,119 742,120 22,429 719,971 Financial 0.1% 0.1% Broadridge Financial Solutions, Inc. 34,166 782,060 33,146 758,712 Food 0.5% 0.6% Corn Products International, Inc. 19,988 922,046 19,391 894,507 Hershey Co. (The) 29,080 1,357,745 28,211 1,317,172 Hormel Foods Corp. 25,053 1,237,618 24,306 1,200,716 Forest products and packaging 0.1% 0.1% Rayonier, Inc. (R) 13,476 797,914 13,074 774,112 Health-care services 1.0% 1.2% AmerisourceBergen Corp. 32,351 1,160,107 31,386 1,125,502 Cardinal Health, Inc. 33,617 1,395,442 32,614 1,353,807 Laboratory Corp. of America Holdings (NON) 11,869 1,067,142 11,515 1,035,314 Lincare Holdings, Inc. 21,206 573,622 20,572 556,473 McKesson Corp. 21,220 1,595,107 20,587 1,547,525 Pharmaceutical Product Development, Inc. 23,326 679,720 22,630 659,438 Warner Chilcott PLC Class A (Ireland) 37,337 895,715 36,223 868,990 Insurance 2.2% 2.5% ACE, Ltd. 25,379 1,563,093 24,621 1,516,407 Allied World Assurance Company Holdings, Ltd. 9,125 550,511 8,854 534,162 Arch Capital Group, Ltd. (NON) 7,915 698,499 7,679 677,672 Aspen Insurance Holdings, Ltd. 17,791 534,620 17,260 518,663 Axis Capital Holdings, Ltd. 19,662 699,574 19,075 678,689 Berkshire Hathaway, Inc. Class B (NON) 38,977 3,186,370 37,814 3,091,295 Chubb Corp. (The) 24,407 1,413,898 23,679 1,371,724 Endurance Specialty Holdings, Ltd. (Bermuda) 11,658 541,980 11,310 525,802 Everest Re Group, Ltd. 8,626 726,999 8,368 705,255 PartnerRe, Ltd. 10,604 868,256 10,287 842,300 RenaissanceRe Holdings, Ltd. 10,021 657,578 9,721 637,892 Transatlantic Holdings, Inc. 12,021 618,480 11,662 600,010 Travelers Cos., Inc. (The) 31,077 1,748,392 30,150 1,696,239 Validus Holdings, Ltd. 20,795 632,168 20,174 613,290 W.R. Berkley Corp. 24,622 695,572 23,887 674,808 Machinery 0.1% 0.1% MSC Industrial Direct Co., Inc. 8,501 505,214 8,248 490,179 Manufacturing 0.1% 0.1% Roper Industries, Inc. 11,303 878,130 10,965 851,871 Media 0.2% 0.2% Viacom, Inc. Class B 27,469 1,141,337 26,649 1,107,266 Medical technology 0.2% 0.3% C.R. Bard, Inc. 11,086 1,045,964 10,756 1,014,829 Gen-Probe, Inc. (NON) 10,020 630,158 9,721 611,354 Metals 0.2% 0.2% Newmont Mining Corp. 21,609 1,190,008 20,964 1,154,487 Natural gas utilities 0.2% 0.2% AGL Resources, Inc. 12,753 468,035 12,373 454,089 Southern Union Co. 24,326 649,991 23,601 630,619 Oil and gas 2.2% 2.5% Chevron Corp. 51,873 4,924,304 50,325 4,777,352 Exxon Mobil Corp. 90,867 7,331,150 88,154 7,112,265 Holly Corp. 13,061 640,903 12,673 621,864 Murphy Oil Corp. 18,109 1,200,627 17,568 1,164,758 Oil States International, Inc. (NON) 9,852 667,572 9,558 647,650 Sunoco, Inc. 18,968 805,192 18,402 781,165 Pharmaceuticals 1.1% 1.3% Abbott Laboratories 62,495 2,822,274 60,629 2,738,006 Cephalon, Inc. (NON) 12,142 717,349 11,779 695,903 Eli Lilly & Co. 62,983 2,189,919 61,104 2,124,586 Forest Laboratories, Inc. (NON) 32,482 1,047,869 31,512 1,016,577 Perrigo Co. 13,163 957,477 12,771 928,963 Publishing 0.2% 0.2% McGraw-Hill Cos., Inc. (The) 21,403 834,289 20,764 809,381 Washington Post Co. (The) Class B 966 413,786 937 401,364 Real estate 0.6% 0.7% Annaly Capital Management, Inc. (R) 63,831 1,138,107 61,925 1,104,123 Digital Realty Trust, Inc. (R) 14,226 773,894 13,802 750,829 Federal Realty Investment Trust (R) 9,779 786,525 9,488 763,120 Jones Lang LaSalle, Inc. 7,781 689,708 7,549 669,143 Realty Income Corp. (R) 20,205 706,367 19,600 685,216 Regional Bells 0.5% 0.5% Verizon Communications, Inc. 92,690 3,301,618 89,923 3,203,057 Restaurants 0.5% 0.6% Brinker International, Inc. 15,457 363,703 14,996 352,856 Darden Restaurants, Inc. 12,402 584,258 12,033 566,875 Panera Bread Co. Class A (NON) 3,880 370,773 3,765 359,783 Starbucks Corp. 35,202 1,109,919 34,150 1,076,750 Yum! Brands, Inc. 22,422 1,048,453 21,752 1,017,124 Retail 1.5% 1.7% Advance Auto Parts, Inc. 8,044 514,333 7,804 498,988 Amazon.com, Inc. (NON) 11,625 1,972,065 11,278 1,913,200 AutoZone, Inc. (NON) 3,026 767,182 2,935 744,111 Big Lots, Inc. (NON) 12,107 384,882 11,745 373,374 Dollar Tree, Inc. (NON) 10,871 549,855 10,547 533,467 Family Dollar Stores, Inc. 11,717 497,738 11,366 482,828 Herbalife, Ltd. 14,507 947,742 14,075 919,520 PETsMART, Inc. 12,647 508,915 12,270 493,745 Ross Stores, Inc. 9,998 651,870 9,701 632,505 Safeway, Inc. 65,692 1,359,167 63,731 1,318,594 Target Corp. 25,448 1,395,314 24,687 1,353,588 TJX Cos., Inc. (The) 22,025 1,043,765 21,368 1,012,630 Semiconductor 0.2% 0.3% Cypress Semiconductor Corp. (NON) 44,415 961,585 43,089 932,877 Novellus Systems, Inc. (NON) 23,535 848,907 22,832 823,550 Shipping 0.4% 0.5% J. B. Hunt Transport Services, Inc. 17,845 731,645 17,312 709,792 United Parcel Service, Inc. Class B 32,348 2,316,764 31,383 2,247,650 Software 0.8% 0.9% Amdocs, Ltd. (United Kingdom) (NON) 38,367 1,118,014 37,221 1,084,620 BMC Software, Inc. (NON) 27,342 1,304,213 26,526 1,265,290 CA, Inc. 65,110 1,549,618 63,166 1,503,351 Intuit, Inc. (NON) 36,424 1,709,378 35,338 1,658,412 Technology 0.2% 0.2% Avago Technologies, Ltd. 43,085 1,236,970 41,799 1,200,049 Technology services 0.6% 0.7% Accenture PLC Class A 52,388 2,696,410 50,826 2,616,014 AOL, Inc. (NON) 29,585 695,839 28,700 675,024 FactSet Research Systems, Inc. 10,067 1,014,754 9,767 984,514 Telecommunications 0.2% 0.2% American Tower Corp. Class A (NON) 28,905 1,470,108 28,042 1,426,216 Textiles 0.1% 0.1% Cintas Corp. 22,605 634,296 21,931 615,384 Tobacco 0.9% 1.1% Lorillard, Inc. 21,038 1,582,899 20,410 1,535,648 Philip Morris International, Inc. 86,289 4,939,182 83,711 4,791,618 Transportation services 0.1% 0.1% Landstar Systems, Inc. 11,502 476,528 11,158 462,276 Total common stocks (cost $153,592,570 and $149,071,301) CORPORATE BONDS AND NOTES(a) 500 Fund 15.6% 700 Fund 16.7% Principal amount Value Principal amount Value Advertising and marketing services 0.2% % Lamar Media Corp. company guaranty sr. notes 9 3/4s, 2014 $990,000 $1,145,925 $200,000 $231,500 Aerospace and defense 0.2% 0.1% Alliant Techsystems, Inc. sr. sub. notes 6 3/4s, 2016 265,000 272,950 335,000 345,050 BE Aerospace, Inc. sr. unsec. unsub. notes 8 1/2s, 2018 285,000 310,650 Boeing Co. (The) sr. unsec. unsub. notes 3 1/2s, 2015 252,000 264,079 148,000 155,094 United Technologies Corp. sr. unsec. unsub. notes 4 7/8s, 2015 252,000 278,735 148,000 163,701 Automotive 0.2% % Affinion Group Holdings, Inc. 144A sr. notes 10 3/4s, 2016 130,000 144,950 Daimler Finance North America, LLC company guaranty 6 1/2s, 2013 (Germany) 157,000 178,005 93,000 105,443 TRW Automotive, Inc. 144A company guaranty sr. unsec. unsub. notes 7s, 2014 1,000,000 1,100,000 Banking 1.9% 1.5% Bank of America Corp. sr. unsec. notes 5 3/4s, 2017 2,015,000 2,109,836 1,185,000 1,240,772 Bank of New York Mellon Corp. (The) sr. unsec. notes 2.95s, 2015 252,000 258,594 148,000 151,873 Barclays Bank PLC sr. unsec. unsub. notes 5.2s, 2014 346,000 375,615 204,000 221,461 BB&T Corp. unsec. sub. notes 5.2s, 2015 189,000 203,833 111,000 119,711 Citigroup, Inc. sr. unsec. unsub. notes 6 1/8s, 2017 1,575,000 1,727,936 925,000 1,014,819 Credit Suisse Guernsey sr. unsec. notes 5 1/2s, 2014 787,000 865,822 463,000 509,372 Deutsche Bank AG sr. unsec. notes 6s, 2017 (United Kingdom) 346,000 388,237 204,000 228,902 HSBC Finance Corp. 144A sr. unsec. sub. notes 6.676s, 2021 740,000 766,908 435,000 450,817 JPMorgan Chase & Co. sr. unsec. unsub. notes 3.7s, 2015 1,701,000 1,767,121 999,000 1,037,833 PNC Funding Corp. bank guaranty sr. unsec. note 3 5/8s, 2015 283,000 292,782 167,000 172,773 Shinhan Bank 144A sr. unsec. bond 6s, 2012 (South Korea) 225,000 236,764 150,000 157,843 UBS AG/Stamford CT sr. unsec. notes Ser. DPNT, 3 7/8s, 2015 300,000 308,999 250,000 257,500 US Bancorp sr. unsec. unsub. notes 2.45s, 2015 252,000 251,710 148,000 147,830 VTB Bank Via VTB Capital SA sr. notes 6 1/4s, 2035 (Russia) 500,000 515,625 500,000 515,625 VTB Bank Via VTB Capital SA 144A sr. unsec. notes 6 7/8s, 2018 (Russia) 1,600,000 1,707,360 1,500,000 1,600,650 Wells Fargo & Co. sr. unsec. unsub. notes 5 5/8s, 2017 1,291,000 1,434,039 759,000 843,095 Westpac Banking Corp. sr. unsec. unsub. notes 3s, 2015 (Australia) 220,000 220,322 130,000 130,190 Beverage 0.2% 0.2% Anheuser-Busch InBev Worldwide, Inc. company guaranty sr. unsec. unsub. notes 4 1/8s, 2015 346,000 368,509 204,000 217,271 Coca-Cola Refreshments USA, Inc. sr. unsec. unsub. notes 7 3/8s, 2014 157,000 183,645 93,000 108,783 Constellation Brands, Inc. company guaranty sr. unsec. unsub. notes 7 1/4s, 2016 260,000 276,575 590,000 627,613 Diageo Capital PLC company guaranty 5 3/4s, 2017 (United Kingdom) 189,000 215,537 111,000 126,585 PepsiCo, Inc. sr. unsec. unsub. notes 3.1s, 2015 441,000 461,412 259,000 270,988 Biotechnology % 0.1% Amgen, Inc. sr. unsec. notes 5.85s, 2017 189,000 218,807 111,000 128,505 Talecris Biotherapeutics Holdings Corp. company guaranty sr. unsec. notes 7 3/4s, 2016 65,000 71,175 200,000 219,000 Broadcasting 0.4% 0.2% Belo Corp. sr. unsec. unsub. notes 8s, 2016 195,000 212,550 200,000 218,000 DIRECTV Holdings, LLC/DIRECTV Financing Co., Inc. company guaranty sr. unsec. notes 7 5/8s, 2016 189,000 209,790 161,000 178,710 DISH DBS Corp. company guaranty 7 1/8s, 2016 255,000 266,475 DISH DBS Corp. company guaranty 7s, 2013 220,000 235,400 Echostar DBS Corp. sr. notes 6 3/8s, 2011 145,000 148,806 News America, Inc. company guaranty sr. unsec. notes 5.3s, 2014 252,000 280,599 148,000 164,796 Sirius XM Radio, Inc. 144A sr. notes 9 3/4s, 2015 685,000 772,338 220,000 248,050 Univision Communications, Inc. 144A company guaranty sr. unsec. unsub. notes 9 3/4s, 2015 (PIK) 1,938 2,112 Univision Communications, Inc. 144A sr. sec. notes 12s, 2014 855,000 933,019 Building materials % 0.1% Owens Corning, Inc. company guaranty unsec. unsub. notes 9s, 2019 210,000 246,750 275,000 323,125 Cable television 0.5% 0.6% CCO Holdings, LLC/CCO Holdings Capital Corp. company guaranty sr. unsec. notes 7 7/8s, 2018 270,000 284,175 Charter Communications Operating LLC/Charter Communications Operating Capital 144A company guaranty sr. notes 8s, 2012 200,000 210,750 300,000 316,125 Comcast Corp. company guaranty sr. unsec. unsub. bonds 6 1/2s, 2017 630,000 726,873 370,000 426,893 CSC Holdings LLC sr. notes 6 3/4s, 2012 215,000 224,406 84,000 87,675 CSC Holdings LLC sr. unsec. unsub. notes 8 1/2s, 2014 695,000 776,663 730,000 815,775 CSC Holdings, Inc. sr. notes Ser. B, 7 5/8s, 2011 40,000 40,250 Mediacom Broadband, LLC/Mediacom Broadband Corp. sr. unsec. unsub. notes 8 1/2s, 2015 900,000 922,500 1,400,000 1,435,000 Time Warner Cable, Inc. company guaranty sr. unsec. notes 5.85s, 2017 535,000 595,894 315,000 350,854 Virgin Media Secured Finance PLC company guaranty sr. notes 7s, 2018 (United Kingdom) GBP 145,000 245,824 100,000 169,534 Chemicals 0.8% 0.7% Dow Chemical Co. (The) sr. unsec. FRN 2.536s, 2011 155,000 156,745 110,000 111,239 Dow Chemical Co. (The) sr. unsec. unsub. notes 5.9s, 2015 315,000 349,456 185,000 205,236 E.I. du Pont de Nemours & Co. sr. unsec. unsub. notes 3 1/4s, 2015 252,000 261,789 148,000 153,749 Hexion U.S. Finance Corp./Hexion Nova Scotia Finance, ULC company guaranty sr. notes FRN 4.786s, 2014 400,000 383,000 750,000 718,125 Ineos Finance PLC 144A company guaranty sr. notes 9s, 2015 (United Kingdom) 1,020,000 1,122,000 1,170,000 1,287,000 Kronos International, Inc. sr. notes 6 1/2s, 2013 (Germany) EUR 1,000,000 1,375,585 1,000,000 1,375,585 Lyondell Chemical Co. 144A company guaranty sr. notes 8s, 2017 $899,000 1,003,509 $ Momentive Performance Materials, Inc. company guaranty sr. notes 12 1/2s, 2014 647,000 723,023 165,000 184,388 Coal 0.1% 0.2% Arch Western Finance, LLC company guaranty sr. notes 6 3/4s, 2013 379,000 382,790 282,000 284,820 Peabody Energy Corp. company guaranty 7 3/8s, 2016 135,000 151,200 555,000 621,600 Combined utilities % 0.1% El Paso Corp. sr. unsec. notes 7s, 2017 225,000 242,528 465,000 501,224 El Paso Corp. sr. unsec. notes Ser. GMTN, 7 3/8s, 2012 26,000 27,648 Commercial and consumer services 0.2% 0.3% Corrections Corporation of America company guaranty sr. notes 7 3/4s, 2017 260,000 284,375 320,000 350,000 Expedia, Inc. 144A company guaranty sr. notes 8 1/2s, 2016 240,000 261,000 210,000 228,375 Lender Processing Services, Inc. company guaranty sr. unsec. unsub. notes 8 1/8s, 2016 405,000 418,163 559,000 577,168 Sabre Holdings Corp. sr. unsec. unsub. notes 8.35s, 2016 500,000 485,000 Travelport LLC company guaranty 9 7/8s, 2014 190,000 186,675 195,000 191,588 Communications equipment % % Cisco Systems, Inc. sr. unsec. unsub. notes 5 1/2s, 2016 283,000 322,590 167,000 190,362 Computers 0.4% 0.4% Ceridian Corp. company guaranty sr. unsec. notes 12 1/4s, 2015 (PIK) 485,000 506,825 695,000 726,275 Hewlett-Packard Co. sr. unsec. notes 6 1/8s, 2014 252,000 284,984 148,000 167,372 IBM Corp. sr. unsec. notes 5.7s, 2017 378,000 434,506 222,000 255,186 Seagate Technology International 144A company guaranty sr. sec. notes 10s, 2014 (Cayman Islands) 230,000 268,525 SunGard Data Systems, Inc. company guaranty 10 1/4s, 2015 985,000 1,037,944 1,085,000 1,143,319 Xerox Corp. sr. unsec. unsub. notes 4 1/4s, 2015 220,000 232,798 130,000 137,562 Conglomerates 0.3% 0.2% General Electric Co. sr. unsec. notes 5 1/4s, 2017 1,984,000 2,148,648 1,166,000 1,262,764 SPX Corp. sr. unsec. notes 7 5/8s, 2014 260,000 284,050 125,000 136,563 Consumer % 0.1% Jarden Corp. company guaranty sr. unsec. notes 8s, 2016 135,000 146,644 Jarden Corp. company guaranty sr. unsec. sub. notes 7 1/2s, 2017 435,000 457,838 Consumer finance 0.2% 0.1% American Express Credit Corp. sr. unsec. unsub. notes 5 1/8s, 2014 567,000 614,212 333,000 360,728 Capital One Financial Corp. sr. unsec. unsub. notes 6 3/4s, 2017 252,000 290,931 148,000 170,864 SLM Corp. sr. unsec. unsub. notes Ser. MTN, 8.45s, 2018 220,000 237,695 130,000 140,456 Consumer goods 0.2% 0.2% ACCO Brands Corp. company guaranty sr. notes 10 5/8s, 2015 500,000 565,000 500,000 565,000 Procter & Gamble Co. (The) sr. unsec. notes 3 1/2s, 2015 252,000 266,138 148,000 156,303 Revlon Consumer Products Corp. company guaranty notes 9 3/4s, 2015 300,000 318,750 300,000 318,750 Consumer services 0.2% 0.3% Hertz Holdings Netherlands BV 144A sr. bonds 8 1/2s, 2015 (Netherlands) EUR 500,000 744,803 750,000 1,117,204 Service Corporation International sr. notes 7s, 2017 $170,000 179,138 $185,000 194,944 Service Corporation International sr. unsec. 7 3/8s, 2014 180,000 196,650 195,000 213,038 Stewart Enterprises, Inc. sr. notes 6 1/4s, 2013 200,000 200,000 Containers % 0.1% Owens Brockway Glass Container, Inc. company guaranty 6 3/4s, 2014 150,000 154,125 Reynolds Group DL Escrow, Inc./Reynolds Group Escrow, LLC 144A company guaranty sr. notes 7 3/4s, 2016 (Luxembourg) 195,000 205,725 200,000 211,000 Electric utilities 0.6% 0.5% AES Corp. (The) sr. notes 8 7/8s, 2011 50,000 50,000 AES Corp. (The) sr. unsec. unsub. notes 9 3/4s, 2016 210,000 242,025 150,000 172,875 AES Corp. (The) sr. unsec. unsub. notes 8s, 2017 1,035,000 1,120,388 1,000,000 1,082,500 Appalachian Power Co. sr. unsec. unsub. notes 7s, 2038 189,000 217,095 111,000 127,500 Carolina Power & Light Co. 1st mtge. bonds 5.3s, 2019 155,000 171,831 90,000 99,773 Consolidated Edison Co. of New York sr. unsec. notes 7 1/8s, 2018 157,000 191,099 93,000 113,198 Dominion Resources, Inc. sr. unsec. unsub. notes Ser. 07-A, 6s, 2017 315,000 362,321 185,000 212,792 Duke Energy Corp. sr. unsec. unsub. notes 6.3s, 2014 315,000 353,056 185,000 207,350 Exelon Corp. sr. unsec. notes 4.9s, 2015 252,000 268,738 148,000 157,830 FirstEnergy Corp. notes Ser. B, 6.45s, 2011 11,000 11,429 7,000 7,273 FirstEnergy Corp. sr. unsec. unsub. notes Ser. C, 7 3/8s, 2031 220,000 233,301 130,000 137,860 FPL Group Capital, Inc. company guaranty sr. unsec. notes 7 7/8s, 2015 157,000 188,610 93,000 111,725 National Rural Utilities Cooperative Finance Corp. sr. bonds 10 3/8s, 2018 126,000 173,140 74,000 101,685 NV Energy, Inc. sr. unsec. unsub. notes 6 3/4s, 2017 145,000 146,737 170,000 172,037 Pacific Gas & Electric Co. sr. unsec. bonds 4.8s, 2014 220,000 239,412 130,000 141,471 Southern Power Co. sr. unsec. notes Ser. D, 4 7/8s, 2015 189,000 204,846 111,000 120,306 Texas-New Mexico Power Co. 144A 1st mtge. sec. 9 1/2s, 2019 275,000 345,889 125,000 157,222 Electronics % 0.1% NXP BV/NXP Funding, LLC company guaranty Ser. EXCH, 9 1/2s, 2015 (Netherlands) 545,000 583,831 STATS ChipPAC, Ltd. 144A company guaranty sr. unsec. notes 7 1/2s, 2015 (Singapore) 200,000 217,500 200,000 217,500 Energy (oil field) 0.1% 0.2% Expro Finance Luxemburg 144A sr. notes 8 1/2s, 2016 (Luxembourg) 530,000 522,050 615,000 605,775 Trico Shipping AS 144A sr. notes 13 7/8s, 2014 (Norway) (In default) (NON) 555,000 456,488 645,000 530,513 Entertainment % 0.1% AMC Entertainment, Inc. sr. sub. notes 8s, 2014 350,000 354,375 Financial 0.4% 0.5% CIT Group, Inc. sr. bonds 7s, 2014 1,100,000 1,120,625 1,100,000 1,120,625 Icahn Enterprises LP/Icahn Enterprises Finance Corp. company guaranty sr. unsec. notes 7 3/4s, 2016 300,000 309,375 700,000 721,875 Leucadia National Corp. sr. unsec. notes 8 1/8s, 2015 162,000 178,200 324,000 356,400 Leucadia National Corp. sr. unsec. notes 7 1/8s, 2017 266,000 276,640 Leucadia National Corp. sr. unsec. notes 7s, 2013 100,000 107,250 Vnesheconombank Via VEB Finance, Ltd. 144A bank guaranteed bonds 6.8s, 2025 (Russia) 800,000 788,000 700,000 689,500 Food 0.2% 0.4% Dole Food Co. 144A sr. notes 8s, 2016 200,000 213,000 Kraft Foods, Inc. sr. unsec. unsub. notes 4 1/8s, 2016 598,000 627,770 352,000 369,524 Reddy Ice Corp. company guaranty sr. notes 11 1/4s, 2015 300,000 311,250 Smithfield Foods, Inc. company guaranty sr. notes 10s, 2014 180,000 211,725 530,000 623,413 Tyson Foods, Inc. sr. unsec. unsub. notes 10 1/2s, 2014 230,000 273,700 505,000 600,950 Forest products and packaging 0.4% 0.8% PE Paper Escrow GmbH sr. notes Ser. REGS, 11 3/4s, 2014 (Austria) EUR 100,000 157,140 165,000 259,281 PE Paper Escrow GmbH 144A sr. notes 12s, 2014 (Austria) $250,000 291,293 $850,000 990,396 Sappi Papier Holding AG 144A company guaranty 6 3/4s, 2012 (Austria) 60,000 61,652 Smurfit Kappa Funding PLC sr. unsec. sub. notes 7 3/4s, 2015 (Ireland) 1,000,000 1,017,500 1,410,000 1,434,675 Verso Paper Holdings, LLC/Verso Paper, Inc. company guaranty sr. notes FRN Ser. B, 4.037s, 2014 500,000 480,625 Verso Paper Holdings, LLC/Verso Paper, Inc. sr. notes 11 1/2s, 2014 1,225,000 1,350,563 1,205,000 1,328,513 Gaming and lottery 0.3% 0.3% Ameristar Casinos, Inc. company guaranty sr. unsec. notes 9 1/4s, 2014 1,255,000 1,345,988 325,000 348,563 Harrah's Operating Co., Inc. sr. notes 11 1/4s, 2017 390,000 442,650 695,000 788,825 MGM Resorts International sr. notes 10 3/8s, 2014 180,000 203,850 190,000 215,175 Yonkers Racing Corp. 144A sr. notes 11 3/8s, 2016 162,000 179,010 Health-care services 0.6% 0.9% CHS/Community Health Systems, Inc. company guaranty sr. unsec. sub. notes 8 7/8s, 2015 525,000 554,531 810,000 855,563 Fresenius US Finance II, Inc. 144A sr. unsec. notes 9s, 2015 235,000 269,956 525,000 603,094 HCA, Inc. company guaranty sr. notes 9 5/8s, 2016 (PIK) 1,000,000 1,078,750 1,230,000 1,326,863 HCA, Inc. company guaranty sr. notes 8 1/2s, 2019 50,000 55,750 HCA, Inc. sr. sec. notes 9 1/8s, 2014 160,000 168,000 IASIS Healthcare/IASIS Capital Corp. sr. sub. notes 8 3/4s, 2014 545,000 559,306 815,000 836,394 Omnicare, Inc. sr. sub. notes 6 7/8s, 2015 575,000 595,125 665,000 688,275 Tenet Healthcare Corp. sr. notes 9s, 2015 275,000 303,875 455,000 502,775 Tenet Healthcare Corp. sr. notes 8 7/8s, 2019 40,000 45,800 80,000 91,600 UnitedHealth Group, Inc. sr. unsec. notes 6s, 2018 189,000 214,256 111,000 125,833 Ventas Realty LP/Capital Corp. sr. notes 6 3/4s, 2017 (R) 135,000 140,842 WellPoint, Inc. unsec. unsub. notes 5 1/4s, 2016 157,000 172,680 93,000 102,288 Household furniture and appliances 0.1% 0.2% Sealy Mattress Co. 144A company guaranty sr. sec. notes 10 7/8s, 2016 752,000 854,460 962,000 1,093,073 Insurance 0.4% 0.3% Allstate Corp. (The) sr. unsec. unsub. notes 5s, 2014 189,000 207,642 111,000 121,948 American International Group, Inc. sr. unsec. notes Ser. MTN, 5.45s, 2017 315,000 326,414 185,000 191,703 Berkshire Hathaway, Inc. sr. unsec. unsub. notes 3.2s, 2015 693,000 716,698 407,000 420,918 Hartford Financial Services Group, Inc. (The) jr. unsec. sub. debs. FRB 8 1/8s, 2038 530,000 575,515 645,000 700,390 MetLife, Inc. sr. unsec. 6 3/4s, 2016 252,000 293,385 148,000 172,306 Prudential Financial, Inc. sr. disc. unsec. unsub. notes Ser. MTN, 4 3/4s, 2015 315,000 336,545 185,000 197,653 Investment banking/Brokerage 0.5% 0.3% E*Trade Financial Corp. sr. unsec. unsub. notes 12 1/2s, 2017 175,000 208,031 210,000 249,638 Goldman Sachs Group, Inc. (The) sr. unsec. notes 6 1/4s, 2017 1,543,000 1,702,620 907,000 1,000,827 Morgan Stanley sr. unsec. unsub. notes Ser. MTN, 6s, 2015 1,323,000 1,432,805 777,000 841,489 Lodging/Tourism % 0.1% FelCor Lodging LP company guaranty sr. notes 10s, 2014 (R) 750,000 849,375 Machinery 0.2% 0.1% Altra Holdings, Inc. company guaranty sr. notes 8 1/8s, 2016 395,000 414,750 450,000 472,500 Caterpillar Financial Services Corp. sr. unsec. notes 6 1/8s, 2014 346,000 390,911 204,000 230,479 Deere & Co. sr. unsec. notes 6.95s, 2014 252,000 292,504 148,000 171,788 Manufacturing % % General Cable Corp. company guaranty sr. unsec. unsub. notes FRN 2.678s, 2015 85,000 80,750 125,000 118,750 Media 0.3% 0.3% Interpublic Group of Companies, Inc. (The) sr. unsec. notes 6 1/4s, 2014 231,000 249,480 234,000 252,720 Nielsen Finance LLC/Nielsen Finance Co. sr. notes 11 5/8s, 2014 175,000 204,094 175,000 204,094 Time Warner, Inc. company guaranty sr. unsec. notes 5 7/8s, 2016 409,000 461,145 241,000 271,726 WMG Holdings Corp. company guaranty sr. unsec. disc. notes 9 1/2s, 2014 850,000 857,438 915,000 923,006 Metals 0.5% 0.5% Alcoa, Inc. sr. unsec. unsub. notes 5.55s, 2017 189,000 201,762 111,000 118,495 ArcelorMittal sr. unsec. unsub. notes 6 1/8s, 2018 (France) 189,000 201,062 111,000 118,084 ArcelorMittal sr. unsec. unsub. notes 5 3/8s, 2013 (France) 150,000 160,250 BHP Billiton Finance USA Ltd company guaranty sr. unsec. unsub. notes 5 1/2s, 2014 (Canada) 189,000 210,271 111,000 123,492 FMG Resources August 2006 Pty, Ltd. 144A sr. notes 7s, 2015 (Australia) 1,250,000 1,288,467 750,000 773,080 Rio Tinto Finance USA, Ltd. company guaranty sr. unsec. notes 8.95s, 2014 (Australia) 283,000 343,826 167,000 202,894 SGL Carbon SE company guaranty sr. sub. notes FRN Ser. EMTN, 2.3s, 2015 (Germany) EUR 100,000 130,706 150,000 196,059 Steel Dynamics, Inc. company guaranty sr. unsec. unsub. notes 6 3/4s, 2015 $500,000 510,000 $500,000 510,000 Steel Dynamics, Inc. sr. unsec. unsub. notes 7 3/4s, 2016 170,000 181,475 220,000 234,850 Teck Resources Limited sr. notes 10 3/4s, 2019 (Canada) 185,000 240,500 Teck Resources Limited sr. notes 10 1/4s, 2016 (Canada) 15,000 18,375 Vale Overseas, Ltd. company guaranty sr. unsec. unsub. notes 6 1/4s, 2017 220,000 245,075 130,000 144,817 Natural gas utilities 0.1% 0.1% Enterprise Products Operating, LLC company guaranty sr. unsec. unsub. bonds Ser. L, 6.3s, 2017 220,000 250,291 130,000 147,899 Kinder Morgan Energy Partners LP notes 6s, 2017 252,000 280,449 148,000 164,708 TransCanada Pipelines, Ltd. sr. unsec. unsub. notes 6 1/2s, 2018 (Canada) 220,000 257,650 130,000 152,248 Oil and gas 2.1% 2.2% Anadarko Petroleum Corp. sr. notes 5.95s, 2016 220,000 240,601 130,000 142,173 BP Capital Markets PLC company guaranty sr. unsec. notes 3 7/8s, 2015 (United Kingdom) 252,000 263,972 148,000 155,031 Chesapeake Energy Corp. company guaranty sr. unsec. notes 9 1/2s, 2015 490,000 573,300 500,000 585,000 Comstock Resources, Inc. company guaranty sr. unsub. notes 8 3/8s, 2017 560,000 575,400 685,000 703,838 Connacher Oil and Gas, Ltd. 144A sec. notes 10 1/4s, 2015 (Canada) 250,000 263,125 Connacher Oil and Gas, Ltd. 144A sr. sec. notes 11 3/4s, 2014 (Canada) 580,000 630,025 895,000 972,194 ConocoPhillips company guaranty sr. unsec. notes 4.6s, 2015 504,000 551,737 296,000 324,036 Denbury Resources, Inc. sr. sub. notes 7 1/2s, 2015 565,000 587,600 630,000 655,200 EnCana Holdings Finance Corp. company guaranty sr. unsec. unsub. notes 5.8s, 2014 (Canada) 220,000 245,137 130,000 144,853 Forest Oil Corp. company guaranty 8 1/2s, 2014 965,000 1,068,738 1,035,000 1,146,263 Forest Oil Corp. sr. notes 8s, 2011 240,000 250,800 230,000 240,350 Gazprom Via White Nights Finance BV notes 10 1/2s, 2014 (Russia) 1,000,000 1,193,880 1,000,000 1,193,880 Newfield Exploration Co. sr. unsec. sub. notes 7 1/8s, 2018 175,000 187,250 Newfield Exploration Co. sr. unsec. sub. notes 6 5/8s, 2014 435,000 444,788 195,000 199,388 OPTI Canada, Inc. 144A sr. notes 9s, 2012 (Canada) 1,160,000 1,133,900 1,245,000 1,216,988 Petrohawk Energy Corp. company guaranty sr. unsec. notes 10 1/2s, 2014 1,035,000 1,190,250 Petroleos de Venezuela SA sr. unsec. bonds zero %, 2011 (Venezuela) 2,445,000 2,359,425 2,255,000 2,176,075 Petroleos de Venezuela SA sr. unsec. notes 4.9s, 2014 (Venezuela) 3,295,000 2,151,635 2,805,000 1,831,665 Quicksilver Resources, Inc. sr. notes 11 3/4s, 2016 225,000 263,250 280,000 327,600 Shell International Finance BV company guaranty sr. unsec. notes 3.1s, 2015 (Netherlands) 441,000 454,803 259,000 267,107 Whiting Petroleum Corp. company guaranty 7s, 2014 125,000 132,500 XTO Energy, Inc. sr. unsec. unsub. notes 6 1/4s, 2017 189,000 222,806 111,000 130,854 Pharmaceuticals 0.4% 0.4% Abbott Laboratories sr. unsec. notes 5 7/8s, 2016 283,000 327,269 167,000 193,124 AstraZeneca PLC sr. unsub. notes 5.9s, 2017 (United Kingdom) 189,000 217,927 111,000 127,989 ConvaTec Healthcare E SA 144A sr. notes 7 3/8s, 2017 (Luxembourg) EUR 415,000 585,820 445,000 628,169 Elan Finance PLC/Elan Finance Corp. company guaranty sr. unsec. unsub. notes 8 7/8s, 2013 (Ireland) $400,000 413,000 $600,000 619,500 GlaxoSmith Kline Capital, Inc. company guaranty sr. unsec. unsub. notes 4 3/8s, 2014 252,000 272,841 148,000 160,240 Merck & Co., Inc. sr. unsec. notes 4s, 2015 283,000 304,017 167,000 179,402 Novartis Capital Corp. company guaranty sr. unsec. notes 2.9s, 2015 252,000 259,744 148,000 152,548 Pfizer, Inc. sr. unsec. notes 5.35s, 2015 598,000 672,739 352,000 395,994 Power producers 0.1% 0.2% Calpine Corp. 144A sr. sec. notes 7 1/4s, 2017 350,000 357,875 Mirant Americas Generation, Inc. sr. unsec. notes 8.3s, 2011 260,000 262,600 200,000 202,000 NRG Energy, Inc. sr. notes 7 3/8s, 2016 676,000 699,660 600,000 621,000 Railroads % 0.1% RailAmerica, Inc. company guaranty sr. notes 9 1/4s, 2017 631,000 696,466 Real estate 0.1% 0.2% CB Richard Ellis Services, Inc. company guaranty sr. unsec. sub. notes 11 5/8s, 2017 355,000 411,800 685,000 794,600 Simon Property Group LP sr. unsec. unsub. notes 5.65s, 2020 (R) 220,000 238,541 130,000 140,956 Regional Bells 0.4% 0.3% AT&T, Inc. sr. unsec. unsub. notes 2 1/2s, 2015 1,449,000 1,446,218 851,000 849,366 Qwest Communications International, Inc. company guaranty Ser. B, 7 1/2s, 2014 250,000 253,750 Qwest Corp. sr. unsec. unsub. notes 8 3/8s, 2016 642,000 768,795 173,000 207,168 Verizon Communications, Inc. sr. unsec. notes 5.55s, 2016 819,000 917,713 481,000 538,974 Restaurants % 0.1% Wendy's/Arby's Restaurants LLC company guaranty sr. unsec. unsub. notes 10s, 2016 235,000 261,438 300,000 333,750 Retail 0.5% 0.5% CVS Corp. sr. unsec. 5 3/4s, 2017 220,000 246,986 130,000 145,946 Home Depot, Inc. (The) sr. unsec. unsub. notes 5.4s, 2016 157,000 176,106 93,000 104,318 Kroger Co. company guaranty 6.4s, 2017 157,000 179,984 93,000 106,615 Macy's Retail Holdings, Inc. company guaranty sr. unsec. notes 6 5/8s, 2011 135,000 136,175 135,000 136,175 QVC Inc. 144A sr. notes 7 1/8s, 2017 475,000 498,750 570,000 598,500 SUPERVALU, Inc. sr. unsec. notes 8s, 2016 125,000 121,875 575,000 560,625 Target Corp. sr. unsec. notes 5 3/8s, 2017 252,000 284,397 148,000 167,027 Toys R Us, Inc. sr. unsec. unsub. notes 7 7/8s, 2013 1,200,000 1,272,000 1,000,000 1,060,000 Wal-Mart Stores, Inc. sr. unsec. unsub. notes 3.2s, 2014 598,000 626,577 352,000 368,821 Shipping % % United Parcel Service, Inc. sr. unsec. unsub. notes 3 7/8s, 2014 189,000 203,153 111,000 119,312 Software 0.1% % Oracle Corp. sr. unsec. notes 5 1/4s, 2016 346,000 388,154 204,000 228,854 Technology services 0.1% 0.2% Iron Mountain, Inc. company guaranty 6 5/8s, 2016 100,000 100,375 245,000 245,919 Unisys Corp. 144A company guaranty sr. sub. notes 14 1/4s, 2015 477,000 575,978 815,000 984,113 Telecommunications 0.7% 1.1% America Movil SAB de CV company guaranty unsec. unsub. notes 5 1/2s, 2014 (Mexico) 189,000 206,308 111,000 121,165 Cellco Partnership/Verizon Wireless Capital, LLC sr. unsec. unsub. notes 5.55s, 2014 252,000 279,311 148,000 164,040 Clearwire Communications, LLC/Clearwire Finance, Inc. 144A company guaranty sr. notes 12s, 2015 200,000 218,000 205,000 223,450 Deutsche Telekom International Finance BV company guaranty sr. unsec. unsub. notes 5 3/4s, 2016 (Germany) 252,000 282,534 148,000 165,933 Inmarsat Finance PLC 144A company guaranty sr. notes 7 3/8s, 2017 (United Kingdom) 130,000 138,125 Intelsat Subsidiary Holding Co., Ltd. company guaranty sr. unsec. notes 8 1/2s, 2013 (Bermuda) 150,000 150,750 75,000 75,375 Level 3 Financing, Inc. 144A company guaranty FRN 4.344s, 2015 1,100,000 987,250 Nextel Communications, Inc. sr. notes Ser. E, 6 7/8s, 2013 840,000 844,200 805,000 809,025 NII Capital Corp. company guaranty sr. unsec. unsub. notes 10s, 2016 245,000 274,400 740,000 828,800 PAETEC Holding Corp. company guaranty sr. notes 8 7/8s, 2017 290,000 311,750 725,000 779,375 SBA Telecommunications, Inc. company guaranty sr. unsec. notes 8s, 2016 240,000 262,200 195,000 213,038 Sprint Nextel Corp. sr. unsec. notes 6s, 2016 265,000 260,363 120,000 117,900 Telecom Italia Capital SA company guaranty 5 1/4s, 2015 (Italy) 283,000 289,369 167,000 170,759 Telefonica Emisones SAU company guaranty sr. unsec. notes 4.949s, 2015 (Spain) 315,000 330,215 185,000 193,936 Vodafone Group PLC sr. unsec. unsub. notes 5 5/8s, 2017 (United Kingdom) 283,000 316,673 167,000 186,871 Wind Acquisition Finance SA 144A company guaranty sr. notes 7 1/4s, 2018 (Netherlands) 560,000 579,600 700,000 724,500 Windstream Corp. company guaranty sr. unsec. unsub. notes 8 5/8s, 2016 505,000 535,300 865,000 916,900 Telephone 0.1% % Cricket Communications, Inc. company guaranty sr. unsub. notes 7 3/4s, 2016 380,000 399,950 Tire and rubber 0.2% 0.2% Goodyear Tire & Rubber Co. (The) sr. unsec. notes 10 1/2s, 2016 975,000 1,106,625 1,050,000 1,191,750 Tobacco 0.1% 0.1% Altria Group, Inc. company guaranty sr. unsec. notes 4 1/8s, 2015 378,000 395,646 222,000 232,364 Philip Morris International, Inc. sr. unsec. unsub. notes 5.65s, 2018 189,000 213,810 111,000 125,571 Total corporate bonds and notes (cost $106,885,798 and $97,647,334) ASSET-BACKED SECURITIES(a) 500 Fund 6.4% 700 Fund 6.6% Principal amount Value Principal amount Vlaue Accredited Mortgage Loan Trust FRB Ser. 07-1, Class A3, 0.39s, 2037 $1,346,000 $989,727 $1,495,000 $1,099,288 Ace Securities Corp. FRB Ser. 06-HE3, Class A2C, 0.41s, 2036 1,040,666 509,463 FRB Ser. 06-NC3, Class A2B, 0.37s, 2036 (F) 1,040,000 447,200 Citigroup Mortgage Loan Trust, Inc. FRB Ser. 06-NC2, Class A2B, 0.42s, 2036 2,145,213 1,072,607 2,181,288 1,090,644 Conseco Finance Securitizations Corp. Ser. 00-4, Class A6, 8.31s, 2032 (F) 2,709,421 2,140,443 353,638 279,374 Ser. 00-5, Class A6, 7.96s, 2032 1,108,680 909,118 Ser. 00-6, Class A5, 7.27s, 2031 2,876,519 2,962,815 3,427,476 3,530,300 Ser. 01-1, Class A5, 6.99s, 2031 (F) 1,619,388 1,659,873 1,995,634 2,045,525 Ser. 01-3, Class A4, 6.91s, 2033 1,977,208 2,056,297 2,806,060 2,918,303 Countrywide Asset Backed Certificates FRB Ser. 07-12, Class 2A2, 0.76s, 2047 (F) 369,000 283,208 FRB Ser. 07-7, Class 2A3, 0.49s, 2047 2,008,000 933,720 FRB Ser. 07-9, Class 2A3, 0.44s, 2047 2,147,000 966,586 FRB Ser. 07-3, Class 2A2, 0.43s, 2047 540,000 412,327 575,000 439,052 FRB Ser. 07-6, Class 2A2, 0.43s, 2037 372,000 289,676 FRB Ser. 06-23, Class 2A3, 0.43s, 2037 1,826,000 989,802 777,000 421,181 FRB Ser. 06-8, Class 2A3, 0.42s, 2046 483,000 299,460 480,000 297,600 FRB Ser. 06-24, Class 2A3, 0.41s, 2047 699,000 359,985 1,044,000 537,660 FRB Ser. 07-1, Class 2A2, 0.36s, 2037 (F) 944,000 743,400 1,096,000 863,100 Credit-Based Asset Servicing and Securitization Ser. 07-CB1, Class AF2, 5.973s, 2037 (F) 1,098,000 543,510 First Franklin Mortgage Loan Asset Backed Certificates FRB Ser. 06-FF13, Class A2D, 0 1/2s, 2036 1,002,000 521,086 1,254,000 652,138 FRB Ser. 07-FF1, Class A2D, 0.48s, 2038 1,009,000 487,526 2,291,000 1,106,959 FRB Ser. 06-FF18, Class A2C, 0.42s, 2037 1,842,000 893,370 2,759,000 1,338,115 FRB Ser. 06-FF13, Class A2C, 0.42s, 2036 1,320,000 660,000 1,224,000 612,000 FRB Ser. 06-FF9, Class 2A3, 0.42s, 2036 (F) 1,300,000 750,750 FRB Ser. 06-FF11, Class 2A3, 0.41s, 2036 955,000 563,450 1,144,000 674,960 FRB Ser. 07-FF1, Class A2C, 0.4s, 2038 1,347,000 626,484 3,032,000 1,410,171 Green Tree Financial Corp. Ser. 99-5, Class A5, 7.86s, 2029 842,615 766,779 Ser. 96-8, Class M1, 7.85s, 2027 457,000 442,119 FRN Ser. 96-9, Class M1, 7.63s, 2027 1,564,000 1,542,140 635,000 626,125 Ser. 99-4, Class A7, 7.41s, 2031 1,020,196 948,782 1,263,241 1,174,814 Ser. 1997-5, Class M1, 6.95s, 2029 2,058,000 2,037,420 927,000 917,730 Ser. 99-3, Class A9, 6.53s, 2031 361,652 347,185 GSAA Home Equity Trust FRB Ser. 05-11, Class 3A4, 0.51s, 2035 1,108,511 945,006 1,148,627 979,204 FRB Ser. 06-19, Class A3A, 0 1/2s, 2036 528,751 296,101 1,010,718 566,002 FRB Ser. 06-11, Class 2A2, 0.42s, 2036 716,487 386,903 757,730 409,174 FRB Ser. 07-5, Class 2A1A, 0.38s, 2047 169,181 116,735 155,595 107,361 FRB Ser. 07-4, Class A1, 0.36s, 2037 363,639 177,700 540,253 264,007 FRB Ser. 06-17, Class A1, 0.32s, 2036 1,635,336 834,022 2,042,936 1,041,897 FRB Ser. 06-16, Class A1, 0.32s, 2036 1,064,369 612,012 1,424,817 819,270 FRB Ser. 06-12, Class A1, 0.31s, 2036 2,297,071 1,196,544 1,018,655 530,617 GSAMP Trust FRB Ser. 07-FM1, Class A2D, 0.51s, 2036 747,000 321,023 1,101,000 473,155 FRB Ser. 07-FM1, Class A2C, 0.43s, 2036 910,000 386,523 1,548,000 657,513 FRB Ser. 07-HE2, Class A2A, 0.38s, 2047 66,463 62,592 55,669 52,426 FRB Ser. 07-NC1, Class A2B, 0.36s, 2046 2,050,000 922,500 GSMPS Mortgage Loan Trust FRB Ser. 05-14, Class 2A2, 0.51s, 2035 680,087 486,263 805,409 575,868 HSI Asset Securitization Corp. Trust FRB Ser. 06-HE1, Class 2A1, 0.31s, 2036 68,076 54,461 61,541 49,233 Lehman XS Trust FRB Ser. 07-3, Class 1BA2, 6.17s, 2037 (F) 665,740 311,233 621,574 290,586 FRB Ser. 06-8, Class 2A1, 0.44s, 2036 876,093 516,895 FRB Ser. 06-19, Class A2, 0.43s, 2036 2,443,240 1,465,944 FRB Ser. 06-15, Class A4, 0.43s, 2036 (F) 930,144 523,206 FRB Ser. 07-3, Class 1BA1, 0.42s, 2037 (F) 1,766,627 772,899 Long Beach Mortgage Loan Trust FRB Ser. 06-WL1, Class 2A3, 0 1/2s, 2046 420,099 306,672 508,396 371,129 Madison Avenue Manufactured Housing Contract FRB Ser. 02-A, Class B1, 3.51s, 2032 897,000 816,270 315,000 286,650 Merrill Lynch First Franklin Mortgage Loan Asset Backed Certificates FRB Ser. 07-1, Class A2C, 0.51s, 2037 2,080,000 1,008,800 5,859,000 2,841,615 FRB Ser. 07-1, Class A2B, 0.43s, 2037 1,348,156 741,149 925,316 508,693 Merrill Lynch Mortgage Investors Trust FRB Ser. 07-HE1, Class A2B, 0.43s, 2037 850,287 313,140 1,939,841 714,397 Morgan Stanley Capital, Inc. FRB Ser. 06-WMC2, Class A2C, 0.41s, 2036 850,758 306,273 668,972 240,830 Morgan Stanley IXIS Real Estate Capital FRB Ser. 06-2, Class A3, 0.41s, 2036 3,216,000 1,185,900 Novastar Home Equity Loan FRB Ser. 06-6, Class A2B, 0.36s, 2037 559,251 345,267 737,589 455,369 Oakwood Mortgage Investors, Inc. Ser. 00-D, Class A4, 7.4s, 2030 1,106,000 763,140 447,000 308,430 Ser. 02-B, Class A4, 7.09s, 2032 716,974 695,181 Ser. 02-A, Class A4, 6.97s, 2032 769,425 780,966 341,046 346,161 Ser. 02-B, Class A2, 5.19s, 2019 355,881 312,980 273,775 240,771 Securitized Asset Backed Receivables, LLC FRB Ser. 06-FR4, Class A2B, 0.43s, 2036 652,736 278,555 FRB Ser. 07-BR4, Class A2A, 0.35s, 2037 496,886 339,124 388,544 265,182 WAMU Asset-Backed Certificates FRB Ser. 07-HE2, Class 2A1, 0.37s, 2037 213,361 141,842 158,559 105,410 FRB Ser. 07-HE1, Class 2A1, 0.31s, 2037 199,341 188,377 182,074 172,060 Total asset-backed securities (cost $43,229,705 and $37,998,126) SENIOR LOANS(a)(c) 500 Fund 4.2% 700 Fund 5.1% Principal amount Value Principal amount Value Advertising and marketing services 0.1% 0.2% Advantage Sales & Marketing, LLC bank term loan FRN 5 1/4s, 2017 $1,000,000 $1,005,171 $1,000,000 $1,005,171 Aerospace and defense % % TransDigm Group, Inc. bank term loan FRN Ser. B, 5s, 2016 222,000 225,275 222,000 225,275 Automotive 0.1% 0.2% Federal Mogul Corp. bank term loan FRN Ser. B, 2.198s, 2014 634,042 615,945 752,924 731,434 Federal Mogul Corp. bank term loan FRN Ser. C, 2.198s, 2015 323,491 314,258 384,145 373,181 Building materials % % Goodman Global, Inc. bank term loan FRN 5 3/4s, 2016 338,238 340,772 238,238 240,023 Cable television 0.1% 0.1% Atlantic Broadband Finance, LLC bank term loan FRN Ser. B, 5s, 2015 643,800 648,226 643,800 648,226 Chemicals 0.3% 0.4% Arizona Chemical bank term loan FRN 6 3/4s, 2016 791,489 801,713 791,489 801,713 General Chemical Holding Co. bank term loan FRN Ser. B, 6.751s, 2015 748,125 763,088 748,125 763,088 Styron Corp. bank term loan FRN 6s, 2017 500,000 507,709 500,000 507,709 Tronox Worldwide bank term loan FRN Ser. B, 7s, 2015 500,000 504,375 Commercial and consumer services 0.2% 0.3% Brickman Group Holdings, Inc. bank term loan FRN Ser. B, 7 1/4s, 2016 1,300,000 1,326,000 1,200,000 1,224,000 Rural/Metro Operating Co., LLC bank term loan FRN 6s, 2016 300,000 303,250 300,000 303,250 Communications equipment 0.2% 0.2% Avaya, Inc. bank term loan FRN Ser. B1, 3.034s, 2014 997,405 973,842 748,054 730,381 CommScope, Inc. bank term loan FRN Ser. B, 5s, 2018 355,000 362,100 355,000 362,100 Computers 0.1% 0.1% Syniverse Holdings, Inc. bank term loan FRN 5 1/4s, 2017 667,000 677,005 667,000 677,005 Construction % % Armstrong World Industries, Inc. bank term loan FRN Ser. B, 5s, 2017 285,000 288,776 285,000 288,776 Consumer 0.1% 0.1% Viking Acquisition, Inc. bank term loan FRN Ser. B, 6s, 2016 400,000 401,000 400,000 401,000 Consumer goods 0.4% 0.4% Amscan Holdings, Inc. bank term loan FRN 6 3/4s, 2017 997,500 1,010,956 997,500 1,010,956 Revlon Consumer Products bank term loan FRN 6s, 2015 545,875 549,202 645,125 649,056 Spectrum Brands, Inc. bank term loan FRN 5s, 2016 1,000,000 1,008,750 1,000,000 1,008,750 Consumer services 0.1% % Getty Images, Inc. bank term loan FRN Ser. B, 5 1/4s, 2016 748,125 759,035 Containers 0.1% 0.2% Reynolds Group Holdings, Ltd. bank term loan FRN Ser. D, 6 1/2s, 2016 (New Zealand) 870,000 873,625 1,030,000 1,034,292 Distribution 0.1% 0.1% Green Mountain Coffee Roasters, Inc. bank term loan FRN Ser. B, 5 1/2s, 2016 666,000 668,498 668,000 670,505 Entertainment 0.2% 0.3% Cedar Fair LP bank term loan FRN Ser. B, 5 1/2s, 2016 211,718 214,440 241,260 244,362 Clubcorp Club Operations, Inc. bank term loan FRN Ser. B, 6s, 2016 250,000 252,969 250,000 252,969 Six Flags Theme Parks bank term loan FRN Ser. B, 5 1/2s, 2016 1,000,000 1,012,188 1,000,000 1,012,188 Gaming and lottery 0.1% 0.2% Harrah's Operating Co., Inc. bank term loan FRN Ser. B1, 3.303s, 2015 1,000,000 928,906 1,000,000 928,906 Health-care services 0.3% 0.3% Ardent Health Systems bank term loan FRN Ser. B, 6 1/2s, 2015 748,116 751,856 748,116 751,856 Multiplan, Inc. bank term loan FRN Ser. B, 6 1/2s, 2017 1,217,538 1,228,573 972,973 981,791 Homebuilding 0.1% 0.1% Realogy Corp. bank term loan FRN 0.111s, 2013 44,729 43,284 59,292 57,376 Realogy Corp. bank term loan FRN Ser. B, 3.286s, 2013 377,440 365,241 500,328 484,157 Insurance % 0.1% CNO Financial Group, Inc. bank term loan FRN 7 1/2s, 2016 295,000 297,950 420,000 424,200 Investment banking/Brokerage 0.1% 0.2% Nuveen Investments, Inc. bank term loan FRN Ser. B, 5.803s, 2017 517,286 520,649 587,336 591,153 Nuveen Investments, Inc. bank term loan FRN Ser. B, 3.297s, 2014 442,714 431,922 502,664 490,412 Metals % % Novelis, Inc. bank term loan FRN Ser. B, 5 1/4s, 2016 285,000 289,809 285,000 289,809 Publishing 0.2% 0.5% Centage Learning Acquisitions, Inc. bank term loan FRN Ser. B, 2.55s, 2014 957,526 941,163 1,137,062 1,117,631 Centage Learning Acquisitions, Inc. bank term loan FRN Ser. B3, 3.763s, 2014 957,526 789,959 1,137,062 938,076 Cenveo Corp. bank term loan FRN Ser. B, 6 1/4s, 2016 800,000 810,500 Railroads 0.1% 0.2% Swift Transportation Co., LLC bank term loan FRN 6s, 2016 943,354 955,146 943,354 955,146 Restaurants 0.2% 0.2% DineEquity, Inc. bank term loan FRN Ser. B, 6s, 2017 722,264 733,089 654,972 664,789 Dunkin Brands, Inc. bank term loan FRN Ser. B, 5 3/4s, 2017 800,000 812,562 800,000 812,562 Retail 0.4% 0.5% Claire's Stores, Inc. bank term loan FRN 3.043s, 2014 957,519 918,705 1,137,054 1,090,963 Petco Animal Supplies, Inc. bank term loan FRN 6s, 2017 833,000 843,413 834,000 844,425 Rite-Aid Corp. bank term loan FRN 6s, 2014 997,449 1,001,605 997,449 1,001,605 Telecommunications 0.1% 0.2% Intelsat Jackson Holdings, Ltd. bank term loan FRN Ser. B, 5 1/4s, 2018 (Bermuda) 1,000,000 1,012,250 1,000,000 1,012,250 Textiles 0.1% 0.1% Gymboree Corp. bank term loan FRN 5 1/2s, 2017 833,000 843,022 834,000 844,034 Total senior loans (cost $28,940,035 and $29,981,702) COMMODITY LINKED NOTES(a) 500 Fund 4.7% 700 Fund 4.7% Principal amount Value Principal amount Value UBS AG 144A notes zero %, 2011 (Indexed to the UBS Bloomberg CMCI Essence Excess Return) (United Kingdom) $3,400 $3,486,096 $3,300 $3,383,564 UBS AG 144A notes zero %, 2012 (Indexed to the UBS Bloomberg CMCI Essence Excess Return) (United Kingdom) (FWC) 10,494,000 10,660,855 8,980,000 8,980,000 UBS AG 144A notes zero %, 2011 (Indexed to the UBS Bloomberg CMCI Essence Excess Return) (United Kingdom) 3,600 3,727,557 2,400 2,485,038 UBS AG 144A notes zero %, 2012 (Indexed to the UBS Bloomberg CMCI Essence Excess Return) (United Kingdom) 11,236 11,237,941 10,214 10,215,764 UBS AG 144A notes zero %, 2011 (Indexed to the UBS Bloomberg CMCI Essence Excess Return) (United Kingdom) 3,361 3,474,548 2,874 2,971,095 Total commodity linked notes (cost $32,068,317 and $27,750,978) U.S. GOVERNMENT AND AGENCY MORTGAGE OBLIGATIONS(a) 500 Fund 3.6% 700 Fund 3.9% Principal amount Value Principal amount Value U.S. Government Guaranteed Mortgage Obligations 2.6% 3.9% Government National Mortgage Association Pass-Through Certificates 4s, TBA, February 1, 2041 $18,000,000 $18,047,812 $23,000,000 $23,061,093 U.S. Government Agency Mortgage Obligations 1.0% % Federal National Mortgage Association Pass-Through Certificates 4s, TBA, February 1, 2041 7,000,000 6,937,657 Total U.S. government and agency mortgage obligations (cost $24,939,688 and $23,036,016) U.S. GOVERNMENT AGENCY OBLIGATIONS(a) 500 Fund 0.1% 700 Fund 0.1% Principal amount Value Principal amount Value Goldman Sachs Group, Inc (The) 1 5/8s, FDIC guaranteed notes, July 15, 2011 $900,000 $905,761 $700,000 $704,481 Total U.S. government agency obligations (cost $897,588 and $698,027) FOREIGN GOVERNMENT BONDS AND NOTES(a) 500 Fund 1.7% 700 Fund 1.8% Principal amount Value Principal amount Value Argentina (Republic of) sr. unsec. bonds Ser. VII, 7s, 2013 $1,405,000 $1,440,828 $1,305,000 $1,338,278 Argentina (Republic of) sr. unsec. unsub. bonds 7s, 2015 7,665,000 7,182,105 6,830,000 6,399,710 Argentina (Republic of) sr. unsec. unsub. bonds FRB 0.469278s, 2012 2,805,000 664,785 2,610,000 618,570 Ukraine (Government of ) Financing of Infrastructural Projects State Enterprise 144A govt. guaranty notes 8 3/8s, 2017 200,000 211,000 150,000 158,250 Ukraine (Government of) 144A bonds 7 3/4s, 2020 500,000 507,500 450,000 456,750 Ukraine (Government of) 144A sr. unsec. unsub. notes 7.65s, 2013 1,700,000 1,763,750 1,600,000 1,660,000 Total foreign government bonds and notes (cost $12,008,693 and $10,800,283) PURCHASED OPTIONS OUTSTANDING(a) 500 Fund 0.4% 700 Fund 0.5% Expiration date/ Contract amount/ Contract amount/ strike price number of contracts Value number of contracts Value SPDR S&P ETF 500 Trust (Put) Jun-11/$112.00 614,641 $1,021,982 601,761 $1,000,566 SPDR S&P ETF 500 Trust (Put) Mar-11/103.00 614,641 107,316 601,761 105,067 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to pay a fixed rate of 4.22% versus the three month USD-LIBOR-BBA maturing February 16, 2041. Feb-11/4.22 $5,804,500 140,701 $7,596,900 184,149 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to pay a fixed rate of 3.04% versus the three month USD-LIBOR-BBA maturing February 9, 2021. Feb-11/3.04 14,422,900 559,176 18,876,500 731,842 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to pay a fixed rate of 3.11% versus the three month USD-LIBOR-BBA maturing February 9, 2021. Feb-11/3.11 14,422,900 471,773 18,876,500 617,450 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to receive a fixed rate of 3.04% versus the three month USD-LIBOR-BBA maturing February 9, 2021. Feb-11/3.04 14,422,900 288 18,876,500 378 Option on an interest rate swap with Credit Suisse International for the right to pay a fixed rate of 1.578% versus the six month CHF-LIBOR-BBA maturing December 24, 2013. Dec-11/0.578 CHF 6,030,000 17,556 7,290,000 21,225 Option on an interest rate swap with Credit Suisse International for the right to pay a fixed rate of 1.602% versus the six month CHF-LIBOR-BBA maturing December 22, 2013. Dec-11/1.602 CHF 6,030,000 16,561 7,290,000 20,021 Option on an interest rate swap with Credit Suisse International for the right to pay a fixed rate of 1.70175% versus the six month CHF-LIBOR-BBA maturing January 23, 2014. Jan-12/1.70175 CHF 12,060,000 35,863 14,580,000 43,357 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to receive a fixed rate of 3.59% versus the three month USD-LIBOR-BBA maturing April 28, 2021. Apr-11/3.59 $6,184,499 115,588 $3,687,081 68,912 Option on an interest rate swap with Barclays Bank PLC for the right to receive a fixed rate of 3.7375% versus the three month USD-LIBOR-BBA maturing March 9, 2021. Mar-11/3.7375 5,703,300 135,282 3,400,200 80,653 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to receive a fixed rate of 4.22% versus the three month USD-LIBOR-BBA maturing February 16, 2041. Feb-11/4.22 5,804,500 46,204 7,596,900 60,471 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the right to receive a fixed rate of 3.11% versus the three month USD-LIBOR-BBA maturing February 9, 2021. Feb-11/3.11 14,422,900 865 18,876,500 1,133 Total purchased options outstanding (cost $4,910,112 and $5,313,668) CONVERTIBLE BONDS AND NOTES(a) 500 Fund 0.1% 700 Fund 0.1% Principal amount Value Principal amount Value Advanced Micro Devices, Inc. cv. sr. unsec. notes 6s, 2015 $105,000 $105,788 $110,000 $110,825 Penn Virginia Corp. cv. sr. unsec. sub. notes 4 1/2s, 2012 550,000 548,625 650,000 648,375 Total convertible bonds and notes (cost $628,718 and $730,047) SHORT-TERM INVESTMENTS(a) 500 Fund 19.5% 700 Fund 15.7% Principal amount/ Principal amount/ shares Value shares Value Putnam Money Market Liquidity Fund (0.17% (e) 22,809,211 $22,809,211 27,604,143 $27,604,143 U.S. Treasury Bills for an effective yield of 0.28%, December 15, 2011 (SEGSF) $17,000,000 16,958,078 $24,000,000 23,940,816 U.S. Treasury Bills for effective yields ranging from 0.20% to 0.25%, October 20, 2011 (SEG) (SEGSF) 12,300,000 12,282,079 7,500,000 7,489,072 U.S. Treasury Bills for an effective yield of 0.20%, September 22, 2011 15,000,000 14,980,095 U.S. Treasury Bills for an effective yield of 0.20%, August 25, 2011 (SEG) (SEGSF) 25,000,000 24,965,400 U.S. Treasury Bills for an effective yield of 0.24%, July 28, 2011 (SEG) 402,000 401,497 U.S. Treasury Bills for an effective yield of 0.27%, June 2, 2011 (SEG) (SEGSF) 16,000,000 15,985,504 U.S. Treasury Bills for an effective yield of 0.23%, May 5, 2011 (SEG) (SEGSF) 27,000,000 26,984,232 3,362,000 3,360,037 U.S. Treasury Bills for an effective yield of 0.20%, April 7, 2011 (SEG) (SEGSF) 25,000,000 24,991,000 5,300,000 5,298,092 Federal Farm Credit Bank for an effective yield of 0.25375%, February 28, 2011 1,400,000 1,400,000 1,000,000 1,000,000 Total short-term investments (cost $136,390,209 and $94,064,542) TOTAL INVESTMENTS Total investments (cost $716,777,116 and $612,968,490) (b) Putnam Absolute Return 500 Fund FORWARD CURRENCY CONTRACTS at 1/31/11 (aggregate face value $263,076,768) (Unaudited) Unrealized Contract Delivery Aggregate appreciation/ Counterparty Currency type date Value face value (depreciation) Bank of America, N.A. Australian Dollar Buy 2/16/11 $5,190,883 $5,203,041 $(12,158) Brazilian Real Buy 2/16/11 579,051 578,325 726 British Pound Sell 2/16/11 1,301,818 1,300,008 (1,810) Canadian Dollar Sell 2/16/11 2,540,898 2,543,074 2,176 Chilean Peso Buy 2/16/11 777,944 777,585 359 Czech Koruna Buy 2/16/11 1,982,769 1,957,275 25,494 Euro Sell 2/16/11 5,357,965 5,239,184 (118,781) Japanese Yen Sell 2/16/11 11,267,589 11,222,633 (44,956) Mexican Peso Buy 2/16/11 1,061,439 1,058,391 3,048 Norwegian Krone Buy 2/16/11 1,430,505 1,409,153 21,352 Singapore Dollar Sell 2/16/11 882,983 873,852 (9,131) South Korean Won Buy 2/16/11 701,765 704,249 (2,484) Swedish Krona Buy 2/16/11 3,566,989 3,463,671 103,318 Swiss Franc Sell 2/16/11 4,473,293 4,442,991 (30,302) Taiwan Dollar Sell 2/16/11 264,970 262,843 (2,127) Turkish Lira Sell 2/16/11 161,938 161,984 46 Barclays Bank PLC Australian Dollar Sell 2/16/11 38,931 38,913 (18) Brazilian Real Buy 2/16/11 1,864,868 1,853,420 11,448 British Pound Sell 2/16/11 5,326,156 5,271,540 (54,616) Canadian Dollar Buy 2/16/11 165,958 167,119 (1,161) Chilean Peso Sell 2/16/11 369,354 361,613 (7,741) Czech Koruna Buy 2/16/11 1,382,424 1,370,492 11,932 Euro Buy 2/16/11 1,642,085 1,639,743 2,342 Hungarian Forint Sell 2/16/11 564,252 540,409 (23,843) Indian Rupee Buy 2/17/11 1,290,902 1,301,185 (10,283) Japanese Yen Sell 2/16/11 5,112,360 5,081,482 (30,878) Mexican Peso Buy 2/16/11 522,054 521,239 815 New Zealand Dollar Sell 2/16/11 763,034 764,215 1,181 Norwegian Krone Buy 2/16/11 2,568,759 2,573,283 (4,524) Philippines Peso Buy 2/16/11 656,020 656,869 (849) Polish Zloty Buy 2/16/11 1,895,891 1,879,075 16,816 Singapore Dollar Sell 2/16/11 625,902 624,045 (1,857) South Korean Won Buy 2/16/11 1,289,967 1,291,913 (1,946) Swedish Krona Buy 2/16/11 1,432,549 1,399,288 33,261 Swiss Franc Sell 2/16/11 4,699,677 4,634,980 (64,697) Taiwan Dollar Buy 2/16/11 12,196 12,161 35 Thai Baht Buy 2/16/11 1,289,484 1,287,135 2,349 Turkish Lira Sell 2/16/11 306,519 311,865 5,346 Citibank, N.A. Australian Dollar Sell 2/16/11 80,949 79,414 (1,535) Brazilian Real Buy 2/16/11 632,410 630,036 2,374 British Pound Buy 2/16/11 1,488,638 1,438,879 49,759 Canadian Dollar Buy 2/16/11 1,443,197 1,458,467 (15,270) Chilean Peso Sell 2/16/11 137,586 135,058 (2,528) Czech Koruna Buy 2/16/11 801,477 778,151 23,326 Euro Sell 2/16/11 1,578,143 1,542,183 (35,960) Hungarian Forint Sell 2/16/11 522,774 512,952 (9,822) Japanese Yen Sell 2/16/11 2,628,179 2,615,895 (12,284) Mexican Peso Buy 2/16/11 561,110 563,634 (2,524) New Zealand Dollar Buy 2/16/11 13,259 13,076 183 Norwegian Krone Buy 2/16/11 1,251,232 1,241,582 9,650 Polish Zloty Buy 2/16/11 847,651 833,432 14,219 Singapore Dollar Sell 2/16/11 495,252 491,533 (3,719) South African Rand Buy 2/16/11 731,183 739,933 (8,750) South Korean Won Buy 2/16/11 1,554,871 1,550,337 4,534 Swedish Krona Buy 2/16/11 3,427,314 3,416,212 11,102 Swiss Franc Sell 2/16/11 3,298,772 3,293,745 (5,027) Taiwan Dollar Sell 2/16/11 473,354 475,240 1,886 Turkish Lira Buy 2/16/11 142,777 148,534 (5,757) Credit Suisse AG Australian Dollar Buy 2/16/11 1,778,585 1,814,157 (35,572) Brazilian Real Buy 2/16/11 786,086 782,668 3,418 British Pound Buy 2/16/11 1,056,836 1,045,934 10,902 Canadian Dollar Sell 2/16/11 3,077,516 3,091,574 14,058 Czech Koruna Buy 2/16/11 1,572,331 1,567,158 5,173 Euro Sell 2/16/11 3,376,455 3,381,234 4,779 Indian Rupee Buy 2/17/11 648,953 648,795 158 Japanese Yen Sell 2/16/11 1,336,851 1,344,637 7,786 Malaysian Ringgit Buy 2/16/11 1,024,588 1,024,648 (60) Norwegian Krone Sell 2/16/11 227,858 224,228 (3,630) Polish Zloty Buy 2/16/11 1,957,640 1,963,167 (5,527) South African Rand Sell 2/16/11 260,896 267,086 6,190 South Korean Won Buy 2/16/11 2,574,511 2,581,573 (7,062) Swedish Krona Sell 2/16/11 1,122,372 1,082,212 (40,160) Swiss Franc Sell 2/16/11 1,222,427 1,236,572 14,145 Taiwan Dollar Sell 2/16/11 484,221 485,311 1,090 Turkish Lira Sell 2/16/11 640,348 640,530 182 Deutsche Bank AG Australian Dollar Buy 2/16/11 7,066,149 7,051,026 15,123 Brazilian Real Buy 2/16/11 344,380 343,948 432 British Pound Sell 2/16/11 2,634,558 2,604,933 (29,625) Chilean Peso Buy 2/16/11 497,704 497,351 353 Czech Koruna Buy 2/16/11 990,632 988,049 2,583 Euro Sell 2/16/11 1,285,408 1,285,039 (369) Hungarian Forint Sell 2/16/11 1,102,789 1,094,644 (8,145) Malaysian Ringgit Buy 2/16/11 1,013,230 1,012,136 1,094 Mexican Peso Buy 2/16/11 799,857 800,279 (422) New Zealand Dollar Sell 2/16/11 264,649 261,337 (3,312) Norwegian Krone Buy 2/16/11 1,412,569 1,397,509 15,060 Philippines Peso Buy 2/16/11 652,753 650,366 2,387 Polish Zloty Buy 2/16/11 1,772,184 1,765,682 6,502 Singapore Dollar Sell 2/16/11 661,768 655,998 (5,770) South Korean Won Buy 2/16/11 1,708,906 1,715,698 (6,792) Swedish Krona Buy 2/16/11 123,711 119,072 4,639 Swiss Franc Sell 2/16/11 1,345,581 1,359,902 14,321 Taiwan Dollar Buy 2/16/11 3,852 3,823 29 Turkish Lira Buy 2/16/11 1,157,143 1,197,485 (40,342) Goldman Sachs International Australian Dollar Buy 2/16/11 1,185,657 1,208,555 (22,898) British Pound Sell 2/16/11 1,340,271 1,337,430 (2,841) Canadian Dollar Buy 2/16/11 160,766 162,227 (1,461) Chilean Peso Buy 2/16/11 3,147 3,101 46 Euro Buy 2/16/11 962,276 960,671 1,605 Hungarian Forint Sell 2/16/11 1,593,369 1,580,414 (12,955) Norwegian Krone Sell 2/16/11 20,046 19,880 (166) Polish Zloty Buy 2/16/11 21,151 20,582 569 South African Rand Sell 2/16/11 802,277 803,064 787 Swedish Krona Buy 2/16/11 818,953 799,453 19,500 Swiss Franc Sell 2/16/11 4,553,524 4,466,462 (87,062) HSBC Bank USA, National Association Australian Dollar Buy 2/16/11 1,211,843 1,235,965 (24,122) British Pound Sell 2/16/11 1,369,592 1,357,606 (11,986) Euro Sell 2/16/11 1,294,445 1,281,669 (12,776) Japanese Yen Sell 2/16/11 1,389,097 1,369,276 (19,821) Norwegian Krone Sell 2/16/11 268,764 268,839 75 Philippines Peso Buy 2/16/11 652,753 650,513 2,240 Singapore Dollar Sell 2/16/11 1,448,170 1,440,888 (7,282) South Korean Won Buy 2/16/11 1,709,040 1,716,001 (6,961) Swiss Franc Sell 2/16/11 2,429,274 2,430,026 752 Taiwan Dollar Buy 2/16/11 13,481 13,493 (12) JPMorgan Chase Bank, N.A. Australian Dollar Buy 2/16/11 1,169,427 1,179,186 (9,759) Brazilian Real Buy 2/16/11 794,042 790,081 3,961 British Pound Buy 2/16/11 2,825,064 2,822,162 2,902 Canadian Dollar Sell 2/16/11 1,145,631 1,157,171 11,540 Chilean Peso Buy 2/16/11 763,253 762,554 699 Czech Koruna Buy 2/16/11 826,531 826,014 517 Euro Buy 2/16/11 428,971 428,789 182 Hungarian Forint Sell 2/16/11 930,378 914,559 (15,819) Japanese Yen Sell 2/16/11 1,356,009 1,363,291 7,282 Malaysian Ringgit Buy 2/16/11 1,052,132 1,051,127 1,005 Mexican Peso Buy 2/16/11 941,613 941,159 454 New Zealand Dollar Sell 2/16/11 780,225 775,779 (4,446) Norwegian Krone Sell 2/16/11 83,955 83,233 (722) Polish Zloty Buy 2/16/11 776,266 756,407 19,859 Singapore Dollar Sell 2/16/11 1,546,470 1,538,031 (8,439) South African Rand Buy 2/16/11 946,355 957,706 (11,351) South Korean Won Buy 2/16/11 2,568,183 2,573,338 (5,155) Swedish Krona Sell 2/16/11 1,217,395 1,188,662 (28,733) Swiss Franc Sell 2/16/11 2,069,880 2,091,950 22,070 Taiwan Dollar Sell 2/16/11 264,594 263,552 (1,042) Thai Baht Buy 2/16/11 655,026 657,336 (2,310) Turkish Lira Sell 2/16/11 330,408 330,564 156 Royal Bank of Scotland PLC (The) Australian Dollar Buy 2/16/11 2,042,440 2,035,156 7,284 Brazilian Real Buy 2/16/11 1,035,652 1,031,971 3,681 British Pound Sell 2/16/11 1,434,483 1,431,388 (3,095) Canadian Dollar Buy 2/16/11 200,208 202,284 (2,076) Czech Koruna Buy 2/16/11 1,053,023 1,038,697 14,326 Euro Sell 2/16/11 1,323,882 1,311,213 (12,669) Hungarian Forint Sell 2/16/11 1,109,564 1,089,858 (19,706) Japanese Yen Sell 2/16/11 3,901,930 3,901,071 (859) Malaysian Ringgit Buy 2/16/11 1,024,620 1,024,877 (257) Norwegian Krone Buy 2/16/11 4,861,162 4,801,763 59,399 Polish Zloty Buy 2/16/11 672,388 663,064 9,324 Singapore Dollar Sell 2/16/11 1,517,246 1,509,359 (7,887) South African Rand Sell 2/16/11 821,242 833,092 11,850 South Korean Won Buy 2/16/11 2,084,209 2,089,333 (5,124) Swedish Krona Buy 2/16/11 2,117,670 2,123,987 (6,317) Swiss Franc Sell 2/16/11 1,196,778 1,184,517 (12,261) Taiwan Dollar Sell 2/16/11 205,983 206,063 80 Turkish Lira Buy 2/16/11 3,359 3,438 (79) State Street Bank and Trust Co. Australian Dollar Buy 2/16/11 5,672,992 5,694,190 (21,198) Brazilian Real Buy 2/16/11 2,522,642 2,508,658 13,984 British Pound Sell 2/16/11 3,984,603 3,936,231 (48,372) Canadian Dollar Buy 2/16/11 161,065 162,537 (1,472) Euro Sell 2/16/11 4,104,597 4,055,828 (48,769) Hungarian Forint Sell 2/16/11 2,102,717 2,076,046 (26,671) Japanese Yen Sell 2/16/11 3,952,737 3,953,224 487 Malaysian Ringgit Buy 2/16/11 1,042,374 1,041,609 765 Mexican Peso Buy 2/16/11 809,901 810,189 (288) Norwegian Krone Buy 2/16/11 1,879,356 1,871,487 7,869 Philippines Peso Buy 2/16/11 652,753 650,659 2,094 Polish Zloty Buy 2/16/11 3,028,563 3,007,724 20,839 Swedish Krona Sell 2/16/11 1,434,672 1,388,691 (45,981) Swiss Franc Buy 2/16/11 27,450 27,763 (313) Taiwan Dollar Sell 2/16/11 267,495 265,685 (1,810) Thai Baht Buy 2/16/11 655,026 657,123 (2,097) Westpac Banking Corp. Australian Dollar Buy 2/16/11 3,557,568 3,595,734 (38,166) British Pound Sell 2/16/11 1,318,481 1,311,489 (6,992) Canadian Dollar Sell 2/16/11 165,559 167,515 1,956 Euro Sell 2/16/11 2,199,488 2,201,868 2,380 Japanese Yen Sell 2/16/11 1,391,715 1,400,405 8,690 New Zealand Dollar Sell 2/16/11 526,291 523,687 (2,604) Norwegian Krone Sell 2/16/11 26,498 26,302 (196) Swedish Krona Buy 2/16/11 2,827,420 2,724,631 102,789 Swiss Franc Sell 2/16/11 1,232,707 1,233,299 592 Total Putnam Absolute Return 500 Fund FUTURES CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Unrealized Number of Expiration appreciation/ contracts Value date (depreciation) Australian Government Treasury Bond 10 yr (Short) 4 $2,826,448 Mar-11 $(1,739) Canadian Government Bond 10 yr (Long) 71 8,599,141 Mar-11 (9,378) Euro-Bund 10 yr (Long) 17 2,880,748 Mar-11 (578) Japanese Government Bond 10 yr (Short) 5 8,536,243 Mar-11 (18,682) Japanese Government Bond 10 yr Mini (Short) 19 3,243,309 Mar-11 7,966 NASDAQ 100 Index E-Mini (Long) 254 11,582,400 Mar-11 410,718 S&P Mid Cap 400 Index E-Mini (Long) 6 553,860 Mar-11 9,168 U.K. Gilt 10 yr (Long) 114 21,433,093 Mar-11 2,353 U.S. Treasury Bond 20 yr (Long) 11 1,326,875 Mar-11 (6,208) U.S. Treasury Bond 30 yr (Long) 595 73,277,969 Mar-11 (2,897,787) U.S. Treasury Note 5 yr (Long) 81 9,591,539 Mar-11 58,526 U.S. Treasury Note 10 yr (Short) 726 87,698,531 Mar-11 3,058,996 Total Putnam Absolute Return 500 Fund WRITTEN OPTIONS OUTSTANDING at 1/31/11 (premiums received $14,945,792) (Unaudited) Contract amount/ Expiration date/ number of contracts strike price Value SPDR S&P rust (Call) 1,243,660 Feb-11/$135.00 $84,146 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.49% versus the three month USD-LIBOR-BBA maturing August 17, 2021. $6,474,000 Aug-11/4.49 472,214 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.475% versus the three month USD-LIBOR-BBA maturing August 19, 2021. 3,847,000 Aug-11/4.475 39,778 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.475% versus the three month USD-LIBOR-BBA maturing August 19, 2021. 3,847,000 Aug-11/4.475 276,176 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.55% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 3,237,000 Aug-11/4.55 29,392 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.49% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 6,474,000 Aug-11/4.49 45,318 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.55% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 3,237,000 Aug-11/4.55 249,896 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.70% versus the three month USD-LIBOR-BBA maturing August 8, 2021. 1,929,000 Aug-11/4.7 12,596 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.70% versus the three month USD-LIBOR-BBA maturing August 8, 2021. 1,929,000 Aug-11/4.7 170,967 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 4,267,500 Jul-11/4.5475 29,873 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 8,535,000 Jul-11/4.52 64,525 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 4,267,500 Jul-11/4.5475 332,865 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 8,535,000 Jul-11/4.52 648,660 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.375% versus the three month USD-LIBOR-BBA maturing August 10, 2045. 6,180,300 Aug-15/4.375 1,046,448 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.80% versus the three month USD-LIBOR-BBA maturing January 17, 2022. 19,957,200 Jan-12/4.80 314,619 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.80% versus the three month USD-LIBOR-BBA maturing January 17, 2022. 19,957,200 Jan-12/4.80 1,709,694 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.375% versus the three month USD-LIBOR-BBA maturing August 10, 2045. 6,180,300 Aug-15/4.375 462,534 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.46% versus the three month USD-LIBOR-BBA maturing August 7, 2045. 6,180,300 Aug-15/4.46 489,418 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.46% versus the three month USD-LIBOR-BBA maturing August 7, 2045. 6,180,300 Aug-15/4.46 999,849 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.72% versus the three month USD-LIBOR-BBA maturing January 19, 2022. 11,974,320 Jan-12/4.72 209,670 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 3.89% versus the three month USD-LIBOR-BBA maturing April 28, 2021. 2,473,799 Apr-11/3.89 23,788 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.04% versus the three month USD-LIBOR-BBA maturing September 11, 2025. 27,400,500 Sep-15/4.04 926,959 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.04% versus the three month USD-LIBOR-BBA maturing September 11, 2025. 27,400,500 Sep-15/4.04 3,108,039 Option on an interest rate swap with Barclays Bank PLC for the obligation to receive a fixed rate of 5.36% versus the three month USD-LIBOR-BBA maturing February 13, 2025. 1,726,280 Feb-15/5.36 98,398 Option on an interest rate swap with Barclays Bank PLC for the obligation to pay a fixed rate of 5.36% versus the three month USD-LIBOR-BBA maturing February 13, 2025. 1,726,280 Feb-15/5.36 134,822 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 5.27% versus the three month USD-LIBOR-BBA maturing February 12, 2025. 3,955,380 Feb-15/5.27 236,176 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 5.27% versus the three month USD-LIBOR-BBA maturing February 12, 2025. 3,955,380 Feb-15/5.27 293,845 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.8675% versus the three month USD-LIBOR-BBA maturing April 12, 2022. 2,391,100 Apr-12/4.8675 48,351 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.8675% versus the three month USD-LIBOR-BBA maturing April 12, 2022. 2,391,100 Apr-12/4.8675 203,850 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.72% versus the three month USD-LIBOR-BBA maturing January 19, 2022. 11,974,320 Jan-12/4.72 963,574 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.70175% versus the six month CHF-LIBOR-BBA maturing January 23, 2014. CHF 12,060,000 Jan-12/0.70175 8,803 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.578% versus the six month CHF-LIBOR-BBA maturing December 24, 2013. CHF 6,030,000 Dec-11/0.578 1,987 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.602% versus the six month CHF-LIBOR-BBA maturing December 22, 2013. CHF 6,030,000 Dec-11/0.602 2,361 Option on an interest rate swap with Barclays Bank PLC for the obligation to receive a fixed rate of 4.7375% versus the three month USD-LIBOR-BBA maturing March 9, 2021. $ Mar-11/4.7375 114 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.665% versus the three month USD-LIBOR-BBA maturing March 8, 2021. 5,703,300 Mar-11/4.665 114 Total Putnam Absolute Return 500 Fund INTEREST RATE SWAP CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Payments Payments Unrealized Swap counterparty / premium Termination made by received by appreciation/ Notional amount received (paid) date fund per annum fund per annum (depreciation) Bank of America, N.A. $40,811,000 $(2,770) 12/6/12 0.79% 3 month USD-LIBOR-BBA $(78,838) GBP 890,000 (E) 12/7/30 6 month GBP-LIBOR-BBA 4.93% 2,638 GBP 560,000 12/8/20 3.685% 6 month GBP-LIBOR-BBA 5,644 GBP 890,000 (E) 12/8/30 6 month GBP-LIBOR-BBA 4.9675% 5,476 GBP 1,313,000 12/9/20 3.63% 6 month GBP-LIBOR-BBA 23,315 GBP 2,000,000 (E) 12/9/30 6 month GBP-LIBOR-BBA 4.85643% (6,538) AUD 1,220,000 12/21/20 6.0975% 6 month AUD-BBR-BBSW (9,430) AUD 2,070,000 9/17/15 6 month AUD-BBR-BBSW 5.38% (21,181) AUD 910,000 9/17/20 5.5725% 6 month AUD-BBR-BBSW 25,752 AUD 930,000 9/22/20 5.685% 6 month AUD-BBR-BBSW 19,267 AUD 2,090,000 9/22/15 6 month AUD-BBR-BBSW 5.56% (6,985) AUD 2,980,000 9/29/15 6 month AUD-BBR-BBSW 5.5275% (15,122) AUD 1,510,000 9/29/20 5.63% 6 month AUD-BBR-BBSW 38,100 $65,211,100 (97,070) 11/10/12 0.53% 3 month USD-LIBOR-BBA 63,743 GBP 3,080,000 6/15/15 2.59% 6 month GBP-LIBOR-BBA 20,756 $45,088,900 26,976 7/23/15 1.90% 3 month USD-LIBOR-BBA 131,038 GBP 6,600,000 1/21/13 1.815% 6 month GBP-LIBOR-BBA (17,250) Barclays Bank PLC AUD 930,000 (E) 2/4/20 6 month AUD-BBR-BBSW 6.8% 13,773 AUD 1,230,000 10/1/15 6 month AUD-BBR-BBSW 5.43% (11,114) $3,536,100 (E) 3/9/21 4.2375% 3 month USD-LIBOR-BBA (218,920) AUD 1,120,000 5/24/15 5.505% 6 month AUD-BBR-BBSW 5,800 AUD 2,730,000 7/27/15 5.435% 6 month AUD-BBR-BBSW 23,367 $9,205,900 102,586 10/28/30 3 month USD-LIBOR-BBA 3.38% (821,287) AUD 2,000,000 8/26/15 6 month AUD-BBR-BBSW 5.025% (49,016) GBP 4,000,000 1/18/21 3.7875% 6 month GBP-LIBOR-BBA 9,969 GBP 2,640,000 1/25/13 1.61625% 6 month GBP-LIBOR-BBA 10,222 GBP 6,600,000 1/25/13 1.61% 6 month GBP-LIBOR-BBA 26,836 GBP 1,520,000 1/25/21 6 month GBP-LIBOR-BBA 3.72% (19,332) $2,093,200 (201) 1/28/16 3 month USD-LIBOR-BBA 2.17% (1,316) 11,963,100 1,776 1/28/21 3.41% 3 month USD-LIBOR-BBA 62,306 5,546,600 (2,960) 1/28/41 3 month USD-LIBOR-BBA 4.21% (91,223) 23,249,100 11/12/20 2.7225% 3 month USD-LIBOR-BBA 1,302,840 AUD 2,380,000 12/8/20 6 month AUD-BBR-BBSW 5.93% (11,402) AUD 2,380,000 12/22/15 5.895% 6 month AUD-BBR-BBSW (19,914) Citibank, N.A. GBP 19,680,000 7/1/12 6 month GBP-LIBOR-BBA 1.43% (4,230) GBP 15,740,000 7/1/15 2.45% 6 month GBP-LIBOR-BBA 291,388 GBP 4,680,000 7/1/20 6 month GBP-LIBOR-BBA 3.3675% (222,798) $93,381,800 17,889 7/9/20 3 month USD-LIBOR-BBA 3.01% (2,734,017) 10,594,000 11/8/20 2.635% 3 month USD-LIBOR-BBA 670,804 SEK 10,970,000 11/23/20 3.25% 3 month SEK-STIBOR-SIDE 63,293 $6,200,000 12/14/20 3.3975% 3 month USD-LIBOR-BBA 4,308 2,118,700 1/14/41 3 month USD-LIBOR-BBA 4.240625% (19,236) 7,015,200 189 1/26/13 0.84% 3 month USD-LIBOR-BBA (7,150) 6,788,900 20,897 1/28/16 3 month USD-LIBOR-BBA 2.17% 17,278 12,874,000 (76,262) 1/28/21 3.41% 3 month USD-LIBOR-BBA (11,124) Credit Suisse International 6,275,200 12/8/20 3 month USD-LIBOR-BBA 3.08125% (173,743) CHF 2,150,000 12/14/20 2.1075% 6 month CHF-LIBOR-BBA 15,632 $6,900,000 12/17/40 4.334% 3 month USD-LIBOR-BBA (70,596) CHF 9,010,000 1/28/13 0.675% 6 month CHF-LIBOR-BBA (378) $24,537,100 (214,056) 2/1/41 4.29% 3 month USD-LIBOR-BBA (152,713) 2,796,700 11,558 2/1/21 3 month USD-LIBOR-BBA 3.47% 10,747 CHF 2,870,000 7/28/15 1.27% 6 month CHF-LIBOR-BBA (2,282) $6,952,500 (1,911) 11/3/12 0.50% 3 month USD-LIBOR-BBA 17,713 7,098,400 11/8/15 3 month USD-LIBOR-BBA 1.31125% (238,089) 8,720,300 11/17/40 3.95% 3 month USD-LIBOR-BBA 464,887 CHF 9,010,000 5/20/12 0.62833% 6 month CHF-LIBOR-BBA (65,267) GBP 3,940,000 7/9/15 2.425% 6 month GBP-LIBOR-BBA 83,249 GBP 2,180,000 7/9/20 6 month GBP-LIBOR-BBA 3.3725% (104,555) Deutsche Bank AG $62,546,400 (1,774) 11/3/12 0.50% 3 month USD-LIBOR-BBA 177,943 19,432,200 11/5/20 3 month USD-LIBOR-BBA 2.6675% (1,167,032) 36,578,400 11/5/15 1.3855% 3 month USD-LIBOR-BBA 1,081,958 65,238,300 152,827 7/27/20 3 month USD-LIBOR-BBA 2.94% (2,286,147) 55,217,900 142,322 5/6/15 2.68% 3 month USD-LIBOR-BBA (2,026,884) 1,101,400 250 12/31/20 3 month USD-LIBOR-BBA 3.55% 12,407 3,610,800 12,988 12/31/40 4.28% 3 month USD-LIBOR-BBA 12,640 3,700,000 12/31/40 3 month USD-LIBOR-BBA 4.1342% (93,422) 14,668,000 1/14/13 0.85625% 3 month USD-LIBOR-BBA (27,177) 7,207,500 12/3/15 1.905% 3 month USD-LIBOR-BBA 53,959 EUR 9,060,000 12/23/20 3.325% 6 month EUR-EURIBOR-REUTERS 103,763 Goldman Sachs International AUD 445,000 (E) 2/23/20 6 month AUD-BBR-BBSW 6.6925% 4,917 AUD 1,450,000 (E) 2/23/20 6 month AUD-BBR-BBSW 6.7% 16,384 SEK 6,000,000 12/10/20 3.5775% 3 month SEK-STIBOR-SIDE 10,702 CHF 9,010,000 12/15/12 0.538% 6 month CHF-LIBOR-BBA 12,511 $1,921,700 (473) 10/1/13 0.84% 3 month USD-LIBOR-BBA 7,916 12,802,800 8/12/15 3 month USD-LIBOR-BBA 1.665% (87,781) 3,873,600 8/12/40 3.68% 3 month USD-LIBOR-BBA 348,923 AUD 2,080,000 9/20/15 6 month AUD-BBR-BBSW 5.39% (20,681) AUD 920,000 9/20/20 5.5775% 6 month AUD-BBR-BBSW 25,817 AUD 850,000 (E) 2/5/20 6 month AUD-BBR-BBSW 6.71% 9,994 GBP 2,020,000 1/21/21 3.81% 6 month GBP-LIBOR-BBA (190) $21,995,500 (16,862) 1/27/41 4.29% 3 month USD-LIBOR-BBA 26,153 JPMorgan Chase Bank, N.A. AUD 1,120,000 3/1/15 5.6% 6 month AUD-BBR-BBSW (3,703) AUD 840,000 3/2/15 5.6515% 6 month AUD-BBR-BBSW (4,202) JPY 367,000,000 12/7/20 1.25% 6 month JPY-LIBOR-BBA (8,976) $18,497,200 12/10/15 3 month USD-LIBOR-BBA 2.06625% (8,281) 13,640,600 (E) 2/9/21 3.56% 3 month USD-LIBOR-BBA (89,482) 3,536,100 (E) 3/8/21 4.165% 3 month USD-LIBOR-BBA (197,102) 14,998,900 685,450 10/14/20 4.02% 3 month USD-LIBOR-BBA (250,433) GBP 1,531,800 12/23/20 6 month GBP-LIBOR-BBA 3.6245% (31,651) AUD 380,000 6/26/19 6 month AUD-BBR-BBSW 6.05% 2,669 JPY 447,200,000 5/25/15 0.674375% 6 month JPY-LIBOR-BBA (27,735) AUD 840,000 6/11/15 5.545% 6 month AUD-BBR-BBSW 3,164 AUD 2,240,000 9/3/15 5.075% 6 month AUD-BBR-BBSW 50,555 $18,900,000 10/28/20 3 month USD-LIBOR-BBA 2.72175% (1,013,657) 61,183,200 (58,279) 11/10/12 0.53% 3 month USD-LIBOR-BBA 92,600 JPY 140,000,000 1/24/21 6 month JPY-LIBOR-BBA 1.3025% 8,052 $11,935,700 2,817 1/27/13 0.84% 3 month USD-LIBOR-BBA (9,490) 2,541,100 (346) 1/31/15 3 month USD-LIBOR-BBA 1.79% 4,638 6,423,000 (4,540) 1/31/21 3.51% 3 month USD-LIBOR-BBA (28,427) 22,857,100 (11,136) 1/31/16 3 month USD-LIBOR-BBA 2.24% 52,722 2,629,800 (4,861) 1/31/41 4.33% 3 month USD-LIBOR-BBA (18,096) JPY 445,960,000 9/16/15 6 month JPY-LIBOR-BBA 0.59125% 877 CAD 1,460,000 9/21/20 3.105% 3 month CAD-BA-CDOR 36,825 $29,505,400 10/5/12 0.62125% 3 month USD-LIBOR-BBA (35,545) JPY 24,900,000 (E) 7/28/29 6 month JPY-LIBOR-BBA 2.67% (252) JPY 33,500,000 (E) 7/28/39 2.40% 6 month JPY-LIBOR-BBA 890 Total (E) See Total return swap contracts note and/or Interest rate swap contracts note(s) regarding extended effective dates. Putnam Absolute Return 500 Fund TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Fixed payments Total return Unrealized Swap counterparty / premium Termination received (paid) by received by appreciation/ Notional amount received (paid) date fund per annum or paid by fund (depreciation) Barclays Bank PLC $4,689,286 $ 1/12/39 5.50% (1 month Synthetic TRS $(15,825) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 10,176,611 1/12/38 (6.50%) 1 month Synthetic TRS (15,534) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 2,344,643 1/12/39 5.50% (1 month Synthetic TRS (7,912) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 10,852,447 1/12/38 (6.50%) 1 month Synthetic TRS (16,566) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 10,020,049 1/12/39 5.50% (1 month Synthetic TRS (33,814) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 10,020,049 1/12/39 5.50% (1 month Synthetic TRS (33,814) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 10,852,447 1/12/38 (6.50%) 1 month Synthetic TRS (16,566) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 2,911,394 1/12/39 5.50% (1 month Synthetic TRS (9,825) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools Citibank, N.A. 177,769 9/9/11 3 month USD- Research (676,429) LIBOR-BBA in Motion Limited baskets 271,349 10/14/11 3 month USD- A basket 116,337 LIBOR-BBA minus (CGPUTSB3) 0.50 bp of common stocks baskets 260,334 1/9/12 (3 month USD- A basket 171,669 LIBOR-BBA plus (CGPUTLB3) 0.15 bp) of common stocks GBP 2,420,000 5/18/13 (3.38%) GBP Non-revised 64,717 UK Retail Price Index Credit Suisse International units 1,000 (F) 7/15/11 (1 month USD- The Middle East (104,279) LIBOR-BBA plus Custom Basket 1.00%) Index currently sponsored by Credit Suisse ticker CSGCCPUT units 450 (F) 7/12/11 (3 month USD- The Middle East (37,711) LIBOR-BBA) Custom Basket Index currently sponsored by Credit Suisse ticker CSGCCPUT3 units 588 (F) 7/12/11 (3 month USD- The Middle East (53,396) LIBOR-BBA) Custom Basket Index currently sponsored by Credit Suisse ticker CSGCCPUT2 units 1,037 (F) 7/15/11 (3 month USD- The Middle East (78,651) LIBOR-BBA plus 1%) Custom Basket Index currently sponsored by Credit Suisse ticker CSGCCPU5 Goldman Sachs International baskets 419,065 10/15/11 (1 month USD- A basket (230,500) LIBOR-BBA) (GSCBPCSL) of common stocks baskets 468,569 12/15/11 (1 month USD- A basket 208,015 LIBOR-BBA) (GSCBPINS) of common stocks $1,210,000 7/28/11 (0.685%) USA Non Revised 11,597 Consumer Price Index- Urban (CPI-U) 1,210,000 7/29/11 (0.76%) USA Non Revised 10,684 Consumer Price Index- Urban (CPI-U) 1,210,000 7/30/11 (0.73%) USA Non Revised 11,041 Consumer Price Index- Urban (CPI-U) baskets 3,445 11/26/11 (3 month USD- A basket 71,172 LIBOR-BBA plus (GSPMGCC2) 75 bp) of common stocks $2,359,685 1/12/39 5.50% (1 month Synthetic TRS (7,963) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools JPMorgan Chase Bank, N.A. EUR 675,000 8/10/12 (1.435%) Eurostat 10,118 Eurozone HICP excluding tobacco UBS, AG shares 135,484 3/4/11 3 month USD- iShares MSCI (116,959) LIBOR-BBA minus Emerging Markets .05% Index Total (F) Is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures ("ASC 820") based on the securities' valuation inputs. Putnam Absolute Return 500 Fund CREDIT DEFAULT CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Fixed payments premium Termi- received Unrealized Swap counterparty / received Notional nation (paid) by fund appreciation/ Referenced debt* Rating*** (paid)** amount date per annum (depreciation) Credit Suisse International Bonos Y Oblig Del Estado, 5 1/2%, 7/30/17 $(3,383) $380,000 12/20/19 (100 bp) $35,212 Deutsche Bank AG DJ CDX NA IG Series 15 Version 1 Index BBB+ 198,754 62,200,000 12/20/15 100 bp 720,888 Total * Payments related to the referenced debt are made upon a credit default event. ** Upfront premium is based on the difference between the original spread on issue and the market spread on day of execution. *** Ratings are presented for credit default contracts in which the fund has sold protection on the underlying referenced debt. Ratings for an underlying index represent the average of the ratings of all the securities included in that index. The Moody's, Standard & Poor's or Fitch ratings are believed to be the most recent ratings available at January 31, 2011. Securities rated by Putnam are indicated by "/P." Securities rated by Fitch are indicated by "/F." Putnam Absolute Return 700 Fund FORWARD CURRENCY CONTRACTS at 1/31/11 (aggregate face value $295,995,290) (Unaudited) Unrealized Contract Delivery Aggregate appreciation/ Counterparty Currency type date Value face value (depreciation) Bank of America, N.A. Australian Dollar Buy 2/16/11 $5,279,200 $5,289,634 $(10,434) Brazilian Real Buy 2/16/11 569,420 568,706 714 British Pound Sell 2/16/11 1,272,016 1,270,248 (1,768) Canadian Dollar Sell 2/16/11 2,920,245 2,922,746 2,501 Chilean Peso Buy 2/16/11 893,996 893,582 414 Czech Koruna Buy 2/16/11 2,146,649 2,122,867 23,782 Euro Sell 2/16/11 6,242,607 6,099,066 (143,541) Japanese Yen Sell 2/16/11 13,159,190 13,124,962 (34,228) Mexican Peso Buy 2/16/11 1,194,237 1,189,554 4,683 Norwegian Krone Buy 2/16/11 1,856,179 1,828,752 27,427 Singapore Dollar Sell 2/16/11 977,845 967,606 (10,239) South Korean Won Buy 2/16/11 909,230 912,269 (3,039) Swedish Krona Buy 2/16/11 3,939,687 3,821,987 117,700 Swiss Franc Sell 2/16/11 4,724,371 4,693,503 (30,868) Taiwan Dollar Sell 2/16/11 351,429 348,609 (2,820) Turkish Lira Sell 2/16/11 7,092 7,094 2 Barclays Bank PLC Australian Dollar Buy 2/16/11 199,435 203,405 (3,970) Brazilian Real Buy 2/16/11 2,178,561 2,165,918 12,643 British Pound Sell 2/16/11 5,898,956 5,839,854 (59,102) Canadian Dollar Buy 2/16/11 208,596 210,055 (1,459) Chilean Peso Sell 2/16/11 347,289 340,011 (7,278) Czech Koruna Buy 2/16/11 1,499,038 1,485,658 13,380 Euro Buy 2/16/11 1,554,730 1,522,615 32,115 Hungarian Forint Sell 2/16/11 739,038 707,809 (31,229) Indian Rupee Buy 2/17/11 1,454,560 1,466,147 (11,587) Japanese Yen Sell 2/16/11 4,390,723 4,369,451 (21,272) Mexican Peso Buy 2/16/11 693,102 692,020 1,082 New Zealand Dollar Sell 2/16/11 822,393 823,666 1,273 Norwegian Krone Buy 2/16/11 2,848,333 2,835,051 13,282 Philippines Peso Buy 2/16/11 740,821 741,780 (959) Polish Zloty Buy 2/16/11 1,865,973 1,849,283 16,690 Singapore Dollar Sell 2/16/11 678,100 671,894 (6,206) South Korean Won Buy 2/16/11 1,730,899 1,732,363 (1,464) Swedish Krona Buy 2/16/11 1,665,882 1,627,205 38,677 Swiss Franc Sell 2/16/11 5,366,214 5,326,734 (39,480) Taiwan Dollar Sell 2/16/11 1,302 1,305 3 Thai Baht Buy 2/16/11 1,452,961 1,450,315 2,646 Turkish Lira Sell 2/16/11 416,820 424,091 7,271 Citibank, N.A. Australian Dollar Sell 2/16/11 42,615 41,807 (808) Brazilian Real Buy 2/16/11 1,018,783 1,014,958 3,825 British Pound Buy 2/16/11 1,937,906 1,873,128 64,778 Canadian Dollar Buy 2/16/11 1,826,938 1,846,273 (19,335) Chilean Peso Sell 2/16/11 165,126 162,092 (3,034) Czech Koruna Buy 2/16/11 684,179 666,599 17,580 Euro Sell 2/16/11 2,455,666 2,393,558 (62,108) Hungarian Forint Sell 2/16/11 505,995 496,501 (9,494) Japanese Yen Sell 2/16/11 2,968,463 2,954,588 (13,875) Mexican Peso Buy 2/16/11 723,941 727,023 (3,082) New Zealand Dollar Buy 2/16/11 10,870 10,719 151 Norwegian Krone Buy 2/16/11 1,623,564 1,611,042 12,522 Polish Zloty Buy 2/16/11 1,091,865 1,073,380 18,485 Singapore Dollar Sell 2/16/11 819,221 812,845 (6,376) South African Rand Buy 2/16/11 663,451 684,645 (21,194) South Korean Won Buy 2/16/11 1,860,867 1,855,366 5,501 Swedish Krona Buy 2/16/11 3,805,824 3,784,740 21,084 Swiss Franc Sell 2/16/11 3,682,860 3,683,620 760 Taiwan Dollar Sell 2/16/11 462,233 464,075 1,842 Turkish Lira Buy 2/16/11 194,101 201,929 (7,828) Credit Suisse AG Australian Dollar Buy 2/16/11 4,132,176 4,214,821 (82,645) Brazilian Real Buy 2/16/11 886,104 882,251 3,853 British Pound Buy 2/16/11 1,792,423 1,773,934 18,489 Canadian Dollar Sell 2/16/11 1,137,043 1,135,639 (1,404) Czech Koruna Buy 2/16/11 1,775,592 1,769,750 5,842 Euro Sell 2/16/11 3,659,332 3,664,230 4,898 Indian Rupee Buy 2/17/11 732,844 732,665 179 Japanese Yen Sell 2/16/11 1,839,327 1,850,040 10,713 Malaysian Ringgit Buy 2/16/11 1,167,008 1,166,566 442 Norwegian Krone Sell 2/16/11 261,707 257,537 (4,170) Polish Zloty Buy 2/16/11 2,258,733 2,275,198 (16,465) South African Rand Sell 2/16/11 215,630 220,746 5,116 South Korean Won Buy 2/16/11 2,826,596 2,833,678 (7,082) Swedish Krona Sell 2/16/11 1,045,018 1,007,626 (37,392) Swiss Franc Sell 2/16/11 1,606,091 1,624,676 18,585 Taiwan Dollar Sell 2/16/11 472,824 473,877 1,053 Turkish Lira Sell 2/16/11 697,396 697,595 199 Deutsche Bank AG Australian Dollar Buy 2/16/11 7,207,038 7,191,613 15,425 Brazilian Real Buy 2/16/11 250,942 250,627 315 British Pound Sell 2/16/11 2,995,062 2,961,382 (33,680) Chilean Peso Buy 2/16/11 535,755 535,375 380 Czech Koruna Buy 2/16/11 1,334,145 1,320,156 13,989 Euro Buy 2/16/11 23,003 22,885 118 Hungarian Forint Sell 2/16/11 1,288,189 1,277,075 (11,114) Malaysian Ringgit Buy 2/16/11 1,160,905 1,159,126 1,779 Mexican Peso Buy 2/16/11 856,566 856,329 237 New Zealand Dollar Sell 2/16/11 353,148 348,729 (4,419) Norwegian Krone Buy 2/16/11 1,809,099 1,789,849 19,250 Philippines Peso Buy 2/16/11 735,508 732,819 2,689 Polish Zloty Buy 2/16/11 1,949,883 1,939,814 10,069 Singapore Dollar Sell 2/16/11 648,719 643,062 (5,657) South Korean Won Buy 2/16/11 1,883,504 1,890,556 (7,052) Swedish Krona Buy 2/16/11 121,123 116,581 4,542 Swiss Franc Sell 2/16/11 1,764,326 1,735,020 (29,306) Taiwan Dollar Sell 2/16/11 551 547 (4) Turkish Lira Buy 2/16/11 1,135,493 1,174,787 (39,294) Goldman Sachs International Australian Dollar Buy 2/16/11 1,575,466 1,605,892 (30,426) British Pound Sell 2/16/11 1,294,928 1,292,182 (2,746) Canadian Dollar Buy 2/16/11 185,630 187,317 (1,687) Chilean Peso Buy 2/16/11 16,913 16,663 250 Euro Buy 2/16/11 1,181,348 1,179,379 1,969 Hungarian Forint Sell 2/16/11 1,764,800 1,750,315 (14,485) Norwegian Krone Sell 2/16/11 22,398 22,213 (185) Polish Zloty Buy 2/16/11 264,947 257,811 7,136 South African Rand Sell 2/16/11 819,325 819,497 172 Swedish Krona Buy 2/16/11 800,432 781,437 18,995 Swiss Franc Sell 2/16/11 4,803,648 4,708,893 (94,755) HSBC Bank USA, National Association Australian Dollar Buy 2/16/11 1,626,445 1,658,819 (32,374) British Pound Sell 2/16/11 1,309,028 1,297,572 (11,456) Euro Sell 2/16/11 1,305,261 1,292,379 (12,882) Japanese Yen Sell 2/16/11 1,772,989 1,747,690 (25,299) Norwegian Krone Sell 2/16/11 687,536 687,728 192 Philippines Peso Buy 2/16/11 735,508 732,983 2,525 Singapore Dollar Sell 2/16/11 1,745,102 1,734,812 (10,290) South Korean Won Buy 2/16/11 1,885,022 1,892,393 (7,371) Swiss Franc Sell 2/16/11 2,779,871 2,785,500 5,629 Taiwan Dollar Sell 2/16/11 1,037 1,032 (5) JPMorgan Chase Bank, N.A. Australian Dollar Buy 2/16/11 1,595,280 1,608,593 (13,313) Brazilian Real Buy 2/16/11 894,419 889,523 4,896 British Pound Buy 2/16/11 1,036,647 1,036,248 399 Canadian Dollar Sell 2/16/11 3,780,392 3,802,758 22,366 Chilean Peso Buy 2/16/11 878,450 877,646 804 Czech Koruna Buy 2/16/11 1,137,620 1,131,545 6,075 Euro Buy 2/16/11 599,437 594,618 4,819 Hungarian Forint Sell 2/16/11 1,068,929 1,050,315 (18,614) Japanese Yen Sell 2/16/11 1,762,662 1,772,994 10,332 Malaysian Ringgit Buy 2/16/11 1,042,798 1,041,724 1,074 Mexican Peso Buy 2/16/11 1,051,625 1,048,588 3,037 New Zealand Dollar Sell 2/16/11 834,188 828,802 (5,386) Norwegian Krone Sell 2/16/11 150,770 149,474 (1,296) Polish Zloty Buy 2/16/11 813,419 792,657 20,762 Singapore Dollar Sell 2/16/11 1,531,780 1,523,297 (8,483) South African Rand Buy 2/16/11 942,492 953,798 (11,306) South Korean Won Buy 2/16/11 2,695,826 2,701,895 (6,069) Swedish Krona Sell 2/16/11 1,126,154 1,099,575 (26,579) Swiss Franc Sell 2/16/11 1,505,724 1,480,713 (25,011) Taiwan Dollar Sell 2/16/11 354,723 353,325 (1,398) Thai Baht Buy 2/16/11 739,700 742,310 (2,610) Turkish Lira Sell 2/16/11 498,754 498,989 235 Royal Bank of Scotland PLC (The) Australian Dollar Buy 2/16/11 1,583,232 1,614,087 (30,855) Brazilian Real Buy 2/16/11 1,218,580 1,214,175 4,405 British Pound Sell 2/16/11 1,330,017 1,327,147 (2,870) Canadian Dollar Buy 2/16/11 209,994 212,171 (2,177) Czech Koruna Buy 2/16/11 1,249,609 1,230,057 19,552 Euro Sell 2/16/11 1,740,668 1,724,010 (16,658) Hungarian Forint Sell 2/16/11 1,307,843 1,283,389 (24,454) Japanese Yen Sell 2/16/11 4,645,262 4,645,663 401 Malaysian Ringgit Buy 2/16/11 1,166,976 1,166,684 292 Norwegian Krone Buy 2/16/11 5,074,734 5,010,364 64,370 Polish Zloty Buy 2/16/11 856,592 844,657 11,935 Singapore Dollar Sell 2/16/11 1,836,448 1,825,475 (10,973) South African Rand Sell 2/16/11 820,853 832,845 11,992 South Korean Won Buy 2/16/11 2,341,508 2,351,057 (9,549) Swedish Krona Buy 2/16/11 2,140,686 2,147,071 (6,385) Swiss Franc Sell 2/16/11 1,280,294 1,267,177 (13,117) Taiwan Dollar Sell 2/16/11 287,736 287,847 111 Turkish Lira Sell 2/16/11 18,601 19,033 432 State Street Bank and Trust Co. Australian Dollar Buy 2/16/11 5,853,111 5,875,772 (22,661) Brazilian Real Buy 2/16/11 2,653,048 2,638,344 14,704 British Pound Sell 2/16/11 4,270,122 4,218,099 (52,023) Canadian Dollar Buy 2/16/11 213,489 215,439 (1,950) Euro Sell 2/16/11 4,452,922 4,400,680 (52,242) Hungarian Forint Sell 2/16/11 2,289,342 2,260,849 (28,493) Japanese Yen Sell 2/16/11 4,607,311 4,608,791 1,480 Malaysian Ringgit Buy 2/16/11 1,211,817 1,210,318 1,499 Mexican Peso Buy 2/16/11 866,100 865,735 365 Norwegian Krone Buy 2/16/11 2,598,145 2,587,268 10,877 Philippines Peso Buy 2/16/11 735,508 733,148 2,360 Polish Zloty Buy 2/16/11 3,282,656 3,257,670 24,986 Swedish Krona Sell 2/16/11 1,804,069 1,761,602 (42,467) Swiss Franc Sell 2/16/11 1,028,581 1,009,108 (19,473) Taiwan Dollar Sell 2/16/11 354,420 352,021 (2,399) Thai Baht Buy 2/16/11 739,703 742,072 (2,369) Westpac Banking Corp. Australian Dollar Buy 2/16/11 3,431,415 3,460,183 (28,768) British Pound Sell 2/16/11 1,682,990 1,674,065 (8,925) Canadian Dollar Sell 2/16/11 548,401 554,879 6,478 Euro Sell 2/16/11 3,212,835 3,211,504 (1,331) Japanese Yen Sell 2/16/11 1,853,030 1,864,601 11,571 New Zealand Dollar Sell 2/16/11 502,933 501,526 (1,407) Norwegian Krone Sell 2/16/11 29,663 29,443 (220) Swedish Krona Buy 2/16/11 3,598,374 3,467,557 130,817 Swiss Franc Sell 2/16/11 1,625,168 1,625,949 781 Total Putnam Absolute Return 700 Fund FUTURES CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Unrealized Number of Expiration appreciation/ contracts Value date (depreciation) Australian Government Treasury Bond 10 yr (Short) 7 $4,946,284 Mar-11 $(2,987) Canadian Government Bond 10 yr (Long) 84 10,173,632 Mar-11 (11,174) Euro-Bund 10 yr (Long) 21 3,558,571 Mar-11 (784) Japanese Government Bond 10 yr (Short) 8 13,657,989 Mar-11 (14,882) NASDAQ 100 Index E-Mini (Long) 295 13,452,000 Mar-11 477,015 S&P Mid Cap 400 Index E-Mini (Long) 8 738,480 Mar-11 12,224 U.K. Gilt 10 yr (Long) 140 26,321,343 Mar-11 (7,030) U.S. Treasury Bond 20 yr (Long) 93 11,218,125 Mar-11 (67,020) U.S. Treasury Bond 30 yr (Long) 798 98,278,688 Mar-11 (4,070,626) U.S. Treasury Note 5 yr (Short) 47 5,565,461 Mar-11 59,395 U.S. Treasury Note 10 yr (Short) 844 101,952,563 Mar-11 3,548,311 Total Putnam Absolute Return 700 Fund WRITTEN OPTIONS OUTSTANDING at 1/31/11 (premiums received $16,232,000) (Unaudited) Contractamount/ Expiration date/ number of contracts strike price Value SPDR S&P rust (Call) 1,210,731 Feb-11/$135.00 $81,918 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.49% versus the three month USD-LIBOR-BBA maturing August 17, 2021. $6,924,000 Aug-11/4.49 505,037 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.475% versus the three month USD-LIBOR-BBA maturing August 19, 2021. 4,943,000 Aug-11/4.475 51,111 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.475% versus the three month USD-LIBOR-BBA maturing August 19, 2021. 4,943,000 Aug-11/4.475 354,858 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.55% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 3,462,000 Aug-11/4.55 31,435 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.49% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 6,924,000 Aug-11/4.49 48,468 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.55% versus the three month USD-LIBOR-BBA maturing August 17, 2021. 3,462,000 Aug-11/4.55 267,266 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.70% versus the three month USD-LIBOR-BBA maturing August 8, 2021. 1,711,000 Aug-11/4.70 11,173 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.70% versus the three month USD-LIBOR-BBA maturing August 8, 2021. 1,711,000 Aug-11/4.70 151,646 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 3,407,000 Jul-11/4.5475 23,849 Option on an interest rate swap with Citibank, N.A. for the obligation to receive a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 6,814,000 Jul-11/4.52 51,514 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 3,407,000 Jul-11/4.5475 265,746 Option on an interest rate swap with Citibank, N.A. for the obligation to pay a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021. 6,814,000 Jul-11/4.52 517,864 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.375% versus the three month USD-LIBOR-BBA maturing August 10, 2045. 6,636,700 Aug-15/4.375 1,123,726 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.80% versus the three month USD-LIBOR-BBA maturing January 17, 2022. 24,852,200 Jan-12/4.80 391,787 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.80% versus the three month USD-LIBOR-BBA maturing January 17, 2022. 24,852,200 Jan-12/4.80 2,129,039 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.375% versus the three month USD-LIBOR-BBA maturing August 10, 2045. 6,636,700 Aug-15/4.375 496,691 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.46% versus the three month USD-LIBOR-BBA maturing August 7, 2045. 6,636,700 Aug-15/4.46 525,560 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.46% versus the three month USD-LIBOR-BBA maturing August 7, 2045. 6,636,700 Aug-15/4.46 1,073,685 Option on an interest rate swap with Bank of America, N.A. for the obligation to receive a fixed rate of 4.72% versus the three month USD-LIBOR-BBA maturing January 19, 2022. 14,911,320 Jan-12/4.72 261,097 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 3.89% versus the three month USD-LIBOR-BBA maturing April 28, 2021. 1,474,833 Apr-11/3.89 14,182 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.04% versus the three month USD-LIBOR-BBA maturing September 11, 2025. 26,918,400 Sep-15/4.04 910,649 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.04% versus the three month USD-LIBOR-BBA maturing September 11, 2025. 26,918,400 Sep-15/4.04 3,053,354 Option on an interest rate swap with Barclays Bank PLC for the obligation to receive a fixed rate of 5.36% versus the three month USD-LIBOR-BBA maturing February 13, 2025. 2,461,160 Feb-15/5.36 140,286 Option on an interest rate swap with Barclays Bank PLC for the obligation to pay a fixed rate of 5.36% versus the three month USD-LIBOR-BBA maturing February 13, 2025. 2,461,160 Feb-15/5.36 192,217 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 5.27% versus the three month USD-LIBOR-BBA maturing February 12, 2025. 5,007,860 Feb-15/5.27 299,019 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 5.27% versus the three month USD-LIBOR-BBA maturing February 12, 2025. 5,007,860 Feb-15/5.27 372,034 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.8675% versus the three month USD-LIBOR-BBA maturing April 12, 2022. 4,527,700 Apr-12/4.8675 91,557 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to pay a fixed rate of 4.8675% versus the three month USD-LIBOR-BBA maturing April 12, 2022. 4,527,700 Apr-12/4.8675 386,004 Option on an interest rate swap with Bank of America, N.A. for the obligation to pay a fixed rate of 4.72% versus the three month USD-LIBOR-BBA maturing January 19, 2022. 14,911,320 Jan-12/4.72 1,199,914 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.70175% versus the six month CHF-LIBOR-BBA maturing January 23, 2014. CHF 14,580,000 Jan-12/0.70175 10,643 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.578% versus the six month CHF-LIBOR-BBA maturing December 24, 2013. CHF 7,290,000 Dec-11/0.578 2,402 Option on an interest rate swap with Credit Suisse International for the obligation to pay a fixed rate of 0.602% versus the six month CHF-LIBOR-BBA maturing December 22, 2013. CHF 7,290,000 Dec-11/0.602 2,852 Option on an interest rate swap with Barclays Bank PLC for the obligation to receive a fixed rate of 4.7375% versus the three month USD-LIBOR-BBA maturing March 9, 2021. $ Mar-11/4.7375 68 Option on an interest rate swap with JPMorgan Chase Bank, N.A. for the obligation to receive a fixed rate of 4.665% versus the three month USD-LIBOR-BBA maturing March 8, 2021. 3,400,200 Mar-11/4.665 68 Total Putnam Absolute Return 700 Fund INTEREST RATE SWAP CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Payments Payments Unrealized Swap counterparty / premium Termination made by received by appreciation/ Notional amount received (paid) date fund per annum fund per annum (depreciation) Bank of America, N.A. $33,340,800 $(2,263) 12/6/12 0.79% 3 month USD-LIBOR-BBA $(64,407) GBP 1,080,000 (E) 12/7/30 6 month GBP-LIBOR-BBA 4.93% 3,202 GBP 680,000 12/8/20 3.685% 6 month GBP-LIBOR-BBA 6,853 GBP 1,080,000 (E) 12/8/30 6 month GBP-LIBOR-BBA 4.9675% 6,645 GBP 1,593,000 12/9/20 3.63% 6 month GBP-LIBOR-BBA 28,287 GBP 3,000,000 (E) 12/9/30 6 month GBP-LIBOR-BBA 4.85643% (9,807) AUD 1,480,000 12/21/20 6.0975% 6 month AUD-BBR-BBSW (11,439) AUD 2,440,000 9/17/15 6 month AUD-BBR-BBSW 5.38% (24,967) AUD 1,100,000 9/17/20 5.5725% 6 month AUD-BBR-BBSW 31,129 AUD 1,120,000 9/22/20 5.685% 6 month AUD-BBR-BBSW 23,203 AUD 2,450,000 9/22/15 6 month AUD-BBR-BBSW 5.56% (8,188) AUD 3,490,000 9/29/15 6 month AUD-BBR-BBSW 5.5275% (17,710) AUD 1,800,000 9/29/20 5.63% 6 month AUD-BBR-BBSW 45,417 $60,078,300 (89,429) 11/10/12 0.53% 3 month USD-LIBOR-BBA 58,726 GBP 3,760,000 6/15/15 2.59% 6 month GBP-LIBOR-BBA 25,339 $70,307,900 42,065 7/23/15 1.90% 3 month USD-LIBOR-BBA 204,329 GBP 8,070,000 1/21/13 1.815% 6 month GBP-LIBOR-BBA (21,093) Barclays Bank PLC AUD 1,140,000 (E) 2/4/20 6 month AUD-BBR-BBSW 6.8% 16,883 AUD 1,450,000 10/1/15 6 month AUD-BBR-BBSW 5.43% (13,102) $2,108,100 (E) 3/9/21 4.2375% 3 month USD-LIBOR-BBA (130,512) AUD 1,230,000 5/24/15 5.505% 6 month AUD-BBR-BBSW 6,369 AUD 3,600,000 7/27/15 5.435% 6 month AUD-BBR-BBSW 30,813 $9,003,500 100,331 10/28/30 3 month USD-LIBOR-BBA 3.38% (803,230) AUD 3,000,000 8/26/15 6 month AUD-BBR-BBSW 5.025% (73,524) GBP 4,980,000 1/18/21 3.7875% 6 month GBP-LIBOR-BBA 12,411 GBP 3,230,000 1/25/13 1.61625% 6 month GBP-LIBOR-BBA 12,506 GBP 8,060,000 1/25/13 1.61% 6 month GBP-LIBOR-BBA 32,773 GBP 1,850,000 1/25/21 6 month GBP-LIBOR-BBA 3.72% (23,529) $12,930,000 (1,239) 1/28/16 3 month USD-LIBOR-BBA 2.17% (8,130) 20,170,100 2,995 1/28/21 3.41% 3 month USD-LIBOR-BBA 105,049 9,139,200 (4,876) 1/28/41 3 month USD-LIBOR-BBA 4.21% (150,308) 29,304,000 11/12/20 2.7225% 3 month USD-LIBOR-BBA 1,642,146 AUD 2,870,000 12/8/20 6 month AUD-BBR-BBSW 5.93% (13,749) AUD 2,870,000 12/22/15 5.895% 6 month AUD-BBR-BBSW (24,015) Citibank, N.A. GBP 24,060,000 7/1/12 6 month GBP-LIBOR-BBA 1.43% (5,172) GBP 19,260,000 7/1/15 2.45% 6 month GBP-LIBOR-BBA 356,552 GBP 5,700,000 7/1/20 6 month GBP-LIBOR-BBA 3.3675% (271,356) $60,664,200 11,622 7/9/20 3 month USD-LIBOR-BBA 3.01% (1,776,117) 14,135,500 11/8/20 2.635% 3 month USD-LIBOR-BBA 895,049 SEK 13,560,000 11/23/20 3.25% 3 month SEK-STIBOR-SIDE 78,236 $7,400,000 12/14/20 3.3975% 3 month USD-LIBOR-BBA 5,142 2,605,800 1/14/41 3 month USD-LIBOR-BBA 4.240625% (23,658) 5,465,300 147 1/26/13 0.84% 3 month USD-LIBOR-BBA (5,571) 9,058,000 27,881 1/28/16 3 month USD-LIBOR-BBA 2.17% 23,053 15,479,800 (91,698) 1/28/21 3.41% 3 month USD-LIBOR-BBA (13,376) Credit Suisse International 7,781,600 12/8/20 3 month USD-LIBOR-BBA 3.08125% (215,452) CHF 2,600,000 12/14/20 2.1075% 6 month CHF-LIBOR-BBA 18,904 $7,800,000 12/17/40 4.334% 3 month USD-LIBOR-BBA (79,805) CHF 11,240,000 1/28/13 0.675% 6 month CHF-LIBOR-BBA (471) $30,332,700 (264,616) 2/1/41 4.29% 3 month USD-LIBOR-BBA (188,784) 5,430,400 22,443 2/1/21 3 month USD-LIBOR-BBA 3.47% 20,868 CHF 3,550,000 7/28/15 1.27% 6 month CHF-LIBOR-BBA (2,822) $1,939,400 (1,910) 10/27/14 3 month USD-LIBOR-BBA 1.06% (36,188) 4,538,500 (1,248) 11/3/12 0.50% 3 month USD-LIBOR-BBA 11,563 9,470,900 11/8/15 3 month USD-LIBOR-BBA 1.31125% (317,666) 10,697,800 11/17/40 3.95% 3 month USD-LIBOR-BBA 570,309 CHF 11,240,000 5/20/12 0.62833% 6 month CHF-LIBOR-BBA (81,420) GBP 4,840,000 7/9/15 2.425% 6 month GBP-LIBOR-BBA 102,265 GBP 2,670,000 7/9/20 6 month GBP-LIBOR-BBA 3.3725% (128,055) Deutsche Bank AG $64,187,300 (1,821) 11/3/12 0.50% 3 month USD-LIBOR-BBA 182,611 17,889,200 11/5/20 3 month USD-LIBOR-BBA 2.6675% (1,074,365) 33,674,100 11/5/15 1.3855% 3 month USD-LIBOR-BBA 996,052 56,941,800 133,392 7/27/20 3 month USD-LIBOR-BBA 2.94% (1,995,412) 2,018,900 459 12/31/20 3 month USD-LIBOR-BBA 3.55% 22,743 5,700,400 20,505 12/31/40 4.28% 3 month USD-LIBOR-BBA 19,955 4,200,000 12/31/40 3 month USD-LIBOR-BBA 4.1342% (106,046) 19,178,400 1/14/13 0.85625% 3 month USD-LIBOR-BBA (35,533) 7,662,200 12/3/15 1.905% 3 month USD-LIBOR-BBA 57,364 EUR 10,880,000 12/23/20 3.325% 6 month EUR-EURIBOR-REUTERS 124,608 Goldman Sachs International AUD 547,500 (E) 2/23/20 6 month AUD-BBR-BBSW 6.6925% 6,050 AUD 1,790,000 (E) 2/23/20 6 month AUD-BBR-BBSW 6.7% 20,226 SEK 7,200,000 12/10/20 3.5775% 3 month SEK-STIBOR-SIDE 12,842 CHF 10,900,000 12/15/12 0.538% 6 month CHF-LIBOR-BBA 15,135 $40,937,500 7/20/20 3 month USD-LIBOR-BBA 2.96375% (1,415,023) 45,526,100 (5,068) 10/1/12 0.59% 3 month USD-LIBOR-BBA (37,899) 1,695,900 (418) 10/1/13 0.84% 3 month USD-LIBOR-BBA 6,986 14,792,400 8/12/15 3 month USD-LIBOR-BBA 1.665% (101,423) 4,489,400 8/12/40 3.68% 3 month USD-LIBOR-BBA 404,392 AUD 2,440,000 9/20/15 6 month AUD-BBR-BBSW 5.39% (24,261) AUD 1,100,000 9/20/20 5.5775% 6 month AUD-BBR-BBSW 30,869 AUD 1,050,000 (E) 2/5/20 6 month AUD-BBR-BBSW 6.71% 12,346 GBP 2,500,000 1/21/21 3.81% 6 month GBP-LIBOR-BBA (235) $29,968,800 (22,974) 1/27/41 4.29% 3 month USD-LIBOR-BBA 35,633 51,668,500 (121,057) 6/16/15 2.33% 3 month USD-LIBOR-BBA (1,156,410) JPMorgan Chase Bank, N.A. AUD 1,230,000 3/1/15 5.6% 6 month AUD-BBR-BBSW (4,066) AUD 922,500 3/2/15 5.6515% 6 month AUD-BBR-BBSW (4,614) JPY 447,000,000 12/7/20 1.25% 6 month JPY-LIBOR-BBA (10,933) $22,381,100 12/10/15 3 month USD-LIBOR-BBA 2.06625% (10,020) 17,852,600 (E) 2/9/21 3.56% 3 month USD-LIBOR-BBA (117,113) 2,108,100 (E) 3/8/21 4.165% 3 month USD-LIBOR-BBA (117,505) 16,394,100 749,210 10/14/20 4.02% 3 month USD-LIBOR-BBA (273,728) GBP 1,872,200 12/23/20 6 month GBP-LIBOR-BBA 3.6245% (38,685) AUD 320,000 6/26/19 6 month AUD-BBR-BBSW 6.05% 2,247 JPY 550,920,000 5/25/15 0.674375% 6 month JPY-LIBOR-BBA (34,168) AUD 922,500 6/11/15 5.545% 6 month AUD-BBR-BBSW 3,475 AUD 2,950,000 9/3/15 5.075% 6 month AUD-BBR-BBSW 66,580 $24,100,000 10/28/20 3 month USD-LIBOR-BBA 2.72175% (1,292,546) 54,739,700 (52,142) 11/10/12 0.53% 3 month USD-LIBOR-BBA 82,848 JPY 170,000,000 1/24/21 6 month JPY-LIBOR-BBA 1.3025% 9,778 $2,265,900 535 1/27/13 0.84% 3 month USD-LIBOR-BBA (1,802) 8,826,100 (1,201) 1/31/15 3 month USD-LIBOR-BBA 1.79% 16,109 11,124,700 (7,863) 1/31/21 3.51% 3 month USD-LIBOR-BBA (49,236) 26,904,800 (13,108) 1/31/16 3 month USD-LIBOR-BBA 2.24% 62,058 2,656,900 (4,913) 1/31/41 4.33% 3 month USD-LIBOR-BBA (18,282) JPY 549,390,000 9/16/15 6 month JPY-LIBOR-BBA 0.59125% 1,081 CAD 1,830,000 9/21/20 3.105% 3 month CAD-BA-CDOR 46,157 $36,880,000 10/5/12 0.62125% 3 month USD-LIBOR-BBA (44,429) JPY 22,600,000 (E) 7/28/29 6 month JPY-LIBOR-BBA 2.67% (229) JPY 30,400,000 (E) 7/28/39 2.40% 6 month JPY-LIBOR-BBA 808 $40,937,500 7/20/20 3 month USD-LIBOR-BBA 2.966% (1,407,626) Total (E) See Total return swap contracts note and/or Interest rate swap contracts note(s) regarding extended effective dates. Putnam Absolute Return 700 Fund TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Fixed payments Total return Unrealized Swap counterparty / premium Termination received (paid) by received by appreciation/ Notional amount received (paid) date fund per annum or paid by fund (depreciation) Barclays Bank PLC $13,278,756 $ 1/12/38 (6.50%) 1 month Synthetic TRS $(20,269) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 12,259,882 1/12/39 5.50% (1 month Synthetic TRS (41,373) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 12,259,882 1/12/39 5.50% (1 month Synthetic TRS (41,373) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools 13,278,756 1/12/38 (6.50%) 1 month Synthetic TRS (20,269) USD-LIBOR Index 6.50% 30 year Fannie Mae pools 3,881,859 1/12/39 5.50% (1 month Synthetic TRS (13,100) USD-LIBOR) Index 5.50% 30 year Fannie Mae pools Citibank, N.A. 206,759 9/9/11 3 month USD- Research (786,739) LIBOR-BBA in Motion Limited baskets 345,356 10/14/11 3 month USD- A basket 148,067 LIBOR-BBA minus (CGPUTSB3) 0.50 bp of common stocks baskets 342,291 1/9/12 (3 month USD- A basket 225,713 LIBOR-BBA plus (CGPUTLB3) 0.15 bp) of common stocks GBP 3,000,000 5/18/13 (3.38%) GBP Non-revised 80,228 UK Retail Price Index Credit Suisse International units 626 (F) 7/15/11 (1 month USD- The Middle East (65,279) LIBOR-BBA plus Custom Basket 1.00%) Index currently sponsored by Credit Suisse ticker CSGCCPUT units 387 (F) 7/12/11 (3 month USD- The Middle East (32,432) LIBOR-BBA) Custom Basket Index currently sponsored by Credit Suisse ticker CSGCCPUT3 units 596 (F) 7/12/11 (3 month USD- The Middle East (54,123) LIBOR-BBA) Custom Basket Index currently sponsored by Credit Suisse ticker CSGCCPUT2 units 814 (F) 7/15/11 (3 month USD- The Middle East (61,738) LIBOR-BBA plus 1%) Custom Basket Index currently sponsored by Credit Suisse ticker CSGCCPU5 Goldman Sachs International baskets 463,294 10/15/11 (1 month USD- A basket (254,828) LIBOR-BBA) (GSCBPCSL) of common stocks baskets 518,022 12/15/11 (1 month USD- A basket 229,969 LIBOR-BBA) (GSCBPINS) of common stocks $1,500,000 7/28/11 (0.685%) USA Non Revised 14,376 Consumer Price Index- Urban (CPI-U) 1,500,000 7/29/11 (0.76%) USA Non Revised 13,245 Consumer Price Index- Urban (CPI-U) 1,500,000 7/30/11 (0.73%) USA Non Revised 13,688 Consumer Price Index- Urban (CPI-U) baskets 2,685 11/26/11 (3 month USD- A basket 55,471 LIBOR-BBA plus (GSPMGCC2) 75 bp) of common stocks JPMorgan Chase Bank, N.A. EUR 735,000 8/10/12 (1.435%) Eurostat 11,017 Eurozone HICP excluding tobacco UBS, AG shares 130,053 3/4/11 3 month USD- iShares MSCI (112,270) LIBOR-BBA minus Emerging Markets .05% Index Total (F) Is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures ("ASC 820") based on the securities' valuation inputs. Putnam Absolute Return 700 Fund CREDIT DEFAULT CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Upfront Fixed payments premium Termi- received Unrealized Swap counterparty / received Notional nation (paid) by fund appreciation/ Referenced debt* Rating*** (paid)** amount date per annum (depreciation) Credit Suisse International Bonos Y Oblig Del Estado, 5 1/2%, 7/30/17 $(4,006) $450,000 12/20/19 (100 bp) $41,699 Deutsche Bank AG DJ CDX NA IG Series 15 Version 1 Index BBB+ 123,982 38,800,000 12/20/15 100 bp 449,686 Total * Payments related to the referenced debt are made upon a credit default event. ** Upfront premium is based on the difference between the original spread on issue and the market spread on day of execution. *** Ratings are presented for credit default contracts in which the fund has sold protection on the underlying referenced debt. Ratings for an underlying index represent the average of the ratings of all the securities included in that index. The Moody's, Standard & Poor's or Fitch ratings are believed to be the most recent ratings available at January 31, 2011. Securities rated by Putnam are indicated by "/P." Securities rated by Fitch are indicated by "/F." Key to holding's currency abbreviations AUD Australian Dollar CAD Canadian Dollar CHF Swiss Franc EUR Euro GBP British Pound JPY Japanese Yen SEK Swedish Krona Key to holding's abbreviations EMTN Euro Medium Term Notes ETF Exchange Traded Fund FDIC Guaranteed Federal Deposit Insurance Corp. Guaranteed FRB Floating Rate Bonds FRN Floating Rate Notes GMTN Global Medium Term Notes IFB Inverse Floating Rate Bonds IO Interest Only MTN Medium Term Notes PO Principal Only SPDR S&P 500 Index Depository Receipts TBA To Be Announced Commitments Notes to the funds' portfolio Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from November 1, 2010 through January 31, 2011 (the reporting period). (a) Percentages indicated are based on net assets as follows: 500 Fund $697,871,301 700 Fund 597,957,882 (b) The aggregate identified cost on a tax basis is as follows: Cost Appreciation Depreciation Net Appreciation 500 Fund $717,198,468 $22,423,178 $(6,851,497) $15,571,681 700 Fund 613,587,317 23,321,378 (6,760,370) 16,561,008 (NON) Non-income-producing security. (PIK) Income may be received in cash or additional securities at the discretion of the issuer. (SEG) These securities, in part or in entirety, were pledged and segregated with the broker to cover margin requirements for futures contracts at the close of the reporting period. (SEGSF) These securities, in part or in entirety, were pledged and segregated with the custodian for collateral on certain derivatives contracts at the close of the reporting period. (FWC) Forward commitments, in part or in entirety. (c) Senior loans are exempt from registration under the Securities Act of 1933, as amended, but contain certain restrictions on resale and cannot be sold publicly. These loans pay interest at rates which adjust periodically. The interest rates shown for senior loans are the current interest rates at the close of the reporting period. Senior loans are also subject to mandatory and/or optional prepayment which cannot be predicted. As a result, the remaining maturity may be substantially less than the stated maturity shown. Senior loans are purchased or sold on a when-issued or delayed delivery basis and may be settled a month or more after the trade date, which from time to time can delay the actual investment of available cash balances; interest income is accrued based on the terms of the securities. Senior loans can be acquired through an agent, by assignment from another holder of the loan, or as a participation interest in another holder’s portion of the loan. When the fund invests in a loan or participation, the fund is subject to the risk that an intermediate participant between the fund and the borrower will fail to meet its obligations to the fund, in addition to the risk that the borrower under the loan may default on its obligations. (e) Each fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Investment Management, LLC (Putnam Management), the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $13,559 and $13,557 (for 500 Fund and 700 Fund, respectively) for the reporting period. During the reporting period, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated as follows: Cost of purchases Proceeds of sales 500 Fund $166,657,361 $200,095,969 700 Fund 165,147,960 174,364,618 Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. (F) Is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) based on the securities' valuation inputs. (R) Real Estate Investment Trust. At the close of the reporting period, the fund maintained liquid assets to cover certain derivatives contracts as follows: 500 Fund $493,098,048 700 Fund 516,961,810 Debt obligations are considered secured unless otherwise indicated. 144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The rates shown on FRB and FRN are the current interest rates at the close of the reporting period. The dates shown on debt obligations are the original maturity dates. IFB are securities that pay interest rates that vary inversely to changes in the market interest rates. As interest rates rise, inverse floaters produce less current income. The interest rates shown are the current interest rates at the close of the reporting period. Security valuation: Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities. If no sales are reported as in the case of some securities traded over-the-counter a security is valued at its last reported bid price and is generally categorized as a Level 2 security. Market quotations are not considered to be readily available for certain debt obligations; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Investment Management, LLC (Putnam Management), the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which considers such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which will generally represent a transfer from a Level 1 to a Level 2 security, will be classified as Level 2. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs. Such valuations and procedures are reviewed periodically by the Trustees. Certain securities may be valued on the basis of a price provided by a single source. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount. Stripped securities: Each fund may invest in stripped securities which represent a participation in securities that may be structured in classes with rights to receive different portions of the interest and principal. Interest-only securities receive all of the interest and principal-only securities receive all of the principal. If the interest-only securities experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, principal-only securities increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. The market value of these securities is highly sensitive to changes in interest rates. Futures contracts: Each fund uses futures contracts to gain exposure to interest rates and manage exposure to market risk. The potential risk to the fund is that the change in value of futures contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” For the 500 Fund and 700 Fund outstanding contracts on futures contracts at the close of the reporting period are indicative of the volume of activity during the period. Options contracts: Each fund uses options contracts to hedge duration, convexity, and prepayment risk, to gain exposure to interest rates and volatility and to hedge against changes in values of securities it owns, owned or expects to own. The potential risk to the fund is that the change in value of options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments. Exchange traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. The 500 Fund had an average contract amount of approximately $140,300,000 on purchased options contracts for the reporting period. The 700 Fund had an average contract amount of approximately $167,600,000 on purchased options contracts for the reporting period. For both 500 Fund and 700 Fund outstanding contracts on written options contracts at the close of the reporting period are indicative of the volume of activity during the period. Forward currency contracts: Each fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to hedge foreign exchange risk and gain exposure on currency. The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. The 500 Fund had an average contract amount of approximately $226,100,000 on forward currency contracts for the reporting period. The 700 Fund had an average contract amount of approximately $259,300,000 on forward currency contracts for the reporting period. Total return swap contracts: Each fund enters into total return swap contracts, which are arrangements to exchange a market linked return for a periodic payment, both based on a notional principal amount to hedge sector exposure and to manage exposure to specific sectors or industries and to gain exposure to specific markets/countries and to specific sector/industries. To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. Total return swap contracts are marked to market daily based upon quotations from market makers and the change, if any, is recorded as an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain total return swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. The fund’s maximum risk of loss from counterparty risk is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. For 500 Fund and 700 Fund outstanding notional on total return swap contracts at the close of the reporting period are indicative of the volume of activity during the period. Interest rate swap contracts: Each fund enters into interest rate swap contracts, which are arrangements between two parties to exchange cash flows based on a notional principal amount, to hedge interest rates and gain exposure on interest rates. An interest rate swap can be purchased or sold with an upfront premium. An upfront payment received by the fund is recorded as a liability on the fund's books. An upfront payment made by the fund is recorded as an asset on the fund's books. Interest rate swap contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain interest rate swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or if the counterparty defaults on its obligation to perform. The fund’s maximum risk of loss from counterparty risk is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. For 500 Fund and 700 Fund outstanding notional on interest rate swap contracts at the close of the reporting period are indicative of the volume of activity during the period. Credit default contracts: Each fund enters into credit default contracts to hedge credit and market risk and to gain exposure on individual names and/or baskets of securities. In a credit default contract, the protection buyer typically makes an up front payment and a periodic stream of payments to a counterparty, the protection seller, in exchange for the right to receive a contingent payment upon the occurrence of a credit event on the reference obligation or all other equally ranked obligations of the reference entity. Credit events are contract specific but may include bankruptcy, failure to pay, restructuring and obligation acceleration. An upfront payment received by the fund, as the protection seller, is recorded as a liability on the fund’s books. An upfront payment made by the fund, as the protection buyer, is recorded as an asset on the fund’s books. Periodic payments received or paid by the fund are recorded as realized gains or losses. The credit default contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as an unrealized gain or loss. Upon the occurrence of a credit event, the difference between the par value and market value of the reference obligation, net of any proportional amount of the upfront payment, is recorded as a realized gain or loss. In addition to bearing the risk that the credit event will occur, the fund could be exposed to market risk due to unfavorable changes in interest rates or in the price of the underlying security or index or the possibility that the fund may be unable to close out its position at the same time or at the same price as if it had purchased the underlying reference obligations. In certain circumstances, the fund may enter into offsetting credit default contracts which would mitigate its risk of loss. The fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Where the fund is a seller of protection, the maximum potential amount of future payments the fund may be required to make is equal to the notional amount of the relevant credit default contract. For 500 Fund and 700 Fund outstanding notional on credit default swap contracts at the close of the reporting period are indicative of the volume of activity during the period. Master agreements: Each fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern over the counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio. Collateral posted to the funds which cannot be sold or repledged totaled $8,410,263 and $7,469,800 (for 500 Fund and 700 Fund, respectively) at the close of the reporting period. Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund's future derivative activity. At the close of the reporting period, the 500 Fund had a net liability position of $20,851,311 on derivative contracts subject to the Master Agreements. Collateral posted by the fund totaled $21,097,971. At the close of the reporting period, the 700 Fund had a net liability position of $21,817,277 on derivative contracts subject to the Master Agreements. Collateral posted by the fund totaled $20,684,733. TBA purchase commitments: Each fund may enter into “TBA” (to be announced) commitments to purchase securities for a fixed unit price at a future date beyond customary settlement time. Although the unit price has been established, the principal value has not been finalized. However ,it is anticipated that the amount of the commitments will not significantly differ from the principal amount. Each fund holds, and maintains until settlement date, cash or high-grade debt obligations in an amount sufficient to meet the purchase price, or Each fund may enter into offsetting contracts for the forward sale of other securities it owns. Income on the securities will not be earned until settlement date. TBA purchase commitments may be considered securities themselves, and involve a risk of loss if the value of the security to be purchased declines prior to the settlement date, which risk is in addition to the risk of decline in the value of the fund’s other assets. Unsettled TBA purchase commitments are valued at fair value of the underlying securities, according to the procedures described under “Security valuation” above. The contract is marked to market daily and the change in market value is recorded by the fund as an unrealized gain or loss. Although the fund will generally enter into TBA purchase commitments with the intention of acquiring securities for its portfolio or for delivery pursuant to options contracts it has entered into, the fund may dispose of a commitment prior to settlement if Putnam Management deems it appropriate to do so. TBA sale commitments: Each fund may enter into TBA sale commitments to hedge its portfolio positions or to sell mortgage-backed securities it owns under delayed delivery arrangements. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, equivalent deliverable securities, or an offsetting TBA purchase commitment deliverable on or before the sale commitment date, are held as “cover” for the transaction. Unsettled TBA sale commitments are valued at the fair value of the underlying securities, generally according to the procedures described under “Security valuation” above. The contract is marked to market daily and the change in market value is recorded by the fund as an unrealized gain or loss. If the TBA sale commitment is closed through the acquisition of an offsetting TBA purchase commitment, the fund realizes a gain or loss. If the fund delivers securities under the commitment, the fund realizes a gain or a loss from the sale of the securities based upon the unit price established at the date the commitment was entered into. Dollar rolls: To enhance returns, the fund may enter into dollar rolls (principally using TBAs) in which the fund sells securities for delivery in the current month and simultaneously contracts to purchase similar securities on a specified future date. During the period between the sale and subsequent purchase, the fund will not be entitled to receive income and principal payments on the securities sold. The fund will, however, retain the difference between the initial sales price and the forward price for the future purchase. The fund will also be able to earn interest on the cash proceeds that are received from the initial sale on settlement date. The fund may be exposed to market or credit risk if the price of the security changes unfavorably or the counterparty fails to perform under the terms of the agreement. ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows: Level 1 – Valuations based on quoted prices for identical securities in active markets. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement. The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period : 500 Fund Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Common stocks: Basic materials $4,576,171 $ $ Capital goods 9,610,331 Communication services 5,459,569 Conglomerates 829,547 Consumer cyclicals 22,175,727 Consumer staples 19,363,597 Energy 19,422,992 Financials 24,133,784 Health care 18,152,146 Technology 25,964,636 Transportation 4,885,109 Utilities and power 6,092,885 Total common stocks Asset-backed securities $ $44,410,994 $ Commodity linked notes 32,586,997 Convertible bonds and notes 654,413 Corporate bonds and notes 108,529,378 Foreign government bonds and notes 11,769,968 Mortgage-backed securities 178,797,737 790,687 Purchased options outstanding 2,669,155 Senior loans 29,612,897 U.S. Government Agency Obligations 905,761 U.S. Government and Agency Mortgage Obligations 24,985,469 Short-term investments 22,809,211 113,580,988 Totals by level Valuation inputs Other financial instruments: Level 1 Level 2 Level 3 Forward currency contracts $ $(473,433) $ Futures contracts 613,355 Written options (13,739,819) Interest rate swap contracts (7,737,296) Total return swap contracts (780,394) Credit default contracts 560,729 Totals by level $ At the start and/or close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund's portfolio. Market Values of Derivative Instruments as of the close of the reporting period Asset derivatives Liability derivatives Derivatives not accounted for as hedging instruments under ASC 815 Market value Market value Credit contracts $560,729 $ Foreign exchange contracts 854,071 1,327,504 Equity contracts 2,116,377 1,382,071 Interest rate contracts 10,609,640 30,318,945 Total 700 Fund Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Common stocks: Basic materials $4,439,635 $ $ Capital goods 9,323,459 Communication services 5,296,578 Conglomerates 804,875 Consumer cyclicals 21,513,492 Consumer staples 18,785,439 Energy 18,843,113 Financials 23,413,616 Health care 17,610,629 Technology 25,189,598 Transportation 4,739,265 Utilities and power 5,911,090 Total common stocks Asset-backed securities $ $39,365,561 $ Commodity linked notes 28,035,461 Convertible bonds and notes 759,200 Corporate bonds and notes 100,019,235 Foreign government bonds and notes 10,631,558 Investment Companies Mortgage-backed securities 142,947,567 997,673 Purchased options outstanding 2,935,224 Senior loans 30,761,426 U.S. Government Agency Obligations 704,481 U.S. Government and Agency Mortgage Obligations 23,061,093 Short-term investments 27,604,143 66,454,914 Totals by level Valuation inputs Other financial instruments: Level 1 Level 2 Level 3 Forward currency contracts $ $(561,503) $ Futures contracts (77,558) Written options (15,038,719) Interest rate swap contracts (7,725,979) Total return swap contracts (712,019) Credit default contracts 371,409 Totals by level $ At the start and/or close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund's portfolio. Market Values of Derivative Instruments as of the close of the reporting period Asset derivatives Liability derivatives Derivatives not accounted for as hedging instruments under ASC 815 Market value Market value Credit contracts $371,409 $ Foreign exchange contracts 1,032,050 1,593,553 Equity contracts 2,254,092 1,449,327 Interest rate contracts 12,409,925 33,833,741 Total For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com Item 2. Controls and Procedures: (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 3. Exhibits: Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Putnam Funds Trust By (Signature and Title): /s/ Janet C. Smith Janet C. Smith Principal Accounting Officer Date: March 31, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer Date: March 31, 2011 By (Signature and Title): /s/ Steven D. Krichmar Steven D. Krichmar Principal Financial Officer Date: March 31, 2011 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: (811- ) Exact name of registrant as specified in charter: Putnam Funds Trust Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 Name and address of agent for service: Beth S. Mazor, Vice President One Post Office Square Boston, Massachusetts 02109 Copy to: John W. Gerstmayr, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199-3600 Registrant’s telephone number, including area code: (617) 292-1000 Date of fiscal year end: October 31, 2011 Date of reporting period: January 31, 2011 Item 1. Schedule of Investments: Putnam Absolute Return 1000 Fund had no holdings as of January 31, 2011. Item 2. Controls and Procedures: (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 3. Exhibits: Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Putnam Funds Trust By (Signature and Title): /s/ Janet C. Smith Janet C. Smith Principal Accounting Officer Date: March 31, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer Date: March 31, 2011 By (Signature and Title): /s/ Steven D. Krichmar Steven D. Krichmar Principal Financial Officer Date: March 31, 2011 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: (811- ) Exact name of registrant as specified in charter: Putnam Funds Trust Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 Name and address of agent for service: Beth S. Mazor, Vice President One Post Office Square Boston, Massachusetts 02109 Copy to: John W. Gerstmayr, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199-3600 Registrant’s telephone number, including area code: (617) 292-1000 Date of fiscal year end: April 30, 2011 Date of reporting period: January 31, 2011 Item 1. Schedule of Investments: Putnam Asia Pacific Equity Fund The fund's portfolio 1/31/11 (Unaudited) COMMON STOCKS (94.5%)(a) Shares Value Airlines (1.0%) Qantas Airways, Ltd. (Australia) (NON) 41,005 $97,984 Automotive (5.0%) Dongfeng Motor Group Co., Ltd. (China) 18,000 31,628 Honda Motor Co., Ltd. (Japan) 2,800 118,370 Kia Motors Corp. (South Korea) 2,840 138,605 Nissan Motor Co., Ltd. (Japan) 18,500 186,738 Banking (14.2%) Australia & New Zealand Banking Group, Ltd. (Australia) 8,853 209,776 Bank of Baroda (India) 2,454 46,478 Bank Rakyat Indonesia (Indonesia) 84,000 45,354 Chiba Bank, Ltd. (The) (Japan) 11,000 68,418 China Construction Bank Corp. (China) 116,000 101,598 DBS Group Holdings, Ltd. (Singapore) 7,000 82,386 Hang Seng Bank, Ltd. (Hong Kong) 3,400 56,275 Industrial & Commercial Bank of China (China) 181,000 134,255 Mitsubishi UFJ Financial Group, Inc. (Japan) 26,300 136,360 National Australia Bank, Ltd. (Australia) 7,358 181,721 Shinhan Financial Group Co., Ltd. (South Korea) 1,950 86,547 Sumitomo Mitsui Financial Group, Inc. (Japan) 5,800 197,109 Broadcasting (0.9%) Fuji Media Holdings, Inc. (Japan) 52 80,677 Chemicals (4.4%) JSR Corp. (Japan) 2,700 55,563 Nitto Denko Corp. (Japan) 2,300 114,446 OCI Co., Ltd. (South Korea) 207 70,406 Petronas Chemicals Group Bhd (Malaysia) (NON) 29,800 59,587 TSRC Corp. (Taiwan) 46,000 120,460 Coal (0.9%) PT Adaro Energy Tbk (Indonesia) 358,000 89,055 Computers (2.9%) Fujitsu, Ltd. (Japan) 22,000 136,838 Wistron Corp. (Taiwan) 69,064 135,262 Conglomerates (1.7%) Mitsui & Co., Ltd. (Japan) 9,300 156,105 Construction (1.0%) China National Materials Co., Ltd. (China) 113,000 97,664 Electrical equipment (2.4%) Mitsubishi Electric Corp. (Japan) 21,000 231,355 Electronics (6.2%) Asustek Computer, Inc. (Taiwan) 11,000 98,780 Hon Hai Precision Industry Co., Ltd. (Taiwan) 30,000 128,460 LG Display Co., Ltd. (South Korea) 2,470 83,902 Samsung Electronics Co., Ltd. (South Korea) 277 243,398 Woongjin Energy Co., Ltd. (South Korea) (NON) 1,810 29,552 Engineering and construction (0.7%) Daelim Industrial Co., Ltd. (South Korea) 630 70,234 Financial (1.9%) ORIX Corp. (Japan) 1,840 181,296 Food (1.6%) Indofood Sukses Makmur Tbk PT (Indonesia) 85,500 44,418 Toyo Suisan Kaisha, Ltd. (Japan) 5,000 107,139 Gaming and lottery (1.1%) Sankyo Co., Ltd. (Japan) 1,800 99,878 Homebuilding (1.4%) Daito Trust Construction Co., Ltd. (Japan) 1,900 133,043 Insurance (2.1%) AIA Group, Ltd. (Hong Kong) (NON) 13,000 35,923 Ping An Insurance (Group) Co. of China, Ltd. (China) 16,000 159,357 Investment banking/Brokerage (%) BGP Holdings PLC (Malta) (NON) (F) 132,965 182 Machinery (4.5%) BHI Co., Ltd. (South Korea) 2,612 48,332 Hitachi Construction Machinery Co., Ltd. (Japan) 4,100 96,366 Lonking Holdings, Ltd. (China) 50,000 29,368 Samsung Heavy Industries Co., Ltd. (South Korea) 2,200 83,332 Sumitomo Heavy Industries, Ltd. (Japan) 27,000 171,710 Metals (8.0%) BHP Billiton, Ltd. (Australia) 6,153 273,654 Fortescue Metals Group, Ltd. (Australia) (NON) 11,960 76,813 POSCO (South Korea) 107 43,504 Rio Tinto, Ltd. (Australia) 2,654 226,280 Xstrata PLC (United Kingdom) 6,033 133,635 Natural gas utilities (1.7%) Tokyo Gas Co., Ltd. (Japan) 36,000 157,035 Office equipment and supplies (1.3%) Canon, Inc. (Japan) 2,600 127,287 Oil and gas (2.3%) China Petroleum & Chemical Corp. (China) 72,000 79,298 CNOOC, Ltd. (China) 63,000 140,231 Pharmaceuticals (2.4%) Astellas Pharma, Inc. (Japan) 3,300 125,943 Nippon Shinyaku Co., Ltd. (Japan) 7,000 98,663 Photography/Imaging (0.7%) Altek Corp. (Taiwan) 45,908 69,615 Power producers (0.7%) China Power New Energy Development Co., Ltd. (China) (NON) 316,000 29,289 China WindPower Group, Ltd. (China) (NON) 430,000 41,434 Publishing (0.3%) Fairfax Media, Ltd. (Australia) 22,366 30,226 Railroads (0.8%) East Japan Railway Co. (Japan) 1,100 72,628 Real estate (4.3%) CFS Retail Property Trust (Australia) (R) 58,606 106,022 Cheung Kong Holdings, Ltd. (Hong Kong) 5,000 82,742 Mitsubishi Estate Co., Ltd. (Japan) 5,000 94,295 Wharf (Holdings), Ltd. (Hong Kong) 16,000 121,422 Retail (4.5%) Esprit Holdings, Ltd. (Hong Kong) 11,826 56,091 Hyundai Department Store Co., Ltd. (South Korea) 745 87,285 JB Hi-Fi, Ltd. (Australia) (S) 2,372 43,762 Myer Holdings, Ltd. (Australia) 14,855 54,041 PCD Stores, Ltd. (China) 220,000 69,195 Shinsegae Co., Ltd. (South Korea) 166 42,623 Woolworths, Ltd. (Australia) 2,876 76,701 Semiconductor (2.1%) Jusung Engineering Co., Ltd. (South Korea) (NON) 1,401 25,132 Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan) 67,000 175,250 Shipping (0.6%) SembCorp Marine, Ltd. (Singapore) 14,000 59,353 Software (0.5%) Longtop Financial Technologies Ltd. ADR (Hong Kong) (NON) 1,316 43,296 Telecommunications (4.0%) China Mobile, Ltd. (China) 19,000 186,726 NTT DoCoMo, Inc. (Japan) 54 96,391 PT Telekomunikasi Indonesia Tbk (Indonesia) 59,500 49,765 Telstra Corp., Ltd. (Australia) 15,458 43,282 Telephone (1.4%) Nippon Telegraph & Telephone (NTT) Corp. (Japan) 2,800 130,206 Tobacco (1.8%) Japan Tobacco, Inc. (Japan) 45 168,879 Toys (1.4%) Nintendo Co., Ltd. (Japan) 500 135,071 Trucks and parts (1.8%) Aisin Seiki Co., Ltd. (Japan) 4,400 166,814 Total common stocks (cost $7,642,175) SHORT-TERM INVESTMENTS (6.6%)(a) Principal amount/shares Value Putnam Cash Collateral Pool, LLC 0.20% (d) 38,500 $38,500 Putnam Money Market Liquidity Fund 0.17% (e) 582,086 582,086 Total short-term investments (cost $620,586) TOTAL INVESTMENTS Total investments (cost $8,262,761) (b) TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Fixed payments Total return Unrealized Swap counterparty / Termination received (paid) by received by appreciation/ Notional amount date fund per annum or paid by fund (depreciation) UBS, AG units 442 6/14/11 (3 month USD- MSCI Daily Total $(23,307) LIBOR-BBA minus Return Net 1.25%) Emerging Markets India USD Index Total Key to holding's abbreviations ADR American Depository Receipts Notes to the fund's portfolio Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from May 1, 2010 through January 31, 2011 (the reporting period). (a) Percentages indicated are based on net assets of $9,468,047. (b) The aggregate identified cost on a tax basis is $8,281,563, resulting in gross unrealized appreciation and depreciation of $1,445,649 and $155,057, respectively, or net unrealized appreciation of $1,290,592. (NON) Non-income-producing security. (d) The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. At the close of the reporting period, the value of securities loaned amounted to $36,631. The fund received cash collateral of $38,500 which is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Investment Management, LLC (Putnam Management), the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged by Putnam Cash Collateral Pool, LLC. The rate quoted in the security description is the annualized 7-day yield at the close of the reporting period. (e) The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $548 for the reporting period. During the reporting period, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $1,228,552 and $1,126,975, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. (F) Is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) based on the securities' valuation inputs. At the close of the reporting period, fair value pricing was also used for certain foreign securities in the portfolio. (R) Real Estate Investment Trust. (S) Securities on loan, in part or in entirety, at the close of the reporting period. At the close of the reporting period, the fund maintained liquid assets totaling $23,576 to cover certain derivatives contracts. ADR after the name of a foreign holding represents ownership of foreign securities on deposit with a custodian bank. DIVERSIFICATION BY COUNTRY Distribution of investments by country of risk at the close of the reporting period (as a percentage of Portfolio Value): Japan 38.3% Australia 14.9 China 11.5 South Korea 11.0 Taiwan 7.6 United States 6.1 Hong Kong 4.2 Indonesia 2.4 Singapore 1.5 United Kingdom 1.4 Malaysia 0.6 India 0.5 Total 100.0% Security valuation: Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities. If no sales are reported as in the case of some securities traded over-the-counter a security is valued at its last reported bid price and is generally categorized as a Level 2 security. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which will generally represent a transfer from a Level 1 to a Level 2 security, will be classified as Level 2. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount. Total return swap contracts: The fund enters into total return swap contracts, which are arrangements to exchange a market linked return for a periodic payment, both based on a notional principal amount to gain exposure to specific markets/countries. To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. Total return swap contracts are marked to market daily based upon quotations from market makers and the change, if any, is recorded as an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain total return swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. The fund’s maximum risk of loss from counterparty risk is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Outstanding notional on total return swap contracts at the close of the reporting period are indicative of the volume of activity during the period. Master agreements: The fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern over the counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio. Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund's future derivative activity. At the close of the reporting period, the fund had a net liability position of $23,307 on derivative contracts subject to the Master Agreements. There was no collateral posted by the fund. ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows: Level 1 – Valuations based on quoted prices for identical securities in active markets. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement. The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period : Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Common stocks: Basic materials $ $1,272,012 $ Capital goods 1,024,798 Communication services 506,370 Conglomerates 156,105 Consumer cyclicals 1,307,233 Consumer staples 397,137 Energy 308,584 Financial 2,127,334 182 Health care 224,606 Technology 43,296 1,126,189 Transportation 229,965 Utilities and power 227,758 Total common stocks Short-term investments 582,086 38,500 Totals by level Valuation inputs Other financial instruments: Level 1 Level 2 Level 3 Total return swap contracts $ $(23,307) $ Totals by level $ $ At the start and/or close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund's portfolio. Market Values of Derivative Instruments as of the close of the reporting period Asset derivatives Liability derivatives Derivatives not accounted for as hedging instruments under ASC 815 Market value Market value Equity contracts $ $23,307 Total $ For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com Item 2. Controls and Procedures: (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 3. Exhibits: Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Putnam Funds Trust By (Signature and Title): /s/ Janet C. Smith Janet C. Smith Principal Accounting Officer Date: March 31, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer Date: March 31, 2011 By (Signature and Title): /s/ Steven D. Krichmar Steven D. Krichmar Principal Financial Officer Date: March 31, 2011 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: (811- ) Exact name of registrant as specified in charter: Putnam Funds Trust Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 Name and address of agent for service: Beth S. Mazor, Vice President One Post Office Square Boston, Massachusetts 02109 Copy to: John W. Gerstmayr, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199-3600 Registrant’s telephone number, including area code: (617) 292-1000 Date of fiscal year end: April 30, 2011 Date of reporting period: January 31, 2011 Item 1. Schedule of Investments: Putnam Capital Spectrum Fund The fund's portfolio 1/31/11 (Unaudited) COMMON STOCKS (66.8%)(a) Shares Value Aerospace and defense (2.9%) L-3 Communications Holdings, Inc. 92,400 $7,230,300 Airlines (4.0%) United Continental Holdings, Inc. (NON) (S) 392,100 9,959,340 Banking (6.2%) BB&T Corp. 66,600 1,840,824 Citigroup, Inc. (NON) 1,140,500 5,497,210 JPMorgan Chase & Co. 120,600 5,419,764 Synovus Financial Corp. (S) 651,700 1,720,488 Wells Fargo & Co. 34,500 1,118,490 Biotechnology (0.6%) Sequenom, Inc. (NON) (S) 215,200 1,474,120 Broadcasting (21.4%) DISH Network Corp. Class A (NON) 1,232,900 26,026,519 EchoStar Corp. Class A (NON) 1,026,014 27,958,882 Chemicals (9.0%) LyondellBasell Industries NV Class A (Netherlands) (NON) 289,782 10,414,765 OM Group, Inc. (NON) 93,300 3,375,594 Rhodia SA (France) 88,343 2,637,787 W.R. Grace & Co. (NON) 177,500 6,299,475 Communications equipment (2.7%) Harris Corp. 147,700 6,873,958 Consumer finance (1.2%) Capital One Financial Corp. 61,700 2,971,472 Electric utilities (0.5%) AES Corp. (The) (NON) 110,700 1,372,680 Energy (oil field) (0.1%) Stallion Oilfield Holdings, Ltd. 10,433 326,031 Entertainment (0.3%) MGM Studios, Inc. Class A 36,206 792,006 Forest products and packaging (0.2%) Verso Paper Corp. (NON) 109,460 511,178 Gaming and lottery (1.0%) Isle of Capri Casinos, Inc. (NON) 255,300 2,404,926 MTR Gaming Group, Inc. (NON) 77,053 176,451 Health-care services (0.5%) Lincare Holdings, Inc. 44,850 1,213,193 Household furniture and appliances (1.3%) Select Comfort Corp. (NON) 322,565 3,277,260 Medical technology (1.1%) Alliance HealthCare Services, Inc. (NON) 66,700 279,473 STAAR Surgical Co. (NON) 486,300 2,540,918 Oil and gas (8.5%) Chesapeake Energy Corp. 213,800 6,313,514 Petrohawk Energy Corp. (NON) 300,000 6,015,000 Pioneer Natural Resources Co. 26,800 2,550,288 Rosetta Resources, Inc. (NON) 161,722 6,460,794 Pharmaceuticals (1.4%) Biospecifics Technologies Corp. (NON) 44,700 1,037,487 Elan Corp. PLC ADR (Ireland) (NON) 353,400 2,385,450 Regional Bells (0.8%) Cincinnati Bell, Inc. (NON) 707,648 2,016,797 Restaurants (1.6%) AFC Enterprises (NON) 124,943 1,861,651 Domino's Pizza, Inc. (NON) 89,900 1,474,360 Famous Dave's of America, Inc. (NON) 59,800 601,588 Retail (1.5%) K-Swiss, Inc. Class A (NON) 339,300 3,901,950 Total common stocks (cost $140,498,250) CORPORATE BONDS AND NOTES (6.9%)(a) Principal amount Value Automotive (0.1%) TRW Automotive, Inc. company guaranty sr. unsec. unsub. notes Ser. REGS, 6 3/8s, 2014 EUR 200,000 $290,348 Banking (0.2%) Provident Funding Associates 144A sr. notes 10 1/4s, 2017 $500,000 535,000 Biotechnology (%) Talecris Biotherapeutics Holdings Corp. company guaranty sr. unsec. notes 7 3/4s, 2016 35,000 38,325 Broadcasting (0.1%) Gray Television, Inc. company guaranty sr. notes 10 1/2s, 2015 300,000 308,250 Cable television (0.1%) Mediacom LLC/Mediacom Capital Corp. sr. unsec. notes 9 1/8s, 2019 25,000 25,813 Virgin Media Finance PLC company guaranty sr. notes Ser. 1, 9 1/2s, 2016 (United Kingdom) 225,000 255,656 Chemicals (0.3%) Ineos Finance PLC 144A company guaranty sr. notes 9s, 2015 (United Kingdom) 250,000 275,000 Ineos Group Holdings PLC 144A company guaranty unsec. sub. notes 8 1/2s, 2016 (United Kingdom) 500,000 510,000 Commercial and consumer services (0.4%) Travelport, LLC/Travelport, Inc. company guaranty sr. unsec. notes 9s, 2016 1,015,000 956,638 Computers (0.1%) Ceridian Corp. company guaranty sr. unsec. notes 12 1/4s, 2015 (PIK) 319,500 333,878 Consumer services (0.1%) RSC Equipment Rental, Inc. 144A sr. unsec. notes 8 1/4s, 2021 350,000 357,875 Containers (0.1%) Reynolds Group DL Escrow, Inc./Reynolds Group Escrow, LLC 144A company guaranty sr. notes 7 3/4s, 2016 (Luxembourg) 130,000 137,150 Electronics (0.8%) Freescale Semiconductor, Inc. company guaranty sr. unsec. notes 9 1/8s, 2014 (PIK) 56,039 58,421 Freescale Semiconductor, Inc. 144A company guaranty sr. notes 9 1/4s, 2018 700,000 775,250 Freescale Semiconductor, Inc. 144A company guaranty sr. unsec. notes 10 3/4s, 2020 1,000,000 1,135,000 Financial (0.2%) Ally Financial, Inc. 144A company guaranty sr. unsec. unsub. notes 7 1/2s, 2020 500,000 545,000 Forest products and packaging (0.5%) NewPage Corp. company guaranty sr. notes 11 3/8s, 2014 270,000 270,675 PE Paper Escrow GmbH sr. notes Ser. REGS, 11 3/4s, 2014 (Austria) EUR 70,000 109,998 Verso Paper Holdings, LLC/Verso Paper, Inc. company guaranty Ser. B, 11 3/8s, 2016 $800,000 862,000 Gaming and lottery (1.3%) FireKeepers Development Authority 144A sr. sec. notes 13 7/8s, 2015 450,000 535,500 Harrah's Operating Co., Inc. company guaranty sr. notes 10s, 2018 1,070,000 971,025 MTR Gaming Group, Inc. company guaranty sr. notes 12 5/8s, 2014 1,145,000 1,203,681 Pinnacle Entertainment, Inc. company guaranty sr. unsec. sub. notes 8 3/4s, 2020 190,000 201,875 Pinnacle Entertainment, Inc. company guaranty sr. unsec. sub. notes 7 1/2s, 2015 105,000 108,675 Health-care services (0.2%) Aviv Healthcare Properties LP 144A sr. notes 7 3/4s, 2019 475,000 488,063 Homebuilding (0.1%) Realogy Corp. 144A company guaranty sr. notes 7 7/8s, 2019 265,000 266,325 Lodging/Tourism (0.4%) CityCenter Holdings LLC/CityCenter Finance Corp. 144A company guaranty sr. notes 10 3/4s, 2017 (PIK) 750,000 781,875 FelCor Lodging LP company guaranty sr. notes 10s, 2014 (R) 100,000 113,250 Manufacturing (0.2%) General Cable Corp. company guaranty sr. unsec. unsub. notes FRN 2.665s, 2015 20,000 19,000 RBS Global, Inc./Rexnord Corp. company guaranty unsec. sr. notes 8 1/2s, 2018 500,000 536,250 Media (0.1%) Affinia Group Inc. 144A company guaranty sr. notes 11 5/8s, 2015 335,000 345,050 Oil and gas (1.0%) Compton Petroleum Finance Corp. company guaranty sr. unsec. notes 10s, 2017 (Canada) 201,450 167,204 Connacher Oil and Gas, Ltd. 144A sr. sec. notes 11 3/4s, 2014 (Canada) 255,000 276,994 Laredo Petroleum, Inc. 144A sr. notes 9 1/2s, 2019 765,000 797,513 Newfield Exploration Co. sr. unsec. sub. notes 6 5/8s, 2014 250,000 255,625 Rosetta Resources, Inc. company guaranty sr. unsec. notes 9 1/2s, 2018 785,000 866,444 SandRidge Energy, Inc. 144A sr. unsec. notes 9 7/8s, 2016 200,000 219,000 Power producers (0.2%) Calpine Corp. 144A sr. sec. notes 7 1/4s, 2017 174,000 177,915 Dynegy Holdings, Inc. sr. unsec. notes 7 3/4s, 2019 300,000 215,250 Technology services (0.4%) First Data Corp. 144A sr. bonds 12 5/8s, 2021 960,000 971,997 Total corporate bonds and notes (cost $16,072,154) PREFERRED STOCKS (1.7%)(a) Shares Value Ally Financial, Inc. 144A Ser. G, 7.00% cum. pfd. 1,000 $960,938 Strategic Hotels & Resorts Ser. A, $2.13 cum. pfd. (NON)(R) 125,733 3,357,071 Total preferred stocks (cost $3,029,472) CONVERTIBLE PREFERRED STOCKS (1.0%)(a) Shares Value FelCor Lodging Trust, Inc. Ser. A, $0.488 cum. cv. pfd. (R) 97,508 $2,565,679 Total convertible preferred stocks (cost $1,360,496) SENIOR LOANS (1.0%)(a)(c) Principal amount Value AGFS Funding Co. bank term loan FRN 7 1/4s, 2015 $400,000 $405,444 Harrah's Operating Co., Inc. bank term loan FRN Ser. B2, 3.303s, 2015 680,000 632,719 Ineos Holdings, Ltd. bank term loan FRN Ser. B2, 7.501s, 2013 (United Kingdom) 247,348 256,108 Ineos Holdings, Ltd. bank term loan FRN Ser. C2, 8.001s, 2014 (United Kingdom) 247,500 256,266 Level 3 Financing, Inc. bank term loan FRN Ser. B, 11 1/2s, 2014 115,000 124,430 Revlon Consumer Products bank term loan FRN 6s, 2015 496,250 499,274 Telecordia Technologies, Inc. bank term loan FRN 6 3/4s, 2016 372,188 373,816 Total senior loans (cost $2,436,267) CONVERTIBLE BONDS AND NOTES (0.3%)(a) Principal amount Value CompuCredit Corp. cv. sr. unsec. unsub. notes 3 5/8s, 2025 $655,000 $585,406 Leap Wireless International, Inc. cv. sr. unsec. notes 4 1/2s, 2014 200,000 185,000 Total convertible bonds and notes (cost $479,463) SHORT-TERM INVESTMENTS (21.5%)(a) Principal amount/shares Value Putnam Cash Collateral Pool, LLC 0.20% (d) 7,547,750 $7,547,750 Putnam Money Market Liquidity Fund 0.17% (e) 41,465,409 41,465,409 U.S. Treasury Bills with an effective yield of 0.26%, October 20, 2011 $1,800,000 1,796,792 U.S. Treasury Bills with an effective yield of 0.24%, June 2, 2011 (SEG) (SEGSH) 1,850,000 1,848,722 U.S. Treasury Bills with an effective yield of 0.19%, March 10, 2011 (SEGSH) 1,400,000 1,399,918 Total short-term investments (cost $54,058,009) TOTAL INVESTMENTS Total investments (cost $217,934,111) (b) FUTURES CONTRACTS OUTSTANDING at 1/31/11 (Unaudited) Number of Expiration Unrealized contracts Value date appreciation U.S. Treasury Note 10 yr (Short) 10 $1,207,969 Mar-11 $45,669 Total Securities sold short at 1/31/11 (Unaudited) INVESTMENT COMPANIES (4.8%)(a) Shares Value iShares Russell 2000 Index Fund 63,200 $4,926,440 SPDR S&P rust 55,300 7,115,451 Total investment companies (cost $12,020,970) COMMON STOCKS (0.1%)(a) Shares Value Restaurants (0.1%) Texas Roadhouse, Inc. Class A (NON) 16,300 $270,906 Total common stocks (cost $179,398) Total securities sold short (proceeds $12,200,368) Key to holding's currency abbreviations EUR Euro USD / $ United States Dollar Key to holding's abbreviations ADR American Depository Receipts ETF Exchange Traded Fund FRN Floating Rate Notes SPDR S&P 500 Index Depository Receipts Notes to the fund's portfolio Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from May 1, 2010 through January 31, 2011 (the reporting period). (a) Percentages indicated are based on net assets of $251,883,005. (b) The aggregate identified cost on a tax basis is $217,933,173, resulting in gross unrealized appreciation and depreciation of $33,182,935 and $1,224,595, respectively, or net unrealized appreciation of $31,958,340. (NON) Non-income-producing security. (PIK) Income may be received in cash or additional securities at the discretion of the issuer. (SEG) This security, in part or in entirety, was pledged and segregated with the broker to cover margin requirements for futures contracts at the close of the reporting period. (SEGSH) These securities, in part or in entirety, were segregated for securities sold short at the close of the reporting period. (c) Senior loans are exempt from registration under the Securities Act of 1933, as amended, but contain certain restrictions on resale and cannot be sold publicly. These loans pay interest at rates which adjust periodically. The interest rates shown for senior loans are the current interest rates at the close of the reporting period. Senior loans are also subject to mandatory and/or optional prepayment which cannot be predicted. As a result, the remaining maturity may be substantially less than the stated maturity shown. Senior loans are purchased or sold on a when-issued or delayed delivery basis and may be settled a month or more after the trade date, which from time to time can delay the actual investment of available cash balances; interest income is accrued based on the terms of the securities. Senior loans can be acquired through an agent, by assignment from another holder of the loan, or as a participation interest in another holder’s portion of the loan. When the fund invests in a loan or participation, the fund is subject to the risk that an intermediate participant between the fund and the borrower will fail to meet its obligations to the fund, in addition to the risk that the borrower under the loan may default on its obligations. (d) The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. At the close of the reporting period, the value of securities loaned amounted to $7,123,590. The fund received cash collateral of $7,547,750 which is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Investment Management, LLC (Putnam Management), the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged by Putnam Cash Collateral Pool, LLC. The rate quoted in the security description is the annualized 7-day yield at the close fo the reporting period. (e) The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $19,641 for the reporting period. During the reporting period, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $126,178,312 and $96,873,454, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. (R) Real Estate Investment Trust. (S) Securities on loan, in part or in entirety, at the close of the reporting period. At the close of the reporting period, the fund maintained liquid assets totaling $13,520,766 to cover certain derivatives contracts and securities sold short. Debt obligations are considered secured unless otherwise indicated. 144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. ADR after the name of a foreign holding represents ownership of foreign securities on deposit with a custodian bank. The rates shown on FRN are the current interest rates at the close of the reporting period. The dates shown on debt obligations are the original maturity dates. Security valuation: Investments (including securities sold short, if any) for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities. If no sales are reported as in the case of some securities traded over-the-counter a security is valued at its last reported bid price and is generally categorized as a Level 2 security. Market quotations are not considered to be readily available for certain debt obligations; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which considers such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which will generally represent a transfer from a Level 1 to a Level 2 security, will be classified as Level 2. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount. Futures contracts: The fund uses futures contracts to manage exposure to market risk. The potential risk to the fund is that the change in value of futures contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” The fund had an average number of contracts of approximately 4 on futures contracts for the reporting period. Short sale of securities: The fund may engage in short sales of securities to realize appreciation when a security that the fund does not own declines in value. A short sale is a transaction in which the fund sells a security it does not own to a third party by borrowing the security in anticipation of purchasing the same security at the market price on a later date to close out the borrow and thus the short position. The price the fund pays at the later date may be more or less than the price at which the fund sold the security. If the price of the security sold short increases between the short sale and when the fund closes out the short sale, the fund will incur a loss, which is theoretically unlimited. The fund will realize a gain, which is limited to the price at which the fund sold the security short, if the security declines in value between those dates. Dividends on securities sold short are recorded as dividend expense. While the short position is open, the fund will post cash or liquid assets at least equal in value to the market value of the securities sold short. The fund will also post collateral representing an additional 2%-5% of the market value of the securities sold short. This additional collateral will be in the form of a loan from the custodian. All collateral is marked-to-market daily. The fund may also be required to pledge on the books of the fund additional assets for the benefit of the security and cash lender. The fund is subject to risk of loss if the lender of the security were to fail to perform its obligations under the contract. Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows: Level 1 – Valuations based on quoted prices for identical securities in active markets. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement. The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period : Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Common stocks: Basic materials $20,601,012 $2,637,787 $ Capital goods 7,230,300 Communication services 2,016,797 Consumer cyclicals 63,745,988 792,006 Consumer staples 3,937,599 Energy 21,339,596 326,031 Financials 18,568,248 Health care 8,930,641 Technology 6,873,958 Transportation 9,959,340 Utilities and power 1,372,680 Total common stocks Convertible bonds and notes 770,406 Convertible preferred stocks 2,565,679 Corporate bonds and notes 17,298,788 Preferred stocks 3,357,071 960,938 Senior loans 2,548,057 Short-term investments 41,465,409 12,593,182 Totals by level $ Valuation inputs Other financial instruments: Level 1 Level 2 Level 3 Futures contracts $45,669 $ $ Securities sold short (12,312,797) Totals by level $ $ Market Values of Derivative Instruments as of the close of the reporting period Asset derivatives Liability derivatives Derivatives not accounted for as hedging instruments under ASC 815 Market value Market value Interest rate contracts $45,669 $ Total $ For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com Item 2. Controls and Procedures: (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 3. Exhibits: Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Putnam Funds Trust By (Signature and Title): /s/ Janet C. Smith Janet C. Smith Principal Accounting Officer Date: March 31, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer Date: March 31, 2011 By (Signature and Title): /s/ Steven D. Krichmar Steven D. Krichmar Principal Financial Officer Date: March 31, 2011 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: (811- ) Exact name of registrant as specified in charter: Putnam Funds Trust Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 Name and address of agent for service: Beth S. Mazor, Vice President One Post Office Square Boston, Massachusetts 02109 Copy to: John W. Gerstmayr, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199-3600 Registrant’s telephone number, including area code: (617) 292-1000 Date of fiscal year end: April 30, 2011 Date of reporting period: January 31, 2011 Item 1. Schedule of Investments: Putnam Equity Spectrum Fund The fund's portfolio 1/31/11 (Unaudited) COMMON STOCKS (72.1%)(a) Shares Value Aerospace and defense (2.9%) L-3 Communications Holdings, Inc. 73,300 $5,735,725 Airlines (5.5%) United Continental Holdings, Inc. (NON) (S) 422,900 10,741,660 Banking (5.6%) BB&T Corp. 49,700 1,373,708 Citigroup, Inc. (NON) 848,900 4,091,698 JPMorgan Chase & Co. 86,800 3,900,792 Synovus Financial Corp. (S) 486,300 1,283,832 Wells Fargo & Co. 12,670 410,761 Biotechnology (1.5%) Sequenom, Inc. (NON) (S) 423,700 2,902,345 Broadcasting (21.3%) DISH Network Corp. Class A (NON) 985,500 20,803,905 EchoStar Corp. Class A (NON) 771,130 21,013,292 Chemicals (9.7%) LyondellBasell Industries NV Class A (Netherlands) (NON) 228,129 8,198,956 OM Group, Inc. (NON) 64,700 2,340,846 Rhodia SA (France) 127,975 3,821,138 W.R. Grace & Co. (NON) 130,000 4,613,700 Communications equipment (2.8%) Harris Corp. 117,200 5,454,488 Consumer finance (1.1%) Capital One Financial Corp. 46,400 2,234,624 Electric utilities (0.3%) AES Corp. (The) (NON) 43,300 536,920 Forest products and packaging (0.2%) Verso Paper Corp. (NON) 86,539 404,137 Gaming and lottery (1.7%) Isle of Capri Casinos, Inc. (NON) 202,100 1,903,782 Lakes Entertainment, Inc. (NON) 422,923 1,205,331 MTR Gaming Group, Inc. (NON) 61,454 140,730 Health-care services (1.0%) Lincare Holdings, Inc. 75,400 2,039,570 Household furniture and appliances (0.9%) Select Comfort Corp. (NON) 177,517 1,803,573 Medical technology (1.3%) Alliance HealthCare Services, Inc. (NON) 153,900 644,841 STAAR Surgical Co. (NON) 345,300 1,804,193 Oil and gas (9.3%) Chesapeake Energy Corp. 160,100 4,727,753 Petrohawk Energy Corp. (NON) 224,700 4,505,235 Pioneer Natural Resources Co. 43,400 4,129,944 Rosetta Resources, Inc. (NON) 121,802 4,865,990 Pharmaceuticals (1.9%) Biospecifics Technologies Corp. (NON) (S) 81,000 1,880,010 Elan Corp. PLC ADR (Ireland) (NON) 278,700 1,881,225 Regional Bells (0.8%) Cincinnati Bell, Inc. (NON) 558,049 1,590,440 Restaurants (2.7%) AFC Enterprises (NON) 145,489 2,167,786 Domino's Pizza, Inc. (NON) 110,900 1,818,760 Famous Dave's of America, Inc. (NON) 132,200 1,329,932 Retail (1.6%) K-Swiss, Inc. Class A (NON) 266,400 3,063,600 Total common stocks (cost $118,453,390) PREFERRED STOCKS (0.5%)(a) Shares Value Strategic Hotels & Resorts Ser. A, $2.13 cum. pfd. (NON)(R) 33,185 $886,040 Total preferred stocks (cost $797,767) SHORT-TERM INVESTMENTS (28.2%)(a) Principal amount/shares Value U.S. Treasury Bills for effective yields from 0.19% to 0.28%, March 10, 2011 (SEGSH) $4,800,000 $4,798,676 U.S. Treasury Bills for effective yields from 0.23% to 0.24%, June 2, 2011 (SEGSH) 7,427,000 7,420,271 Putnam Cash Collateral Pool, LLC 0.20% (d) 8,544,510 8,544,510 Putnam Money Market Liquidity Fund 0.17% (e) 34,445,808 34,445,808 Total short-term investments (cost $55,210,131) TOTAL INVESTMENTS Total investments (cost $174,461,288) (b) Securities sold short at 1/31/2011 (Unaudited) COMMON STOCKS (0.1%)(a) Shares Value Restaurants (0.1%) Texas Roadhouse, Inc. Class A (NON) 15,000 249,300 Total common stocks (cost $165,090) INVESTMENT COMPANIES (4.8%)(a) Shares Value iShares Russell 2000 Index Fund 49,500 $3,858,525 SPDR S&P rust 43,700 5,622,879 Total investment companies (cost $9,464,805) Total securities sold short (proceeds $9,629,895) Key to holding's abbreviations ADR American Depository Receipts SPDR S&P 500 Index Depository Receipts Notes to the fund's portfolio Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from May 1, 2010 through January 31, 2011 (the reporting period). (a) Percentages indicated are based on net assets of $195,981,790. (b) The aggregate identified cost on a tax basis is $174,460,799, resulting in gross unrealized appreciation and depreciation of $23,996,007 and $996,279, respectively, or net unrealized appreciation of $22,999,728. (NON) Non-income-producing security. (SEGSH) These securities, in part or in entirety, were segregated for securities sold short at the close of the reporting period. (d) The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. At the close of the reporting period, the value of securities loaned amounted to $8,142,864. The fund received cash collateral of $8,544,510 which is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Investment Management, LLC (Putnam Management), the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged by Putnam Cash Collateral Pool, LLC. The rate quoted in the security description is the annualized 7-day yield at the close fo the reporting period. (e) The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $18,276 for the reporting period. During the reporting period, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $114,974,650 and $84,101,143, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. (R) Real Estate Investment Trust. (S) Securities on loan, in part or in entirety, at the close of the reporting period. At the close of the reporting period, the fund maintained liquid assets totaling $9,730,704 to cover securities sold short. ADR after the name of a foreign holding represents ownership of foreign securities on deposit with a custodian bank. Security valuation: Investments, including securities sold short, for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities. If no sales are reported as in the case of some securities traded over-the-counter a security is valued at its last reported bid price and is generally categorized as a Level 2 security. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which will generally represent a transfer from a Level 1 to a Level 2 security, will be classified as Level 2. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount. Short sale of securities: The fund may engage in short sales of securities to realize appreciation when a security that the fund does not own declines in value. A short sale is a transaction in which the fund sells a security it does not own to a third party by borrowing the security in anticipation of purchasing the same security at the market price on a later date to close out the borrow and thus the short position. The price the fund pays at the later date may be more or less than the price at which the fund sold the security. If the price of the security sold short increases between the short sale and when the fund closes out the short sale, the fund will incur a loss, which is theoretically unlimited. The fund will realize a gain, which is limited to the price at which the fund sold the security short, if the security declines in value between those dates. Dividends on securities sold short are recorded as dividend expense. While the short position is open, the fund will post cash or liquid assets at least equal in value to the market value of the securities sold short. The fund will also post collateral representing an additional 2%-5% of the market value of the securities sold short. This additional collateral will be in the form of a loan from the custodian. All collateral is marked-to-market daily. The fund may also be required to pledge on the books of the fund additional assets for the benefit of the security and cash lender. The fund is subject to risk of loss if the lender of the security were to fail to perform its obligations under the contract. Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows: Level 1 – Valuations based on quoted prices for identical securities in active markets. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement. The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period : Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Common stocks: Basic materials $15,557,639 $3,821,138 $ Capital goods 5,735,725 Communication services 1,590,440 Consumer cyclicals 49,934,213 Consumer staples 5,316,478 Energy 18,228,922 Financials 13,295,415 Health care 11,152,184 Technology 5,454,488 Transportation 10,741,660 Utilities and power 536,920 Total common stocks Preferred stocks 886,040 Short-term investments 34,445,808 20,763,457 Totals by level $ Valuation inputs Other financial instruments: Level 1 Level 2 Level 3 Securities sold short $(9,730,704) $ $ Totals by level $ $ For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com Item 2. Controls and Procedures: (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 3. Exhibits: Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Putnam Funds Trust By (Signature and Title): /s/ Janet C. Smith Janet C. Smith Principal Accounting Officer Date: March 31, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer Date: March 31, 2011 By (Signature and Title): /s/ Steven D. Krichmar Steven D. Krichmar Principal Financial Officer Date: March 31, 2011 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: (811- ) Exact name of registrant as specified in charter: Putnam Funds Trust Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 Name and address of agent for service: Beth S. Mazor, Vice President One Post Office Square Boston, Massachusetts 02109 Copy to: John W. Gerstmayr, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199-3600 Registrant’s telephone number, including area code: (617) 292-1000 Date of fiscal year end: October 31, 2011 Date of reporting period: January 31, 2011 Item 1. Schedule of Investments: Putnam Global Sector Fund The fund's portfolios 1/31/11 (Unaudited) Shares Value Global Sector Funds* 99.7% Putnam Global Consumer Fund (Class Y) 25,903 $390,351 Putnam Global Financials Fund (Class Y) 31,537 393,271 Putnam Global Health Care Fund (Class Y) 3,921 182,223 Putnam Global Industrials Fund (Class Y) 14,845 232,028 Putnam Global Natural Resources Fund (Class Y) 16,555 377,948 Putnam Global Technology Fund (Class Y) 14,444 236,310 Putnam Global Telecommunications Fund (Class Y) 6,565 85,736 Putnam Global Utilities Fund (Class Y) 7,115 79,966 Total Global Sector Funds (cost $1,848,259) Fixed Income Funds* 0.3% Putnam Money Market Fund (Class A) 6,906 $6,906 Total Fixed Income Funds (cost $6,906) Total Investments (cost $1,855,165)(a) Notes to the fund's portfolio Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from November 1, 2010 through January 31, 2011 (the reporting period). (*) Percentages indicated are based on net assets of $1,984,269. (a) The aggregate identified cost on a tax basis is $1,865,650, resulting in gross unrealized appreciation and depreciation of $135,775 and $16,686, respectively, or net unrealized appreciation of $119,089. Security valuation The price of the fund’s shares are based on its net asset value (NAV), which is in turn based on the NAVs of the underlying Putnam Funds in which it invests, which are classified as Level 1 securities. The NAVs of the underlying Putnam Funds are determined based on the policies contained in each of the underlying Putnam Fund’s financial statements. The NAV per share of each class equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the close of regular trading on the New York Stock Exchange each day the exchange is open. Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows: Level 1 – Valuations based on quoted prices for identical securities in active markets. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement. The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period: Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Global sector funds $1,977,833 $ $ Fixed income funds 6,906 Totals by level $ $ Transactions with affiliated issuers Putnam Global Sector Fund Investment Affiliates Purchase cost Sale proceeds income Value Putnam Global Consumer Fund $147,706 $33,042 $3,527 $390,351 Putnam Global Financial Fund 163,384 35,066 4,158 393,271 Putnam Global Health Care Fund 73,269 16,663 - 182,223 Putnam Global Industrials Fund 85,898 17,985 2,346 232,028 Putnam Global Natural Resources Fund 119,256 29,663 6,952 377,948 Putnam Global Technology Fund 81,235 20,126 - 236,310 Putnam Global Telecommunications Fund 30,745 6,809 2,028 85,736 Putnam Global Utilities Fund 27,647 7,094 790 79,966 Putnam Money Market Fund 3,231 1,904 (20) 6,906 Totals Market values are shown for those securities affiliated at period end. For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com Item 2. Controls and Procedures: (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 3. Exhibits: Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Putnam Funds Trust By (Signature and Title): /s/ Janet C. Smith Janet C. Smith Principal Accounting Officer Date: March 31, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer Date: March 31, 2011 By (Signature and Title): /s/ Steven D. Krichmar Steven D. Krichmar Principal Financial Officer Date: March 31, 2011 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: (811- ) Exact name of registrant as specified in charter: Putnam Funds Trust Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 Name and address of agent for service: Beth S. Mazor, Vice President One Post Office Square Boston, Massachusetts 02109 Copy to: John W. Gerstmayr, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199-3600 Registrant’s telephone number, including area code: (617) 292-1000 Date of fiscal year end: April 30, 2011 Date of reporting period: January 31, 2011 Item 1. Schedule of Investments: Putnam Multi-Cap Core Fund The fund's portfolio 1/31/11 (Unaudited) COMMON STOCKS (97.9%)(a) Shares Value Aerospace and defense (3.2%) General Dynamics Corp. 400 $30,160 L-3 Communications Holdings, Inc. 329 25,744 Northrop Grumman Corp. 254 17,602 Precision Castparts Corp. 371 53,049 Raytheon Co. 300 14,997 Safran SA (France) 377 13,624 United Technologies Corp. 457 37,154 Airlines (0.6%) Delta Air Lines, Inc. (NON) 1,100 12,837 JetBlue Airways Corp. (NON) 2,000 12,000 US Airways Group, Inc. (NON) 1,249 12,390 Automotive (0.8%) Ford Motor Co. (NON) 1,918 30,592 General Motors Co. (NON) 525 19,157 Banking (4.9%) Bancorp, Inc. (NON) 800 7,520 Bank of America Corp. 3,447 47,327 Citigroup, Inc. (NON) 12,247 59,031 Fifth Third Bancorp 1,400 20,818 JPMorgan Chase & Co. 1,534 68,938 PNC Financial Services Group, Inc. 633 37,980 Wells Fargo & Co. 1,698 55,049 Beverage (1.9%) Coca-Cola Co. (The) 977 61,404 Coca-Cola Enterprises, Inc. 1,451 36,507 Dr. Pepper Snapple Group, Inc. 400 14,172 Hansen Natural Corp. (NON) 100 5,664 Biotechnology (1.1%) Amgen, Inc. (NON) 438 24,125 Celgene Corp. (NON) 300 15,459 Dendreon Corp. (NON) 380 13,315 Human Genome Sciences, Inc. (NON) 600 14,556 Broadcasting (0.3%) CBS Corp. Class B 1,000 19,830 Building materials (0.2%) Owens Corning, Inc. (NON) 400 13,388 Cable television (1.0%) Comcast Corp. Class A 1,237 28,142 DIRECTV Class A (NON) 315 13,353 Time Warner Cable, Inc. 300 20,349 Chemicals (2.5%) Albemarle Corp. 607 34,089 Dow Chemical Co. (The) 756 26,823 E.I. du Pont de Nemours & Co. 706 35,780 Huntsman Corp. 1,491 25,958 LyondellBasell Industries NV Class A (Netherlands) (NON) 900 32,346 Coal (1.0%) Alpha Natural Resources, Inc. (NON) 400 21,492 Walter Energy, Inc. 300 39,081 Commercial and consumer services (0.6%) Alliance Data Systems Corp. (NON) 300 21,222 Booz Allen Hamilton Holding Corp. (NON) 822 15,339 Communications equipment (2.2%) Cisco Systems, Inc. (NON) 2,293 48,497 Harris Corp. 469 21,827 Motorola Solutions, Inc. (NON) 304 11,786 Qualcomm, Inc. 915 49,529 Computers (5.2%) Apple, Inc. (NON) 259 87,884 EMC Corp. (NON) 1,521 37,858 Hewlett-Packard Co. 1,534 70,088 IBM Corp. 441 71,442 Polycom, Inc. (NON) 500 21,925 Seagate Technology (NON) 1,911 26,754 Conglomerates (2.6%) General Electric Co. 4,558 91,798 Honeywell International, Inc. 500 28,005 Tyco International, Ltd. 891 39,944 Consumer finance (0.5%) Discover Financial Services 1,400 28,826 Consumer goods (2.4%) Energizer Holdings, Inc. (NON) 350 25,459 hhgregg, Inc. (NON) 479 8,780 Kimberly-Clark Corp. 280 18,124 Newell Rubbermaid, Inc. 1,542 29,684 Procter & Gamble Co. (The) 1,012 63,888 Consumer services (0.9%) Avis Budget Group, Inc. (NON) 1,000 13,840 Hertz Global Holdings, Inc. (NON) 2,700 39,717 Electric utilities (2.8%) AES Corp. (The) (NON) 1,982 24,577 Ameren Corp. 1,037 29,420 CMS Energy Corp. 2,208 43,056 Edison International 747 27,101 Entergy Corp. 317 22,878 NV Energy, Inc. 1,500 21,555 Electrical equipment (0.5%) Emerson Electric Co. 351 20,667 WESCO International, Inc. (NON) 200 11,210 Electronics (3.8%) Agilent Technologies, Inc. (NON) 900 37,647 Hollysys Automation Technologies, Ltd. (China) (NON) 900 14,445 Intel Corp. 800 17,168 Jabil Circuit, Inc. 1,100 22,231 SanDisk Corp. (NON) 1,000 45,370 Sensata Technologies Holding NV (Netherlands) (NON) 714 22,498 Texas Instruments, Inc. 1,198 40,624 Tyco Electronics, Ltd. (Switzerland) 821 29,745 Energy (oil field) (2.6%) National Oilwell Varco, Inc. 780 57,642 Schlumberger, Ltd. 1,113 99,046 Energy (other) (0.5%) First Solar, Inc. (NON) 183 28,288 Financial (0.9%) Assurant, Inc. 600 23,538 CME Group, Inc. 100 30,856 Food (1.0%) H.J. Heinz Co. 799 37,953 Hershey Co. (The) 500 23,345 Forest products and packaging (0.8%) MeadWestvaco Corp. 700 20,041 Weyerhaeuser Co. 1,159 26,866 Health-care services (3.6%) Aetna, Inc. 989 32,578 AmerisourceBergen Corp. 700 25,102 Cardinal Health, Inc. 700 29,057 CIGNA Corp. 556 23,363 HealthSouth Corp. (NON) 600 13,572 Lincare Holdings, Inc. 1,072 28,998 McKesson Corp. 248 18,642 Quest Diagnostics, Inc. 300 17,085 Tenet Healthcare Corp. (NON) 2,600 17,290 WellPoint, Inc. (NON) 265 16,462 Insurance (3.6%) ACE, Ltd. 200 12,318 Aflac, Inc. 497 28,617 Assured Guaranty, Ltd. (Bermuda) 1,100 15,906 MBIA, Inc. (NON) 1,313 14,049 MetLife, Inc. 896 41,010 Prudential Financial, Inc. 809 49,762 RenaissanceRe Holdings, Ltd. 300 19,686 XL Group PLC 1,628 37,314 Investment banking/Brokerage (3.2%) Ameriprise Financial, Inc. 200 12,330 BlackRock, Inc. 214 42,376 Goldman Sachs Group, Inc. (The) 427 69,866 Legg Mason, Inc. 600 19,878 Morgan Stanley 806 23,696 Solar Capital, Ltd. 1,200 28,500 Lodging/Tourism (0.4%) Wyndham Worldwide Corp. 848 23,854 Machinery (0.7%) Parker Hannifin Corp. 500 44,705 Manufacturing (1.5%) Eaton Corp. 312 33,684 Illinois Tool Works, Inc. 600 32,094 Ingersoll-Rand PLC 644 30,397 Media (1.3%) Interpublic Group of Companies, Inc. (The) (NON) 3,133 33,492 Time Warner, Inc. 392 12,328 Walt Disney Co. (The) 900 34,983 Medical technology (2.6%) Baxter International, Inc. 1,000 48,490 Covidien PLC (Ireland) 371 17,611 Medtronic, Inc. 1,251 47,938 Thermo Fisher Scientific, Inc. (NON) 500 28,635 Waters Corp. (NON) 200 15,278 Metals (1.7%) DIA Bras Exploration, Inc. (NON) 8,000 22,533 Freeport-McMoRan Copper & Gold, Inc. Class B 378 41,108 Teck Resources Limited Class B (Canada) 700 42,420 Oil and gas (9.0%) Chevron Corp. 763 72,432 Cimarex Energy Co. 400 41,652 Devon Energy Corp. 600 53,214 Ensco International PLC ADR (United Kingdom) 500 27,170 Exxon Mobil Corp. 1,181 95,283 Hess Corp. 467 39,284 Linn Energy, LLC (Units) 300 11,877 Marathon Oil Corp. 700 31,990 Occidental Petroleum Corp. 981 94,843 Petroleo Brasileiro SA ADR (Brazil) 821 30,155 Plains Exploration & Production Co. (NON) 600 20,514 QEP Resources, Inc. 709 28,814 Pharmaceuticals (3.6%) Abbott Laboratories 481 21,722 Johnson & Johnson 1,328 79,375 Pfizer, Inc. 5,600 102,032 Somaxon Pharmaceuticals, Inc. (NON) (S) 6,100 18,422 Publishing (0.6%) Gannett Co., Inc. 1,200 17,688 McGraw-Hill Cos., Inc. (The) 500 19,490 Railroads (1.0%) CSX Corp. 300 21,180 Kansas City Southern (NON) 200 9,996 Union Pacific Corp. 300 28,389 Real estate (1.6%) American Capital Agency Corp. (R) 441 12,652 Annaly Capital Management, Inc. (R) 1,895 33,788 Campus Crest Communities, Inc. (R) 1,111 14,665 Chesapeake Lodging Trust (R) 1,500 27,450 HCP, Inc. (R) 287 10,645 Regional Bells (1.6%) AT&T, Inc. 1,579 43,454 Verizon Communications, Inc. 1,434 51,079 Restaurants (0.8%) Denny's Corp. (NON) 3,300 12,474 McDonald's Corp. 461 33,962 Retail (5.7%) American Eagle Outfitters, Inc. 2,300 33,258 AnnTaylor Stores Corp. (NON) 800 17,696 Bed Bath & Beyond, Inc. (NON) 276 13,248 Best Buy Co., Inc. 400 13,600 Coach, Inc. 400 21,636 CVS Caremark Corp. 702 24,008 Dollar General Corp. (NON) 951 26,447 Limited Brands, Inc. 657 19,211 Lowe's Cos., Inc. 1,157 28,694 Macy's, Inc. 473 10,950 OfficeMax, Inc. (NON) 1,796 28,862 Safeway, Inc. 900 18,621 Target Corp. 534 29,279 Urban Outfitters, Inc. (NON) 500 16,910 Wal-Mart Stores, Inc. 815 45,697 Schools (0.2%) Apollo Group, Inc. Class A (NON) 277 11,432 Semiconductor (0.7%) Applied Materials, Inc. 1,000 15,690 Novellus Systems, Inc. (NON) 800 28,856 Shipping (0.5%) Scorpio Tankers, Inc. (Monaco) (NON) 802 7,868 United Parcel Service, Inc. Class B 300 21,486 Software (3.2%) Adobe Systems, Inc. (NON) 400 13,220 BMC Software, Inc. (NON) 600 28,620 CA, Inc. 1,400 33,320 Microsoft Corp. 1,849 51,264 Oracle Corp. 2,159 69,153 Technology services (2.6%) Accenture PLC Class A 600 30,882 AOL, Inc. (NON) 700 16,464 Google, Inc. Class A (NON) 85 51,031 Unisys Corp. (NON) 700 19,831 VeriSign, Inc. 700 23,555 Western Union Co. (The) 900 18,252 Telecommunications (0.8%) Iridium Communications, Inc. (NON) 3,400 26,112 NII Holdings, Inc. (NON) 500 20,990 Textiles (0.5%) Hanesbrands, Inc. (NON) 253 5,824 VF Corp. 300 24,816 Tobacco (1.0%) Philip Morris International, Inc. 1,080 61,819 Toys (0.5%) Hasbro, Inc. 643 28,350 Trucks and parts (0.6%) Autoliv, Inc. (Sweden) 200 15,360 Tower International, Inc. (NON) 1,300 23,228 Total common stocks (cost $5,423,833) INVESTMENT COMPANIES (0.3%)(a) Shares Value Hercules Technology Growth Capital, Inc. 2,000 $21,000 Total investment companies (cost $20,000) WARRANTS (0.1%)(a)(NON) Expiration date Strike Price Warrants Value Citigroup, Inc. 1/04/19 $10.61 6,772 $6,704 Total warrants (cost $6,840) SHORT-TERM INVESTMENTS (3.1%)(a) Shares Value Putnam Cash Collateral Pool, LLC 0.20% (d) 17,225 $17,225 Putnam Money Market Liquidity Fund 0.17% (e) 174,541 174,541 Total short-term investments (cost $191,766) TOTAL INVESTMENTS Total investments (cost $5,642,439) (b) Key to holding's abbreviations ADR American Depository Receipts Notes to the fund's portfolio Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from September 24, 2010 (commencement of operations) through January 31, 2011 (the reporting period). (a) Percentages indicated are based on net assets of $6,096,322. (b) The aggregate identified cost on a tax basis is $5,642,439, resulting in gross unrealized appreciation and depreciation of $608,841 and $61,787, respectively, or net unrealized appreciation of $547,054. (NON) Non-income-producing security. (d) The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. At the close of the reporting period, the value of securities loaned amounted to $16,006. The fund received cash collateral of $17,225 which is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Investment Management, LLC (Putnam Management), the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged by Putnam Cash Collateral Pool, LLC. The rate quoted in the security description is the annualized 7-day yield at the close fo the reporting period. (e) The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $113 for the reporting period. During the reporting period, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $3,842,755 and $3,668,214, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. (R) Real Estate Investment Trust. (S) Securities on loan, in part or in entirety, at the close of the reporting period. ADR after the name of a foreign holding represents ownership of foreign securities on deposit with a custodian bank. Security valuation: Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities. If no sales are reported as in the case of some securities traded over-the-counter a security is valued at its last reported bid price and is generally categorized as a Level 2 security. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which will generally represent a transfer from a Level 1 to a Level 2 security, will be classified as Level 2. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount. Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows: Level 1 – Valuations based on quoted prices for identical securities in active markets. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement. The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period : Valuation inputs Investments in securities: Level 1 Level 2 Level 3 Common stocks: Basic materials $307,964 $ $ Capital goods 390,051 13,624 Communication services 203,479 Conglomerates 159,747 Consumer cyclicals 625,841 Consumer staples 540,853 Energy 792,777 Financials 894,391 Health care 669,107 Technology 1,077,456 Transportation 126,146 Utilities and power 168,587 Total common stocks Investment companies 21,000 Warrants 6,704 Short-term investments 174,541 17,225 Totals by level $ Market Values of Derivative Instruments as of the close of the reporting period Asset derivatives Liability derivatives Derivatives not accounted for as hedging instruments under ASC 815 Market value Market value Equity contracts $6,704 $ Total $ For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com Item 2. Controls and Procedures: (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 3. Exhibits: Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Putnam Funds Trust By (Signature and Title): /s/ Janet C. Smith Janet C. Smith Principal Accounting Officer Date: March 31, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer Date: March 31, 2011 By (Signature and Title): /s/ Steven D. Krichmar Steven D. Krichmar Principal Financial Officer Date: March 31, 2011

Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 October 15, 2009 (October 8, 2009) Date of Report (Date of earliest event Reported) L & L INTERNATIONAL HOLDINGS, INC. (Exact name of registrant as specified in its charter) Nevada 000-32505 91-2103949 (State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.) incorporation) 130 Andover Park East, Suite 101, Seattle WA 98188 (Address of principal executive offices) (Zip Code) (206) 264-8065 Registrant’s Telephone Number, Including Area Code N/A (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions(see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Forward Looking Statements This Form 8-K and other reports filed by L & L International Holdings, Inc. (the “Registrant” or “Company”) from time to time with the Securities and Exchange Commission (collectively the “Filings”) contain or may contain forward looking statements and information that are based upon beliefs of, and information currently available to, the Registrant’s management as well as estimates and assumptions made by the Registrant’s management. When used in the Filings, the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to the Registrant or the Registrant’s management identify forward looking statements. Such statements reflect the current view of the Registrant with respect to future events and are subject to risks, uncertainties, assumptions, and other factors (including the risks contained in the section of the Registrant’s Form 10-K entitled “Risk Factors”) relating to the Registrant’s industry, the Registrant’s operations and results of operations, and any businesses that may be acquired by the Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Registrant believes that the expectations reflected in the forward looking statements are reasonable, the Registrant cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Registrant does not intend to update any of the forward looking statements to conform these statements to actual results. Item 1.01 Entry into a Material Definitive Agreement The following discussion provides only a brief description of the document described below. The discussion is qualified in its entirety by the full text of the agreements described below, which are attached to this Current Report on Form 8-K as exhibits. Common Stock and Warrant Financing On October 8, 2009, L&L International Holdings, Inc., a Nevada corporation (the "Company") entered into a Securities Purchase Agreement, the form of which is attached hereto as Exhibit 10.1 (the "Purchase Agreement"), with the purchasers named therein (the "Buyers"). Laidlaw & Company (UK) Ltd. (“Laidlaw”) acted as the placement agent and financial advisor for this transaction.

EXHIBIT 31.2 CERTIFICATION I, Daphne Taylor, certify that: 1. I have reviewed this quarterly report on Form 10-Q of BioLife Solutions, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: November 13, 2012 /s/ Daphne Taylor Daphne Taylor Chief Financial Officer

EXHIBIT 3.2 -i- -ii- -iii- -iv- -1- -2- -3- -4- -5- -6- -7- -8- -9- -10- -11- -12- -13- -14- -15- -16- -17- -18- -19- -20- -21- -22- -23- -24- -25- -26- -27- -28- -29- -30- -31- -32- -33- -34- -35- -36- -37- -38- -39- -40- -41- -42- -43- -44- -45- -46- -47- -48- -49- -50- -51- -52- -53- -54- -55- -56- -57- -58- -59- -60- -61- -62-

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of June, 2015 Commission File Number 1565025 AMBEV S.A. (Exact name of registrant as specified in its charter) AMBEV S.A. (Translation of Registrant's name into English) Rua Dr. Renato Paes de Barros, 1017 - 3rd Floor 04530-000 São Paulo, SP Federative Republic of Brazil (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F X Form 40-F Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X CONSOLIDATED FORM Management and Related Persons’ Transactions of Securities Issued by the Company Article 11 - CVM Instruction # 358/2002 In May, 2015 the only transactions with securities and derivatives were those presented below, in compliance with Article 11 - CVM Instruction # 358/2002 : Company Name: Ambev S.A. Group and Related Persons ( ) Board of Directors ( X ) Management ( ) Fiscal Council ( ) Technical and Consulting Committees Initial Balance Securities / Derivatives Securities Characteristics Quantity % Same Class and Type Total Shares Common 5,945,749 0.0378 0.0378 ADR (*) Common 367,280 0.0023 0.0023 Transac tions in the month Securities / Derivatives Securities Characteristics Intermediary Operation Day Quantity Price R$ Volume (R$) Shares Common Direct with the Company Subscription 13 544,630 1.54022 838,850.72 Total Subscription Shares Common Itau Corretora Sell 15 1,000 19.58 19,580.00 Shares Common JP Morgan Sell 15 8,700 19.59 170,433.00 Shares Common JP Morgan Sell 15 1,300 19.60 25,480.00 Total Sell Final Balance Securities / Derivatives Securities Characteristics Quantity % Same Class and Type Total Shares Common 6,479,379 0.0412 0.0412 ADR (*) Common 367,280 0.0023 0.0023 (1) When filling in the form, delete the lines that do not have any information. If there is no acquisition/change in the position of any person in relation to Article 11 - CVM Instruction # 358/2002, send a statement with that information. (2) Issue/Series, convertibility, simple, term, guaranties, type/class, among others. (3) Quantity multiplied by price. Note: These consolidated data must have information by group: Directors, Management (which have not been included in the Board of Directors), etc. (*) Each ADR is equivalent to 1 (one) share. CONSOLIDATED FORM Management and Related Persons’ Transactions of Securities Issued by the Company Article 11 - CVM Instruction # 358/2002 In May, 2015 the only transactions with securities and derivatives were those presented below, in compliance with Article 11 - CVM Instruction # 358/2002 : Company Name: Ambev S.A. Group and related persons ( X ) Board of Directors ( ) Management ( ) Fiscal Council ( ) Technical and Consulting Committees Initial Balance Securities / Derivatives Securities Characteristics Quantity % Same Class and Type Total Shares Common 11,291,600,795 71.8404 71.8404 ADR (*) Common 16,302,499 0.1037 0.1037 Transac tions in the month Securities / Derivatives Securities Characteristics Intermediary Operation Day Quantity Price R$ Volume (R$) Shares Common Brasil Plural Buy 15 5,200 19.38 100,776.00 Shares Common Brasil Plural Buy 15 18,900 19.39 366,471.00 Shares Common Brasil Plural Buy 15 74,000 19.40 1,435,600.00 Shares Common Brasil Plural Buy 15 5,600 19.42 108,752.00 Shares Common Brasil Plural Buy 15 2,500 19.43 48,575.00 Shares Common Brasil Plural Buy 15 7,500 19.44 145,800.00 Shares Common Brasil Plural Buy 15 51,200 19.45 995,840.00 Shares Common Brasil Plural Buy 15 1,700 19.47 33,099.00 Shares Common Brasil Plural Buy 15 400 19.48 7,792.00 Shares Common Brasil Plural Buy 15 8,400 19.49 163,716.00 Shares Common Brasil Plural Buy 15 24,600 19.50 479,700.00 Shares Common Brasil Plural Buy 15 1,800 19.52 35,136.00 Shares Common Brasil Plural Buy 15 11,100 19.53 216,783.00 Shares Common Brasil Plural Buy 15 62,200 19.54 1,215,388.00 Shares Common Brasil Plural Buy 15 85,300 19.55 1,667,615.00 Shares Common Brasil Plural Buy 15 1,000,000 19.57 19,570,000.00 Shares Common Brasil Plural Buy 22 200 18.61 3,722.00 Shares Common Brasil Plural Buy 22 3,800 18.62 70,756.00 Shares Common Brasil Plural Buy 22 80,500 18.63 1,499,715.00 Shares Common Brasil Plural Buy 22 69,200 18.64 1,289,888.00 Shares Common Brasil Plural Buy 22 346,300 18.65 6,458,495.00 Shares Common Brasil Plural Buy 22 1,500 18.71 28,065.00 Shares Common Brasil Plural Buy 22 60,000 18.72 1,123,200.00 Shares Common Brasil Plural Buy 22 5,300 18.73 99,269.00 Shares Common Brasil Plural Buy 22 11,900 18.74 223,006.00 Shares Common Brasil Plural Buy 22 32,900 18.75 616,875.00 Shares Common Brasil Plural Buy 22 26,800 18.76 502,768.00 Shares Common Brasil Plural Buy 22 24,700 18.77 463,619.00 Shares Common Brasil Plural Buy 22 15,600 18.78 292,968.00 Shares Common Brasil Plural Buy 22 26,100 18.79 490,419.00 Shares Common Brasil Plural Buy 22 95,200 18.80 1,789,760.00 Shares Common Brasil Plural Buy 22 6,400 18.86 120,704.00 Shares Common Brasil Plural Buy 22 31,400 18.87 592,518.00 Shares Common Brasil Plural Buy 22 32,800 18.88 619,264.00 Shares Common Brasil Plural Buy 22 55,300 18.89 1,044,617.00 Shares Common Brasil Plural Buy 22 174,100 18.90 3,290,490.00 Shares Common Brasil Plural Buy 29 400 18.23 7,292.00 Shares Common Brasil Plural Buy 29 11,300 18.24 206,112.00 Shares Common Brasil Plural Buy 29 20,000 18.25 365,000.00 Shares Common Brasil Plural Buy 29 47,300 18.26 863,698.00 Shares Common Brasil Plural Buy 29 32,500 18.27 593,775.00 Shares Common Brasil Plural Buy 29 42,600 18.28 778,728.00 Shares Common Brasil Plural Buy 29 32,800 18.29 599,912.00 Shares Common Brasil Plural Buy 29 58,100 18.30 1,063,230.00 Shares Common Brasil Plural Buy 29 200 18.34 3,668.00 Shares Common Brasil Plural Buy 29 11,700 18.35 214,695.00 Shares Common Brasil Plural Buy 29 2,000 18.36 36,720.00 Shares Common Brasil Plural Buy 29 3,000 18.37 55,110.00 Shares Common Brasil Plural Buy 29 20,600 18.38 378,628.00 Shares Common Brasil Plural Buy 29 96,600 18.39 1,776,474.00 Shares Common Brasil Plural Buy 29 472,000 18.40 8,684,800.00 Shares Common Brasil Plural Buy 29 6,000 18.43 110,580.00 Shares Common Brasil Plural Buy 29 33,300 18.44 614,052.00 Shares Common Brasil Plural Buy 29 60,700 18.45 1,119,915.00 Shares Common Brasil Plural Buy 29 48,900 18.50 904,650.00 Total Buy Final Balance Securities / Derivatives Securities Characteristics Quantity % Same Class and Type Tot al Shares Common 11,295,061,195 71.8624 71.8624 ADR (*) Common 16,302,499 0.1037 0.1037 (1) When filling in the form, delete the lines that do not have any information. If there is no acquisition/change in the position of any person in relation to Article 11 - CVM Instruction # 358/2002, send a statement with that information. (2) Issue/Series, convertibility, simple, term, guaranties, type/class, among others. (3) Quantity multiplied by price. Note: These consolidated data must have information by group: Directors, Management (which have not been included in the Board of Directors), etc. (*) Each ADR is equivalent to 1 (one) share. CONSOLIDATED FORM Management and Related Persons’ Transactions of Securities Issued by the Company Article 11 - CVM Instruction # 358/2002 In May, 2015 the only transactions with securities and derivatives were those presented below, in compliance with Article 11 - CVM Instruction # 358/2002 : Company Name: Ambev S.A. Group and related persons ( ) Board of Directors ( ) Management (X) Fiscal Council ( ) Technical and Consulting Committees Initial Balance Securities / Derivatives Securities Characteristics Quantity % Same Class and Type Total Shares Common 7,225 0.0000 0.0000 Final Balance Securities / Derivatives Securities Characteristics Quantity % Same Class and Type Tot al Shares Common 7,225 0.0000 0.0000 When filling in the form, delete the lines that do not have any information. If there is no acquisition/change in the position of any person in relation to Article 11 - CVM Instruction # 358/2002, send a statement with that information. Issue/Series, convertibility, simple, term, guaranties, type/class, among others. Quantity multiplied by price. Note: These consolidated data must have information by group: Directors, Management (which have not been included in the Board of Directors), etc. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date:June 10, 2015 AMBEV S.A. By: /s/ Nelson José Jamel Nelson Jose Jamel Chief Financial and Investor Relations Officer

AMENDMENT TO THE ADVISORS SERIES TRUST FUND ADMINISTRATION SERVICING AGREEMENT THIS AMENDMENT dated as of the15th day of July, 2011, to the Fund Administration Servicing Agreement, dated as of June 8, 2006, as amended (the “Agreement”), is entered into by and between Advisors Series Trust, a Delaware statutory trust (the “Trust”) and U.S. Bancorp Fund Services, LLC, a Wisconsin limited liability company (“USBFS”). RECITALS WHEREAS, the parties have entered into a Fund Administration Servicing Agreement; and WHEREAS, the parties desire to amend the series of the Trust to add funds; and WHEREAS, Section 10 of the Agreement allows for its amendment by a written instrument executed by both parties. NOW, THEREFORE, the parties agree to amend the exhibits and add the following series to the Advisor Series Trust: Exhibit AA, Fort Pitt Capital Total Return Fund, is hereby added to the Agreement and attached hereto. Except to the extent amended hereby, the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by a duly authorized officer on one or more counterparts as of the date and year first written above. ADVISORS SERIES TRUST U.S. BANCORP FUND SERVICES, LLC By:/s/ Douglas G. Hess By:/s/ Michael R. McVoy Printed Name: Douglas G. Hess Printed Name: Michael R. McVoy Title:President Title: Executive Vice President Exhibit AA to the Advisors Series Trust Fund Administration Servicing Agreement Name of Series Date Added Fort Pitt Capital Total Return Fund on or after June 2, 2011 FUND ACCOUNTING, FUND ADMINISTRATION AND PORTFOLIO COMPLIANCE, AND CHIEF COMPLIANCE OFFICER (CCO) SERVICES at June, 2011 Domestic Funds Annual Fee Based Upon Market Value Per Fund* ¨[] basis points on the first $[] ¨[] basis points on the next $[] ¨[] basis points on the balance ¨Minimum annual fee:$[] first fund, ¨$[] per fund thereafter Fund Administration Out-of-pocket Costs Plus out-of-pocket expenses, but not limited to: ·Postage, Stationery ·Programming, Special Reports ·Compliance Systems Costs ·Proxies, Insurance ·EDGAR filing ·Retention of records ·Federal and state regulatory filing fees ·Certain insurance premiums ·Expenses from board of directors meetings ·Auditing and legal expenses ·Blue Sky conversion expenses (if necessary) ·All other out-of-pocket expenses Fund Accounting Out-of-pocket Costs Plus out-of-pocket expenses, including pricing, corporate action, and factor services: ·$[]Domestic and Canadian Equities ·$[]Options ·$[]Corp/Gov/Agency Bonds ·$[]CMO’s ·$[]International Equities and Bonds ·$[]Municipal Bonds ·$[]Money Market Instruments ·$[] /fund/month - Mutual Fund Pricing ·$[] /equity Security/Month Corporate Actions ·$[] /month Manual Security Pricing (>[]/day) ·Factor Services (BondBuyer) ·$[] /CMO/month ·$[]/Mortgage Backed/month ·$[] /month Minimum Per Fund Group ·Fair Value Services (FT Interactive) ·$[] on the first [] securities per day ·$[] on the balance of securities per day Fund CCO Services - $[] per year Multiple Classes – Add the following for each class beyond the first class: ·[] basis point at each level ·$[] per class minimum Priced Separately: ·Master/Feeder Funds Multiple Manager Funds* Additional base fee: $[] per manager/sub-advisor per fund Conversion and extraordinary services quoted separately. NOTE – All schedules subject to change depending upon the use of derivatives – options, futures, short sales, etc. Fee are billed monthly. * Annual fee * Subject to CPI increase, Milwaukee MSA. Advisor’s Signature below acknowledges approval of the fee schedule on this Exhibit AA. Fort Pitt Capital Group, Inc. By: /s/ Charles A. Smith Printed Name: Charles A. SmithTitle: Treasurer Date: 7/15/2011 2

Name: Commission Regulation (EEC) No 83/85 of 11 January 1985 temporarily suspending intervention buying in of beef in Northern Ireland Type: Regulation Date Published: nan No L 11 / 12 Official Journal of the European Communities 12. 1 . 85 COMMISSION REGULATION (EEC) No 83/85 of 11 January 1985 temporarily suspending intervention buying in of beef in Northern Ireland HAS ADOPTED THIS REGULATION : Article 1 In application of Article 3 (2) of Regulation (EEC) No 868/84, intervention buying in shall be suspended from 14 January 1985 in the following region of the United Kingdom for the following classes : Northern Ireland : Category C, classes R3 , R4, 03 THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 805/68 of 27 June 1968 on the common organization of the market in beef and veal ('), as last amended by the Act of Accession of Greece , and in particular Article 6 (5) (b) thereof, Having regard to Council Regulation (EEC) No 868/84 of 31 March 1984 fixing the guide price and the inter ­ vention price of adult bovine animals for the 1984/85 , marketing year (2), and in particular Article 3 (2) and (4) (b) thereof, Whereas the situation of the market in Northern Ireland is such that the application of the abovemen ­ tioned rules is required ; Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Beef and Veal , Article 2 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels , 11 January 1985 . For the Commission Frans ANDRIESSEN Member of the Commission (') OJ No L 148 , 28 . 6 . 1968 , p . 24 . (2) OJ No L 90 , 1 . 4 . 1984, p . 30 .

Exhibit 10.2     DIGITAL ANGEL CORPORATION   SECURITIES PURCHASE AGREEMENT   July 31, 2003     TABLE OF CONTENTS   1. PURCHASE AND SALE OF NOTE AND WARRANT.       1.1 Purchase of Note and Warrant       1.2 The Closing Date       1.3 Form of Payment               2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.       2.1 Organization, Good Standing and Qualification       2.2 Subsidiaries       2.3 Capitalization; Voting Rights.       2.4 Authorization; Binding Obligations       2.5 Liabilities       2.6 Agreements; Action       2.7 Obligations to Related Parties       2.8 Changes       2.9 Title to Properties and Assets; Liens, Etc.       2.10 Intellectual Property.       2.11 Compliance with Other Instruments       2.12 Litigation       2.13 Tax Returns and Payments       2.14 Employees       2.15 Registration Rights and Voting Rights       2.16 Compliance with Laws; Permits       2.17 Environmental and Safety Laws       2.18 Valid Offering       2.19 Full Disclosure       2.20 Insurance       2.21 SEC Reports       2.22 No Market Manipulation       2.23 Listing       2.24 No Integrated Offering       2.25 Stop Transfer       2.26 Dilution       2.27 Material Agreements       2.28 ERISA       2.29 Solvency               3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.       3.1 Requisite Power and Authority       1     3.2 Investment Representations       3.3 Purchaser Bears Economic Risk       3.4 Acquisition for Own Account       3.5 Purchaser Can Protect Its Interest       3.6 Accredited Investor       3.7 Legends.               4. COVENANTS OF THE COMPANY.       4.1 Stop-Orders       4.2 Listing       4.3 Market Regulations       4.4 Reporting Requirements       4.5 Use of Funds       4.6 Access to Facilities       4.7 Offering Restrictions       4.8 Insurance       4.9 Intellectual Property       4.10 Financial Information       4.11 Reservation of Shares       4.12 Confidentiality       4.13 Corporate Existence       4.14 Reissuance of Securities       4.15 Priority of Notes       4.16 Expenses and Other Payments       4.17 Transfer and Depositary Agent Instructions               5. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.       5.1 Execution       5.2 Payment       5.3 Representations and Warranties               6. CONDITIONS TO THE PURCHASER’S OBLIGATION TO PURCHASE.       6.1 Execution       6.2 Exchange Listing       6.3 Representations and Warranties       6.4 Legal Opinion       6.5 Delivery of Securities       6.6 Board Resolutions       6.7 Reservation of Shares       6.8 Transfer Agent Instructions       6.9 Good Standing Certificates       6.10 Secretary’s Certificate       6.11 Filings       6.12 Security Agreement       6.13 Other Transaction Documents       2   7. COVENANTS OF THE COMPANY AND THE PURCHASER REGARDING INDEMNIFICATION.   7.1 Company Indemnification       7.2 Purchaser’s Indemnification       7.3 Procedures               8. MISCELLANEOUS.       8.1 Governing Law       8.2 Survival       8.3 Successors and Assigns       8.4 Entire Agreement       8.5 Severability       8.6 Amendment and Waiver.       8.7 Delays or Omissions       8.8 Notices       8.9 Titles and Subtitles       8.10 Facsimile Signatures; Counterparts       8.11 Broker’s Fees       8.12 Construction       3   DIGITAL ANGEL CORPORATION   SECURITIES PURCHASE AGREEMENT   THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of July 31, 2003, by and among Digital Angel Corporation, a Delaware corporation (the “Company”), and Laurus Master Fund, Ltd. (the “Purchaser”).   RECITALS   Whereas, the Company and the Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);   Whereas, the Company desires to sell and the Purchaser desires to purchase, upon the terms and conditions stated in this Agreement, (i) a secured convertible note of the Company substantially in the form attached as Exhibit A in the principal amount of $2,000,000 (together with any secured convertible notes issued in exchange therefor or replacement thereof in accordance with the terms thereof, the “Note”) and (ii) a warrant substantially in the form attached as Exhibit B (the “Warrant”) to acquire 125,000 shares of the Company’s common stock (the “Warrant Shares”);   Whereas, the Note shall be convertible into shares of the Company’s common stock (the “Conversion Shares”), in accordance with the terms of the Note (the Note, the Warrant, the Conversion Shares and the Warrant Shares are referred to herein collectively as the “Securities”); and   Whereas, contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement substantially in the form attached as Exhibit C (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration rights under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.   the parties hereto are executing and delivering a Security Agreement substantially in the form attached as Exhibit D (the “Security Agreement”) pursuant to which the Company has agreed to provide the Purchaser with a security interest in certain assets of the Company.   AGREEMENT   NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants hereinafter set forth and are hereby acknowledged, the parties hereto agree as follows:     1.              PURCHASE AND SALE OF NOTE AND WARRANT.   1.1                               PURCHASE OF NOTE AND WARRANT.  SUBJECT TO THE SATISFACTION (OR WAIVER) OF THE CONDITIONS SET FORTH IN SECTIONS 5 AND 6 BELOW, THE COMPANY SHALL ISSUE AND SELL TO THE PURCHASER AND THE PURCHASER AGREES TO PURCHASE FROM THE COMPANY THE NOTE AND THE WARRANT.  THE PURCHASE PRICE (THE “PURCHASE PRICE”) OF THE NOTE AND THE WARRANT AT THE CLOSING (THE “CLOSING”) SHALL BE EQUAL TO $1.00 FOR EACH $1.00 OF PRINCIPAL AMOUNT OF THE NOTE PURCHASED (REPRESENTING AN AGGREGATE PURCHASE PRICE OF $2,000,000).   1.2                               THE CLOSING DATE.  THE DATE AND TIME OF THE CLOSING (THE “CLOSING DATE”) SHALL BE AT SUCH TIME AND PLACE AS IS MUTUALLY AGREED TO BY THE COMPANY AND THE PURCHASER, SUBJECT TO THE SATISFACTION (OR WAIVER) OF ALL OF THE CONDITIONS TO THE CLOSING SET FORTH IN SECTIONS 5 AND 6.   1.3                               FORM OF PAYMENT. PURSUANT TO A FUNDS ESCROW AGREEMENT (THE “FUNDS ESCROW AGREEMENT”), ON THE CLOSING DATE, (I) THE PURCHASER SHALL PAY THE PURCHASE PRICE TO THE COMPANY FOR THE NOTE AND THE WARRANT BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS IN ACCORDANCE WITH THE COMPANY’S WRITTEN WIRE INSTRUCTIONS, LESS ANY AMOUNT WITHHELD FOR EXPENSES AND OTHER PAYMENTS PURSUANT TO SECTION 4.16, AND (II) THE COMPANY SHALL DELIVER TO THE PURCHASER THE NOTE REPRESENTING THE PRINCIPAL AMOUNT OF THE NOTE THAT THE PURCHASER IS THEN PURCHASING HEREUNDER ALONG WITH THE WARRANT, DULY EXECUTED ON BEHALF OF THE COMPANY AND REGISTERED IN THE NAME OF THE PURCHASER OR ITS DESIGNEE.   2.              REPRESENTATIONS AND WARRANTIES OF THE COMPANY.   The Company hereby represents and warrants to the Purchaser as of the date of this Agreement as set forth below except as disclosed in the Company’s filings under the Securities Exchange Act of 1934 (collectively, the “Exchange Act Filings”) or the Schedules hereto.   2.1                               ORGANIZATION, GOOD STANDING AND QUALIFICATION.  THE COMPANY IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION AND IS QUALIFIED TO DO BUSINESS AND IN GOOD STANDING IN EACH OTHER JURISDICTION IN WHICH THE OWNERSHIP OR LEASING OF ITS PROPERTIES OR THE NATURE OF ITS BUSINESS REQUIRES SUCH QUALIFICATION, EXCEPT TO THE EXTENT THAT THE FAILURE TO BE SO QUALIFIED OR BE IN GOOD STANDING WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.  AS USED IN THIS AGREEMENT, “MATERIAL ADVERSE EFFECT” MEANS ANY MATERIAL ADVERSE EFFECT ON THE BUSINESS, PROPERTIES, ASSETS, OPERATIONS, RESULTS OF OPERATIONS, FINANCIAL CONDITION OR PROSPECTS OF THE COMPANY, OR ON THE TRANSACTIONS CONTEMPLATED HEREBY, OR BY THE OTHER DOCUMENTS, INSTRUMENTS OR THE AGREEMENTS TO BE ENTERED INTO IN CONNECTION HEREWITH, OR ON THE AUTHORITY OR ABILITY OF THE COMPANY TO PERFORM ITS OBLIGATIONS UNDER THE OFFERING DOCUMENTS.   2.2                               SUBSIDIARIES.  SCHEDULE 2.2 HERETO SETS FORTH EACH SUBSIDIARY OF THE COMPANY, SHOWING THE JURISDICTION OF ITS INCORPORATION OR ORGANIZATION AND SHOWING THE PERCENTAGE OF EACH PERSON’S OWNERSHIP OF THE OUTSTANDING STOCK OR OTHER INTERESTS OF SUCH SUBSIDIARY.  FOR THE PURPOSES OF THIS AGREEMENT, “SUBSIDIARY” SHALL MEAN ANY CORPORATION OR OTHER ENTITY OF WHICH AT LEAST A MAJORITY OF THE SECURITIES OR OTHER OWNERSHIP INTEREST HAVING ORDINARY VOTING POWER (ABSOLUTELY OR CONTINGENTLY) FOR THE ELECTION OF DIRECTORS OR OTHER PERSONS   2   performing similar functions are at the time owned directly or indirectly by the Company and/or any of its other subsidiaries.  All of the outstanding shares of capital stock of each subsidiary have been duly authorized and validly issued, and are fully paid and nonassessable.  There are no outstanding preemptive, conversion or other rights, options, warrants or agreements granted or issued by or binding upon any subsidiary for the purchase or acquisition of any shares of capital stock of any subsidiary or any other securities convertible into, exchangeable for or evidencing the rights to subscribe for any shares of such capital stock.  Neither the Company nor any subsidiary is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of the capital stock of any subsidiary or any convertible securities, rights, warrants or options of the type described in the preceding sentence.  Neither the Company nor any subsidiary is party to, nor has any knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of any subsidiary.   2.3                               CAPITALIZATION; VOTING RIGHTS.   (A)                                  THE AUTHORIZED CAPITAL STOCK OF THE COMPANY, AS OF JUNE 30, 2003, CONSISTS OF (I)1,000,000 SHARES OF PREFERRED STOCK, PAR VALUE $1.75 PER SHARE, NO SHARES OF WHICH ARE ISSUED AND OUTSTANDING, AND (II) 95,000,000 SHARES OF COMMON STOCK, PAR VALUE $.005 PER SHARE (THE “COMMON STOCK”), 26,858,239 SHARES OF WHICH ARE ISSUED AND OUTSTANDING.   (B)                                  EXCEPT AS DISCLOSED ON SCHEDULE 2.3(B), OTHER THAN (I) THE SHARES RESERVED FOR ISSUANCE UNDER THE COMPANY’S STOCK OPTION PLANS; AND (II) SHARES WHICH MAY BE GRANTED PURSUANT TO THIS AGREEMENT AND THE TRANSACTION DOCUMENTS, THERE ARE NO OUTSTANDING OPTIONS, WARRANTS, RIGHTS (INCLUDING PREEMPTIVE RIGHTS AND RIGHTS OF FIRST REFUSAL) TO SUBSCRIBE TO, CALL OR COMMITMENT OF ANY CHARACTER WHATSOEVER RELATING TO, OR SECURITIES OR RIGHTS CONVERTIBLE INTO, ANY SHARES OF CAPITAL STOCK OF THE COMPANY (SUCH SCHEDULE 2.3 SHALL PROVIDE THE EXERCISE OR CONVERSION TERM, EXERCISE OR CONVERSION PRICE, VESTING PERIOD, HOLDERS OF SUCH OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES AND THE AMOUNT GRANTED OR ISSUED TO EACH HOLDER).  EXCEPT AS DESCRIBED IN SCHEDULE 2.3(B), THERE EXISTS NO PROXY OR STOCKHOLDER AGREEMENTS, OR ARRANGEMENTS OR AGREEMENTS OF ANY KIND, FOR THE PURCHASE OR ACQUISITION FROM THE COMPANY OF ANY OF ITS SECURITIES.  NEITHER THE OFFER, ISSUANCE OR SALE OF ANY OF THE NOTE OR WARRANT, OR THE ISSUANCE OF ANY OF THE CONVERSION SHARES OR WARRANT SHARES, NOR THE CONSUMMATION OF ANY TRANSACTION CONTEMPLATED HEREBY, WILL RESULT IN A CHANGE IN THE PRICE OR NUMBER OF ANY SECURITIES OF THE COMPANY OUTSTANDING, UNDER ANTI-DILUTION OR OTHER SIMILAR PROVISIONS CONTAINED IN OR AFFECTING ANY SUCH SECURITIES.   (C)                                  ALL ISSUED AND OUTSTANDING SHARES OF THE COMPANY’S COMMON STOCK (I) HAVE BEEN DULY AUTHORIZED AND VALIDLY ISSUED AND ARE FULLY PAID AND NONASSESSABLE AND (II) TOGETHER WITH THE OFFER AND SALE OF ALL CONVERTIBLE SECURITIES, RIGHTS, WARRANTS, OR OPTIONS OF THE COMPANY, WERE ISSUED IN COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL LAWS CONCERNING THE ISSUANCE OF SECURITIES, AND NO STOCKHOLDER HAS A RIGHT OF RESCISSION OR DAMAGES AGAINST THE COMPANY WITH RESPECT THERETO.   (D)                                  THE RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS OF THE SHARES OF THE COMMON STOCK ARE AS STATED IN THE COMPANY’S CERTIFICATE OF INCORPORATION, AS AMENDED TO THE DATE OF THIS AGREEMENT (THE “CHARTER”).  THE CONVERSION SHARES AND WARRANT SHARES HAVE BEEN DULY AND VALIDLY RESERVED FOR ISSUANCE.  WHEN ISSUED IN COMPLIANCE WITH THE PROVISIONS OF   3   this Agreement and the Company’s Charter, the Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances, other than those that may be created with respect to the Purchaser or its property; provided, however, that the Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed, except to the extent that such restrictions shall be eliminated by virtue of the Registration Rights Agreement.   2.4                               AUTHORIZATION; BINDING OBLIGATIONS.  ALL CORPORATE ACTION ON THE PART OF THE COMPANY NECESSARY FOR THE AUTHORIZATION OF THIS AGREEMENT, THE NOTE, THE WARRANT, THE REGISTRATION RIGHTS AGREEMENT, THE FUNDS ESCROW AGREEMENT AND THE SECURITY AGREEMENT (COLLECTIVELY, THE “TRANSACTION DOCUMENTS”), THE PERFORMANCE OF ALL OBLIGATIONS OF THE COMPANY HEREUNDER AT THE APPLICABLE CLOSING, AND THE AUTHORIZATION, SALE, ISSUANCE AND DELIVERY OF THE NOTE AND WARRANT HAS BEEN TAKEN OR WILL BE TAKEN PRIOR TO THE CLOSING AND NO FURTHER CONSENT OR AUTHORIZATION OF THE COMPANY, ITS BOARD OF DIRECTORS OR STOCKHOLDERS IS REQUIRED.  THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, WHEN EXECUTED AND DELIVERED AND TO THE EXTENT THAT THE COMPANY IS A PARTY THERETO, WILL BE VALID AND BINDING OBLIGATIONS OF THE COMPANY ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS, EXCEPT (A) AS LIMITED BY APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS OF GENERAL APPLICATION AFFECTING ENFORCEMENT OF CREDITORS’ RIGHTS, AND (B) GENERAL PRINCIPLES OF EQUITY THAT RESTRICT THE AVAILABILITY OF EQUITABLE OR LEGAL REMEDIES.  THE SALE OF THE NOTE AND THE SUBSEQUENT CONVERSION OF THE NOTE INTO CONVERSION SHARES ARE NOT AND WILL NOT BE SUBJECT TO ANY PREEMPTIVE RIGHTS OR RIGHTS OF FIRST REFUSAL THAT HAVE NOT BEEN PROPERLY WAIVED OR COMPLIED WITH. THE ISSUANCE OF THE WARRANT AND THE SUBSEQUENT EXERCISE OF THE WARRANT FOR WARRANT SHARES ARE NOT AND WILL NOT BE SUBJECT TO ANY PREEMPTIVE RIGHTS OR RIGHTS OF FIRST REFUSAL THAT HAVE NOT BEEN PROPERLY WAIVED OR COMPLIED WITH.  THE NOTE AND THE WARRANT, WHEN EXECUTED AND DELIVERED IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, WILL BE VALID AND BINDING OBLIGATIONS OF THE COMPANY, ENFORCEABLE IN ACCORDANCE WITH THEIR RESPECTIVE TERMS, EXCEPT (A) AS LIMITED BY APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS OF GENERAL APPLICATION AFFECTING ENFORCEMENT OF CREDITORS’ RIGHTS, AND (B) GENERAL PRINCIPLES OF EQUITY THAT RESTRICT THE AVAILABILITY OF EQUITABLE OR LEGAL REMEDIES.   2.5                               LIABILITIES.  THE COMPANY HAS NO MATERIAL LIABILITIES AND, TO THE BEST OF ITS KNOWLEDGE, KNOWS OF NO MATERIAL CONTINGENT LIABILITIES, EXCEPT CURRENT LIABILITIES INCURRED IN THE ORDINARY COURSE OF BUSINESS AND LIABILITIES DISCLOSED IN THE COMPANY’S MOST RECENT EXCHANGE ACT FILING.   2.6                               AGREEMENTS; ACTION.  EXCEPT AS SET FORTH ON SCHEDULE 2.6:   (A)                                  THERE ARE NO AGREEMENTS, UNDERSTANDINGS, INSTRUMENTS, CONTRACTS, PROPOSED TRANSACTIONS, JUDGMENTS, ORDERS, WRITS OR DECREES TO WHICH THE COMPANY IS A PARTY OR TO ITS KNOWLEDGE BY WHICH IT IS BOUND WHICH MAY INVOLVE (I) OBLIGATIONS (CONTINGENT OR OTHERWISE) OF, OR PAYMENTS TO, THE COMPANY IN EXCESS OF $50,000 (OTHER THAN OBLIGATIONS OF, OR PAYMENTS TO, THE COMPANY ARISING FROM PURCHASE OR SALE AGREEMENTS ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS), OR (II) THE TRANSFER OR LICENSE OF ANY PATENT, COPYRIGHT, TRADE SECRET OR OTHER PROPRIETARY RIGHT TO OR FROM THE COMPANY (OTHER THAN LICENSES ARISING FROM THE PURCHASE OF “OFF THE SHELF” OR OTHER STANDARD PRODUCTS), OR (III) PROVISIONS RESTRICTING THE DEVELOPMENT, MANUFACTURE OR   4   distribution of the Company’s products or services, or (iv) indemnification by the Company with respect to infringements of proprietary rights.   (B)                                  THE COMPANY HAS NOT (I) DECLARED OR PAID ANY DIVIDENDS, OR AUTHORIZED OR MADE ANY DISTRIBUTION UPON OR WITH RESPECT TO ANY CLASS OR SERIES OF ITS CAPITAL STOCK, (II) INCURRED ANY INDEBTEDNESS FOR MONEY BORROWED OR ANY OTHER LIABILITIES INDIVIDUALLY IN EXCESS OF $50,000 OR, IN THE CASE OF INDEBTEDNESS AND/OR LIABILITIES INDIVIDUALLY LESS THAN $50,000, IN EXCESS OF $150,000 IN THE AGGREGATE, (III) MADE ANY LOANS OR ADVANCES TO ANY PERSON OR ENTITY IN EXCESS, INDIVIDUALLY OR IN THE AGGREGATE, OF $100,000, OTHER THAN ORDINARY ADVANCES FOR TRAVEL EXPENSES, OR (IV) SOLD, EXCHANGED OR OTHERWISE DISPOSED OF ANY OF ITS ASSETS OR RIGHTS, OTHER THAN THE SALE OF ITS INVENTORY IN THE ORDINARY COURSE OF BUSINESS.  EXCEPT AS DISCLOSED IN SCHEDULE 2.6(B), NEITHER THE COMPANY NOR ANY SUBSIDIARY IS IN DEFAULT WITH RESPECT TO ANY INDEBTEDNESS.   (C)                                  FOR THE PURPOSES OF SUBSECTIONS (A) AND (B) ABOVE, ALL INDEBTEDNESS, LIABILITIES, AGREEMENTS, UNDERSTANDINGS, INSTRUMENTS, CONTRACTS AND PROPOSED TRANSACTIONS INVOLVING THE SAME PERSON OR ENTITY (INCLUDING PERSONS OR ENTITIES THE COMPANY HAS REASON TO BELIEVE ARE AFFILIATED THEREWITH) SHALL BE AGGREGATED FOR THE PURPOSE OF MEETING THE INDIVIDUAL MINIMUM DOLLAR AMOUNTS OF SUCH SUBSECTIONS.   2.7                               OBLIGATIONS TO RELATED PARTIES.  EXCEPT AS SET FORTH IN SCHEDULE 2.7, THERE ARE NO OBLIGATIONS OF THE COMPANY TO OFFICERS, DIRECTORS, STOCKHOLDERS OR EMPLOYEES OF THE COMPANY OTHER THAN (A) FOR PAYMENT OF SALARY FOR SERVICES RENDERED, (B) REIMBURSEMENT FOR REASONABLE EXPENSES INCURRED ON BEHALF OF THE COMPANY, (C) FOR OTHER STANDARD EMPLOYEE BENEFITS MADE GENERALLY AVAILABLE TO ALL EMPLOYEES (INCLUDING STOCK OPTION AGREEMENTS OUTSTANDING UNDER ANY STOCK OPTION PLAN APPROVED BY THE BOARD OF DIRECTORS OF THE COMPANY) AND (D) OBLIGATIONS LISTED IN THE COMPANY’S FINANCIAL STATEMENTS OR DISCLOSED IN ANY OF ITS EXCHANGE ACT FILINGS.  EXCEPT AS DESCRIBED ABOVE OR SET FORTH ON SCHEDULE 2.7, NONE OF THE OFFICERS, DIRECTORS OR, TO THE BEST OF THE COMPANY’S KNOWLEDGE, KEY EMPLOYEES OR STOCKHOLDERS OF THE COMPANY OR ANY MEMBERS OF THEIR IMMEDIATE FAMILIES, ARE INDEBTED TO THE COMPANY, INDIVIDUALLY OR IN THE AGGREGATE, IN EXCESS OF $50,000 OR HAVE ANY DIRECT OR INDIRECT OWNERSHIP INTEREST IN ANY FIRM OR CORPORATION WITH WHICH THE COMPANY IS AFFILIATED OR WITH WHICH THE COMPANY HAS A BUSINESS RELATIONSHIP, OR ANY FIRM OR CORPORATION WHICH COMPETES WITH THE COMPANY, OTHER THAN PASSIVE INVESTMENTS IN PUBLICLY TRADED COMPANIES (REPRESENTING LESS THAN 1% OF SUCH COMPANY) WHICH MAY COMPETE WITH THE COMPANY.  EXCEPT AS DESCRIBED ABOVE, NO OFFICER, DIRECTOR OR STOCKHOLDER, OR ANY MEMBER OF THEIR IMMEDIATE FAMILIES, IS, DIRECTLY OR INDIRECTLY, INTERESTED IN ANY MATERIAL CONTRACT WITH THE COMPANY AND NO AGREEMENTS, UNDERSTANDINGS OR PROPOSED TRANSACTIONS ARE CONTEMPLATED BETWEEN THE COMPANY AND ANY SUCH PERSON.  EXCEPT AS SET FORTH ON SCHEDULE 2.7, THE COMPANY IS NOT A GUARANTOR OR INDEMNITOR OF ANY INDEBTEDNESS OF ANY OTHER PERSON, FIRM OR CORPORATION.   2.8                               CHANGES.  SINCE DECEMBER 31, 2002, EXCEPT AS DISCLOSED IN ANY SCHEDULE TO THIS AGREEMENT OR TO ANY OF THE OTHER TRANSACTION DOCUMENTS, THERE HAS NOT BEEN:   (A)                                  ANY CHANGE IN THE ASSETS, LIABILITIES, FINANCIAL CONDITION, PROSPECTS OR OPERATIONS OF THE COMPANY, OTHER THAN CHANGES IN THE ORDINARY COURSE OF BUSINESS, NONE OF WHICH INDIVIDUALLY OR IN THE AGGREGATE HAS HAD OR IS REASONABLY EXPECTED TO HAVE A MATERIAL   5   adverse effect on such assets, liabilities, financial condition, prospects or operations of the Company;   (B)                                  ANY RESIGNATION OR TERMINATION OF ANY OFFICER, KEY EMPLOYEE OR GROUP OF EMPLOYEES OF THE COMPANY;   (C)                                  ANY MATERIAL CHANGE, EXCEPT IN THE ORDINARY COURSE OF BUSINESS, IN THE CONTINGENT OBLIGATIONS OF THE COMPANY BY WAY OF GUARANTY, ENDORSEMENT, INDEMNITY, WARRANTY OR OTHERWISE;   (D)                                  ANY DAMAGE, DESTRUCTION OR LOSS, WHETHER OR NOT COVERED BY INSURANCE, MATERIALLY AND ADVERSELY AFFECTING THE PROPERTIES, BUSINESS OR PROSPECTS OR FINANCIAL CONDITION OF THE COMPANY;   (E)                                  ANY WAIVER BY THE COMPANY OF A VALUABLE RIGHT OR OF A MATERIAL DEBT OWED TO IT;   (F)                                    ANY DIRECT OR INDIRECT MATERIAL LOANS MADE BY THE COMPANY TO ANY STOCKHOLDER, EMPLOYEE, OFFICER OR DIRECTOR OF THE COMPANY, OTHER THAN ADVANCES MADE IN THE ORDINARY COURSE OF BUSINESS;   (G)                                 ANY MATERIAL CHANGE IN ANY COMPENSATION ARRANGEMENT OR AGREEMENT WITH ANY EMPLOYEE, OFFICER, DIRECTOR OR STOCKHOLDER;   (H)                                 ANY DECLARATION OR PAYMENT OF ANY DIVIDEND OR OTHER DISTRIBUTION OF THE ASSETS OF THE COMPANY;   (I)                                    ANY LABOR ORGANIZATION ACTIVITY RELATED TO THE COMPANY;   (J)                                    ANY DEBT, OBLIGATION OR LIABILITY INCURRED, ASSUMED OR GUARANTEED BY THE COMPANY, EXCEPT THOSE FOR IMMATERIAL AMOUNTS AND FOR CURRENT LIABILITIES INCURRED IN THE ORDINARY COURSE OF BUSINESS;   (K)                                ANY SALE, ASSIGNMENT OR TRANSFER OF ANY PATENTS, TRADEMARKS, COPYRIGHTS, TRADE SECRETS OR OTHER INTANGIBLE ASSETS;   (L)                                    ANY CHANGE IN ANY MATERIAL AGREEMENT TO WHICH THE COMPANY IS A PARTY OR BY WHICH IT IS BOUND WHICH MAY MATERIALLY AND ADVERSELY AFFECT THE BUSINESS, ASSETS, LIABILITIES, FINANCIAL CONDITION, OPERATIONS OR PROSPECTS OF THE COMPANY;   (M)                              ANY OTHER EVENT OR CONDITION OF ANY CHARACTER THAT, EITHER INDIVIDUALLY OR CUMULATIVELY, HAS OR MAY MATERIALLY AND ADVERSELY AFFECT THE BUSINESS, ASSETS, LIABILITIES, FINANCIAL CONDITION, PROSPECTS OR OPERATIONS OF THE COMPANY; OR   (N)                                 ANY ARRANGEMENT OR COMMITMENT BY THE COMPANY TO DO ANY OF THE ACTS DESCRIBED IN SUBSECTION (A) THROUGH (M) ABOVE.   6   2.9                               TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. THE COMPANY HAS GOOD AND MARKETABLE TITLE TO ITS PROPERTIES AND ASSETS, AND GOOD TITLE TO ITS LEASEHOLD ESTATES, IN EACH CASE SUBJECT TO NO MORTGAGE, PLEDGE, LIEN, LEASE, ENCUMBRANCE OR CHARGE, OTHER THAN (A) THOSE RESULTING FROM TAXES WHICH HAVE NOT YET BECOME DELINQUENT, (B) MINOR LIENS AND ENCUMBRANCES WHICH DO NOT MATERIALLY DETRACT FROM THE VALUE OF THE PROPERTY SUBJECT THERETO OR MATERIALLY IMPAIR THE OPERATIONS OF THE COMPANY, AND (C) THOSE THAT HAVE OTHERWISE ARISEN IN THE ORDINARY COURSE OF BUSINESS.  ALL FACILITIES, MACHINERY, EQUIPMENT, FIXTURES, VEHICLES AND OTHER PROPERTIES OWNED, LEASED OR USED BY THE COMPANY ARE IN GOOD OPERATING CONDITION AND REPAIR AND ARE REASONABLY FIT AND USABLE FOR THE PURPOSES FOR WHICH THEY ARE BEING USED.  THE COMPANY IS IN COMPLIANCE WITH ALL MATERIAL TERMS OF EACH LEASE TO WHICH IT IS A PARTY OR IS OTHERWISE BOUND.   2.10                        INTELLECTUAL PROPERTY.   (A)                                  THE COMPANY OWNS OR POSSESSES SUFFICIENT LEGAL RIGHTS TO ALL PATENTS, TRADEMARKS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS, TRADE SECRETS, LICENSES, INFORMATION AND OTHER PROPRIETARY RIGHTS AND PROCESSES NECESSARY FOR ITS BUSINESS AS NOW CONDUCTED AND TO THE COMPANY’S KNOWLEDGE AS PRESENTLY PROPOSED TO BE CONDUCTED (THE “INTELLECTUAL PROPERTY”), WITHOUT ANY KNOWN INFRINGEMENT OF THE RIGHTS OF OTHERS.  THERE ARE NO OUTSTANDING OPTIONS, LICENSES OR AGREEMENTS OF ANY KIND RELATING TO THE FOREGOING PROPRIETARY RIGHTS, NOR IS THE COMPANY BOUND BY OR A PARTY TO ANY OPTIONS, LICENSES OR AGREEMENTS OF ANY KIND WITH RESPECT TO THE PATENTS, TRADEMARKS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS, TRADE SECRETS, LICENSES, INFORMATION AND OTHER PROPRIETARY RIGHTS AND PROCESSES OF ANY OTHER PERSON OR ENTITY OTHER THAN SUCH LICENSES OR AGREEMENTS ARISING FROM THE PURCHASE OF “OFF THE SHELF” OR STANDARD PRODUCTS.   (B)                                  THE COMPANY HAS NOT RECEIVED ANY COMMUNICATIONS ALLEGING THAT THE COMPANY HAS VIOLATED ANY OF THE PATENTS, TRADEMARKS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS OR TRADE SECRETS OR OTHER PROPRIETARY RIGHTS OF ANY OTHER PERSON OR ENTITY, NOR IS THE COMPANY AWARE OF ANY BASIS THEREFOR.   (C)                                  THE COMPANY DOES NOT BELIEVE IT IS OR WILL BE NECESSARY TO UTILIZE ANY INVENTIONS, TRADE SECRETS OR PROPRIETARY INFORMATION OF ANY OF ITS EMPLOYEES MADE PRIOR TO THEIR EMPLOYMENT BY THE COMPANY, EXCEPT FOR INVENTIONS, TRADE SECRETS OR PROPRIETARY INFORMATION THAT HAVE BEEN RIGHTFULLY ASSIGNED TO THE COMPANY.   2.11                        COMPLIANCE WITH OTHER INSTRUMENTS.  THE COMPANY IS NOT IN VIOLATION OR DEFAULT OF ANY TERM OF ITS CHARTER OR ITS BYLAWS AS CURRENTLY IN EFFECT (THE “BYLAWS”), OR OF ANY MATERIAL PROVISION OF ANY MORTGAGE, INDENTURE, CONTRACT, AGREEMENT, INSTRUMENT OR CONTRACT TO WHICH IT IS PARTY OR BY WHICH IT IS BOUND OR OF ANY JUDGMENT, DECREE, ORDER OR WRIT.  THE EXECUTION, DELIVERY AND PERFORMANCE OF AND COMPLIANCE WITH THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY, AND THE ISSUANCE AND SALE OF THE NOTE AND WARRANT BY THE COMPANY AND THE OTHER SECURITIES BY THE COMPANY EACH PURSUANT HERETO AND THERETO, WILL NOT, WITH OR WITHOUT THE PASSAGE OF TIME OR GIVING OF NOTICE, RESULT IN ANY SUCH MATERIAL VIOLATION, OR BE IN CONFLICT WITH OR CONSTITUTE A DEFAULT UNDER ANY SUCH TERM OR PROVISION, OR RESULT IN THE CREATION OF ANY MORTGAGE, PLEDGE, LIEN, ENCUMBRANCE OR CHARGE UPON ANY OF THE PROPERTIES OR ASSETS OF THE COMPANY OR THE SUSPENSION, REVOCATION, IMPAIRMENT, FORFEITURE OR NONRENEWAL OF ANY PERMIT, LICENSE, AUTHORIZATION OR APPROVAL APPLICABLE TO THE COMPANY, ITS BUSINESS OR OPERATIONS OR ANY OF ITS ASSETS OR PROPERTIES.   7   2.12                        LITIGATION.  THERE IS NO ACTION, SUIT, PROCEEDING OR INVESTIGATION PENDING OR, TO THE COMPANY’S KNOWLEDGE, CURRENTLY THREATENED AGAINST THE COMPANY OR ANY SUBSIDIARY THAT PREVENTS THE COMPANY TO ENTER INTO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, OR TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EXCEPT AS SET FORTH ON SCHEDULE 2.12 HERETO, THERE IS NO ACTION, SUIT, PROCEEDING OR INVESTIGATION PENDING OR, TO THE KNOWLEDGE OF THE COMPANY, THREATENED, AGAINST OR INVOLVING THE COMPANY, ANY SUBSIDIARY OF THE COMPANY OR ANY OF THEIR RESPECTIVE PROPERTIES OR ASSETS WHICH INDIVIDUALLY OR IN THE AGGREGATE WOULD HAVE A MATERIAL ADVERSE EFFECT. THE COMPANY IS NOT A PARTY OR SUBJECT TO THE PROVISIONS OF ANY ORDER, WRIT, INJUNCTION, JUDGMENT OR DECREE OF ANY COURT OR GOVERNMENT AGENCY OR INSTRUMENTALITY.  THERE IS NO ACTION, SUIT, PROCEEDING OR INVESTIGATION BY THE COMPANY CURRENTLY PENDING OR WHICH THE COMPANY INTENDS TO INITIATE.   2.13                        TAX RETURNS AND PAYMENTS.  THE COMPANY HAS TIMELY FILED ALL TAX RETURNS (FEDERAL, STATE AND LOCAL) REQUIRED TO BE FILED BY IT OF WHICH THE FAILURE TO FILE WOULD HAVE A MATERIAL ADVERSE EFFECT.  ALL TAXES SHOWN TO BE DUE AND PAYABLE ON SUCH RETURNS, ANY ASSESSMENTS IMPOSED, AND TO THE COMPANY’S KNOWLEDGE ALL OTHER TAXES DUE AND PAYABLE BY THE COMPANY ON OR BEFORE THE CLOSING, HAVE BEEN PAID OR WILL BE PAID PRIOR TO THE TIME THEY BECOME DELINQUENT.  THE COMPANY HAS NOT BEEN ADVISED (A) THAT ANY OF ITS RETURNS, FEDERAL, STATE OR OTHER, HAVE BEEN OR ARE BEING AUDITED AS OF THE DATE HEREOF, OR (B) OF ANY DEFICIENCY IN ASSESSMENT OR PROPOSED JUDGMENT TO ITS FEDERAL, STATE OR OTHER TAXES.  THE COMPANY HAS NO KNOWLEDGE OF ANY LIABILITY OF ANY TAX TO BE IMPOSED UPON ITS PROPERTIES OR ASSETS AS OF THE DATE OF THIS AGREEMENT THAT IS NOT ADEQUATELY PROVIDED FOR.   2.14                        EMPLOYEES.  EXCEPT AS SET FORTH ON SCHEDULE 2.14, THE COMPANY HAS NO COLLECTIVE BARGAINING AGREEMENTS WITH ANY OF ITS EMPLOYEES.  THERE IS NO LABOR UNION ORGANIZING ACTIVITY PENDING OR, TO THE COMPANY’S KNOWLEDGE, THREATENED WITH RESPECT TO THE COMPANY.  THE COMPANY IS NOT A PARTY TO OR BOUND BY ANY CURRENTLY EFFECTIVE EMPLOYMENT CONTRACT, DEFERRED COMPENSATION ARRANGEMENT, BONUS PLAN, INCENTIVE PLAN, PROFIT SHARING PLAN, RETIREMENT AGREEMENT OR OTHER EMPLOYEE COMPENSATION PLAN OR AGREEMENT.  TO THE COMPANY’S KNOWLEDGE, NO EMPLOYEE OF THE COMPANY, NOR ANY CONSULTANT WITH WHOM THE COMPANY HAS CONTRACTED, IS IN VIOLATION OF ANY TERM OF ANY EMPLOYMENT CONTRACT, PROPRIETARY INFORMATION AGREEMENT OR ANY OTHER AGREEMENT RELATING TO THE RIGHT OF ANY SUCH INDIVIDUAL TO BE EMPLOYED BY, OR TO CONTRACT WITH, THE COMPANY BECAUSE OF THE NATURE OF THE BUSINESS TO BE CONDUCTED BY THE COMPANY; AND TO THE COMPANY’S KNOWLEDGE THE CONTINUED EMPLOYMENT BY THE COMPANY OF ITS PRESENT EMPLOYEES, AND THE PERFORMANCE OF THE COMPANY’S CONTRACTS WITH ITS INDEPENDENT CONTRACTORS, WILL NOT RESULT IN ANY SUCH VIOLATION.  THE COMPANY IS NOT AWARE THAT ANY OF ITS EMPLOYEES IS OBLIGATED UNDER ANY CONTRACT (INCLUDING LICENSES, COVENANTS OR COMMITMENTS OF ANY NATURE) OR OTHER AGREEMENT, OR SUBJECT TO ANY JUDGMENT, DECREE OR ORDER OF ANY COURT OR ADMINISTRATIVE AGENCY, THAT WOULD INTERFERE WITH THEIR DUTIES TO THE COMPANY.  THE COMPANY HAS NOT RECEIVED ANY NOTICE ALLEGING THAT ANY SUCH VIOLATION HAS OCCURRED.  EXCEPT FOR EMPLOYEES WHO HAVE A CURRENT EFFECTIVE EMPLOYMENT AGREEMENT WITH THE COMPANY, NO EMPLOYEE OF THE COMPANY HAS BEEN GRANTED THE RIGHT TO CONTINUED EMPLOYMENT BY THE COMPANY OR TO ANY MATERIAL COMPENSATION FOLLOWING TERMINATION OF EMPLOYMENT WITH THE COMPANY.  THE COMPANY IS NOT AWARE THAT ANY OFFICER, KEY EMPLOYEE OR GROUP OF EMPLOYEES INTENDS TO TERMINATE HIS, HER OR THEIR EMPLOYMENT WITH THE COMPANY, NOR DOES THE COMPANY HAVE A PRESENT INTENTION TO TERMINATE THE EMPLOYMENT OF ANY OFFICER, KEY EMPLOYEE OR GROUP OF EMPLOYEES.   8   2.15                        REGISTRATION RIGHTS AND VOTING RIGHTS.  EXCEPT AS SET FORTH IN SCHEDULE 2.15, THE COMPANY IS PRESENTLY NOT UNDER ANY OBLIGATION, AND HAS NOT GRANTED ANY RIGHTS, OR A PARTY TO ANY AGREEMENT, TO REGISTER ANY OF THE COMPANY’S PRESENTLY OUTSTANDING SECURITIES OR ANY OF ITS SECURITIES THAT MAY HEREAFTER BE ISSUED.  TO THE COMPANY’S KNOWLEDGE, AND EXCEPT AS SET FORTH IN SCHEDULE 2.3(B), NO STOCKHOLDER OF THE COMPANY HAS ENTERED INTO ANY AGREEMENT WITH RESPECT TO THE VOTING OR TRANSFER OF ANY EQUITY SECURITIES OF THE COMPANY.   2.16                        COMPLIANCE WITH LAWS; PERMITS.  TO ITS KNOWLEDGE, THE COMPANY IS NOT IN VIOLATION IN ANY MATERIAL RESPECT OF ANY APPLICABLE STATUTE, RULE, REGULATION, ORDER OR RESTRICTION OF ANY DOMESTIC OR FOREIGN GOVERNMENT OR ANY INSTRUMENTALITY OR AGENCY THEREOF IN RESPECT OF THE CONDUCT OF ITS BUSINESS OR THE OWNERSHIP OF ITS PROPERTIES WHICH VIOLATION WOULD MATERIALLY AND ADVERSELY AFFECT THE BUSINESS, ASSETS, LIABILITIES, FINANCIAL CONDITION, OPERATIONS OR PROSPECTS OF THE COMPANY.  NO GOVERNMENTAL ORDERS, PERMISSIONS, CONSENTS, APPROVALS OR AUTHORIZATIONS ARE REQUIRED TO BE OBTAINED AND NO REGISTRATIONS OR DECLARATIONS ARE REQUIRED TO BE FILED IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE ISSUANCE OF ANY OF THE SECURITIES, EXCEPT SUCH AS HAS BEEN DULY AND VALIDLY OBTAINED OR FILED, OR WITH RESPECT TO ANY FILINGS THAT MUST BE MADE AFTER THE CLOSING, AS WILL BE FILED IN A TIMELY MANNER.  THE COMPANY HAS ALL MATERIAL FRANCHISES, PERMITS, LICENSES AND ANY SIMILAR AUTHORITY NECESSARY FOR THE CONDUCT OF ITS BUSINESS AS NOW BEING CONDUCTED BY IT, THE LACK OF WHICH WOULD MATERIALLY AND ADVERSELY AFFECT THE BUSINESS, PROPERTIES, PROSPECTS OR FINANCIAL CONDITION OF THE COMPANY.   2.17                        ENVIRONMENTAL AND SAFETY LAWS.  THE COMPANY IS NOT IN VIOLATION OF ANY APPLICABLE STATUTE, LAW OR REGULATION RELATING TO THE ENVIRONMENT OR OCCUPATIONAL HEALTH AND SAFETY, AND TO ITS KNOWLEDGE, NO MATERIAL EXPENDITURES ARE OR WILL BE REQUIRED IN ORDER TO COMPLY WITH ANY SUCH EXISTING STATUTE, LAW OR REGULATION.  NO HAZARDOUS MATERIALS (AS DEFINED BELOW) ARE USED OR HAVE BEEN USED, STORED, OR DISPOSED OF BY THE COMPANY OR, TO THE COMPANY’S KNOWLEDGE, BY ANY OTHER PERSON OR ENTITY ON ANY PROPERTY OWNED, LEASED OR USED BY THE COMPANY.  FOR THE PURPOSES OF THE PRECEDING SENTENCE, “HAZARDOUS MATERIALS” SHALL MEAN (A) MATERIALS WHICH ARE LISTED OR OTHERWISE DEFINED AS “HAZARDOUS” OR “TOXIC” UNDER ANY APPLICABLE LOCAL, STATE, FEDERAL AND/OR FOREIGN LAWS AND REGULATIONS THAT GOVERN THE EXISTENCE AND/OR REMEDY OF CONTAMINATION ON PROPERTY, THE PROTECTION OF THE ENVIRONMENT FROM CONTAMINATION, THE CONTROL OF HAZARDOUS WASTES, OR OTHER ACTIVITIES INVOLVING HAZARDOUS SUBSTANCES, INCLUDING BUILDING MATERIALS, OR (B) ANY PETROLEUM PRODUCTS OR NUCLEAR MATERIALS.   2.18                        VALID OFFERING.  ASSUMING THE ACCURACY OF THE REPRESENTATIONS AND WARRANTIES OF THE PURCHASER CONTAINED IN THIS AGREEMENT, THE OFFER, SALE AND ISSUANCE OF THE SECURITIES WILL BE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND WILL HAVE BEEN REGISTERED OR QUALIFIED (OR ARE EXEMPT FROM REGISTRATION AND QUALIFICATION) UNDER THE REGISTRATION, PERMIT OR QUALIFICATION REQUIREMENTS OF ALL APPLICABLE STATE SECURITIES LAWS.  NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES, NOR ANY PERSON ACTING ON ITS OR THEIR BEHALF, HAS ENGAGED IN ANY FORM OF GENERAL SOLICITATION OR GENERAL ADVERTISING (WITHIN THE MEANING OF REGULATION D) IN CONNECTION WITH THE OFFER OR SALE OF THE SECURITIES.   2.19                        FULL DISCLOSURE.  THE COMPANY HAS PROVIDED THE PURCHASER WITH ALL INFORMATION REQUESTED BY THE PURCHASER IN CONNECTION WITH ITS DECISION TO PURCHASE THE NOTE AND WARRANT, INCLUDING ALL INFORMATION THE COMPANY BELIEVES IS REASONABLY NECESSARY TO MAKE SUCH INVESTMENT DECISION.  NEITHER THIS AGREEMENT, THE EXHIBITS AND SCHEDULES HERETO, THE OTHER   9   Transaction Documents nor any other document delivered by the Company to Purchaser or its attorneys or agents in connection herewith or therewith or with the transactions contemplated hereby or thereby, contain any untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances in which they are made, not misleading.  Any financial projections and other estimates provided to the Purchaser by the Company were based on the Company’s experience in the industry and on assumptions of fact and opinion as to future events which the Company, at the date of the issuance of such projections or estimates, believed to be reasonable.  As of the date hereof, no facts have come to the attention of the Company that would, in its opinion, require the Company to revise or amplify in any material respect the assumptions underlying such projections and other estimates or the conclusions derived therefrom.   2.20                        INSURANCE.  THE COMPANY HAS GENERAL COMMERCIAL, PRODUCT LIABILITY, FIRE AND CASUALTY INSURANCE POLICIES WITH COVERAGE CUSTOMARY FOR COMPANIES SIMILARLY SITUATED TO THE COMPANY IN THE SAME OR SIMILAR BUSINESS.   2.21                        SEC REPORTS.  THE COMMON STOCK OF THE COMPANY IS REGISTERED PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE “EXCHANGE ACT”) AND, SINCE JANUARY 1, 2002, THE COMPANY HAS TIMELY FILED ALL PROXY STATEMENTS, REPORTS, SCHEDULES, FORMS, STATEMENTS AND OTHER DOCUMENTS REQUIRED TO BE FILED BY IT UNDER THE EXCHANGE ACT, EXCEPT FOR ITS QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2002.  THE COMPANY HAS FURNISHED THE PURCHASER WITH COPIES OF (I) ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002, (II) ITS QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED MARCH 31, 2003 AND (III) ITS PROXY STATEMENT FILED WITH THE SEC ON APRIL 17, 2003 (COLLECTIVELY, THE “SEC REPORTS”).  THE COMPANY IS ELIGIBLE TO FILE A REGISTRATION STATEMENT ON FORM S-3 WITH THE SEC.  EACH SEC REPORT WAS, AT THE TIME OF ITS FILING, IN SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENTS OF ITS RESPECTIVE FORM AND NONE OF THE SEC REPORTS, NOR THE FINANCIAL STATEMENTS (AND THE NOTES THERETO) INCLUDED IN THE SEC REPORTS, AS OF THEIR RESPECTIVE FILING DATES, CONTAINED ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITTED TO STATE A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.  THE FINANCIAL STATEMENTS OF THE COMPANY INCLUDED IN THE SEC REPORTS COMPLY AS TO FORM IN ALL MATERIAL RESPECTS WITH APPLICABLE ACCOUNTING REQUIREMENTS AND THE PUBLISHED RULES AND REGULATIONS OF THE SEC OR OTHER APPLICABLE RULES AND REGULATIONS WITH RESPECT THERETO.  SUCH FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”) APPLIED ON A CONSISTENT BASIS DURING THE PERIODS INVOLVED (EXCEPT (I) AS MAY BE OTHERWISE INDICATED IN SUCH FINANCIAL STATEMENTS OR THE NOTES THERETO OR (II) IN THE CASE OF UNAUDITED INTERIM STATEMENTS, TO THE EXTENT THEY MAY NOT INCLUDE FOOTNOTES OR MAY BE CONDENSED) AND FAIRLY PRESENT IN ALL MATERIAL RESPECTS THE FINANCIAL POSITION OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE DATES THEREOF AND THE RESULTS OF OPERATIONS AND CASH FLOWS FOR THE PERIODS THEN ENDED (SUBJECT, IN THE CASE OF UNAUDITED STATEMENTS, TO NORMAL YEAR-END AUDIT ADJUSTMENTS).   2.22                        NO MARKET MANIPULATION.  THE COMPANY HAS NOT TAKEN, AND WILL NOT TAKE, DIRECTLY OR INDIRECTLY, ANY ACTION DESIGNED TO, OR THAT MIGHT REASONABLY BE EXPECTED TO, CAUSE OR RESULT IN STABILIZATION OR MANIPULATION OF THE PRICE OF THE COMMON STOCK OF THE COMPANY TO FACILITATE THE SALE OR RESALE OF ANY OF THE SECURITIES BEING OFFERED HEREBY OR AFFECT THE PRICE AT WHICH ANY OF THE SECURITIES BEING OFFERED HEREBY MAY BE ISSUED.   10   2.23                        LISTING.  THE COMPANY’S COMMON STOCK IS LISTED FOR TRADING ON THE AMERICAN STOCK EXCHANGE AND SATISFIES ALL REQUIREMENTS FOR THE CONTINUATION OF SUCH LISTING.  THE COMPANY HAS NOT RECEIVED ANY NOTICE THAT ITS COMMON STOCK WILL BE DELISTED FROM THE AMERICAN STOCK EXCHANGE OR THAT THE COMMON STOCK AND THE COMPANY DO NOT MEET ALL REQUIREMENTS FOR THE CONTINUATION OF SUCH LISTING.   2.24                        NO INTEGRATED OFFERING.  NEITHER THE COMPANY, NOR ANY OF ITS AFFILIATES, NOR ANY PERSON ACTING ON ITS OR THEIR BEHALF, HAS DIRECTLY OR INDIRECTLY MADE ANY OFFERS OR SALES OF ANY SECURITY OR SOLICITED ANY OFFERS TO BUY ANY SECURITY UNDER CIRCUMSTANCES THAT WOULD CAUSE THE OFFERING OF THE SECURITIES PURSUANT TO THIS AGREEMENT TO BE INTEGRATED WITH PRIOR OFFERINGS BY THE COMPANY FOR PURPOSES OF THE 1933 ACT WHICH WOULD PREVENT THE COMPANY FROM SELLING THE SECURITIES PURSUANT TO RULE 506 UNDER THE 1933 ACT, OR ANY APPLICABLE EXCHANGE-RELATED STOCKHOLDER APPROVAL PROVISIONS, NOR WILL THE COMPANY OR ANY OF ITS AFFILIATES OR SUBSIDIARIES TAKE ANY ACTION OR STEPS THAT WOULD CAUSE THE OFFERING OF THE SECURITIES TO BE INTEGRATED WITH OTHER OFFERINGS.   2.25                        STOP TRANSFER.  THE SECURITIES ARE RESTRICTED SECURITIES AS OF THE DATE OF THIS AGREEMENT.  THE COMPANY WILL NOT ISSUE ANY STOP TRANSFER ORDER OR OTHER ORDER IMPEDING THE SALE AND DELIVERY OF ANY OF THE SECURITIES AT SUCH TIME AS THE SECURITIES ARE REGISTERED FOR PUBLIC SALE, WHETHER AS A RESULT OF THE REGISTRATION RIGHTS AGREEMENT OR OTHERWISE, OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE, EXCEPT AS REQUIRED BY FEDERAL SECURITIES LAWS.   2.26                        DILUTION.  THE COMPANY UNDERSTANDS THE NATURE OF THE SECURITIES BEING SOLD HEREBY AND RECOGNIZES THAT THEY MAY HAVE A POTENTIAL DILUTIVE EFFECT.  THE COMPANY SPECIFICALLY ACKNOWLEDGES THAT ITS OBLIGATION TO ISSUE THE SHARES OF COMMON STOCK UPON CONVERSION OF THE NOTE AND EXERCISE OF THE WARRANT IS BINDING UPON THE COMPANY AND ENFORCEABLE REGARDLESS OF THE DILUTION SUCH ISSUANCE MAY HAVE ON THE OWNERSHIP INTERESTS OF OTHER SHAREHOLDERS OF THE COMPANY.   2.27                        MATERIAL AGREEMENTS.  THERE IS NO AGREEMENT THAT HAS NOT BEEN FILED WITH THE SEC AS AN EXHIBIT TO A REGISTRATION STATEMENT OR OTHER APPLICABLE FORM THE BREACH OF WHICH COULD HAVE A MATERIAL ADVERSE EFFECT AS TO THE COMPANY AND ITS SUBSIDIARIES, OR WOULD PROHIBIT OR OTHERWISE INTERFERE WITH THE ABILITY OF THE COMPANY TO ENTER INTO AND PERFORM AND OF ITS OBLIGATIONS UNDER THIS AGREEMENT IN ANY MATERIAL RESPECT.   2.28                        ERISA.  BASED UPON THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (“ERISA”), AND THE REGULATIONS AND PUBLISHED INTERPRETATIONS THEREUNDER: (I) THE COMPANY HAS NOT ENGAGED IN ANY PROHIBITED TRANSACTIONS AS DEFINED IN SECTION 406 OF ERISA AND SECTION 4975 OF THE INTERNAL REVENUE CODE, AS AMENDED; (II) THE COMPANY HAS MET ALL APPLICABLE MINIMUM FUNDING REQUIREMENTS UNDER SECTION 302 OF ERISA IN RESPECT OF ITS PLANS; (III) THE COMPANY DOES NOT HAVE ANY KNOWLEDGE OF ANY EVENT OR OCCURRENCE WHICH WOULD CAUSE THE PENSION BENEFIT GUARANTY CORPORATION TO INSTITUTE PROCEEDINGS UNDER TITLE IV OF ERISA TO TERMINATE ANY EMPLOYEE BENEFIT PLAN(S); (IV) THE COMPANY DOES NOT HAVE ANY FIDUCIARY RESPONSIBILITY FOR INVESTMENTS WITH RESPECT TO ANY PLAN EXISTING FOR THE BENEFIT OF PERSONS OTHER THAN COMPANIES’ EMPLOYEES; AND (V) THE COMPANY HAS NOT WITHDRAWN, COMPLETELY OR PARTIALLY, FROM ANY MULTI-EMPLOYER PENSION PLAN SO AS TO INCUR LIABILITY UNDER THE MULTIEMPLOYER PENSION PLAN AMENDMENTS ACT OF 1980.   11   2.29                        SOLVENCY.  THE COMPANY IS SOLVENT, ABLE TO PAY ITS DEBTS AS THEY MATURE, HAS CAPITAL SUFFICIENT TO CARRY ON ITS BUSINESS AND ALL BUSINESSES IN WHICH SUCH COMPANY IS ABOUT TO ENGAGE AND THE FAIR SALEABLE VALUE OF ITS ASSETS (CALCULATED ON A GOING CONCERN BASIS) IS IN EXCESS OF THE AMOUNT OF ITS LIABILITIES.   3.              REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.   The Purchaser hereby represents and warrants to the Company as follows:   3.1                               REQUISITE POWER AND AUTHORITY.  THE PURCHASER HAS ALL NECESSARY POWER AND AUTHORITY UNDER ALL APPLICABLE PROVISIONS OF LAW TO EXECUTE AND DELIVER THIS AGREEMENT AND THE TRANSACTION DOCUMENTS AND TO CARRY OUT THEIR PROVISIONS.  ALL CORPORATE ACTION ON PURCHASER’S PART REQUIRED FOR THE LAWFUL EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE TRANSACTION DOCUMENTS HAVE BEEN OR WILL BE EFFECTIVELY TAKEN PRIOR TO THE CLOSING.  UPON THEIR EXECUTION AND DELIVERY, THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS WILL BE VALID AND BINDING OBLIGATIONS OF THE PURCHASER, ENFORCEABLE IN ACCORDANCE ENFORCEMENT OF CREDITORS’ RIGHTS, AND (B) AS LIMITED BY GENERAL PRINCIPLES OF EQUITY THAT RESTRICT THE AVAILABILITY OF EQUITABLE AND LEGAL REMEDIES.   3.2                               INVESTMENT REPRESENTATIONS. THE PURCHASER UNDERSTANDS THAT THE SECURITIES ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION CONTAINED IN THE 1933 ACT BASED IN PART UPON THE PURCHASER’S REPRESENTATIONS CONTAINED IN THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THAT THE PURCHASER IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF REGULATION D. THE PURCHASER HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND RECEIVE ANSWERS FROM THE COMPANY REGARDING THE COMPANY’S BUSINESS, MANAGEMENT AND FINANCIAL AFFAIRS AND THE TERMS AND CONDITIONS OF THE OFFERING AND THE SECURITIES AND TO OBTAIN ADDITIONAL INFORMATION (TO THE EXTENT THE COMPANY POSSESSED SUCH INFORMATION OR COULD ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE) NECESSARY TO VERIFY ANY INFORMATION FURNISHED TO THE PURCHASER OR TO WHICH THE PURCHASER HAD ACCESS.   3.3                               PURCHASER BEARS ECONOMIC RISK.  THE PURCHASER HAS SUBSTANTIAL EXPERIENCE IN EVALUATING AND INVESTING IN PRIVATE PLACEMENT TRANSACTIONS OF SECURITIES IN COMPANIES SIMILAR TO THE COMPANY SO THAT IT IS CAPABLE OF EVALUATING THE MERITS AND RISKS OF ITS INVESTMENT IN THE COMPANY AND HAS THE CAPACITY TO PROTECT ITS OWN INTERESTS.  THE PURCHASER MUST BEAR THE ECONOMIC RISK OF THIS INVESTMENT UNTIL THE SECURITIES ARE SOLD PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR (II) AN EXEMPTION FROM REGISTRATION IS AVAILABLE.   3.4                               ACQUISITION FOR OWN ACCOUNT.  THE PURCHASER IS ACQUIRING THE NOTE AND THE WARRANT FOR ITS OWN ACCOUNT FOR INVESTMENT ONLY, AND NOT AS A NOMINEE OR AGENT AND NOT WITH A VIEW TOWARDS OR FOR RESALE IN CONNECTION WITH THEIR DISTRIBUTION.   3.5                               PURCHASER CAN PROTECT ITS INTEREST.  THE PURCHASER REPRESENTS THAT BY REASON OF ITS, OR OF ITS MANAGEMENT’S, BUSINESS AND FINANCIAL EXPERIENCE, THE PURCHASER HAS THE CAPACITY TO EVALUATE THE MERITS AND RISKS OF ITS INVESTMENT IN THE SECURITIES AND TO PROTECT ITS OWN INTERESTS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT, AND THE OTHER TRANSACTION DOCUMENTS.  FURTHER, THE PURCHASER IS AWARE OF NO PUBLICATION OF ANY ADVERTISEMENT   12   in connection with the transactions contemplated in the Agreement or the other Transaction Documents.   3.6                               ACCREDITED INVESTOR.  THE PURCHASER REPRESENTS THAT IT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF REGULATION D.   3.7                               LEGENDS.   (A)                                  THE CONVERSION SHARES AND THE WARRANT SHARES, IF NOT ISSUED BY DWAC SYSTEM (AS HEREINAFTER DEFINED), SHALL BEAR A LEGEND WHICH SHALL BE IN SUBSTANTIALLY THE FOLLOWING FORM UNTIL SUCH SHARES ARE COVERED BY AN EFFECTIVE REGISTRATION STATEMENT FILED WITH THE SEC:   “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR IF APPLICABLE, STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO DIGITAL ANGEL CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”   (B)                                  THE WARRANT SHALL BEAR SUBSTANTIALLY THE FOLLOWING LEGEND:   “THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO DIGITAL ANGEL CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”   4.              COVENANTS OF THE COMPANY.   The Company covenants and agrees with the Purchaser as follows:   4.1                               STOP-ORDERS. THE COMPANY WILL ADVISE THE PURCHASER, PROMPTLY AFTER IT RECEIVES NOTICE OF ISSUANCE BY THE SEC, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY OF ANY STOP ORDER OR OF ANY ORDER PREVENTING OR SUSPENDING ANY OFFERING OF ANY   13   securities of the Company, or of the suspension of the qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose.   4.2                               LISTING.  THE COMPANY WILL MAINTAIN THE LISTING OF ITS COMMON STOCK ON THE THE NASDAQ STOCK MARKET, AMERICAN STOCK EXCHANGE OR NEW YORK STOCK EXCHANGE (A “PRINCIPAL MARKET”), AND WILL COMPLY IN ALL MATERIAL RESPECTS WITH THE COMPANY’S REPORTING, FILING AND OTHER OBLIGATIONS UNDER THE BYLAWS OR RULES OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (“NASD”) AND SUCH EXCHANGES, AS APPLICABLE.  THE COMPANY WILL PROVIDE THE PURCHASER COPIES OF ALL NOTICES IT RECEIVES NOTIFYING THE COMPANY OF THE THREATENED AND ACTUAL DELISTING OF THE COMMON STOCK FROM ANY PRINCIPAL MARKET.   4.3                               MARKET REGULATIONS.  THE COMPANY SHALL NOTIFY THE SEC, NASD AND APPLICABLE STATE AUTHORITIES, IN ACCORDANCE WITH THEIR REQUIREMENTS, OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND SHALL TAKE ALL OTHER NECESSARY ACTION AND PROCEEDINGS AS MAY BE REQUIRED AND PERMITTED BY APPLICABLE LAW, RULE AND REGULATION, FOR THE LEGAL AND VALID ISSUANCE OF THE SECURITIES TO THE PURCHASER AND PROMPTLY PROVIDE COPIES THEREOF TO THE PURCHASER.   4.4                               REPORTING REQUIREMENTS.  THE COMPANY WILL TIMELY FILE WITH THE SEC ALL REPORTS REQUIRED TO BE FILED PURSUANT TO THE EXCHANGE ACT AND REFRAIN FROM TERMINATING ITS STATUS AS AN ISSUER REQUIRED BY THE EXCHANGE ACT TO FILE REPORTS THEREUNDER EVEN IF THE EXCHANGE ACT OR THE RULES OR REGULATIONS THEREUNDER WOULD PERMIT SUCH TERMINATION.  WITHIN TWENTY-FIVE (25) DAYS AFTER THE END OF EACH MONTH, THE COMPANY WILL DELIVER TO THE PURCHASER UNAUDITED TRIAL BALANCES AS AT THE END OF SUCH MONTH.   4.5                               USE OF FUNDS.  THE COMPANY AGREES THAT IT WILL USE THE PROCEEDS OF THE SALE OF THE NOTE AND WARRANT FOR GENERAL CORPORATE PURPOSES ONLY AND THAT IT WILL NOT USE ANY OF SUCH PROCEEDS TO REPAY ANY INDEBTEDNESS TO ANY CURRENT EXECUTIVE OFFICERS, DIRECTORS OR PRINCIPAL STOCKHOLDERS OF THE COMPANY.   4.6                               ACCESS TO FACILITIES.  THE COMPANY WILL PERMIT ANY REPRESENTATIVES DESIGNATED BY THE PURCHASER (OR ANY TRANSFEREE OF THE PURCHASER), UPON REASONABLE NOTICE AND DURING NORMAL BUSINESS HOURS, AT SUCH PERSON’S EXPENSE AND ACCOMPANIED BY A REPRESENTATIVE OF THE COMPANY, TO (A) VISIT AND INSPECT ANY OF THE PROPERTIES OF THE COMPANY, (B) EXAMINE THE CORPORATE AND FINANCIAL RECORDS OF THE COMPANY (UNLESS SUCH EXAMINATION IS NOT PERMITTED BY FEDERAL, STATE OR LOCAL LAW OR BY CONTRACT) AND MAKE COPIES THEREOF OR EXTRACTS THEREFROM AND (C) DISCUSS THE AFFAIRS, FINANCES AND ACCOUNTS OF ANY SUCH CORPORATIONS WITH THE DIRECTORS, OFFICERS AND INDEPENDENT ACCOUNTANTS OF THE COMPANY.   4.7                               OFFERING RESTRICTIONS.  EXCEPT AS PREVIOUSLY DISCLOSED IN THE SEC REPORTS OR IN THE EXCHANGE ACT FILINGS; OR STOCK OR STOCK OPTIONS GRANTED TO EMPLOYEES OR DIRECTORS OF THE COMPANY; OR EQUITY OR DEBT ISSUED IN CONNECTION WITH AN ACQUISITION OF A BUSINESS OR ASSETS BY THE COMPANY; OR THE ISSUANCE BY THE COMPANY OF STOCK IN CONNECTION WITH THE ESTABLISHMENT OF A JOINT VENTURE PARTNERSHIP OR LICENSING ARRANGEMENT; OR AS DISCLOSED IN SCHEDULE 2.3(B) (THESE EXCEPTIONS HEREINAFTER REFERRED TO AS THE “EXCEPTED ISSUANCES”), THE COMPANY WILL NOT ISSUE ANY SECURITIES WITH A VARIABLE/FLOATING CONVERSION FEATURE WHICH ARE OR   14   could be (by conversion or registration) free-trading securities (i.e. common stock subject to a registration statement) prior to the full repayment or conversion of the Note.   4.8                               INSURANCE.  THE COMPANY WILL KEEP ITS ASSETS WHICH ARE OF AN INSURABLE CHARACTER INSURED BY FINANCIALLY SOUND AND REPUTABLE INSURERS AGAINST LOSS OR DAMAGE BY FIRE, EXPLOSION AND OTHER RISKS CUSTOMARILY INSURED AGAINST BY COMPANIES IN SIMILAR BUSINESS SIMILARLY SITUATED AS THE COMPANY; AND THE COMPANY WILL MAINTAIN, WITH FINANCIALLY SOUND AND REPUTABLE INSURERS, INSURANCE AGAINST OTHER HAZARDS AND RISKS AND LIABILITY TO PERSONS AND PROPERTY TO THE EXTENT AND IN THE MANNER CUSTOMARY FOR COMPANIES IN SIMILAR BUSINESS SIMILARLY SITUATED AS THE COMPANY AND TO THE EXTENT AVAILABLE ON COMMERCIALLY REASONABLE TERMS.   4.9                               INTELLECTUAL PROPERTY.  THE COMPANY SHALL MAINTAIN IN FULL FORCE AND EFFECT ITS CORPORATE EXISTENCE, RIGHTS AND FRANCHISES AND ALL LICENSES AND OTHER RIGHTS TO USE INTELLECTUAL PROPERTY OWNED OR POSSESSED BY IT AND REASONABLY DEEMED TO BE NECESSARY TO THE CONDUCT OF ITS BUSINESS.   4.10                        FINANCIAL INFORMATION.  THE COMPANY AGREES TO SEND THE FOLLOWING TO THE PURCHASER:  (I) UNLESS THE FOLLOWING ARE FILED WITH THE SEC THROUGH EDGAR AND ARE AVAILABLE TO THE PUBLIC THROUGH EDGAR, WITHIN ONE (1) DAY AFTER THE FILING THEREOF WITH THE SEC, A COPY OF ITS ANNUAL REPORT ON FORM 10-K, ITS QUARTERLY REPORTS ON FORM 10-Q, ANY CURRENT REPORTS ON FORM 8-K AND ANY REGISTRATION STATEMENTS (OTHER THAN ON FORM S-8) OR AMENDMENTS FILED PURSUANT TO THE 1933 ACT;  (II) ON THE SAME DAY AS THE RELEASE THEREOF, FACSIMILE COPIES OF ALL PRESS RELEASES ISSUED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES, UNLESS AVAILABLE THROUGH BLOOMBERG FINANCIAL MARKETS (OR ANY SUCCESSOR THERETO) CONTEMPORANEOUSLY WITH THE RELEASE; AND (III) COPIES OF ANY NOTICES AND OTHER INFORMATION MADE AVAILABLE OR GIVEN TO THE STOCKHOLDERS OF THE COMPANY GENERALLY, CONTEMPORANEOUSLY WITH THE MAKING AVAILABLE OR GIVING THEREOF TO THE STOCKHOLDERS.   4.11                        RESERVATION OF SHARES.  THE COMPANY SHALL TAKE ALL ACTION NECESSARY TO AT ALL TIMES HAVE AUTHORIZED, AND RESERVED FOR THE PURPOSE OF ISSUANCE, NO LESS THAN 110% OF THE NUMBER OF SHARES OF COMMON STOCK NEEDED TO PROVIDE FOR THE ISSUANCE OF THE CONVERSION SHARES UPON CONVERSION OF THE ENTIRE OUTSTANDING NOTE (WITHOUT REGARD TO ANY LIMITATIONS ON CONVERSIONS) AND 110% OF THE NUMBER OF SHARES OF COMMON STOCK NEEDED TO PROVIDE FOR THE ISSUANCE OF THE WARRANT SHARES UPON EXERCISE OF ALL OUTSTANDING WARRANT (WITHOUT REGARD TO ANY LIMITATIONS ON EXERCISES).   4.12                        CONFIDENTIALITY.  THE COMPANY AGREES THAT IT WILL NOT DISCLOSE, AND WILL NOT INCLUDE IN ANY PUBLIC ANNOUNCEMENT, THE NAME OF THE PURCHASER, UNLESS EXPRESSLY AGREED TO BY THE PURCHASER OR UNLESS AND UNTIL SUCH DISCLOSURE IS REQUIRED BY LAW OR APPLICABLE REGULATION, AND THEN ONLY TO THE EXTENT OF SUCH REQUIREMENT.  THE PURCHASER AGREES THAT IT WILL NOT DISCLOSE AND WILL MAINTAIN AS CONFIDENTIAL ALL INFORMATION IT RECEIVES UNDER OR PURSUANT TO THE TRANSACTION DOCUMENTS, UNLESS IT IS OR BECOMES GENERALLY AVAILABLE TO THE PUBLIC OTHER THAN AS A RESULT OF DISCLOSURE BY PURCHASER, IT IS DISCLOSED PURSUANT TO A COURT ORDER OR THE REQUIREMENT OF ANY GOVERNMENTAL AUTHORITY, OR IS REQUIRED TO BE DISCLOSED BY LAW, REGULATION OR LEGAL PROCESS OR IS OTHERWISE COMPELLED IN LITIGATION.   4.13                        CORPORATE EXISTENCE.  SO LONG AS THE PURCHASER BENEFICIALLY OWNS ANY OF THE SECURITIES, THE COMPANY SHALL MAINTAIN ITS CORPORATE EXISTENCE AND SHALL NOT SELL ALL OR   15   consolidation or sale or transfer of all or substantially all of the Company’s assets where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and the Transaction Documents and (ii) is a publicly traded company whose common stock is quoted or listed on a Principal Market.   4.14                        REISSUANCE OF SECURITIES.  THE COMPANY AGREES TO REISSUE CERTIFICATES REPRESENTING THE SECURITIES WITHOUT THE LEGENDS SET FORTH IN SECTION 5.7 ABOVE AT SUCH TIME AS (A) THE HOLDER THEREOF IS PERMITTED TO DISPOSE OF SUCH SECURITIES PURSUANT TO RULE 144(K) UNDER THE 1933 ACT, OR (B) UPON RESALE SUBJECT TO AN EFFECTIVE REGISTRATION STATEMENT AFTER SUCH SECURITIES ARE REGISTERED UNDER THE 1933 ACT.  THE COMPANY AGREES TO COOPERATE WITH THE PURCHASER IN CONNECTION WITH ALL RESALES PURSUANT TO RULE 144(D) AND RULE 144(K) AND PROVIDE LEGAL OPINIONS OR SUCH TRANSFER AGENT INSTRUCTIONS NECESSARY TO ALLOW SUCH RESALES PROVIDED THE COMPANY AND ITS COUNSEL RECEIVE REASONABLY REQUESTED REPRESENTATIONS FROM THE SELLING PURCHASER AND BROKER, IF ANY.   4.15                        PRIORITY OF NOTES.  FOR SO LONG AS THE NOTE IS OUTSTANDING, IN THE EVENT THAT THE COMPANY OR ANY OF ITS SUBSIDIARIES ISSUES OR INCURS ANY INDEBTEDNESS (AS DEFINED IN THE NOTE), IT SHALL, OR IT SHALL CAUSE ANY SUBSIDIARY TO, FIRST ENTER INTO, AND CAUSE THE LENDER TO ENTER INTO, A SUBORDINATION AGREEMENT, CONTAINING TERMS AND CONDITIONS ACCEPTABLE TO THE PURCHASER.   4.16                        EXPENSES AND OTHER PAYMENTS. THE COMPANY SHALL REIMBURSE THE PURCHASER FOR ITS REASONABLE LEGAL FEES FOR SERVICES RENDERED TO THE PURCHASER IN PREPARATION OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, AND REASONABLE EXPENSES IN CONNECTION WITH THE PURCHASER’S DUE DILIGENCE REVIEW OF THE COMPANY AND RELEVANT MATTERS.  AMOUNTS PAYABLE HEREUNDER AND UNDER SECTION 6.10 OF THE NOTE SHALL BE WITHHELD BY THE PURCHASER FROM THE PURCHASE PRICE TO BE PAID AT CLOSING.   4.17                        TRANSFER AND DEPOSITARY AGENT INSTRUCTIONS. THE COMPANY SHALL ISSUE IRREVOCABLE INSTRUCTIONS TO ITS TRANSFER AGENT IN THE FORM ATTACHED HERETO AS EXHIBIT E (THE “IRREVOCABLE TRANSFER AGENT INSTRUCTIONS”), AND ANY SUBSEQUENT TRANSFER AGENT, TO ISSUE CERTIFICATES, REGISTERED IN THE NAME OF THE PURCHASER OR ITS RESPECTIVE NOMINEE(S), FOR THE CONVERSION SHARES AND THE WARRANT SHARES IN SUCH AMOUNTS AS SPECIFIED FROM TIME TO TIME BY THE PURCHASER TO THE COMPANY UPON CONVERSION OF THE NOTE OR EXERCISE OF THE WARRANT.  PRIOR TO REGISTRATION OF THE CONVERSION SHARES AND THE WARRANT SHARES UNDER THE 1933 ACT, ALL SUCH CERTIFICATES SHALL BEAR THE RESTRICTIVE LEGEND SPECIFIED IN SECTION 3.7.  THE COMPANY WARRANTS THAT NO INSTRUCTION OTHER THAN THE IRREVOCABLE TRANSFER AGENT INSTRUCTIONS REFERRED TO IN THIS SECTION 4.18 WILL BE GIVEN BY THE COMPANY TO ITS TRANSFER AGENT AND THAT THE SECURITIES SHALL OTHERWISE BE FREELY TRANSFERABLE ON THE BOOKS AND RECORDS OF THE COMPANY AS AND TO THE EXTENT PROVIDED IN THIS AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT.  IF THE PURCHASER PROVIDES THE COMPANY WITH AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, TO THE EFFECT THAT A PUBLIC SALE, ASSIGNMENT OR TRANSFER OF THE SECURITIES MAY BE MADE WITHOUT REGISTRATION UNDER THE 1933 ACT OR THE PURCHASER PROVIDES THE COMPANY WITH REASONABLE ASSURANCES THAT THE SECURITIES CAN BE SOLD PURSUANT TO RULE 144 WITHOUT ANY RESTRICTION AS TO THE NUMBER OF SECURITIES ACQUIRED AS OF A PARTICULAR DATE THAT CAN THEN BE IMMEDIATELY SOLD, THE COMPANY SHALL PERMIT THE TRANSFER, AND, IN THE CASE OF THE CONVERSION SHARES AND THE WARRANT SHARES, PROMPTLY INSTRUCT ITS TRANSFER AGENT TO ISSUE ONE OR MORE CERTIFICATES IN SUCH NAME AND IN SUCH DENOMINATIONS AS SPECIFIED BY THE   16   Purchaser and without any restrictive legend.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Purchaser by vitiating the intent and purpose of the transaction contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 4.18 will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 4.18, that the Purchaser shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.   5.              CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.   The obligation of the Company to issue and sell the Note and the Warrant to the Purchaser at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing the Purchaser with prior written notice thereof:   5.1                               EXECUTION. THE PURCHASER SHALL HAVE EXECUTED EACH OF THE TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY AND DELIVERED THE SAME TO THE COMPANY.   5.2                               PAYMENT. THE PURCHASER SHALL HAVE DELIVERED TO THE COMPANY THE PURCHASE PRICE (LESS THE AMOUNTS WITHHELD PURSUANT TO SECTION 4.16) BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS PURSUANT TO THE WIRE INSTRUCTIONS PROVIDED BY THE COMPANY.   5.3                               REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND WARRANTIES OF THE PURCHASER SHALL BE TRUE AND CORRECT AS OF THE DATE WHEN MADE AND AS OF THE CLOSING DATE AS THOUGH MADE AT THAT TIME (EXCEPT FOR REPRESENTATIONS AND WARRANTIES THAT SPEAK AS OF A SPECIFIC DATE, WHICH SHALL BE TRUE AND CORRECT AS OF SUCH DATE), AND THE PURCHASER SHALL HAVE PERFORMED, SATISFIED AND COMPLIED WITH THE COVENANTS, AGREEMENTS AND CONDITIONS REQUIRED BY THE TRANSACTION DOCUMENTS TO BE PERFORMED, SATISFIED OR COMPLIED WITH BY THE PURCHASER AT OR PRIOR TO THE CLOSING DATE.   6.              CONDITIONS TO THE PURCHASER’S OBLIGATION TO PURCHASE.   The obligation of the Purchaser hereunder to purchase the Note and the Warrant from the Company at the Closing is subject to the satisfaction, at or before the conditions are for the Purchaser’s sole benefit and may be waived by the Purchaser at any time in its sole discretion by providing the Company with prior written notice thereof:   6.1                               EXECUTION. THE COMPANY SHALL HAVE EXECUTED EACH OF THE TRANSACTION DOCUMENTS AND DELIVERED THE SAME TO THE PURCHASER.   6.2                               EXCHANGE LISTING. THE COMMON STOCK (X) SHALL BE DESIGNATED FOR QUOTATION OR LISTED ON THE PRINCIPAL MARKET AND (Y) SHALL NOT HAVE BEEN SUSPENDED BY THE SEC OR THE PRINCIPAL MARKET FROM TRADING ON THE PRINCIPAL MARKET NOR SHALL SUSPENSION BY THE SEC OR THE PRINCIPAL MARKET HAVE BEEN THREATENED EITHER (A) IN WRITING BY THE SEC OR THE PRINCIPAL MARKET   17   or (B) by falling below the minimum listing maintenance requirements of the Principal Market; and the Conversion Shares and the Warrant Shares issuable upon conversion or exercise of the Notes and the related Warrants, as the case may be, shall be listed upon the Principal Market.   6.3                               REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY SHALL BE TRUE AND CORRECT AS OF WHICH SHALL BE TRUE AND CORRECT AS OF SUCH DATE) AND THE COMPANY SHALL HAVE WITH BY THE COMPANY AT OR PRIOR TO THE CLOSING DATE.  THE PURCHASER SHALL HAVE RECEIVED A CERTIFICATE, EXECUTED BY EITHER THE CHIEF EXECUTIVE OFFICER OR THE CHIEF FINANCIAL OFFICER OF THE COMPANY, DATED AS OF THE CLOSING DATE, TO THE FOREGOING EFFECT AND AS TO SUCH OTHER MATTERS AS MAY BE REASONABLY REQUESTED BY THE PURCHASER.   6.4                               LEGAL OPINION. THE PURCHASER SHALL HAVE RECEIVED A LEGAL OPINION, DATED AS OF THE CLOSING DATE, IN FORM, SCOPE AND SUBSTANCE REASONABLY SATISFACTORY TO THE PURCHASER AND IN SUBSTANTIALLY THE FORM OF EXHIBIT F ATTACHED HERETO.   6.5                               DELIVERY OF SECURITIES. THE COMPANY SHALL HAVE EXECUTED AND DELIVERED TO THE PURCHASER THE NOTE AND THE WARRANT (IN SUCH DENOMINATIONS AS SUCH BUYER SHALL REQUEST) FOR THE NOTE AND THE WARRANT BEING PURCHASED BY THE PURCHASER AT THE CLOSING.   6.6                               BOARD RESOLUTIONS. THE BOARD OF DIRECTORS OF THE COMPANY SHALL HAVE ADOPTED RESOLUTIONS CONSISTENT WITH SECTION 2.4 ABOVE AND IN A FORM REASONABLY ACCEPTABLE TO THE PURCHASER (THE “RESOLUTIONS”).   6.7                               RESERVATION OF SHARES. AS OF THE CLOSING DATE, THE COMPANY SHALL HAVE RESERVED OUT OF ITS AUTHORIZED AND UNISSUED COMMON STOCK, SOLELY FOR THE PURPOSE OF EFFECTING THE CONVERSION OF THE NOTE AND THE EXERCISE OF THE WARRANT, AT LEAST THE NUMBER OF SHARES OF COMMON STOCK AS SET FORTH IN SECTION 4.11 HEREOF.   6.8                               TRANSFER AGENT INSTRUCTIONS. THE IRREVOCABLE TRANSFER AGENT INSTRUCTIONS SHALL HAVE BEEN DELIVERED TO AND ACKNOWLEDGED IN WRITING BY THE COMPANY’S TRANSFER AGENT AND THE COMPANY SHALL DELIVER A COPY THEREOF TO THE PURCHASER.   6.9                               GOOD STANDING CERTIFICATES. THE COMPANY SHALL HAVE DELIVERED TO THE PURCHASER A CERTIFICATE EVIDENCING THE INCORPORATION AND GOOD STANDING OF THE COMPANY AND EACH SUBSIDIARY IN SUCH ENTITY’S STATE OF INCORPORATION OR ORGANIZATION ISSUED BY THE SECRETARY OF STATE OF SUCH STATE OF INCORPORATION OR ORGANIZATION AS OF THE CLOSING DATE.   6.10                        SECRETARY’S CERTIFICATE. THE COMPANY SHALL HAVE DELIVERED TO THE PURCHASER A SECRETARY’S CERTIFICATE, DATED AS OF THE CLOSING DATE, CERTIFYING AS TO (A) THE RESOLUTIONS, (B) THE CHARTER, CERTIFIED AS OF THE CLOSING DATE, BY THE SECRETARY OF STATE OF THE STATE OF DELAWARE AND (C) THE BYLAWS, EACH AS IN EFFECT AT THE CLOSING.   18   6.11                        FILINGS. THE COMPANY SHALL HAVE MADE ALL FILINGS UNDER ALL APPLICABLE FEDERAL AND STATE SECURITIES LAWS NECESSARY TO CONSUMMATE THE ISSUANCE OF THE SECURITIES PURSUANT TO THIS AGREEMENT IN COMPLIANCE WITH SUCH LAWS.   6.12                        SECURITY AGREEMENT. THE COMPANY SHALL HAVE DELIVERED TO THE PURCHASER AN EXECUTED COPY OF THE SECURITY AGREEMENT.   6.13                        OTHER TRANSACTION DOCUMENTS. THE COMPANY SHALL HAVE DELIVERED TO THE PURCHASER SUCH OTHER DOCUMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AS THE PURCHASER OR ITS COUNSEL MAY REASONABLY REQUEST.   7.              COVENANTS OF THE COMPANY AND THE PURCHASER REGARDING INDEMNIFICATION.   7.1                               COMPANY INDEMNIFICATION.  THE COMPANY AGREES TO INDEMNIFY, HOLD HARMLESS, REIMBURSE AND DEFEND THE PURCHASER, EACH OF THE PURCHASER’S OFFICERS, DIRECTORS, AGENTS, AFFILIATES, CONTROL PERSONS, AND PRINCIPAL SHAREHOLDERS, AGAINST ANY CLAIM, COST, EXPENSE, LIABILITY, OBLIGATION, LOSS OR DAMAGE (INCLUDING REASONABLE LEGAL FEES) OF ANY NATURE, INCURRED BY OR IMPOSED UPON THE THE PURCHASER WHICH RESULTS, ARISES OUT OF OR IS BASED UPON THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AGREEMENT INCLUDING BUT NOT LIMITED TO (I) ANY MISREPRESENTATION BY COMPANY OR BREACH OF ANY WARRANTY BY COMPANY IN THIS AGREEMENT OR IN ANY EXHIBITS OR SCHEDULES ATTACHED HERETO OR ANY TRANSACTION DOCUMENT, OR (II) ANY BREACH OR DEFAULT IN PERFORMANCE BY COMPANY OF ANY COVENANT OR UNDERTAKING TO BE PERFORMED BY COMPANY HEREUNDER, OR ANY OTHER AGREEMENT ENTERED INTO BY THE COMPANY AND THE PURCHASER RELATING HERETO.   7.2                               PURCHASER’S INDEMNIFICATION.  THE PURCHASER AGREES TO INDEMNIFY, HOLD HARMLESS, REIMBURSE AND DEFEND THE COMPANY AND EACH OF THE COMPANY’S OFFICERS, DIRECTORS, AGENTS, AFFILIATES, CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS, AT ALL TIMES AGAINST ANY CLAIM, COST, EXPENSE, LIABILITY, OBLIGATION, LOSS OR DAMAGE (INCLUDING REASONABLE LEGAL FEES) OF ANY NATURE, INCURRED BY OR IMPOSED UPON THE COMPANY WHICH RESULTS, ARISES OUT OF OR IS BASED UPON ANY BREACH OF THE REPRESENTATIONS OF THE PURCHASER CONTAINED IN SECTION 3 OF THIS AGREEMENT.   7.3                               PROCEDURES. PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED PARTY PURSUANT TO THE PROVISIONS OF SECTION 7.1 OR 7.2 OF NOTICE OF THE COMMENCEMENT OF ANY ACTION INVOLVING THE SUBJECT MATTER OF THE FOREGOING INDEMNITY PROVISIONS SUCH INDEMNIFIED PARTY WILL, IF A CLAIM THEREOF IS TO BE MADE AGAINST THE INDEMNIFYING PARTY PURSUANT TO THE PROVISIONS OF SECTION 7.1 OR 7.2, PROMPTLY NOTIFY THE INDEMNIFYING PARTY OF THE COMMENCEMENT THEREOF; BUT THE OMISSION TO SO NOTIFY THE INDEMNIFYING PARTY WILL NOT RELIEVE IT FROM ANY LIABILITY WHICH IT MAY HAVE TO ANY INDEMNIFIED PARTY OTHERWISE UNDER THIS SECTION EXCEPT TO THE EXTENT THE DEFENSE OF THE CLAIM IS PREJUDICED.  IN CASE SUCH ACTION IS BROUGHT AGAINST ANY INDEMNIFIED PARTY AND IT NOTIFIES THE INDEMNIFYING PARTY OF THE COMMENCEMENT THEREOF, THE INDEMNIFYING PARTY SHALL HAVE THE RIGHT TO PARTICIPATE IN, AND, TO THE EXTENT THAT IT MAY WISH, JOINTLY WITH ANY OTHER INDEMNIFYING PARTY SIMILARLY NOTIFIED, TO ASSUME THE DEFENSE THEREOF, WITH COUNSEL REASONABLY SATISFACTORY TO SUCH INDEMNIFIED PARTY, PROVIDED, HOWEVER, IF COUNSEL FOR THE INDEMNIFYING PARTY CONCLUDES THAT A SINGLE COUNSEL CANNOT UNDER APPLICABLE LEGAL AND ETHICAL CONSIDERATIONS, REPRESENT BOTH THE INDEMNIFYING PARTY AND THE INDEMNIFIED PARTY, THE INDEMNIFIED PARTY OR PARTIES HAVE THE RIGHT TO   19   select separate counsel to participate in the defense of such action on behalf of such indemnified party or parties; provided that there shall be no more than one such separate counsel.  After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party pursuant to the provisions of said Section 7.1 or 7.2 for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, unless (i) the indemnified party shall have employed counsel in accordance with the provisions of the preceding sentence, (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after the notice of the commencement of the action or (iii) the indemnifying party has, in its sole discretion, authorized the employment of counsel for the indemnified party at the expense of the indemnifying party.   8.              MISCELLANEOUS.   8.1                               GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  ANY ACTION BROUGHT BY EITHER PARTY AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK.  BOTH PARTIES AND THE INDIVIDUAL SIGNING THIS AGREEMENT ON BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS.  THE PREVAILING PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ITS REASONABLE ATTORNEYS’ FEES AND COSTS.  IN THE EVENT THAT ANY PROVISION OF THIS NOTE IS INVALID OR UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED MODIFIED TO CONFORM WITH SUCH STATUTE OR RULE OF LAW.  ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY OR UNENFORCEABILITY OF ANY OTHER PROVISION OF THIS NOTE. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY OTHER AGREEMENT DELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED INOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED MODIFIED TO CONFORM WITH SUCH STATUTE OR RULE OF LAW.  ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF ANY AGREEMENT.   8.2                               SURVIVAL. THE REPRESENTATIONS, WARRANTIES, INDEMNITIES, AGREEMENTS, COVENANTS AND OTHER STATEMENTS OF THE COMPANY MADE HEREIN SHALL SURVIVE EXECUTION OF THIS AGREEMENT AND DELIVERY OF THE NOTE AND WARRANT FOR A PERIOD OF TWO YEARS. ALL STATEMENTS AS TO FACTUAL MATTERS CONTAINED IN ANY CERTIFICATE OR OTHER INSTRUMENT DELIVERED BY OR ON BEHALF OF THE COMPANY PURSUANT HERETO IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE DEEMED TO BE REPRESENTATIONS AND WARRANTIES BY THE COMPANY HEREUNDER SOLELY AS OF THE DATE OF SUCH CERTIFICATE OR INSTRUMENT.   8.3                               SUCCESSORS AND ASSIGNS.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE PROVISIONS HEREOF SHALL INURE TO THE BENEFIT OF, AND BE BINDING UPON, THE SUCCESSORS, ASSIGNS, HEIRS, EXECUTORS AND ADMINISTRATORS OF THE PARTIES HERETO AND SHALL INURE TO THE BENEFIT OF AND BE ENFORCEABLE BY EACH PERSON WHO SHALL BE A HOLDER OF THE SECURITIES FROM TIME TO TIME.  THE   20   Purchaser may assign and/or grant participations (in whole or in part) in this Agreement and the other Transaction Documents.   8.4                               ENTIRE AGREEMENT.  THIS AGREEMENT, THE EXHIBITS AND SCHEDULES HERETO, THE OTHER TRANSACTION DOCUMENTS AND THE OTHER DOCUMENTS DELIVERED PURSUANT HERETO CONSTITUTE THE FULL AND ENTIRE UNDERSTANDING AND AGREEMENT BETWEEN THE PARTIES WITH REGARD TO THE SUBJECTS HEREOF, INCLUDING, BUT NOT LIMITED TO, THE PURCHASE AND SALE OF THE NOTE AND WARRANT AND THE SUBSEQUENT ISSUANCE OF THE CONVERSION SHARES AND THE WARRANT SHARES.  NO PARTY SHALL BE LIABLE OR BOUND TO ANY OTHER IN ANY MANNER BY ANY REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS EXCEPT AS SPECIFICALLY SET FORTH HEREIN AND THEREIN.  THE PURCHASER SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY TO THE COMPANY OTHER THAN AS EXPRESSLY MADE BY THE PURCHASER IN SECTION 3 HEREOF.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AND NOTWITHSTANDING ANY OTHERWISE EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY THE PURCHASER IN SECTION 3 HEREOF, THE PURCHASER MAKES NO REPRESENTATION OR WARRANTY TO THE COMPANY WITH RESPECT TO THE TIMING OR THE MANNER IN WHICH THE COMPANY’S COMMON STOCK WILL BE SOLD.   8.5                               SEVERABILITY.  IN CASE ANY PROVISION OF THE AGREEMENT SHALL BE INVALID, ILLEGAL OR UNENFORCEABLE, THE VALIDITY, LEGALITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS SHALL NOT IN ANY WAY BE AFFECTED OR IMPAIRED THEREBY.   8.6                               AMENDMENT AND WAIVER.   (A)                                  THIS AGREEMENT MAY BE AMENDED OR MODIFIED ONLY UPON THE WRITTEN CONSENT OF THE COMPANY AND THE PURCHASER.   (B)                                  THE OBLIGATIONS OF THE COMPANY AND THE RIGHTS OF THE PURCHASER UNDER THIS AGREEMENT MAY BE WAIVED ONLY WITH THE WRITTEN CONSENT OF THE PURCHASER.   8.7                               DELAYS OR OMISSIONS.  IT IS AGREED THAT NO DELAY OR OMISSION TO EXERCISE ANY RIGHT, POWER OR REMEDY ACCRUING TO ANY PARTY, UPON ANY BREACH, DEFAULT OR NON-COMPLIANCE BY ANOTHER PARTY UNDER THIS AGREEMENT OR THE TRANSACTION DOCUMENTS, SHALL IMPAIR ANY SUCH RIGHT, POWER OR REMEDY, NOR SHALL IT BE CONSTRUED TO BE A WAIVER OF ANY SUCH BREACH, DEFAULT OR NONCOMPLIANCE, OR ANY ACQUIESCENCE THEREIN, OR OF OR IN ANY SIMILAR BREACH, DEFAULT OR NONCOMPLIANCE THEREAFTER OCCURRING.  ALL REMEDIES, EITHER UNDER THIS AGREEMENT, THE NOTE, THE WARRANT OR THE OTHER TRANSACTION DOCUMENTS, BY LAW OR OTHERWISE AFFORDED TO ANY PARTY, SHALL BE CUMULATIVE AND NOT ALTERNATIVE.   8.8                               NOTICES.  ALL NOTICES REQUIRED OR PERMITTED HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED EFFECTIVELY GIVEN: (A) UPON PERSONAL DELIVERY TO THE PARTY TO BE NOTIFIED, (B) WHEN SENT BY CONFIRMED FACSIMILE IF SENT DURING NORMAL BUSINESS HOURS OF THE RECIPIENT, IF NOT, THEN ON THE NEXT BUSINESS DAY, (C) FIVE DAYS AFTER HAVING BEEN SENT BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, OR (D) ONE DAY AFTER DEPOSIT WITH A NATIONALLY RECOGNIZED OVERNIGHT COURIER, SPECIFYING NEXT DAY DELIVERY, WITH WRITTEN VERIFICATION OF RECEIPT.  ALL COMMUNICATIONS SHALL BE SENT TO THE COMPANY AT THE ADDRESS AS SET FORTH ON THE SIGNATURE PAGE HEREOF, WITH A COPY TO MICHELE D. VAILLANCOURT, ESQ., WINTHROP & WEINSTINE, P.A., SUITE 3500, 225 SOUTH SIXTH STREET, MINNEAPOLIS, MN 55402, FACSIMILE NUMBER (612) 604-6800, AND TO THE PURCHASER AT THE ADDRESS SET FORTH ON THE SIGNATURE PAGE HERETO FOR SUCH PURCHASER, WITH A   21   copy in the case of the Purchaser to John Tucker, Esq., 152 West 57th Street, 4th Floor, New York, NY 10019, facsimile number (212) 541-4434, or at such other address as the Company or the Purchaser may designate by ten days advance written notice to the other parties hereto.   8.9                               TITLES AND SUBTITLES.  THE TITLES OF THE SECTIONS AND SUBSECTIONS OF THE AGREEMENT ARE FOR CONVENIENCE OF REFERENCE ONLY AND ARE NOT TO BE CONSIDERED IN CONSTRUING THIS AGREEMENT.   8.10                        FACSIMILE SIGNATURES; COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED BY FACSIMILE SIGNATURES AND IN ANY NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL BE AN ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE INSTRUMENT.   8.11                        BROKER’S FEES.  EXCEPT AS DESCRIBED IN SCHEDULE 8.11, EACH PARTY HERETO REPRESENTS AND WARRANTS THAT, EXCEPT AS EACH PARTY MAY HAVE NOTIFIED THE OTHER IN WRITING ON OR PRIOR TO THE DATE HEREOF, NO AGENT, BROKER, INVESTMENT BANKER, PERSON OR FIRM ACTING ON BEHALF OF OR UNDER THE AUTHORITY OF SUCH PARTY HERETO IS OR WILL BE ENTITLED TO ANY BROKER’S OR FINDER’S FEE OR ANY OTHER COMMISSION DIRECTLY OR INDIRECTLY IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREIN.  EACH PARTY HERETO FURTHER AGREES TO INDEMNIFY EACH OTHER PARTY FOR ANY CLAIMS, LOSSES OR EXPENSES INCURRED BY SUCH OTHER PARTY AS A RESULT OF THE REPRESENTATION IN THIS SECTION 8.11 BEING UNTRUE.   8.12                        CONSTRUCTION.  EACH PARTY ACKNOWLEDGES THAT ITS LEGAL COUNSEL PARTICIPATED IN THE PREPARATION OF THIS AGREEMENT AND, THEREFORE, STIPULATES THAT THE RULE OF CONSTRUCTION THAT AMBIGUITIES ARE TO BE RESOLVED AGAINST THE DRAFTING PARTY SHALL NOT BE APPLIED IN THE INTERPRETATION OF THIS AGREEMENT TO FAVOR ANY PARTY AGAINST THE OTHER.   IN WITNESS WHEREOF, the parties hereto have executed this Securities Purchase Agreementas of the date set forth in the first paragraph hereof.     COMPANY:   PURCHASER:             DIGITAL ANGEL CORPORATION   LAURUS MASTER FUND, LTD.             By:     By:     Name:   Name:   Title:   Address:   Address: 490 Villaume Ave. South St. Paul, MN  55075   c/o Ironshore Corporate Services Ltd. P.O. Box 1234 G.T., Queensgate House, South Church Street Grand Cayman, Cayman Islands     22

Title: [US-IN] Paypal attached my email to another account and is now saying I owe $367. Question:Hi, I received this email today from Paypal: &gt;Your PayPal account registered to [email protected] appears to be linked to another PayPal account registered to [email protected]. This other account currently has a negative balance of -$366.28. Before we can remove the limitation from your accounts, you first need to resolve the negative balance on any associated account(s). &gt;These accounts appear to be linked because they have some key details in common or they appear very similar. For example: &gt; * Sharing the same personal or business details (email addresses, phone, tax ID) &gt; * Appearing to be the same business (same name, using the same web address or eBayseller ID) &gt; * Linking to the same bank account, credit card, or other financial account. &gt; * Appearing to use the same computer when accessing accounts. &gt; To learn the specific details these accounts share, please call us at the number listed below. &gt; You may choose to complete a payment in one of the following ways: &gt; * Call us at the phone number provided below and complete a payment over the phone or provide authorization to transfer funds. &gt; * Send a check or money order to the following address (please indicate the associated email address in the memo): &gt;PayPal Accounting &gt;PO Box 45950 &gt;Omaha, NE 68145-0950 &gt;If you believe that there was an error and want to appeal our decision, please call 1-866-648-5870. Please call within 14 days, if we don't hear from you we'll use funds from any linked account to pay for any negative balance you may have. &gt;For more information on reasons why we limit access to accounts, please refer to the 'Closing Accounts and Limiting Account Access' section of our User Agreement. &gt;You can contact our Customer Service at 1-866-648-5870 for further assistance. &gt;Thanks, &gt;PayPal &gt;Please do not reply to this email. This mailbox is not monitored and you will not receive a response. For assistance, log in to your PayPal account and click the Help link in the top right corner of any PayPal page. This is NOT my account at all. I thought this email was fishy, so I went to Paypal's website. Lo and behold, I was not allowed to log in to my account. I grabbed a phone number off of their website since I didn't trust the one in the email. When I called them up, I was bounced around to a few different departments, before I finally reached collections. Here I was told that yes, the email was legitimate, yes I would be billed, and yes, they would try billing my bank account or send me to collections. I pestered them to find out how I got connected to this email and finally I was told that it was because our mailing address was the same. Normally, this would be pretty good evidence that it was my address... except my address is a small college. Our campus has all mail sent to the mailroom. I've been using this address since I'm almost always here. I told the agent to Google it for proof. Now I don't know what to do. This was not my account and I would be happy to prove it if they would let me know. How can I get this charge removed from my account? I want to avoid a chargeback. How would I also avoid collections and having this (probaby) ruin my credit history? Answer #1: Contest the charge with your bank, otherwise you're not seeing that money again. PayPal may try to sue or put the money through collections, but you have a pretty valid defense as to why the debt is not valid.

Name: Decision No 8/74 of the EEC-FINLAND Joint Committee supplementing and amending Protocol No 3 concerning the definition of the concept of "originating products" and methods of administrative cooperation Type: Decision Subject Matter: nan Date Published: 1974-08-13 Avis juridique important|21974D0813(13)Decision No 8/74 of the EEC-FINLAND Joint Committee supplementing and amending Protocol No 3 concerning the definition of the concept of "originating products" and methods of administrative cooperation Official Journal L 224 , 13/08/1974 P. 0032REGULATION (EEC) No 2132/74 OF THE COUNCIL of 6 August 1974 on the application of Decision No 8/74 of the EEC-Finland Joint Committee supplementing and amending Protocol No 3 concerning the definition of the concept of "originating products" and methods of administrative cooperation and Decision No 9/74 of the EEC-Finland Joint Committee establishing a simplified procedure for the issue of EUR.1 movement certificates THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Article 113 thereof; Having regard to the proposal from the Commission; Whereas an Agreement (1) between the European Economic Community and the Republic of Finland was signed on 5 October 1973 and entered into force on 1 January 1974; Whereas pursuant to Articles 16 and 28 of Protocol No 3 concerning the definition of the concept of "originating products" and methods of administrative cooperation, which is an integral part of that Agreement, the Joint Committee adopted Decision No 8/74 supplementing and amending the said Protocol and Decision No 9/74 establishing a simplified procedure for the issue of EUR.1 movement certificates. Whereas it is necessary to apply these Decisions in the Community, HAS ADOPTED THIS REGULATION: Article 1 For the purpose of implementing the Agreement between the European Economic Community and the Republic of Finland, Decisions Nos 8/74 and 9/74 of the Joint Committee, annexed to this Regulation, shall apply in the Community. Article 2 This Regulation shall enter into force on 1 September 1974. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 6 August 1974. For the Council The President B. DESTREMAU (1)OJ No L 328, 28.11.1973, p. 2. ANNEX DECISION No 8/74 OF THE JOINT COMMITTEE supplementing and amending Protocol No 3 concerning the definition of the concept of "originating products" and methods of administrative cooperation THE JOINT COMMITTEE, Having regard to the Agreement between the European Economic Community and the Republic of Finland signed on 5 October 1973 in Brussels; Having regard to Protocol No 3 concerning the definition of the concept of "originating products" and methods of administrative cooperation, and in particular Article 28 thereof; Whereas Decision No 3/74 of the Joint Committee supplemented and amended certain provisions of Protocol No 3, and in particular Article 8 thereof; Whereas it is necessary to lay down the procedure for the issue of the movement certificate when it refers to accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle; HAS DECIDED AS FOLLOWS: Sole Article 1.The following new paragraph shall be added to Article 8 of Protocol No 3: "4. Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle which are part of the normal equipment and included in the price thereof or are not separately invoiced are regarded as one with the piece of equipment, machine, apparatus or vehicle in question." 2.The former paragraph 4 of Article 8 of Protocol No 3 shall be re-numbered paragraph 5. 3.In the sixth line of the first paragraph of Article 16 of Protocol No 3, the reference "Article 8 (4)" is replaced by the reference "Article 8 (5)". 4.In the first and second lines of Note 9 referring to Articles 16 and 22 of Annex I to Protocol No 3, the reference "Article 8 (2) or (4)" is replaced by the reference "Article 8 (2) or (5)". Done at Brussels, 19 June 1974. For the Joint Committee The President P. TALVITIE The Secretaries S. SUNDBACK J. von GRUMME DECISION No 9/74 OF THE JOINT COMMITTEE establishing a simplified procedure for the issue of EUR.1 movement certificates THE JOINT COMMITTEE, Having regard to the Agreement between the European Economic Community and the Republic of Finland, signed in Brussels on 5 October 1973; Having regard to Protocol No 3 concerning the definition of the concept of "originating products" and methods of administrative cooperation, and in particular Articles 16 and 28 thereof; Whereas the formalities relating to the issue of EUR.1 movement certificates may be considerably eased in the cases of exporters making frequent shipments ; whereas the conditions and detailed rules for easing the formalities must be laid down, HAS DECIDED AS FOLLOWS: Article 1 By way of derogation from Article 8 (1), (2) and (5), and Articles 9 and 10 of Protocol No 3, a simplified procedure for the issue of EUR.1 movement certificates is hereby established in accordance with the following provisions. Article 2 The Customs authorities in the exporting State may authorize any exporter, hereinafter referred to as "approved exporter", who satisfies the conditions set out in Article 3 and who intends to carry out transactions for which EUR.1 movement certificates may be issued not to submit to the Customs office in the exporting State at the time of export either the goods or the application for an EUR.1 movement certificate relating to those goods, for the purpose of obtaining an EUR.1 movement certificate under the conditions laid down in Article 8 of Protocol No 3. Article 3 1. The authorization referred to in Article 2 shall be granted only to exporters making frequent shipments and who offer, to the satisfaction of the Customs authorities, all guarantees necessary to verify the originating status of the products. 2. The Customs authorities shall refuse such authorization to exporters who do not offer all the guarantees which they consider necessary. 3. The Customs authorities may withdraw the authorization at any time. They must do so where the approved exporter no longer satisfies the conditions or no longer offers the guarantees referred to in the preceding paragraphs. Article 4 1. The authorization shall stipulate, at the choice of the Customs authorities, that box No 11, "Customs Endorsement", of the EUR.1 movement certificate must (a) either be endorsed beforehand with the stamp of the competent Customs office of the exporting State and the handwritten or non-handwritten signature of an official of that office, or (b) be endorsed by the approved exporter with a special stamp which has been approved by the Customs authorities of the exporting State and corresponds to the specimen given in the Annex ; this stamp may be preprinted on the forms. 2. In the cases referred to in paragraph 1 (a), one of the following phrases shall be entered in box No 7, "Remarks", of the EUR.1 movement certificate : "Simplified procedure", "Forenklet procedure", "Vereinfachtes Verfahren", "Procà ©dure simplifià ©e", "Procedura semplificata", "Vereenvoudigde procedure", "Fà ¶renklad procedur", "Yksinkertaistettu menettely". 3. Where the simplified procedure applies, the Customs authorities of the exporting State may prescribe the use of EUR.1 movement certificates bearing a distinctive sign by which they may be identified. Article 5 1. In the authorization the Customs authorities shall specify in particular: (a) the conditions under which the applications for EUR.1 movement certificates are made, (b) the conditions under which these applications and the EUR.1 movement certificates used as the basis for the issue of other EUR.1 movement certificates under the conditions laid down in Article 8 (2) of Protocol No 3 are kept for at least two years, (c) in the cases referred to in Article 4 (1) (b), the Customs authority competent to carry out the subsequent verification referred to in Article 18 of Decision No 4/74 of the Joint Committee. 2. The approved exporter may be required to inform the Customs authorities, in accordance with the rules which they lay down, of goods to be dispatched by him, so that the competent Customs office may make any verification it thinks necessary before the departure of the goods. Article 6 Where, under the simplified procedure, Article 19 of Decision No 4/74 of the Joint Committee is applied, the expressions laid down in that Article shall be authenticated, as appropriate, either by the stamp used by the competent Customs office of the exporting State, or by the special stamp referred to in Article 4 (1) (b), which may be preprinted on the form. Article 7 1. In the cases referred to in Article 4 (1), box No 11, "Customs Endorsement", of the EUR.1 movement certificate shall be completed if necessary by the approved exporter. 2. The approved exporter shall if necessary indicate in box No 13, "Request for Verification", of the EUR.1 movement certificate the name and address of the Customs authority competent to verify the certificate. Article 8 The Customs authorities in the exporting State may carry out any check on the approved exporter which they consider necessary. The approved exporter must allow this to be done. Article 9 The Customs authorities in the exporting State may declare certain categories of goods ineligible for the special treatment provided for in Article 1. Article 10 This Decision shall not prejudice application of the rules of the Community, the Member States and Finland on customs formalities and the use of customs documents. Article 11 This Decision shall apply mutatis mutandis where movement certificates of the types referred to in Article 9 (3) of Decision No 3/73 of the Joint Committee are used. Done at Brussels, 8 July 1974. For the Joint Committee The Chairman R. de KERGORLAY The Secretaries S. SUNDBACK J. von GRUMME ANNEX >PIC FILE= "T0005172">

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 4, 2017 UNIFIRST CORPORATION (Exact Name of Registrant as Specified in Charter) Massachusetts 001-08504 04-2103460 (State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.) 68 Jonspin Road, Wilmington, Massachusetts 01887 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (978) 658-8888 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 . Results of Operations and Financial Condition. On January 4, 2017, UniFirst Corporation (the “Company”) issued a press release ("Press Release") announcing financial results for the first quarter of fiscal 2017, which ended on November 26, 2016 . A copy of the Press Release is attached as Exhibit 99 to this Current Report on Form 8-K and is incorporated herein by reference. The information in this Item 2.02, including the exhibit attached hereto, shall not be deemed “filed” for any purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing. Item 9.01 . Financial Statements and Exhibits. (d) Exhibits EXHIBIT NO. DESCRIPTION 99 Press release of the Company dated January 4, 2017 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. UNIFIRST CORPORATION Date: January 4, 2017 By: /s/ Ronald D. Croatti Name: Ronald D. Croatti Title: Chairman of the Board, Chief Executive Officer and President By: /s/ Steven S. Sintros Name: Steven S. Sintros Title: Senior Vice President and Chief Financial Officer EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 99 Press release of the Company dated January 4, 2017

Exhibit 10.1 LOAN AGREEMENT Senior Subordinated Promissory Note Series I $1,400,000.00 MADE BY AND BETWEEN STAR BUFFET, INC., a Delaware corporation AND ROBERT E. WHEATON & SUZANNE H. WHEATON, LOAN AGREEMENT BY THIS AGREEMENT made and entered into as of the 15th day of June, 2007, STAR BUFFET, INC., a Delaware corporation, whose address is 1312 N. Scottsdale Road, Scottsdale, Arizona 85257 (hereinafter severally and collectively called “Borrower”), and ROBERT E. WHEATON & SUZANNE H. WHEATON, whose address is 4716 East Valley Vista Lane, Paradise Valley, Arizona 85253 (hereinafter called “Lender”), for and in consideration of the recitals and mutual promises contained herein, confirm and agree as follows: SECTION 1.         RECITALS 1.0           Loan.  Borrower has applied to Lender for a term loan in the amount of ONE MILLION FOUR HUNDRED THOUSAND AND NO/100THS DOLLARS ($1,400,000.00), upon the terms, conditions and provisions set forth herein, for the sole purpose of providing working capital for Borrower in the ordinary course of business. SECTION 2.         DEFINITIONS 1.0           Defined Terms.  As used herein, the following capitalized terms shall have the meanings specified below, unless the context otherwise requires. ( )            Adjusted Tangible Net Worth.  Tangible net worth plus subordinated debt, determined in accordance with GAAP, plus the amount of any reductions in tangible net worth for non-cash charges required under Financial Accounting Standard 144 and reserves for notes receivable. ( )            Advance.  Omitted. ( )            Affiliate.  Any person or entity (i) that directly or indirectly controls, or is controlled by, or is under common control with, Borrower; (ii) that directly or indirectly beneficially owns or holds five percent (5%) or more of any class of voting stock of or membership in Borrower; (iii) five percent (5%) or more of the voting stock of or membership in which entity is directly or indirectly beneficially owned or held by Borrower; (iv) that is an officer, director or manager of Borrower; (v) of which another Affiliate is an officer, director or manager; or (vi) who is related by blood, adoption, or marriage to another Affiliate.  The term “control” means the possession, directly or policies of an entity, whether through the ownership of voting securities, by contract, or otherwise. ( )            Business Day.  Any day other than a Saturday, Sunday, public holiday, or other day when commercial banks in Arizona are authorized or required to close. ( )            Capital Expenditures.  For a period, any expenditures of money during such period for the lease, purchase or construction of assets that are capitalized on Borrower’s balance sheet. 1 (a)           Closing.  The satisfaction of all of the conditions precedent set forth in SECTION 5 hereof and the consummation of all of the loan transactions contemplated by this Loan Agreement. ( )            Closing Date.  The date, on or before June 15, 2007, on which the Closing occurs. ( )            Commitment.  As defined in Paragraph 3.1 hereof. ( )            Compliance Certificate. A certification of compliance in the form attached hereto as Exhibit “A.” ( )            CPLTD.  The amount of principal payments on long term debt and the amount of capitalized leases that are to be paid within one year. ( )            Disbursement Account.  Omitted. ( )            EBITDA.  Pretax earnings from continuing operations plus interest expense, depreciation and amortization, impairment of long-lived assets and reserves for notes receivable, computed and calculated in accordance with GAAP calculated on a rolling four (4) quarter basis. ( )            Environmental Law.  Any federal, state or local statute, ordinance, or regulation pertaining to health, industrial hygiene, or the environment, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”); the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, et seq. (“RCRA”); and the Arizona Environmental Quality Act, Title 49, Arizona Revised Statutes, and all rules adopted and guidelines promulgated pursuant to the foregoing. ( )            ERISA.  The Employee Retirement Income Security Act of 1974, as amended and as in effect from time to time. (b)           Event of Default.  As defined in Paragraph 1.0 hereof. ( )            Facility.  Any real property and improvements owned or occupied by Borrower in the conduct of its business.  ( )            Fixed Charge Coverage.  The ratio of (a) EBITDA, less cash taxes and maintenance Capital Expenditures plus rent expense, to (b) CPLTD, plus interest expense plus rent expense calculated on a rolling four (4) quarter basis. ( )            GAAP.  Those generally accepted accounting principles and practices that are recognized as such by the American Institute of Certified Public Accountants acting through its Accounting Principles Board or by the Financial Accounting Standards Board or through other appropriate boards or committees thereof and which are consistently applied for all periods after the date thereof so as to properly reflect the financial condition, and the results of operations and changes in the financial position, of Borrower. 2 ( )            Hazardous Substance:  Includes: ( )                                     those substances included within the definitions of “hazardous substances,” “hazardous materials,” “toxic substances,” or “solid waste” in CERCLA, RCRA, and the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., and in the regulations promulgated pursuant thereto; ( )                                     those substances defined as “hazardous substances” in A.R.S. Section 49-201 and in rules adopted or guidelines promulgated pursuant thereto; ( )                                     those substances listed in the United States Department of Transportation Table (49 CFR 172.101 and amendments thereto) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 302 and amendments thereto); and ( )                                     all other substances, materials and wastes that are, or that become, regulated under, or that are classified as hazardous or toxic under, any Environmental Law. ( )            Indebtedness.  The total outstanding indebtedness owed Lender by Borrower under or in connection with the Loan, including principal and interest accrued but not previously paid. ( )            Lien.  Any lien, mortgage, security interest, tax lien, pledge, encumbrance, conditional sale or title retention arrangement, or any other interest in property designed to secure the payment of any indebtedness or performance of any obligation, whether arising by agreement or under any statute or law, or otherwise. ( )            Loan Documents.  This Agreement, the Note and all other documents now or hereafter executed or delivered in connection with the Loan. (c)           Loan.  As defined in Paragraph 1.0 hereof. ( )            Long Term Debt.  Financing that has a maturity of greater than one year. (y)           Maintenance Capital.  Expenditures defined by GAAP to be capitalized that are necessary to maintain the operations of the existing restaurants. (z)            Material Adverse Effect.  Any event or condition that either (i) would have a material adverse effect upon the validity, performance or enforceability of this Agreement, or any of the other Loan Documents, (ii) is material and adverse to the properties, financial condition, credit or business operations and prospects of Borrower or any Subsidiary, (iii) would impair the ability of Borrower to fulfill its obligations under this Agreement, or any of the other Loan Documents, or (iv) causes an Event of Default or an event or condition that with notice or lapse of time or both, would become an Event of Default. 3 ( )            Termination Date.  Shall mean June 5, 2012; provided, however, upon the request of Borrower, such date may be extended in writing by Lender in its sole and absolute discretion. (d)           Note.  As defined in Paragraph 2.0 hereof. ( )            Obligations.  Any and all of the representations, warranties, covenants and other obligations made or undertaken by Borrower in this Agreement or in any of the other Loan Documents. ( )            PBGC.  The Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. ( )            Permitted Liens.  (i) Liens granted to Lender; (ii) existing Liens approved by Lender and listed on Exhibit “B” hereto, (iii) future Liens approved in writing by Lender in its sole discretion; (iv) Liens for taxes, assessments and other governmental charges that are not past due or delinquent; (v) Liens imposed by law, such as mechanics’ liens, arising in the ordinary course of business and that secure payments not yet due; (vi) Mortgage Liens secured by a Facility where Lender has been notified in writing in advance of such lien being recorded; and (vii) Liens on other assets to the extent that such Liens secure financing for the acquisition of that asset. ( )            Plan.  Each pension, profit sharing, stock bonus, thrift, savings, and employee stock ownership plan established or maintained, or to which contributions have been made, by Borrower or any trade or business which together with Borrower would be treated as a single employer under ERISA. ( )            Primary Lender.  M&I Marshall & Ilsley Bank. ( )            SEC.  The United States Security and Exchange Commission. ( )            Subsidiary.  Any corporation fifty percent (50%) or more of which is owned, directly or indirectly, by Borrower. ( )            Total Funded Debt.  All financings, capitalized lease obligations and outstanding letters of credit. (kk)         Total Funded Debt to EBITDA.  The ratio Total Funded Debt to EBITDA 2.0           Other Terms.  All accounting and financial terms used and not otherwise defined in this Agreement shall have the meanings accorded them under GAAP. SECTION 3.         LOAN 1.0           Loan.  Subject to the conditions herein set forth, Lender agrees to loan to or for the benefit of Borrower, and Borrower agrees to borrow, in the manner and upon the terms and conditions herein expressed, amounts that shall not exceed at any time the Commitment (the “Loan”).  The “Commitment” shall be the principal sum of $1,400,000.00. 4 2.0           Note.  The Loan shall be evidenced by a promissory note of Borrower, executed and delivered simultaneously with the execution of this Agreement, in the amount of the $1,400,000.00 payable to Lender upon the terms and conditions contained therein (the “Note”). 3.0           Advances.  Omitted. 4.0           Readvances.  Omitted. 5.0           Other Disbursements by Lender.  Lender, from time to time in its sole discretion, may make disbursements in payment of interest accrued and payable upon the Loan and any charges and expenses that are the obligation of Borrower under this Agreement or any of the other Loan Documents and any charges or matters necessary to cure any Event of Default, all of which shall be added to and be part of the Indebtedness. 6.0           Repayment.  Borrower, from time to time, may repay the Loan in whole or in part at any time, without penalty, provided that any repayment complies with terms then in effect between borrow and Primary Lender.  Borrower shall immediately repay to Lender, from time to time, an amount equal to any amount by which the outstanding principal balance of the Loan exceeds the Commitment. 7.0           Termination.  The entire outstanding principal balance, all accrued and unpaid interest, and all other sums payable in connection with the Loan shall be due and payable on that date. 8.0           Application of Payments.  So long as no Event of Default exists, all payments shall be applied first to the payment of any costs, fees and other charges incurred in connection with the Loan, next to the payment of any accrued interest and then to the reduction of the principal balance.  Upon the occurrence and during the continuation of any Event of Default, all payments shall be applied by Lender to the Indebtedness and Obligations in such order and manner as Lender shall determine in its sole and absolute discretion.  All payments shall be applied to the Indebtedness and Obligations only when received in immediately available funds. 9.0           Prior Performance.  Although Lender shall have no obligation to make any Advance unless and until all of the requirements and conditions precedent set forth herein have been satisfied, Lender, at its sole discretion, may make any Advance prior to that time without waiving or releasing any of the requirements or conditions precedent of this Agreement; Borrower shall continue to be strictly obligated to perform, and shall be subject to, all such requirements and conditions notwithstanding any such disbursement. 10.0         Right to Advance.  Omitted. SECTION 4.         LOAN FEE 1.0           Loan Fee.  Omitted. 2.0           Commitment Fee.  Omitted. 5 SECTION 5.         CONDITIONS PRECEDENT FOR CLOSING The obligation of Lender to make the Loan, and to make any Advance at Closing, is subject to the following express conditions precedent, all of which shall have been satisfied prior to Closing: 1.0           Documents Required.  Borrower shall have executed (or obtained the execution or issuing of) and delivered to Lender the following documents, all in form satisfactory to Lender: ( )            This Agreement ( )            The Note 2.0           Loan Fee.  Omitted. 3.0           Items Required.  Borrower, at its expense, shall have obtained and delivered to Lender the following items, all of which shall be in form and content satisfactory to Lender and shall be subject to approval in writing by Lender: ( )            A copy of the articles of incorporation and bylaws of Borrower and each Subsidiary, including all amendment thereto, certified by the secretary of Borrower or each Subsidiary, as appropriate, as being true, complete and correct as of the date of certification. ( )            Certificates of good standing for Borrower and each Subsidiary issued by the Secretary of State of the state of incorporation of that corporation. ( )            Resolutions of Borrower approving the execution, delivery and performance of this Agreement and the other Loan Documents and the transaction contemplated thereby, duly adopted by Borrower’s board of directors and accompanied by a certificate of the Secretary of Borrower stating that such resolutions are true and correct and are in full force and effect. ( )            A signed certificate of the secretary of Borrower which shall certify the names of the officers of Borrower authorized to sign each of the Loan Documents, together with the true signature of each such officer. 4.0           Representative and Warranties True.  All representations and warranties by Borrower shall remain true and correct in all material respects and all agreements that Borrower is to have performed or complied with by the date hereof shall have been performed or complied with. 5.0           No Default.  No Event of Default exists, and no event has occurred and no condition exists that, after notice or lapse of time, or both, would constitute an Event of Default. SECTION 6.         ADDITIONAL CONDITIONS The obligation of Lender to make the Loan shall be subject to the following additional conditions precedent, all of which shall have been satisfied and remain satisfied at the time of each Advance of the Loan: 6 1.2           Prior Conditions.  All of the conditions precedent provided in SECTION 5 hereof shall have been satisfied. 2.0           Request for Advance.  Omitted. 3.0           Representatives and Warranties True.  All representations and date of the requested Advance shall have been performed or complied with. 4.0           No Default.  No Event of Default exists, and no event has occurred SECTION 7.         REPRESENTATIONS AND WARRANTIES Borrower represents and warrants to Lender as follows: 1.0           Recitals True.  The recitals appearing in this Agreement are true and correct. 2.0           Organization and Good Standing.  Borrower and each Subsidiary is a of the state of its incorporation and is qualified to do business and is in good standing in each state in which the nature of its business and property makes such qualification necessary or appropriate. 3.0           Power and Authority.  Borrower and each Subsidiary has full power and authority to own its properties and assets and to carry on its business as now being conducted.  Borrower has full power and authority to execute, deliver and perform this Agreement and the other Loan Documents to which Borrower is a party. 4.0           Authorization.  Borrower is fully authorized and permitted to enter into this Agreement, to execute any and all documentation required herein, to borrow the amounts contemplated herein upon the terms set forth herein, and to perform the terms of this Agreement. 5.0           No Breach or Default as to Borrower.  The execution, delivery and performance by Borrower of this Agreement and the other Loan Documents to which it is a party will not conflict with or result in a default under:  (i) any law, rule or regulation applicable to Borrower, (ii) the organizational documents of Borrower, or (iii) the terms, conditions or provisions of any agreement or instrument under which Borrower is a party or is obligated. 6.0           Enforceable Obligations.  This Agreement and each of the other Loan Documents to which Borrower is a party are valid and binding legal obligations of Borrower and each is enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors’ rights. 7.0           No Liens.  Except for Permitted Liens, all of the properties and assets of Borrower and its Subsidiaries are free and clear of all Liens and other adverse claims of any nature, and such corporations have good and marketable title to such properties and assets. 7 8.0           No Adverse Proceedings.  No actions, suits or proceedings are pending or, to the knowledge of Borrower, threatened against Borrower or any Subsidiary that could result in a Material Adverse Effect.  Neither Borrower nor any Subsidiary is in default with respect to any order, writ, injunction or decree, of any court, governmental department, commission, board, agency or official, which default could result in a Material Adverse Effect.  No actions, suits or proceedings are pending or threatened against Borrower or any Subsidiary other than as set forth in Exhibit ”C.” 9.0           Licenses; Permits; Agreements.  Borrower and its Subsidiaries have obtained, and there remains in full force and effect, all licenses, permits, rights, approvals and agreements necessary or appropriate for the operation of their respective businesses.  Neither Borrower nor any Subsidiary is in default under any material agreement to which it is a party or by which it or any of its properties is bound. 10.0         Compliance with Laws.  Borrower and each of its Subsidiaries are in compliance with all material laws, rules, regulations, orders and decrees that are applicable to Borrower or any Subsidiary, or its or their properties. 11.0         No Violation of Environmental Laws.  To the best of their respective knowledge, neither Borrower nor any Subsidiary, nor any Facility owned by them or any Affiliate thereof, is in violation of any Environmental Law and neither Borrower or any Subsidiary, nor any Facility owned by them or any Affiliate thereof is subject to any existing, pending or, to the best of their respective knowledge, threatened investigation by any federal, state or local governmental authority under or in connection with any Environmental Law.  Borrower has not obtained as the result of the requirements of any Environmental Law, and is not required by any Environmental Law to obtain, any permit or license to construct or use any improvements, fixtures or equipment that are a part of, or are located on, any Facility or to operate any business that is being conducted or intended to be conducted on any Facility.  Borrower has not caused or permitted the Release of, or has any knowledge of the Release or presence of, any Hazardous Substance on any Facility or the migration of any Hazardous Substance from or to any other property adjacent to, or in the vicinity of, any Facility.  Borrower’s prior and present use of each Facility has not resulted in, and its future use of each Facility will not result in, the Release of any Hazardous Substance on the Facility. 12.0         Statements Correct.  All financial statements, profit and loss statements, statements as to ownership and other statements or reports previously or hereafter given to Lender by or on behalf of Borrower and its Subsidiaries are and shall be true, complete and correct in all material respects as of the date thereof.  There has been no change since the latest financial statements of Borrower and its Subsidiaries given to Lender that could have a Material Adverse Effect.  There is no material fact that Borrower has not disclosed to Lender that would have a Material Adverse Effect. 13.0         Tax Returns Filed.  Borrower and its Subsidiaries have properly prepared, executed and filed (unless an extension of time has been granted by the proper authorities) all federal, state and local tax returns required by law and has paid all of its respective current obligations before delinquent, including all federal, state and local taxes and all other payments required under federal, state or local law. 14.0         No Margin Security.  Borrower does not own any “margin security” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System except 8 amounts thereof that do not and will not in the aggregate constitute a substantial part of Borrower’s assets. 15.0         ERISA Compliance.  Borrower is in compliance in all material respects with all applicable provisions of ERISA.  Neither a “reportable event” as defined in ERISA nor a “prohibited transaction” as set forth in ERISA or in the Internal Revenue Code has occurred and is continuing with respect to any Plan.  No notice of intent to terminate a Plan has been filed nor has any Plan been terminated; no circumstances exist that constitute grounds under ERISA entitling PBGC to institute proceedings to terminate, or appoint a trustee to administer, a Plan, nor has the PBGC instituted any such proceedings.  Borrower is not a party to, and has no employees who are covered by, a multi-employer pension or benefit plan.  Borrower has met its minimum funding requirements under ERISA with respect to each Plan and the present value of all vested benefits under each Plan did not exceed the fair market value of all Plan assets allocable to such benefits, as determined on the most recent valuation date of ERISA for calculating the potential liability of Borrower to the PBGC or the Plan under ERISA.  Borrower has not incurred any liability to the PBGC under ERISA. 16.0         Principal Office.  The principal office of Borrower is at Borrower’s address at 1312 North Scottsdale Road, Scottsdale, Arizona 85257.  Borrower maintains its principal books and records at that address. 17.0         Subsidiaries.  Borrower does have Subsidiaries. 18.0         Affirmation.  Each request by Borrower for an Advance shall constitute an affirmation on the part of Borrower that the representations and warranties contained herein are true and correct in all material respects as of the time of such request and that the conditions precedent for that Advance have been satisfied. 19.0         Survival.  All representations and warranties made herein shall survive the execution of this Agreement, all Advances, and the execution and delivery of all other Loan Documents, so long as Lender has any commitment to lend to Borrower hereunder and until the Indebtedness has been fully paid and all of the Obligations have been fully performed. SECTION 8.         AFFIRMATIVE COVENANTS Until the Indebtedness as been fully paid and all of the Obligations have been fully performed: 1.0           No Change in Documents.  Borrower shall, and shall cause each of its Subsidiaries to, maintain its corporate existence with no material amendments or changes in its organizational documents without the prior written approval of the Lender, which consent shall not be unreasonably withheld. 2.0           Licenses, Permits; Agreements.  Borrower shall, and shall cause each of its Subsidiaries, to comply with and maintain in full force and effect all licenses, permits, rights, approvals and agreements necessary or desirable to conduct its business and to comply with its obligations under this Agreement and the other Loan Documents. 9 3.0           Maintain Business.  Borrower shall, and shall cause each of its Subsidiaries, to act prudently and in accordance with customary industry standards in managing and operating its properties, assets and business.  Borrower shall, and shall cause each of its Subsidiaries, to keep all of its properties in good condition and repair (subject to ordinary wear and tear) and shall make all needed and proper repairs and improvements to its properties in order to properly conduct its business. 4.0           Comply With Laws.  Borrower shall comply in all material respects with all applicable laws, including without limitation, all applicable Environmental Laws.  Borrower will not, and will not permit any third party to, use, generate, manufacture, produce, store, or Release on, under or about any Facility, or transfer to or from any Facility, any Hazardous Substance except in compliance with all applicable Environmental Laws. 5.0           Management.  Borrower shall, and shall cause each of its Subsidiaries, to at all times hire and retain executive and management personnel adequate for the proper management, supervision and conduct of its business, operations and properties. 6.0           Maintain Insurance.  Borrower shall at all times maintain insurance with responsible and reputable insurers in such amounts and against such risks as may from time to time be required by Lender, but in all events in such amounts and against such risks, including public liability, property damage and worker’s compensation insurance, as is usually carried by companies engaged in similar business and owning properties in the same general areas in which Borrower operates. 7.0           Loan Payments.  Borrower shall make all payments of interest and principal on the Loan and shall keep and comply with all terms, conditions and provisions of the Loan Documents. 8.0           Pay Obligations.  Borrower shall pay all of its current obligations before they become delinquent, including all federal, state and local taxes, assessments, levies and governmental charges and all other payments required under any federal, state or local law. 9.0           Statements and Reports.  Borrower shall maintain a standard, modern system of accounting that reflects the application of GAAP, consistently applied, and shall furnish to Lender the following: ( )            Omitted. ( )            Omitted. ( )            Omitted. ( )            Omitted. ( )            Omitted. ( )            Omitted. 10 10.0         Records.  Borrower shall maintain, in a safe place, proper and accurate books, ledgers, correspondence and other records relating to its operations and business affairs. 11.0         No Margin Security.  Borrower shall not use any proceeds of the Loan, or any proceeds of any other or future loan from Lender to Borrower, directly or indirectly, to purchase or carry any “margin security” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System or to reduce or retire any indebtedness undertaken for such purposes within the meaning of said Regulation U, and will not use such proceeds in a manner that would cause Borrower to be in violation of Regulation G, T, or X of such Board, nor use such proceeds for any purpose not permitted by Section 7 of the Securities Exchange Act of 1934, as amended, or any of the rules or regulations respecting the extensions of credit promulgated thereunder. 12.0         Further Assurance.  Borrower shall execute and deliver such additional documents and do such other acts as Lender may reasonably require in connection with this Loan. SECTION 9.         NEGATIVE COVENANTS fully performed, without receiving the prior written consent of Lender, Borrower shall not, and shall not permit any Subsidiary to: 1.0           Incur Debt.  Become or remain obligated either directly or as a guarantor or surety for any indebtedness for borrowed money or for any indebtedness incurred in connection with the acquisition of any property, real or personal, tangible or intangible, except: ( )            Indebtedness to Primary Lender; ( )            Indebtedness to Lender; ( )            Indebtedness secured by Permitted Liens; ( )            Current liabilities for taxes and assessments incurred in the ordinary course of business; unsecured trade, utility or non-extraordinary accounts payable arising in the ordinary course of its business; ( )            Real estate debt in connection with the purchase of restaurant properties. 2.0           Negative Pledge.  Create or permit to be created or exist any Lien on any of its property or assets which it now owns or hereafter acquires except Permitted Liens. 3.0           Loans.  Make any loan, advance, extension of credit, or gift to any person or entity except items not to exceed $10,000.00 in the aggregate for Borrower and all Subsidiaries in any fiscal year. 4.0           Investments.  Omitted. 5.0           Dissolution; Management Change.  Dissolve or liquidate, or merge or consolidate with or into any other entity; sell, transfer, lease or otherwise dispose of all or any substantial 11 part of its property, assets or business; or, turn over the management or operation of its property, assets or business to any other person, firm or corporation or make any other material change in its management or operations. 6.0           Fiscal Year.  Change the times of commencement or termination of its fiscal year or other accounting periods; or change its methods of accounting other than to conform to GAAP. 7.0           Guarantees.  Guarantee, directly or indirectly, or otherwise become contingently liable or obligated for, any indebtedness or obligation of any other person or entity except for the endorsement in the ordinary course of business of negotiable instruments for deposit or collection. 8.0           Dividends.  Omitted. 9.0           Acquisitions.  Omitted. 10.0         Nature of Business.  Engage in any line of business materially different from that in which it is presently engaged, or purchase, lease or otherwise acquire assets not related to the operation of its business. 11.0         Capital Expenditures.  Omitted. 12.0         Salaries.  Pay excessive or unreasonable salaries, bonuses, commissions or other compensation; or increase the salary, bonus, commissions or other compensation of any director, officer, or consultant, or any member of their families, by more than 20% in any one fiscal year, either individually or in the aggregate for all such persons. 13.0         Financial Covenants.  For Borrower and its Subsidiaries, on a combined basis, as determined as of end of each fiscal quarter from the financial statements included in Borrower’s Form 10K and Form 10-Qs filed with the SEC, permit: ( )            Adjusted Tangible Net Worth to be less than $17,000,000.00. ( )            The ratio of Total Funded Debt to EBITDA to be greater than 2.75 to 1.0. ( )            The Fixed Charge Coverage to exceed 1.00 to 1.00. All computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with GAAP and shall be certified as true and correct by Borrower. SECTION 10.       WAIVER 1.0           Notice Waivers.  Borrower waives presentment, demand, protest and notices of protest, nonpayment, partial payment and all other notices and formalities except as expressly called for in this Agreement or in the Note.  Borrower consents to and waives notice of: (i) the granting of indulgences or extensions of time of payment, (ii) the taking or releasing of security, and (iii) the addition or release of persons who may be or become primarily or secondarily liable 12 on or with respect to the Indebtedness or any part thereof, and all in such manner and at such time as Lender may deem advisable. 2.0           No Waivers By Lender.  No delay or omission by Lender in exercising any right, power or remedy hereunder, and no indulgence given to Borrower, with respect to any term, condition or provision set forth herein, shall impair any right, power or remedy of Lender under this Agreement, or be construed as a waiver by Lender of, or acquiescence in, any Event of Default.  Likewise, no such delay, omission or indulgence by Lender shall be construed as a variation or waiver of any of the terms, conditions or provisions of this Agreement.  Any actual waiver by Lender of any Event of Default shall not be a waiver of any other prior or subsequent Event of Default or of the same Event of Default after notice to Borrower demanding strict performance. SECTION 11.       DEFAULT 1.0           Events of Default.  The occurrence of any of the following events or conditions shall constitute an “Event of Default” under this Agreement: ( )            Any failure to pay any interest or principal or any other part of the Indebtedness when the same becomes due and payable. (a)           Any failure or neglect to perform or observe any of the terms, provisions, conditions or covenants of this Agreement or any other Loan Document, other than those referred to in the other provisions of this Paragraph 1.0, and such failure or neglect either (i) cannot be remedied,  (ii) can be remedied within fifteen (15) days by prompt and diligent action, but it continues unremedied for a period of fifteen (15) days after notice thereof to Borrower, or (iii) can be remedied, although not within fifteen (15) days even by prompt and diligent action, but such remedy is not commenced within fifteen (15) days after notice thereof to Borrower or is not diligently prosecuted to completion within a total of thirty (30) days from the date of such notice. ( )            Any warranty, representation or statement contained in this Agreement, in the Note, in any other Loan Document, or made or furnished to Lender by or on behalf of Borrower that shall be or shall prove to have been false or misleading in any material respect as of the time made or furnished. ( )            The filing by Borrower or any Subsidiary of any proceeding under the federal bankruptcy laws now or hereafter existing or any other similar statute now or hereafter in effect; or the entry of an order for relief under such laws with respect to Borrower or any Subsidiary. (b)           The commencement of any proceeding described in subparagraph 4.0( )above against Borrower or any Subsidiary unless dismissal of such proceeding is promptly sought and diligently prosecuted and such proceeding is in fact dismissed within sixty (60) days from the date of such commencement; the acquiescence by Borrower or such Subsidiary to such proceedings; or the appointment of a receiver, trustee, custodian or conservator for all or any part of the assets of Borrower or any Subsidiary. 13 ( )            The insolvency of Borrower or any Subsidiary; or the execution by Borrower or any Subsidiary of an assignment for the benefit of creditors; or the convening by Borrower or any Subsidiary of a meeting of its creditors, or any class thereof, for purposes of affecting a moratorium upon or extension or composition of its debts; or the failure of Borrower or any Subsidiary to pay its debts as they mature; or if Borrower or any Subsidiary is generally not paying its debts as they mature. ( )            The admission in writing by Borrower or any Subsidiary that it is unable to pay its debts as they mature or that it is generally not paying its debts as they mature. ( )            The liquidation, termination or dissolution of Borrower or any of its Subsidiaries. ( )            Any final judgment for the payment of money in excess of $500,000.00 (other than a judgment covered by insurance where coverage has been acknowledged by the insurer) is entered against Borrower or any Subsidiary and such judgment is not satisfied or discharged with thirty (30) days after the entry thereof. ( )            The existence or the filing of any Lien, other than Permitted Liens, in excess of $500,000.00 against any property or assets of Borrower or any Subsidiary that is not removed, released, bonded or stayed to the satisfaction of Lender within thirty (30) days after its creation. ( )            Any levy or execution upon, or judicial seizure of, any property of Borrower or any Subsidiary that has a fair market value in excess of $250,000.00. ( )            The entry of any judgment, order or decree, or any other type of adverse ruling, against Borrower or any Subsidiary that could have a Material Adverse Effect. ( )            The abandonment by Borrower or any Subsidiary of all or any material part of its property or assets. ( )            The loss, theft or destruction of, or any substantial damage to, any material part of the property of Borrower or any Subsidiary that is not adequately covered by insurance. ( )            The occurrence of any event or condition, that with the giving of notice or passage of time, or both, could result in a material default by Borrower under any other contract, loan, obligation or agreement of any kind to which Borrower is a party that results in a Material Adverse Effect. ( )            The issuance of any order or decree enjoining or prohibiting Lender or Borrower from performing under this Agreement or any of the other Loan Documents, which order or decree is not vacated within fifteen (15) days after the granting thereof. ( )            The occurrence of any default under any of the other Loan Documents that is not cured within any period for cure set forth therein. (c)           Any failure or neglect to satisfy any of the financial covenants set forth in Paragraph 12.0 hereof which failure or neglect is not fully remedied and cured by the end of the next calendar month. 14 ( )            The occurrence of any event or condition that Lender, in its reasonably judgment, believes results in a Material Adverse Effect. 1.3           Remedies.  Upon the occurrence of any Event of Default, and at any time thereafter while such Event of Default is continuing, Lender may do one or more of the following [except that in the case of an Event of Default described in subparagraphs 4.0( ) through 7.0( ) above relating to Borrower, acceleration shall be automatic]: ( )            Declare the entire Loan and the rest of the Indebtedness immediately due and payable, without notice or demand. ( )            Proceed to protect and enforce its rights under this Agreement, the Note and all other Loan Documents. ( )            Avail itself of any other relief to which Lender may be legally or equitably entitled. 3.0           Payment of Costs.  Borrower shall pay all costs and expenses including, without limitation, court costs and reasonable attorneys’ fees incurred in enforcing payment of the Indebtedness and performance of the Obligation or in exercising the rights and remedies of Lender hereunder.  In the event of any court proceedings, court costs and reasonable attorneys’ fees shall be set by the court and not by jury and shall be included in any judgment obtained by Lender. 4.0           Right to Pay and Perform.  If Borrower shall fail to pay any amount as required herein or in any of the other Loan Documents, to satisfy any requirement hereof or of any of the other Loan Documents, or to perform otherwise as required herein or in any of the other Loan Documents, Lender may advance the moneys necessary to pay the same, to satisfy such requirements or to so perform. 5.0           No Prejudice to Lender.  No failure on the part of Lender to exercise any of its rights hereunder arising upon any Event of Default shall be construed to prejudice its rights upon the occurrence of any other or subsequent Event of Default.  No delay on the part of Lender in exercising any such rights shall be construed to preclude it from the exercise thereof at any time during the continuance of that Event of Default.  Lender may enforce any one or more remedies or rights hereunder successively or concurrently.  By accepting payment of any of the Indebtedness or performance of any of the Obligation after its due date, Lender shall not thereby waive the agreement contained herein that time is of the essence, nor shall Lender waive either its right to require prompt payment when due of the remainder of the Indebtedness or performance when due of the remainder of the Obligation or its right to consider the failure to so pay or perform an Event of Default. SECTION 12.       ACTION UPON AGREEMENT 1.0           No Third Party Beneficiaries.  This Agreement is made for the sole protection and benefit of the parties hereto and no other person or organization shall have any right of action hereon or be a third party beneficiary hereof. 2.0           Entire Agreement.  This Agreement, together with the documents and instruments referred to herein, embodies the entire Agreement of the parties with regard to the 15 subject matter hereof.  There are no representations, promises, warranties, understandings or agreements expressed or implied, oral or otherwise, in relation thereto, except those expressly referred to or set forth herein.  Borrower acknowledges that the execution and delivery of this Agreement is its free and voluntary act and deed, and that said execution and delivery have not been induced by, nor done in reliance upon, any representations, promises, warranties, understandings or agreements made by Lender, its agents, officers, employees or representatives, other than as set forth herein. 3.0           Changes in Writing.  No promise, representation, warranty or agreement made subsequent to the execution and delivery of this Agreement by either party hereto, and no revocation, partial or otherwise, or change, amendment or addition to, or alteration or modification of, this Agreement shall be valid unless the same shall be in writing signed by all parties hereto. 4.0           Separate Entities.  Lender and Borrower have separate and independent rights and obligations under this Agreement.  Nothing contained herein shall be construed as creating, forming or constituting any partnership, joint venture, merger or consolidation of Lender and Borrower for any purpose or in any respect. SECTION 13.       GENERAL 1.0           Agreement to Continue.  This Agreement, and the representations, warranties, and covenants contained herein shall survive the making of the Loan and shall remain in full force and effect until the Indebtedness as been fully paid and all of the Obligations have been fully performed. 2.0           Lender’s Investigations.  Borrower shall be solely responsible for all aspects of Borrower’s business and activities.  Any investigation or review by Lender or its counsel shall be solely for Lender’s benefit, including to determine whether Borrower is properly discharging its obligations to Lender, and may not be relied upon by Borrower or any third party.  Neither Lender, nor Lender’s counsel, owes any duty of care to Borrower or to any third party to protect against, or to inform Borrower or any third party of, any matters disclosed by any investigation or review by Lender or its counsel. 3.0           Rights to Protect Lender.  All rights, powers and remedies granted Lender herein, or otherwise available to Lender, are for the sole benefit and protection of Lender, and Lender may exercise any such right, power or remedy at its option and in its sole and absolute discretion without any obligation to do so.  In addition, if, under the terms hereof, Lender is given two or more alternative courses of action, Lender may elect any alternative or combination of alternatives, at its option and in its sole and absolute discretion.  All monies advanced by Lender under the terms hereof and all amounts paid, suffered or incurred by Lender in exercising any authority granted herein, including reasonable attorneys’ fees, shall bear interest at the highest rate payable on any of the Indebtedness until paid, and shall be due and payable by Borrower to Lender immediately without demand. 4.0           Indemnity.  Borrower shall indemnify and hold Lender harmless from and against all claims, costs, expenses, actions, suits, proceedings, losses, damages and liabilities of any kind whatsoever, including but not limited to reasonable attorneys’ fees and expenses, arising out of any matter relating, directly or indirectly, to the Loan, whether resulting from internal disputes of the Borrower or whether involving other third persons or entities, or out of any other 16 matter whatsoever related to this Agreement, the other Loan Documents, or any Facility, including but not limited to (i) any use, generation, manufacture, production, storage, Release, threatened Release, or presence of a Hazardous Substance; (ii) any violation or claim of violation of any Environmental Law; or (iii) any breach of any of the warranties, representations and covenants contained herein, but excluding any claim or liability which arises as the direct result of the gross negligence or willful misconduct of Lender.  This indemnity provision shall continue in full force and effect and shall survive not only the making of the Loan but shall also survive the payment of the Indebtedness and the performance of the Obligations. 5.0           Joint and Several; Context.  If Borrower consists of more than one person or entity their liability shall be joint and several.  The provisions hereof shall apply to the parties according to the context thereof and without regard to the number or gender of words or expressions used. 6.0           Time of the Essence.  Time is expressly made of the essence of this Agreement. 7.0           Notices.  All notices required or permitted to be given hereunder shall be in writing and may be given in person or by United States mail, by commercial delivery service or by electronic transmission with verified receipt.  Any notice directed to a party to this Agreement shall become effective upon the earliest of the following:  (i) actual receipt by that party; (ii) delivery to the designated address of that party, addressed to that party; or (iii) if given by certified or registered United States mail, the earlier of the date of delivery shown on the return receipt or twenty-four (24) hours after deposit with the United States Postal Service, postage prepaid, addressed to that party at its designated address.  The designated address of a party shall be the address of the party shown below or such other address within the continental United States as that party, from time to time, may specify by notice to the other parties: Borrower:                                                                                                                                                                                            Star Buffet, Inc. 1312 N. Scottsdale Road Scottsdale, AZ  85257 Lender:                                                                                                                                                                                                        Robert E. Wheaton and Suzanne H. Wheaton 4716 E. Valley Vista Lane Paradise Valley, AZ  85253 8.0           Costs and Expenses.  Borrower shall pay all costs and expenses arising from the preparation of this Agreement, the closing of the Loan and the making of the Advance, including but not limited to, Lender’s attorneys’ fees, any other charges that may be imposed on Lender as a result of this transaction. 9.0           Choice of Law.  This Agreement shall be governed by and construed according to the laws of the State of Arizona. 10.0         Venue.  Lender may bring any action or proceeding to enforce or arising out of this Agreement in any court of competent jurisdiction.  If Lender commences such an action in a court located in the County of Maricopa, State of Arizona, or the United States District Court for the District of Arizona, Borrower hereby agrees that it will submit and does hereby irrevocably submit to the personal jurisdiction of such courts and will not attempt to have such action dismissed, abated, or transferred on the ground of forum non convenience or similar grounds; provided, however, that nothing contained herein shall prohibit Borrower from seeking, by 17 appropriate motion, to remove any action brought in a Arizona state court to the United States District Court for the District of Arizona.  If such action is so removed, however, Borrower shall not seek to transfer such action to any other district, nor shall Borrower seek to transfer to any other district any action which Lender originally commences in such federal court.  Any action or proceeding brought by Borrower arising out of this Agreement or any of the other Loan Documents shall be brought solely in a court of competent jurisdiction located in the County of Maricopa, State of Arizona, or in the United States District Court for the District of Arizona.  Borrower waives any objection which it may now or hereafter have to venue of any such action or proceeding and waives any right to seek removal of any action or proceeding commenced in accordance herewith. 11.0         WAIVER OF TRIAL BY JURY.  BORROWER AND LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT THE TRANSACTION THAT IS THE SUBJECT OF THIS AGREEMENT WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.  THIS WAIVER HAS BEEN NEGOTIATED BY THE PARTIES AND IS AN ESSENTIAL PART OF THEIR BARGAIN.  EITHER PARTY MAY FILE A COPY OF THIS PROVISION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY. 12.0         Successors and Assigns.  Except as otherwise provided herein, this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their successors and assigns. 13.0         Headings.  The headings or captions of sections and paragraphs in this Agreement are for convenience and reference only, do not define, control or limit the provisions of such sections or paragraphs, and shall not affect the 14.0         Participations.  Lender, at any time, shall have the right to sell, assign, or grant participations in all or any portion of the Loan and in any of the Loan Documents.  Lender is authorized to furnish any purchaser or participant, or prospective purchaser or participant, any documents or information provided to Lender or that Lender may have obtained relating to Borrower or relating to the Loan. 15.0         Loan Agreement to Prevail.  In the event of any direct conflict between the provisions of this Agreement and those of the Note or any other Loan Document, the provisions of this Agreement shall prevail. 18 IN WITNESS WHEREOF, these presents are executed as of the date indicated above. BORROWER:         STAR BUFFET, INC., a Delaware corporation         By: /s/ Ron Dowdy   Name: Ron Dowdy   Title: Secretary               LENDER:         Robert E. Wheaton and Suzanne H. Wheaton         By: /s/ Robert E. Wheaton   Name: Robert E. Wheaton         By: /s/ Suzanne H. Wheaton   Name: Suzanne H. Wheaton   19

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 27, 2015 PULASKI FINANCIAL CORP. (Exact name of registrant as specified in its charter) Missouri 0- 24571 43-1816913 (State or other jurisdiction of incorporation or organization) (Commission File Number) (IRS Employer Identification No.) 12300 Olive Boulevard, St. Louis, Missouri 63141 (Address of principal executive offices) (Zip Code) (314) 878-2210 (Registrant’s telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02Results of Operations and Financial Condition On October 27, 2015, Pulaski Financial Corp., the parent of Pulaski Bank, announced its financial results for the quarter and year ended September 30, 2015.The press release announcing financial results for the quarter and year ended September 30, 2015 is filed as Exhibit 99.1 and incorporated herein by reference. Item 9.01Financial Statements and Exhibits. (d)Exhibits Number Description Press Release Dated October 27, 2015 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: October 28, 2015 By: /s/Paul J. Milano Paul J. Milano Chief Financial Officer

EXHIBIT 21.1 Subsidiaries of Bridgeline Digital, Inc. Bridgeline Intelligence Group, Inc Bridgeline Digital, Pvt. Ltd.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 December 5, 2011 Commission File Number: 001-32292 RUBICON MINERALS CORPORATION ————— (Translation of registrant’s name into English) Suite 1540 – 800 West Pender Street, Vancouver, British Columbia, V6C 2V6, Canada ————— (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:[]Form 20-F[x]Form 40-F Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):[] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):[] SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. RUBICON MINERALS CORPORATION By: /s/ Robert Lewis Robert Lewis Chief Financial Officer Date: December 5, 2011 EXHIBIT INDEX Exhibit No. Description Material Change Report dated December 5, 2011 and News Release dated December 2, 2011 – “Rubicon Announces that the Ministry of Northern Development and Mines has Accepted its Production Closure Plan As Filed”. .

Exhibit 99(c)(2) * International Lottery & Totalizator Systems, Inc. Valuation Analysis Jeff K. Davis, CFA Matt Crow, CFA, ASA January 8, 2014 * Contents of Presentation Engagement Overview Company Overview Valuation Analysis Transaction Method Net Asset Value Method Earnings Capitalization via the ACAPM Range of Value Conclusion Guideline Transaction & Company Method Discounted Cash Flow Method Proposed Transaction Fairness Considerations * Engagement Overview SECTION ONE * Engagement Overview International Lottery & Totalizator Systems, Inc. (“ILTS”) is 71.3% owned by Hong Kong-based Berjaya Lottery Management (H.K.) Ltd. (“Berjaya”). The special committee of the Board of Directors of ILTS has retained Mercer Capital Management, Inc. (“Mercer”) for two purposes: Prepare a valuation analysis of ILTS for the proposed acquisition of the 28.7% minority share interest by ILTS through a reverse stock split, which would result in Berjaya becoming the sole shareholder of ILTS. Render a fairness opinion that opines to the fairness from a financial point of view of the acquisition of the minority share interest by ILTS through a reserve stock split, which would result in Berjaya becoming the sole shareholder of ILTS. Mercer Capital did not participate in the discussions by the ILTS board of directors or in negotiations between the special committee and Berjaya regarding the proposed transaction. * Engagement Overview Mercer Capital was not informed of the valuation conclusion that was prepared by ITLS’ financial advisor prior to rendering its preliminary valuation opinion that was presented in draft form on November 7 and subsequently updated on December 9. Mercer Capital has no financial interest in ILTS nor has it been engaged by the Company during the past three years. * Level of Value The ILTS valuation is prepared on a marketable, minority interest level of value, which is comparable to financial control. Although a “blockage” discount may be appropriate given the size of the 28.7% interest (3.7 million shares) vs. the limited OTC Bulletin Board (“OTCBB”) trading activity in ILTS’ registered shares, we have not applied such a discount given the nature of the contemplated transaction. * Proposed Transaction SECTION TWO * Note: all values (000) except per share data; NOPAT net op profit after-tax, x-interest expense and income; all earning measures are adjusted as detailed in the valuation analysis * Company Overview SECTION THREE * Company Overview Vista, California-based ILTS was founded in 1978. An IPO occurred in 1981. The Company remains a registrant with the SEC; its shares are traded via the OTCBB. ILTS generates revenues via the “lottery and pari-mutual” and “voting” business units. The lottery unit designs, manufactures, licenses, and services computerized systems and terminals for the lottery and pari-mutual racing industries. Latest 12 months (“LTM) revenues as of October 31, 2013 were $19.3 million. The voting unit develops, manufactures, licenses, and supports systems for governmental election jurisdictions via a wholly-owned subsidiary, Unisyn Voting Solutions, Inc. (“Unisyn”). LTM revenues were $2.3 million. * Company Overview Market share for both business units is modest; competitors are significantly larger than ILTS with greater financial, manpower and technical resources. While a small firm operating in large markets has growth opportunities, management noted lotteries (188 globally) are a mature business while municipalities have curtailed voting systems expenditures due to financial constraints. ILTS employs 35 individuals, none of whom have an employment agreement. Jeff Johnson, age 52, joined ILTS in 1984 and has served as President since 2007. His FY13 compensation was $181,000. * Company Overview - Products The gaming systems include a central computer, proprietary DataTrak software, Datamark and Intelimark point-of-sale terminals, and an interfacing communication network. Over 50,000 terminals have been delivered since 1980. Unisyn has developed a certified end-to-end optical scan voting system and a full-featured election management software that provides precinct tabulation, ballot review, and audio voting capability. Unisyn’s Inkavote Plus Precinct Ballot Counter has been certified by the National Association of State Election Directors 2002 Voting Systems Standards. Also, its OpenElect digital optical scan election system has received the 2005 Voluntary Voting System (“VVS”) Guidelines certification from the United States Election Assistance Commission (“EAC”). The 2005 VVS certification was thought to be a significant competitive advantage when Unisyn was of the first to obtain it; however, that certification did not translate into a significant increase in voting revenues. * Company Overview - Customers ILTS’ gaming customer base is concentrated. Large system replacement contracts typically occur every ten years. Affiliates of Berjaya are large ILTS customers: Philippine Gaming Management, Sports Toto Malaysia, and Natural Avenue. Their LTM revenues were $9.9 million, 46% of total revenues. Ab Trav Och Galopp (Swedish racing association) LTM revenues were $9.4 million (43%). Management stated ATOG was expected to be a one-time large order. Only since FY12 has the voting unit gained some traction even though ILTS voting business has existed for ~ten years and its products have key certifications. The voting unit has one primary customer (agent), Adkins (IA, KS & MO) that produced $1.2 million of LTM revenue, 5% of total revenue. Two other agent relationships have yet to produce orders in a FY that has exceeded $300,000. Management indicated revenues should be $3 million +/- annually, though LTM revenues were $2.3 million. * Company Overview - Gaming vs. Voting LTM gaming revenues were $19.3 million, ~all of which were attributable to affiliates of Berjaya & ATOG. Voting revenues were $2.3M (vs. $5.0M peak in FY12) of which 50% was Adkins Source: company reports * Company Overview - Equity ILTS has never paid a dividend nor has it repurchased a material amount of shares. As of October 31, 2013, $11.1 million of shareholders’ equity consisted of $56.4 million of contributed capital and deficit retained earnings of $45.3 million. Aside from $6.5 million of capital raised via the exercise of warrants, options, and the like that occurred during the 1990s, Berjaya funded operating losses in prior years via its capital infusion. Berjaya acquired 2.2 million shares (adjusted for a 1:3 reverse stock split in June 1998) for $35.3 million, or $5.35 per share, via two transactions in 1993. Berjaya acquired an additional 6.9 million shares in May 1999 for $5.2 million, or $0.75 per share. * Company Overview 1992 – 2013 EBITDA and Margin History Source: company reports and Bloomberg; EBITDA as reported, not adjusted * Valuation Analysis SECTION FOUR * Valuation Process As shown in the accompanying slides, there is a significant dispersion in value between the DCF method and various measures of capitalized earning power. The delta is attributable to management’s assessment that once the current Sports Toto and ATOG contracts are completed, the only visible, potential contracts of size are (one each) from Vietnam in FY15 and the Philippines in FY17 and FY18. As of October 31, ILTS had $8.0M of cash. Management estimated $5M is needed as an operating cushion given long periods when losses have been sustained. We added all but $1.5 million of the cash to the indicated value of the operating company, noting that $3.5M of net working capital (A/R + inventory - A/P - accrued expense - other current liabilities) represents future net liquidity. Rather than develop a point value, we derived a range based upon weighting the various indications of value somewhat differently. * Transactions Method The transactions method is a market approach that develops an indication of value based upon consideration of actual transactions in the stock of a subject company. Transactions are reviewed to determine if they have occurred at arms’ length, with a reasonable degree of frequency, and within a reasonable period of time relative to the valuation date. Indications of value within the context of the transaction method can also be derived from offers to acquire a significant block or all of the subject company’s common shares. Management indicated it was not aware of Berjaya ever receiving an offer or expression of interest for ILTS. The transactions-based indication of value that follows was developed from OTCBB trading activity in the Company’s shares. * Transactions Method: 1992 – 2rice and Volume History Source: Bloomberg * Transactions Method: Two-Year ILTS Daily Price and Volume Source: Bloomberg * Transactions Method Jan 2 price of $1.05 per share equated to 2.9x reported LTM EBITDA ($0.36 per share), while Oct 31 cash was $0.62 per share. BVPS was $0.85. One cannot know what is reflected in ILTS share price given the lack of analyst coverage and institutional ownership. The 75% one-year increase presumably reflects higher earnings, a modest valuation, and liquidity flows into small- and micro-cap stocks. Source: Bloomberg and Mercer Capital * Net Asset Value Method The net asset value (“NAV”) method is an asset-based approach that develops a valuation indication in the context of a going concern by adjusting the reported book values of a subject company’s assets to their market values and subtracting its liabilities (adjusted to market value, if appropriate). The indicated value should not be interpreted as an estimate of liquidation value. Often times the NAV method is considered to be more appropriate in the valuation of asset holding companies than for operating companies such as ILTS. No adjustments to ILTS’ reported assets and liabilities were identified. The balance sheet is relatively simple, consisting of cash, receivables, payables, accrued expenses, deferred revenue, and costs related to the percentage-of-completion accounting method for long-lived contracts. Also, ILTS leases its real estate from a third party. * Net Asset Value Method: Source: Mercer Capital * Earning Power Development Ongoing earning power is an estimate of sustainable earnings and represents a base from which long‑term growth can be expected. Earning power in the case of ILTS has less certainty given the Company’s uneven financial performance: Periods of losses have been replaced with earnings the past two years and an expectation based upon management’s assessment that earnings will roughly double in FY14 and then decline sharply in FY15. We have developed two measures of earning power in Exhibits V-2 and V-4: earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and net operating profit after tax (“NOPAT”), which converts EBIT to an after-tax basis (i.e., interest income and expense are excluded). * Earning Power Development In Exhibit V-2, reported earnings were adjusted as follows: Cost of goods sold was reduced by $334,000 in fiscal year (“FY”) 2012 and $340,000 in FY11 for inventory write-offs associated with a prior customer. Cost of goods sold was increased by $357,000 in FY09 to eliminate a non-recurring adjustment to warranty reserve that was made after the reserve associated with a specific contract expired. Management estimated the annual cost of being a registered company at $443,000. We reduced operating expenses by $298,000 assuming all but the audit-related fees of $145,000 will be eliminated. LTM operating expenses were reduced $145,000 for estimated transaction-related expenses incurred in 2Q14; FY09 op expenses were increased by $68,000 to eliminate a gain realized on the sale of voting equipment Ongoing EBITDA and NOPAT earning power measures are developed by applying a weighted average to LTM, FY13, FY12 and FY11 adjusted earnings to reflect our view that the LTM results over-state earning power while the loss incurred in FY11 understates it. * Earning Power Development As shown in the following pages, adjusted EBITDA increased from a cycle low of -$887,000 in FY09 to a cycle peak of $5.1 million in the LTM-period ended October 31, 2013. The adjusted EBITDA margin rose from -13.6% in FY09 to 23.6% in the LTM period. The improvement reflects an increase in revenues from $6.5 million to $21.6 million as a result of orders from all three Berjaya-controlled companies, ATOG, and Adkins (voting). See note 7 in Exhibit 4a for additional perspective. R&D expenditures were incurred in FY09 and FY10 for the voting business unit. Absent R&D, the only year adjusted EBITDA was negative was FY11 when revenues were the lowest (see page 21). Our ongoing earning power measures entail EBITDA of $2.2 million and NOPAT of $1.2 million. * Source: company reports and Mercer Capital * Earning Power Development Source: company reports and Mercer Capital * Source: company reports and Mercer Capital EBITDA and NOPAT Earning Power * Capitalization of Earning Power (NOPAT) Using ACAPM (Build-Up) Risk-free rates per Fed’s H.15 for Treasury rates (20-year selected). Equity premium per main studies of market returns. Specific risk premium of 5% reflects: (a) small size; (b) customer concentration; (c) erratic earnings history; and (d) limited financial flexibility. Management’s forecast and historical performance provide little perspective on sustainable growth – we assume it is nominal @ 2.0%. Source: Mercer Capital * Guideline Transactions and Companies (“Comps”) Guideline Transactions We reviewed the public filings and other docs of the four competitors in the lottery business and three in the voting business. The only recent transaction with disclosed pricing was Scientific Games’ acquisition of WMS for $1.5B of cash; priced at 6.0x adjusted EBITDA. Thomson Reuters tracks M&A activity: The median EV / EBITDA multiple for deals < $100M YTD thru Sep 30 was 6.8x. TR reports that where the target was public, the median premium was 26% - we applied a 25% minority interest discount to derive an adj EBITDA multiple of 5.1x. Guideline Companies The only public company operating in the same industry as ILTS that we identified was Scientific Games (SGMS). As of Jan 2 SGMS’s enterprise value (i.e., market value of its equity and net debt at par) was 8.1x LTM operating EBITDA (thru Oct 31) as reported by SGMC. Given the significant size and resource differential, the application of a meaningful “fundamental” discount (30-40%) is appropriate; we applied a fundamental discount of 35% to derive an adjusted EBITDA multiple of 5.3x. * Guideline Transactions EBITDA Multiples Source: Thomson Reuters via KeyBanc Capital Markets 3Q13 M&A Review * Guideline Transactions and Companies (“Comps”) Source: Mercer Capital * Discounted Cash Flow Method The DCF method measures the present value of projected cash flows that accrue to shareholders. Cash flows are discounted at an appropriate required rate of return for the subject company (17.0% per above). Cash flow consists of after-tax income excluding interest income and expense (NOPAT), plus depreciation, less capital expenditures, +/- reductions/increases in net working capital. Forecasted revenue and earnings reflect management’s “industry opportunities” assessment for 2014 – 2018. We made a simplifying assumption that net working capital is equal to 12% of sales based upon the historical 2009-LTM average. Because the forecast reflects near break-even earnings in FY18, the terminal value NOPAT of $206,000 reflects an average of FY18 and FY15-FY18 average NOPAT. The earnings multiple of 6.7x was derived above using the ACAPM. * Source: Mercer Capital * Discounted Cash Flow Method Source: Mercer Capital * Conclusion of Value The conclusion of value reflects a range based upon weights applied to the various indications of value. The low-end is anchored by a 50% weight applied to the DCF method, the lowest indicated value vis-à-vis other earnings based measures. Weights of 25% are applied to two measures of capitalized EBITDA. The effect is to evenly weight future performance that is expected to decline vs. today’s better performance. The high-end of the range is derived via applying a 50% weight to the ACAPM build-up method used to capitalize NOPAT (i.e., net income x-interest income and expense) and 25% each to various measures of capitalized EBITDA. No weight was assigned to the capitalization of LTM EBITDA or FY14E EBITDA because the indicated values reflect cyclical peak earnings as a result of the timing of the Sports Toto and ATOG contracts. * Conclusion of Value The conclusion of value for the operating company is $8.9 million to $9.9 million, which equates to 4.0x to 4.4x ongoing EBITDA. All of the indications of value are on a debt-free basis (i.e., earning measures exclude interest expense—ILTS is not levered—and interest income). Deriving an equity indication of value entails subtracting the subject’s debt and adding cash (or subtracting net debt). Cash as of October 31 totaled $8.0 million, while there was no interest bearing debt. Management noted that ~$5 million of cash is needed to sustain ops because there can be long periods between major orders and because ILTS’ request for a line of credit was recently rejected by four banks. We note as of October 31 A/R and inventory less accrued expenses and accounts payable approximated $3.5 million. As a result, $1.5 was deducted to increase net capital (x-cash) to $5.0 million. * Conclusion of Value We also added $1.2 million to the value of the operating company for the estimated present value of ILTS’ Federal NOL carry-forward. The present value calculation is shown in Exhibit V-9. The $14.5 million NOL was reduced for year-to-date net income through October 31. We utilized management’s “industry opportunities” forecast to value utilization of the remaining NOL through 2018; thereafter we assumed taxable income of $1.0 million per year. The discount rate of 20% reflects an additional premium in excess of the cost of equity capital referenced above given the long-time frame necessary to utilize the NOL. Although the subject block of shares represents a minority interest, no marketability discount was applied because a nominal market exists, the shares are registered and to do so is not reasonable in the context of a majority shareholder acquiring (or squeezing out) the minority. * Conclusion of Value Source: Mercer Capital * Conclusion of Value Source: Mercer Capital * Fairness Considerations SECTION FIVE * Fairness Considerations Elements in rendering our fairness opinion include: Valuation - The proposed price of $1.33 per share of cash to be paid to the minority shareholders is within the $1.29-$1.37 per share range developed by Mercer Capital, and it is above the $1.09-$1.19 per share range that was proposed by the Company’s financial advisor. Premium - The proposed price of $1.33 per share equates to a 33% premium to the Company’s closing price of $1.00 per share on January 2, 2014 and 45% premium to the 20-day volume weighted closing price of $0.92 per share. Process - The Board took steps to make an informed decision by forming a special committee consisting of the independent directors to evaluate the proposed transaction with the assistance of an independent financial advisor.

  EXHIBIT 10.1 INVESTMENT AND SHAREHOLDERS’ AGREEMENT Spepharm Holding B.V. by and among 1.   TVM Life Science Ventures VI L.P., c/o M&C Corporate Services Ltd., P.O. Box 309, Ugland House, South Church Street, Grand Cayman, Cayman Islands - hereinafter referred to as “TVM LP” - 2.   TVM Life Science Ventures VI GmbH & Co. KG, Maximilianstr. 35 c, D-80539 Munich, Germany - hereinafter referred to as “TVM KG” - 3.   Life Sciences Opportunities Fund (Institutional) II, L.P., 126 East 56 th Street, 28 th Floor, New York, NY 10022, U.S.A. - hereinafter referred to as “LSOFI” - 4.   Life Sciences Opportunities Fund II, L.P., 126 East 56 th Street, 28 th Floor, New York, NY 10022, U.S.A. - hereinafter referred to as “LSOF” - 5.   ARCADE SARL, 40 Rue des Mathurins, 75008 Paris, France - hereinafter referred to as “ARCADE” - - TVM LP, TVM KG, LSOFI, LSOF and ARCADE hereinafter referred to as “Investors” - as well as 6.   Valera Pharmaceuticals Inc., 7 Clarke Drive, Cranbury, NJ, USA 08512-3617 - hereinafter referred to as “Valera” - - Valera and the Investors as well as other future shareholders of Spepharm Holding B.V., which may accede to this Shareholders Agreement, hereinafter referred to as “Shareholders” - and 7.   Jean-François Labbé, 27 Allée des Bocages, 78110 Le Vésinet, France - hereinafter referred to as “JFLAB” - as well as, upon its incorporation and accession hereto, 8.   Spepharm Holding B.V., c/o Mr Wim van Bree, Heinsiuslaan 43, 3818 JG Amersfoort, The Netherlands 31   - hereinafter referred to as the “Company” -. All of the above stated parties — as well as any third party that accedes to this Investment and Shareholders’ Agreement (“this Agreement”) in the future as of such accession — hereinafter: the “Parties”. 32   Recitals Sec. 1 Foundation of Spepharm and Loan Commitment by LSOFI and LSOF Sec. 2 First Capital Increase Sec. 3 Second Capital Increase Sec. 4 General Obligations with regard to Capital Increases / Syndication Sec. 5 Default on Investment Obligation Sec. 6 Valera’s Covenant to obtain Shire Waiver/Licence Sec. 7 Other Covenants Sec. 8 Intellectual Property Rights Sec. 9 Transfer of Shares / Notification Sec. 10 Rights of First Refusal Sec. 11 Tag-Along Rights Sec. 12 Drag-Along Rights Sec. 13 Restrictions of Transfer Sec. 14 Share Transfers and Share Issuance under Accession to this Agreement Sec. 15 Transfers to Affiliated Companies and Funds Sec. 16 Stock Incentive Scheme Sec. 17 Supervisory Board Sec. 18 Information Sec. 19 Refinancing by KfW Sec. 20 Effective Date / Succession of Rights Sec. 21 Delivery Addresses and Authorised Recipients Sec. 22 Amendments to and Cancellation of this Agreement Sec. 23 Miscellaneous 33   Recitals Valera and the Investors intend to jointly create, incorporate and finance a Dutch B.V. under the name of Spepharm Holding B.V. with its registered office in Amsterdam to serve as the parent company of a European specialty pharmaceutical group of companies with the vision to become one of the leading suppliers of specialty urology and endocrinology products to the European market place. For this purpose and in order to regulate the legal relationship among themselves as future shareholders of the Company, Valera and the Investors enter into the following agreement, which they expect the Company to accede to in due course: Sec. 1 Foundation of Spepharm and Loan Commitment by LSOFI and LSOF (1)   Immediately after signing this Agreement, the Investors and Valera shall set up a new B.V. under Dutch law to be named Spepharm Holding B.V. (the “Company”), and shall provide all information necessary to apply to the ministry of justice for its consent to the Company’s incorporation. The Investors and Valera shall be entitled and obliged to subscribe for the Company’s initial shares and make payments in the following amounts (with the term “cost” referring to Sec. 23 (4) below):                           Payment in EUR     Shares   Nominal   Premium   Total TVM LP   181,700   1,817   668,396 - cost   670,213 - cost                   TVM KG   655,400   6,554   2,410,935 - cost   2,417,489 - cost                   LSOFI   469,900   4,699   1,728,561 - cost   1,733,260 - cost                   LSOF   84,100   841   309,368 - cost   310,209 - cost                   ARCADE   88,100   881   324,082 - cost   324,963 - cost                   Valera   367,492   3,674.92   —   3,674.92 The payments of the nominal amounts shall be effected to the Company’s bank account and the payments of the premium shall be effected to a notary’s third party account, in each case immediately upon the consent to the Company’s incorporation by the ministry of justice having been granted. Without delay upon the receipt of all payments set forth above on the Company’s bank account and on the notary’s third party account, respectively, the notarial deed for incorporation of the Company shall be executed. (2)   The Shareholders shall adopt articles of association for the Company in the form set out in Appendix 1.2. (3)   JFLAB shall become the Company’s initial director. Immediately after the foundation deed of the Company has been executed, JFLAB shall offer to the Company the conclusion of a service agreement at terms and conditions as set forth in Appendix 1.3. (4)   The Shareholders shall appoint Messrs. David Tierney, James Gale, Hubert Birner and Bernd Seibel as members of the Company’s initial supervisory board. The Parties shall, to the extent legally permissible and respecting the independence of the supervisory board and its members, use their best efforts and all the influence they have to the effect that the supervisory board adopts the Rules of Procedure for the Management as set forth in Appendix 1.4 immediately upon their appointment. 34   (5)   LSOFI and LSOF undertake to grant to the Company, immediately upon the Company’s incorporation, short term loans in the amount of EUR 890,568 and EUR 159,432, respectively, at the terms and conditions set forth in the draft loan agreement as attached hereto as Appendix 1.5. Sec. 2 First Capital Increase (1)   If the Company requires additional funds, it shall inform the Shareholders accordingly in writing. Each Investor shall, within six weeks as of receipt of such information, notify the Company and the Shareholders whether such Investor supports the additional funding. If Investors, who hold (together) a Qualified Investor Majority (as defined in Sec. 23 (1) below), notify the Company and the Shareholders within such six weeks period of their support of the additional funding, the Company shall without delay call for a written shareholders resolution of an increase of the Company’s share capital from EUR 18,466.92 by up to EUR 25,536.83 to up to EUR 44,003.75 by issuing new shares in the Company (the “First Capital Increase”) to Valera and the Investors. All Shareholders shall participate in, and vote in favour of, the resolution on the First Capital Increase, waiving all requirements as to the form and time period for calling such shareholders resolution. (2)   The Investors shall then each be entitled and obliged to subscribe for the Company’s new             shares from the First Capital Increase and make payments in the following amounts (with the term “cost” referring to Sec. 23 (4) below): TVM LP   86,000   860   316,357 - cost   317,217 – cost                   TVM KG   310,400   3,104   1,141,828 - cost   1,144,932 – cost                   LSOFI   576,300   5,763   2,119,960 - cost   2,125,723 – cost                   LSOF   103,200   1,032   379,629 - cost   380,661 – cost                   ARCADE   88,100   881   —   881 provided, that one or more third party investors (or any of the Investors) agree to subscribe for new shares from the First Capital Increase and make payments in the following amounts: 35                                         Payment in EUR     Shares   Nominal   Premium   Total Third party investor(s)     881,500       8.815     3,242,660 — cost   3,251,475 – cost The payments set forth above in this Sec. 2 (2) shall be effected, within one week after the resolution on the First Capital Increase has been taken, to a notary’s third party account, instructing the notary to pay these amounts to the Company upon the execution of the notarial deed on the First Capital Increase and issuance of the new shares as set forth in the above table. (3)   Immediately upon payment of all of the above stated amounts, but in any event after the lapse of four weeks as of the Shareholders’ resolution on the First Capital Increase, the Company shall inform Valera on the extent to which the First Capital Increase has been subscribed and paid pursuant to Sec. 2 (2), and shall offer to issue to Valera 19.9% of the entire new shares from the First Capital Increase (i.e., the aggregate amount of the new shares subscribed and paid for pursuant to Sec. 2 (2) plus the shares to be allotted to Valera pursuant to this Sec. 2 (3) so that following such issuance Valera would own 19.9%, or – in case of Sec. 6 (2) – 19.4%, of the outstanding shares of the Company) at a price that equals such shares’ nominal amount. Valera shall subscribe and pay for those shares within one week as of receipt of such offer, or the offer shall lapse. Valera’s payment shall be made to the same notary’s third party account as used for the purpose of Sec. 2 (2), equally instructing the notary to pay these amounts to the Company upon the execution of the notarial deed on the First Capital Increase and issuance of the respective new shares to Valera. (4)   In addition to the payment set forth to be made to the Company by ARCADE in the table in Sec. 2 (2), ARCADE hereby commits towards the Shareholders, but without obliging itself towards the Company, and provided that the Company has not filed for insolvency or has become obliged to file for insolvency prior to such payment, to make an additional payment of EUR 324,082 minus cost (see Sec. 23 (4) below) into the Company’s capital reserves at the latest immediately prior to any of the following events: (i) a Trade Sale (as defined in Sec. 12 (1) below); (ii) an initial public offering of shares of the Company; (iii) the liquidation of the Company (but not in the context of an insolvency); and (iv) any transfer of any shares by ARCADE except for share transfers under Sec. 15 (1) if the acquirer assumes this payment obligation. Nothing in this Sec. 2 (4) shall be interpreted to grant to the Company any right or claim to the additional payment by ARCADE. Sec. 3 Second Capital Increase (1)   If after implementation of the First Capital Increase the Company requires additional funds, it shall inform the Shareholders accordingly in writing. Each Investor shall, within six weeks as of receipt of such information, notify the Company and the Shareholders whether such Investor supports the additional funding. If Investors, who hold (together) a Qualified Investor Majority (as defined in Sec. 23 (1) below), notify the Company and the Shareholders within such six weeks period of their support of the additional funding, the Company shall without delay call for a written shareholders resolution of a further increase of the Company’s share capital by up to EUR 23,691.64 by issuing new shares in the Company (the “Second Capital Increase”) to Valera and the Investors. All Shareholders shall participate in, and vote in favour of, the resolution on the Second Capital Increase, waiving all requirements as to the form and time period for calling such shareholders resolution. Company’s new shares from the Second Capital Increase and make payments in the following amounts: 36   TVM LP   144,200   1,442   530,450   531,892                   TVM KG   520,100   5,201   1,913,225   1,918,426                   LSOFI   563,400   5,634   2,072,507   2,078,141                   LSOF   100,900   1,009   371,168   372,177                   ARCADE   95,000   950   —   950                     474,100   4.741   1,744,011   1,748,752 Such payments shall be effected, within one week after the resolution on the Second Capital Increase has been taken, to a notary’s third party account, instructing the notary to pay these amounts to the Company upon the execution of the notarial deed on the Second Capital Increase and issuance of the new shares as set forth in the above table. Second Capital Increase, the Company shall inform Valera on the extent to which the Second Capital Increase has been subscribed and paid pursuant to Sec. 3 (2), and shall offer to issue to Valera 19.9%, or – in case of Sec. 6 (2) – 19.4%, of the entire new shares from the Second Capital Increase (i.e., the aggregate amount of the new shares subscribed and paid for pursuant to Sec. 3 (2) plus the shares to be allotted to Valera pursuant to this Sec. 3 (3) so that following such issuance Valera would own 19.9%, or – in case of Sec. 6 (2) – 19.4%, of the outstanding shares of the Company, provided that Valera has fully subscribed to the shares offered to Valera pursuant to Sec. 2 (3)) at a price that equals such shares’ nominal amount. Valera shall subscribe and pay for those shares within one week as of receipt of such offer, or the offer shall lapse. Valera’s payment shall be made to the same notary’s third party account as used for the purpose of Sec. 3 (2), equally instructing the notary to pay these amounts to the Company upon the execution of the notarial deed on the Second Capital Increase and issuance of the respective new shares to Valera. in the table in Sec. 3 (2), ARCADE hereby commits towards the Shareholders, but such payment, to make an additional payment of EUR 349,464 (on top of the additional payment under Sec. 2 (2) above) into the Company’s capital reserves at the latest immediately prior to any of the following events: (i) a Trade Sale (as defined in Sec. 12 (1) below); (ii) an initial public offering of shares of the Company; (iii) the liquidation of the Company (but not in the context of an insolvency); and (iv) any transfer of any shares by ARCADE except for share transfers under Sec. 15 (1) if the acquirer assumes this payment obligation. Nothing in this Sec. 3 (4) shall be interpreted to grant to the Company any right or claim to the additional payment by ARCADE. Sec. 4 General Obligations with regard to Capital Increases / Syndication (1)   To the extent necessary to implement Secs. 2 and 3, the Shareholders shall waive their statutory subscription rights for the First and Second Capital Increase. 37   (2)   The Parties shall make any and all statements and undertake any and all actions necessary or appropriate, including the co-operation with the execution of any relevant notarial deeds, to implement the aforesaid resolutions set out in Secs. 1 to 3 as soon as reasonably practicable. (3)   Each of the Investors listed on the cover page of this Agreement shall be entitled to transfer and assign its rights and obligations to subscribe and pay for shares from the First and Second Capital Increase to a third party, provided that such third party (i) meets the approval of Shareholders who hold (together) a majority of the shares held by all Shareholders at the time of the approval, and (ii) accedes to this Agreement as an Investor by a syndication and accession agreement as set forth in draft form as Appendix 4.3a hereto, which shall be accepted on behalf of all Parties by the respective Investor who transfers and assigns its rights and obligations. The same requirements shall apply to the third party investor or third party investors envisaged in Secs. 2(2) and 3(2) to invest in the First and Second Capital Increase, except that in such case, such third party investor shall accede to this Agreement as an Investor by an accession agreement as set forth in draft form as Appendix 4.3b, which shall be accepted on behalf of all Parties by any of the Investors. Sec. 5 Default on Investment Obligation (1)   If an Investor fails (i) to subscribe for shares from the First or Second Capital Increase, or (ii) to make any of the payments under Sec. 2 (2) and 3 (2), in each case within the time period provided for with regard to such subscription or payment in the respective Sections above plus a grace period of one additional week (“Default”), such Investor’s right to acquire shares from the respective First or Second Capital Increase shall lapse. In addition, such Investor (the “Defaulting Investor”) shall be obliged to transfer 50% of the shares held by such Investor at that time to the other Shareholders (who shall be entitled to acquire such shares pro rata to their shareholdings) for an aggregate consideration of EUR 1, such amount to be pro rated among the Shareholders receiving such transferred shares. The share transfer shall be implemented without delay upon the lapse of the respective applicable time period plus the grace period of one week, and the Defaulting Investor shall, in particular, provide all co-operation needed for the execution of the notarial deed of the share transfer. Secs. 9 – 11 of this Agreement shall not apply to such share transfer. The Company shall immediately inform all Shareholders of such lapse of time and failure to subscribe or make payments. (2)   Each Investor hereby assigns, subject to the condition precedent that he commits a Default, all of the Relevant Claims (as defined hereinafter) to all other Shareholders (at the time of Default) pro rata to their shareholdings at the time of Default. The Relevant Claims are 50% of all claims of the Defaulting Investor for dividends, liquidation proceeds, trade sale proceeds and redemption compensation with respect to all of the shares held by him at the time of Default, provided, however, that such claims arise or become payable in the time period between the Default and the share transfer pursuant to Sec. 5 (1). Sec. 6 Valera’s Covenant to obtain Shire Waiver/Licence (1)   Valera hereby undertakes to obtain from Shire US Inc. a license to the Development Data for the development, manufacture, use, supply and sale of the Licensed Product in Ireland (each capitalised term as defined in the Termination Agreement, License Back and Option dated 21 December 2001 between Hydro Med Sciences, Inc. (n/k/a Valera Pharmaceuticals, Inc.) and Shire US Inc.). (2)   If Valera fails to obtain from Shire such license by the lapse of six months as of the date of incorporation of the Company, Valera shall transfer to the Company without consideration such number of Valera’s shares which represent 0.5% of the entire outstanding shares of the Company at that time. All Parties shall in such event, without delay upon the lapse of six 38       months after the incorporation of the Company, take all steps, measures and resolutions necessary to implement such share transfer, including – but not limited to – the shareholders resolution on the Company’s acquisition of such shares and the Company’s consent to such share transfer. Secs. 9 – 11 shall not apply to such share transfer. Sec. 7 Other Covenants (1)   Valera and the Investors shall ensure that immediately upon the Company’s incorporation the Company will accede to this Agreement by signing it. (2)   Valera hereby offers to the Company or any of its subsidiaries the conclusion of the Licence and Distribution Agreement set out in Appendix 7.2, and all Parties shall ensure that the Company or its appropriate subsidiary without delay accepts such offer and enters into said Distribution and Licence Agreement upon the Company’s or the appropriate subsidiary’s incorporation. (3)   It is the parties’ joint intention that the Company sets up subsidiaries and a structure as set out in Appendix 7.3 as amended from time to time by the Company’s management with the approval of the Company’s supervisory board. The Parties shall make any and all statements and undertake any and all actions necessary or appropriate to implement the aforesaid structure as soon as reasonably practicable, provided, however, that no Shareholder shall be obliged under this Sec. 7.3 to accept or enter into any financial obligations other than expressly provided for in this Agreement. The Parties agree to procure that the articles of association or similar instruments of any future subsidiaries of the Company will be established in such a manner that they will provide that prior approval of the respective subsidiary’s shareholders meeting shall be required for those resolutions or actions by such subsidiary’s management for which, if such resolution or action was to be taken by the management of the Company, the management would require the consent of the Company’s supervisory board, thus ensuring that any such resolution or action ultimately requires the consent of the supervisory board of the Company. (4)   All Parties shall ensure that the Company without delay upon its incorporation issues the Management Rights Letter attached in draft form as Appendix 7.4 hereto to TVM LP as well as to TVM KG. By signing and acceding to this Agreement, the Company undertakes to issue such Management Right Letters without delay. Sec. 8 Intellectual Property Rights (1)   The parties agree that JFLAB does not have any rights in or relating to intellectual property rights (including, without limitation, any inventions, patents, copyrights and other industrial property rights, especially with a view to software and related materials or rights for remuneration) (hereinafter collectively referred to as the “IP Rights”) in the field of speciality urology and endocrinology products (the “Field”). For the avoidance of doubt, JFLAB hereby offers to transfer to the Company or the appropriate subsidiary, to the extent legally possible, any and all IP Rights owned by him in the Field without any additional compensation. Where such transfer is not possible for any legal reasons, JFLAB herewith offers to grant to the Company or the appropriate subsidiary an exclusive and irrevocable licence to use such IP Rights for all currently known uses without any fee or other consideration being payable. The offered grant of licence is as broad as legally possible and shall specifically, without limitation, be unlimited (in respect of duration, territorial scope and scope of the rights concerned), exclusive, transferable and shall include the right to modify the IP Rights and to grant sub-licences to third parties. The licence shall also include the permanent or temporary reproduction of the work results by any means and in any form, in part or in whole, the loading, displaying, running, transmission or storage of the work results, the translation, 39       adaptation, arrangement and any other alteration of the work results and the reproduction of the results thereof, without prejudice to the rights of the person who alters the work results, any form of distribution to the public, including the rental, of the original work results or of copies thereof, and the right to make available to the public the work results by any means. (2)   Where the above transfer of rights and the grant of licences requires any further deeds, acts or declarations, JFLAB agrees to give and make any such deeds, acts and declarations forthwith. Any costs accruing in this context shall be borne by the Company or the appropriate subsidiary. (3)   At the request of the Company or the appropriate subsidiary, JFLAB shall demonstrate and explain all IP Rights, know-how and any knowledge or work results in the Field to an expert named by the Company or the appropriate subsidiary and answer all questions such expert may have. JFLAB shall make available to the Company or the appropriate subsidiary all of his documentation on IP Rights, know-how and any knowledge or work results in the Field. Sec. 9 Transfer of Shares / Notification (1)   In the event that a Shareholder intends to transfer all or part of his shares in the Company to any third person (including other Shareholders) with or without consideration, or to enter into any commercially equivalent transaction (the “Selling Shareholder”), the Selling Shareholder shall be obliged to notify the other Shareholders of such intent in writing (the “Notification”) with a copy to the chairman of the Company’s supervisory board. (2)   The Notification of the Selling Shareholder shall contain the following information:   a)   name / firm name and address / registered office of the Selling Shareholder;     b)   name / firm name and address / registered office of the prospective purchaser;     c)   description of business of the prospective purchaser;     d)   purchase price or other consideration for the proposed transfer, if any;     e)   due date for payment of the purchase price and / or other consideration, if any;     f)   number of shares to be transferred;     g)   representations and warranties as well as indemnities to be given and covenants to be assumed by each party to the proposed transfer. (3)   If, however, the Selling Shareholder intends to transfer shares for consideration other than cash, the Selling Shareholder shall, for the purpose of the right of first refusal under Sec. 10, indicate in the Notification the value of any non-cash consideration in cash according to the consideration’s fair market value. In the event that another Shareholder has reasonable doubt as to the accuracy of the consideration’s value, such Shareholder (the “Objecting Shareholder”) shall inform the Selling Shareholder accordingly in writing within two weeks as of the receipt of the Notification, indicating the value which the Objecting Shareholder believes to be accurate, with a copy of such information to all other Shareholders. If the Objecting Shareholder and the Selling Shareholder do not agree within a period of one week on the value of the non-cash consideration or on an expert to ultimately determine the non-cash consideration’s fair market value, such value shall be ultimately determined by an auditor nominated by the chairman of the Dutch Institute for Chartered Accountants (Nederlands Instituut voor Register Accountants – NIVRA -) (the agreed expert or auditor nominated by NIVRA hereinafter: the “Expert”). Such determination by the Expert shall be finally binding for the purpose of the right of first refusal under Sec. 10. The Selling Shareholder shall notify in writing all other Shareholders of the so determined fair market value of the non-cash consideration immediately upon its determination with a copy to the chairman of the Company’s supervisory board, and the Notification shall be deemed accordingly amended with regard to the purchase price / consideration, and received by the other Shareholders only 40       upon receipt of the notification on the non-cash consideration’s fair market value as determined by the Expert. The cost of the Expert’s determination of the non-cash consideration’s fair market value shall be borne by the Objecting Shareholder, if the determined value is closer to the Selling Shareholder’s indication of value in the Notification, and by the Selling Shareholder if the determined value is closer to the Objecting Shareholder’s indication of value. Sec. 10 Rights of First Refusal (1)   In the event that a Shareholder intends to sell his present or future shares in the Company for consideration (purchase / swap / contribution against shareholder’s rights, etc.) the Shareholders (other than the Selling Shareholder) shall have a right of first refusal as set forth in the following provisions to acquire the shares, which the Selling Shareholder intends to sell, at the terms and conditions set forth in the Notification pursuant to Sec. 9 (2) and (3). (2)   Within 30 days of receipt of the Notification, each Shareholder (other than the Selling Shareholder), who wishes to exercise a right of first refusal, shall state in writing to the Selling Shareholder the maximum number of shares (the “Acquisition Limit”) he is willing to acquire at the terms and conditions set forth in the Notification pursuant to Sec. 9 (2) and (3) (hereinafter: the “Purchase Statement”) with a copy to the chairman of the Company’s supervisory board. Such statement shall be binding in accordance with Sec. 10 (3), (4) and (5) below. (3)   If the aggregate number of shares that all Shareholders (other than the Selling Shareholder) have stated to be willing to acquire within the aforesaid 30-day-period falls short of the aggregate number of shares which the Selling Shareholder intends to sell pursuant to the Notification, the Selling Shareholder shall inform all other Shareholders accordingly, and no right of first refusal shall apply at all. The Selling Shareholder, subject to the Shareholders’ Tag-Along Rights pursuant to Sec. 11 and the provisions of Sec. 14, shall be entitled to sell his shares, but only in strict accordance with the Notification, within two months upon the lapse of the aforesaid 30-days-period. The purchase agreement between the Selling Shareholder and the purchaser shall be submitted to the chairman of the Company’s supervisory board for review immediately. (4)   If the Shareholders (other than the Selling Shareholder) within the 30-day-period set forth in Sec. 10 (2) state to be willing to acquire in aggregate all of, or even more than, the shares which the Selling Shareholder intends to sell pursuant to the Notification, the Shareholders, who have issued a Purchase Statement, shall have (and shall be deemed to have exercised by way of their Purchase Statements) a right of first refusal with regard to all of the shares, which the Selling Shareholder intends to sell. Such right of first refusal shall vest with its holders (and be deemed to be exercised by way of the Purchase Statements) — up to each holder’s Acquisition Limit — pro rata to their shareholdings (including common shares, if any) inter se if and to the extent that more than one Shareholder have issued Purchase Statements. (5)   If a right of first refusal applies pursuant to Sec. 10 (4), the Selling Shareholder shall be obliged vis-à-vis each holder of such right of first refusal, and each holder of such right of first refusal shall be obliged vis-à-vis the Selling Shareholder, to sell/purchase and transfer shares in accordance with (i) the terms and conditions set forth in the Notification pursuant to Sec. 9 (2) and (3), and (ii) the respective Purchase Statement pursuant to Sec. 10 (2) above and allocation pursuant to Sec. 10 (4) above. Sec. 11 Tag-Along Rights (1)   The Shareholders shall be entitled to request from any Selling Shareholder, to the extent that the latter is entitled under Sec. 10 (3) to sell shares to the purchaser named in the Notification and provided that the purchaser is not one of the Shareholders, to co-sell shares held by the Shareholders (other than the Selling Shareholder) to the purchaser named in the Notification at 41       the same terms and conditions as stated therein (the “Tag-Along Right”). Each Shareholder (other than the Selling Shareholder) may (i) request the co-sale of shares and (ii) state to be willing to acquire shares of the Selling Shareholder under his right of first refusal pursuant to Sec. 10 at the same time to the effect that the co-sale shall occur if no rights of first refusal apply pursuant to Sec. 10 (3). No co-sale rights shall apply with regard to a sale and transfer of shares in exercise of the right of first refusal pursuant to Sec. 10. (2)   The Tag-Along Right shall be exercised within the 30-days-periods under Sec. 10 (2) by written declaration to the Selling Shareholder with a copy to the chairman of the Company’s supervisory board, stating the number of shares which the respective Shareholder wishes to be co-sold. If the respective Shareholder considers the purchaser named in the Notification a competitor of the Company or a company affiliated with such competitor, and on this basis asserts Sec.11 (4) below to apply, he shall state this, too, in the written declaration (“Assertion of Competition”). (3)   In the event that the purchaser named in the Notification is not willing to purchase all of the shares that the Selling Shareholder and the Shareholders wish to be sold, the Selling Shareholder shall not be entitled to sell shares to the purchaser unless (and subject to Sec. 11 (4) below) shares of the Shareholders who have requested the co-sale of shares pursuant to Sec. 11 (2) are being sold to the purchaser pro rata (i.e., the same percentage of the respective shareholdings — prior to the sale — of the Selling Shareholder and the Shareholders, who have requested a co-sale, are being sold). (4)   The provisions of Sec. 11 (3) notwithstanding, the Selling Shareholder shall not be entitled to sell shares to the purchaser without all of the shares that the Shareholders requested to be co-sold being equally sold, if the purchaser named in the Notification is a competitor of the Company or a company affiliated with such competitor, or if, as a result of the share sale, the purchaser (and, if applicable, all companies affiliated with the purchaser) would hold more than 50% of the Company’s share capital. Subject only to a final and binding court decision, an Assertion of Competition shall be binding on all parties for the purposes of this Sec. 11 (4). Sec. 12 Drag-Along Rights (1)   Investors, who hold (together) a Qualified Investor Majority (as defined in Sec. 23 (1) below), are entitled to demand from all Shareholders (i) to sell their shares to one or more third parties (other than companies affiliated to, or private equity or venture capital funds regularly managed or advised — with regard to its investment activities — by any of the Shareholders or their affiliated companies, or managed or advised — with regard to its investment activities — by the same manager or advisor that regularly manages or advises any of the Shareholders) or to transfer their shares in the course of a merger, a contribution or a similar transaction (such sale of shares or transfer of shares in the course of a merger, a contribution or a similar transaction hereinafter: “Trade Sale”) or (ii) to participate in and support the sale of more than 50% of the tangible and intangible assets of the Company (calculated at fair market values) (such sale of assets hereinafter: “Asset Deal”). (2)   The person to be authorised to negotiate the terms and conditions of a Trade Sale pursuant to Sec. 12 (1)(i) or an Asset Deal pursuant to Sec. 12 (1)(ii) with a third party (the “Negotiator”) shall be equally determined by Investors, who hold (together) a Qualified Investor Majority (as defined in Sec. 23 (1) below). Herewith, all of the Shareholders instruct the Negotiator to negotiate all terms and conditions with the prospective purchaser on their behalf. No Party shall be obliged to pay any fees to the Negotiator (unless otherwise agreed), or to make any other payments to the Negotiator with regard to the negotiation of the Trade Sale or the Asset Deal, other than a customary fee for the Negotiator that will be deducted from the proceeds of a completed Trade Sale or the Asset Deal which had been negotiated by the Negotiator. The authorisation (Beauftragung) shall be valid during the term of this Agreement and shall continue to be valid even after a Shareholder’s death. The Negotiator shall keep the Shareholders informed about the negotiations of the Trade Sale or the Asset Deal and shall act in the interest of all Shareholders. The Negotiator shall in particular ensure that the Shareholders’ interest in achieving a high price as consideration and reasonable representations, warranties, indemnities and covenants for the Trade Sale or the Asset Deal be 42       duly considered. (3)   The Negotiator shall without undue delay submit a draft shareholders’ sales offer negotiated with a third party purchaser (hereinafter: the “Final Draft Offer”) to the Shareholders and the chairman of the Company’s supervisory board. Upon the receipt of the Final Draft Offer and a written approval thereof by Investors, who hold (together) a Qualified Investor Majority (as defined in Sec. 23 (1) below) (the “Investors’ Approval of the Offer”), the Company through the chairman of its supervisory board shall immediately inform the Shareholders in writing and submit the Final Draft Offer to them. (4)   In the event that the Final Draft Offer meets the following requirements, all Shareholders shall submit, within two weeks after receiving the Final Draft Offer and the information on the Investors’ Approval of the Offer, a duly signed and binding sales offer in accordance with the Final Draft Offer to the Negotiator for passing it on to the purchaser:   a)   95% or more of the Company’s shares shall be included in the Trade Sale or more than 50% of the tangible and intangible assets of the Company shall be included in the Asset Deal; the term to accept the offer shall not exceed four weeks, and the Trade Sale or Asset Deal shall become unconditionally effective or ineffective no later than three months after the acceptance of the offer;     b)   the consideration to be paid shall be in cash or shall be a divisible non-cash consideration (e.g. shares) and shall, in case of a Trade Sale, be distributed among the Shareholders in proportion to their respective participation in the Company’s share capital at the time of the Trade Sale or, if Sec. 5 (2) above applies, in the proportion set forth therein;     c)   up to the amount that tax accrues as a result of the sale, the consideration to be paid to the Shareholders shall fall due and be liquid to an extent that enables the Shareholders to timely pay any accrued tax;     d)   (i) the liability of each Shareholder with regard to representations, warranties, indemnities and covenants granted to the purchaser in connection with the Trade Sale or the Asset Deal, and any other obligations or liabilities in this regard shall be as customarily agreed in such transactions and shall for each Party be limited in the aggregate at maximum to the consideration received by such Party pursuant to lit. (b), (ii) the representations, warranties and indemnities in the event of a Trade Sale shall for all Shareholders who have not held a management position in the Company within the last 12 months prior to the conclusion of the agreement on the Trade Sale or Asset Sale be limited exclusively to representations and warranties regarding the existence and unrestricted legal title to the shares (including the non-existence of third party rights in the shares), full payment of the share capital attributable to them (including non-repayment), and their unrestricted transferability, which representations and warranties are only to be given by the Shareholders with respect to the shares sold by the respective Shareholder, and (iii) the Shareholders are only severally liable.     If these requirements are met, the Shareholders shall, furthermore, immediately submit all declarations and undertake all measures, which the implementation of the Trade Sale or the Asset Deal requires, in particular but not limited to shareholders’ resolutions or filings for court or administrative clearances, permissions or authorisations. (5)   Sec. 9 to 11 and 14 shall not apply to any Trade Sale entered into pursuant to this Sec. 12, except that Valera shall be entitled to exercise a right of first refusal upon receipt of the Final Draft Offer and the information on the Investors’ Approval of the Offer by submitting to the Negotiator within two weeks from such receipt a duly signed and binding offer to purchase and acquire the shares in the Company at the terms and conditions set forth in the Final Draft Offer. This right of first refusal of Valera shall, however, not apply (i) if the Investors, who exercise their right to demand a Trade Sale pursuant to Sec. 12 (1) through (4) have requested from Valera- prior to such demand — an offer from Valera for Valera’s purchase of the entire shares of the Company (the “Valera Offer”), with such offer to be granted within three months as of the request by the Investors (the “Valera Offer Period”) and with an acceptance period of at least six months, and (ii) unless Valera has made a Valera Offer within the Valera Offer Period and the purchase price of the Valera Offer exceeds the purchase price of the 43       Final Draft Offer. Notwithstanding the foregoing, if Valera has made an offer to acquire either all shares held by all Shareholders other than Valera or all assets of the Company, then for a period of nine months after the date of such offer, neither the Shareholders nor the Company shall engage in a Trade Sale or Asset Deal at an aggregate purchase price that is less than the aggregate purchase price offered by Valera. (6)   Upon an Asset Deal pursuant to this Sec. 12, Investors, who hold (together) a Qualified Investor Majority (as defined in Sec. 23 (1) below), shall be entitled, within a time period of six months as of the implementation of the Asset Deal, to request from all Shareholders to resolve the dissolution and liquidation of the Company without undue delay. Sec. 13 Restrictions of Transfer (1)   The Company’s shares shall be registered in the shareholders’ names. In order to ensure that shares are solely transferred in compliance with this Agreement, the transferability of the shares in the Company shall be restricted and any transfer shall require the Company’s previous consent. The Company’s consent shall be required for the transfer of shares in the Company irrespective of whether a share certificate has been issued. (2)   This Sec. 13 as well as Secs. 9, 10, 11 and 14 shall apply mutatis mutandis to any transfer by JFLAB of any shares in ARCADE (which is currently owned 50.6% by JFLAB), as well as to any other measure which entails that JFLAB does no longer exercise control over ARCADE. (3)   The Company shall be obliged to grant its consent to the transfer of shares if the transfer is in compliance with the provisions of this Agreement; otherwise, the Company shall not consent to the transfer of shares. The Company’s consent shall be decided upon by the Company’s supervisory board. Sec. 14 Share Transfers and Share Issuance under Accession to this Agreement Shares in the Company shall in no event – except as expressly provided otherwise in this Agreement – be transferred or issued to an acquirer, who is not yet a Party to this Agreement, unless the acquirer has previously signed and acceded to this Agreement as Party hereto. Sec. 20 (3) and (4) apply. Sec. 9 – 11 remain unaffected. Sec. 15 Transfers to Affiliated Companies and Funds (1)   Sec. 9 – 11 shall not apply to any transfers of shares with or without consideration by any Shareholder to affiliated companies and/or to other private equity or venture capital funds (in whatever legal form, e.g., companies, partnerships or other entities; hereinafter: “Funds”) regularly managed or advised — with regard to their investment activities — by such Shareholder, by an affiliated company of such Shareholder or by the same manager or advisor that regularly manages or advises — with regard to its investment activities — such Shareholder. With reference to Sec. 19, Sec. 9 – 11 shall equally not apply to any transfers of shares by TVM KG, TVM LP or any of their permitted transferees under the preceding sentence to KfW or an affiliated company of KfW, provided that this exemption from Sec. 9 – 11 shall be limited to the transfer of such number of shares that corresponds to the portion of TVM KG’s and TVM LP’s investment, which is refinanced by KfW, and shall in no event extend to more than 20% of all of the shares in the Company held by TVM KG, TVM LP and their permitted transferees under the preceding sentence immediately prior to such share transfer. 44   (2)   Sec. 15 (1) shall in no event apply to the transfer of shares to a portfolio company of the respective Shareholder. Sec. 16 Stock Incentive Scheme (1)   The Parties agree that a Stock Incentive Scheme shall be implemented at the Company for the purpose of granting to the management of the Company, its employees and / or its supervisory board members, advisors, or similar beneficiaries in aggregate options to shares in the Company or economically comparable rights (one or the other hereinafter: “Option Rights”) up to an aggregate amount equivalent to 10% of the aggregate (fully diluted) number of outstanding shares of the Company, including the shares reserved under the Stock Incentive Scheme. As a general rule, the Option Rights shall be subject to a vesting over three or four years, and the specific terms as well as the allocation of the Option Rights shall be subject to the approval of the Company’s supervisory board. (2)   The Parties further agree that from the overall amount of Option Rights to be granted pursuant to Sec. 16 (1), Option Rights to an aggregate amount equivalent to 1.5% of the aggregate (fully diluted) number of outstanding shares of the Company shall be reserved for members of the Company’s supervisory board. Sec. 17 (4) lit. c) shall not apply in this respect.       (1) Sec. 17 Supervisory Board (1)   The Company’s supervisory board shall consist of five members. The Shareholders shall exercise their voting rights at elections of the supervisory board as follows:   a)   one member of the supervisory board (and a respective substitute member) shall be appointed as nominated by Valera;     b)   one member of the supervisory board (and a respective substitute member) shall be appointed as nominated jointly by TVM LP and TVM KG;     c)   one member of the supervisory board (and a respective substitute member) shall be appointed as nominated jointly by LSOFI and LSOF;     d)   one member of the supervisory board (and a respective substitute member) shall be appointed as nominated by simple majority of the Investors.     A further member of the supervisory board (as well as the respective substitute member) shall be elected by the Shareholders’ meeting of the Company with simple majority, provided, however, that this candidate (as well as the substitute member) shall be an independent member and industry expert with proven success, network and regulatory and/or marketing expertise in global pharmaceutical industry. Nominations and appointments of supervisory board members shall not exceed the time period from the date of such nomination/appointment to the ordinary annual shareholders meeting of the calendar year following the year of nomination and appointment. (2)   The nomination rights set forth above shall apply mutatis mutandis with regard to the removal of members of the supervisory board. Retiring members of the supervisory board shall be replaced pursuant to the provisions set forth in Sec. 17 (1) above. Any nomination right set forth in Sec. 17 (1) litt. a) through c) shall expire if and when the shareholding of the respective holder of such nomination right (and any of its permitted transferees under Sec. 15 (1) above) falls below 10% of the entire outstanding shares of the Company, except that Valera’s nomination right pursuant to Sec. 17 (1) lit. a) shall not expire as long as Valera’s shareholding amounts to at least 5% of the entire outstanding shares of the Company and 50% or more of the entire net sales of the Company and its subsidiaries within the respective last calendar quarter (from time to time) have been 45       made by the Company and its subsidiaries with products supplied by Valera. (3)   Each of the Shareholders undertakes individually for himself vis-à-vis each other Shareholder to vote in any Shareholders’ meeting of the Company resolving on the election of members of the supervisory board in favour of the candidates nominated pursuant to Sec. 19 (1) above. (4)   The Parties shall, to the extent legally permissible and respecting the and all influence they have to the effect that   a)   the Company’s supervisory board shall hold meetings at least quarterly at the Company’s registered seat or at any other place which the majority of the Company’s supervisory board deems from time to time appropriate;     b)   the members of the supervisory board and of the management board shall be granted a Directors’ and Officers’ liability insurance at the Company’s costs with a sufficient coverage, but at least in the amount of EUR 1,000,000.00 per insured event, provided that such insurance is available for the Company at reasonable conditions;     c)   only the independent industry experts nominated as members of the supervisory board under Sec. 17 (1) above shall be granted by the Shareholders’ meeting an appropriate cash remuneration for their services as members of the supervisory board; Sec. 16 (2) remains unaffected;     d)   the transactions and measures listed in the rules of procedure for the Company’s management board, as attached as Appendix 1.4 hereto shall be subject to supervisory board approval requiring the consent of each of the three supervisory board members nominated pursuant to Sec. 17 (1) litt. b), c) and d).     Any reasonable disbursements of members of the supervisory board in connection with board meetings, especially travel expenses shall be refunded by the Company. Sec. 18 Information (1)   To the extent legally permissible, and with the consent of all Shareholders hereto being hereby granted, the Company shall be obliged to forward the following information to each Shareholder:   a)   audited annual financial statements within 90 days after the end of the respective fiscal year;     b)   annual business plan and budget including in particular without limitation planned balance sheet, planned profit and loss statement and planned cash flow statement for the forthcoming business year no later than 30 calendar days before the beginning of each business year;     c)   monthly written reports on business operations no later than 21 calendar days after the end of each month including unaudited financial statements (profit and loss statements, balance sheets and statement of cash flows, plan versus actual budget, liquidity status, number of employees) along with key operating parameters as well as management discussion and analysis of all relevant details. (2)   All Shareholders shall keep secret and not disclose any confidential information concerning the Company. Exempt from this confidentiality covenant, however, is the passing on of information to the Shareholders’ shareholders, partners or investors (as the case may be) who are under a duty to keep such information confidential, as well as any disclosure of information required by law, by any stock exchange, by court or administrative order, or by any regulatory authority, to which any of the Parties may be subject. All Shareholders also shall abide by all confidentiality requirements of any agreements entered into by the Company, including the License and Distribution Agreement between the Company and Valera. 46   Sec. 19 Refinancing by KfW (2) TVM KG’s Investment into the Company is partly refinanced by Kreditanstalt für Wiederaufbau (“KfW”). The Parties acknowledge that such investment is subject to certain restrictions and agree to be bound by the provisions set forth in Appendix 19a hereto. Furthermore, the Parties acknowledge that TVM KG requires the internal approval by KfW in case of any amendments to this Agreement. The Company, upon its incorporation, shall without delay sign the KfW Rights Letter as attached hereto in draft form as Appendix 19b. Sec. 20 Effective Date / Succession of Rights (1)   This Agreement shall become effective upon its being signed by Valera and the Investors, and shall remain in effect until terminated in writing by Shareholders holding (together) 75% (or more) of the shares in the Company held by all Shareholders at the time of termination with effect for all Parties, except that its provisions in Secs. 9 — 23 shall lapse and become ineffective at an earlier date, if and when the shares in the Company or substituting securities are first listed on a domestic or foreign stock exchange with the consent of Shareholders who hold (together), at the time of the consent, at least 60% of the shares in the Company held by all of the Shareholders from time to time, or upon the implementation of a Trade Sale, irrespective whether effected by exercising Drag-Along Rights pursuant to Sec. 12 above or not. To the extent legally permissible, any termination of this Agreement by a Party hereto is excluded. This Agreement shall apply to all shares held from time to time by any of the Parties hereto. Any provisions herein relating to the transfer of shares in the Company (in particular, but not limited to, rights of first refusal, tag-along rights, drag-along rights) shall accordingly apply to any rights to acquire shares, e.g., share options, warrants, subscription rights etc. (2)   This Agreement shall be binding upon the Parties irrespective of whether the Company and all of its shareholders have become a Party hereto, and it shall continue to be binding even if one or several Parties cease to be shareholders of the Company. If a Party to this Agreement other than the Company and JFLAB transfers all of its shares and rights to shares in the Company, such Party shall cease to be Party to this Agreement with effect for the future (but not affecting any rights and obligations that have at this point of time already arisen hereunder). (3)   This Agreement shall be binding upon all Parties that may accede to it in the future. Herewith, the Parties irrevocably offer to future shareholders the accession to this Shareholders’ Agreement; this shall in particular apply to persons who exercise option rights granted under the Company’s employee incentive scheme and to persons or entities that acquire shares in accordance with this Agreement. Herewith, the Shareholders irrevocably authorise the Company to receive and accept respective declarations of accession from any third party future shareholder. (4)   In the event that shares in the Company are transferred, the new shareholder shall, except if expressly provided otherwise in this Agreement, enter into all of the rights and obligations of the transferring shareholder under this Agreement. The separate transfer of rights and obligations from or in connection with this Agreement shall – except as stated in the preceding sentence and unless stated otherwise in this Agreement – be excluded. Sec. 21 Delivery Addresses and Authorised Recipients (1)   Each Shareholder shall at any time maintain a mailing address and fax number, and keep at all times the Company and the other Shareholders informed thereof. As of the date of this Agreement, the Parties may direct any and all communication, in particular any and all notifications, statements, declarations, demands and information to be issued in connection with this Agreement or the shareholding in the Company to any other Party hereof to the persons and addresses (and such 47       communication, notifications, statements, declarations, demands and information shall be deemed received if delivered to the persons and addresses) as stated in Appendix 21.1. The Persons listed in Appendix 21.1 also shall be deemed to be authorised to issue any and all notifications, statements, Agreement or the shareholding in the Company to any other Party hereof. (2)   In case of a change of address of any Party hereto, such Party shall immediately inform all other Parties of such change of address in writing, with such change of address taking effect for the purposes of Sec. 21 (1) two weeks upon receipt of such information by the other Parties. (3)   Any communication, notification, statement, declaration, demand and information that is required under this Agreement to be made in writing shall suffice to be sent by telecopy. Sec. 22 Amendments to and Cancellation of this Agreement (1)   This Agreement may be amended or cancelled with effect for the future (but not affecting any rights and obligations that have at this point of time already arisen hereunder) by way of an agreement among Shareholders holding (together) 75% (or more) of the shares in the Company held by all Shareholders at the time of such agreement with effect for all Parties (hereinafter: a “Majority Amendment”), provided, however, that no amendments to this Agreement shall be made to the disadvantage of a specifically named Shareholder (instead of all Shareholders or any other group of Shareholders defined under this Agreement, e.g., the Investors) without such Shareholder’s consent; and provided, further, that the provisions of Sec. 17(1)(a)-(c) shall not be amended without the consent of the party named in such subsection. In addition, if obligations or covenants of the Company shall be created, the Company’s consent shall be required. (2)   In order for any Majority Amendment to become effective, (i) a copy of the respective agreement pursuant to Sec. 22 (1) above must be sent by registered mail to every Shareholder, who has not signed such agreement, and (ii) a copy of the respective agreement together with copies of the mail registration certificates to all other Shareholders must be sent to the Company. Upon receipt of such documents by the Company, the Majority Amendment shall become effective, and the Company shall accordingly inform all Shareholders in writing without undue delay, enclosing a copy of the respective agreement pursuant to Sec. 22 (1). If a Shareholder believes, for whatever reason, that this Agreement has not been validly amended to the effect as set forth in the information received by the Company, he shall notify the Company thereof in writing within three weeks as of the receipt of the information. Otherwise the Shareholder’s consent to the amendment as set forth in the information by the Company shall be deemed granted. (3)   In case of a Majority Amendment, the requirement of any amendments to this Agreement to be in writing (Sec. 23 (7) below) is met if the agreement among by all Shareholders at the time of such agreement is in written form. (4)   Investors, who hold (together) a Qualified Investor Majority (as defined in Sec. 23 (1) below), shall have the right to determine the terms and conditions of further financing rounds of the Company, and to request from all other Shareholders and the Company to consent to such terms and conditions and make all declarations and take all actions required (except for entering into financial obligations) to implement such financing rounds, provided that all Shareholders shall be granted the right to invest pro rata in each further financing round and that the terms and conditions of such financing rounds shall not be more onerous on some investing Shareholder than on others. The terms and conditions of further financing rounds to be determined by Investors holding a Qualified Investor Majority (as defined in Sec. 23 (1) below) may, in particular, include (but shall not be limited to):   a)   the introduction and issuance of shares of preferred stock, carrying preference rights like a liquidation and exit proceeds preference, a dividend preference, drag along, tag along and first refusal rights superior to the respective 48         rights of shares of common stock, IPO demand rights and a right to anti dilution protection;     b)   the conversion of any investor’s shares of preferred stock into common stock, and loss of preference rights, in case such investor does not invest pro rata to other existing investors from time to time in the then following financing rounds (“pay to play”). Sec. 23 Miscellaneous (1)   The term “affiliated company” or “company affiliated with ...” shall, for the purposes of this Agreement, be understood to be any group company (groepsmaatschappij) as defined in article 2:24b of the Dutch Civil Code. The term “Qualified Investor Majority” shall, for the purposes of this Agreement, be understood as 60% (or more) of all of the shares held by all of the Investors in the Company from time to time; this term shall not imply a requirement to hold a meeting or have a formal vote among the Investors. (2)   The liability of the Investors for any and all obligations under this Agreement shall not be jointly in nature, but severally only. This applies, in particular for (but not limited to) the payment and subscription obligations under Secs. 1, 2 and 3 of this Agreement. (3)   The Parties shall ensure that the Company arranges for Key-Man-Insurance for JFLAB in the amount of EUR 1,000,000 payable in favor of the Company. (4)   The Parties shall each bear their own costs incurred in connection with this Agreement, provided, however, that the Investors shall be entitled to deduct from their premium payments in the context of the foundation of the Company and of the First Capital Increase the costs incurred in the context of this transaction for legal and tax advice. The Parties agree that the Company shall bear, to the extent legally admissible, any costs and fees of registration and the notary in connection with its foundation and the capital increases provided for in this Agreement. (5)   In the event that provisions of this Agreement contradict provisions of the Company’s articles of association (Satzung), this Agreement shall prevail to the extent legally permissible. The Parties acknowledge and agree that the arrangements included in this Agreement which relate in any way to the transfer of shares, are different from the transfer restriction clauses in the articles of association of the Company. This deviation, however, is expressly agreed and accepted by the Parties in their mutual contractual relations as established through this Agreement. The Parties hereby agree to act in accordance with the provisions of this Agreement and to co-operate in the effectuation of any transaction in accordance with the provisions of this Agreement, including co-operation with the execution of any additional documents, waivers, resolutions and/or notarial deeds necessary or relevant for such transaction. In particular, each of the Parties agrees to waive any rights under the articles of association of the Company to the extent such waiver is necessary to procure that the provisions of this Agreement may be applied in such manner as is described herein. (6)   The Parties shall maintain confidentiality about the content of this Agreement and its execution; provided that Valera may disclose the existence of this Agreement and its contents, and file this Agreement with applicable regulatory authorities, as required by law. The exemptions provided for in Sec. 18 (2) shall apply accordingly. Valera and the Investors shall agree on the content, timing and format of any press release in connection with the conclusion and implementation of this Agreement. (7)   Any amendments to this Agreement, including amendments to or waivers of this form requirement, must be in written form in order to be effective. (8)   In the event that a provision of this Agreement is or becomes partly or entirely invalid or if this Agreement contains a gap or omission, the validity of the remaining provisions of this Agreement shall not be affected thereby. The Parties shall be obliged to replace the partly or entirely invalid provision with a valid provision, which the Parties would have agreed on, had 49       they been aware of the invalidity of the respective provision. The same shall apply in the event that this Agreement contains a gap or omission. (9)   This Agreement shall be governed by Dutch law under exclusion of its rules of conflict of laws. To the extent legally permissible, the place of jurisdiction and place of performance shall be Amsterdam. 50                       , this 17 July 2006       /s/ B. Seibel                   TVM Life Science Ventures VI L.P.   TVM Life Science Ventures VI GmbH & Co. KG       /s/ James Gale             Life Sciences Opportunities Fund (Instititutional) II, L.P.   Life Sciences Opportunities Fund II, L.P.       /s/ Jean-Francois Labbé   David S. Tierney             ARCADE SARL   Valera Pharmaceuticals Inc.           26.06 2006                   Jean-François Labbé   Spepharm Holding B.V. (3)       List of Appendices           Appendix 1.2:   Articles of Association of the Company       Appendix 1.3:   Terms of Service Agreement of JFLAB       Appendix 1.4:   Rules of Procedure for the Management       Appendix 1.5:   Draft Loan Agreement       Appendix 4.3a/b:   Accession Forms for Third Party Investor(s) (First and/or Second Capital Increase)       Appendix 7.2:   Distribution and Licence Agreement       Appendix 7.3:   Group Structure       Appendix 7.4:   Management Rights Letter       Appendix 19a/b:   KfW Provisions / KfW Rights Letter       Appendix 21.1: 51

EXHIBIT 10.2 EXECUTION VERSION EXECUTIVE EMPLOYMENT AGREEMENT      This Executive Employment Agreement (“Agreement”) is made effective as of April 11, 2011 (“Effective Date”), by and between Spark Networks, Inc., a Delaware Corporation (“Company”) and Gregory R. Liberman (“Executive”) and supersedes and replaces the Executive Employment Agreement dated August 31, 2005, and as amended, that was previously entered into with Executive.      The parties agree as follows:      1. Employment. The Company hereby employs Executive, and Executive hereby accepts such employment, upon the terms and conditions set forth herein.      2. Duties.           2.1 Position. Effective, as of the date hereof, Executive is employed on a full-time basis as President & Chief Executive Officer, shall report directly to the Board of Directors of the Company (the “Board”), and shall have the duties and responsibilities commensurate with such position as shall be reasonably and in good faith determined from time to time by the Board. Executive shall also continue to serve on the Board. Executive, however, acknowledges that in the event that he is not re-elected as a director of the Company by the stockholders from time to time in accordance with the Company’s certificate of incorporation, bylaws or other applicable constitutional documents, subject to the Company’s compliance with Section 2.2 the resulting termination of his position as a director will not affect his position as an employee and President & Chief Executive Officer of the Company and this Agreement will not be terminated solely as a result of such termination of his directorship.           2.2 Duties. Except for vacation and illness periods, Executive shall devote substantially all of his business time, energy, skill and efforts to the performance of his duties hereunder in a manner that will faithfully and diligently further the business interests of the Company, provided, that, notwithstanding the foregoing, Executive may (i) make and manage personal business investments of his choice, (ii) subject to obtaining the prior consent of the Board, which consent will not be unreasonably withheld, serve as a director or in any other capacity of any business enterprise, including an enterprise whose activities may involve or relate to the business of the Company, provided that such service is not to a business enterprise that competes with a “Company Business,” as defined in Section 9 of this Agreement, and (iii) serve in any capacity with any civic, educational, religious or charitable organization, or any governmental entity or trade association. In addition, during Term of Employment, subject to the Company’s certificate of incorporation, bylaws and the rules and requirements of the charter of the nominating and corporate governance committee of that Board, the Company shall cause Executive to be nominated as a member of the Board and the Board shall not take any action to remove Executive from the Board (the obligation to nominate and for the Board to not remove will continue even if Executive is not re-elected in any year). Executive agrees to serve as a member of the Board.      3. Term of Employment. The term of Executive’s employment with the Company under this Agreement shall commence on the Effective Date and shall continue until the third     anniversary of the Effective Date, unless earlier terminated as herein provided (the “Initial Term”). As used herein, “Term of Employment” shall include the Initial Term and any additional term that may be agreed to by the Company and Executive (the “Extended Term”), but the Term of Employment shall end upon any termination of Executive’s employment with the Company as herein provided.      4. Compensation.           4.1 Base Salary. As compensation for Executive’s performance of Executive’s duties, the Company shall pay to Executive a base salary of three hundred twenty-five thousand dollars ($325,000) per year (“Base Salary”), payable in accordance with the normal payroll practices of the Company, less all legally required or authorized payroll deductions and tax withholdings. Base Salary shall be reviewed annually, and may be increased, at the sole discretion of the Board’s Compensation Committee, in light of Executive’s performance and the Company’s financial performance and other economic conditions and relevant factors, but may not be decreased at anytime without Executive’s written consent.           4.2 Annual Bonus. The Company shall pay an annual bonus to Executive based on a performance plan established by the Board of Directors for each fiscal year during the Term of Employment (the “Annual Bonus”). The performance plan shall be based on a 12-month performance period beginning on January 1 and ending on December 31 of each fiscal year during the Term of Employment. The performance goals under the performance plan shall be set by the Board, with the input of Executive and the Board’s Compensation Committee, and shall be based on metrics, which may include: (i) Company gross revenue, (ii) Company earnings before interest, depreciation and amortization (“EBITDA”), and (iii) management objectives. The performance plan for each fiscal year during the Term of Employment shall be incorporated into this Agreement by reference. Except as otherwise provided by Section 8 of this Agreement, to be eligible for an annual incentive bonus, Executive must maintain continued employment with the Company throughout the relevant performance period. The Annual Bonus payable under the performance plan shall be paid to Executive as soon as reasonably practical upon the release of audited financial statements but in no event later than two and one-half (2-1/2) months from the last day of each performance period. The target Annual Bonus payable to Executive under the performance plan shall be two hundred twenty-five thousand dollars ($225,000) (the “Target Annual Bonus”). The Board or the Compensation Committee may increase (but not decrease) the amount of the Target Annual Bonus and may also develop separate bonus plans.           4.3 Stock Options.                (a) Concurrent with the execution of this Agreement, Executive shall be granted an option pursuant to the Company’s 2007 Omnibus Incentive Plan (the “Plan”) to purchase three hundred forty-three thousand (343,000) shares of the Company’s common stock (the “Shares”). Such option shall be granted with an exercise price equal to the Fair Market Value of the underlying stock on the Effective Date, such option shall provide for a term of ten (10) years and shall have a one year exercisability period immediately following Executive’s termination of employment (it being understood that, in no event shall any option remain exercisable after the expiration of the full stated term of such option). So long as Executive’s -2-   employment relationship with the Company continues, the Shares underlying the option shall vest and become exercisable in accordance with the following schedule: 1/36th of the aggregate Shares underlying the option (i.e., approximately 9,528) shall vest and become exercisable on each monthly anniversary of the Effective Date such that all of the Shares will be fully vested and exercisable on the three year anniversary of the Effective Date. In addition, such options shall be subject to the terms and conditions of the Plan and a form of option agreement (the “Option Agreement”) reflecting (and not inconsistent with) the terms set forth in this Agreement between the Company and Executive, which documents are incorporated herein by reference.                (b) For purposes of the Agreement, “Fair Market Value” shall mean the closing price of the Company’s shares on the Effective Date as traded on the NYSE American Stock Exchange, the principal exchange on which the Company’s shares are traded on the Effective Date. If the Effective Date is on a Saturday, Sunday or a holiday, Fair Market Value” shall mean the closing price of the Company’s shares on the Friday immediately before the Effective Date as traded on the NYSE American Stock Exchange.                (c) The Company represents and warrants to Executive that the terms of the Plan do not conflict with and will not prevent the option grants and the terms and treatment of the options contemplated anywhere in this Agreement. To the extent that after the date hereof the Company, the board or any committee thereof has under the terms of the Plan any discretion with respect to the interpretation of the Plan or the power to make any decisions under the Plan, such discretion shall be exercised and decisions made in a manner to give full effect to the intent of this Agreement with respect to the options.      5. Health and Welfare Benefits. Executive shall be eligible for all health and welfare benefits generally available to other executives, officers, or full-time employees of the Company, subject to the terms and conditions of the Company’s policies and benefit plan documents. However, Company shall pay one hundred percent (100%) of the cost of coverage for all Company health and welfare benefits.      6. Vacation. Notwithstanding the standard vacation policy provisions on vacation accrual rates, Executive shall be entitled to earn vacation at the rate of twenty (20) days per year.      7. Business and Personal Expenses. Executive shall be reimbursed promptly for all reasonable, out-of-pocket business expenses incurred in the performance of Executive’s duties on behalf of the Company. Such business expenses shall include the costs incurred by Executive for cellular telephone hardware and usage fees, facsimile hardware and usage fees, DSL hardware and usage fees and reasonable business related education and training costs. In addition, the Company shall reimburse Executive for any reasonable legal fees incurred in connection with this Agreement, the negotiation and execution of any new employment agreements of any successor organization in connection with a Change in Control and any future agreements with the Company entered into upon Executive’s termination of employment. To obtain reimbursement, expenses must be submitted promptly with appropriate supporting documentation and must be submitted within the same fiscal year in which they were incurred or within two and one-half (21/2) months after the end of such year. -3-        8. Termination of Employment. Subject to the terms and conditions of this Section 8, either the Company or Executive may terminate Executive’s employment at any time, with or without Cause (as defined in Section 8.9), during the Term of Employment. Any termination of Executive’s employment during the Term of Employment shall be communicated by written notice of termination from the terminating party to the other party (“Notice of Termination”). The Notice of Termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination and a written statement of the reason(s) for the termination. In the case of a Notice of Termination provided by Executive to the Company, such Notice of Termination shall not be effective for a period of thirty (30) days after receipt of such Notice of Termination by the Company. In the case of a Notice of Termination provided by the Company to Executive, such Notice of Termination shall be effective on the date designated by the Company in the Notice of Termination. In the event Executive’s employment is terminated by either party, for any reason, during the Term of Employment, the Company shall pay the prorated Base Salary earned as of the date of Executive’s termination of employment and the accrued but unused vacation as of the date of Executive’s termination of employment to Executive upon Executive’s termination of employment. Except as otherwise provided in this Section 8 or in any other agreement between the Company and Executive, the Company shall have no further obligation to make or provide to Executive, and Executive shall have no further right to receive or obtain from the Company, any payments or benefits in respect of the termination of Executive’s employment with the Company during the Term of Employment.           8.1 Severance upon Involuntary Termination without Cause and Termination by Executive with Good Reason. In the event that the Company causes to occur an involuntary termination without Cause (as defined in Section 8.9) or in the event that Executive resigns from employment with the Company for Good Reason (as defined in Section 8.9) during the Term of Employment, Executive shall be entitled to a “Severance Package” that consists of the following: (a) a single cash lump-sum “Severance Payment” equal to the Target Annual Bonus, pro-rated for the completed portion of the fiscal year, plus one hundred percent (100%) of the annual Base Salary in effect immediately prior to Executive’s termination of employment, payment to be made on the thirtieth (30th ) day following termination, (b) reimbursement of any COBRA payments paid by Executive in the twelve (12) month period following Executive’s termination of employment; provided, however, that if any plan pursuant to which such benefits are provided to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5) or the Company is otherwise unable to continue to cover Executive under its group health plans without substantial adverse tax consequences, then an amount equal to each remaining premium payment shall thereafter be paid to Executive as currently taxable compensation in substantially equal monthly installments over the continuation coverage period (or the remaining portion thereof), (c) immediate accelerated vesting of the lesser of (w) eighty-nine thousand two hundred fifty (89,250) stock-option Shares of the unvested stock option shares that are held by and granted to Executive prior to the option grant in Section 4.3 (“Prior Options”), or (x) the remaining unvested stock-option shares from the Prior Options, and (d) immediate vesting of the lesser of (y) eighty-five thousand seven hundred fifty (85,750) stock-option Shares of the unvested stock option Shares held by Executive pursuant to the option grant in Section 4.3 (“New Options”), or (z) the remaining unvested stock-option Shares from the New Options, and Executive shall also have one year to exercise any and all vested stock-options held by Executive immediately following Executive’s termination of employment (it being understood that, in no event shall any -4-   option remain exercisable after the expiration of the full stated term of the option); provided , however, that Executive executes, within the thirty (30)-day period following termination, a Separation Agreement that includes a general mutual release by the Company and Executive in favor of the other and their successors, affiliates and estates to the fullest extent permitted by law, drafted by and in a form reasonably satisfactory to the Company and Executive, and Executive does not revoke the mutual general release within any legally required revocation period, if applicable. All legally required and authorized deductions and tax withholdings shall be made from the Severance Payment, including for wage garnishments, if applicable, to the extent required or permitted by law. Effective immediately upon termination of employment, Executive shall no longer be eligible to contribute to or to receive additional Company contributions as an active participant in any retirement or benefit plan covering employees of the Company, but shall continue to have all rights under each such plan that are afforded to terminated employees and inactive participants.           8.2 Change in Control; Severance upon Termination Following a Change in Control. In the event of a Change in Control (as defined in Section 8.9), Executive shall be entitled to immediate vesting of any and all unvested stock options (including any unvested equity awards) held by Executive immediately prior to the Change in Control. However, in the event a successor company desires to retain Executive’s services for the one-year period following a Change in Control, such acceleration of unvested options and the payment of any proceeds from such option acceleration shall occur in accordance with the terms and conditions set forth under Section 8.3 below. In addition, in the event that within twelve (12) months following a Change in Control, the Company or its successors causes to occur an involuntary termination without Cause (as defined in Section 8.9) or in the event that Executive resigns from employment with the Company for Good Reason (as defined in Section 8.9), Executive shall be entitled to the Severance Package provided under Section 8.1, payment to commence on the thirtieth (30th ) day following termination, except that vesting of all of Executive’s unvested stock options (including any unvested equity awards) shall have accelerated immediately prior to the Change in Control; provided, however, that Executive must, within the thirty (30)-day period following termination, execute a Separation Agreement that includes a general mutual release by the Company and Executive in favor of the other and their successors, affiliates and estates to the fullest extent permitted by law, drafted by and in a form reasonably satisfactory to the Company and Executive, and Executive does not revoke the mutual general release within any legally required revocation period, if applicable. All legally required and authorized deductions and tax withholdings shall be made from the Severance Payment, including for wage garnishments, if applicable, to the extent required or permitted by law. Effective immediately upon termination of employment, Executive shall no longer be eligible to contribute to or to receive additional Company contributions as an active participant in any retirement or benefit plan covering employees of the Company, but shall continue to have all rights under each such plan that are afforded to terminated employees and inactive participants.           8.3 Continuation of Employment after Change in Control. In the event a successor company desires to retain Executive’s services for the one-year period following a Change in Control on all of the terms and conditions set forth in this Agreement, this Agreement shall continue to remain in force and effect and any cash or other proceeds received by Executive with respect to fifty percent (50%) of Executive’s options the vesting of which was accelerated under Section 8.2 by reason of the Change in Control (the “Accelerated Proceeds”) shall be -5-   deposited in an escrow (the “Escrow”) with an independent escrow holder to be held for Executive’s benefit pursuant to an escrow agreement which shall provide that (i) if Executive’s employment with the successor company is terminated during the one-year period following the Change in Control by the successor company for Cause or by Executive without Good Reason, Executive shall forfeit the Accelerated Proceeds (and any earnings thereon) and they shall be paid to the predecessor company immediately and (ii) the Accelerated Proceeds (and any earnings thereon) shall be paid to Executive immediately upon the earlier of (x) the first anniversary of the Change in Control if Executive maintains continuous employment with the successor company throughout the one-year period following such Change in Control date, (y) the date of Executive’s termination of employment with the successor company if Executive’s employment is terminated for any reason other than by the successor company for Cause or by Executive without Good Reason, or (z) the effective date of a Change in Control of the successor company. Any taxes due on the Accelerated Proceeds shall be withheld and paid from the Escrow at the appropriate time.           8.4 Section 409A Compliance. The parties intend for this Agreement either to satisfy the requirements of Section 409A or to be exempt from the application of Section 409A, and this Agreement shall be construed and interpreted accordingly. If this Agreement either fails to satisfy the requirements of Section 409A or is not exempt from the application of Section 409A, then the parties hereby agree to amend or to clarify this Agreement in a timely manner so that this Agreement either satisfies the requirements of Section 409A or is exempt from the application of Section 409A.                (a) Notwithstanding any provision in this Agreement to the contrary, in the event that Executive is a “specified employee” (as defined in Section 409A), any Severance Payment, severance benefits or other amounts payable under this Agreement that would be subject to the special rule regarding payments to “specified employees” under Section 409A(a)(2)(B) of the Code (together, “Specified Employee Payments”) shall not be paid before the expiration of a period of six months following the date of Executive’s termination of employment (or before the date of Executive’s death, if earlier). The Specified Employee Payments to which Executive would otherwise have been entitled during the six-month period following the date of Executive’s termination of employment shall be accumulated and paid as soon as administratively practicable following the first date of the seventh month following the date of Executive’s termination of employment, with interest on each of the Specified Employee Payments for the period of deferral, at the prime rate, as published in the Wall Street Journal (which shall be adjusted on the effective date of each change in such rate) plus 300 basis points.                (b) To the extent necessary to ensure satisfaction of the requirements of Section 409A(b)(3) of the Code, assets shall not be set aside, reserved in a trust or other arrangement, or otherwise restricted for purposes of the payment of amounts payable under this Agreement.                (c) The Company hereby informs Executive that the federal, state, local, and/or foreign tax consequences (including without limitation those tax consequences implicated by Section 409A) of this Agreement are complex and subject to change. Executive acknowledges and understands that Executive should consult with his or her own personal tax or financial advisor in connection with this Agreement and its tax consequences. Executive -6-   understands and agrees that the Company has no obligation and no responsibility to provide Executive with any tax or other legal advice in connection with this Agreement and its tax consequences. Executive agrees that Executive shall bear sole and exclusive responsibility for any and all adverse federal, state, local, and/or foreign tax consequences (including without limitation any and all tax liability under Section 409A) of this Agreement to which he may be subject under applicable law. The Company shall bear sole and exclusive responsibility for any and all adverse federal, state, local, and/or foreign tax consequences (including without limitation any and all tax liability under Section 409A) of this Agreement to which it may be subject under applicable law.                (d) To the extent that any payments or reimbursements provided to Executive under this Agreement, are deemed to constitute taxable compensation to shall be paid in accordance with the terms of the provisions under which such rights arise, but in no event later than December 31 of the year following the year in which the expense is incurred (which payment shall be contingent upon Executive’s timely submission of proper substantiation). The amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and Executive’s right to such payments or reimbursement shall not be subject to liquidation or exchange for any other benefit.                (e) Notwithstanding anything to the contrary herein, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean Separation from Service. Further, for purposes of Section 409A of the Code, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of the Section 409A.           8.5 Effect of Death or Disability. In the event that Executive dies or terminates employment by reason of a Disability (as defined in Section 8.9) during the Term of Employment, Executive shall be entitled to (i) payment of the unpaid prorated Base Salary earned as of the date of Executive’s death or Disability (the “Measurement Date”), and (ii) reimbursement of any COBRA payments paid by Executive or his estate or beneficiaries in the twelve (12) month period following the Measurement Date; provided, however, that if any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5) or the Company is otherwise unable to continue to cover Executive under its group health plans without substantial adverse tax consequences, then an amount equal to each remaining premium payment shall thereafter be paid to Executive or his estate or beneficiaries as currently taxable compensation in substantially equal monthly installments over the continuation coverage period (or the remaining portion thereof). All legally required and authorized deductions and tax withholdings shall be made from the payments described in the previous sentence, permitted by law. Payment under this Section 8.5 shall be made not more than once, if at all. -7-             8.6 Statement Regarding Termination of Employment. In the event Executive’s employment is terminated without Cause, or Executive resigns for Good Reason, Executive and the Company will negotiate in good faith to reach an agreement on a statement reflecting a benign reason for termination or resignation.           8.7 Ineligibility for Severance. Executive shall not be entitled to any Severance Package under this Agreement, if at any time during the Term of Employment, either (a) Executive voluntarily resigns or otherwise terminates employment with the Company other than for Good Reason, or (b) the Company properly terminates Executive’s employment with Cause. Effective immediately upon termination of employment, Executive shall no longer be eligible to contribute to or to be an active participant in any retirement or benefit plan covering employees of the Company.           8.8 Taxes and Withholdings. The Company may withhold from any amounts payable under this Agreement, including any benefits or Severance Payment, such federal, state or local taxes as may be required to be withheld pursuant to applicable law or regulations, which amounts shall be deemed to have been paid to Executive.           8.9 Definitions.                (a) “Cause” shall mean the occurrence during the Term of Employment of any of the following: (i) formal admission to (including a plea of guilty or nolo contendere to), or conviction of a felony, or any criminal offence involving Executive’s moral turpitude under any applicable law, (ii) gross negligence or willful misconduct by Executive in the performance of Executive’s material duties required by this Agreement; or (iii) material breach of this Agreement by Executive which breach has been communicated to Executive in the form of a written notice from the Board, and that Executive has not substantially cured within thirty (30) days following receipt by Executive of such written notice.                (b) “Change in Control” shall mean (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the 1934 Securities Exchange Act) or group becomes the “beneficial owner” (as defined in Rule 13d-3 of the 1934 Securities Exchange Act) or has the right to acquire beneficial ownership, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; (ii) the consummation of the sale, lease or other disposition by the Company of all or substantially all of the Company’s assets (including any equity interests in subsidiaries); (iii) the consummation of a liquidation or dissolution of the Company; (iv) the consummation of a merger, consolidation, business combination, scheme of arrangement, share exchange or similar transaction involving the Company and any other corporation (“Business Combination”), other than a Business Combination which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such Business Combination or (v) any combination of the foregoing. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely as a result of (x) a repurchase or redemption of securities (which is open to all stockholders) by the Company done in the ordinary course of -8-   business and the purpose of which is not to effect a Change of Control or (y) a rights issue, recapitalization, capitalization, sub-division or consolidation or a share capital reduction and any other variation of the capital of the Company and/or rights in respect thereof, or capital distribution (being any distribution, whether in cash or in other specie, out of capital profits or capital reserves (including share premium account and any capital redemption reserve fund)) so long as in each instance it is done either as part of a reincorporation merger or in the ordinary course of business and in any event is not done to effect a Change of Control.                (c) “Disability” shall mean, to the extent consistent with applicable federal and state law (including, without limitation Section 409A), Executive’s inability by reason of physical or mental illness to fulfill his obligations hereunder for ninety (90) consecutive days or for a total of one hundred and eighty (180) days in any twelve (12) month period which, in the reasonable opinion of an independent physician selected by the Company or its insurers and reasonably acceptable to Executive or Executive’s legal representative, renders Executive unable to perform the essential functions of his job, even after reasonable accommodations are made by the Company. The Company is not, however, required to make unreasonable accommodations for Executive or accommodations that would create an undue hardship on the Company.                (d) “Good Reason” shall mean the occurrence during the Term of Employment of any of the following: (i) a material breach of this Agreement by the Company which is not cured by the Company within thirty (30) days following the Company’s receipt of written notice by Executive to the Company describing such alleged breach; (ii) Executive’s Base Salary, Annual Bonus target or other bonus opportunity is reduced by the Company or the terms and conditions for stock option agreements are not fully complied with by the Company; (iii) a reduction in Executive’s title (other than in connection with a continuation of employment after Change in Control pursuant to Section 8.3), or a material reduction in Executive’s duties, authorities, and/or responsibilities; or (iv) a requirement by the Company, without Executive’s consent, that Executive relocate to a location greater than thirty-five (35) miles from Executive’s place of residence; (v) the Company provides Executive with notice of non-renewal of this Agreement or does not agree to renew or extend the Term of Employment in writing by at least another annual term; or (vi) the circumstances described in the last sentence of Section 12.7.3. Notwithstanding the above, the occurrence of any of the events described in the foregoing sentence shall not constitute Good Reason unless Executive gives the Company written notice, within thirty (30) calendar days after Executive has knowledge of the occurrence of any of the events described in the foregoing sentence, that such circumstances constitute Good Reason and the Company thereafter fails to cure such circumstances within thirty (30) days after receipt of such notice.                (e) “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, (“Code”) and all applicable guidance promulgated thereunder.           8.10 Nonduplication of Benefits. Notwithstanding any provision in this Agreement or in any other Company benefit plan or compensatory arrangement to the contrary, but at all times subject to Section 8.4, (a) any payments due under either Section 8.1 or Section 8.2 shall be made not more than once, if at all, (b) payments may be due under either Section 8.1 or Section 8.2, but under no circumstances shall payments be made under both -9-   Section 8.1 and Section 8.2, and (c) Executive shall not be entitled to severance benefits from the Company other than as contemplated under this Agreement, unless such other severance benefits provide for larger benefits than under this Agreement.           8.11 Section 280G Best After-Tax. If any payment or benefit that Executive would receive under this Agreement or otherwise, when combined with any other payment or benefit Executive receives that is contingent upon a Change in Control (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (“Excise Tax”), then at the sole discretion of the Executive, such Payment shall be either (x) the full amount of such Payment or (y) such lesser amount as would result in no portion of the Payment being subject to the Excise Tax (the “Reduced Amount”), whichever of the foregoing amounts, taking into account the applicable federal, state and local employment taxes, income taxes and the Excise Tax, that the Executive chooses which may result in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in a manner necessary to provide Executive with the greatest economic benefit. If more than one manner of reduction of payments or benefits necessary to arrive at the Reduced Amount yields the greatest economic benefit, the payments and benefits shall be reduced pro rata.      9. No Competition and No Conflict of Interest. Except as otherwise provided in Section 2.2 of this Agreement, during the Term of Employment, Executive must not engage in any work, paid or unpaid, that creates an actual conflict of interest with the Company Business where such conflict would materially and substantially disrupt operations. Such work shall include directly or indirectly competing with the Company Business, or acting as an officer, director, employee, consultant, stockholder, volunteer, lender, or agent of any business enterprise which is in direct competition with the Company Business (in each case where it would materially and substantially disrupt operations). Notwithstanding the foregoing, Executive’s investment in, or ownership of, less than five percent (5%) of the capital stock of any business entity that competes with the Company Business and whose securities are traded on any national securities exchange or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, shall not be treated as a breach of this Section 8. For purposes of this Agreement, the term “Company Business” shall mean an online personals service or internet dating.      10. Confidentiality. During the Term of Employment, Executive has been and will continue to be given access to a wide variety of information about the Company, its affiliates and other related businesses that the Company considers “Confidential Company Information.” As a condition of continued employment, Executive agrees to abide by the Company’s reasonable and written business policies and directives on confidentiality and nondisclosure of “Confidential Company Information.” “Confidential Company Information” shall mean all information applicable to the business of the Company which confers a competitive advantage upon the Company over one who does not possess the information; and has commercial value in the business of the Company or any other business in which the Company engages or is preparing to engage during Executive’s employment with the Company. “Confidential Company Information” includes, but is not limited to, information regarding the Company’s business plans -10-   and strategies; contracts and proposals; and other business partners and the Company’s business arrangements and strategies with respect to them; current and future marketing or advertising campaigns; software programs; codes, formulae or techniques; financial information; personnel information; and all ideas, plans, processes or information related to the current, future and proposed projects or other business of the Company that has not been disclosed to the public by an authorized representative of the Company, acting within the scope of his or her authority, whether or not such information would be enforceable as a trade secret of the Company or enjoined or restrained by a court or arbitrator as constituting unfair competition. “Confidential Company information” also includes confidential information of any third party who may disclose such information to the Company or Executive in the course of the Company’s business.           10.1 Continuing Obligation. Executive agrees that the agreement not to disclose Confidential Company Information will be effective during Executive’s employment and continue even after Executive is no longer employed by the Company. Any obligation not to disclose any portion of any Confidential Company Information will continue for two (2) years after the date Executive’s employment is terminated unless such information (a) has become public knowledge through no fault of Executive; or (b) has been developed independently without any reference to any information obtained during Executive’s employment with the Company; (c) must be disclosed in response to a valid order by a court or government agency or is otherwise required by law; or (d) was known by Executive prior to the date hereof or later becomes known to Executive outside the scope of his employment. Nothing in this Section 10 shall be interpreted to prohibit or restrict Executive from taking any actions not prohibited by Section 11, it being understood that Executive’s use in subsequent employment or in any other role of his experience, general knowledge or other skills gained during employment with the Company shall not violate this Section 10.           10.2 Return of Company Property. On termination of employment with the Company for whatever reason, or at the request of the Company before termination, Executive agrees to promptly deliver to the Company all records, files, computer disks, memoranda, documents, lists and other information regarding or containing any Confidential Company Information, including all copies and reproductions thereof, then in Executive’s possession or control, whether prepared by Executive or others. Executive also agrees to promptly return, on termination or the Company’s request, any and all Company property issued to Executive, including but not limited to computers, cellular phones, keys and credits cards. Executive further agrees that should Executive discover any Company property or Confidential Company Information in Executive’s possession after the return of such property has been requested, Executive agrees to return it promptly to the Company without retaining copies of any kind.           10.3 No Violation of Rights of Third Parties. Executive warrants that the performance of all the terms of this Agreement does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by Executive prior to Executive’s employment with the Company. Executive agrees not to disclose to the Company, or induce the Company to use, any confidential or proprietary information or material belonging to any previous employers or others. Executive warrants that Executive is not a party to any other agreement that will interfere with Executive’s full compliance with this Agreement. Executive further agrees not to enter into any agreement, whether written or oral, in conflict with the provisions of this Agreement while such provisions remain effective. -11-        11. Interference with Business Relations.           11.1 Interference with Customers, Suppliers and Other Business Partners. Executive acknowledges that the Company’s tenant and customer base and its other business arrangements have been developed through substantial effort and expense, and its nonpublic business information is confidential. In addition, because of Executive’s position, Executive understands that the Company will be vulnerable to significant harm from Executive’s use of such information for purposes other than to further the Company’s business interests. Accordingly, Executive agrees that during Executive’s employment with the Company, and for a period of twelve (12) months thereafter, Executive will not knowingly, separately or in association with others, materially and substantially interfere with, impair, disrupt or damage the Company’s relationship with any of the customers of the Company with whom Executive has had contact by contacting them for the purpose of inducing or encouraging any of them to divert or take away business from the Company and to an enterprise that is in direct competition with the Company Business; provided, however, that none of the foregoing restrictions shall preclude Executive from (i) being employed by a consulting, financial or advisory firm that provides any advice or services to a person, enterprise or business that is in competition with the Company Business so long as Executive does not personally provide such advice or services to the competing person, enterprise or business, (ii) becoming or acting as an employee, consultant, partner, principal, agent, representative or equity holder in any subsidiary, division or separate business unit of a person, enterprise or business that is in competition with the Company Business if that subsidiary, division or separate business unit does not itself directly engage in internet dating and online personals or (iii) becoming or acting as an employee, consultant, partner, principal, agent, representative or equity holder or engaging in any other manner in any business that does not derive more than twenty percent (20%) of its revenue from internet dating and online personals (such exclusion does not apply to Match.com, eHarmony, Zoosk, OKCupid or People Media).           11.2 Interference with the Company’s Employees. Executive acknowledges that the services provided by the Company’s officers and key employees are unique and special, and that the Company’s officers and key employees possess trade secrets and Confidential Company Information that is protected against misappropriation and unauthorized use. As such, Executive agrees that during, and for a period of twelve (12) months after, Executive’s employment with the Company, Executive will not, knowingly, separately or in association with others, materially and substantially, interfere with, impair, disrupt or damage the Company’s business by directly contacting any Company officers or key employees for the purpose of inducing or encouraging them to discontinue their employment with the Company; provided, however, that the foregoing provisions shall not (i) restrict Executive from directly or indirectly making any general solicitation for employees, making a public advertising or participating in any job fairs or recruiting workshops or (ii) preclude Executive from soliciting and/or hiring any officer, key employee or other person at any time (A) in the case of voluntary terminations, later than six (6) months after such person’s termination of employment from the Company and (B) in the case of all other terminations, after such person’s termination of employment from the Company.           11.3 Injunctive Relief. Executive acknowledges that Executive’s breach of the covenants contained in Sections 9 through 11 of this Agreement inclusive (collectively -12-   “Covenants”) would cause irreparable injury and continuing harm to the Company for which there will be no adequate remedy at law, and agrees that in the event of any such breach, the Company seek temporary, preliminary and permanent injunctive relief to the fullest extent allowed by applicable law, without the necessity of proving actual damages or posting any bond or other security.      12. General Provisions.           12.1 Successors and Assigns. The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) or assignee to all or substantially all of the business and/or assets of the if no such succession or assignment had taken place (provided that the Company shall also remain liable under this Agreement). Executive shall not be entitled to assign any of Executive’s rights or obligations under this Agreement without the Company’s written consent, provided that upon Executive’s death, Executive’s named beneficiaries, estate or heirs, as the case may be, shall succeed to all of Executive’s rights under this Agreement.           12.2 Indemnification; Directors’ and Officers’ Liability Insurance.                (a) During the Term of Employment and thereafter, the Company shall indemnify Executive to the fullest extent permitted under Delaware law from and against any expenses (including but not limited to attorneys’ fees, expenses of investigation and preparation and fees and disbursements of Executive’s accountants or other experts), judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by Executive in connection with any proceeding in which Executive was or is made party or was or is involved (for example, as a witness) by reason of the fact Executive was or is employed by or serving as an officer or director of the Company or any of its affiliates. Such indemnification shall continue as to Executive during the Term of Employment and for so long thereafter as Executive may have exposure with respect to acts or omissions which occurred prior to his cessation of employment with the Company and shall inure to the benefit of Executive’s heirs, executors and administrators. The Company shall advance to Executive all costs and expenses incurred by him in connection with any proceeding covered by this provision within 20 calendar days after receipt by the Company of a written request for such advance. Such request shall include an undertaking by Executive to repay the amount of such advance if it shall ultimately be determined that he is not entitled to be indemnified against such costs and expenses.                (b) The Company agrees to use its best efforts to purchase and maintain adequate Directors’ and Officers’ liability insurance from a reputable, nationally recognized and financially sound insurer with terms no less favorable to Executive than those in effect as of the date of this Agreement, with coverage limits of not less than thirty-five million dollars ($35,000,000) and with provisions that will provide coverage for Executive as a director, officer and employees as well as coverage as a former director, officer and employee following any termination of this Agreement or Executive’s employment and service on the Board. Such insurance shall inure to the benefit of Executive’s heirs, executors and administrators. -13-             12.3 Nonexclusivity Rights. Executive is not prevented from continuing or future participation in any Company benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company subject to the terms and conditions of such plans, programs, or practices.           12.4 Waiver. Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.           12.5 Attorneys’ Fees. In any action to enforce the terms of this Agreement, the prevailing party shall be reimbursed by the non-prevailing party for such prevailing party’s reasonable attorneys’ fees and costs, including the costs of enforcing a judgment.           12.6 Severability. Subject to Section 12.7, in the event any provision of this Agreement is found to be unenforceable by a court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit contemplated herein to the fullest extent permitted by law. If a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall           12.7 Overriding Provision — Compliance with Applicable Law.                12.7.1 The Company represents and warrants to Executive that (i) this Agreement and the Option Agreement have been duly authorized, executed and delivered by the Company, (ii) as of the date of this Agreement, no shareholder approval, Board approval or any other action on the part of the Company or any other person or entity is necessary to authorize the execution and delivery of this Agreement and the Option Agreement or the performance by the Company of its obligations hereunder or thereunder and (iii) as of the date of this Agreement, the execution, delivery and performance of this Agreement and the Option Agreement does not result in any breach of or result in a violation of any law, regulation, ordinance or order or the terms of the Plan, any material contract, any certificate of incorporation or any other organizational document of the Company.                12.7.2 To the extent that any law or regulation becomes effective and enforceable after the date of this Agreement that requires shareholder approval in order for the Company to comply with one or more provisions of this Agreement (“Shareholder Approval”), the Company undertakes to use all reasonable efforts to seek such Shareholder Approval, and Executive acknowledges that in the event that Shareholder Approval is sought but is not obtained, subject to the Company’s compliance with Section 12.7.3, the Company will not be regarded as in breach of the relevant unapproved provision(s) of this Agreement if the Company is unable to comply with such unapproved provision(s) as a result of such failure to obtain Shareholder Approval.                12.7.3 In the event that:                (a) Shareholder Approval is required for any provision of this Agreement and Shareholder Approval is sought but is not obtained; and -14-                  (b) any provision of this Agreement, or any part of a provision of this Agreement, is found to be illegal, invalid or unenforceable due to the absence of such Shareholder Approval; the remaining provisions, or the remainder of the provision concerned, shall continue in effect. In relation to any illegal, invalid or unenforceable part of this Agreement, the Company agrees to amend such part in such manner as may be reasonably requested by the Executive provided that such proposed amendment is legal and enforceable and to the maximum extent possible carries out the original intent of the parties in relation to that part. If this Agreement cannot or is not amended in a manner that preserves the economic value (over the Initial Term) of this Agreement to Executive, then Executive will be entitled to resign from employment with the Company for “Good Reason.”           12.8 Interpretation; Construction. The headings set forth in this Agreement are for convenience only and shall not be used in interpreting this Agreement. This Agreement has been drafted by legal counsel representing the Company, but Executive has participated in the negotiation of its terms. Furthermore, Executive acknowledges that Executive has had an opportunity to review and revise the Agreement and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any in the interpretation of this Agreement.           12.9 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California. Each party consents to the jurisdiction and venue of the state or federal courts in Los Angeles County, California in any action, suit or proceeding arising out of or relating to this Agreement.           12.10 Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (a) by personal delivery when delivered personally; (b) by overnight courier upon written verification of receipt; (c) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (d) by certified or registered mail, return receipt requested, upon verification of receipt. Notice shall be sent to the addresses set forth below, or such other address as either party may specify in writing.           12.11 Survival. The following provisions shall survive Executive’s employment with the Company to the extent reasonably necessary to fulfill the parties’ expectations in entering this Agreement: Sections 7, (“Business and Personal Expenses”), 8 (“Termination of Employment”), 10 (“Confidentiality”), 11 (“Interference with Business Relations”), 12 (“General Provisions”) and 13 (“Entire Agreement”).      13. Entire Agreement. This Agreement, together with the other agreements and documents governing the benefits described in this Agreement constitute the entire agreement between the parties relating to this subject matter hereof and supersedes all prior or simultaneous representations, discussions, negotiations, and agreements, whether written or oral. This Agreement may be amended or modified only with the written consent of Executive and the Board of Directors of the Company. No oral waiver, amendment or modification will be effective under any circumstances whatsoever. -15-        THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.             GREGORY R. LIBERMAN       /s/ Gregory R. Liberman             Dated: April 11, 2011        SPARK NETWORKS, INC       /s/ Adam S. Berger       Adam S. Berger      Chairman of the Board of Directors      Dated: April 11, 2011      -16-

Title: Help me !! I may be scammed. What do i do? Question:This happened couple of days back.. a girl (age 18, ***, tx) replies to my how are you msg on okc with her cell number. I text her on that. She sent her cleavage pic and ask for one back, i sent a decent one. She tries to find out what i do for a living, i answer. I asked same, she says she helps her mom. She says i am sexy, are you single ?. I say yea. She without asking sends one in her panties and says she is turning 17 next month and hope i am not mad and guess i want her to delete my num. i say damn, its risky. She says send a good pic. I ask what kind ? Nude ? She says yes lol. I say its scary. She says she will promise delete. I say do you have kik. She gives kik id. I ask her where do u live and if she goes to college and ask here to send more pics since she doesnt look underage. She ignores those ques and sends a NUDE one without me asking. I ask her are you real ? She says wtf i am. I text her in kik. anonymously in kik, i said hot tits. She says send pic. She send another nude one. I suffer a moment of weakness and ask dick pic ? Its hard!! And she says yes and i Flash!!! 2 hrs later i get on her number - anonymous , my wife saw saw this phone and saw kik where you asked my 16 yo daughter to send pics. I NEVER ASKED HER for nude. If you dont want law, callback now and explain shit or we will hire lawyer and have your ass in jail. I suffer another weakness and reply i am sorry , this wont happen. :( .. over phone, i say sorry, we can talk this out.. she says i am amanda, recently moved to city near *** from south carolina.. how do you wana sort this out. I said i will think abt it and callback. She says her husband will call me back .. he DOESNT. I dont respond, she says since "u want" law to be involved, we will call monday morning and goto police for charges, see you at station. Sunday morning i get a call from "det smith" saying, explain to me, i said, i have a lawyer and i dont wana talk. I asked his id and full name and which dept. he doesnt mention id, says he is detective david smith from investigation dept of *** police station. He said ask ur lawyer to call me back and report to that imaginary station at 10:45 monday without giving address. Well ***, tx doesnt have a station.. his number traced to a landline in city where i live, near ***. She kept stressing in this manner - "since this is what you want , blah blah".. both mothers and daughters number traced to a different name in SC. I talk to my lawyer, he says they are trying to extort money and asks me to block them including so called detective and change number. I DID.. so i didnt give them a chance to talk about money. I am scared at what might be happening behind the scenes. What if this is real. What if that was police indeed? What if that was a minor indeed? Do you guys sense an obvious scam ? My sending pic despite she claiming 17 and saying sorry, wont do again is making me feel bad about how this may end up. I am hoping this is a scam and by ignoring, it will fade away.. they dont have my real name, address. Now not even the new phone number. They have couple good photos and one genital no face.. What do i do next ? Stay quiet ? Do something proactively? Hire Priv det ? They still have the transcript no matter what. Isnt them going to police if they were real, put their daughter in equal trouble too for sending inappropriate pics ? Answer #1: Detectives don't give you a call when you're being accused of a crime, they just come over. Block, ignore, move on.

Exhibit 10.1   THIRD AMENDED AND RESTATED CREDIT AGREEMENT   dated as of  February 14, 2018   among   SANCHEZ ENERGY CORPORATION,   as Borrower,              as Administrative Agent,              as Collateral Agent,   RBC CAPITAL MARKETS, as Arranger   and   THE LENDERS PARTY HERETO       Sanchez Energy Third Amended and Restated Credit Agreement     TABLE OF CONTENTS       Page     ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS 2 Section 1.01 Terms Defined Above 2 Section 1.02 Certain Defined Terms 3 Section 1.03 Types of Loans and Borrowings 29 Section 1.04 Terms Generally; Rules of Construction 29 Section 1.05 Accounting Terms and Determinations; GAAP 29     ARTICLE II THE CREDITS 30 Section 2.01 Commitments 30 Section 2.02 Loans and Borrowings 30 Section 2.03 Requests for Borrowings 31 Section 2.04 Interest Elections 32 Section 2.05 Funding of Borrowings 33 Section 2.06 Changes in the Aggregate Commitment Amount 34 Section 2.07 Letters of Credit 35     ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES 39 Section 3.01 Repayment of Loans 39 Section 3.02 Interest 39 Section 3.03 Alternate Rate of Interest 40 Section 3.04 Prepayments 40 Section 3.05 Fees 42     ARTICLE IV PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS 43 Section 4.01 Payments Generally; Pro Rata Treatment; Sharing of Set-offs 43 Section 4.02 Presumption of Payment by the Borrower 44 Section 4.03 Certain Deductions by the Administrative Agent 44 Section 4.04 Disposition of Proceeds 44       ARTICLE V INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY 45 Section 5.01 Increased Costs 45 Section 5.02 Break Funding Payments 46 Section 5.03 Taxes 47 Section 5.04 Mitigation Obligations 50 Section 5.05 Illegality 50     ARTICLE VI CONDITIONS PRECEDENT 51 Section 6.01 Conditions to Effectiveness 51 Section 6.02 Each Credit Event 52       ARTICLE VII REPRESENTATIONS AND WARRANTIES 53 Section 7.01 Organization; Powers 53   i   Section 7.02 Authority; Enforceability 53 Section 7.03 Approvals; No Conflicts 54 Section 7.04 Financial Condition; No Material Adverse Change 54 Section 7.05 Litigation 55 Section 7.06 Environmental Matters 55 Section 7.07 Compliance with the Laws and Agreements; No Defaults 56 Section 7.08 Investment Company Act 56 Section 7.09 Taxes 56 Section 7.10 ERISA 57 Section 7.11 Disclosure; No Material Misstatements 57 Section 7.12 Insurance 57 Section 7.13 Restriction on Liens 57 Section 7.14 Subsidiaries 58 Section 7.15 Location of Business and Offices 58 Section 7.16 Properties; Titles, Etc. 58 Section 7.17 Maintenance of Properties 59 Section 7.18 Gas Imbalances, Prepayments 60 Section 7.19 Marketing of Production 60 Section 7.20 Swap Agreements 60 Section 7.21 Use of Loans and Letters of Credit 60 Section 7.22 Solvency 60 Section 7.23 Foreign Corrupt Practices 61 Section 7.24 Money Laundering 61 Section 7.25 OFAC 61       ARTICLE VIII AFFIRMATIVE COVENANTS 61 Section 8.01 Financial Statements; Ratings Change; Other Information 61 Section 8.02 Notices of Material Events 63 Section 8.03 Existence; Conduct of Business 64 Section 8.04 Payment of Obligations 64 Section 8.05 Performance of Obligations under Loan Documents 64 Section 8.06 Operation and Maintenance of Properties 64 Section 8.07 Insurance 65 Section 8.08 Books and Records; Inspection Rights 66 Section 8.09 Compliance with Laws 66 Section 8.10 Environmental Matters 66 Section 8.11 Further Assurances 67 Section 8.12 Reserve Reports 67       ARTICLE IX NEGATIVE COVENANTS 68 Section 9.01 Financial Covenant 69 Section 9.02 Indebtedness 69 Section 9.03 Liens 69 Section 9.04 Dividends, Distributions and Redemptions 69 Section 9.05 Reserved 69 Section 9.06 Nature of Business 69 Section 9.07 Proceeds of Notes/Loans 70   ii   Section 9.08 Mergers, Etc. 70 Section 9.09 Disposition of Oil and Gas Properties 70 Section 9.10 Environmental Matters 70 Section 9.11 Reserved 70 Section 9.12 Reserved 70 Section 9.13 Swap Agreements 71 Section 9.14 ERISA 72       ARTICLE X EVENTS OF DEFAULT; REMEDIES 73 Section 10.01 Events of Default 73 Section 10.02 Remedies 74       ARTICLE XI THE ADMINISTRATIVE AGENT 75 Section 11.01 Appointment; Powers 75 Section 11.02 Duties and Obligations of Administrative Agent 76 Section 11.03 Action by Administrative Agent 76 Section 11.04 Reliance by Administrative Agent 77 Section 11.05 Subagents 77 Section 11.06 Resignation or Removal of Agents 78 Section 11.07 Administrative Agent as Lender 79 Section 11.08 No Reliance 79 Section 11.09 Authority to Release Collateral and Liens 79 Section 11.10 Filing of Proofs of Claim 80       ARTICLE XII MISCELLANEOUS 80 Section 12.01 Notices 80 Section 12.02 Waivers; Amendments 81 Section 12.03 Expenses, Indemnity; Damage Waiver 83 Section 12.04 Successors and Assigns 85 Section 12.05 Survival; Revival; Reinstatement 88 Section 12.06 Counterparts; Integration; Effectiveness 89 Section 12.07 Severability 89 Section 12.08 Right of Setoff 89 Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS 90 Section 12.10 Headings 91 Section 12.11 Confidentiality 91 Section 12.12 EXCULPATION PROVISIONS 92 Section 12.13 No Third Party Beneficiaries 92 Section 12.14 Collateral Matters; Swap Agreements 93 Section 12.15 US Patriot Act Notice 94 Section 12.16 Interest Rate Limitation 94 Section 12.17 Termination and Release 95 Section 12.18 Release 95 Section 12.19 Amendment and Restatement 96 Section 12.20 Termination of Commitment under 2014 Credit Agreement 96 Section 12.21 No Novation, Etc. 96   iii   Section 12.22 Keepwell 97   Annex 1   Aggregate Commitment Amount       Exhibit A   Form of Note Exhibit B   Form of Borrowing Request Exhibit C   Form of Interest Election Request Exhibit D   Form of Compliance Certificate Exhibit E   Form of Assignment and Assumption Exhibit F   U.S. Tax Compliance Certificates (F-1 through F-4) Exhibit G   Form of Repayment Notice Exhibit H   Form of Guaranty       Schedule 7.01   Corporate Organizational Chart Schedule 7.05   Litigation Schedule 7.14   Subsidiaries Schedule 7.20   Swap Agreements   iv     This THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 14, 2018, is among SANCHEZ ENERGY CORPORATION, a Delaware corporation (the “Borrower”), ROYAL BANK OF CANADA (“RBC”), as administrative agent for the Lenders (hereinafter defined) (in such capacity, together with its successors in such capacity, the “Administrative Agent”), ROYAL BANK OF CANADA, as collateral agent for the Lenders and the other Secured Parties (in such capacity, together with its successors in such capacity, the “Collateral Agent”), and each of the Lenders from time to time party hereto.   RECITALS   A.            Borrower, SEP Holdings III, LLC, a Delaware limited liability company (“SEP”), and SN Marquis LLC, a Delaware limited liability company (“SN Marquis”; Borrower, SEP and SN Marquis collectively called the “2012 Credit Agreement Borrowers”), Capital One, National Association, as administrative agent (the “2012 Credit Agreement Agent”) and the lenders party thereto (the “Original Lenders”) were parties to that certain Credit Agreement dated as of November 15, 2012 (the “2012 Credit  Agreement”).   B.            In order to secure the full and punctual payment and performance of the obligations of the 2012 Credit Agreement Borrowers under the 2012 Credit Agreement and the other Loan Documents (as defined in the 2012 Credit Agreement), the 2012 Credit Agreement Borrowers executed and delivered mortgages, deeds of trust, collateral assignments, security agreements, pledge agreements and financing statements in favor of the 2012 Credit Agreement Agent (collectively, the “2012 Security Documents”) granting first priority mortgage liens and continuing security interests in and to the collateral described in such 2012 Security Documents.   C.            The 2012 Credit Agreement was amended and restated in its entirety by that certain Amended and Restated Credit Agreement dated as of May 31, 2013 among the 2012 Credit Agreement Borrowers and SN Cotulla Assets, LLC, a Texas limited liability company (“SN Cotulla”; SN Cotulla together with SEP and SN Marquis collectively called the “Subsidiary Former Borrowers”), as co-borrowers, Capital One, National Association, as resigning administrative agent and issuing bank, Royal Bank of Canada, as successor administrative agent and issuing bank, Capital One, National Association, as syndication agent, and Compass Bank and SunTrust Bank, as co-documentation agents, and the lenders party thereto (the “2013 Credit Agreement”).   D.            The 2013 Credit Agreement was amended and restated in its entirety by that certain Second Amended and Restated Credit Agreement dated as of June 30, 2014 among the Borrower, as borrower, the Subsidiary Former Borrowers, as guarantors, Royal Bank of Canada, as administrative agent and issuing bank, “2014 Credit Agreement Lenders”) (the “2014 Credit Agreement”).   E.            The Borrower has requested certain amendments to the 2014 Credit Agreement including (i) reducing the total “Commitment” thereunder to $25,000,000, (ii) reducing to one the number of “Lenders” thereunder, (iii) extending the “Maturity Date” thereunder, and (iv)   1   making certain other amendments.  In connection with such request, each 2014 Credit Agreement Lender other than Royal Bank of Canada has assigned to Royal Bank of Canada, and Royal Bank of Canada has assumed, each such other 2014 Credit Agreement Lender’s “Elected Commitment” and “Maximum Credit Amount” as defined in the 2014 Credit Agreement.   F.             Royal Bank of Canada, as the only continuing Lender, has agreed to amend and restate in its entirety the 2014 Credit Agreement on the terms and conditions set forth herein, to effect such requested amendments.   G.            In consideration of the premises and the agreements, provisions and covenants herein contained, the Borrower, the Subsidiary Former Borrowers and the other “Guarantors” under the 2014 Credit Agreement (as more fully defined below, collectively, the “Existing Guarantors”), the Administrative Agent, Royal Bank of Canada, as the Issuing Bank (hereinafter defined) and Royal Bank of Canada, as the only continuing Lender, do hereby agree that the 2014 Credit Agreement is amended and restated in its entirety as set forth herein.  It is the intention of the Borrower, the Existing Guarantors, the Lenders, Royal Bank of Canada, as the Issuing Bank, and the Administrative Agent, that this Agreement supersede and replace the 2014 Credit Agreement in its entirety; provided, that, (a) such amendment and restatement shall operate to renew, amend and modify the rights and obligations of the parties under the 2014 Credit Agreement, as applicable and as provided herein, but shall not effect a novation thereof, (b) unless otherwise provided for herein and evidenced by a separate written agreement, amendment or release, no other Loan Document, as defined in, and executed and/or delivered pursuant to the terms of, the 2014 Credit Agreement (collectively, the “Existing Loan Documents”) shall be amended, terminated or released in any respect and all of such other Existing Loan Documents shall remain in full force and effect except that the Borrower, the Existing Guarantors and Royal Bank of Canada, as the only continuing Lender, agree that by executing this Agreement the definition of “Credit Agreement” contained in such Existing Loan Documents shall be amended to include this Agreement and all future amendments hereto, and (c) the Liens (hereinafter defined) securing the obligations under and as defined in the 2014 Credit Agreement and granted pursuant to the Existing Loan Documents and the liabilities and obligations of the Borrower and the Existing Guarantors in respect of such Liens shall not be extinguished, but shall be carried forward and assigned to the Collateral Trustee, and such Liens shall secure the Obligations (hereinafter defined) and the First Lien Senior Secured Note Obligations, in each case, as renewed, amended, restated, extended and modified hereby and by the Security Instruments (hereinafter defined).   NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree that the 2014 Credit Agreement is amended and restated in its entirety to read as follows:   ARTICLE I   DEFINITIONS AND ACCOUNTING MATTERS   Section 1.01         Terms Defined Above.  As used in this Agreement, each term defined above has the meaning indicated above.   2   Section 1.02         Certain Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:   “2012 Credit Agreement” has the meaning given in Recital A.   “2012 Credit Agreement Agent” has the meaning given in Recital A.   “2012 Credit Agreement Borrowers” has the meaning given in Recital A.   “2012 Security Documents” has the meaning given in Recital B.   “2013 Credit Agreement” has the meaning given in Recital C.   “2014 Credit Agreement” has the meaning given in Recital D.   “2014 Credit Agreement Lenders” has the meaning given in Recital D.   “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.   “Acquisition” means one or more acquisitions by the Loan Parties of Oil and Gas Properties.   “Acquisition I” means SR Acquisition I, LLC, a Delaware limited liability company and wholly-owned Subsidiary of Borrower.   “Acquisition III” means SR Acquisition III, LLC, a Delaware limited liability   “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.   “Administrative Agent” has the meaning given in the introductory paragraph.   “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.   “Affected Loans” has the meaning assigned to such term in Section 5.05.   “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.   3   “Aggregate Commitment Amount” at any time shall equal the sum of the Commitments, as the same may be reduced or terminated pursuant to Section 2.06. As of the Third Amended and Restated Effective Date, the Aggregate Commitment Amount is $25,000,000.   “Agreement” means this Third Amended and Restated Credit Agreement, as the same may from time to time be amended, modified, supplemented or restated.   “Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one month interest period commencing on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective day of such change in the Prime Rate, the Federal Funds Effective Rate and the Adjusted LIBO Rate, respectively.   “Applicable Margin” means, for any day with respect to any ABR Loan or Eurodollar Loan, or with respect to the Letter of Credit Fee Rate or Commitment Fee Rate, as the case may be, the rate per annum set forth in the Utilization Grid below based upon the Utilization Percentage then in effect:   Utilization Grid   Utilization Percentage   <50 % >50 % ABR Loans   1.50 % 2.25 % Eurodollar Loans   2.50 % 3.25 % Letter of Credit Fee Rate   2.50 % 3.25 % Commitment Fee Rate   0.50 % 0.50 %   Each change in the Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.   “Applicable Percentage” means, with respect to any Lender, the percentage of the Aggregate Commitment Amount represented by such Lender’s Commitment as such percentage is set forth on Annex I or in an Assignment and Assumption Agreement, as the case may be, as such percentage may be modified from time to time pursuant to Section 2.06.   “Approved Counterparty” means (i) any Person who at the time a Swap Agreement was entered into was (a) a Lender or any Affiliate of a Lender, (b) a Person who had been a “Lender” under the 2013 Credit Agreement or any Affiliate of such a Person, (c) a Person who had been a 2014 Credit Agreement Lender or any Affiliate of such a Person, or (d) Shell Energy North America (US), L.P., Koch Supply & Trading, LP, BP Energy Company, Citibank, N.A., JPMorgan Chase Bank, N.A., or any of their respective Affiliates, or (ii) any Person whose issuer rating or long term senior unsecured debt rating, at the time of entry into the applicable Swap Agreement, is, or, at the time such Person or any Affiliate thereof first entered into a Swap   4   Agreement with a Loan Party after the date of this Agreement, was, BBB / Baa2 by S&P or Moody’s (or their equivalent) or higher (or whose obligations under the applicable Swap Agreement are guaranteed by an Affiliate of such Person who, at the time of entry into the applicable Swap Agreement, meets, or, at the time such Person or any Affiliate thereof entered into such first such Swap Agreement, met, such rating standards).   “Approved Fund” means (a) a CLO or (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.   “Approved Petroleum Engineers” means Ryder Scott Company, L.P. or any other nationally recognized independent petroleum engineer selected by the Borrower.   “Arranger” means RBC Capital Markets.   “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 12.04(b)), and accepted by the Administrative Agent, in the form of Exhibit E or any other form approved by the Administrative Agent.   “Availability” means, at any time, (a) the then effective Aggregate Commitment Amount minus (b) the aggregate principal amount of Loans and participation interests in Letters of Credit (without regard to any sale by a Lender of a participation in any Loan under Section 12.04(c)).   “Availability Period” means the period from and including the Third Amended and Restated Effective Date to but excluding the Termination Date.   “Bank Product” means any of the following products, services or facilities extended to the Borrower or any Subsidiary by a Lender or any of its Affiliates: (a) cash management services including, without limitation, any services provided in connection with operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services; (b) commercial credit card and merchant card services; and (c) leases and other banking products or services as may be requested by Borrower or any Subsidiary, other than Letters of Credit.   “Bank Product Provider” means any Lender or any of its Affiliates that extends a Bank Product to the Borrower or any Subsidiary.   “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire within one year by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have correlative meanings. For purposes of this definition, a Person shall be deemed not to Beneficially Own securities that are the subject of a stock purchase agreement,   5   merger agreement or similar agreement until consummation of the transaction or, as applicable, series of related transactions contemplated thereby.   “Benefiting Loan Party” means a Loan Party for which funds or other support are necessary for such Loan Party to constitute an Eligible Contract Participant.   “Board” means the Board of Governors of the Federal Reserve System of the U.S. or any successor Governmental Authority.   “Board of Directors” means:   (a)           with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;   (b)           with respect to a limited partnership, the Board of Directors of the general partner of the partnership;   (c)           with respect to a limited liability company, the manager or managers, the managing member or members or any controlling committee of managers or managing members thereof; and   (d)           with respect to any other Person, the board or committee of such Person serving a similar function.   “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the applicable Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the First Lien Senior Secured Note Trustee.   “Borrower” has the meaning given in the introductory paragraph.   “Borrowing” means Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.   “Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03.   “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Houston, Texas or New York, New York, are authorized or required by law to remain closed; and if such day relates to a Borrowing or continuation of, a payment or prepayment of principal of or interest on, or a conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice by the Borrower with respect to any such Borrowing or continuation, payment, prepayment, conversion or Interest Period, any day which is also a day on which dealings in dollar deposits are carried out in the London interbank market.   “Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the stated maturity   6   thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.   “Capital Stock” means:   (a)           in the case of a corporation, corporate stock;   (b)           in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;   (c)           in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and   (d)           any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities exercisable for, exchangeable for or convertible into Capital Stock, regardless of whether such debt securities include any right of participation with Capital Stock.   “Casualty Event” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Property of the Borrower or any of its Restricted Subsidiaries having a fair market value in excess of $10,000,000.   “CERCLA” has the meaning set forth in the definition of “Environmental Laws”.   “Change of Control” means the occurrence of any of the following:   (a)           the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets (including Equity Interests of the Restricted Subsidiaries) of the Borrower and its Restricted Subsidiaries taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act);   (b)           the adoption by the stockholders of the Borrower of a plan relating to the liquidation or dissolution of the Borrower; or   (c)           the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Borrower, measured by voting power rather than number of shares, units or the like; provided that, solely to the extent that a Change of Control would result under this clause (iii) from the sale of any assets or properties used or useful in the Oil and Gas Business by any Permitted Holder to the Borrower or any Restricted Subsidiary for Equity Interests, a Change of Control shall be deemed not to have occurred   7   Notwithstanding the preceding, a conversion of the Borrower or any of its Restricted Subsidiaries from a limited partnership, corporation, limited liability company or other form of entity to a limited liability company, corporation, limited partnership or other form of entity, an exchange of all of the outstanding Equity Interests in one form of entity for Equity Interests in another form of entity or the transfer or redomestication of the Borrower to or in another jurisdiction shall not, in any case, constitute a Change of Control, so long as following such conversion, exchange, transfer or redomestication, the “persons” (as that term is used in Section 13(d)(3) of the Exchange Act) who Beneficially Owned the Capital Stock of the Borrower immediately prior to such transactions continue to Beneficially Own in the aggregate more than 50% of the Voting Stock of such entity, or Beneficially Own sufficient Equity Interests in such entity or its general partner, as applicable, to elect a majority of its directors, managers, trustees or other persons serving in a similar capacity for such entity or its general partner, as applicable, and, in either case no “person,” Beneficially Owns more than 50% of the Voting Stock of such entity or its general partner, as applicable.   “Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 5.01(b), by any lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or any Governmental Authority with respect to the implementation of the Basel III Accord shall, in each case, be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued, including if such date is before a Lender became a party to this Agreement.   “CLO” means any Person (other than a natural Person) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender.   and any successor statute.   “Collateral” means collectively, Property which is pledged to secure the Obligations and the First Lien Senior Secured Note Obligations pursuant to one or more Security Instruments.   “Collateral Agent” has the meaning given in the introductory paragraph.   “Collateral Trust Agreement” means (a) a Collateral Trust Agreement (in form approved by the Administrative Agent) among the Borrower, the other Loan Parties, the Collateral Agent, the First Lien Senior Secured Note Trustee and the Collateral Trustee dated as of the Third   8   Amended and Restated Effective Date, and (b) if the First Lien Senior Secured Note Obligations are refinanced or replaced in accordance with the terms of such Collateral Trust Agreement, any successor agreement entered into in accordance with such terms, in each case as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms of the then effective Collateral Trust Agreement.   “Collateral Trustee” means RBC, in its capacity as collateral trustee under the Collateral Trust Agreement or any successor collateral trustee reasonably acceptable to the Administrative Agent.   “Commitment” means, as to each Lender, the amount set forth opposite such Lender’s name on Annex I under the caption “Commitment,” evidencing the commitment of such Lender to make Loans and to acquire participations in Letters of Credit hereunder, as such commitment may be (a) modified from time to time pursuant to Section 2.06 and (b) modified from time to time pursuant to assignments by or to such Lender pursuant to Section 12.04(b).   “Commitment Fee Rate” means the rate specified as such in the definition of “Applicable Margin”.   “Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended and any successor statute.   “Consolidated Subsidiaries” means each Subsidiary of a Person (whether now existing or hereafter created or acquired) the financial statements of which shall be (or should have been) consolidated with the financial statements of such Person in accordance with GAAP.   “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.   “Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Loans and such Lender’s LC Exposure at such time.   “Debt” means, for any Person, the sum of the following (without duplication):  (a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments; (b) all obligations of such Person (whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all accounts payable and all accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of Property or services excluding accounts payable and accrued obligations incurred in the ordinary course of business with respect to which no more than 90 days have elapsed since the date such payables were due to be paid; (d) all Capital Lease Obligations; (e) all Debt (as defined in the other clauses of this definition) of others secured by a Lien on any Property of such Person, whether or not such Debt is assumed by such Person to the extent of the lesser of the amount of such Debt and the fair market value of the Property encumbered thereby as determined by such Person in good faith; and (f) all Debt (as defined in the other clauses of this definition) of others guaranteed by such Person or in which   9   such Person otherwise assures a creditor against loss of the Debt (howsoever such assurance shall be made) to the extent of the lesser of the amount of such Debt and the maximum stated amount of such guarantee or assurance against loss.   For the sake of clarity, obligations under Swap Agreements shall not constitute Debt.   “Debtor Relief Laws” means the Bankruptcy Code of the U.S., and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the U.S. or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.   “Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.   “Defaulting Lender” means any Lender, as determined by the Administrative Agent, that has (a) failed to fund any portion of its Loans or participations in Letters of Credit within three (3) Business Days of the date required to be funded by it hereunder, (b) notified the Borrower, the Administrative Agent, or an Issuing Bank in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit, (c) failed, within three (3) Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and purchase participations in then outstanding Letters of Credit, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three (3) Business Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian, appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.   “Disposition” means any sale, transfer, conveyance or other disposition.   “dollars” or “$” refers to lawful money of the U.S.   “Domestic Subsidiary” means any Subsidiary that is organized under the laws of the U.S. or any state thereof or the District of Columbia.   “Eligible Contract Participant” means an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder.   10   “Engineered Value” means the value attributed to the Oil and Gas Properties in the applicable Reserve Report based upon the discounted present value of the estimated net cash flow to be realized from the production of Hydrocarbons from such Oil and Gas Properties as set forth in such applicable Reserve Report.   “Environmental Laws” means any and all Governmental Requirements pertaining in any way to public health and safety, the environment or the preservation or reclamation of natural resources, in effect in any and all jurisdictions in which the Borrower or any Subsidiary is conducting or at any time has conducted business, or where any Property of the Borrower or any Subsidiary is located, including without limitation, the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection Governmental Requirements.  The term “oil” shall have the meaning specified in OPA, the terms “hazardous substance” and “release” (or “threatened release”) have the meanings specified in CERCLA, the terms “solid waste” and “disposal” (or “disposed”) have the meanings specified in RCRA and the term “oil and gas waste” shall have the meaning specified in Section 91.1011 of the Texas Natural Resources Code (“Section 91.1011”); provided, however, that (a) in the event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment and (b) to the extent the laws of the state or other jurisdiction in which any Property of the Borrower or any Subsidiary are located establish a meaning for “oil,” “hazardous substance,” “release,” “solid waste,” “disposal” or “oil and gas waste” which is broader than that specified in either OPA, CERCLA, RCRA or Section 91.1011, such broader meaning shall apply with respect to Property located in such state or other jurisdiction.   “Environmental Permit” means any permit, registration, license, notice, approval, consent, exemption, variance, or other authorization required under or issued pursuant to applicable Environmental Laws.   “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is exercisable for, convertible into, or exchangeable for, Capital Stock).   “ERISA” means the Employee Retirement Income Security Act of 1974, as amended   “ERISA Affiliate” means each trade or business (whether or not incorporated) that, together with the Borrower or a Subsidiary is treated as a “single employer” under Section 414(b) or (c) of the Code, or solely for the proposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.   11   “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the existence with respect to any Plan of a failure to meet the minimum funding standards under Section 412 or 430 of the Code or Section 303 of ERISA; (c) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (d) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (e) the determination that any Plan is considered an “at risk” plan or a plan in endangered or critical status within the meaning of Section 430 of the Code or Section 303 of ERISA; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from Borrower or any ERISA Affiliate of any notice, concerning the imposition of withdrawal liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.   “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.   “Event of Default” has the meaning given in Section 10.01.     “Excluded Swap Obligation” means, with respect to any Loan Party individually determined on a Loan Party by Loan Party basis, any Swap Obligation, if and to the extent that, all or a portion of the joint and several liability or the guaranty of such Loan Party for, or the grant by such Loan Party of a security interest or other Lien to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an Eligible Contract Participant at the time such guarantee or the grant of such security interest or other Lien becomes effective with respect to, or any other time such Loan Party is by virtue of such guarantee or grant of such security interest or other Lien otherwise deemed to enter into, such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee, security interest or other Lien is or becomes illegal.   “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder or under any other Loan Document, (a) income or franchise taxes (i) imposed on (or measured by) its net income (however denominated) by the U.S. or such other jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, or (ii) that are Other Connection Taxes, (b) any branch profits  taxes (i) imposed by the   12   U.S. or any similar tax imposed by any other jurisdiction in which the Borrower is located, or (ii) that are Other Connection Taxes, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 5.04(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 5.03(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts with respect to such withholding tax pursuant to Section 5.03(a) or Section 5.03(c) and (d) any federal withholding Taxes imposed under FATCA.   “Existing Guarantors” means SN Palmetto, SN Marquis, SN Cotulla, SN Operating, SN TMS, SN Catarina, SN Maverick and Ranch.   “Existing Loan Documents” has the meaning given in Recital G.   “Existing Unrestricted Subsidiaries” means SN UR Holdings, SN Services SN Terminal, SN Midstream, LLC, SN Comanche, UnSub GP, UnSub Holdings, UnSub LP, Resources, SR TMS, Acquisition I, Acquisition III, and SN Capital.   “Family” means (a) an individual, (b) such individual’s spouse, (c) any other natural person who is related to such individual or such individual’s spouse within the second degree of kinship and (d) any other natural person who has been adopted by such individual.   “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantially comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.   “FCPA” means the Foreign Corrupt Practices Act of 1977.   “Federal Flood Insurance” means federally backed flood insurance available under the National Flood Insurance Program to owners of real property improvements located in Special Flood Hazard Areas in a community participating in the National Flood Insurance Program.   “Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, New York or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.   13   “FEMA” means the Federal Emergency Management Agency, a component of the United States Department of Homeland Security that administers the National Flood Insurance Program.   “Financial Officer” means, for any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person.  Unless otherwise specified, all references herein to a Financial Officer mean a Financial Officer of the Borrower.   “Financial Statements” means the financial statement or statements of the Borrower and its Consolidated Subsidiaries referred to in Section 7.04(a).   “First Lien Senior Secured Note Indenture” means that certain Indenture dated as of the date hereof, among the Borrower, the guarantors party thereto and the First Lien Senior Secured Note Trustee.   “First Lien Senior Secured Note Obligations” means any principal (including reimbursement obligations), interest (including all interest, fees and expenses accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate even if such interest, fee or expense is not enforceable, allowable or allowed as a claim in such proceeding), premium (if any), penalties, fees, charges, expenses, indemnifications, reimbursements, damages, guarantees and other liabilities or amounts payable under the First Lien Senior Secured Note Indenture or the First Lien Senior Secured Notes or in respect thereto.   “First Lien Senior Secured Note Holder” means a Person in whose name a First Lien Senior Secured Note is registered.   “First Lien Senior Secured Note Trustee” means Delaware Trust Company, in its capacity as trustee under the First Lien Senior Secured Note Indenture, together with its successors in such capacity.   “First Lien Senior Secured Notes” means notes issued under the First Lien Senior Secured Note Indenture”.   “Flood Insurance” means, for any owned real property located in a Special Flood Hazard Area, Federal Flood Insurance or private insurance that meets or exceeds the requirements, if any, applicable with respect to such property set forth by FEMA in its Mandatory Purchase of Flood Insurance Guidelines.   “Flood Insurance Regulations” means (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as the same may be amended or recodified from time to time, and (iv) the Flood Insurance Reform Act of 2004 and any regulations promulgated thereunder.   “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Loan Parties are located.  For purposes of this definition, the U.S.,   14   each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.   “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.   “GAAP” means generally accepted accounting principles in the U.S. as in effect from time to time, subject to the terms and conditions set forth in Section 1.05.   “Governmental Authority” means the government of the U.S., any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government over the Borrower, any Subsidiary, any of their Properties, the Administrative Agent, any Issuing Bank or any Lender.   “Governmental Requirement” means any applicable law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement, whether now or hereinafter in effect, including, without limitation, Environmental Laws, energy regulations and occupational, safety and health standards or controls, of any Governmental Authority.   “Guaranty” means the guaranty to be executed by the Guarantors dated the Third Amended and Restated Effective Date, substantially in the form of Exhibit H.   “Guarantors” means collectively all Restricted Subsidiaries of Borrower and “Guarantor” individually means any one of them.  As of the Third Amended and Restated Effective Date, the Guarantors are the Existing Guarantors.   “Hazardous Materials” means any substance regulated or as to which liability might arise under any applicable Environmental Law and including, without limitation:  (a) any chemical, compound, material, product, byproduct, substance or waste defined as or included in the definition or meaning of “hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar meaning or import found in any applicable Environmental Law; (b) Hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil and gas waste, crude oil, and any components, fractions, or derivatives thereof; and (c) radioactive materials, asbestos containing materials, polychlorinated biphenyls, or radon.   “Highest Lawful Rate” means, with respect to each Lender, the maximum non-usurious interest rate, if any (or, if the context so requires, an amount calculated at such rate), that at any time or from time to time may be contracted for, taken, reserved, charged, or received by such Lender under applicable laws with respect to an obligation, as such laws are presently in effect or, to the extent allowed by applicable law, as such laws may hereafter be in effect and which allow a higher maximum non-usurious interest rate than such laws now allow.  The determination of the Highest Lawful Rate shall, to the extent required by applicable law, take into account as interest paid, taken, received, charged, reserved or contracted for any and all relevant payments or charges under the Loan Documents.   15   “Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.   “Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.   “Indebtedness” has the meaning given such term in the First Lien Senior Secured Note Indenture.   “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.   “Indemnified Taxes” means Taxes other than Excluded Taxes.   “Indemnitee” has the meaning given in Section 12.03(b).   “Insolvency or Liquidation Proceeding” has the meaning given such term in the Collateral Trust Agreement.   “Intercreditor Agreement” means the Intercreditor Agreement attached as an exhibit to the First Lien Senior Secured Note Indenture to be entered into by the Collateral Trustee as “Priority Lien Representative” (as defined in the Intercreditor Agreement) on behalf of each Secured Party as a “Priority Lien Secured Party” (as defined in the Intercreditor Agreement).   “Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.04.   “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each calendar quarter and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.   “Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter, as the Borrower may elect; provided, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest   16   Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.   “Investment” has the meaning given such term in the First Lien Senior Secured Note Indenture.   “Investment Company Act” means the Investment Company Act of 1940, as amended.   “Issuing Bank” means RBC, in its capacity as an issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.07(i).   “LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter of Credit.   “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit (other than any portion of any Letters of Credit that has been cash collateralized in accordance with Section 2.07(j)) at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.   “Lenders” means the Persons listed on Annex I and any Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.   “Letter of Credit” means any letter of credit issued pursuant to this Agreement.   “Letter of Credit Agreements” means all letter of credit applications and other agreements (including any amendments, modifications or supplements thereto) submitted by the Borrower or entered into by the Borrower with an Issuing Bank relating to any Letter of Credit.   “Letter of Credit Fee Rate” means the rate specified as such in the definition of “Applicable Margin”.   “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period the greater of (a) zero percent (0%) per annum and (b) the ICE Benchmark Administration LIBO rate appearing on Reuters Libor Rates LIBOR01 (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the LIBO Rate with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the   17   Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.   “Lien” has the meaning given such term in the First Lien Senior Secured Note Indenture.   “Liquidate,” “Liquidated” and “Liquidation” when used in reference to any Swap Agreement or any portion thereof have the correlative meanings to the term “Swap Liquidation”.   “Loan Documents” means this Agreement, the Notes, the Letter of Credit Agreements, the Letters of Credit, the Security Instruments, the Guaranties and all other agreements, instruments, documents and certificates (other than Swap Agreements, agreements relating to Bank Products, and participation or similar agreements between any Lender and any other lender or creditor with respect to any Obligations pursuant to this Agreement) executed and delivered by any Loan Party to the Administrative Agent or any Lender (or, in the case of the Security Instruments, the Collateral Trustee (or its predecessor)) in connection with this Agreement or the transactions contemplated hereby.   “Loan Parties” means the Borrower, each Guarantor and each Restricted Subsidiary that is a party to any Loan Document.   “Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.   “Material Adverse Effect” means a material adverse effect on (a) the business, operations, Property or condition (financial or otherwise) of Borrower and its Restricted Subsidiaries taken as a whole, (b) the ability of the Loan Parties to perform their obligations under the Loan Documents, (c) the validity or enforceability of the Loan Documents or (d) the rights and remedies of or benefits available to the Administrative Agent, any Issuing Bank or any Lender under the Loan Documents; provided, that general market or industry conditions, which do not affect the Borrower and its Restricted Subsidiaries in a disproportionately adverse manner, shall not constitute or be taken into account in determining whether there has been a Material Adverse Effect.   “Material Indebtedness” means (a) Debt (other than the Loans and Letters of Credit), and (b) obligations in respect of one or more Swap Agreements, in each case of (a) and (b) of Borrower and its Restricted Subsidiaries in an aggregate principal amount exceeding $40,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Restricted Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Restricted Subsidiary would be required to pay if such Swap Agreement were Liquidated at such time.   “Maturity Date” means the earlier to occur of (i) the 91st day prior to the scheduled maturity of any Material Indebtedness including any Material Indebtedness arising in connection with the Senior Unsecured Notes or the First Lien Senior Secured Note Obligations, and (ii) February 14, 2023.   18   “Maximum Commodity Swap Limitation” has the meaning given in Section 9.13(b).   “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that is a nationally recognized rating agency.   “Mortgaged Property” means any Property owned by the Borrower or any Restricted Subsidiary that is subject to the Liens existing and that will exist under the terms of the Mortgages.   “Mortgages” means all mortgages and deeds of trust executed in connection herewith as amended in connection with the Collateral Trust Agreement.   “Multiemployer Plan” means a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.   “National Flood Insurance Program” means the program created by the United States Congress pursuant to the Flood Insurance Regulations, that mandates the purchase of flood insurance to cover real property improvements located in Special Flood Hazard Areas in participating communities and provides protection to property owners through a federal insurance program.   “Non-Recourse Debt” has the meaning given such term in the First Lien Senior Secured Note Indenture.   “Notes” means the promissory notes of the Borrower described in Section 2.02(d) and being substantially in the form of Exhibit A, together with all amendments, modifications, replacements, extensions and rearrangements thereof.   “Obligations” means, without duplication, (a) all Debt evidenced hereunder, (b) the obligation of the Loan Parties for the payment of the fees payable hereunder or under the other Loan Documents, (c) all Swap Obligations or other obligations and liabilities of any Loan Party under any Swap Agreement (i) existing on the date of this Agreement between such Loan Party and any counterparty that is (A) a Lender or an Affiliate of a Lender on the date of this Agreement or (B) a Secured Swap Provider or (ii) entered into on or after the date of this Agreement between such Loan Party and any Person that, at the time such obligation was entered into, was both (x) a Secured Swap Provider and (y) an Approved Counterparty, provided that, notwithstanding anything to the contrary, with respect to any Loan Party that is not an Eligible Contract Participant, the Obligations of such Loan Party shall exclude any Excluded Swap Obligations of such Loan Party (such non-excluded Obligations in this clause (c), the “Secured Priority Swap Obligations”), (d) the obligations of the Loan Parties relating to Bank Products (such Obligations in this clause (d), the “Secured Bank Product Obligations”), and (e) all other obligations and liabilities (monetary or otherwise, whether absolute or contingent, matured or unmatured) of the Loan Parties to the Administrative Agent, the Collateral Agent, an Issuing Bank and the Lenders, including reimbursement obligations with respect to LC Disbursements, in each case now existing or hereafter incurred under, arising out of or in connection with any Security Instrument or any other Loan Document, and to the extent that any of the foregoing includes or refers to the payment of amounts deemed or constituting interest, only so much   19   thereof as shall have accrued, been earned and which remains unpaid at each relevant time of determination.   “OFAC” means the U.S. Treasury Department’s Office of Foreign Assets Control.   “OPA” has the meaning given in the definition of “Environmental Laws”.   “Oil and Gas Business” has the meaning given such term in the First Lien Senior Secured Note Indenture.   “Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to Hydrocarbon Interests; (e) all Hydrocarbons in and under and which may be produced and saved or attributable to Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to Hydrocarbon Interests; and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.   “Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).   “Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement and any other Loan Document; “Other Taxes” shall not include Excluded Taxes.   20   “Participant” has the meaning set forth in Section 12.04(c)(i).   “Patriot Act” has the meaning set forth in Section 12.15.   “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA, and any successor entity performing similar functions.   “PDP Coverage Ratio” means the ratio of (a) (i) the Loan Parties’ proved developed producing properties’ PV-10 value (based on most recent Reserve Report and the then-current strip pricing as of the date of calculation) plus (ii) the net mark-to-market value of commodity Swap Agreements in effect as of the date of calculation based on the then-current strip pricing as of the date of calculation plus (iii) unrestricted cash on hand of the Loan Parties to (b) the Aggregate Commitment Amount.   “Permitted Holder” has the meaning given such term in the First Lien Senior Secured Note Indenture.   “Permitted Investments” has the meaning given such term in the First Lien Senior Secured Note Indenture.   “Permitted Payment” has the meaning given such term in the First Lien Senior Secured Note Indenture.   “Permitted Prior Liens” has the same meaning as the defined term “Permitted Collateral Liens” in the First Lien Senior Secured Note Indenture.   “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.   “Plan” means any employee pension benefit plan (other than a Multiemployer Plan), subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.   “Prime Rate” means for any day, the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its U.S. “prime rate.” Such rate is a rate set by the Administrative Agent based upon various factors including the Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.   “Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and contract rights.   “Proved Reserves” shall have the meaning given that term in the SPE/WPC Definitions.   21   “Qualified ECP Credit Party” means, with respect to any Benefiting Loan Party in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 and that, at the time of the guaranty by such Benefiting Loan Party of, or grant by such Benefiting Loan Party of a security interest or other Lien securing, such Swap Obligation is entered into or becomes effective with respect to, or at any other time such Benefiting Loan Party is by virtue of such guaranty or grant of a security interest or other Lien otherwise deemed to enter into, such Swap Obligation, constitutes an Eligible Contract Participant and can cause such Benefiting Loan Party to qualify as an Eligible Contract Participant at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.   “Ranch” means Rockin L Ranch Company, LLC, a Delaware limited liability company, and wholly-owned Subsidiary of Borrower.   “RBC” has the meaning given in the introductory paragraph.   “RCRA” has the meaning set forth in the definition of “Environmental Laws”.   “Recipient” means (a) the Administrative Agent, (b) any Lender or (c) any Issuing Bank, as applicable.   “Register” has the meaning given in Section 12.04(b)(iv).   “Regulation D” means Regulation D of the Board, as the same may be amended, supplemented or replaced from time to time.   “Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors (including attorneys, accountants and experts) of such Person and such Person’s Affiliates.   “Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping, or disposing.   “Remedial Work” has the meaning given in Section 8.10.   “Repayment Notice” means a notice of repayment of a Borrowing pursuant to Section 3.04, substantially in the form of Exhibit G or any other form reasonably approved by the Administrative Agent.   “Required Lenders” means, at any time while no Loans or LC Exposure are outstanding, Lenders having more than fifty percent (50%) of the Aggregate Commitment Amount; and at any time while any Loans or LC Exposure is outstanding, Lenders holding more than fifty percent (50%) of the outstanding aggregate principal amount of the Loans and participation interests in Letters of Credit (without regard to any sale by a Lender of a participation in any Loan under Section 12.04(c)).   “Required Reserve Mortgage Percentage” means the greater of (A) the percentage of the net present value of Proved Reserves associated with the Loan Parties’ Oil and Gas   22   Properties required to be mortgaged under the First Lien Senior Secured Note Indenture, if any, and (B) eighty-five percent (85%) of the net present value of Proved Reserves associated with the Loan Parties’ Oil and Gas Properties, as calculated based on the Oil and Gas Properties owned by the Loan Parties at the time of determination.   “Reserve Report” means a report, in form and substance reasonably satisfactory to the Administrative Agent, setting forth, as of each December 31st (or January 1st) or June 30th (or July 1st) the oil and gas reserves attributable to the proved Oil and Gas Properties of the Borrower and the Guarantors, together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, based upon the pricing assumptions consistent with SEC reporting requirements at the time, and reflecting Swap Agreements in place with respect to such production.   “Resources” means Sanchez Resources, LLC, a Delaware limited liability company   “Responsible Officer” means, as to any Person, the Chief Executive Officer, the Chief Operating Officer, the President, any Financial Officer or any Vice President of such Person.  Unless otherwise specified, all references to a Responsible Officer herein shall mean a Responsible Officer of the Borrower.   “Restricted Payments” has the meaning given such term in the First Lien Senior Secured Note Indenture.   “Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. If not otherwise specified, reference to a Restricted Subsidiary shall mean a Restricted Subsidiary of the Borrower.   “S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and any successor thereto that is a nationally recognized rating agency.   “Sanchez Family” means (a) Antonio R. Sanchez, III and A.R. Sanchez, Jr., (b) any spouse or descendant of any individual named in (a), (c) any other natural person who is a member of the Family of any such individual referenced in (a)-(b) above and (d) any other natural person who has been adopted by any such individual referenced in (a)-(c) above.   “Sanchez Group” means (a) any member of the Sanchez Family, (b) Sanchez Oil & Gas Corporation, Sanchez Energy Partners I, LP, SEP Management I, LLC and (c) any Person Controlled by any one or more of the foregoing.   “SEC” means the U.S. Securities and Exchange Commission or any successor Governmental Authority.   “Securities Act” means the Securities Act of 1933, as amended.   “Section 91.1011” has the meaning set forth in the definition of “Environmental Laws”.   23   “Secured Parties” means the Collateral Agent, the Administrative Agent, the Lenders, the Issuing Bank, the Secured Priority Swap Providers and the Bank Product Providers.   “Secured Priority Swap Obligation” has the meaning given to such term in clause (c) of the defined term “Obligations.”   “Secured Priority Swap Provider” means any Secured Swap Provider that holds Secured Priority Swap Obligations, to the extent thereof.   “Secured Swap Provider” means any Swap Provider that is listed on Schedule 7.20 or on any supplement to such Schedule as a “Secured Swap Provider”.   “Security Agreement” means the Second Amended and Restated Security and Pledge Agreement dated as of the Third Amended and Restated Effective Date among the Borrower and the Guarantors, as grantors, and the Collateral Trustee, as it may be further amended, restated, supplemented or modified from time to time.   “Security Instruments” means the Collateral Trust Agreement and the Security Agreement and the other mortgages, deeds of trust, security agreements, pledge agreements and other agreements, instruments or certificates now or heretofore or hereafter executed and delivered by the Borrower or any other Person (other than Swap Agreements, agreements relating to Bank Products, and participation or similar agreements between any Lender and any other lender or creditor with respect to any Obligations pursuant to this Agreement) evidencing, or providing for, Liens granted as security for the payment or performance of the Obligations or the First Lien Senior Secured Note Obligations, as such agreements may be amended, modified, supplemented or restated from time to time.   “Senior Unsecured Notes” means senior unsecured notes issued or to be issued by Borrower and guaranteed by some or all of the other Loan Parties, (a) in one or more Rule 144A or other private placement offerings including without limitation (i) the Borrower’s $600,000,000 principal amount of 7.750% Senior Notes due 2021, and (ii) the Borrower’s $1,150,000,000 principal amount of 6.125% Senior Notes due 2023, and (b) registered senior unsecured notes issued in exchange therefor.   “SN Capital” means SN Capital, LLC, a Delaware limited liability company, and wholly-owned Subsidiary of Borrower.   “SN Catarina” means SN Catarina, LLC, a Delaware limited liability company, and   “SN Comanche” means SN Comanche Manager, LLC, a Delaware limited liability company, and wholly-owned Subsidiary of Borrower.   “SN Cotulla” has the meaning given in Recital C.   “SN Marquis” has the meaning given in Recital A.   24   “SN Maverick” means SN EF Maverick, LLC, a Delaware limited liability company,   “SN Midstream” means SN Midstream, LLC, a Delaware limited liability company, and wholly-owned Subsidiary of Borrower which is an Unrestricted Subsidiary.   “SN Operating” means SN Operating, LLC, a Texas limited liability company.   “SN Palmetto” means SN Palmetto, LLC, a Delaware limited liability company, known prior to its name change on March 14, 2016 as SEP Holdings III, LLC.   “SN Services” means SN Services, LLC, a Delaware limited liability company.   “SN Terminal “ means SN Terminal, LLC, a Delaware limited liability company.   “SN TMS” means SN TMS, LLC, a Delaware limited liability company.   “SN UR Holdings “ means SN UR Holdings, LLC, a Delaware limited liability company.   “Special Flood Hazard Area”  means an area that FEMA’s current flood maps indicate has at least a one percent (1%) chance of a flood equal to or exceeding the base flood elevation (a 100-year flood) in any given year.   “Specified Acquisition” means any Acquisition for which: (i) a binding and enforceable purchase and sale agreement has been signed by the Borrower or one or more of its Restricted Subsidiaries, and (ii) the aggregate volumes hedged with respect to the reasonably anticipated projected production to be acquired by the Borrower and its Restricted Subsidiaries in all pending Specified Acquisitions that have not yet been consummated shall not exceed the amount permitted by Section 9.13(c).   “SPE/WPC Definitions” means the definitions promulgated by the Society of Petroleum Evaluation Engineers and the World Petroleum Congress and in effect   “SR TMS” means SR TMS, LLC, a Delaware limited liability company and   “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to constitute Eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.   25   “Subsidiary” means, with respect to any specified Person:   (a)   any corporation, association or other business entity (other than a partnership or limited liability company) of which more than 50% of the total voting power of Voting Stock is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and   (b)   any partnership (whether general or limited) or limited liability company (i) the sole general partner or member of which is such Person or a Subsidiary of such Person, or (ii) if there is more than a single general partner or member, either (x) the only managing general partners or managing members of which are such Person or one or more Subsidiaries of such Person (or any combination thereof) or (y) a majority of the outstanding general partner interests, member interests or other Voting Stock of such partnership or limited liability company is at the time owned or controlled, directly or indirectly, by combination thereof).   “Subsidiary Guarantee” has the meaning given such term in the First Lien Senior Secured Note Indenture   “Swap Agreement” means any transaction or agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement, whether exchange traded, “over-the-counter” or otherwise, involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions, whether or not any such transaction is governed by or subject to any master agreement.  For the avoidance of doubt, (a) a Swap Agreement governed by a master agreement, including any master agreement published by the International Swaps and Derivatives Association, Inc., shall be deemed entered into when such individual Swap Agreement is entered into without regard to the date on which such master agreement is entered into, (b) any hedge position or hedging arrangement of the type described in the immediately preceding sentence shall be considered a Swap Agreement regardless of whether a written agreement or written confirmation is entered into, and (c) options, warrants, rights and other similar interests in respect of Equity Interests in the Borrower shall not constitute Swap Agreements.   “Swap Liquidation” means the sale, assignment, novation, liquidation, unwind or termination of all or any part of any Swap Agreement (other than, in each case, at its scheduled maturity).   “Swap Obligation” means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, including any such obligation comprised of a guaranty or a security interest or other Lien.   26   “Swap Provider” means each Person listed on Schedule 7.20 or on any supplement to such Schedule as a “Swap Provider”. The Borrower may, at any time and from time to time, update Schedule 7.20 by written notice to the Administrative Agent.   “Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.   “Termination Date” means the earliest of (a) the Maturity Date, (b) the date of termination of the Commitments pursuant to Section 2.06 and (c) the date of termination of the Commitments pursuant to Section 10.02(a).   “Third Amended and Restated Effective Date” means the date on which the conditions specified in Section 6.01 and Section  6.02 are satisfied (or waived in accordance with Section 12.02).   “Transactions” means the execution, delivery and performance by the Loan Parties of this Agreement and each other Loan Document to which any of them is a party, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder and the grant of Liens by the Loan Parties on Mortgaged Properties, other Properties and Collateral pursuant to the Security Instruments.   “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Alternate Base Rate or the Adjusted LIBO Rate.   “UCC” means the Uniform Commercial Code in effect from time to time in the State of New York, or, where applicable as to specific Property, any other relevant state.   “Unrestricted Subsidiary” means (a) the Existing Unrestricted Subsidiaries and (b) any other Subsidiary of the Borrower that is designated or deemed designated by the Board of Directors of the Borrower as an Unrestricted Subsidiary pursuant to a Board Resolution of the Borrower, but only to the extent that such Subsidiary:   (a)           has no Indebtedness other than Non-Recourse Debt owing to any Person other than the Borrower or any of its Restricted Subsidiaries (other than any guarantees of the First Lien Senior Secured Notes or the Subsidiary Guarantees or any Indebtedness that would be released upon designation);   (b)           except as permitted by the First Lien Senior Secured Note Indenture, is not party to any agreement, contract, arrangement or understanding, together with the terms of all other agreements, contracts, arrangements and understandings with such Unrestricted Subsidiary, taken as a whole, with the Borrower or any Restricted Subsidiary of the Borrower unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Borrower or such Restricted Subsidiary than those that might be obtained at the time of entry into such agreement, contract, arrangement or undertaking from Persons who are not Affiliates of the Borrower, as determined in good faith by the Borrower;   27   (c)           is a Person with respect to which neither the Borrower nor any of its Restricted Subsidiaries has any direct or indirect obligation (i) to subscribe for additional Equity Interests or (ii) to maintain or preserve such Person’s financial condition; and   (d)           has not guaranteed or otherwise become an obligor on any Indebtedness of the Borrower or any of its Restricted Subsidiaries, except to the extent such guarantee or obligation would be released upon such designation and except for (i) any Non-Recourse Debt with respect to which the Borrower or any of its Restricted Subsidiaries has pledged (or provided a guarantee limited in recourse solely to) Equity Interests in such Subsidiary or (ii) any guarantee of the First Lien Senior Secured Notes and the Subsidiary Guarantees,   except, in the case of (a), (b), (c) or (d), for any such Indebtedness that is subject to a guarantee by or other obligation of, or any agreement, contract, arrangement or understanding with, or any equity subscription or credit support obligation of, the Borrower or Restricted Subsidiary that constitutes an Investment in such Subsidiary that has been effected as a Restricted Payment, Permitted Payment or Permitted Investment that complies with the First Lien Senior Secured Note Indenture.   Each Subsidiary of an Unrestricted Subsidiary shall also be an Unrestricted Subsidiary.   Any designation of a Subsidiary of the Borrower as an Unrestricted Subsidiary shall be made in an officer’s certificate delivered to the Administrative Agent and containing a certification that such designation is in compliance with the terms of this definition.  If at any time any Unrestricted Subsidiary remains a Subsidiary and would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and the other Loan Documents, any Debt of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Borrower as of such date and any Lien on the assets of such Subsidiary will be deemed to be incurred as of such date and, if such Debt is not permitted to be incurred pursuant to Section 9.02 hereof, or such Lien is not permitted to be incurred as of such date pursuant to Section 9.03 hereof, then in either case, the Borrower will be in default of the relevant covenant.   “UnSub GP” means SN EF UnSub GP, LLC, a Delaware limited liability company, and   “UnSub Holdings” means SN EF UnSub Holdings, LLC, a Delaware limited liability   “UnSub LP” means SN EF UnSub, LP, a Delaware limited partnership, 100% of whose common limited partnership interests are indirectly owned by Borrower and whose sole general partner is UnSub GP.   “U.S.” and “United States” means the United States of America.   “U.S. Tax Compliance Certificate” has the meaning given in Section 5.03(e)(ii)(1)(C).   28   “Utilization Percentage” means, as of any day, the fraction, expressed as a percentage, the numerator of which is the sum of the Credit Exposures of the Lenders on such day, and the denominator of which is the Aggregate Commitment Amount in effect on such day.   “Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of members of the Board of Directors of such Person; provided that with respect to a limited partnership or other entity which does not have a Board of Directors, Voting Stock means the Capital Stock of the general partner of such limited partnership or other business entity with the ultimate authority to manage the business and operations of such Person.   Section 1.03         Types of Loans and Borrowings.  For purposes of this Agreement, Loans and Borrowings, respectively, may be classified and referred to by Type (e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).   Section 1.04         Terms Generally; Rules of Construction.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any law shall be construed as referring to such law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time, (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to the restrictions contained herein), (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) with respect to the determination of any time period, the word “from” means “from and including” and the word “to” means “to and including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Annexes, Exhibits and Schedules to, this Agreement.  No provision of this Agreement or any other Loan Document shall be interpreted or construed against any Person solely because such Person or its legal representative drafted such provision.  Defined terms specified to have the meanings set forth in the First Lien Senior Secured Note Indenture shall have such meaning set forth therein, except that the term “Company” shall be read as “Borrower” and other defined terms used in such definition, but not defined in this Agreement, shall have the meanings given such terms in the First Lien Senior Secured Note Indenture.   Section 1.05         Accounting Terms and Determinations; GAAP.  Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Administrative   29   Agent or the Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with the Financial Statements except for changes in which the Borrower’s independent certified public accountants concur and which are disclosed to Administrative Agent on the next date on which financial statements are required to be delivered to the Lenders pursuant to Section 8.01(a); provided that, unless the Borrower and the Required Lenders shall otherwise agree in writing, no such change shall modify or affect the manner in which compliance with the covenants contained herein is computed such that all such computations shall be conducted utilizing financial information presented consistently with prior periods.   ARTICLE II   THE CREDITS   Section 2.01         Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Loans to the Borrower during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Credit Exposure exceeding such Lender’s Commitment or (b) the total Credit Exposures exceeding the Aggregate Commitment Amount.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, repay and reborrow the Loans.   Section 2.02         Loans and Borrowings.   (a)           Borrowings; Several Obligations.  Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.   (b)           Types of Loans.  Subject to Section 3.03, the Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith.  Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.   (c)           Minimum Amounts; Limitation on Number of Borrowings.  At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount of $100,000 or a whole multiple of $100,000 in excess thereof.  At the time that each ABR Borrowing is made, such $100,000 in excess thereof; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Aggregate Commitment Amount or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.07(e).  Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of six (6) Eurodollar Borrowings outstanding.  Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Eurodollar Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.   30   (d)           Notes.  Any Lender may request that Loans made by it be evidenced by a single promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender in substantially the form of Exhibit A, dated, in the case of (i) any Lender party hereto as of the date of this Agreement, as of the date of this Agreement (subject to clause (ii) of this section), or (ii) any Lender that becomes a party hereto or that has its Commitment increased pursuant to an Assignment and Assumption, as of the effective date of the Assignment and Assumption, payable to the order of such Lender in a principal amount equal to its Commitment as in effect on such date, and otherwise duly completed.  If any Lender’s Commitment decreases for any reason (whether pursuant to Section 2.06, Section 12.04(b) or otherwise), the Borrower shall deliver or cause to be delivered on the effective date of such increase or decrease, a new Note payable to the order of any Lender who requested a Note hereunder in a principal amount equal to its Commitment after giving effect to such increase or decrease, and otherwise duly completed, and such Lender agrees to promptly thereafter return the previously issued Note held by such Lender marked canceled or otherwise similarly defaced.  The date, amount, Type, interest rate and, if applicable, Interest Period of each Loan made by each Lender that receives a Note, and all payments made on account of the principal thereof, shall be recorded by such Lender on its books for its Note, and, prior to any transfer, may be endorsed by such Lender on a schedule attached to such Note or any continuation thereof or on any separate record maintained by such Lender.  Failure to make any such notation or to attach a schedule shall not affect any Lender’s or the Borrower’s rights or obligations in respect of such Loans or affect the validity of such transfer by any Lender of its Note.   Section 2.03         Requests for Borrowings.  To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone or email request or by delivery of a written Borrowing Request in substantially the form of Exhibit B (each such signed request in the form of Exhibit B, a “written Borrowing Request”):  (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., Houston, Texas time, one (1) Business Day before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., Houston, Texas time, on the date of the proposed Borrowing.  Each telephonic or email request not evidenced by a written Borrowing Request shall be confirmed promptly by delivery to the Administrative Agent of a Borrowing Request signed by a Responsible Officer which may be delivered by hand, by courier service, by scanned pdf, or by facsimile.  Each such telephonic, email, facsimile and written Borrowing Request shall be irrevocable and shall specify the following information in compliance with Section 2.02:   (i)            the aggregate amount of the requested Borrowing;   (ii)           the date of such Borrowing, which shall be a Business Day;   (iii)          whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;   (iv)          in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”;   31   (v)           the amount equal to the Aggregate Commitment Amount, the current total Credit Exposures (without regard to the requested Borrowing) and the pro forma total Credit Exposures (giving effect to the requested Borrowing); and   (vi)          the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.05.   If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Each Borrowing Request shall constitute a representation that the amount of the requested Borrowing shall not cause the total Credit Exposures to exceed the Aggregate Commitment Amount.  Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.   Section 2.04         Interest Elections.   (a)           Conversion and Continuance.  Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.04.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.   (b)           Interest Election Requests.  To make an election pursuant to this Section 2.04, the Borrower shall notify the Administrative Agent of such election by telephone or by a written Interest Election Request in substantially the form of Exhibit C signed by a Responsible Officer (a “written Interest Election Request”) by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each telephonic and written Interest Election Request shall be irrevocable and each telephonic or email Interest Election Request shall be confirmed promptly by hand delivery, courier service, scanned pdf or facsimile delivery to the Administrative Agent.   (c)           Information in Interest Election Requests.  Each telephonic, email and written Interest Election Request shall specify the following information in compliance with Section 2.02:   (i)            the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to Section 2.04(c)(iii) and (iv) shall be specified for each resulting Borrowing);   32   (ii)           the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;   (iii)          whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and   (iv)          if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.   If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.   (d)           Notice to Lenders by the Administrative Agent.  Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.   (e)           Effect of Failure to Deliver Timely Interest Election Request and Events of Default on Interest Election.  If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing:  (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing (and any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be deemed to have requested an ABR Borrowing) and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.   Section 2.05         Funding of Borrowings.   (a)           Funding by Lenders.  Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., Houston, Texas time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loans available to the Borrower in the amount so received, in like funds, to an account of Borrower maintained either with a Lender or a non-Lender in Houston, Texas and designated by the Borrower in the applicable Borrowing Request; provided that ABR Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.07(e) shall be remitted by the Administrative Agent to the Issuing Bank that made such LC Disbursement.   (b)           Presumption of Funding by the Lenders.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.05(a) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its   33   share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.   Section 2.06         Changes in the Aggregate Commitment Amount.   (a)           Scheduled Termination of Commitments.  Unless previously terminated, the Commitments shall terminate on the Maturity Date.  If at any time the Aggregate Commitment Amount is terminated or reduced to zero, then the Commitment of each Lender shall automatically terminate on the effective date of such termination or reduction.  Notwithstanding the foregoing, the parties hereto hereby agree that this Agreement shall not be terminated until all Obligations are paid and performed in full.   (b)           Optional Termination and Reduction of the Aggregate Commitment Amount.   (i)            The Borrower may at any time terminate, or from time to time reduce, the Aggregate Commitment Amount; provided that (1) each reduction of the Aggregate Commitment Amount shall be in an amount that is an integral multiple of $1,000,000 and not less than $1,000,000 (or, if less than $1,000,000, the entire Aggregate Commitment Amount), and (2) the Borrower shall not terminate or reduce the Aggregate Commitment Amount if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 3.04 and any concurrent cash collateralization of any portion of any Letters of Credit in accordance with Section 3.04(c)(i), the total Credit Exposures would exceed the Aggregate Commitment Amount.   (ii)           The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Aggregate Commitment Amount under Section 2.06(b)(i) at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section 2.06(b)(ii) shall be irrevocable.  Any termination or reduction of the Aggregate Commitment Amount shall be permanent and may not be reinstated.  Each reduction of the Aggregate Commitment Amount shall be made ratably among the Lenders in accordance with each Lender’s Applicable Percentage.   (iii)          Notwithstanding paragraph (ii) above, if the Borrower has reduced the Aggregate Commitment Amount as required under Section 3.04(c), the Borrower may reinstate such reduced Commitments by delivery to the Administrative Agent of a certificate of a Financial Officer demonstrating that, after giving pro forma effect to such reinstatement, the PDP Coverage Ratio will be no less than 4.00 to 1.00.   34   Section 2.07         Letters of Credit.   (a)           General.  Subject to the terms and conditions set forth herein, the Borrower may request any Issuing Bank to issue Letters of Credit in dollars for its own account or for the account of any of its Restricted Subsidiaries (or any Person that at the time of such issuance is an Unrestricted Subsidiary), in a form reasonably acceptable to the Administrative Agent and such Issuing Bank, at any time and from time to time during the Availability Period.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Letter of Credit Agreement, the terms and conditions of this Agreement shall control.   (b)           Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to the Issuing Bank selected by the Borrower and to the Administrative Agent (not less than three (3) Business Days in advance of the requested date of issuance, amendment, renewal or extension) a notice: (i) requesting the issuance of a Letter of Credit or identifying the outstanding Letter of Credit to be amended, renewed or extended; (ii) specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day); (iii) specifying the date on which such Letter of Credit is to expire (which shall comply with Section 2.07(c)); (iv) specifying the amount of such Letter of Credit; (v) specifying the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit; and (vi) specifying the amount of the current total Credit Exposures (without regard to the requested Letter of Credit or the requested amendment, renewal or extension of an outstanding Letter of Credit) and the pro forma total Credit Exposures (giving effect to the requested Letter of Credit or the requested amendment, renewal or extension of an outstanding Letter of Credit).  If requested by such Issuing Bank, the Borrower shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Letter of Credit, but any such application shall be subject to the final sentence of Section 2.07(a). A Letter of Credit shall be issued, amended, renewed or extended only if (and with respect to each notice provided by the Borrower above and any issuance, amendment, renewal or extension of each Letter of Credit, the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, the total Credit Exposures shall not exceed the Aggregate Commitment Amount.   (c)           Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal, which renewal may be provided for in the initial Letter of Credit, or extension thereof, one year after such renewal or extension; provided no such renewal or extension shall extend beyond the date referred to in clause (ii) of this subsection) and (ii) the date that is twenty (20) Business Days prior to the Maturity Date.   (d)           Participations.  By the issuance of a Letter of Credit (or an amendment to an existing Letter of Credit increasing the amount thereof) and without any further action on the part of such Issuing Bank that issues such Letter of Credit or the Lenders, such Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from such Issuing Bank, a   35   participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of such Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the date due as provided in Section 2.07(e) (but giving effect to the proviso in the first sentence thereof), or of any reimbursement payment required to be refunded to the Borrower for any reason.  Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this Section 2.07(d) in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.   (e)           Reimbursement.  If any Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying such Issuing Bank, through the Administrative Agent, an amount equal to such LC Disbursement (i) not later than 2:00 p.m., Houston, Texas time, on the date such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 12:00 noon, Houston Texas time, on such date (provided it shall not be an Event of Default if the Borrower fails to reimburse such LC Disbursement pursuant to this clause (i) if such LC Disbursement is reimbursed on the first Business Day immediately following the day that the Borrower received notice of such LC Disbursement), or (ii) not later than 12:00 noon, Houston, Texas time, on the first Business Day immediately following the day that the Borrower received such notice, if such notice is not received prior to 12:00 noon on the date such LC Disbursement was made.  If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this Section 2.07(e), the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that Lenders have made payments pursuant to this Section 2.07(e) to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear.  Any payment made by a Lender pursuant to this Section 2.07(e) to reimburse an Issuing Bank for any LC Disbursement shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.   (f)            Obligations Absolute.  The Borrower’s obligation to reimburse LC Disbursements as provided in Section 2.07(e) shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged,   36   fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit or any Letter of Credit Agreement, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.07(f), constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.  Neither the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of such Issuing Bank; provided that the foregoing shall not be construed to excuse such Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of such Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised all requisite care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the applicable Issuing Bank may, in its sole reasonable discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.   (g)           Disbursement Procedures.  Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit issued by it.  Such Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement.   (h)           Interim Interest.  If an Issuing Bank shall make any LC Disbursement, then, until the Borrower shall have reimbursed such Issuing Bank for such LC Disbursement (either with its own funds or a Borrowing under Section 2.07(e)), the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Loans.  Interest accrued pursuant to this Section 2.07(h) shall be for the account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any   37   Lender pursuant to Section 2.07(d) to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment.   (i)            Replacement of an Issuing Bank.  Any Issuing Bank may be replaced or resign at any time by written agreement among the Borrower, the Administrative Agent, such replaced Issuing Bank and a successor Issuing Bank.  At the time any such resignation or replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 3.05(b).  From and after the effective date of such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the resignation or replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.   (j)            Cash Collateralization.  If (i) any Event of Default shall occur and be continuing and the Borrower receives notice from the Administrative Agent or the Required Lenders demanding the deposit of cash collateral pursuant to this Section 2.07(j), or (ii) the Borrower is required to pay to the Administrative Agent the excess attributable to an LC Exposure in connection with any prepayment pursuant to Section 3.04(c), then the Borrower shall deposit, in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to, in the case of an Event of Default, the LC Exposure, and in the case of a payment required by Section 3.04(c), the amount of such excess as provided in Section 3.04(c), as of such date plus any accrued and unpaid interest thereon to the extent not otherwise included in such payment; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower or any Restricted Subsidiary described in Section 10.01(f) or Section 10.01(g).  The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Bank and the Lenders, an exclusive first priority and continuing perfected security interest in and Lien on such account and all cash, checks, drafts, certificates and instruments, if any, from time to time deposited or held in such account, all deposits or wire transfers made thereto, any and all investments purchased with funds deposited in such account, all interest, dividends, cash, instruments, financial assets and other Property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing, and all proceeds, products, accessions, rents, profits, income and benefits therefrom, and any substitutions and replacements therefor.  The Borrower’s obligation to deposit amounts pursuant to this Section 2.07(j) shall be absolute and unconditional, without regard to whether any beneficiary of any such Letter of Credit has attempted to draw down all or a portion of such amount under the terms of a Letter of Credit, and, to the fullest extent permitted by applicable law, shall not be subject to any defense or be affected by a right of set-off, counterclaim or recoupment which the Borrower or any of its Subsidiaries may now or hereafter have against any such beneficiary, an Issuing Bank, the Administrative Agent, the Lenders or any other Person for any reason whatsoever.  Such deposit shall be held as collateral securing the payment and performance of the Borrower’s obligations under this Agreement and the other Loan Documents   38   in a “securities account” (within the meaning of Article 8 of the UCC) over which the Administrative Agent shall have “control” (within the meaning of the UCC).  Notwithstanding the foregoing, the Borrower may direct the Administrative Agent and the “securities intermediary” (within the meaning of the UCC) to invest amounts credited to the securities account, at the Borrower’s risk and expense, in Investments.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Administrative Agent to reimburse, on a pro rata basis, the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, be applied to satisfy other obligations of the Borrower under this Agreement or the other Loan Documents pursuant to Section 10.02(c).  If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, and the Borrower is not otherwise required to pay to the Administrative Agent the excess attributable to an LC Exposure in connection with any prepayment pursuant to Section 3.04(c), then such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. If the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section 3.04(c)(i) with respect to any portion of any Letter of Credit, then, if no Event of Default is then continuing, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after such portion of such Letter of Credit expires or is otherwise no longer outstanding.   ARTICLE III   PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES   Section 3.01         Repayment of Loans.  Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan on the Termination Date.   Section 3.02         Interest.   (a)           ABR Loans.  The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Margin, but in no event to exceed the Highest Lawful Rate.   (b)           Eurodollar Loans.  The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin, but in no event to exceed the Highest Lawful Rate.   (c)           Post-Default Rate.  Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder or under any other Loan Document is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to two percent (2%) plus the rate applicable to ABR Loans as provided in Section 3.02(a), but in no event to exceed the Highest Lawful Rate.   39   (d)           Interest Payment Dates.  Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and on the Termination Date; provided that  (i) interest accrued pursuant to Section 3.02(c) shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than an optional prepayment of an ABR Loan prior to the Termination Date), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.   (e)           Interest Rate Computations.  All interest hereunder shall be computed on the basis of a year of 360 days, unless such computation would exceed the Highest Lawful Rate, in which case interest shall be computed on the basis of a year of 365 days (or 366 days in a leap year), except that interest computed by reference to the Alternate Base Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error, and be binding upon the parties hereto.   Section 3.03         Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a Eurodollar Borrowing:   (a)           the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest Period; or   (b)           the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;   then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.   Section 3.04         Prepayments.   (a)           Optional Prepayments.  The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with Section 3.04(b).  Partial optional prepayments pursuant to this Section 3.04 shall be in an aggregate principal amount of $100,000 or any whole multiple of $50,000 in excess thereof.   (b)           Notice and Terms of Optional Prepayment.  The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy of a signed Repayment Notice) of   40   any prepayment hereunder not later than 11:00 a.m., Houston, Texas time, on the Business Day of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid.  Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.   (c)           Mandatory Prepayments.   (i)            If, after giving effect to any termination or reduction of the Aggregate Commitment Amount pursuant to Section 2.06(b), the total Credit Exposures exceed the Aggregate Commitment Amount, then the Borrower shall (A) prepay the Borrowings within 1 Business Day after the date of such termination or reduction in an aggregate principal amount equal to such excess, and (B) if any excess remains after prepaying all of the Borrowings as a result of LC Exposure, pay to the Administrative Agent on behalf of the Lenders an amount equal to such excess to be held as cash collateral as provided in Section 2.07(j).   (ii)           If (A) any Loan Party consummates a Disposition to any non-Loan Party of proved developed producing properties included in the most recent Reserve Report delivered to the Administrative Agent having a PV-10 value in such Reserve Report in excess of $10,000,000 at a time when any Loans or Letters of Credit are outstanding under this Agreement and (B) after giving effect to such Disposition, the PDP Coverage Ratio is less than 4.00 to 1.00, then within 15 Business Days after the consummation of such Disposition, the Borrower shall (I) reduce the Aggregate Commitment Amount pursuant to Section 2.06(b) in an amount sufficient to increase the PDP Coverage Ratio to no less than 4.00 to 1.00 and (II) comply with Section 3.04(c)(i).   (iii)          If (A) any Loan Party causes one or more Swap Agreements included in the most recent Reserve Report delivered to the Administrative Agent having a value in such Reserve Report in excess of $10,000,000 in the aggregate to be Liquidated at a time when any Loans or Letters of Credit are outstanding under this Agreement and (B) after giving effect to such Liquidations, the PDP Coverage Ratio is less than 4.00 to 1.00, then within 15 Business Days after the consummation of the Liquidation resulting in the $10,000,000 amount being exceeded, the Borrower shall (I) reduce the Aggregate Commitment Amount pursuant to Section 2.06(b) in an amount sufficient to increase the PDP Coverage Ratio to no less than 4.00 to 1.00 and (II) comply with Section 3.04(c)(i).   (iv)          If (A) any Loans or Letters of Credit are outstanding under this Agreement as of the end of a fiscal quarter and (B) as of the end of such fiscal quarter, the PDP Coverage Ratio is less than 4.00 to 1.00, then within the time period specified in the following sentence, the Borrower shall (I) reduce the Aggregate Commitment Amount pursuant to Section 2.06(b) in an amount sufficient to increase the PDP Coverage Ratio to no less than 4.00 to 1.00 and (II) comply with Section 3.04(c)(i).  The Borrower shall satisfy its obligations under the preceding sentence (y) if the PDP Coverage Ratio as of the end of such fiscal quarter is less than 1.50 to 1.00, within 10 Business Days after the Borrower becomes aware of such circumstance and (z) if the PDP Coverage Ratio as of   41   the end of such fiscal quarter is less than 4.00 to 1.00 but is not less than 1.50 to 1.00, within 45 days after the Borrower becomes aware of such circumstance.   (d)           Prepayments in General.   (i)            Unless otherwise elected by the Borrower, each prepayment of Borrowings pursuant to this Section 3.04 shall be applied to outstanding Borrowings first, ratably to any ABR Borrowings then outstanding, and, second, to any Eurodollar Borrowings then outstanding, and if more than one Eurodollar Borrowing is then outstanding, to each such Eurodollar Borrowing in order of priority beginning with the Eurodollar Borrowing with the least number of days remaining in the Interest Period applicable thereto and ending with the Eurodollar Borrowing with the most number of days remaining in the Interest Period applicable thereto.   (ii)           Each prepayment of Borrowings pursuant to this Section 3.04 shall be applied ratably to the Loans included in the prepaid Borrowings.  Prepayments pursuant to this Section 3.04 shall be accompanied by accrued interest to the extent required by Section 3.02.   (e)           No Premium or Penalty.  Prepayments permitted or required under this Section 3.04 shall be without premium or penalty, except as required under Section 5.02.   Section 3.05         Fees.   (a)           Commitment Fees.  The Borrower agrees to pay to the Administrative Agent for the account of each Lender, ratably in accordance with its Applicable Percentage, a commitment fee, which shall accrue at the applicable Commitment Fee Rate on the average daily amount of the excess of such Lender’s Commitment over such Lender’s Credit Exposure during the period from and including the Third Amended and Restated Effective Date to but excluding the Termination Date.  Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the Termination Date, commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).   (b)           Letter of Credit Fees.  The Borrower agrees to pay (i) to the Administrative Agent, for the account of each Lender, ratably in accordance with its Applicable Percentage, a Letter of Credit fee on the aggregate undrawn amount of all outstanding Letters of Credit at such time, which shall accrue at the Letter of Credit Fee Rate and be payable in arrears on the Termination Date and the last day of each calendar quarter, (ii) to each Issuing Bank, for its own account, a fronting fee equal to the lesser of (a) $500 or 0.125% per annum of the face amount of each outstanding Letter of Credit and (iii) to each Issuing Bank, for its own account, its standard and customary fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit issued by such Issuing Bank or processing of drawings thereunder, which shall be payable upon issuance and upon any renewal of such Letter of Credit.  Any other fees payable to an Issuing Bank pursuant to this Section 3.05(b) shall be payable within 10 days after demand.  All Letter of Credit fees and fronting fees (as set forth herein) shall be computed on the basis of a   42   year of 365 days (or 366 days in a leap year), and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).   (c)           Administrative Agent Fees.  As long as there is only one Lender hereunder, no administrative agent fee will accrue or be payable.  As soon as a second Lender becomes a party hereto, the Borrower and the Administrative Agent will negotiate in good faith an amount to be paid annually as an administrative agent’s fee.   ARTICLE IV   PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS   Section 4.01         Payments Generally; Pro Rata Treatment; Sharing of Set-offs.   (a)           Payments by the Borrower.  The Borrower shall make each payment required to be made by the Borrower hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 5.01, Section 5.02, Section 5.03 or otherwise) prior to 12:00 noon, Houston, Texas time, on the date when due, in dollars that constitute immediately available funds, without defense, deduction, recoupment, set-off or counterclaim.  Fees, once paid, shall not be refundable under any circumstances absent manifest error (e.g., as a result of a clerical mistake).  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices specified in Section 12.01, except payments to be made directly to an Issuing Bank as expressly provided herein and except that payments pursuant to Section 5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in dollars.   (b)           Application of Insufficient Payments.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.   (c)           Sharing of Payments by Lenders.  Subject to any applicable requirements as to the sharing of set-offs pursuant to the Collateral Trust Agreement, if any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations   43   in LC Disbursements and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this Section 4.01(c) shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this Section 4.01(c) shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that, subject to any applicable requirements as to the sharing of set-offs pursuant to the Collateral Trust Agreement, any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower  rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.   Section 4.02         Presumption of Payment by the Borrower.  Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or any Issuing Bank that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or such Issuing Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or such Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.   Section 4.03         Certain Deductions by the Administrative Agent.  If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(a), 2.07(d) or (e), 4.02 or 12.03(c), then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (a) apply any amounts thereafter received by the Administrative Agent for the account of such Lender and for the benefit of the Administrative Agent or an Issuing Bank to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid, and/or (b) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under such Sections; in the case of each of (a) and (b) above, in any order as determined by the Administrative Agent in its discretion.   Section 4.04         Disposition of Proceeds.  The Mortgages contain an assignment by the Borrower and other Loan Parties unto and in favor of the Collateral Trustee for the benefit of (i)   44   the Lenders, (ii) the Secured Priority Swap Providers, (iii) the First Lien Senior Secured Note Holders, (iv) the Bank Product Providers, (v) the Collateral Trustee, (vi) the Collateral Agent, (vii) the Administrative Agent and (viii) the First Lien Senior Secured Note Trustee of all of each Loan Party’s interest in and to production and all proceeds attributable thereto that may be produced from or allocated to the Mortgaged Property.  The Mortgages further provide in general for the application of such proceeds to the satisfaction of the Obligations and the First Lien Senior Secured Note Obligations.  Notwithstanding the assignment contained in such Mortgages, until the occurrence of an Event of Default, (a) each Secured Party agrees that it will not instruct the Collateral Trustee to notify the purchaser or purchasers of such production or take any other action to cause such proceeds to be remitted to the Collateral Trustee for payment in accordance with the Collateral Trust Agreement, but will instead instruct the Collateral Trustee to permit such proceeds to continue to be paid to the Borrower and its Restricted Subsidiaries and (b) the Secured Parties hereby authorize the Administrative Agent and the Collateral Agent to instruct the Collateral Trustee to take such actions as may be necessary to cause such proceeds to be paid to the Borrower and/or such Restricted Subsidiaries. Upon the expiration or termination of the Commitments and the payment in full of the Obligations, the Administrative Agent and the Collateral Agent shall, and shall instruct the Collateral Trustee to, at the expense of the Borrower, execute and deliver such documentation as the Borrower shall reasonably request to re-convey to the Borrower and the other Loan Parties, any property purportedly conveyed to the Administrative Agent, the Collateral Agent or the Collateral Trustee under the Security Instruments in accordance with the Collateral Trust Agreement.   ARTICLE V   INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY   Section 5.01         Increased Costs.   (a)           Eurodollar Changes in Law.  If any Change in Law shall:   (i)            impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or   (ii)           impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender;   and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.   (b)           Capital Requirements.  If any Lender or any Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Bank’s capital or on the capital of   45   such Lender’s or such Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction suffered.   (c)           Certificates.  A certificate of a Lender or any Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company, as the case may be, as specified in Section 5.01(a) or (b) and reasonably detailed calculations therefor shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or such Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.   (d)           Effect of Failure or Delay in Requesting Compensation.  Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section 5.01 shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section 5.01 for any increased costs or reductions incurred more than ninety (90) days prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 90-day period referred to above shall be extended to include the period of retroactive effect thereof.   Section 5.02         Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan into an ABR Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 5.04(b), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of   46   a comparable amount and period from other banks in the Eurodollar market.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 5.02 and reasonably detailed calculations therefor shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.   Section 5.03         Taxes.   (a)           Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 5.03(a)), the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.   (b)           Payment of Other Taxes by the Borrower.  The Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.   (c)           Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent, each Lender and each Issuing Bank, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or such Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 5.03) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate of the Administrative Agent, a Lender or an Issuing Bank as to the amount of such payment or liability under this Section 5.03 shall be delivered to the Borrower and shall be conclusive absent manifest error.   (d)           Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.   (e)           Foreign Lenders.   (i)            Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement or any other Loan Document shall deliver to the Borrower (with a copy to the   47   Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate. In addition, any Foreign Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.   (ii)           Without limiting the generality of the foregoing:   (1)           any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:   (A)          in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the U.S. is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “business profits” or “other income” article of such tax treaty;   (B)          executed originals of IRS Form W-8ECI;   (C)          in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit F-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E; or   (D)          to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W 8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption,   48   such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4 on behalf of each such direct and indirect partner.   (2)           any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.   (f)            FATCA.  If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (f), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.   (g)           U.S. Lenders.  Any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.   (h)           Certifications.  Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.   (i)            Tax Refunds.  If the Administrative Agent or a Lender determines, in its reasonable discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 5.03, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 5.03 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided,   49   that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This Section 5.03 shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.   Section 5.04         Mitigation Obligations.   (a)           Designation of Different Lending Office.  If any Lender requests compensation under Section 5.01, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.03, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 5.01 or Section 5.03, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.   (b)           Replacement of Lenders.  If (i) any Lender requests compensation under Section 5.01, (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.03, (iii) any Lender becomes a Defaulting Lender or (iv) any Lender has not approved (or is not deemed to have approved) any amendment to, or waiver of, the terms of this Agreement or any other Loan Document approved by Administrative Agent and Required Lenders, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.04(b)), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that, (1) the Borrower shall have received the written consent of the Administrative Agent, which consent shall not unreasonably be withheld, delayed or conditioned, (2) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (2) in the case of any such assignment resulting from a claim for compensation under Section 5.01 or payments required to be made pursuant to Section 5.03, such assignment will result in a reduction in such compensation or payments.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such  assignment and delegation cease to apply.   Section 5.05         Illegality.  Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its applicable lending office to honor its   50   obligation to make or maintain Eurodollar Loans either generally or having a particular Interest Period hereunder, then (a) such Lender shall promptly notify the Borrower and the Administrative Agent thereof and such Lender’s obligation to make such Eurodollar Loans shall be suspended (the “Affected Loans”) until such time as such Lender may again make and maintain such Eurodollar Loans and (b) all Affected Loans which would otherwise be made by such Lender shall be made instead as ABR Loans (and, if such Lender so requests by notice to the Borrower and the Administrative Agent, all Affected Loans of such Lender then outstanding shall be automatically converted into ABR Loans on the date specified by such Lender in such notice) and, to the extent that Affected Loans are so made as (or converted into) ABR Loans, all payments of principal which would otherwise be applied to such Lender’s Affected Loans shall be applied instead to its ABR Loans.   ARTICLE VI   CONDITIONS PRECEDENT   Section 6.01         Conditions to Effectiveness.  The amendment and restatement of the 2014 Credit Agreement and the obligation of each Lender to make Loans and the Issuing Bank to issue Letters of Credit shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 12.02):   (a)           Satisfactory evidence that (i)  the Collateral Agent, on behalf of the Lenders and the other Secured Parties, the Borrower and the First Lien Senior Secured Note Trustee, on behalf of the First Lien Senior Secured Note Holders, shall have entered into the Collateral Trust Agreement setting forth the first-out payment priority right of the Lenders, the Issuing Bank, the Secured Priority Swap Providers, and the Bank Product Providers under this Agreement and, which agreement shall be on terms and conditions customary for new-money “first lien last out” secured notes issuances having substantially greater exposure than the “first lien first out” facility and otherwise acceptable to the parties entering into such agreement, (ii)  all commodity swaps required by the First Lien Senior Secured Note Indenture, if any, shall be in place, and (iii) all Swap Agreements of any Loan Party existing prior to the Third Amended and Restated Effective Date shall be terminated, novated, assigned, maintained or amended, in each case, in a manner acceptable to the Borrower;   (b)           The Administrative Agent shall have received a certificate of a Responsible Officer or the Secretary or an Assistant Secretary of each Loan Party setting forth (i) resolutions of its Board of Directors with respect to the authorization of such Loan Party to execute and deliver amendments or supplements to the Loan Documents to which it is a party, (ii) the officers of such Loan Party (y) who are authorized to sign the amendments or supplements to the Loan Documents to which such Loan Party is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement, (iii) specimen signatures of such authorized officers, and (iv) the articles or certificate of incorporation and bylaws or other comparable organizational documents of such Loan Party, certified as being true and complete.  The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary;   51   (c)           The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party and duly executed counterparts (in such number as may be requested by the Administrative Agent) of amendments or supplements to the loan documents governing the 2014 Credit Agreement and all commitments thereunder shall be terminated (other than the commitments of the Lenders under this Agreement).  Notwithstanding anything to the contrary, Liens granted in the Collateral by any Loan Party shall not secure any obligation in respect of any Excluded Swap Obligation;   (d)           The Administrative Agent shall have received duly executed Notes payable to the order of each Lender that has requested a Note in a principal amount equal to its Commitment dated as of the date hereof;   (e)           The Administrative Agent shall have received, in form and substance reasonably satisfactory to it, an opinion of Akin Gump Strauss Hauer & Feld LLP, counsel to the Loan Parties;   (f)            The Collateral Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower is carrying insurance in accordance with Section 7.12 and shall provide a copy of such certificate to the Administrative Agent;   (g)           The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower has received all consents and approvals required by Section 7.03 or otherwise necessary for the continued operations of the Loan Parties;   (h)           The Administrative Agent shall have received UCC search certificates and other lien searches reflecting the absence of Liens other than Liens permitted under the “limitation on liens” negative covenant in the First Lien Senior Secured Note Indenture and Liens being released;   (i)            The Administrative Agent shall have received duly executed Guaranties from all Subsidiaries of the Borrower that have guaranteed the First Lien Senior Secured Note Obligations;   (j)            The Administrative Agent shall have received all documentation and other information that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the Patriot Act;   (k)           The Administrative Agent, Arranger and the Lenders shall have received all fees and other amounts due and payable, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder; and   (l)            The Third Amended and Restated Effective Date shall have occurred on or before March 31, 2018.   Section 6.02         Each Credit Event.  The obligation of each Lender to make a Loan on the occasion of any Borrowing (including the initial funding), and of the Issuing Bank to issue,   52   amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:   (a)           The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable, including to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder;   (b)           At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, (i) no Default shall have occurred and be continuing and (ii) regardless of any grace period before any payment is required to be paid, no amounts are required to be prepaid pursuant to Section 3.04(c);   (c)           If there are no Loans or Letters of Credit outstanding immediately prior to giving effect to such Borrowing or the issuance of such Letter of Credit, the PDP Coverage Ratio was no less than 4.00 to 1.00 as of the most recent quarterly period for which financial statements were delivered to the Administrative Agent pursuant to Section 8.01(a) or (b); and   (d)           The receipt by the Administrative Agent of a Borrowing Request in accordance with Section 2.03 or a request for a Letter of Credit in accordance with Section 2.07(b), as applicable.   Each request for a Borrowing and each issuance, amendment, renewal or extension of any Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in Section 6.02(a) through (d).   ARTICLE VII   REPRESENTATIONS AND WARRANTIES   The Borrower represents and warrants to the Lenders that   Section 7.01         Organization; Powers.  The Borrower and each of its Subsidiaries is duly organized, validly existing and in good standing under the authority, and has all material governmental licenses, authorizations, consents and approvals necessary, to own its assets and to carry on its business as now conducted, and is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where failure to have such good standing, power, authority, licenses, authorizations, consents, approvals and qualifications could not reasonably be expected to have a Material Adverse Effect. As of the Third Amended and Restated Effective Date, Schedule 7.01 is an accurate corporate organizational chart of the Borrower and its Subsidiaries and shows the ownership of all Equity Interests in such Persons.   Section 7.02         Authority; Enforceability.  The Transactions to be entered into by each Loan Party are within such Loan Party’s organizational powers and company and, if required, stockholder or member, action (including, without limitation, any action required to be taken by any class of directors of such Loan Party or any other Person, whether interested or disinterested, in order to ensure the due authorization of the Transactions).  Each Loan Document to which any Loan Party is a party   53   has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.   Section 7.03         Approvals; No Conflicts.  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any other third Person (including members, shareholders or any class of directors, whether interested or disinterested, of any Loan Party or any other Person), nor is any such consent, approval, registration, filing or other action necessary for the validity or enforceability of any Loan Document or the consummation of the transactions contemplated thereby, except such as have been obtained or made and are in full force and effect, other than (i) the recording and filing of any Security Instruments as required by the Loan Documents and (ii) those third party consents, approvals, registrations, filings or other actions which, if not made or obtained, would not cause a Default hereunder, could not reasonably be expected to have a Material Adverse Effect or do not have an adverse effect on the enforceability of the Loan Documents, (b) will not result in a violation by any Loan Party of any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any Subsidiary or any order of any Governmental Authority, (c) will not breach or result in a default under any material indenture, agreement or other instrument binding upon the Borrower or any Subsidiary or its Properties, or give rise to a right thereunder to require any material payment to be made by the Borrower or such Subsidiary, which breach, default or right to require payment could reasonably be expected to result in a Material Adverse Effect, and (d) will not result in the creation or imposition of any Lien on any Property of the Borrower or any Subsidiary (other than the Liens created or permitted by the Loan Documents).   Section 7.04         Financial Condition; No Material Adverse Change.   (a)           The Borrower has heretofore furnished to the Lenders its (i) audited consolidated balance sheet and statement of income, stockholders equity and cash flows as of and for the fiscal year ended December 31, 2016, all reported on by KPMG LLP and (ii) unaudited consolidated balance sheet and statements of income, stockholders’ equity and cash flows as of and for the fiscal quarter and the portion of the fiscal year ended September 30, 2017, certified by a Financial Officer.  Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its Consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the unaudited quarterly financial statements.   (b)           Since the “as of” date of the financial statements of the Borrower most recently delivered, or deemed delivered, pursuant to Section 8.01(a) or Section 8.01(b), there has been no event, development or circumstance that has had or could be reasonably expected to have a Material Adverse Effect.   (c)           Neither the Borrower nor any of its Subsidiaries has incurred, created, assumed or suffered to exist any Indebtedness except as permitted by Section 9.02.   54   Section 7.05         Litigation.  Except as set forth on Schedule 7.05 or as notified to the Administrative Agent pursuant to Section 8.02, there are no actions, suits, investigations or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened in writing against or affecting the Borrower or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve any Loan Document or the Transactions.   Section 7.06         Environmental Matters.  Except as could not reasonably be expected to have a Material Adverse Effect (or with respect to (c), (d) and (e) below, where the failure to take such actions could not be reasonably expected to have a Material Adverse Effect), to the knowledge of Borrower:   (a)           neither any Property of the Borrower or any Subsidiary nor the operations conducted thereon violate any order or requirement of any court or Governmental Authority or any Environmental Laws;   (b)           no Property of the Borrower or any Subsidiary nor the operations currently conducted thereon or by any prior owner or operator of such Property or operations are in violation of or subject to any existing, pending or threatened action, suit, investigation, inquiry or proceeding by or before any court or Governmental Authority or to any remedial obligations under Environmental Laws;   (c)           all Environmental Permits, if any, required to be obtained or filed in connection with the operation or use of any and all Property of the Borrower and each Subsidiary, including, without limitation, past or present treatment, storage, disposal or release of a hazardous substance, oil and gas waste or solid waste into the environment, have been duly obtained or filed, and Borrower and each Subsidiary are in compliance with the terms and conditions of all such Environmental Permits;   (d)           all hazardous substances, solid waste and oil and gas waste, if any, generated at any and all Property of the Borrower or any Subsidiary have in the past been transported, treated and disposed of in accordance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment, and all such transport carriers and treatment and disposal facilities have been and are operating in compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment, and are not the subject of any existing, pending or threatened action, investigation or inquiry by any Governmental Authority in connection with any Environmental Laws;   (e)           the Borrower has taken all steps reasonably necessary to determine and has determined that no oil, hazardous substances, solid waste or oil and gas waste, have been disposed of or otherwise released and there has been no threatened Release of any oil, hazardous substances, solid waste or oil and gas waste on or to any Property of the Borrower or any Subsidiary except in compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment;   55   (f)            to the extent applicable, all Property of the Borrower and each Subsidiary currently satisfies all design, operation, and equipment requirements imposed by the OPA, and the Borrower does not have any reason to believe that such Property, to the extent subject to the OPA, will not be able to maintain compliance with the OPA requirements during the term of this Agreement; and   (g)           neither the Borrower nor any Subsidiary has any known contingent liability or Remedial Work in connection with any release or threatened release of any oil, hazardous substance, solid waste or oil and gas waste into the environment.   Section 7.07         Compliance with the Laws and Agreements; No Defaults.  Except as could not reasonably be expected to have a Material Adverse Effect:   (a)           the Borrower and each Subsidiary is in compliance with all Governmental Requirements applicable to it or its Property and all agreements and other instruments binding upon it or its Property, and possesses all licenses, permits, franchises, exemptions, approvals and other governmental authorizations (other than Environmental Permits) necessary for the ownership of its Property and the conduct of its business, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect;   (b)           Neither the Borrower nor any Subsidiary is in default nor has any event or circumstance occurred which, but for the expiration of any applicable grace period or the giving of notice, or both, would constitute a default or would require the Borrower or a Subsidiary to redeem or make any offer to redeem under any material indenture, note, credit agreement or instrument pursuant to which any Material Indebtedness is outstanding or by which the Borrower or any Subsidiary or any of their Properties is bound; and   (c)           No Default has occurred and is continuing.   Section 7.08         Investment Company Act.  Neither the Borrower nor any Subsidiary is an “investment company” or a company “controlled” by an “investment company,” within the meaning of, and subject to regulation under, the Investment Company Act.   Section 7.09         Taxes.  The Borrower and its Subsidiaries have timely filed or caused to be filed all Tax returns and reports required to have been filed and have paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.  The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of Taxes and other governmental charges are, in the reasonable opinion of the Borrower, adequate.  Except as notified to the Administrative Agent pursuant to Section 8.02, no Tax Lien relating to Taxes described in the first sentence of this Section 7.09 has been filed and, to the knowledge of the Borrower, no claim is being asserted with respect to any such Tax or other such governmental charge.   56   Section 7.10         ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair market value of the assets of all such underfunded Plans.   Section 7.11         Disclosure; No Material Misstatements.  To the knowledge of Borrower, taken as a whole, none of the financial statements, certificates or other reports and information furnished by or on behalf of the Borrower or any Subsidiary to the Administrative Agent or any Lender or any of their Affiliates in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or under any other Loan Document (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the made, not misleading; provided that, with respect to forward-looking statements, projected financial information, prospect information, geological and geophysical data and engineering projections, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.   Section 7.12         Insurance.  The Loan Parties have (a) all insurance policies sufficient for the compliance by each of them with all material Governmental Requirements and all material agreements including, without limitation, Flood Insurance, if required, and (b) insurance coverage in at least amounts and against such risk (including, without limitation, public liability) the same or a similar business for the assets and operations of the Loan Parties.  The Collateral Trustee has been named as additional insured in respect of such liability insurance policies and the Collateral Trustee has been named as loss payee with respect to Property loss insurance, in each case to the extent required under Section 8.07.  No Loan Party owns any material Building (as defined in the applicable Flood Insurance Regulation) or material Manufactured (Mobile) Home (as defined in the applicable Flood Insurance Regulation) for which such Loan Party has not delivered to the Administrative Agent evidence reasonably satisfactory to the Administrative Agent that either (A) such Loan Party maintains Flood Insurance for such Building or Manufactured (Mobile) Home or (B) such Building or Manufactured (Mobile) Home is not located in a Special Flood Hazard Area.   Section 7.13         Restriction on Liens.  Neither the Borrower nor any of the Restricted Subsidiaries is a party to any material agreement or arrangement (other than the Collateral Trust Agreement, the First Lien Senior Secured Note Indenture, the indentures governing the Senior Unsecured Notes, and agreements governing Liens permitted to be granted under Section 9.03) or subject to any order, judgment, writ or decree, which either restricts or purports to restrict its   57   ability to grant Liens to the Collateral Trustee and the Lenders on or in respect of their Properties to secure the Obligations and the Loan Documents.   Section 7.14         Subsidiaries.  Schedule 7.14 sets forth the name of, and the ownership interest of Borrower in, each Subsidiary of the Borrower as of the Third Amended and Restated Effective Date.  As of the Third Amended and Restated Effective Date, there are no Unrestricted Subsidiaries other than SN Midstream, SN Services, SN UR Holdings, SN Terminal, SN Capital, UnSub Holdings, UnSub GP, UnSub LP, SN Comanche, Resources, SR TMS, Acquisition I and Acquisition III.   Section 7.15         Location of Business and Offices. The jurisdiction of organization of the Borrower is Delaware; the name of the Borrower as listed in the public records of Delaware or Texas is Sanchez Energy Corporation; the federal taxpayer identification number of the Borrower is 45-3090102 and the organizational identification number of the Borrower is 5027889. As of the Third Amended and Restated Effective Date, each Subsidiary’s jurisdiction of organization, name as listed in the public records of its jurisdiction of organization, federal taxpayer identification number and organizational identification number in its jurisdiction of organization is stated on Schedule 7.14.   Section 7.16         Properties; Titles, Etc.   (a)           Except as disclosed in writing to the Administrative Agent, the Borrower and each of the Restricted Subsidiaries has good and defensible title to the proved Oil and Gas Properties evaluated in the most recently delivered Reserve Report (excluding any such Oil and Gas Properties sold or transferred in compliance with Section 9.09) and good title to all its personal Properties, in each case, free and clear of all Liens except Liens permitted by Section 9.03.  After giving full effect to the Permitted Prior Liens, the Borrower or the Restricted Subsidiary specified as the owner owns the net interests in production attributable to the Hydrocarbon Interests as reflected in the most recently delivered Reserve Report, and the ownership of such Properties shall not in any material respect obligate the Borrower or such Restricted Subsidiary to bear the costs and expenses relating to the maintenance, development and operations of each such Property in an amount in excess of the working interest of each Property set forth in the most recently delivered Reserve Report that is not offset by a corresponding proportionate increase in the Borrower’s or such Restricted Subsidiary’s net revenue interest in such Property.  For purposes of this Section 7.16(a), prior to the delivery of the first Reserve Report after the Third Amended and Restated Effective Date, the phrase “most recently delivered Reserve Report” shall be read to mean the “most recently delivered Reserve Report delivered pursuant to the 2014 Credit Agreement.”   (b)           All material leases and agreements necessary for the conduct of the business of the Borrower and its Subsidiaries are valid and subsisting, in full force and effect, and there exists no default or event or circumstance which, with the giving of notice or the passage of time, or both, would give rise to a default under any such lease or agreement, which could reasonably be   (c)           The rights and Properties presently owned, leased or licensed by the Borrower and its Subsidiaries, including all easements and rights of way, include all rights and Properties   58   necessary to permit the Borrower and its Subsidiaries to conduct their business in all material respects in the same manner as its business has been conducted prior to the date hereof, except where the failure to include all such rights and Properties, individually or in the aggregate, could not reasonably be   (d)           All of the material Properties of the Borrower and its Subsidiaries which are reasonably necessary for the operation of their businesses are in good working condition and are maintained in accordance with prudent business standards except where the failure of such Properties to be in good working condition or to be so maintained, individually or in the aggregate,   (e)           The Borrower and each Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual Property material to its business, and the use thereof by the Borrower and such Subsidiary does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected in each case to result in a Material Adverse Effect.  The Borrower and its Subsidiaries either own or have valid licenses or other rights to use all databases, geological data, geophysical data, engineering data, seismic data, maps, interpretations and other technical information used in their businesses as presently conducted, subject to the limitations contained in the agreements governing the use of the same, which limitations are customary for companies engaged in the business of the exploration and production of Hydrocarbons, with such exceptions as could not reasonably be expected to have a Material Adverse Effect.   Section 7.17         Maintenance of Properties.  Except for such acts or failures to act as could not be reasonably expected to have a Material Adverse Effect, the Oil and Gas Properties (and Properties unitized therewith) have been maintained, operated and developed in a good and workmanlike manner and in conformity with all Governmental Requirements and in conformity with the provisions of all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and agreements forming a part of the Oil and Gas Properties.  Specifically in connection with the foregoing, except for those as could not be reasonably expected to have a Material Adverse Effect, (a) no Oil and Gas Property is subject to having allowable production reduced below the full and regular allowable (including the maximum permissible tolerance) because of any overproduction (whether or not the same was permissible at the time) and (b) to the knowledge of the Borrower,  none of the wells comprising a part of the Oil and Gas Properties (or Properties unitized therewith) is deviated from the vertical more than the maximum permitted by Governmental Requirements, and such wells are, in fact, bottomed under and are producing from, and the well bores are wholly within, the Oil and Gas Properties (or in the case of wells located on Properties unitized therewith, such unitized Properties).  All pipelines, wells, gas processing plants, platforms and other material improvements, fixtures and equipment owned in whole or in part by the Borrower or any of its Subsidiaries that are necessary to conduct normal operations are being maintained in a state adequate to conduct normal operations, and with respect to such of the foregoing that are operated by the Borrower or any of its Subsidiaries, in a manner consistent with the Borrower’s or its Subsidiaries’ past practices (other than those the failure of which to maintain in accordance with this Section 7.17 could not reasonably be expect to have a Material Adverse Effect).   59   Section 7.18         Gas Imbalances, Prepayments.  Except as disclosed in writing to the Administrative Agent or on the most recent certificate delivered pursuant to Section 8.12(b), on a net basis there are no gas imbalances, take or pay or other prepayments which would require the Borrower or any of the Restricted Subsidiaries to deliver Hydrocarbons produced from the Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor.   Section 7.19         Marketing of Production.  Except for contracts either disclosed in writing to the Administrative Agent or included in the most recently delivered Reserve Report (with respect to all of which contracts the Borrower represents that it or its Restricted Subsidiaries are receiving a price for all production sold thereunder which is computed substantially in accordance with the terms of the relevant contract and are not having deliveries curtailed substantially below the subject Property’s delivery capacity), no material agreements exist which are not cancelable on 60 days’ notice or less without penalty or detriment for the sale of production from the Borrower’s or the Restricted Subsidiaries’ Oil and Gas Properties (including, without limitation, calls on or other rights to purchase production, whether or not the same are currently being exercised) that (a) pertain to the sale of production at a fixed price and (b) have a maturity or expiry date of longer than six (6) months from the date hereof.   Section 7.20         Swap Agreements.  Schedule 7.20, as of the Third Amended and Restated Effective Date, and after the Third Amended and Restated Effective Date, each report required to be delivered by the Borrower pursuant to Section 8.01(d), sets forth, a true and complete list of all Swap Agreements of the Borrower and each Subsidiary, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark to market value thereof as of the end of the preceding calendar month, all credit support agreements relating thereto (including any margin required or supplied), the counterparty to each such agreement, whether each such counterparty is a Secured Swap Provider, and whether each such counterparty is a Secured Priority Swap Provider.   Section 7.21         Use of Loans and Letters of Credit.  The proceeds of the Loans and the Letters of Credit shall be used to (i) refinance Debt existing under the 2014 Credit Agreement, (ii) pay fees, commissions and expenses in connection with the refinancing of the Debt existing under the 2014 Credit Agreement, or (iii) finance ongoing working capital requirements and other general corporate purposes of the Borrower and its Subsidiaries (including funding Restricted Payments permitted under this Agreement) and to support obligations of any Loan Party. The Borrower and its Subsidiaries are not engaged principally, or as one of their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board).  No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.   Section 7.22         Solvency.  Before and after giving effect to the Transactions, (a) the aggregate assets, at a fair valuation, of the Borrower and its Restricted Subsidiaries, taken as a whole, will exceed the aggregate debt of the Borrower and its Restricted Subsidiaries on a consolidated basis, (b) the Borrower and its Restricted Subsidiaries, taken as a whole, have not incurred and do not intend to incur, debt beyond their ability to pay such debt as such debt matures and (c) none of the Borrower nor any Restricted Subsidiary will have (nor will have any reason to believe that it will have thereafter) unreasonably small capital for the conduct of its   60   business as such business is now conducted and is now proposed to be conducted following the date hereof.  For purposes of this section, “debt” shall have the meaning given such term under the U.S. Bankruptcy Code.   Section 7.23         Foreign Corrupt Practices.  Neither the Borrower nor any of its Subsidiaries, nor, to the knowledge of the Borrower, any director, officer, agent, employee or Affiliate of the Borrower or any of its Subsidiaries, is material violation by such Persons of the FCPA, including making use of the mails or any means or instrumentality of interstate commerce corruptly in for foreign political office, in contravention of the FCPA; and, the Borrower, its Subsidiaries and, to the knowledge of the Borrower, their respective Affiliates have conducted their business in material compliance with the FCPA which are reasonably expected to continue to ensure, continued compliance therewith.   Section 7.24         Money Laundering.  The operations of the Borrower and its Subsidiaries are and have been conducted at all times in material compliance with applicable financial recordkeeping and reporting requirements of the money laundering laws, and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Borrower or any of its Subsidiaries with respect to the money laundering laws is pending or, to the knowledge of the Borrower, threatened.   Section 7.25         OFAC.  Neither the Borrower nor any of its Subsidiaries, nor, to the knowledge of the Borrower, any director, officer, agent, employee or Affiliate of the Borrower or any of its Subsidiaries is currently subject to any material U.S. sanctions administered by OFAC, and the Borrower will not directly or indirectly use the proceeds from the Loans or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.   ARTICLE VIII   AFFIRMATIVE COVENANTS   Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder and all other amounts payable under the Loan Documents shall have been paid in full (other than unasserted contingent reimbursement and indemnification obligations) and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:   Section 8.01         Financial Statements; Ratings Change; Other Information.  The Borrower will furnish to the Administrative Agent and each Lender:   61   (a)                                 Annual Financial Statements.  As soon as available, but in any event in accordance with then applicable law and not later than one hundred and twenty (120) days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by KPMG LLP or another firm of independent public accountants proposed by the Borrower and reasonably acceptable to the Administrative Agent (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied.   (b)                                 Quarterly Financial Statements.  As soon as than forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated balance sheet as of the end of such fiscal quarter, setting forth in comparative form the figures for the end of the previous fiscal year, and related statements of (i) operations for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in comparative form the figures for the corresponding period or periods of the previous fiscal year, (ii) stockholders’ equity as of the end of such fiscal quarter and the end of the previous fiscal year, together with changes thereto in the then elapsed portion of the fiscal year and (iii) cash flows for the then elapsed portion of the fiscal year, setting forth in comparative form the figures for the corresponding period or periods of the previous fiscal year, in each case, certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes.   (c)                                  Certificate of Financial Officer — Compliance.  Concurrently with any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a certificate of a Financial Officer of the Borrower in substantially the form of Exhibit D hereto (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto and if a Default has not occurred, certifying compliance with the covenants of the Loan Documents, (ii) only if any Loans or Letters of Credit are outstanding under this Agreement, setting forth a calculation demonstrating compliance with the PDP Coverage Ratio as of the date of such financial statements and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 7.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate.   (d)                                 Certificate of Financial Officer — Swap Agreements.  Concurrently with any delivery of financial statements under Borrower, in form and substance reasonably satisfactory to the Administrative Agent, setting forth as of a recent date, a true and complete list of all Swap Agreements of the Borrower and each Subsidiary, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark-to-market value therefor, any credit support agreements relating thereto, any margin required or supplied under any credit support document, and the  Swap Provider counterparty to each such agreement.   62   (e)                                  Production Report and Lease Operating Statements.  Concurrently with the delivery of the semi-annual Reserve Reports under Section 8.12(a)(i), a report setting forth, for the period covered by such Reserve Report, the volume of production and sales attributable to production (and the prices at which such sales were made and the revenues derived from such sales) for each month during the period covered by such Reserve Report from the Oil and Gas Properties, and setting forth the related ad valorem, severance and production taxes and lease operating expenses attributable thereto and incurred for each month during such period, all certified by a Responsible Officer of the Borrower as presenting fairly in all material respects the information contained therein, and to the extent applicable, all based on the actual lease operating statements for such Oil and Gas Properties.   (f)                                   Other Requested Information. Promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any one or more Restricted Subsidiaries (including, without limitation, any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA), or compliance with the terms of this Agreement or any other Loan Document, as the Administrative Agent or any Lender may reasonably request.   To the extent any documents which are required to be delivered pursuant to Section 8.01 are included in materials otherwise filed with the SEC, such documents may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the following website address: www.sanchezenergycorp.com; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests in writing that the Borrower deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender.  Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide portable document format (.pdf) or other electronic communication copies of the compliance certificates required by Section 8.01(c) to the Administrative Agent.  Except for such compliance certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.   Section 8.02                            Notices of Material Events.  Promptly, and in any event within five (5) Business Days after any Responsible Officer of the Borrower obtains knowledge thereof, the Borrower will furnish to the Administrative Agent written notice of the following:   (a)                                 the occurrence of any Default;   (b)                                 the occurrence of any Casualty Event;   (c)                                  any change in the name or corporate structure of the Borrower or any Restricted Subsidiary;   63   (d)                                 the filing or commencement of, or the threat in writing of, any action, suit, proceeding, investigation or arbitration by or before any arbitrator or Governmental Authority against the Borrower or any Restricted Subsidiary not previously disclosed in writing to the Lenders or any material adverse development in any action, suit, proceeding, investigation or arbitration previously disclosed to the Lenders that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;   (e)                                  the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; and   (f)                                   any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.   Each notice delivered under this Section 8.02 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.   Section 8.03                            Existence; Conduct of Business.  The Borrower will, and will cause each Restricted Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business and maintain, if necessary, its qualification to do business in each other jurisdiction in which its Oil and Gas Properties are located or the ownership of its Properties requires such qualification, in each case except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 9.08.   Section 8.04                            Payment of Obligations.  The Borrower will, and will cause each Restricted Subsidiary to, pay its obligations, including Tax liabilities of the Borrower and all of its Restricted Subsidiaries before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings and the Borrower or such Restricted Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (b) the failure to make payment could not reasonably be expected to result in a Material Adverse Effect or result in the seizure or levy of any material Property of the Borrower or any Restricted Subsidiary.   Section 8.05                            Performance of Obligations under Loan Documents.  The Borrower will pay the Loans and reimburse  LC Disbursements according to the terms of this Agreement, and the Borrower will, and will cause each Restricted Subsidiary to, do and perform every act and discharge all of the obligations to be performed and discharged by them under the Loan Documents, including this Agreement, at the time or times and in the manner specified.   Section 8.06                            Operation and Maintenance of Properties.  The Borrower, at its own expense, will, and will cause each Restricted Subsidiary to (in each case, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect);   64   (a)                                 operate its Oil and Gas Properties and other material Properties or cause such Oil and Gas Properties and other material Properties to be operated in accordance with the practices of the industry and in compliance with all applicable contracts and agreements and in compliance with all Governmental Requirements, including, without limitation, applicable pro ration requirements and Environmental Laws, and all applicable laws, rules and regulations of every other Governmental Authority from time to time constituted to regulate the development and operation of its Oil and Gas Properties and the production and sale of Hydrocarbons and other minerals therefrom;   (b)                                 keep and maintain all Property material to the conduct of its business in good working order and condition (ordinary wear and tear and economic obsolescence excepted), preserve, maintain and keep in good repair, working order and efficiency (ordinary wear and tear and economic obsolescence excepted) all of its material Oil and Gas Properties and other material Properties, including, without limitation, all equipment, machinery and facilities;   (c)                                  promptly pay and discharge, or make reasonable and customary efforts to cause to be paid and discharged, all delay rentals, royalties, expenses and obligations accruing under the leases or other agreements affecting or pertaining to its Oil and Gas Properties and will do all other things necessary to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder;   (d)                                 promptly perform or make reasonable and customary efforts to cause to be performed, in accordance with industry standards, the obligations required by each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its Oil and Gas Properties which are necessary for the operation of their business and ownership of its Oil and Gas Properties and other material Properties;   (e)                                  operate its Oil and Gas Properties and other material Properties or cause or make reasonable and customary efforts to cause such Oil and Gas Properties and other material Properties to be operated in accordance with the practices of the industry and in material compliance with all applicable contracts and agreements and in compliance in all material respects with all Governmental Requirements;   (f)                                   notwithstanding anything to the contrary in this Section 8.06, to the extent the Borrower or one of its Restricted Subsidiaries is not the operator of any Property, the Borrower shall not be obligated itself to perform or cause any of its Restricted Subsidiaries to perform the covenants in this Section 8.06, but shall use reasonable efforts to cause the operator to comply with this Section 8.06; and   (g)                                  notwithstanding anything to the contrary in this Section 8.06, the Borrower and its Restricted Subsidiaries shall not be required to maintain any lease or interest which is no longer capable of producing Hydrocarbons in paying quantities.   Section 8.07                            Insurance.  The Borrower will, and will cause each other Loan Party to, maintain, with financially sound and reputable insurance companies, (a) insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same   65   or similar businesses operating in the same or similar locations and (b) in accordance with all Governmental Requirements including, without limitation, Flood Insurance, if required.   Section 8.08                            Books and Records; Inspection Rights.  The Borrower will, and will cause each Restricted Subsidiary to, keep proper books of record and account in which full, true and correct in all material respects entries are made of all dealings and transactions in relation to its business and activities.  The Borrower will, and will cause each Restricted Subsidiary to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its Properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times during normal business hours and as often as reasonably requested on an individual and aggregate basis, in each case at such Lender’s or Administrative Agent’s sole expense; provided, however, that, unless an Event of Default has occurred and is continuing, the Borrower shall not bear the expense of such visits and inspections more than once in any fiscal year.   Section 8.09                            Compliance with Laws.  The Borrower will, and will cause each Restricted Subsidiary to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to them or their Property, except where the failure to do so, individually or in the aggregate,   Section 8.10                            Environmental Matters.   (a)                                 The Borrower shall at its sole expense: (i) comply, and shall cause its Properties and operations and each Restricted Subsidiary and each Restricted Subsidiary’s Properties and operations to comply, with all applicable Environmental Laws, the breach of which could be reasonably expected to have a Material Adverse Effect; (ii) not dispose of or otherwise Release, and shall cause each Subsidiary not to dispose of or otherwise release, any oil, oil and gas waste, hazardous substance, or solid waste on, under, about or from any of the Borrower’s or its Restricted Subsidiaries’ Properties or any other Property to the extent caused by the Borrower’s or any of its Restricted Subsidiaries’ operations except in compliance with applicable Environmental Laws, the disposal or Release of which could reasonably be expected to have a Material Adverse Effect; (iii) timely obtain or file, and shall cause each Restricted Subsidiary to timely obtain or file, all Environmental Permits, if any, required under applicable Environmental Laws to be obtained or filed in connection with the operation or use of the Borrower’s or its Restricted Subsidiaries’ Properties, which failure to obtain or file could reasonably be expected to have a Material Adverse Effect; (iv) promptly commence and diligently prosecute to completion, and shall cause each Restricted Subsidiary to promptly commence and diligently prosecute to completion, any assessment, evaluation, investigation, monitoring, containment, cleanup, removal, repair, restoration, remediation or other remedial obligations (collectively, the “Remedial Work”) in the event any Remedial Work is required or reasonably necessary under applicable Environmental Laws because of or in connection with the actual or suspected past, present or future Release or threatened Release of any Hazardous Material on, under, about or from any of the Borrower’s or its Restricted Subsidiaries’ Properties, which failure to commence and diligently prosecute to completion could reasonably be expected to have a Material Adverse Effect; (v) conduct, and cause each Restricted Subsidiary to conduct their respective operations   66   and business in a manner that will not expose any Property or Person to Hazardous Materials in circumstances that could reasonably be expected to form the basis for a claim for damages or compensation that could reasonably be expected to have a Material Adverse Effect; and (vi) establish and implement, and shall cause each Restricted Subsidiary to establish and implement, such reasonable procedures as may be necessary to assure that the Borrower’s and its Restricted Subsidiaries’ obligations under this Section 8.10 are timely and fully satisfied, which failure to establish and implement could reasonably be expected to have a Material Adverse Effect.  To the extent that the Borrower or one of its Restricted Subsidiaries is not the operator of any Property, the Borrower shall use reasonable efforts to cause the operator to comply with this Section 8.10.   (b)                                 The Borrower will promptly, but in no event later than five (5) Business Days after becoming aware thereof, notify the Administrative Agent in writing of any threatened action, investigation or inquiry by any Governmental Authority or any threatened demand or lawsuit by any landowner or other third party against the Borrower or its Restricted Subsidiaries or their Properties of which the Borrower has knowledge in connection with any applicable Environmental Laws (excluding routine testing and corrective action) if the Borrower reasonably anticipates that such action could reasonably result in a Material Adverse Effect.   Section 8.11                            Further Assurances.   (a)                                 The Borrower at its sole expense will, and will cause each Restricted Subsidiary to, promptly execute and deliver to the Administrative Agent all such other documents, agreements and instruments reasonably requested by the Administrative Agent or Collateral Agent, as applicable, to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of the Borrower or any Restricted Subsidiary, as the case may be, in the Loan Documents, including the Notes, or to further evidence and more fully describe the Collateral intended as security for the Obligations, or to correct any omissions in this Agreement or the Security Instruments, or to state more fully the obligations secured therein, or to perfect, protect or preserve any Liens created pursuant to this Agreement or any of the Security Instruments or the priority thereof, or to make any recordings, file any notices or obtain any consents, all as may be reasonably necessary or appropriate, in the sole discretion of the Administrative Agent, in connection therewith.   (b)                                 The Borrower hereby authorizes the Administrative Agent, the Collateral Agent and the Collateral Trustee to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Mortgaged Property.  A carbon, photographic or other reproduction of the Security Instruments or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.   Section 8.12                            Reserve Reports.     (a) (i)  On or before March 1, 2018, and thereafter semi-annually on each March 1st and September 1st of each year, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report evaluating the Oil and Gas Properties of the Loan Parties as of the immediately preceding June 30 (or July 1), in the case of the Reserve Report required to be delivered by September 1 and as of the preceding December 31 (or January 1), in the case of the Reserve Report required to be delivered by March 1.  Additionally, if any Loans or Letters of Credit are outstanding under this Agreement at the time   67   of delivery of such Reserve Report, such Reserve Report shall include 12-month projections.   The Reserve Reports required to be delivered on or before March 1 shall be prepared by one or more Approved Petroleum Engineers, and the Reserve Report required to be delivered on or before September 1 shall be prepared by or under the supervision of the chief engineer of the Borrower.   (ii)                                  For each Reserve Report prepared by the Borrower’s chief engineer pursuant to clause (i) above, the chief engineer of the Borrower shall certify such Reserve Report to be true and accurate in all material respects and to have been prepared in accordance with the procedures used in the immediately preceding  Reserve Report.   (b)                                 With the delivery of each Reserve Report, the Borrower shall provide to the Administrative Agent and the Lenders a certificate from a Responsible Officer of the Borrower certifying that in all material respects: (i) the information contained in the Reserve Report and any other information delivered in connection therewith is true and correct, (ii) the Loan Parties own good and defensible title to the Oil and Gas Properties evaluated in such Reserve Report and such Properties are free of all Liens except for Liens permitted by Section 9.03, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments in excess of the volume specified in Section 7.18 with respect to its Oil and Gas Properties evaluated in such Reserve Report which would require any Loan Party to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, (iv) none of the Loan Parties’ Oil and Gas Properties have been sold since the date of the last Reserve Report except as set forth on an exhibit to the certificate, which certificate shall list all of its proved Oil and Gas Properties sold and in such detail as reasonably required by the Administrative Agent, and  (v) attached thereto is a schedule of the Oil and Gas Properties evaluated by such Reserve Report that are Collateral and that the Engineered Value of such Oil and Gas Properties represents at least the Required Reserve Mortgage Percentage evaluated in the Reserve Report delivered to the Administrative Agent most recently prior to the Reserve Report attached to such certificate.   (c)                                  Within ninety (90) days after the Third Amended and Restated Effective Date, the Collateral Trustee shall have received, in form and substance reasonably satisfactory to the Collateral Trustee, title information setting forth the status of title to the greater of (A) the percentage of the net present value of Proved Reserves associated with the Loan Parties’ Oil and Gas Properties required to be mortgaged under the First Lien Senior Secured Note Indenture, if any, and (B) eighty-five percent (85%) of the net present value of Proved Reserves associated with the Loan Parties’ Oil and Gas Properties covered by the Reserve Report most recently delivered prior to the Third Amended and Restated Effective Date.   ARTICLE IX   NEGATIVE COVENANTS   Until the Commitments have expired or terminated and the principal of and payable under the Loan Documents have been paid in full (other than unasserted contingent reimbursement and indemnification obligations) and all Letters of Credit have expired or terminated and all LC   68   Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:   Section 9.01                            Financial Covenant.   (a)                                 PDP Coverage Ratio.   (i)                                     Compliance with the PDP Coverage Ratio will not be required if no Loans or Letters of Credit are outstanding under this Agreement.   (ii)                                  The Borrower shall comply with Sections 3.04(c)(ii), 3.04(c)(iii), 3.04(c)(iv), 6.02(c) and 9.04.   Section 9.02                            Indebtedness.  The Borrower will not, and will not permit any Restricted Subsidiary to, incur any Indebtedness, except:   (a)                                 the Notes or other Obligations arising under the Loan Documents or any guaranty of or suretyship arrangement for the Notes or other Obligations arising under the Loan Documents; and   (b)                                 Indebtedness of the Borrower and its Subsidiaries permitted under the First Lien Senior Secured Note Indenture and refinancings, extension, renewals and refundings of such Indebtedness not prohibited by the First Lien Senior Secured Note Indenture.   Section 9.03                            Liens.  The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or permit to exist any Lien on any of its Properties (now owned or hereafter acquired) securing Indebtedness except:   (a)                                 Liens securing the payment of any Obligations or First Lien Senior Secured Note Obligations; and   (b)                                 Liens not prohibited under the First Lien   Section 9.04                            Dividends, Distributions and Redemptions.  The Borrower will not, and will not permit any Restricted Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, return any capital to its Equity Interest holders or make any loan or distribution of its Property to its Equity Interest holders, unless (a) no Default exists at the time of such payment and (b) in the event that any Loans or Letters of Credit are outstanding at the time of such payment, after giving effect to such payment on a pro forma basis, the PDP Coverage Ratio is no less than 4.00 to 1.00.   Section 9.05                            Reserved.   Section 9.06                            Nature of Business.  The Borrower will not, and will not permit any Restricted Subsidiary to, allow any material change to be made in the character of its business as an independent oil and gas exploration and production company.   69   Section 9.07                            Proceeds of Notes/Loans.  The Borrower will not permit the Loans or the proceeds of the Loans to be used for any purpose other than those permitted by Section 7.21.  Neither the Borrower nor any Person acting on behalf of the Borrower has taken or will take any action which might cause any of the Loan Documents to violate Regulations T, U or X or any other regulation of the Board or to violate Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter be in effect.  If requested by the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 or such other form referred to in Regulations U, T or X of the Board, as the case may be.   Section 9.08                            Mergers, Etc.  Neither the Borrower nor any Restricted Subsidiary will merge into or with or consolidate with any other Person, except to the extent not prohibited under the First Lien Senior Secured Note Indenture.   Section 9.09                            Disposition of Oil and Gas Properties.   (a)                                 If, as a result of any Disposition by a Loan Party to any non-Loan Party of Oil and Gas Properties included in the most recent Reserve Report delivered to Administrative Agent, the pro forma effect after giving effect to such Disposition would result in the Maximum Commodity Swap Limitation being exceeded, then within 90 days after the consummation of such Disposition, the Borrower will terminate or otherwise liquidate such excess commodity Swap Agreements (using proceeds of such Disposition or other cash on hand, to the extent necessary) or enter into offsetting positions to the extent necessary to eliminate such excess.   (b)                                 Following any Disposition, the Borrower shall comply with Section 3.04(c)(ii) if applicable.   (c)                                  For the sake of clarity, Liquidations (including the sale, assignment, conveyance, novation or other transfer) of any Swap Agreement are governed by Section 9.13 and not this Section 9.09.   Section 9.10                            Environmental Matters.  The Borrower will not, and will not permit any Restricted Subsidiary to, cause or permit any of its Property to be in violation of, or do anything or permit anything to be done which will subject any such Property to any Remedial Work under any applicable Environmental Laws, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such Property, where such violations or remedial obligations could reasonably be expected to have a Material Adverse Effect.   Section 9.11                            Reserved.   Section 9.12                            Reserved.   70   Section 9.13                            Swap Agreements.   (a)                                 Neither the Borrower nor any of its Subsidiaries (including Unrestricted Subsidiaries) will be a party to or in any manner be liable on any Swap Agreement entered into for speculative purposes.   (b)                                 From and after the Third Amended and Restated Effective Date, the Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Swap Agreements with respect to commodities with any Person other than (i) Swap Agreements constituting floor or put options with a Swap Provider, and (ii) Swap Agreements (other than floor or put options) with a Swap Provider that are limited to notional volumes which (when aggregated with other commodity Swap Agreements then in effect other than floor or put options and basis differential swaps on volumes already hedged pursuant to other Swap Agreements) do not exceed, as of the date such Swap Agreement is executed, (A) for the period remaining in the then current calendar year plus the next three calendar years following the date such Swap Agreement is executed, eighty-five percent (85%) of the Borrower’s and its Restricted Subsidiaries’ reasonably anticipated projected production based on the Borrower’s reasonable and justifiable internal projections (assuming no curtailment or interruption of transportation for such projected production) for each month during the period during which such Swap Agreement is in effect, calculated separately for each of crude oil, natural gas and natural gas liquids (which may be hedged with Swap Agreements for crude oil, natural gas, and/or direct and/or basket product components of natural gas), (B) for the period commencing with the end of the period specified in clause (A) above to the end of the 66th month after the date of execution of such Swap Agreement, sixty-five percent (65%) of the Borrower’s and its Restricted Subsidiaries’ reasonably anticipated projected production based on the Borrower’s reasonable and justifiable internal projections (assuming no curtailment or interruption of transportation for such projected production) for each month during the period during which such Swap Agreement is in effect, calculated separately for each of crude oil, natural gas and natural gas liquids (which may be hedged with Swap Agreements for crude oil, natural gas, and/or direct and/or basket product components of natural gas), and (C) for the period after the end of the 66th month after the date of execution of such Swap Agreement, zero percent (0%) (no commodity Swap Agreements other than floor or put options)(the limitations imposed by clauses (ii) (A), (B) and (C) collectively, the “Maximum Commodity Swap Limitation”).   (c)                                  From and after the Third Amended and Restated Effective Date, reserves pertaining to Oil and Gas Properties to be acquired pursuant to a Specified Acquisition may be hedged as if such Specified Acquisition had closed and the Borrower or one or more Restricted Subsidiaries owned the reserves to be acquired in such Specified Acquisition and the Borrower or any one or more Restricted Subsidiaries may enter into Swap Agreements that would be permitted by Section 9.13(b) based on the Borrower’s reasonable and justifiable internal projections submitted to the Lenders in connection with such Specified Acquisition; provided that Swap Agreements entered into pursuant to this Section 9.13(c) must be Liquidated upon the date which is the earlier to occur of: (i) the date that is 120 days after the execution of the purchase and sale agreement relating to the Specified Acquisition to the extent that such Specified Acquisition has not been consummated by such date and (ii) the date that is 60 days after the date on which the Borrower or any Restricted Subsidiary knows with reasonable certainty that the Specified Acquisition will not be consummated.   71   (d)                                 From and after the Third Amendment Effective Date, the Borrower will not, and will not permit any Restricted Subsidiary to, enter into any Swap Agreements with respect to interest rates with any Person other than Swap Agreements in respect of interest rates with a Lender or Swap Provider, as follows: (i) Swap Agreements effectively converting interest rates from fixed to floating, the notional amounts of which (when aggregated with all other Swap Agreements of the Borrower and its Restricted Subsidiaries then in effect effectively converting interest rates from fixed to floating) do not exceed 75% of the then outstanding principal amount of the Borrower’s and Restricted Subsidiaries’ Debt for borrowed money which bears interest at a fixed rate and (ii) Swap Agreements effectively converting interest rates from floating to fixed, the notional amounts of which (when aggregated with all other Swap Agreements of the Borrower and its Restricted Subsidiaries then in effect effectively converting interest rates from floating to fixed) do not exceed 75% of the then outstanding principal amount of the Borrower’s and Restricted Subsidiaries’ Debt for borrowed money which bears interest at a floating rate.   (e)                                  The Borrower will not, and will not permit any other Loan Party to, Liquidate any Swap Agreement in respect of commodities except to the extent not prohibited by the First Lien Senior Secured Note Indenture.   Section 9.14                            ERISA.  Except where non-compliance, in each case or in combination with all other instances of non-compliance with the provisions of this Section 9.14, could not reasonably be expected to result in a Material Adverse Effect, the Borrower will not, and will not permit any of the Guarantors to, at any time:   (a)                                 engage in, or permit any ERISA Affiliate to engage in, any transaction in connection with which the Borrower, any of its Subsidiaries or any ERISA Affiliate could reasonably be subjected to either a civil penalty assessed pursuant to subsections (c), (i), (l) or (m) of Section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code;   (b)                                 fail to make, or permit any ERISA Affiliate to fail to make, full payment when due of all amounts which, under the provisions of any Plan, agreement relating thereto or applicable law, the Borrower, any of its Subsidiaries or any ERISA Affiliate is required to pay as contributions thereto; and   (c)                                  contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to (i) any employee welfare benefit plan, as defined in Section 3(1) of ERISA, which may not be terminated by such entities in their sole discretion at any time without any material liability (other than for benefits accrued through the date of termination), including, without limitation, any such plan that is maintained to provide benefits to former employees of such entities (other than benefits mandated by Title I, Part 6 of ERISA and Section 4980B of the Code), or (ii) any employee pension benefit plan, as defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code.   72   ARTICLE X   EVENTS OF DEFAULT; REMEDIES   Section 10.01                     Events of Default.  The occurrence and continuation of one or more of the following events shall constitute an “Event of Default”:   (a)                                 the Borrower shall fail to pay within three (3) Business Days  of the date when due any interest on or principal of any Loan or any reimbursement obligation in respect of any LC Disbursement or any fee or other amount, whether at the due date thereof or at a date fixed for prepayment thereof, by acceleration or otherwise;   (b)                                 any representation or warranty made or deemed made by or on behalf of the Borrower or any Restricted Subsidiary in or in connection with any Loan Document or any amendment or modification of any Loan Document or waiver under such Loan Document, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been false, incorrect or misleading in any material respect when made or deemed made;   (c)                                  the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 3.04(c), Section 8.01, Section 8.02, Section 8.03, Section 8.12, or ARTICLE IX;   (d)                                 any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in Section 10.01(a)  or Section 10.01(c)) or any other Loan Document, and such failure shall continue unremedied for a period of thirty (30) days after the earlier to occur of (i) notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender) or (ii) a Responsible Officer of the Borrower or such Subsidiary otherwise becoming aware of such failure;   (e)                                  the Borrower or any Restricted Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable, after the expiration of any applicable period of grace and/or notice and cure;   (f)                                   an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Loan Party under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party, and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;   (g)                                  the Borrower or any Restricted Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any   73   proceeding or petition described in Section 10.01(f), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower or any Restricted Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, or (v) make a general assignment for the benefit of creditors;   (h)                                 the Borrower or any Restricted Subsidiary shall become unable, admit in writing its inability, or fail generally to pay its debts as they become due;   (i)                                     one or more judgments for the payment of money in an aggregate amount in excess of $40,000,000 (to the extent not covered by independent third party insurance provided by insurers of the highest claims paying rating or financial strength as to which the insurer does not dispute coverage and is not subject to an insolvency proceeding) shall be rendered against the Borrower, any Restricted Subsidiary or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Restricted Subsidiary to enforce any such judgment; or   (j)                                    a Change of Control shall occur.   Section 10.02                     Remedies.   (a)                                 In the case of an Event of Default other than one described in Section 10.01(f), Section 10.01(g) or Section 10.01(h), at any time thereafter during the continuance of such Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Notes and the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower and the Guarantors accrued hereunder and under the Notes and the other Loan Documents (including, without limitation, the payment of cash collateral to secure the LC Exposure as provided in Section 2.07(j)), shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby waived by the Borrower and each Guarantor; and in case of an Event of Default described in Section 10.01(f), Section 10.01(g) or Section 10.01(h), the Commitments shall automatically terminate and the Notes and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and the other obligations of the Borrower and the Guarantors accrued hereunder and under the Notes and the other Loan Documents (including, without limitation, the payment of cash collateral to secure the LC Exposure as provided in Section 2.07(j)), shall automatically become due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration,  notice of any kind, all of which are hereby waived by the Borrower and each Guarantor.   (b)                                 In the case of the occurrence of an Event of Default, the Administrative Agent and the Lenders will have all other rights and remedies available at law and equity.   74   (c)                                  All proceeds realized from the liquidation or other disposition of Collateral pursuant to and in accordance with the terms of the Collateral Trust Agreement and paid pursuant to the terms thereof for application to the Obligations or (subject to the Collateral Trust Agreement) otherwise received by the Administrative Agent or the Collateral Agent after maturity of the Loans or the Notes, whether by acceleration or otherwise, shall be applied:  first, to payment or reimbursement of expenses and indemnities provided for in this Agreement and the Security Instruments; second, to accrued interest on the Loans; third, to fees referred to in clause (b) of the definition of “Obligations”; fourth, pro rata to principal outstanding on the Loans and other Obligations referred to in clause (c) of the definition of “Obligations”; fifth, to any other Obligations; sixth, to serve as cash collateral to be held by the Administrative Agent to secure the LC Exposure; and any excess shall be paid to the Borrower or as otherwise required by any Governmental Requirement.  Notwithstanding the foregoing, amounts received from the Borrower or any Loan Party that is not an Eligible Contract Participant shall not be applied to any Excluded Swap Obligations owing to a Secured Swap Provider (it being understood, that in the event that any amount is applied to Obligations other than Excluded Swap Obligations as a result of this clause, the appropriate to distributions pursuant to clause fourth above from amounts received from Eligible Contract Participants to ensure, as nearly as possible, that the proportional aggregate recoveries with respect to Obligations described in clause fourth above by Secured Swap Providers that are the holders of any Excluded Swap Obligations are the same as the proportional aggregate recoveries with respect to other Obligations pursuant to clause fourth above).   ARTICLE XI   THE ADMINISTRATIVE AGENT   Section 11.01                     Appointment; Powers.   (a)                                 Each of the Lenders and each Issuing Bank hereby irrevocably (subject to Section 11.06) appoints the Administrative Agent as its administrative agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to it by the terms hereof, and by the terms of the other Loan Documents, together with such actions and powers as are reasonably incidental thereto.  Each of the Secured Parties hereby irrevocably (subject to Section 11.06) appoints the Collateral Agent as its collateral agent and authorizes the Collateral Agent to take such actions and powers as are reasonably incidental thereto.   (b)                                 The Collateral Agent shall act on behalf of the Lenders and the other Secured Parties with respect to the applicable Collateral and Security Instruments; provided, however, that the Collateral Agent shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article XI with respect to any acts taken or omissions suffered by the Collateral Agent in connection with the Collateral and Security Instruments as fully as if the term “Administrative Agent” as used in this Article XI included the Collateral Agent with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the Collateral Agent.   75   Section 11.02                     Duties and Obligations of Administrative Agent.  The Administrative Agent and Collateral Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, neither the Administrative Agent nor the Collateral Agent (a) shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing (the use of the term “agent” herein and in the other Loan Documents with reference to the Administrative Agent and Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law; rather, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties), (b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except, with respect to the Administrative Agent, as provided in Section 11.03, and (c) except as expressly set forth herein with respect to the Administrative Agent, shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as the Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to it by the Borrower or a Lender, and shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or under any other Loan Document or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or in any other Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in ARTICLE VI or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to it or as to those conditions precedent specifically required to be to its satisfaction, (vi) the existence, value, perfection or priority of any collateral security or the financial or other condition of the Borrower and its Subsidiaries or any other obligor or guarantor, or (vii) any failure by the Borrower or any other Person (other than itself) to perform any of its obligations hereunder or under any other Loan Document or the performance or observance of any covenants, agreements or other terms or conditions set forth herein or therein.  For purposes of determining compliance with the conditions specified in ARTICLE VI, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received written notice from such Lender prior to the proposed Third Amended and Restated Effective Date specifying its objection thereto.   Section 11.03                     Action by Administrative Agent.  The Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that it is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02) and in all cases it shall be fully justified in failing or refusing to act hereunder or under any other Loan Documents unless it shall (a) receive written instructions from the Required Lenders or the Lenders, as applicable (or such other number or percentage of the   76   Lenders as shall be necessary under the circumstances as provided in Section 12.02) specifying the action to be taken and (b) be indemnified to its satisfaction by the Lenders against any and all liability and expenses which may be incurred by it by reason of taking or continuing to take any such action.  The instructions as aforesaid and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders.  If a Default has occurred and is continuing, then the Administrative Agent shall take such action with respect to such Default as shall be directed by the requisite Lenders in the written instructions (with indemnities) described in this Section 11.03, provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interests of the Lenders.  In no event, however, shall the Administrative Agent be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, the Loan Documents or applicable law.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or the Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02), and otherwise the Administrative Agent shall not be liable for any action taken or not taken by it hereunder or under any other Loan Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or willful misconduct.   Section 11.04                     Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely upon, and shall not incur any and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon and each of the Borrower, the Lenders and each Issuing Bank hereby waives the right to dispute the Administrative Agent’s record of such statement, except in the case of gross negligence or willful misconduct by the Administrative Agent.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.  The Administrative Agent may deem and treat the payee of any Note as the holder assignment or transfer thereof permitted hereunder shall have been filed with the Administrative Agent.   Section 11.05                     Subagents.  The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent, including appointing the Collateral Trustee as collateral trustee.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding Sections of this ARTICLE XI shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent.   77   Section 11.06                     Resignation or Removal of Agents.   (a)                                 Subject to the appointment and acceptance of a successor Administrative Agent as provided in this Section 11.06, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank, the Collateral Agent and the Borrower, and the Administrative Agent may be removed at any time with or without cause by the Required Lenders.  Upon any such resignation or removal, and so long as there are Lenders hereunder, the Required Lenders shall have the right, in consultation with and upon the approval of the Borrower (so long as no Event of Default has occurred and is continuing), which approval shall not be unreasonably withheld, to appoint a successor.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation or removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a bank with an office in Houston, Texas, or an Affiliate of any such bank.  Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, the retiring Administrative Agent shall execute such instruments as may be reasonably necessary to give effect to such succession, and the retiring Administrative Agent shall be discharged from any further duties and obligations hereunder.  The fees, if any, payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor, if any, unless otherwise agreed between the Borrower and such successor.  After the Administrative Agent’s resignation hereunder, the provisions of this ARTICLE XI and Section 12.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.   (b)                                 The Collateral Agent may resign as Collateral Agent upon 30 days’ notice to the Lenders with a copy of such notice to the Administrative Agent.  If the Collateral Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor collateral agent for the Lenders with the prior written consent of the Borrower at all times other than during the existence of an Event of Default (which consent of the Borrower shall not be unreasonably conditioned, withheld or delayed).  If no successor collateral agent is appointed prior to the effective date of the resignation of the Collateral Agent, the Collateral Agent may appoint, after consulting with the Lenders and the Borrower, a successor collateral agent from among the Lenders.  Upon the acceptance of its appointment as successor Collateral Agent hereunder, such successor Collateral Agent shall succeed to all the rights, powers and duties of the retiring Collateral Agent and the term “Collateral Agent” shall mean such successor collateral agent and the retiring Collateral Agent’s appointment, powers and duties as Collateral Agent shall be terminated.  After any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions of this Article XI and Section 12.03 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Agreement.  If no successor Collateral Agent has accepted appointment as Collateral Agent by the date which is 30 days following a retiring Collateral Agent’s notice of resignation, the retiring Collateral Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Collateral Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.   78   Section 11.07                     Administrative Agent as Lender.  The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.   Section 11.08                     No Reliance.   (a)                                 Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and each other Loan Document to which it is a party.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document, any related agreement or any document furnished hereunder or thereunder.  The Administrative Agent shall not be required to keep itself informed as to the performance or observance by the Borrower or any of its Subsidiaries of this Agreement, the Loan Documents or any other document referred to or provided for herein or to inspect the Properties or books of the Borrower or its Subsidiaries.  Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall have no duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of the Borrower (or any of its Affiliates) which may come into the possession of the Administrative Agent or any of its Affiliates.  In this regard, each Lender acknowledges that Thompson & Knight LLP is acting in this transaction as special counsel to the Administrative Agent only, except to the extent otherwise expressly stated in any legal opinion or any Loan Document.  Each other party hereto will consult with its own legal counsel to the extent that it deems necessary in connection with the Loan Documents and the matters contemplated therein.   (b)                                 The Lenders acknowledge that the Administrative Agent is acting solely in an administrative capacity with respect to structuring of this facility and has no duties, responsibilities or liabilities under this Agreement and the other Loan Documents other than its administrative duties, responsibilities and liabilities specifically as set forth in the Loan Documents and in its capacity as a Lender.  In structuring and arranging this Agreement, each Lender acknowledges that the Administrative Agent may be an agent or lender under other loans or other securities and waives any existing or future conflicts of interest associated with its role in such other debt instruments.   Section 11.09                     Authority to Release Collateral and Liens.  Each Secured Party hereby authorizes the Collateral Agent to authorize the Collateral Trustee to release any Collateral that is permitted to be sold or released pursuant to the terms of the Loan Documents.  Each Secured Party hereby authorizes the Collateral Agent to authorize the Collateral Trustee to execute and deliver to the Borrower, at the Borrower’s sole cost and expense, any and all releases of Liens, termination statements, assignments or other documents reasonably requested by the Borrower in   79   connection with any sale or other disposition of Property to the extent such sale or other disposition is permitted by the terms of Section 9.11 or is otherwise authorized by the terms of the Loan Documents.   Section 11.10                     Filing of Proofs of Claim.  In case of any Default or Event of Default under Section 10.01(f), Section 10.01(g) or Section 10.01(h), the Administrative Agent (regardless of whether the principal of any Loan or LC Exposure shall then be due and payable and regardless of whether the Administrative Agent has made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:   (a)                                 to (i) file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Exposure and all other Obligations that are owing and unpaid and (ii) file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Section 3.05 and Section 12.03) allowed in such judicial proceeding; and   (b)                                 to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same.   Each Lender hereby authorizes any custodian, receiver, assignee, trustee, conservator, sequestrator or other similar official in any such judicial proceeding: (i) to make such payments to the Administrative Agent; and (ii) if the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 3.05 and Section 12.03.  Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.  Each Lender retains its right to file and prove a claim separately.   ARTICLE XII   MISCELLANEOUS   Section 12.01                     Notices.   (a)                                 Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to Section 12.01(b)), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:   (i)                                     if to the Borrower, to it at Sanchez Energy Corporation, 1000 Main Street, Suite 3000, Houston, Texas 77002, Attention: Alfredo Gutierrez (Telecopy No. (713)   80   756-2784), with a copy to Akin Gump Strauss Hauer & Feld LLP, 1111 Louisiana Street, 44th Floor, Houston, Texas 77002, Attention: David Elder (Telecopy No. (713) 236-0822);   (ii)                                  if to the Administrative Agent, to it at Royal Bank of Canada Agency Services Group, 12th Floor, 200 Bay Street, South Tower, Toronto, Ontario, Canada M5J 2W7, Attention Manager Agency (Fax No. (416) 842-4023), with a copy to 2800 Post Oak Boulevard, Suite 3900, Houston, Texas 77056, Attention Don McKinnerney (Fax No. (713) 403-5624), and for all correspondence related to Letter of Credit requests 12th Floor, 200 Vessey Street, New York, New York 10281-8098, Attention Manager Trade Products (Telephone No. (212) 428-6235) (Fax No. (212) 428-6332);   (iii)                               if to the Collateral Agent, to it at Royal Bank of Canada Agency Services Group, 12th Floor, 200 Bay Street, South Tower, 77056, Attention Don McKinnerney (Fax No. (713) 403-5624); and   (iv)                              if to any other Lender, in its capacity as such, or any other Lender in its capacity as an Issuing Bank, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.   (b)                                 Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to ARTICLE II, ARTICLE III, ARTICLE IV and ARTICLE V unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.   (c)                                  Any party hereto may change its address or other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.   Section 12.02                     Waivers; Amendments.   (a)                                 No failure on the part of the Administrative Agent, the Issuing Bank or any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege, or any abandonment or discontinuance of steps to enforce such right, power or privilege, under any of the Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any of the Loan Documents preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this   81   Agreement or any other Loan Document or consent to any departure by the Borrower Section 12.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.   (b)                                 Neither this Agreement nor any provision hereof nor any Security Instrument nor any provision thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, or reduce any other Obligations hereunder or under any other Loan Document, without the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or any other Obligations hereunder or under any other Loan Document, or forgive or reduce the amount of, waive or excuse any such payment, or postpone or extend the Termination Date without the written consent of each Lender affected thereby, (iv) change Section 4.01(b) or Section 4.01(c) in a manner that would alter the pro rata sharing of payments required thereby in a manner adverse to any Lender, without the written consent of each Lender or change the pro rata share of any Lender (other than as a result of the occurrence of any reallocation as a result of a Lender becoming or ceasing to be a Defaulting Lender) without the written consent of each Lender, (v) release any Guarantor or release any of the Collateral (other than as provided in Section 11.09), without the written consent of each Lender, (vi) waive, amend  or modify the terms of Section 10.02(c) or this Section 12.02(b)(vi) without the written consent of each Secured Priority Swap Provider adversely affected thereby or amend or otherwise modify any Security Instrument in a manner that results in the Secured Priority Swap Obligations secured by such Security Instrument no longer being secured thereby, or amend or otherwise change the definition of  “Secured Priority Swap Obligation” or “Secured Priority Swap Provider”, without the written consent of each Secured Priority Swap Provider adversely affected thereby, or (vii) change any of the provisions of this Section 12.02(b) or the definitions of “Required Lenders” or “Required Reserve Mortgage Percentage” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or under any other Loan Documents or make any determination or grant any consent hereunder or any other Loan Documents, without the written consent of each Lender (other than a Defaulting Lender); provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Issuing Bank hereunder or under any other Loan Document without the prior written consent of the Administrative Agent or the Issuing Bank, as the case may be.  Notwithstanding the foregoing, any supplement to Schedule 7.01 (Corporate Organization Chart), Schedule 7.05 (Litigation), Schedule 7.14 (Subsidiaries) or Schedule 7.20 (Swap Agreements) shall be effective simply by delivering to the Administrative Agent a supplemental schedule clearly marked as such and, upon receipt, the Administrative Agent will promptly deliver a copy thereof to the Lenders.   82   Section 12.03                     Expenses, Indemnity; Damage Waiver.   (a)                                 The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Arranger, Administrative Agent and its Affiliates, including, without limitation, the reasonable fees, charges and disbursements of counsel for the Administrative Agent, the reasonable photocopy, mailing, courier and other similar expenses in connection with the preparation, negotiation, documentation, execution, delivery and administration (both before and after the execution hereof and including advice of counsel to the Administrative Agent as to the rights and duties of the Administrative Agent and the Lenders with respect thereto) of this Agreement and the other Loan Documents and any amendments, modifications or waivers of or consents related to the provisions hereof or thereof, (ii) all costs, expenses, Taxes, assessments and other charges incurred by the Administrative Agent or any Lender in connection with any filing, registration, recording or perfection of any security interest contemplated by this Agreement or any Security Instrument or any other document referred to therein, (iii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit issued by such Issuing Bank or any demand for payment thereunder, and (iv) all out-of-pocket expenses incurred by the Administrative Agent, any Issuing Bank or any Lender, including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent, any Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement or any other Loan Document, including its rights under this Section 12.03, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during  any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.   (b)                                 THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, EACH ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE AND DOCUMENTED OUT-OF-POCKET FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER, THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT OR ANY ENFORCEMENT OR COLLECTION ACTIONS IN CONNECTION THEREWITH INCLUDING REASONABLE ATTORNEYS’ FEES AND SETTLEMENT COSTS, (ii) THE FAILURE OF THE BORROWER OR ANY OF THE GUARANTORS TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY OF THE GUARANTORS SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (iv)   83   ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING (1) ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT, OR (2) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND THE GUARANTORS BY THE BORROWER AND THE GUARANTORS, (vii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY OF THE GUARANTORS OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (ix) THE BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY OF THE GUARANTORS WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY OF THE GUARANTORS, (x) THE PAST OWNERSHIP BY THE BORROWER OR ANY OF THE GUARANTORS OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY OF THE GUARANTORS OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF THE GUARANTORS, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF THE GUARANTORS, (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,   84   DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.   (c)                                  To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent or the Issuing Bank under Section 12.03(a) or Section 12.03(b), each Lender severally agrees to pay to the Administrative Agent or the Issuing Bank, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Issuing Bank in its capacity as such.   (d)                                 To the extent permitted by applicable law, the Borrower and the Indemnitees shall not assert, and hereby waive, any claim against each other, on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.   (e)                                  All amounts due under this Section 12.03 shall be payable not later than ten (10) days after written demand therefor.   Section 12.04                     Successors and Assigns.   (a)                                 The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 12.04.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in Section 12.04(c)) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.   (b)                                 (i)                                     Subject to the conditions set forth in Section 12.04(b)(ii), any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:  (1) the Borrower, provided that no consent of the Borrower shall be required for an assignment to (A) a Lender that is not a Defaulting Lender, (B) an Affiliate of a Lender that is not a Defaulting Lender, (C) an Approved Fund (other than an Approved Fund that is administered by or   85   managed by a Defaulting Lender or an Affiliate of a Defaulting Lender) or (D) if an Event of Default has occurred and is continuing, any bank or other entity other than a Defaulting Lender, a natural Person or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person; provided, further, that the Borrower’s failure to respond to a Lender’s request for consent to an assignment within five (5) Business Days of such request shall be deemed to constitute the Borrower’s written consent to such request; and (2) the Administrative Agent (such consent not to be unreasonably withheld or delayed), provided that no such consent of the Administrative Agent shall be required for an assignment to an assignee that is a Lender that is not a Defaulting Lender immediately prior to giving effect to such assignment.  Notwithstanding the foregoing, at any time when RBC and its Affiliates are the sole Lenders, other than to a Controlled Affiliate of RBC, neither the Administrative Agent, RBC in its capacity as the Lender, nor RBC in its capacity as the Issuing Bank, may assign or delegate its rights and obligations under this Agreement without the written consent of the Borrower.   (ii)                                  Assignments shall be subject to the following additional conditions:  (1) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment, the amount of the Commitment of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $2,500,000 (which minimum amount may be comprised of concurrent assignments from more than one Lender), and the Commitments of any assigning Lender remaining a party hereto after giving effect to the assignment shall be at least $2,500,000, unless, in each case, the Borrower and the Administrative Agent otherwise consents, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;  (2) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement; (3) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; (4) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and shall deliver notice of the Assignment and Assumption to the Borrower; and (5) in the case of an assignment to a CLO, the assigning Lender shall retain the sole right to approve any amendment, modification or waiver of any provision of this Agreement, provided that the Assignment and Assumption between such Lender and such CLO may provide that such Lender will not, without the consent of such CLO, agree to any amendment, modification or waiver described in the first proviso to Section 12.02 that affects such CLO.   (iii)                               Subject to Section 12.04(b)(iv) and the acceptance and recording thereof, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 5.01,   86   Section 5.02, Section 5.03 and Section 12.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.04(c).   (iv)                              The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower, any Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.  In connection with any changes to the Register, if necessary, the Administrative Agent will reflect the revisions on Annex I and forward a copy of such revised Annex I to the Borrower, the Issuing Bank and each Lender.   (v)                                 Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 12.04(b) and any written consent to such assignment required by Section 12.04(b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this Section 12.04(b).   (c)                                  (i)                                     Any Lender may, without the consent of the Borrower, the Administrative Agent or any Issuing Bank, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (1) such Lender’s obligations under this Agreement shall remain unchanged, (2) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (3) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the proviso to Section 12.02 that affects such Participant.  In addition such agreement must provide that the Participant be bound by the provisions of Sections 12.03 and 12.11.  Subject to Section 12.04(c)(ii), the Borrower agrees that each Participant shall be entitled to the benefits of Section 5.01, Section 5.02 and Section 5.03 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.04(b).  To the extent permitted by law, each   87   Participant also shall be entitled to the benefits of Section 12.08 as though it were a Lender, provided such Participant agrees to be subject to Section 4.01(c) as though it were a Lender.   (ii)                                  A Participant shall not be entitled to receive any greater payment under Section 5.01 or Section 5.03 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 5.03 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 5.03(e) as though it were a Lender.   (d)                                 Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or other central bank, and this Section 12.04 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.   (e)                                  Notwithstanding any other provisions of this Section 12.04, no transfer or assignment of the interests or obligations of any Lender or any grant of participations therein shall be permitted if such transfer, assignment or grant would require the Borrower to file a registration statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any state.   Section 12.05                     Survival; Revival; Reinstatement.   (a)                                 All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and ARTICLE XI shall survive and remain in full force and effect regardless of the consummation of the Transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement, any other Loan Document or any provision hereof or thereof.   (b)                                 To the extent that any payments on the Obligations or proceeds of any Collateral are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be   88   repaid to a trustee, debtor in possession, receiver or other Person under any bankruptcy law, common law or equitable cause, then to such extent, the Obligations so satisfied shall be revived and continued as if such payment or proceeds had not been received and the Collateral Trustee’s’ Liens, security interests, rights, powers and remedies under this Agreement and each Loan Document shall continue in full force and effect.  In such event, each Loan Document shall be automatically reinstated and the Borrower shall take such action as may be reasonably requested by the Administrative Agent or the Collateral Trustee to effect such reinstatement.   Section 12.06                     Counterparts; Integration; Effectiveness.   (a)                                 This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.   (b)                                 This Agreement, the Collateral Trust Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and thereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof and thereof.  THIS AGREEMENT, THE COLLATERAL TRUST AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.   (c)                                  This Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy, facsimile, photocopy or by sending a scanned copy by electronic mail  shall be effective as delivery of a manually executed counterpart of this Agreement.   Section 12.07                     Severability.  Any provision of this Agreement or any other Loan Document held to be invalid, illegal or unenforceable in any such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.   Section 12.08                     Right of Setoff.  Subject to any applicable Agreement, if an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations (of whatsoever kind, including, without limitation obligations under Swap Agreements) at any time owing by such Lender or Affiliate to or for the credit or the account of a Loan Party (other than amounts held in payroll accounts, escrow accounts, trust accounts and other accounts held   89   by a Loan Party as a fiduciary for others) against any and all the obligations of a Loan Party owed to such Lender now or hereafter existing under this Agreement or any other Loan Document, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured.  The rights of each Lender under this Section 12.08 are in addition to other rights and remedies (including other rights of setoff) which such Lender or its Affiliates may have.   Section 12.09                     GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.   (a)                                 THIS AGREEMENT AND THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CHOICE-OF-LAW PROVISIONS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION; PROVIDED, TO THE EXTENT ANY OF THE SECURITY INSTRUMENTS RECITE THAT THEY ARE GOVERNED BY THE LAW OF ANOTHER JURISDICTION, OR ANY ACTION OR EVENT TAKEN THEREUNDER (SUCH AS FORECLOSURE OF THE MORTGAGED PROPERTY) REQUIRES APPLICATION OF OR COMPLIANCE WITH THE LAW OF ANOTHER JURISDICTION, SUCH PROVISIONS AND CONCEPTS SHALL APPLY.   (b)                                 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.  THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION.   (c)                                  EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.   90   (d)                                 EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.09.   Section 12.10                     Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.   Section 12.11                     Confidentiality.  Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or self-regulatory body, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; provided, unless prohibited by applicable laws or regulations, the Borrower has been given reasonable advance notice thereof and been afforded an opportunity to limit or protest the disclosure, (d) to any other party to this Agreement or any other Loan Document, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section 12.11, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any Swap Agreement relating to a Loan Party and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 12.11 or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower.  For the purposes of this Section 12.11, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary and their businesses, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower or a Subsidiary.  Any Person required to maintain the confidentiality of Information as provided in this Section 12.11 shall be considered to have complied with its   91   obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.  Notwithstanding anything herein to the contrary, any party hereto (and each employee, representative or other agent of such party) may disclose without limitation of any kind, any information with respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to that party relating to such tax treatment or tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transactions, as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the transactions contemplated hereby.   Section 12.12                     EXCULPATION PROVISIONS.  EACH OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS AND CONDITIONS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY RESULT, SUBJECT TO THE TERMS HEREOF AND THEREOF AND APPLICABLE LAW, IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY.  EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”   Section 12.13                     No Third Party Beneficiaries.  This Agreement, the other Loan Documents, and the agreement of the Lenders to make Loans and the Issuing Bank to issue, amend, renew or extend Letters of Credit hereunder are solely for the benefit of the Loan Parties, and other than a Secured Priority Swap Provider and a Bank Product Provider, no other Person (including any obligor, contractor, subcontractor, supplier or materialmen) shall have any rights, claims, remedies or privileges hereunder or under any other Loan Document against the Administrative Agent, the Issuing Bank or any Lender for any reason whatsoever.  There are no third party beneficiaries.   92   Section 12.14                     Collateral Matters; Swap Agreements.   (a)                                 The benefit of the Security Instruments and of the provisions of this Agreement relating to any Collateral securing the Obligations shall also extend to and be available to (in addition to Lenders and their Affiliates), each other Secured Party; provided that, notwithstanding anything to the contrary, with respect to any Loan Party that is not an Eligible Contract Participant, the Obligations of such Loan Party shall exclude any Excluded Swap Obligations of such Loan Party.  Each Secured Priority Swap Provider, by its entry into a Swap Agreement with a Loan Party, and each Bank Product Provider, by its extension of a Bank Product to the Borrower or any Subsidiary, in each case by virtue thereof and as a condition to obtaining the benefit of this Agreement and the Security Instruments, (i) agrees to be bound by the agreements and acknowledgements of the Secured Parties in this Agreement and the other Loan Documents, and (ii) makes each of the authorizations, directions and instructions of the Secured Parties specified in this Agreement and the other Loan Documents and so authorizes, directs and instructs the Administrative Agent, the Collateral Agent and the Collateral Trustee. Except as and to the extent (and only to the extent) expressly provided in Section 12.02(b) or the Security Instruments, no Secured Party shall have as a result of the existence of Secured Priority Swap Obligations or Secured Bank Product Obligations any right to notice of, or to vote on, consent to, direct, or object to, any action, inaction or circumstance under this Agreement or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) or any amendment or waiver of this Agreement or any other Loan Document, or any proposal with respect to any of the foregoing.  Notwithstanding any other provision of this Agreement to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, any Secured Priority Swap Obligations or Secured Bank Product Obligations unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may reasonably request, from the applicable Secured Priority Swap Provider or Bank Product Provider, as the case may be.   (b)                                 Each Secured Party authorizes and directs the Collateral Agent to enter into and assign to the Collateral Trustee, and authorizes and directs the Collateral Agent to authorize the Collateral Trustee to enter into, the Security Instruments (including any amendments thereto contemplated by Section 7.1 of the Collateral Trust Agreement and any security documents to secure additional Priority Lien Obligations (as defined in the Collateral Trust Agreement) in accordance with Section 3.8 of the Collateral Trust Agreement) and to perform its obligations and exercise its rights thereunder in accordance therewith, subject to the terms and conditions thereof, including the limitations on duties of the Collateral Trustee provided in Section 5.12 of the Collateral Trust Agreement. Each Secured Party acknowledges that, as more fully set forth in the Security Instruments, the Collateral as now or hereafter constituted shall be held for the benefit of all the holders of Priority Lien Obligations (as defined in the Collateral Trust Agreement), subject to the Collateral Trust Agreement, and the Lien of the Security Instruments is subject to and qualified and limited in all respects by the Collateral Trust Agreement.   (c)                                  The provisions of the other Security Instruments are subject to the terms, conditions and benefits set forth in the Collateral Trust Agreement. Each Secured Party (i) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Collateral Trust Agreement and (ii) authorizes and instructs the Collateral Agent to authorize and instruct the Collateral Trustee on behalf of the Secured Parties and each other holder of “First-Out Obligations” (as defined therein) to enter into the Collateral Trust Agreement as Collateral   93   Trustee on behalf of such holders of First-Out Obligations. In addition, each Secured Party authorizes and instructs the Collateral Agent to authorize and instruct the Collateral Trustee to enter into any amendments or joinders to the Collateral Trust Agreement, without the consent of any Secured Party, to add additional Debt as Priority Lien Obligations and add other parties (or any authorized agent or trustee therefor) holding such Debt thereto and to establish that the Lien on any Collateral securing such Debt ranks equally with the Liens on such Collateral securing the Priority Lien Debt then outstanding.   (d)                                 Each Secured Party (i) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement and (ii) authorizes and instructs the Collateral Agent to authorize and instruct the Collateral Trustee on its behalf to enter into the Intercreditor Agreement as Priority Lien Representative (as defined in the Intercreditor Agreement) on behalf of such Secured Party as a Priority Lien Secured Party (as defined in the Intercreditor Agreement). In addition, each Intercreditor Agreement, without the consent of any Secured Party, to add additional Priority Lien Debt or Junior Lien Debt (each as defined in the Intercreditor Agreement) and add other parties (or any authorized agent or trustee therefor) holding such Debt thereto and to establish that the Lien on any Collateral securing such Debt ranks equally with the Liens on such Collateral securing the Priority Lien Debt or Junior Lien Debt, as applicable, then outstanding.   Section 12.15                     US Patriot Act Notice.  Each Lender hereby notifies each Loan Party that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Patriot Act.   Section 12.16                     Interest Rate Limitation.  It is the intention of the parties hereto that each Lender shall conform strictly to usury laws applicable to it.  Accordingly, if the transactions contemplated hereby would be usurious as to any Lender under laws applicable to it (including the laws of the U.S. and the State of New York or any other jurisdiction whose laws may be mandatorily applicable to such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in any of the Loan Documents or any agreement entered into in connection with or as security for the Notes, it is agreed as follows:  (a) the aggregate of all consideration which constitutes interest under law applicable to any Lender that is contracted for, taken, reserved, charged or received by such Lender under any of the Loan Documents or agreements or otherwise in connection with the Notes shall under no circumstances exceed the maximum non-usurious amount allowed by such applicable law, and any excess shall be canceled automatically and if Debt (or, to the extent that the principal amount of the Debt shall have been or would thereby be paid in full, refunded by such Lender to the Borrower); and (b) in the event that the maturity of the Notes is accelerated by reason of an election of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise   94   shall be canceled automatically by such Lender as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by such Lender on the principal amount of the Debt (or, to the extent that the principal amount of the Debt shall have been or would thereby be paid in full, refunded by such Lender to the Borrower).  All sums paid or agreed to be paid to any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to such Lender, be amortized, prorated, allocated and spread throughout the stated term of the Loans evidenced by the Notes until payment in full so that the rate or amount of interest on account of any Loans hereunder does not exceed the maximum amount allowed by such applicable law.  If at any time and from time to time (a) the amount of interest payable to any Lender on any date shall be computed at the Highest Lawful Rate applicable to such Lender pursuant to this Section 12.16 and (b) in respect of any subsequent interest computation period the amount of interest otherwise payable to such Lender would be less than the amount of interest payable to such Lender computed at the Highest Lawful Rate applicable to such Lender, then the amount of interest payable to such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to such Lender until the total amount of interest payable to such Lender shall equal the total amount of interest which would have been payable to such Lender if the total amount of interest had been computed without giving effect to this Section 12.16.   Section 12.17                     Termination and Release. To the extent that a Loan Document provides for the termination of such Loan Document or the release of any Lien thereunder upon the payment in full of the Obligations, or words of similar effect, notwithstanding anything to the contrary in such Loan Document, such Loan Document shall terminate and the Administrative Agent shall release, or cause the Collateral Agent to release, such Liens upon payment in full of the Obligations other than contingent Obligations with are intended to survive the termination of such Loan Document and with respect to which the contingency giving rise to such Obligation has not occurred.   Section 12.18                     Release.  As additional consideration for the execution, delivery and performance of this Agreement by the parties hereto and to induce the Administrative Agent and the Lenders to enter into this Agreement, the Borrower warrants and represents to the Administrative Agent and the Lenders that no facts, events, statuses or conditions exist or have existed which, either now or with the passage of time or giving of notice, or both, constitute or will constitute a basis for any claim or cause of action against the Administrative Agent or any 2014 Credit Agreement Lender or any defense to (i) the payment of Obligations under the Notes and/or the Loan Documents, or (ii) the performance of any of their respective obligations with respect to the Notes and/or the Loan Documents.  In the event any such facts, events, statuses or conditions exist or have existed, the Borrower unconditionally and irrevocably hereby RELEASES, RELINQUISHES and forever DISCHARGES Administrative Agent and the 2014 Credit Agreement Lenders, as well as their predecessors, successors, assigns  and Related Parties, of and from any and all claims, demands, actions and causes of action of any and every kind or character, past or present, which any Loan Party may have against any of them or their predecessors, successors, assigns and Related Parties arising out of or with respect to (a) any right or power to bring any claim for usury or to pursue any cause of action based on any claim of usury, and (b) any and all transactions relating to the Loan Documents occurring prior to the Third Amended and Restated Effective Date, including any loss, cost or damage, of any kind or character, arising out of or in any way connected with or in any way resulting from the acts,   95   actions or omissions of any of them, and their predecessors, successors, assigns and Related Parties, including any breach of fiduciary duty, breach of any duty of fair dealing, breach of confidence, breach of funding commitment, undue influence, duress, economic coercion, conflict of interest, negligence, bad faith, malpractice, intentional or negligent infliction of mental distress, tortious interference with contractual relations, tortious interference with corporate governance or prospective business advantage, breach of contract, deceptive trade practices, libel, slander or conspiracy, but in each case only to the extent permitted by applicable law.   Section 12.19                     Amendment and Restatement.  The parties hereto agree that this Agreement amends, restates and rearranges the 2014 Credit Agreement in its entirety and that all Loans outstanding under the 2014 Credit Agreement on the Third Amended and Restated Effective Date shall be and be deemed to be Loans (of the same Type and having the same Interest Periods) made and Letters of Credit issued under this Agreement, and shall thereafter be evidenced and governed by the terms and conditions of this Agreement. The Lenders are subrogated to the rights of the 2014 Credit Agreement Lenders under the 2014 Credit Agreement to the extent of the Obligations renewed and rearranged hereby.  All Liens created and existing in connection with the 2014 Credit Agreement, except as otherwise provided in this Agreement with respect to Excluded Swap Obligations, shall continue in force and effect as assigned to the Collateral Trustee to secure the Obligations and the First Lien Senior Secured Note Obligations under and as provided in the Collateral Trust Agreement and the other Security Instruments, and the Borrower to the Lenders pursuant to the Notes and this Agreement, and the Borrower and each other Loan Party hereby ratifies, adopts and confirms all such prior Liens.   Section 12.20                     Termination of Commitment under 2014 Credit Agreement.  The “Aggregate Elected Commitment Amount” and the “Aggregate Maximum Credit Amounts” outstanding under the 2014 Credit Agreement of all lenders party thereto other than RBC have been assigned to RBC effective immediately prior to the effectiveness of this Agreement.  As of the Third Amended and Restated Effective Date, the “Aggregate Elected Commitments” and “Aggregate Maximum Credit Amounts” as defined in the 2014 Credit Agreement are hereby terminated and the Administrative Agent and the Lenders hereby waive any right to receive prior notice of such termination.  Each Lender agrees upon the Third Amended and Restated Effective Date to return to the Borrower within 30 days all “Notes” as defined in the 2014 Credit Agreement which were delivered by the Borrower and, to the extent such Notes are not returned within such time period, the Borrower shall be entitled to receive a lost note affidavit containing customary indemnities in favor of the Borrower.   Section 12.21                     No Novation, Etc. To the extent of the Commitment outstanding under the 2014 Credit Agreement in the amount of $300,000,000, nothing contained herein shall be deemed a new Commitment and, to the extent of the Loans under the 2014 Credit Agreement, no Loan hereunder shall be deemed a novation of or a repayment or new advance of any obligation of the Borrower thereunder. To the extent proceeds of the First Lien Senior Secured Note Indenture were used to refinance Obligations under the 2014 Credit Agreement, First Lien Senor Secured Note Holders are subrogated to the Liens securing such Obligations.  The Obligations owing under the 2014 Credit Agreement are renewed, rearranged, extended and carried forward by this Agreement and all of the Liens securing the “Obligations” as defined in the 2014 Credit Agreement (other than Excluded Swap Obligations) are carried forward as assigned to the Collateral Trustee and secure, without interruption or loss or priority, the Obligations and the   96   First Lien Senior Secured Note Obligations under and as provided in the Collateral Trust Agreement and the other Security Instruments.   Section 12.22                     Keepwell.   (a)                                 The Borrower is a Qualified ECP Credit Party and hereby guarantees the payment and performance of all Obligations of each Loan Party (other than the Borrower) and absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each Benefitting Loan Party in order for such Benefitting Loan Party to honor its obligations (without giving effect to Section 12.22(b)) under the Guaranty and any other Security Instrument including obligations with respect to Swap Agreements (provided, however, that the Borrower shall only be liable under this Section 12.22(a) for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 12.22(a), or otherwise under this Agreement or any Loan Document, as it relates to such Benefitting Loan Party, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of the Borrower under this Section 12.22(a) shall remain in full force and effect until all Obligations are paid in full to the Lenders, the Administrative Agent and all Secured Priority Swap Providers, and all of the Lenders’ Commitments are terminated. The Borrower intends that this Section 12.22(a) constitute, and this Section 12.22(a) shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each Benefitting Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.   (b)                                 Notwithstanding any other provisions of this Agreement or any other Loan Document, Obligations guaranteed by any Loan Party, or secured by the grant of any Lien by any Loan Party under any Security Instrument, shall exclude all Excluded Swap Obligations with respect to such Loan Party.   [Signatures Begin Next Page]   97   The parties hereto have caused this Agreement to be duly executed as of the day and year first above written.   BORROWER:     SANCHEZ ENERGY CORPORATION,   a Delaware corporation             By: /s/ Antonio R. Sanchez, III   Name: Antonio R. Sanchez, III   Title: Chief Executive Officer   Signature Page 1 to Third Amended and Restated Credit Agreement       ADMINISTRATIVE AGENT:         as Administrative Agent             By: /s/ Yvonne Brazier   Name: Yvonne Brazier   Title: Manager, Agency   Signature Page 2 to Third Amended and Restated Credit Agreement       LENDERS:       ISSUING BANK AND LENDER:         as Issuing Bank and a Lender             By: /s/ Don J. McKinnerney   Name: Don J. McKinnerney   Title: Authorized Signatory   Signature Page 3 to Third Amended and Restated Credit Agreement     ANNEX I   AGGREGATE COMMITMENT AMOUNT   Name of Lender   Applicable Percentage   Commitment   Royal Bank of Canada   100 % $ 25,000,000.00   TOTAL   100 % $ 25,000,000.00     Annex I-1   EXHIBIT A   FORM OF NOTE   $25,000,000.00 [                ], 2018          “Borrower”), hereby promises to pay to the order of ROYAL BANK OF CANADA (the “Lender”), the lesser of (i) TWENTY-FIVE MILLION DOLLARS ($25,000,000.00) and (ii) the aggregate unpaid Loans made by the Lender pursuant to the Credit Agreement, as hereinafter defined, in lawful money of the U.S. and in immediately available funds, on the dates and in the principal amounts provided in the Credit Agreement.  All capitalized terms used herein and not otherwise defined that are defined in the Credit Agreement have the meanings as defined in the Credit Agreement.   The Borrower promises to pay interest on the unpaid principal amount of this Note outstanding from time to time from the date hereof until such principal amount is paid in full, at the place and at such interest rates as are specified   This Note is one of the Notes referred to in, and this Note and all provisions herein are entitled to the benefits and are subject to the terms of, the Third Amended and Restated Credit Agreement, dated as of even date herewith, among the Borrower, Royal Bank of Canada, as Administrative Agent, and the other lenders signatory thereto (including the Lender) (as the same may be amended or otherwise modified from time to time, the “Credit Agreement”).   The obligations of the Borrower hereunder are secured by the Security Instruments (subject to the limitations contained in the Security Instruments and the Credit Agreement).  The Credit Agreement, among other things, (a) provides for the making of advances by the Lender and other Lenders to the Borrower from time to time, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events, for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified, and for limitations on the amount of interest paid such that no provision of the Credit Agreement or this Note shall require the payment or permit the collection of interest in excess of interest accruing at the Highest Lawful Rate.   The Borrower waives grace, demand, presentment for payment, notice of dishonor or default, notice of intent to accelerate or acceleration, protest and notice of protest and diligence in collecting and bringing of suit against any party hereto.   (Remainder of page intentionally left blank. Signature page follows.)   Exhibit A-1   This Note shall be governed by and construed under the laws of the State of New York and the applicable laws of the U.S.     SANCHEZ ENERGY CORPORATION,   a Delaware corporation             By:     Name:     Title:     Exhibit A-2   EXHIBIT B   FORM OF BORROWING REQUEST     [              ], 20[  ]          SANCHEZ ENERGY CORPORATION, a Delaware corporation (the “Borrower”), pursuant to Section 2.03 of the Third Amended and Restated Credit Agreement dated as of February 14, 2018 (together with all amendments, restatements, supplements or other modifications thereto, the “Credit Agreement”), among the Borrower, Royal Bank of Canada, as Administrative Agent and the lenders (the “Lenders”) which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is defined in the Credit Agreement), hereby requests a Borrowing as follows:   (i)                                   Aggregate amount of the requested Borrowing is $[            ];   (ii)                                Date of such Borrowing is [            ], 20[   ];   (iii)                             Requested Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing];   (iv)                            In the case of a Eurodollar Borrowing, the initial Interest Period applicable thereto is [            ];   (v)                               The Aggregate Commitment Amount is $[            ];   (vi)                            Total Credit Exposures on the date hereof (i.e., outstanding principal amount of Loans and total LC Exposure) is $[            ]; and   (vii)                         Pro forma total Credit Exposures (giving effect to the requested Borrowing) is $[            ]; and   (viii)                      Location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.05 of the Credit Agreement, is as follows:   [                                       ]   [                                       ]   Exhibit B-1   The undersigned certifies that he/she is the [            ] of the Borrower, and that as such he/she is authorized to execute this certificate on behalf of the Borrower.  The undersigned further certifies, represents and warrants on behalf of the Borrower that (a) the Borrower is entitled to receive the requested Borrowing under the terms and conditions of the Credit Agreement, (b) that no Default or Event of Default exists and is continuing, and (c) after giving effect to the Borrowing request made herein the total Credit Exposure will not exceed the Aggregate Commitment Amount as now in effect.     SANCHEZ ENERGY CORPORATION,   a Delaware corporation             By:     Name:     Title:     Exhibit B-2   EXHIBIT C   FORM OF INTEREST ELECTION REQUEST     Section 2.04 of the Third Amended and Restated Credit Agreement dated as of term used herein is defined in the Credit Agreement), hereby makes an Interest Election Request as follows:   (i)                                   The Borrowing to which this Interest Election Request applies, and if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information specified pursuant to (iii) and (iv) below shall be specified for each resulting Borrowing) is [            ];   (ii)                                The effective date of the election made pursuant to this Interest Election Request is [            ], 20[   ];[and]   (iii)                             The resulting Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing][; and]   (iv)                            [If the resulting Borrowing is a Eurodollar Borrowing] The Interest Period applicable to the resulting Borrowing after giving effect to such election is [            ]].   of the Borrower that the Borrower is entitled to receive the requested continuation or conversion under the terms and conditions of the Credit Agreement.     SANCHEZ ENERGY CORPORATION,   a Delaware corporation             By:     Name:     Title:     Exhibit C-1   EXHIBIT D   FORM OF COMPLIANCE CERTIFICATE   The undersigned hereby certifies that he/she is the [            ] of SANCHEZ ENERGY CORPORATION, a Delaware corporation (the “Borrower”), and that as such he/she is authorized to execute this certificate on behalf of the Borrower.  With reference to the Third Amended and Restated Credit Agreement dated as of other modifications thereto being the “Agreement”), among the Borrower, Royal are or become a party thereto, the undersigned represents and warrants as follows (each capitalized term used herein having the same meaning given to it in the Agreement unless otherwise specified), to my knowledge after reasonable investigation:   (a)         The representations and warranties of the Borrower contained in ARTICLE VII of the Agreement and in the Loan Documents and otherwise made in writing by or on behalf of the Borrower in the Agreement and the other Loan Documents were true and correct when made, and are true and correct in all material respects at and as of the time of delivery hereof, except to the extent such representations and warranties are expressly limited to an earlier time or the Required Lenders have consented in writing to the contrary.   (b)         The Borrower has performed and complied with all agreements and conditions contained in the Agreement and in the Loan Documents required to be performed or complied with by the Borrower prior to or at the time of delivery hereof [or specify default and describe].   (c)          Since the “as of” date of the financial statements of the Borrower Section 8.01(b) of the Agreement, no change has occurred, either in any case or in the aggregate, in the condition, financial or otherwise, of the Borrower or any Restricted Subsidiary which could reasonably be expected to have a Material Adverse Effect [or specify event].   (d)         There exists no Default or Event of Default [or specify Default and describe].   (e)          If, as of the [fiscal quarter] [fiscal year] ending [               ], there were any Loans or Letters of Credit outstanding under the Agreement, then compliance [or non-compliance] with the PDP Coverage Ratio is demonstrated by the calculation of the PDP Coverage Ratio set forth on Exhibit A attached hereto.   Exhibit D-1   EXECUTED AND DELIVERED this [      ] day of [            ], 20[  ].     SANCHEZ ENERGY CORPORATION,   a Delaware corporation             By:     Name:     Title:     Exhibit D-2   Exhibit D   PDP COVERAGE CALCULATION WORKSHEET   PDP Coverage Ratio   A. Loan Parties’ proved developed producing properties’ PV-10 value (based on most recent Reserve Report and the then-current strip pricing as of the date of calculation)   $                 B. (+) the net mark-to-market value of commodity Swap Agreements in effect as of the date of calculation based on the then-current strip pricing as of the date of calculation   $                 C. (+)unrestricted cash on hand of the Loan Parties   $                 D. Sum of Lines A + B + C   $                 E. the Aggregate Commitment Amount   $                 F. Line D divided by Line E   $       Is Line F at least 4.00 to 1.00   Yes/No       Exhibit D-3   EXHIBIT E   FORM OF ASSIGNMENT AND ASSUMPTION   Reference is made to the Third Amended and Restated Credit Agreement, dated as of February 14, 2018 (as amended, restated, supplemented or otherwise modified from time to time and in effect on the date hereof, the “Credit Agreement”), Lenders named therein and Royal Bank of Canada, as Administrative Agent for the Lenders.  Capitalized terms defined in the Credit Agreement are used herein with the same meanings.   The Assignor named below hereby sells and assigns, without recourse, to the recourse, from the Assignor, effective as of the Assignment Date set forth below, the interests set forth below (the “Assigned Interest”) in the Assignor’s rights and obligations under the Credit Agreement, including, without limitation, the interests set forth below in the Commitment Amount of the Assignor on the Assignment Date and Loans owing to the Assignor which are outstanding on the Assignment Date, together with the participations in Letters of Credit and LC Disbursements held by the Assignor on the Assignment Date, but excluding accrued interest and fees to and excluding the Assignment Date.  The Assignee hereby acknowledges receipt of a copy of the Credit Agreement.  From and after the Assignment Date (i) the Assignee shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the Assigned Interest, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the Assigned Interest, relinquish its rights and be released from its obligations under the Credit Agreement.   This Assignment and Assumption is being delivered to the Administrative Agent (with a copy to the Borrower) together with (i) if the Assignee is a Foreign Lender, any documentation required to be delivered by the Assignee pursuant to Section 5.03 of the Credit Agreement, duly completed and executed by the Assignee, and (ii) if the Assignee is not already a Lender under the Credit Agreement, an Administrative Questionnaire in the form supplied by the Administrative Agent, duly completed by the Assignee.  The [Assignee/Assignor] shall pay the fee payable to the Administrative Agent pursuant to Section 12.04(b) of the Credit Agreement.   This Assignment and Assumption shall be governed by and construed in accordance with the laws of the State of New York.   Date of Assignment: Legal Name of Assignor: Legal Name of Assignee: Assignee’s Address for Notices: Effective Date:   1   Facility   Principal Amount of Commitment Amount Assigned   Percentage Assigned of Commitment Amount (set forth, to at least 8 decimals)   Loans:             The terms set forth above and on the reverse side hereof are hereby agreed to:     [Name of Assignor], as Assignor             By:     Name:     Title:             [Name of Assignee], as Assignee             By:     Name:     Title:     2   The undersigned hereby consent to the within assignment:(1)       ROYAL BANK OF CANADA, as Administrative Agent             By:     Name:   Title:     (1)                   Consents to be included to the extent required by   3   STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION   1.                                      Representations and Warranties.   1.1                               Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.   1.2.                            Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 8.01(a) or Section 8.01(b) thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (vi) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.   2.                                      Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.   3.                                      General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by fax or other electronic transmission (e.g., .pdf) shall be effective as delivery of a manually executed   Exhibit E-1   counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.   Exhibit E-2   EXHIBIT F-1   [FORM OF]   U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)   Reference is hereby made to the Third Amended and Restated Credit Agreement dated as of February 14, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Sanchez Energy Corporation, Royal Bank of Canada, as Administrative Agent, and each lender from time to time party thereto.   Pursuant to the provisions of Section 5.03 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.   The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E (or applicable successor form).  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.     [NAME OF LENDER]     By:     Name:     Title:         Date:                             , 20[   ]     Exhibit F-1-1   EXHIBIT F-2   [FORM OF]   (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)   party thereto.   of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.   The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E (or applicable successor form). By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.     [NAME OF PARTICIPANT]     By:     Name:     Title:             Exhibit F-2-1   EXHIBIT F-3   [FORM OF]   (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)   party thereto.   undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.   The undersigned has furnished its participating Lender with IRS Form W-8IMY (or applicable successor form) accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E (or applicable successor form) or (ii) an IRS Form W-8IMY (or applicable successor form) accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E (or applicable successor form) from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.         By:     Name:     Title:             Exhibit F-3-1   EXHIBIT F-4   [FORM OF]   (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)   party thereto.   is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the   The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-81MY (or applicable successor form) accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form 8BEN or IRS Form W-8BEN-E (or applicable successor form) or (ii) an IRS Form W-81MY (or applicable successor form) accompanied by of such partner’s/member’s beneficial owners that is claiming the portfolio shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective       By:     Name:     Title:             Exhibit F-4-1   EXHIBIT G   FORM OF REPAYMENT NOTICE     Reference is made to that certain Third Amended and Restated Credit Agreement dated as of February 14, 2018 by and among SANCHEZ ENERGY CORPORATION, a Delaware corporation (the “Borrower”), Royal Bank of Canada, as Administrative Agent and the lenders (the “Lenders”) which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is defined in the Credit Agreement) (together with all amendments, restatements, supplements or other modifications thereto, the “Credit Agreement”).   The Borrower is repaying Borrowings as follows:   1.                                      Borrowings outstanding prior to the repayment referred to herein: $   2.                                      Amount of repayment: $   3.                                      Date of repayment:                , 20  .   4.                                      Type of Borrowing and amount to which repayment applies:   (a)                                 ABR Borrowing for $   (b)                                 Eurodollar Borrowing(s) with Interest Period(s) ending on             (2)   (i) one month $       (ii) three months $       (iii) six months $          ]   The repayment referred to herein is being made pursuant to and complies with [Section 3.04(a) — Optional Prepayments] OR [Section 3.04(c) — Mandatory Prepayments] of the Credit Agreement.   [Signature Page follows]   (2)  If more than one Interest Period ends on a particular date, or if necessary to allocate repayment among Interest Periods, the Borrower shall specify how such repayment is to be allocated.   1   IN WITNESS WHEREOF this instrument is executed as of               , 20 .     SANCHEZ ENERGY CORPORATION,   a Delaware corporation             By:     Name:     Title:     2   EXHIBIT H   FORM OF GUARANTY   THIS GUARANTY AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Guaranty”), dated as of           , 20  , is made by each of the undersigned Restricted Subsidiaries of the Borrower (as defined below) (together with any other entity that may become a party hereto as provided herein each, a “Guarantor,” and collectively, the “Guarantors”), in favor of Royal Bank of Canada, as Administrative Agent (the “Agent”) for the benefit of the Lenders pursuant to that certain Third Amended and Restated Credit Agreement from time to time, the “Credit Agreement”), by and among the Borrower (defined below), the Agent and the Lenders.     WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make Loans and other extensions of credit to Sanchez Energy Corporation, a Delaware corporation (the “Borrower”) in a manner and upon the terms and conditions set forth therein;   WHEREAS, in accordance with the Credit Agreement, the Agent requires that the Guarantors execute a guaranty agreement guaranteeing the Obligations;   NOW, THEREFORE, in consideration of the premises and agreements herein and in order to induce the Lenders to make the Loans and other extensions of credit pursuant to the Credit Agreement, the Guarantors hereby agree as follows:   Section 1.                                          Definitions.  Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned thereto in the Credit Agreement.   Section 2.                                          Guaranty of Payment.  Each Guarantor (not merely as a surety or guarantor of collection) hereby jointly, severally, unconditionally and irrevocably, guarantees the punctual payment when due, whether at stated maturity, as an installment, by prepayment or by demand, acceleration or otherwise, of all Obligations heretofore or hereafter existing.  If any or all of the Obligations become due and payable under the Credit Agreement, the Guarantors jointly and severally and unconditionally promise to pay such Obligations, on demand, together with any and all expenses (including reasonable counsel fees and expenses), which reasonably may be incurred by the Agent in collecting any of the Obligations and in connection with the protection, defense and enforcement of any rights under the Credit Agreement or under any other Loan Document (the “Expenses”).  The Guarantors guarantee that the Obligations shall be paid in accordance with the terms of the Credit Agreement, any applicable Loan Document, any applicable Swap Agreement, and any applicable agreement governing the provision of Bank Products.  The Obligations include, without limitation, interest accruing after the commencement of a proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at the rate or rates provided in the Credit Agreement.  The Agent shall not be required to exhaust any right or remedy or take any action against the Borrower or any other Person or any collateral prior to any demand or other action hereunder against the Guarantors.  The Guarantors agree that, as between the Guarantors and the Agent, the Obligations may be declared to be due and payable for the purposes of this Guaranty notwithstanding any stay, injunction or other prohibition which may   1   prevent, delay or vitiate any declaration as regards the Borrower and that in the event of a declaration or attempted declaration, the Obligations shall immediately become due and payable by the Guarantors for the purposes of this Guaranty and each Guarantor shall forthwith pay the Obligations specified by the Agent to be paid as provided in the Credit Agreement without further notice or demand.  Notwithstanding anything contained herein or in the Credit Agreement, any Loan Document or any other document or any other agreement, security document or instrument relating hereto or thereto to the contrary, the maximum liability of each Guarantor hereunder shall never exceed the maximum amount that said Guarantor could pay without having such payment set aside as a fraudulent transfer or fraudulent conveyance or similar action under the U.S. Bankruptcy Code or applicable state or foreign law.   Section 3.                                          Guaranty Absolute.  The liability of each Guarantor under this Guaranty is absolute and unconditional irrespective of:  (a) any change in the time, manner or place of payment of, or in any other term of, the Credit Agreement or the Obligations, or any other amendment or waiver of or any consent to departure from any of the terms of the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing the Obligations, including any increase or decrease in the rate of interest thereon; (b) any release or amendment or waiver of, or consent to departure from, any other guaranty or support document, or any exchange, release or non-perfection of any collateral, for the Credit Agreement or the Obligations; (c) any present or future law, regulation or order of any jurisdiction (whether of right or in fact) or of any agency thereof purporting to reduce, amend, restructure or otherwise affect any term of the Credit Agreement or the Obligations; (d) any lack of validity or enforceability against the Borrower or any Loan Party or any other guarantor of any of the Obligations, for any reason relating to the Credit Agreement, any other Loan Document or any other agreement or instrument evidencing the Obligations; (e) any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Credit Agreement or the transactions contemplated thereby (other than actual payment) which might constitute a legal or equitable defense available to, or discharge of, the Borrower or the Guarantors; and (f) any claim or assertion that any payment by any Guarantor hereunder should be set aside pursuant to Section 2 hereof in connection with any stay, injunction or other prohibition or event, in which case each Guarantor shall be unconditionally required to pay all amounts demanded of it hereunder prior to any determination of the maximum liability of each Guarantor hereunder in accordance with Section 2 hereof and the recipient of such payment, if so required by a court of competent jurisdiction by a final and non-appealable judgment, shall then be liable for the refund of any excess amounts.  If any such rebate or refund is ever required, then subject to the limitations of Section 2 hereof, all other Guarantors shall be fully liable for the repayment thereof to the maximum extent allowed by applicable law.   Section 4.                                          Guaranty Irrevocable.  This Guaranty is a continuing guaranty of the payment of all Obligations now or hereafter existing and shall remain in full force and effect until payment in full of all Obligations and other amounts payable under this Guaranty and until all Commitments of the Lenders shall be terminated in accordance with the terms of the Credit Agreement.  A Guarantor shall be automatically released from its obligations under this Guaranty upon it ceasing to be a “Guarantor” for purposes of the Credit Agreement (subject to the satisfaction of any conditions set forth therein).   2   Section 5.                                          Reinstatement.  This Guaranty shall continue to be effective, or be automatically reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the Agent on the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower, any Guarantor, or any other Person that is a party to the Loan Documents, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to the Borrower, any Guarantor or any other Person that is a party to the Loan Documents, or otherwise, all as though the payment had not been made.   Section 6.                                          Subrogation.  Each Guarantor hereby agrees that it shall not exercise any rights which it may acquire by way of subrogation, by any payment made under this Guaranty or otherwise, until all the Obligations have been paid in full and all of the Commitments have been terminated and are no longer in effect.  Any amounts paid to a Guarantor on account of subrogation rights under this Guaranty at any time when all the Obligations have not been paid in full, shall be held in trust for the benefit of the Agent and shall promptly be paid to the Agent to be credited and applied to the Obligations, whether matured or unmatured or absolute or contingent, in accordance with the terms of the Credit Agreement.  If a Guarantor has made a payment to the Agent hereunder of all or any part of the Obligations and all the Obligations are paid in full and all of the Commitments have been terminated and are no longer in effect, the Agent shall, at such Guarantor’s request, execute and deliver to the Guarantor the appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting from the payment.   Section 7.                                          Subordination.  Any liabilities owed by the Borrower to the Guarantors in connection with any extension of credit or financial accommodation by the Guarantors to or for the account of the Borrower, including but not limited to interest accruing at the agreed contract rate after the commencement of a bankruptcy or similar proceeding, are hereby subordinated to the Obligations, and such liabilities of the Borrower to the Guarantors, if the Agent so requests, shall be collected, enforced and received by the Guarantors as trustee for the Agent and shall be paid over to the Agent on account of the Obligations.   Section 8.                                          Certain Taxes.  The Guarantors further agree that all payments to be made hereunder shall be made without setoff or counterclaim and free and clear of, and without deduction for Taxes.  If any Taxes are required to be withheld from any amounts payable to the Agent hereunder, the amounts so payable to the Agent shall be increased to the extent necessary to yield to the Agent (after payment of all Taxes) the amounts payable hereunder in the full amounts so to be paid.  Whenever any Tax is paid by a Guarantor, as promptly as possible thereafter, such Guarantor shall send the Agent an official receipt showing payment thereof, together with such additional documentary evidence as may be required from time to time by the Agent.   Section 9.                                          Representations and Warranties.  Each of the Guarantors represents and warrants that: (a) this Guaranty (i) has been authorized by all necessary corporate or other organizational action; (ii) does not violate any agreement, instrument, law, regulation or order applicable to it; (iii) does not require the consent or approval of any Person, or any filing or registration of any kind; and (iv) is the legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, except to the extent that   3   enforcement may be limited by applicable bankruptcy, insolvency and other similar laws affecting creditors’ rights generally; and (b) in executing and delivering this Guaranty, such Guarantor has not relied and will not rely upon any representations or warranties of the Agent not embodied herein or any acts heretofore or hereafter taken by the Agent (including but not limited to any review by the Agent of the affairs of the Borrower).   Section 10.                                   Remedies Generally.  The remedies provided in this Guaranty are cumulative and not exclusive of any remedies provided by law.   Section 11.                                   Setoff.  Each Guarantor agrees that, in addition to (and without limitation of) any right of setoff, banker’s lien or counterclaim the Agent or the Lenders may otherwise have, the Agent and each of the Lenders shall be entitled, at their option, to offset balances (general or special, time or demand, provisional or final) held by them for the account of such Guarantor (other than amounts held in payroll accounts, escrow accounts, trust accounts and other accounts held by a Loan Party as a fiduciary for others) at any of the Agent’s or any Lender’s offices, in U.S. dollars or in any other currency, against any amount payable by such Guarantor under this Guaranty which is not paid when due, in which case it shall promptly notify such Guarantor thereof; provided that the Agent’s or any Lender’s failure to give such notice shall not affect the validity thereof.   Section 12.                                   Formalities.  Each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations, the Credit Agreement and this Guaranty and any liability to which the Credit Agreement and this Guaranty applies or may apply, and waives presentment, demand of payment, notice of intent to accelerate, notice of acceleration, notice of dishonor or nonpayment, and any requirement that the Agent institute suit, collection proceedings or take any other action to collect the Obligations, including any requirement that the Agent protect, secure, perfect or insure any security interest or Lien against any Property or exhaust any right or take any action against the Borrower or any other Person (including the other Guarantors) or any Collateral (it being the intention of the Agent and each Guarantor that the obligations of such Guarantor under this Guaranty are to be a guaranty of payment and not of collection) or that the Borrower or any other Person (including the other Guarantors) be joined in any action hereunder.  Each Guarantor hereby waives marshaling of assets and liabilities, notice by the Agent of the creation of any Obligation or liability to which it applies or may apply, any amounts received by the Agent, notice of disposition or substitution of Collateral and of the creation, advancement, increase, existence, extension, renewal, rearrangement and/or modification of the Obligations.   Section 13.                                   Amendments and Waivers.  No amendment or waiver of any provision of this Guaranty, nor consent to any release by any Guarantor therefrom, shall be effective unless it is in writing and signed by the Agent and such Guarantor, and then the waiver or consent shall which given.  No failure on the part of the Agent to exercise, and no delay in exercising, any right under this Guaranty shall operate as a waiver or preclude any other or further exercise thereof or the exercise of any other right.   Section 14.                                   Expenses.  To extent payable under Section 12.03 of the Credit Agreement, the Guarantors shall reimburse the Agent on demand for all Expenses without   4   duplication of any reimbursements affected under the Credit Agreement.  The obligations of the Guarantors under this Section 14 shall survive the termination of this Guaranty.   Section 15.                                   Assignment.  This Guaranty shall be binding on, and shall inure to the benefit of the Guarantors, the Agent and their respective successors and assigns; provided that the Guarantors may not assign or transfer their respective rights or obligations under this Guaranty.  Without limiting the generality of the foregoing: (a) the obligations of the Guarantors under this Guaranty shall continue in full force and effect and shall be binding on any successor partnership and on previous partners and their respective estates if any of the Guarantors is a partnership, regardless of any change in the partnership as a result of death, retirement or otherwise; and (b) to extent permitted under Section 12.04 of the Credit Agreement, the Agent may assign, sell participations in or otherwise transfer its rights under the Credit Agreement to any other Person in accordance with the terms and conditions thereof, and the other Person shall then become vested with all the rights granted to the Agent in this Guaranty or otherwise.  Guarantor may merge into the Borrower or another Guarantor as provided in the Credit Agreement.   Section 16.                                   Captions.  The headings and captions in this Guaranty are for convenience only and shall not affect the interpretation or construction of this Guaranty.   Section 17.                                   Governing Law, Etc.  THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CHOICE-OF-LAW PROVISIONS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.  EACH GUARANTOR CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF NEW YORK THE SOUTHERN DISTRICT OF NEW YORK.  SERVICE OF PROCESS BY THE AGENT IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON EACH GUARANTOR IF SENT TO SUCH GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS OTHERWISE SPECIFIED BY SUCH GUARANTOR FROM TIME TO TIME.  EACH GUARANTOR (AND, BY ITS ACCEPTANCE HEREOF, THE AGENT) WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL IN ANY ACTION RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION.  TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), EACH SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.   Section 18.                                   Integration; Effectiveness.  This Guaranty alone sets forth the entire understanding of the Guarantors and the Agent relating to the guarantee of the Obligations and constitutes the entire contract between the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the   5   subject matter hereof.  This Guaranty shall become effective when it shall have been executed and delivered by the Guarantors to the Agent.   Section 19.                                   Credit Agreement.  To the extent there are any conflicts or inconsistencies between this Guaranty and the Credit Agreement, the provisions of the Credit Agreement will control.   Section 20.                                   Counterparts.  This Guaranty may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Guaranty by telecopy, facsimile, delivery of a manually executed counterpart signature page of this Guaranty.   Section 21.                                   Excluded Swap Obligations.  Notwithstanding anything to the contrary, the Obligations guaranteed by any Guarantor shall exclude all Excluded Swap Obligations with respect to such Guarantor.   [END OF TEXT]   6   IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be duly executed by their respective authorized officers as of the day and year first above written.     GUARANTOR(S):             [By:     Name:     Title:         Address for Service of Process:       [                            ]   [                            ]]   7   SCHEDULE 7.01   CORPORATE ORGANIZATIONAL CHART       SCHEDULE 7.05   LITIGATION   NONE.     SCHEDULE 7.14   LIST OF SUBSIDIARIES   See Schedule 7.01 for the name of, and the ownership interest of Borrower in, each Subsidiary of the Borrower as of the Third Amended and Restated Effective Date.   Name   Jurisdiction of Organization   Federal Taxpayer Identification Number   Organizational Identification Number Restricted Subsidiaries SN Palmetto, LLC   Delaware   45-3193696   5027789 SN Marquis LLC   Delaware   45-3090102   5061848 SN Cotulla Assets, LLC   Texas   45-3090102   801757040 SN Operating, LLC   Texas   45-3902143   801757045 SN TMS, LLC   Delaware   45-3090102   5383007 SN Catarina, LLC   Delaware   45-3090102   5518394 SN EF Maverick, LLC   Delaware   45-3090102   6257550 Rockin L Ranch Company, LLC   Delaware   45-3090102   6296611 Unrestricted Subsidiaries SN UR Holdings, LLC   Delaware   45-3090102   5913855 SN Services, LLC   Delaware   45-3090102   5560677 SN Terminal, LLC   Delaware   45-3090102   5913857 SN Midstream, LLC   Delaware   45-3090102   5287866 SN Comanche Manager, LLC   Delaware   45-3090102   6319242 SN EF UnSub GP, LLC   Delaware   35-2596466   6257546 SN EF UnSub, LP   Delaware   36-4855302   6257670 SN EF UnSub Holdings, LLC   Delaware   45-3090102   6257548 Sanchez Resources, LLC   Delaware   45-3090102   4873149     SR TMS, LLC   Delaware   45-3090102   5372292 SR Acquisition III, LLC   Delaware   45-3090102   5336370 SR Acquisition I, LLC   Delaware   45-3090102   4884552 SN Capital, LLC   Delaware   45-3090102   5979515     SCHEDULE 7.20   SWAP AGREEMENTS   Transactions Executed Under Master Agreements   Oil Swaps:   Trade ID   Contract Period   Derivative Instrument   Counterparty   Barrels   Purchased   Pricing Index   Fair value as of January 31, 2018   65157696   January 01, 2019 - December 31, 2019   Swap   Comerica   365,0000   $ 50.00   NYMEX WTI   $ (2,811,930 ) 65157698   February 01, 2018 - December 31, 2018   Swap   Capital One   334,000   $ 50.40   NYMEX WTI   $ (4,077,025 ) 65157823     Swap   Capital One   334,000   $ 50.07   NYMEX WTI   $ (4,186,158 ) 65157826     Swap   Capital One   365,000   $ 50.07   NYMEX WTI   $ (2,787,199 ) 65157913     Swap   Capital One   334,000   $ 50.10   NYMEX WTI   $ (4,176,234 ) 65157916     Swap   Capital One   365,000   $ 50.10   NYMEX WTI   $ (2,776,599 ) 65158441     Swap   Bank of Montreal   334,000   $ 50.06   NYMEX WTI   $ (4,189,464 ) 65158444     Swap   Bank of Montreal   365,000   $ 50.06   NYMEX WTI   $ (2,790,731 ) 66282822     Swap   Macquarie   334,000   $ 51.45   NYMEX WTI   $ (3,729,781 ) 66282823     Swap   ING   668,000   $ 51.61   NYMEX WTI   $ (7,353,737 ) 66302382     Swap   Comerica   334,000   $ 51.60   NYMEX WTI   $ (3,680,176 ) 66303973     Swap   Fifth Third Bank   334,000   $ 51.60   NYMEX WTI   $ (3,680,176 ) 66321193     Swap   Fifth Third Bank   334,000   $ 51.20   NYMEX WTI   $ (3,812,457 ) 67698632     Swap   RBC   334,000   $ 51.35   NYMEX WTI   $ (3,762,852 ) 67698637     Swap   Bank of Montreal   334,000   $ 51.40   NYMEX WTI   $ (3,746,316 ) 68050414     Swap   Capital One   668,000   $ 55.00   NYMEX WTI   $ (5,111,547 ) 68518100     Swap   RBC   334,000   $ 51.35   NYMEX WTI   $ (3,762,852 ) 68518101     Swap   Bank of Montreal   334,000   $ 51.40   NYMEX WTI   $ (3,746,316 )                             $ (70,181,550.00 )   Oil Call Swaption:   Trade ID   Contract Period   Derivative Instrument   Counterparty   Barrels   Strike Price   Pricing Index   Fair value as of January 31, 2018   68050440     Swaption Call   Capital One   730,000   $ 55.00   NYMEX WTI   $ (4,518,451.00 )                             $ (4,518,451.00 )   Gas Swaps:   Trade ID   Contract Period   Derivative Instrument   Counterparty   MMBtu   Purchased   Pricing Index   Fair value as of January 31, 2018   58725146     Swap   Capital One   3,340,000   $ 3.00   NYMEX Henry Hub   $ 25,396   58945762     Swap   RBC   3,340,000   $ 3.00   NYMEX Henry Hub   $ 25,396   59647189     Swap   Capital One   3,340,000   $ 3.02   NYMEX Henry Hub   $ 91,660   59647190     Swap   Capital One   3,650,000   $ 3.02   NYMEX Henry Hub   $ 664,902   59648288     Swap   Bank of Montreal   3,340,000   $ 3.02   NYMEX Henry Hub   $ 91,660   59648293     Swap   Bank of Montreal   3,650,000   $ 3.02   NYMEX Henry Hub   $ 664,902   61778196     Swap   ING   835,000   $ 3.00   NYMEX Henry Hub   $ 6,349   61825415     Swap   ING   3,340,000   $ 3.00   NYMEX Henry Hub   $ 25,396   62829247   February 01, 2018 - February 28, 2018   Swap   Bank of Montreal   1,050,000   $ 3.07   NYMEX Henry Hub   $ (591,596 ) 62829248   March 01, 2018 - March 31, 2018   Swap   Bank of Montreal   775,000   $ 3.07   NYMEX Henry Hub   $ 56,110   62829249   April 01, 2018 - April 30, 2018   Swap   Bank of Montreal   750,000   $ 3.07   NYMEX Henry Hub   $ 155,199   62829250   May 01, 2018 - May 31, 2018   Swap   Bank of Montreal   620,000   $ 3.07   NYMEX Henry Hub   $ 131,802   62829251   June 01, 2018 - June 30, 2018   Swap   Bank of Montreal   600,000   $ 3.07   NYMEX Henry Hub   $ 108,246   62829252   July 01, 2018 - July 31, 2018   Swap   Bank of Montreal   387,500   $ 3.07   NYMEX Henry Hub   $ 55,181   62829253   August 01, 2018 - August 31, 2018   Swap   Bank of Montreal   387,500   $ 3.07   NYMEX Henry Hub   $ 55,855   62829254   September 01, 2018 - September 30, 2018   Swap   Bank of Montreal   375,000   $ 3.07   NYMEX Henry Hub   $ 60,991   62829255   October 01, 2018 - October 31, 2018   Swap   Bank of Montreal   387,500   $ 3.07   NYMEX Henry Hub   $ 54,889   62829256   November 01, 2018 - November 30, 2018   Swap   Bank of Montreal   225,000   $ 3.07   NYMEX Henry Hub   $ 22,053   62829257   December 01, 2018 - December 31, 2018   Swap   Bank of Montreal   155,000   $ 3.07   NYMEX Henry Hub   $ (4,343 ) 63420765     Swap   Capital One   3,340,000   $ 3.00   NYMEX Henry Hub   $ 25,396   65104176     Swap   ING   16,700,000   $ 3.04   NYMEX Henry Hub   $ 789,624   66320665     Swap   RBC   696,000   $ 2.93   NYMEX Henry Hub   $ 48,587   66320666     Swap   RBC   651,000   $ 2.93   NYMEX Henry Hub   $ 49,264   66320667     Swap   RBC   759,000   $ 2.93   NYMEX Henry Hub   $ 33,196   66320668     Swap   RBC   874,200   $ 2.93   NYMEX Henry Hub   $ 5,205   66320669     Swap   RBC   939,300   $ 2.93   NYMEX Henry Hub   $ 7,444   66320670     Swap   RBC   1,128,000   $ 2.93   NYMEX Henry Hub   $ 30,112   66320671     Swap   RBC   995,100   $ 2.93   NYMEX Henry Hub   $ 5,894   66320672     Swap   RBC   1,128,000   $ 2.93   NYMEX Henry Hub   $ (42,224 ) 66320673     Swap   RBC   1,128,400   $ 2.93   NYMEX Henry Hub   $ (184,175 )                             $ 2,468,371                                                           Grand Total   $ (72,231,630 )   The Credit support agreements relating to the Swap Agreements listed above are the “Security instruments” (as defined in the Credit Agreement).   Each counterparty listed above is s “Secured Swap Provider” and a “Secured Priority Swap Provider” (as such terms are defined in the Credit Agreement).  

Filed by The Stanley Works Pursuant to Rule425 under the Securities Act of 1933 and deemed filed pursuant to Rule14a-12 under the Securities Exchange Act of 1934 Subject Company: The Black & Decker Corporation Commission File No.: 1-01553 Page 1 STANLEY WORKS COMPANY NEW BRITAIN - IN THE MATTER OF THE MEETING FOR THE EMPLOYEES IN RE:STANLEY WORKS and BLACK & DECKER MERGER, - November

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported):June 28, 2011 (June 28, 2011) U.S. ENERGY CORP. (Exact Name of Company as Specified in its Charter) Wyoming 0-6814 83-0205516 (State or other jurisdiction of (Commission File No.) (I.R.S. Employer incorporation or organization) Identification No.) 877 North 8th West, Riverton, WY (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (307) 856-9271 Not Applicable (Former Name, Former Address or Former Fiscal Year, If Changed From Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2): □Written communications pursuant to Rule 425 under the Securities Act □Soliciting material pursuant to Rule 14a-12 under the Exchange Act □Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act □Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act Section 8:Other Events Item 8.01.Other Events U.S. Energy Corp. published a press release dated June 28, 2011 providing an update on its oil and gas drilling programs. Section 9:Financial Statements and Exhibits Item 9.01.Financial Statements and Exhibits. Exhibit 99.1.Press Release dated June 28, 2011. Safe Harbor Statement Information provided in the exhibit hereto contains statements which may constitute “forward-looking” statements, usually containing the words “believe,” “estimate,” “project,” “anticipate,” “expect,” “target,” “goal,” or similar expressions.Forward looking statements in the exhibit relate to, among other things, USE’s drilling of wells with industry partners, its ownership interests in those wells and their expected costs, anticipated spud dates, and the oil and natural gas targets or goals for the wells.These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995.Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements.Factors that would cause or contribute to such differences include, but are not limited to, future trends in commodity and/or mineral prices, the availability of capital, competitive factors, and other risks described in the Company’s filings with the SEC (including, without limitation, the Form 10-K for the year ended December 31, 2010and the Form 10-Q for the period ended March 31, 2011 filed May 9, 2011).By making these forward-looking statements, the Company undertakes no obligation to update these statements for revision or changes after the date of this release. The forward-looking statements referenced above are made only as of the date of the exhibit.We undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. U.S. ENERGY CORP. Dated:June 28, 2011 By: /s/ Keith G. Larsen Keith G. Larsen, CEO

Exhibit 99.1 Ballantyne Strong Authorizes Share Repurchase Program OMAHA, Nebraska (August 20, 2015) – Ballantyne Strong,Inc. (NYSE MKT: BTN), a diversified provider of digital technology services, products and solutions, announced today that its Board of Directors has authorized the repurchase of up to 700,000 shares of its outstanding common stock, or approximately 5.0% of its outstanding shares, pursuant to a plan adopted under Rule 10b5-1 of the Securities Exchange Act of 1934 (the “Act”). “Considering the Company’s strong cash position and balance sheet, Ballantyne’s Board has decided to authorize a share repurchase program for possible share repurchases,” stated Chairman of the Board of Directors, Kyle Cerminara. “Importantly, this action is not a change in overall strategy as Ballantyne remains committed to seeking opportunities to grow organically and identify acquisition opportunities that will leverage our expertise, market position and capital access,” added Mr.Cerminara. A plan under Rule10b5-1 allows a company to repurchase its shares at times when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. A broker selected by Ballantyne Strong will have the authority under the terms and limitations specified in the plan to repurchase shares on Ballantyne Strong’s behalf in accordance with the terms of the plan. Because the repurchases under the plan are subject to certain pricing parameters and other regulatory requirements applicable to repurchase under Rule10b-18 of the Act, there is no guarantee as to the exact number of shares that will be repurchased under the plan, or that there will be any repurchases pursuant to the plan. About Ballantyne Strong,Inc. (www.strong-world.com) Ballantyne Strong designs, integrates, and installs technology solutions for a broad range of applications; develops and delivers out-of-home messaging, advertising and communications; manufactures projection screens and lighting products; and provides managed services including monitoring of networked equipment. The Company focuses on serving the retail, financial, government and cinema markets. Forward-Looking Statements Except for the historical information in this press release, it includes forward-looking statements that involve risks and uncertainties, including but not limited to, quarterly fluctuations in results; customer demand for the Company’s products; the development of new technology for alternate means of motion picture presentation; domestic and international economic conditions; the management of growth; and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings. Actual results may differ materially from management’s expectations. 1 CONTACT: Nate Legband Elise Stejskal Chief Financial Officer Investor Relations 402/829-9404 402/829-9423 ### 2

EXHIBIT 10.1 EXECUTION VERSION PLEDGE AND ESCROW AGREEMENT by and among RASER TECHNOLOGIES, INC., and THE BANK OF NEW YORK, as Escrow Agent, and as Trustee Dated as of March 26, 2008 PLEDGE AND ESCROW AGREEMENT THIS PLEDGE AND ESCROW AGREEMENT (this “Agreement”), dated as of March 26, 2008, is by and among Raser Technologies, Inc., a Delaware corporation (the “Company”), and The Bank of New York, in its capacity as escrow agent (in such capacity, the “Escrow Agent”) and acknowledged by The Bank of New York, as trustee under the Indenture referred to below (in such capacity, the “Trustee”). RECITALS The Company and the Trustee have entered into an Indenture, dated as of March 26, 2008 (the “Indenture”), pursuant to which the Company will issue up to $50,000,000 in aggregate principal amount of its 8.00% Convertible Senior Notes due 2013 (the “Notes”). The Company desires to establish an escrow account with the Escrow Agent into which certain funds in the form of Government Securities (as defined herein) and/or cash will be, simultaneously with the original issuance of the Notes, deposited by the Company to be held and distributed in accordance with the terms and conditions set forth herein, and the Escrow Agent is willing to establish such an account and to accept such funds in accordance with the terms hereinafter set forth. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Indenture. Further, unless otherwise defined in this Agreement or in the Indenture, terms defined in Article 8 or 9 of the UCC (as defined below) are used in this Agreement as such terms are defined in such Article 8 or 9. “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority. AGREEMENT Section 1. Establishment of Escrow Account. The Escrow Agent shall establish on the date hereof and maintain in the Trustee’s name a “securities account” (within the meaning of Article 8 of the Uniform Commercial Code of the State of New York as in effect from time to time (the “New York UCC”)) (the “Escrow Account”) to which there shall be immediately credited and held the Government Securities received by the Escrow Agent as directed by the Company and such additional funds and/or Government Securities received by the Escrow Agent from time to time after the date hereof, all in accordance with Section 2 hereof. The funds and Government Securities credited to the Escrow Account shall be applied and disbursed only as provided herein. The Escrow Agent, the Company and the Trustee agree that the Escrow Agent shall segregate the funds and Government Securities credited to the Escrow Account from its other funds held as an agent or in trust. The Escrow Agent shall treat all property held by it in   1 the Escrow Account as “financial assets” (as defined in Section 8-102(a)(9) of the New York UCC) in accordance with Section 8-501 (or successor section) of the New York UCC. All property from time to time credited to the Escrow Account constituting “security entitlements” as defined in Section 8-102(a)(17) of the New York UCC shall be held by the Escrow Agent on behalf of the Trustee in the Escrow Account as “entitlement holder” and in no event shall the Company be or be deemed to be the “entitlement holder” (as such term is defined in Section 8-102(a)(7) of the New York UCC) with respect thereto. Section 2. Deposit to the Escrow Account; Investments. (a) Concurrently with the execution and delivery of this Agreement, the Company shall deliver or cause to be delivered to the Escrow Agent for deposit in the Escrow Account Government Securities with an aggregate cost of US$7,894,798.24, as described in Exhibit A (the “Initial Escrow Funds”). Concurrently with the original issuance of any additional Notes under the Indenture on or after the date hereof in connection with the exercise of the Initial Purchaser’s option to purchase additional Notes pursuant to Section 2(b) of the Purchase Agreement, the Company shall deliver or cause to be delivered to the Escrow Agent for deposit in the Escrow Account additional cash funds or Government Securities in an amount proportionately up to approximately US$800,000 (the “Additional Escrow Funds” and, together with the Initial Escrow Funds, the “Escrow Funds”). The Escrow Funds to be deposited with the Escrow Agent shall be delivered or transferred by wire transfer immediately available funds of securities to the following account:   The Bank of New York ABA No.: Account No.: Account Name:   Re:   Attention: (b) Promptly following the deposit of Escrow Funds into the Escrow Account, the Escrow Agent shall acknowledge such deposit in writing. For purposes of this Agreement, “Government Securities” shall mean (i) noncallable direct obligations of, or noncallable obligations the payment of principal of and interest on which are unconditionally guaranteed by, the United States of America; (ii) noncallable bonds, debentures or notes issued by Federal National Mortgage Association, Government National Mortgage Association, Federal Farm Credit Banks, Federal Land Banks, Federal Home Loan Banks, Farmers Home Administration, Federal Home Loan Mortgage Corporation or any of their successors or any other comparable federal agency hereafter created to the extent that said obligations are unconditionally guaranteed by the United States of America; and (iii) holdings in any mutual fund or similar investment vehicle that holds only securities of the type set forth in (i) or (ii) above. Promptly following the deposit of any cash funds into the Escrow Account, (A) the Escrow Agent shall invest such cash funds in the name of the Trustee in Government Securities as instructed by the Company, and (B) the Company shall provide written instructions to the Escrow Agent as to the specific Government Securities in which funds are to be invested and until such instructions are given by the Company, the Escrow Agent shall not invest such funds. All such amounts shall remain so invested until the close of business on the Business Day prior to any withdrawal by the Escrow Agent pursuant to Section 4 hereof.   2 Section 3. Security Interest. (a) Pledge and Assignment. The Company hereby irrevocably pledges, assigns, grants, hypothecates and sets over to the Escrow Agent on behalf of the Trustee, for the equal and ratable benefit of the Holders of the Notes, a first priority continuing security interest in all of the Company’s right, title and interest in and to all of the following whether now owned or existing or hereafter acquired or created (collectively, the “Collateral”): (i) all funds from time to time held in the Escrow Account, including, without limitation, the Escrow Funds and all certificates and instruments, if any, from time to time, representing or evidencing the Escrow Account or the Escrow Funds; (ii) all investments of funds in the Escrow Account, which all shall constitute Government Securities, and all Government Securities from time to time held in the Escrow Account, whether held by or registered in the name of the Escrow Agent and all certificates and instruments, if any, from time to time representing or evidencing any such Government Securities; (iii) all promissory notes, certificates of deposit, deposit accounts, checks and other instruments evidencing such Government Securities from time to time hereafter delivered to or otherwise possessed by the Escrow Agent, for or on behalf of the Company, in substitution for or in addition to any or all of the then existing Collateral; (iv) all interest, dividends, cash, instruments, securities and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the then existing Collateral; and (v) all proceeds of the foregoing including, without limitation, all cash proceeds and all non-cash proceeds thereof. The Company hereby appoints the Escrow Agent to act in such capacity hereunder on behalf of the Trustee and the Holders of the Notes, for purposes of perfecting the foregoing pledge, assignment and security interest in the Collateral, and the Escrow Agent hereby accepts such appointment. Except as set forth in Section 9(b), for so long as the foregoing pledge, assignment and security interest remains in effect, the Escrow Agent hereby waives any right of setoff or banker’s lien that it, in its individual capacity or in its capacity as an agent for Persons other than the Trustee and the Holders of the Notes, may have with respect to any or all of the Collateral. (b) Secured Obligations. This Agreement secures the due and punctual payment and performance of all obligations of the Company, whether now or hereafter existing, under the Notes, the Indenture and this Agreement, including, without limitation, interest and premium, if any, accrued on the Notes after the commencement of a bankruptcy, reorganization or similar proceeding involving the Company to the extent permitted by applicable law (collectively, the “Secured Obligations”).   3 (c) Delivery of Collateral. All certificates or instruments, if any, representing or evidencing all or any portion of the Collateral shall be held by the Escrow Agent on behalf of the Trustee pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignments in blank, all in form and substance reasonably satisfactory to the Trustee, and all in form and substance sufficient to convey a valid security interest in such Collateral to the Trustee. All securities in uncertificated or book-entry form and all security entitlements, if any, in each case representing or evidencing the Collateral shall be registered in the name of the Trustee (or any of its nominees) as the registered owner thereof, by book-entry or as otherwise appropriate so as to properly identify the interest of the Trustee therein. In addition, the Trustee shall have the right, at any time following the occurrence of an Event of Default, to transfer to or to register in the name of the Trustee or any of its nominees any or all other Collateral. Except as otherwise provided herein, all Collateral shall be deposited and held in the Escrow Account. The Escrow Agent shall have the right at any time to exchange certificates or instruments representing or evidencing all or any portion of the Collateral for certificates or instruments of smaller or larger denominations in the same aggregate amount. (d) Maintaining the Escrow Account. So long as this Agreement is in full force and effect: (i) subject to the other terms and conditions of this Agreement, all Collateral held by the Escrow Agent pursuant to this Agreement shall be held in the Escrow Account, which shall be subject to the exclusive dominion and control of the Trustee for the benefit of the Trustee and the equal and ratable benefit of the Holders of the Notes; (ii) the Escrow Account and all Collateral from time to time therein shall remain segregated from all other funds or other property otherwise held by the Trustee or the Escrow Agent, as applicable; (iii) all amounts (including, without limitation, any Escrow Funds or interest on or other proceeds of the Escrow Funds or any Government Securities held in the Escrow Account) shall remain on deposit in the Escrow Account until withdrawn in accordance with this Agreement; and (iv) the Escrow Agent shall take such steps as are necessary to its knowledge to ensure that the Trustee is the holder or entitlement holder (as the case may be) of all of the Collateral and that either the Trustee for the equal and ratable benefit of the Holders of the Notes or, to the extent required by applicable law, the Escrow Agent, for the benefit of the Trustee and the equal and ratable benefit of the Holders of the Notes, is the holder or entitlement holder of all Government Securities and other uncertificated securities on the books of the applicable Federal Reserve Bank or other applicable securities intermediary. (e) Further Assurances. Prior to, contemporaneously herewith, and at any time and from time to time hereafter, the Company shall, at the Company’s expense, execute and deliver to the Trustee or its designee such other instruments and documents, and take all further actions as are necessary or advisable or that the Trustee may deem reasonably necessary or advisable or that the Trustee may reasonably request in order to confirm or perfect the security interest of the   4 Trustee granted or purported to be granted hereby or to enable the Trustee to exercise and enforce its rights and remedies hereunder with respect to any Collateral, and the Company shall take all necessary action to preserve and protect the security interest created hereby as a first priority, perfected lien and encumbrance upon the Collateral. (f) Transfers and Other Liens. The Company agrees that it shall not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Collateral or (ii) create or permit to exist any Lien upon or with respect to any of the Collateral, except for the security interest under Section 3 of this Agreement. (g) Limitation on Duty of Escrow Agent in Respect of Collateral; Indemnification. (i) Beyond the exercise of reasonable care in the custody thereof, the Escrow Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Escrow Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Escrow Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Escrow Agent in good faith. (ii) The Escrow Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes gross negligence, bad faith or willful misconduct on the part of the Escrow Agent, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Company to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. Section 4. Distributions from Escrow Account. Escrow Funds (or Government Securities that are scheduled to mature or that can be liquidated on or before the date of the applicable Scheduled Interest Payment) on deposit in the Escrow Account (including, without limitation, any interest or investment income on or other proceeds of the Escrow Funds) shall be withdrawn by the Escrow Agent and transferred only to persons designated herein in accordance with this Section 4: (a) Event of Default. (i) For so long as an Event of Default has occurred and is continuing under the Indenture, no amounts shall be disbursed from the Escrow Account, except as provided in clause (ii) below. (ii) If (A) any Event of Default has occurred and is continuing under Section 8.01 (Events of Default) of the Indenture, (B) any other Event of Default has occurred and is continuing that   5 results in the acceleration of the payment of principal, interest, premium, if any, pursuant to the terms of the Indenture, or (C) any material breach or violation of any representation, warranty or agreement contained in this Agreement has occurred: (I) The Trustee may, without notice to the Company except as required by applicable law and at any time or from time to time, direct the Escrow Agent to liquidate all Collateral and transfer all proceeds thereof to the Paying Agent to apply such funds in accordance with Section 8.02 (Acceleration) of the Indenture. (II) The Trustee (and/or the Escrow Agent at its direction and on its behalf) may also, in addition to the other rights and remedies provided for herein, exercise in respect of the Collateral all the rights and remedies of a secured party upon default under the New York UCC, and may also, without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sales, at any of the Trustee’s or the Escrow Agent’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Trustee may deem commercially reasonable. The Company agrees that, to the extent notice of sale shall be required by law, at least twenty (20) days’ notice to the Company of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Trustee and the Escrow Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Trustee and/or the Escrow Agent on its behalf may adjourn any fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. (III) Any cash held by the Escrow Agent as Collateral and all net cash proceeds received by the Trustee or the Escrow Agent in respect of any sale or liquidation of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Trustee, be held by the Trustee or the Escrow Agent as collateral for, and then or at any time thereafter be applied (after payment of any costs and expenses incurred in connection with any sale, liquidation or disposition of or realization upon the Collateral and the payment of any amounts payable to the Trustee or the Escrow Agent) in whole or in part by the Trustee for the equal and ratable benefit of the Holders of the Notes against all or any part of the Secured Obligations in such order as described in Section 8.10 (Priorities) of the Indenture. (b) Scheduled Interest Payments. Pursuant to the Notes, the Company is obligated to make payments of interest on the Notes on each of October 1, 2008, April 1, 2009, October 1, 2009 and April 1, 2010 (each, a “Scheduled Interest Payment”). The Scheduled Interest Payments due on the Notes may be made, at the election of the Company, from (1) amounts held in the Escrow Account in accordance with the procedures set forth in subsection (i) below or (2) other sources of funds available to the Company, or from any combination of (1) and (2) above; provided, however, that nothing herein shall be construed as limiting the Company’s obligation to make all interest payments due on the Notes at the times and in the amounts required by the Notes, which obligation shall be absolute and unconditional. (i) Payment of Interest. Unless the Company elects to cause all or a portion of a Scheduled Interest Payment to be made from a source of funds other than the Escrow Account (“Company Funds”) by delivering written notice of such election to the Escrow Agent not later   6 than five (5) Business Days prior to the date of the applicable Scheduled Interest Payment (the “Election Deadline Date”), the Escrow Agent shall transfer from the Escrow Account to the Paying Agent funds (or Government Securities that are scheduled to mature or that can be liquidated on or before the date of the applicable Scheduled Interest Payment) necessary to provide for payment in full (or, if the Company intends, as set forth in such written notice, to make a portion of such interest payment with funds or Government Securities in the Escrow Account and the remainder of such interest payment with Company Funds, such portion) of the next Scheduled Interest Payment on the Notes. Unless the Escrow Agent has received the foregoing written notice from the Company on or prior to the Election Deadline Date, the Escrow Agent shall, at or prior to 1:00 p.m., New York City time, on the day that is no later than one (1) Business Day prior to the date of the applicable Scheduled Interest Payment, transfer such funds (or such Government Securities, as applicable) to the Paying Agent as set forth in paragraph (e)(ii) hereof, and shall notify the Company in writing that it has made such transfer to the Paying Agent. If the Company does not intend to utilize the funds (or Government Securities) in the Escrow Account to make any such Scheduled Interest Payment in full, and has delivered a written notice to the Escrow Agent to such effect as described above, then the Company shall make the Scheduled Interest Payment (or such portion thereof) from Company Funds. (ii) Release of Funds to the Company Due to Direct Payment of Interest by the Company. If the Company makes any Scheduled Interest Payment or a portion of any Scheduled Interest Payment from Company Funds, the Company may, after payment in full of such Scheduled Interest Payment and upon at least five (5) Business Days prior notice, direct the Escrow Agent, so long as no Event of Default has occurred and is continuing, to release to the Company (or at the direction of the Company, to release to a designated third party) an amount of funds or Government Securities from the Escrow Account, the sum of the cumulative interest payments on and aggregate principal amount of which is less than or equal to the amount of Company Funds so expended in making the Scheduled Interest Payment. Upon receipt of such notice, the Escrow Agent shall pay over or transfer to the Company the requested amount. (c) Investment Income. Subject to the provisions of Sections 3 and 4(a) above, all interest or investment income earned on amounts on deposit in the Escrow Account is the personal property of the Company and is subject to this Agreement. Any interest or investment income earned on amounts on deposit in the Escrow Account shall remain in the Escrow Account until withdrawn by the Escrow Agent and transferred to a person designated herein in accordance with this Section 4. (d) Excess Escrow Funds. If, in the course of funding the Escrow Account pursuant to Section 2(a) hereof, the Company either elects or is required to deposit in the Escrow Account funds in an amount greater than that which is required to fund the payment of the Scheduled Interest Payments (in order to permit the Escrow Agent to purchase an amount of Government Securities equal to or greater than that which is required to fund the payment of the Scheduled Interest Payments or otherwise) (any such excess amounts being hereinafter referred to as “Excess Escrow Funds”), the Company may, upon at least five (5) Business Days prior written notice, direct the Escrow Agent, so long as no Event of Default has occurred and is continuing, to release to the Company (or at the direction of the Company, to release to a designated third party) an amount of funds or Government Securities from the Escrow Account, the sum of the   7 cumulative interest payments on and aggregate principal amount of which is less than or equal to the amount of the Excess Escrow Funds. Upon receipt of such notice, the Escrow Agent shall pay over or transfer to the Company the requested amount. (e) Wire Transfer. (i) All funds distributed from the Escrow Account to the Company shall be transferred by wire transfer of immediately available funds to the following account:   UBS Financial Services ABA No.: Account No.: F/C: (ii) All funds (or Government Securities that are scheduled to mature or that can be liquidated on or before the date of the applicable Scheduled Interest Payment) distributed from the Escrow Account to the Paying Agent for payment on the Notes shall be transferred by an account-to-account transfer of immediately available funds to the following account:   The Bank of New York ABA No.: Account No.: Attention: Re: (f) Written Instructions; Certificates. The Company shall, upon request by the Escrow Agent, execute and deliver to the Escrow Agent such additional written instructions and certificates hereunder as may be reasonably required by the Escrow Agent to give effect to this Section 4. Section 5. Termination of Security Interest. Upon payment in full of the Scheduled Interest Payments, the security interest evidenced by this Agreement in any Collateral remaining in the Escrow Account shall automatically terminate and be of no further force and effect. Furthermore, upon the release of any Collateral from the Escrow Account in accordance with the terms of this Agreement, whether upon release of such Collateral to Holders of Notes as payment of interest on the Notes, to the Company pursuant to Sections 4(b)(ii) or 4(c) or otherwise, the security interest evidenced by this Agreement in such Collateral so released shall automatically terminate and be of no further force and effect. The Trustee and the Escrow Agent shall, upon request by the Company, execute and deliver to the Company such additional written instructions and certificates hereunder as may be reasonably required by the Company and acceptable to the Escrow Agent and the Trustee to give effect to this Section 5, including without limitation changing the name on the Escrow Account to that of the Company or its designee or transferring the property in the Escrow Account to another account at Escrow Agent in the name of the Company or its designee. Section 6. Attorneys-in-Fact. The Company hereby irrevocably appoints each of the Trustee and the Escrow Agent as the Company’s attorney-in-fact, coupled with an interest, with   8 full authority in the place and stead of the Company and in the name of the Company or otherwise, from time to time in the Trustee’s or the Escrow Agent’s discretion to take any action and to execute any instrument that is necessary or advisable or that the Trustee or the Escrow Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, endorse and collect all instruments made payable to the Company representing any interest payment, dividend or other distribution in respect of the Collateral or any part thereof and to give full discharge for the same, and the expenses of the Trustee and the Escrow Agent incurred in connection therewith shall be payable by the Company. Section 7. Trustee or Escrow Agent May Perform. Without limiting the authority granted under Section 6 hereof, if the Company fails to perform any agreement contained herein, the Trustee or the Escrow Agent may, but shall not be obligated to, itself perform, or cause performance of, such agreement, and the expenses of the Trustee or the Escrow Agent incurred in connection therewith shall be payable by the Company and shall be secured by the Collateral. Section 8. Representations, Warranties and Agreements. (a) The Company represents, warrants and agrees that: (i) The execution, delivery and performance by the Company of this Agreement is within its corporate power, has been duly authorized by all necessary corporate action of the Company, and does not contravene, or constitute a default under, any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Company (except as would not, individually or in the aggregate, have a Material Adverse Effect (as defined in the Purchase Agreement)), or of the certificate of incorporation or bylaws of the Company or result in the creation or imposition of any Lien on any assets of the Company other than the Lien contemplated hereby. (ii) The Company has full corporate power and authority to enter into this Agreement and has the right to vote, pledge and grant a security interest in the Collateral as provided by this Agreement. (iii) This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable (iv) Upon the execution and delivery of this Agreement by the parties hereto and the delivery to the Escrow Agent of the Collateral, the pledge of the Collateral pursuant to this Agreement creates a valid and perfected first priority security interest in the Collateral, securing the payment of the Secured Obligations for the benefit of the Trustee, the Escrow Agent and the Holders of the Notes, enforceable as such against all creditors of the Company and any persons purporting to purchase any of the Collateral from each of them. (v) No consent of any other person and no consent, authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required either (i) for the pledge by the Company of the Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by each of them or (ii) for the exercise by the Trustee or the Escrow Agent of the remedies in respect of the Collateral   9 (vi) No litigation, investigation or proceeding of or before any arbitrator or governmental authority is pending or, to the best knowledge of the Company, threatened by or against the Company or against any of its properties or revenues with respect to this Agreement or any of the transactions contemplated hereby. (vii) The pledge of the Collateral pursuant to this Agreement is not prohibited by any applicable law or governmental regulation, release, interpretation or opinion of the Board of Governors of the Federal Reserve System or other regulatory agency (including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System). (viii) All information set forth herein relating to the Collateral is accurate and complete in all material respects. (b) The Escrow Agent represents, warrants and agrees that: (i) The Escrow Agent is a “bank” within the meaning of Section 9-102(a)(8) of the New York UCC. (ii) The Escrow Agent is a “securities intermediary” within the meaning of Section 8-102(a)(14) of the New York UCC. (c) The Trustee represents, warrants and agrees that it is an “entitlement holder” within the meaning of Section 8-102(a)(7) of the New York UCC. Section 9. Fees and Expenses of Escrow Agent. (a) The Company agrees to pay the Escrow Agent its agreed-upon compensation for its services as Escrow Agent hereunder promptly upon request therefor, and to reimburse the Escrow Agent for all reasonable and documented expenses of or disbursements incurred by the Escrow Agent in the performance of its duties hereunder, including the reasonable fees, expenses and disbursements of legal counsel to the Escrow Agent. (b) The Escrow Agent shall have a lien upon any investment income on deposit in the Escrow Account solely for any costs, expenses and fees that may arise hereunder and may retain that portion of the investment income in the Escrow Account equal to such unpaid amounts, until all such costs, expenses and fees have been paid. Section 10. Rights, Duties and Immunities of Escrow Agent. Acceptance by the Escrow Agent of its duties under this Agreement is subject to the following terms and conditions, which all parties to this Agreement hereby agree shall govern and control the rights, duties and immunities of the Escrow Agent: (a) The duties and obligations of the Escrow Agent shall be determined solely by the express provisions of this Agreement and the Escrow Agent shall not be liable except for the performance of such duties and obligations as are specifically set out in this Agreement. The   10 Escrow Agent shall not be required to inquire as to the performance or observation of any obligation, term or condition under any agreement or arrangement between the Company and the Trustee. The Escrow Agent is not a party to, and is not bound by, any agreement or other document out of which this Agreement may arise. The Escrow Agent shall be under no liability to any party hereto by reason of any failure on the part of any party hereto (other than the Escrow Agent) or any maker, guarantor, endorser or other signatory of any document or any other person to perform such person’s obligations under any such document. The Escrow Agent shall not be bound by any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall give its prior written consent thereto. This Agreement shall not be deemed to create a fiduciary relationship between the Escrow Agent and any of the other parties hereto under state or federal law. (b) The Escrow Agent shall not be responsible in any manner for the validity or sufficiency of this Agreement or of any property delivered hereunder, or for the value or collectibility of any note, check or other instrument, if any, so delivered, or for any representations made or obligations assumed by any party other than the Escrow Agent. Nothing herein contained shall be deemed to obligate the Escrow Agent to deliver any cash, instruments, documents or any other property referred to herein, unless the same shall have first been received by the Escrow Agent pursuant to this Agreement. (c) The Company shall reimburse and indemnify the Escrow Agent for, and hold it harmless against, any loss, liability or expense, including but not limited to reasonable legal counsel fees, incurred without bad faith, gross negligence or willful misconduct on the part of the Escrow Agent, arising out of or in conjunction with its acceptance of, or the performance of its duties and obligations under, this Agreement, as well as the costs and expenses of defending against any claim or liability arising out of or relating to this Agreement. (d) The Escrow Agent shall be fully protected in acting on and relying upon any written notice, direction, request, waiver, consent, receipt or other paper or document which the Escrow Agent in good faith believes to have been signed and presented by the Company. (e) The Escrow Agent shall not be liable for any error of judgment, or for any act done or step taken or omitted by it in good faith or for any mistake in act or law, or for anything which it may do or refrain from doing in connection herewith, except its own gross negligence or willful misconduct. (f) The Escrow Agent may seek the advice of legal counsel in the event of any dispute or question as to the construction of any of the provisions of this Agreement or its duties hereunder, and except for its own bad faith, gross negligence or willful misconduct it shall incur no liability and shall be fully protected in respect of any action taken, omitted or suffered by it in good faith in accordance with the advice or opinion of such counsel. (g) The parties hereto agree that if the Escrow Agent is notified by the Trustee, the Company or the Holders of the Notes of any dispute with respect to the payment, ownership or right of possession of the Escrow Account, the Escrow Agent is authorized and directed to retain   11 in its possession, without liability to anyone, except for its bad faith, willful misconduct or gross negligence, all or any part of the Escrow Account until such dispute shall have been settled either by mutual agreement by the parties concerned or by the final order, decree or judgment of a court or other tribunal of competent jurisdiction in the United States of America, and a notice executed by the parties to the dispute or their authorized representatives shall have been delivered to the Escrow Agent setting forth the resolution of the dispute. The Escrow Agent shall be under no duty whatsoever to institute, defend or partake in such proceedings. (h) The agreements set forth in this Section 10 shall survive the resignation or removal of the Escrow Agent, the termination of this Agreement and the payment of all amounts hereunder. (i) No provision of this Indenture shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. (j) In no event shall the Escrow Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. Section 11. Resignation or Removal of Escrow Agent. (a) The Escrow Agent shall have the right to resign upon 30 days’ prior written notice to the Company and the Trustee. The Company shall have the right to remove the Escrow Agent upon 30 days’ prior written notice to the Escrow Agent and the Trustee. In the event of such resignation or removal, the Company shall appoint a successor escrow agent hereunder by delivering to the Escrow Agent a written notice of such appointment. Upon receipt of such notice, the Escrow Agent shall upon payment of its charges hereunder deliver to the designated successor escrow agent all money and other property held hereunder and shall thereupon be released and discharged from any and all further responsibilities whatsoever under this Agreement; provided, however, that the Escrow Agent shall not be deprived of its compensation earned prior to such time. (b) If no successor escrow agent shall have been designated by the date specified in the Escrow Agent’s notice, all obligations of the Escrow Agent hereunder shall nevertheless cease and terminate. The Escrow Agent’s sole responsibility thereafter shall be to keep safely all property then held by it and to deliver the same to a person designated by the other parties hereto or in accordance with the direction of a final order or judgment of a court of competent jurisdiction. Section 12. Miscellaneous. (a) Waiver. No waiver of any provision of this Agreement nor consent to any departure by any party therefrom shall in any event be effective unless the same shall be in writing and signed by each of the non-breaching parties and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.   12 (b) Severability. If, for any reason whatsoever, any one or more of the provisions of this Agreement shall be held or deemed to be inoperative, unenforceable or invalid in a particular case or in all cases, such circumstances shall not have the effect of rendering any of the other provisions of this Agreement inoperative, unenforceable or invalid, and the inoperative, unenforceable or invalid provision shall be construed as if it were written so as to effectuate, to the maximum extent possible, the parties’ intent. (c) Binding Effect. This Agreement shall inure to and be binding upon the parties and their respective successors and permitted assigns; provided, however, that the Company may not assign its rights or obligations hereunder without the express prior written consent of the Trustee. (d) Choice of Law. The existence, validity, construction, operation and effect of any and all terms and provisions of this Agreement shall be determined in accordance with and governed by the internal laws of the State of New York including, without limitation the New York UCC, without giving effect to the conflicts of law principles of such State except Section 5-1401 of the New York General Obligations Law. (e) Entire Agreement. This Agreement, the Purchase Agreement, the Notes and the Indenture contain the entire agreement among the parties with respect to the subject matter hereof and supersede any and all prior agreements, understandings and commitments with respect thereto, whether oral or written; provided, however, that this Agreement is executed and accepted by the Trustee and the Escrow Agent subject to all terms and conditions of its acceptance of the trust under the Indenture (including without limitation Section 9.07 thereof), as fully as if all of the said terms and conditions were set forth at length herein. (f) Amendments. This Agreement may be amended only by a writing signed by duly authorized representatives of all parties. The Trustee and the Escrow Agent may execute an amendment to this Agreement only if the requisite consent of each of the Holders of the Notes required by Article 11 (Amendments; Supplements and Waivers) of the Indenture has been obtained, unless no such consent is required by such Section 11.01 (Without Consent of Holders) of the Indenture. (g) Notices. All notices, requests, instructions, orders and other communications required or permitted to be given or made under this Agreement to any party hereto shall be delivered in writing by hand delivery or overnight delivery, or shall be delivered by facsimile or telephonically with machine confirmation of full delivery not more than 24 hours following such facsimile or telephonic notice. A notice given in accordance with the preceding sentence shall be deemed to have been duly given upon the sending thereof. Notices should be addressed as follows: To the Company: Raser Technologies, Inc. 5152 North Edgewood Drive Suite 375 Provo, Utah 84604 Attention: General Counsel Facsimile number: (801) 374-3314 Telephone number: (801) 765-1200   13 Stoel Rives LLP 201 South Main Street Suite 1100 Salt Lake City, Utah 84111 Attention: Reed W. Topham Facsimile number: (801) 578-6999 Telephone number: (801) 328-3131 To the Trustee or the Escrow Agent: 101 Barclay Street, Fl. 8W New York, NY 10286 Attention: Mary K. LaGumina Facsimile number: (212) 815-5707 Telephone number: (212) 815-4812 or at such other address, facsimile number or phone number as the specified entity most recently may have designated in writing in accordance with this paragraph to the other parties. (h) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement. (i) Interpretation. The headings of the sections contained in this Agreement are solely for convenience or reference and shall not affect the meaning or (j) Waiver of Jury Trial. EACH OF THE COMPANY AND THE ESCROW AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY. (k) Force Majeure. In no event shall the Escrow Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Escrow Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances. [Signature pages follow]   14 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day first written above.   RASER TECHNOLOGIES, INC. By:   /s/ MARTIN F. PETERSEN Name:   Martin F. Petersen Title:   Chief Financial Officer THE BANK OF NEW YORK, as Escrow Agent By:   /s/ MARY LAGUMINA Name:   Mary LaGumina Title:   Vice President Acknowledged By:   THE BANK OF NEW YORK, as Trustee By:     15 EXHIBIT A DESCRIPTION OF GOVERNMENT SECURITIES INCLUDED IN INITIAL ESCROW FUNDS   CUSIP    Maturity    Principal Amount    Cost    Coupon Date    Coupon Amount     912820NQ6    09/30/08    $ 2,056,000.00    $ 2,042,718.24    10/01/08    $ 2,055,555.56     912820PH4    03/31/09    $ 2,000,000.00    $ 1,967,720.00    04/01/09    $ 2,000,000.00     912820QA8    09/30/09    $ 2,000,000.00    $ 1,951,280.00    10/01/09    $ 2,000,000.00     912820LL9    03/15/10    $ 2,000,000.00    $ 1,933,080.00    04/01/10    $ 2,000,000.00                            Total       $ 8,056,000.00    $ 7,894,798.24       $ 8,055,555.56   A-1

  Exhibit 10(a) LINDSAY MANUFACTURING CO. 2006 LONG-TERM INCENTIVE PLAN (Effective February 6, 2006)      1. Purpose. The purpose of Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (the “Plan”) is to attract and retain employees and directors for Lindsay Manufacturing Co. and its subsidiaries and to provide such persons with incentives and rewards for superior performance.      2. Definitions. As used in this Plan, the following terms shall be defined as set forth below:      2.1 “Award” means any Options, Stock Appreciation Rights, Restricted Shares, Deferred Shares (Restricted Stock Units), Performance Shares or Performance Units granted under the Plan.      2.2 “Award Agreement” means an agreement, certificate, resolution or other form of writing or other evidence approved by the Committee which sets forth the terms and conditions of an Award. An Award Agreement may be in an electronic medium, may be limited to a notation on the Company’s books and records and, if approved by the Committee, need not be signed by a representative of the Company or a Participant.      2.3 “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of a Freestanding Stock Appreciation Right.      2.4 “Board” means the Board of Directors of the Company.      2.5 “Code” means the Internal Revenue Code of 1986, as amended from time to time.      2.6 “Committee” means the committee of the Board described in Section 4.      2.7 “Company” means Lindsay Manufacturing Co., a Delaware corporation, or any successor corporation.      2.8 “Deferral Period” means the period of time during which Deferred Shares (Restricted Stock Units) are subject to deferral limitations under Section 8.      2.9 “Deferred Shares” or “Restricted Stock Units” means an Award pursuant to Section 8 of the right to receive Shares at the end of a specified Deferral Period.      2.10 “Employee” means any person, including an officer, employed by the Company or a Subsidiary.      2.11 “Fair Market Value” means the fair market value of the Shares as determined by the Committee from time to time. Unless otherwise determined by the Committee, the fair market value shall be the closing price for the Shares reported on a consolidated basis on the New York Stock Exchange on the relevant date or, if there were no sales on such date, the closing price on the nearest preceding date on which sales occurred.      2.12 “Freestanding Stock Appreciation Right” means a Stock Appreciation Right granted pursuant to Section 6 that is not granted in tandem with an Option or similar right.      2.13 “Grant Date” means the date specified by the Committee on which a grant of an Award shall become effective, which shall not be earlier than the date on which the Committee takes action with respect thereto. 32        2.14 “Incentive Stock Option” means any Option that is intended to qualify as an “incentive stock option” under Code Section 422 or any successor provision.      2.15 “Nonemployee Director” means a member of the Board who is not an Employee.      2.16 “Nonqualified Stock Option” means an Option that is not intended to qualify as an Incentive Stock Option.      2.17 “Option” means any option to purchase Shares granted under Section 5.      2.18 “Optionee” means the person so designated in an agreement evidencing an outstanding Option.      2.19 “Option Price” means the purchase price payable upon the exercise of an Option.      2.20 “Participant” means an Employee or Nonemployee Director who is selected by the Committee to receive benefits under this Plan, provided that only Employees shall be eligible to receive grants of Incentive Stock Options.      2.21 “Performance Objectives” means the performance objectives established pursuant to this Plan for Participants who have received Awards. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or the Subsidiary, division, department or function within the Company or Subsidiary in which the Participant is employed. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Any Performance Objectives applicable to a Qualified Performance–Based Award shall be limited to specified levels of or increases in the Company’s or Subsidiary’s return on equity, diluted earnings per share, total earnings, earnings growth, return on capital, return on assets, earnings before interest and taxes, sales, sales growth, gross margin return on investment, increase in the fair market value of the Shares, share price (including but not limited to, growth measures and total stockholder return), operating income or profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), cash flow return on investment (which equals net cash flow divided by total capital), inventory turns, financial return ratios, total return to shareholders, market share, earnings measures/ratios, economic value added (EVA), balance sheet measurements such as receivable turnover, internal rate of return, increase in net present value or expense targets, working capital measurements (such as average working capital divided by sales), customer or dealer satisfaction surveys and productivity. Any Performance Objectives may provide for adjustments to exclude the impact of any significant acquisitions or dispositions of businesses by the Company, one-time non-operating charges, or accounting changes (including the early adoption of any accounting change mandated by any governing body, organization or authority). Except in the case of a Qualified Performance–Based Award, if the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Objectives unsuitable, the Committee may modify such Performance Objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable.      2.22 “Performance Period” means a period of time established under Section 9 within which the Performance Objectives relating to Performance Shares, Performance Units, Deferred Shares (Restricted Stock Units) or Restricted Shares are to be achieved.      2.23 “Performance Share” means a bookkeeping entry that records the equivalent of one Share awarded pursuant to Section 9.      2.24 “Performance Unit” means a bookkeeping entry that records a unit equivalent to $1.00 awarded pursuant to Section 9.      2.25 “Predecessor Plan” means the Lindsay Manufacturing Co. 2001 Long-Term Incentive Plan. 33        2.26 “Qualified Performance–Based Award” means an Award or portion of an Award that is intended to satisfy the requirements for “qualified performance–based compensation” under Code Section 162(m). The Committee shall designate any Qualified Performance–Based Award as such at the time of grant.      2.27 “Restricted Shares” means Shares granted under Section 7 subject to a      2.28 “Shares” means shares of the Common Stock of the Company, $1.00 par value, or any security into which Shares may be converted by reason of any transaction or event of the type referred to in Section 11.      2.29 “Spread” means, in the case of a Freestanding Stock Appreciation Right, the amount by which the Fair Market Value on the date when any such right is exercised exceeds the Base Price specified in such right or, in the case of a Tandem Stock Appreciation Right, the amount by which the Fair Market Value on the date when any such right is exercised exceeds the Option Price specified in the related Option.      2.30 “Stock Appreciation Right” means a right granted under Section 6, including a Freestanding Stock Appreciation Right or a Tandem Stock Appreciation Right.      2.31 “Subsidiary” means a corporation or other entity in which the Company has a direct or indirect ownership or other equity interest, provided that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation (within the meaning of the Code) in which the Company owns or controls directly or indirectly more than 50 percent of the total combined voting power represented by all classes of stock issued by such corporation at the time of such grant.      2.32 “Tandem Stock Appreciation Right” means a Stock Appreciation Right granted pursuant to Section 6 that is granted in tandem with an Option or any similar right granted under any other plan of the Company.      3. Shares Available Under the Plan.      3.1 Reserved Shares. Subject to adjustments as provided in Sections 3.5 and 11, the maximum number of Shares that may be (i) issued or transferred upon the exercise of Options or Stock Appreciation Rights, (ii) awarded as Restricted Shares and released from substantial risk of forfeiture, (iii) issued or transferred in payment of Deferred Shares (Restricted Stock Units) or Performance Shares, or (iv) issued or transferred in payment of dividend equivalents paid with respect to Awards, shall not in the aggregate exceed 600,000 Shares. Such Shares may be Shares of original issuance, Shares held in Treasury, or Shares that have been reacquired by the Company.      3.2 Reduction Ratio. For purposes of Section 3.1, the number of Shares available for issuance under the Plan shall be reduced by two (2) Shares for each Share issued and transferred in settlement of an Award other than an Option and one (1) Share for each Share issued and transferred upon exercise of an Option. For purposes of Section 3.1, shares which are withheld from Awards to satisfy withholding taxes shall be treated as having been issued or transferred, and Shares which are tendered as payment of the Option Price shall not be added back as additional Shares available for issuance under the Plan.      3.3 ISO Maximum. In no event shall the number of Shares issued upon the exercise of Incentive Stock Options exceed 600,000 Shares, subject to adjustment as provided in Section 11.      3.4 Maximum Awards. No Participant may receive Awards representing more than 350,000 Shares in any rolling 36-month period, subject to adjustment as provided in Section 11. In addition, the maximum number of Performance Units that may be granted to a Participant in any rolling 36-month period is 5,000,000.      3.5 Expired, Forfeited and Unexercised Awards. If any Option granted under this Plan expires, is forfeited or becomes unexercisable for any reason without having been exercised or paid in full, the Shares subject 34   thereto which were not exercised shall be available for future Awards under the Plan. Likewise, if any stock option that was outstanding on December 1, 2005 under the Company’s Predecessor Plan or Amended and Restated 1988 and 1991 Long-Term Incentive Plans or the stock options for 350,000 shares granted to Richard W. Parod on March 8, 2000 expires, is forfeited or becomes unexercisable for any reason, the shares subject thereto which were not exercised shall be added to the number of Shares which are available for Awards under Section 3.1. If any Restricted Shares or other Awards made in Shares under this Plan that reduce the number of Shares available for future Awards using a 2 for 1 share reduction ratio under Section 3.2 are forfeited, such shares shall be restored for future Awards under this Plan on a 2 for 1 share increase basis. Likewise, if any restricted stock units granted under the Predecessor Plan are forfeited, the Shares which are forfeited shall be added to the number of shares which are available for Awards under Section 3.1 using a 2 for 1 share increase basis.      4. Plan Administration.      4.1 Board Committee Administration. This Plan shall be administered by the Compensation Committee appointed by the Board from among its members, provided that the full Board may at any time act as the Committee. The interpretation and construction by the Committee of any provision of this Plan or of any Award Agreement and any determination by the Committee pursuant to any provision of this Plan or any such agreement, notification or document shall be final and conclusive. No member of the Committee shall be liable to any person for any such action taken or determination made in good faith. It is intended that the Compensation Committee will consist solely of persons who, at the time of their appointment, each qualified as a “Non-Employee Director” under Rule 16b-3(b)(3)(i) promulgated under the Securities Exchange Act of 1934 and, to the extent that relief from the limitation of Code Section 162(m) is sought, as an “Outside Director” under Section 1.162-27(e)(3)(i) of the Treasury Regulations issued under Code Section 162(m).      4.2 Committee Delegation. The Committee may delegate to one or more officers of the Company the authority to grant Awards to Participants who arc not directors or executive officers of the Company, provided that the Committee shall have fixed the total number of Shares or Performance Units subject to such grants. Any such delegation shall be subject to the limitations of Section 157(c) of the Delaware General Corporation Law.      4.3 Awards to Non-Employee Directors. Notwithstanding any other provision of this Plan to the contrary, all Awards to Non-Employee Directors must be authorized by the full Board pursuant to recommendations made by the Compensation Committee.      5. Options. The Committee may from time to time authorize grants to Participants of Options to purchase Shares upon such terms and conditions as the Committee may determine in accordance with the following provisions:      5.1 Number of Shares. Each grant shall specify the number of Shares to which it pertains.      5.2 Option Price. Each grant shall specify an Option Price per Share, which shall be equal to or greater than the Fair Market Value per Share on the Grant Date.      5.3 Consideration. Each grant shall specify the form of consideration to be paid in satisfaction of the Option Price and the manner of payment of such consideration, which may include (i) cash in the form of currency or check or other cash equivalent acceptable to the Company, (ii) nonforfeitable, unrestricted Shares owned by the Optionee which have a value at the time of exercise that is equal to the Option Price, (iii) any other legal consideration that the Committee may deem appropriate, including without limitation any form of consideration authorized under Section 5.4, on such basis as the Committee may determine in accordance with this Plan, or (iv) any combination of the foregoing.      5.4 Payment of Option Price in Shares. On or after the Grant Date of any Option other than an Incentive Stock Option, the Committee may determine that payment of the Option Price may also be made in whole or in part in the form of Restricted Shares or other Shares that are subject to risk of forfeiture or restrictions on transfer. Unless otherwise determined by the Committee, whenever any Option Price is paid in whole or in part by means of any of the forms of consideration specified in this Section 5.4, the Shares received by the Optionee upon the exercise of the Options shall be subject to the same risks of forfeiture or restrictions on transfer as those that applied to the consideration surrendered by the Optionee, provided that such risks of forfeiture and restrictions 35   on transfer shall apply only to the same number of Shares received by the Optionee as applied to the forfeitable or restricted Shares surrendered by the Optionee. Option Price and any applicable statutory minimum withholding taxes may be paid from the proceeds of sale through a bank or broker on the date of exercise of some or all of the Shares to which the exercise relates.      5.6 Performance–Based Options. Any grant of an Option may specify Performance Objectives that must be achieved as a condition to exercise of the Option.      5.7 Vesting. Each Option grant may specify a period of continuous employment of the Optionee by the Company or any Subsidiary (or, in the case of a Nonemployee Director, service on the Board) that is necessary before the Options or installments thereof shall become exercisable, and any grant may provide for the earlier exercise of such rights in the event of a change in control of the Company or other similar transaction or event.      5.8 ISO Dollar Limitation. Options granted under this Plan may be Incentive Stock Options, Nonqualified Stock Options or a combination of the foregoing, provided that only Nonqualified Stock Options may be granted to Nonemployee Directors. Each grant shall specify whether (or the extent to which) the Option is an Incentive Stock Option or a Nonqualified Stock Option. Notwithstanding any such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by an Optionee during any calendar year (under all plans of the Company) exceeds $100,000, such Options shall be treated as Nonqualified Stock Options.      5.9 Exercise Period. No Option granted under this Plan may be exercised more than ten years from the Grant Date.      5.10 Award Agreement. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with this Plan.      6. Stock Appreciation Rights. The Committee may also authorize grants to Participants of Stock Appreciation Rights. A Stock Appreciation Right is the right of the Participant to receive from the Company an amount, which shall be determined by the Committee and shall be expressed as a percentage (not exceeding 100 percent) of the Spread at the time of the exercise of such right. Any grant of Stock Appreciation Rights under this Plan shall be upon such terms and conditions as the Committee may determine in accordance with the following provisions:      6.1 Payment in Cash or Shares. Any grant may specify that the amount payable upon the exercise of a Stock Appreciation Right will be paid by the Company in cash, Shares or any combination thereof or may grant to the Participant or reserve to the Committee the right to elect among those alternatives.      6.2 Maximum SAR Payment. Any grant may specify that the amount payable upon the exercise of a Stock Appreciation Right shall not exceed a maximum specified by the Committee on the Grant Date.      6.3 Exercise Period. Any grant may specify (i) a waiting period or periods before Stock Appreciation Rights shall become exercisable and (ii) permissible dates or periods on or during which Stock Appreciation Rights shall be exercisable.      6.4 Change in Control. Any grant may specify that a Stock Appreciation Right may be exercised only in the event of a change in control of the Company or other similar transaction or event.      6.5 Dividend Equivalents. On or after the Grant Date of any Stock Appreciation Rights, the Committee may provide for the payment to the Participant of dividend equivalents thereon in cash or Shares on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company. 36        6.6 Award Agreement. Each grant shall be evidenced by an Award Agreement which shall describe the subject Stock Appreciation Rights, identify any related Options, state that the Stock Appreciation Rights are subject to all of the terms and conditions of this Plan and contain such other terms and provisions as the Committee may determine consistent with this Plan.      6.7 Tandem Stock Appreciation Rights. Each grant of a Tandem Stock Appreciation Right shall provide that such Tandem Stock Appreciation Right may be exercised only (i) at a time when the related Option (or any similar right granted under any other plan of the Company) is also exercisable and the Spread is positive and (ii) by surrender of the related Option (or such other right) for cancellation.      6.8 Exercise Period. No Stock Appreciation Right granted under this Plan may be exercised more than ten years from the Grant Date.      6.9 Freestanding Stock Appreciation Rights. Regarding Freestanding Stock Appreciation Rights only:      (a) Each grant shall specify in respect of each Freestanding Stock Appreciation Right a Base Price per Share, which shall be equal to or greater than the Fair Market Value on the Grant Date;      (b) Successive grants may be made to the same Participant regardless of whether any Freestanding Stock Appreciation Rights previously granted to such Participant remain unexercised; and      (c) Each grant shall specify the period or periods of continuous employment of the Participant by the Company or any Subsidiary (or, in the case of a Nonemployee Director, service on the Board) that are necessary before the Freestanding Stock Appreciation Rights or installments thereof shall become exercisable, and any grant may provide for the earlier exercise of such rights in the event of a change in control of the Company or other similar transaction or event.      7. Restricted Shares. The Committee may also authorize grants to Participants of Restricted Shares upon such terms and conditions as the      7.1 Transfer of Shares. Each grant shall constitute an immediate transfer of the ownership of Shares to the Participant in consideration of the performance of services, subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referred to.      7.2 Consideration. Each grant may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Fair Market Value on the Grant Date.      7.3 Substantial Risk of Forfeiture. Each grant shall provide that the Restricted Shares covered thereby shall be subject to a “substantial risk of forfeiture” within the meaning of Code Section 83 for a period to be determined by the Committee on the Grant Date, and any grant or sale may provide for the earlier termination of such risk of forfeiture in the event of a change in      7.4 Dividend, Voting and Other Ownership Rights. Unless otherwise determined by the Committee, an award of Restricted Shares shall entitle the Participant to dividend, voting and other ownership rights during the period for which such substantial risk of forfeiture is to continue.      7.5 Restrictions on Transfer. Each grant shall provide that, during the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Shares shall be prohibited or restricted in the manner and to the extent prescribed by the Committee on the Grant Date. Such restrictions may include, without limitation, rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Shares to a continuing substantial risk of forfeiture in the hands of any transferee. 37        7.6 Performance–Based Restricted Shares. Any grant or the vesting thereof may be further conditioned upon the attainment of Performance Objectives established by the Committee in accordance with the applicable provisions of Section 9 regarding Performance Shares and Performance Units.      7.7 Dividends. Any grant may require that any or all dividends or other distributions paid on the Restricted Shares during the period of such restrictions be automatically sequestered and paid on a deferred basis when the restrictions lapse or reinvested on an immediate or deferred basis in additional Shares, which may be subject to the same restrictions as the underlying Award or such other restrictions as the Committee may determine.      7.8 Award Agreements. Each grant shall be evidenced by an Award Agreement with this Plan. Unless otherwise directed by the Committee, all certificates representing Restricted Shares, together with a stock power that shall be endorsed in blank by the Participant with respect to such Shares, shall be held in custody by the Company until all restrictions thereon lapse.      8. Deferred Shares (Restricted Stock Units). The Committee may authorize grants of Deferred Shares (Restricted Stock Units) to Participants upon such terms and conditions as the Committee may determine in accordance with the following provisions:      8.1 Deferred Compensation. Each grant shall constitute the agreement by the Company to issue or transfer Shares to the Participant in the future in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the Committee may specify.      8.2 Consideration. Each grant may be made without additional consideration      8.3 Deferral Period. Each grant shall provide that the Deferred Shares (Restricted Stock Units) covered thereby shall be subject to a Deferral Period, which shall be fixed by the Committee on the Grant Date, and any grant or sale may provide for the earlier termination of such period in the event of a change in control of the Company or other similar transaction or event.      8.4 Dividend Equivalents and Other Ownership Rights. During the Deferral Period, the Participant shall not have any right to transfer any rights under the subject Award, shall not have any rights of ownership in the Deferred Shares and shall not have any right to vote such shares, but the Committee may on or after the Grant Date authorize the payment of dividend equivalents on such shares in cash or additional Shares on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company.      8.5 Performance Objectives. Any grant or the vesting thereof may be further conditioned upon the attainment of Performance Objectives established by the Committee in accordance with the applicable provisions of Section 9 regarding Performance Shares and Performance Units.      8.6 Award Agreement. Each grant shall be evidenced by an Award Agreement with this Plan.      9. Performance Shares and Performance Units. The Committee may also authorize grants of Performance Shares and Performance Units, which shall become payable to the Participant upon the achievement of specified Performance Objectives, upon such terms and conditions as the Committee may determine in accordance with the following provisions:      9.1 Number of Performance Shares or Units. Each grant shall specify the number of Performance Shares or Performance Units to which it pertains, which may be subject to adjustment to reflect changes in compensation or other factors. 38        9.2 Performance Period. The Performance Period with respect to each Performance Share or Performance Unit shall be determined by the Committee and set forth in the Award Agreement and may be subject to earlier termination in the event of a change in control of the Company or other similar transaction or event.      9.3 Performance Objectives. Each grant shall specify the Performance Objectives that are to be achieved by the Participant.      9.4 Threshold Performance Objectives. Each grant may specify in respect of the specified Performance Objectives a minimum acceptable level of achievement below which no payment will be made and may set forth a formula for determining the amount of any payment to be made if performance is at or above such minimum acceptable level but falls short of the maximum achievement of the specified Performance Objectives.      9.5 Payment of Performance Shares and Units. Each grant shall specify the time and manner of payment of Performance Shares or Performance Units that shall have been earned, and any grant may specify that any such amount will be paid by the Company in cash, Shares or any combination thereof or may grant to the alternatives.      9.6 Maximum Payment. Any grant of Performance Shares may specify that the amount payable with respect thereto may not exceed a maximum specified by the Committee on the Grant Date. Any grant of Performance Units may specify that the amount payable, or the number of Shares issued, with respect thereto may not exceed maximums specified by the Committee on the Grant Date.      9.7 Dividend Equivalents. Any grant of Performance Shares may provide for the payment to the Participant of dividend equivalents thereon in cash or additional Shares on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company.      9.8 Adjustment of Performance Objectives. If provided in the terms of the grant, the Committee may adjust Performance Objectives and the related minimum acceptable level of achievement if, in the sole judgment of the Committee, events or transactions have occurred after the Grant Date that are unrelated to the performance of the Participant and result in distortion of the Performance Objectives or the related minimum acceptable level of achievement.      9.9 Award Agreement. Each grant shall be evidenced by an Award Agreement which shall state that the Performance Shares or Performance Units are subject to all of the terms and conditions of this Plan and such other terms and provisions as the Committee may determine consistent with this Plan.      10. Transferability.      10.1 Transfer Restrictions. Except as provided in Sections 10.2 and 10.4, no Award granted under this Plan shall be transferable by a Participant other than upon death by will or the laws of descent and distribution or designation of a beneficiary in a form acceptable to the Committee, and Options and Stock Appreciation Rights shall be exercisable during a Participant’s lifetime only by the Participant or, in the event of the Participant’s legal incapacity, by his guardian or legal representative acting in a fiduciary capacity on behalf of the Participant under state law. Any attempt to transfer an Award in violation of this Plan shall render such Award null and void.      10.2 Limited Transfer Rights. The Committee may expressly provide in an Award Agreement (or an amendment to an Award Agreement) that a Participant may transfer such Award (other than an Incentive Stock Option), in whole or in part, to a spouse or lineal descendant (a “Family Member”), a trust for the exclusive benefit of Family Members, a partnership or other entity in which all the beneficial owners are Family Members, or any other entity affiliated with the Participant that may be approved by the Committee. Subsequent transfers of Awards shall be prohibited except in accordance with this Section 10.2. All terms and conditions of the Award, including provisions relating to the termination of the Participant’s employment or service with the Company or a Subsidiary, shall continue to apply following a transfer made in accordance with this Section 10.2. 39        10.3 Restrictions on Transfer. Any Award made under this Plan may provide that all or any part of the Shares that are (i) to be issued or transferred by the Company upon the exercise of Options or Stock Appreciation Rights, upon the termination of the Deferral Period applicable to Deferred Shares (Restricted Stock Units) or upon payment under any grant of Performance Shares or Performance Units, or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 7, shall be subject to further restrictions upon transfer.      10.4 Domestic Relations Orders. Notwithstanding the foregoing provisions of this Section 10, any Award made under this Plan may be transferred as necessary to fulfill any domestic relations order as defined in Code Section 414(p)(1)(B).      10.5 Adjustments. The Committee may make or provide for such adjustments in the (a) number of Shares covered by outstanding Options, Stock Appreciation Rights, Deferred Shares (Restricted Stock Units), Restricted Shares and Performance Shares granted hereunder, (b) prices per share applicable to such Options and Stock Appreciation Rights, and (c) kind of shares covered thereby (including shares of another issuer), as the Committee in its sole discretion may in good faith determine to be equitably required in order to prevent dilution or enlargement of the rights of Participants that otherwise would result from (x) any stock dividend, stock split, combination or exchange of Shares, recapitalization or other change in the capital structure of the Company, (y) any merger, consolidation, spin–off, spin–out, split–off, split–up, reorganization, partial or complete liquidation or other distribution of assets (other than a normal cash dividend), issuance of rights or warrants to purchase securities or (z) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event, the Committee may provide in substitution for any or all outstanding Awards under this Plan such alternative consideration as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the cancellation or surrender of all Awards so replaced. The Committee may also make or provide for such adjustments in each of the limitations specified in Section 3 as the Committee in its sole discretion may in good faith determine to be appropriate in order to reflect any transaction or event described in this Section 11.      10.6 Change in Control. The Committee shall also be authorized to determine and specify in any Award Agreement provisions which shall apply upon a change in control of the Company and for such purposes to define a change in control of the Company. Unless otherwise defined in an Award Agreement, a “Change in Control” of the Company for purposes of Awards made under this Plan shall mean any of the following events: (a) a dissolution or liquidation of the Company, (b) a sale of substantially all of the assets of the Company, (c) a merger or combination involving the Company after which the owners of Common Stock of the Company immediately prior to the merger or combination own less than 50% of the outstanding shares of common stock of the surviving corporation, or (d) the acquisition of more than 50% of the outstanding shares of Common Stock of the Company, whether by tender offer or otherwise, by any “person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934) other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company. The decision of the Committee as to whether a Change in Control has occurred shall be conclusive and binding.      10.7 Cash-Out. In connection with any change in control, the Committee, without the consent of Participants, may determine that (i) any or all outstanding Options or Stock Appreciation Rights shall be automatically exercised and cashed out in exchange for a cash payment for such Options and Stock Appreciation Rights which may not exceed the Spread between the Option Price or Base Price and Fair Market Value on the date of exercise, and (ii) any or all other outstanding Awards shall be cashed out in exchange for such consideration as the Committee may in good faith determine to be equitable under the circumstances.      11. Fractional Shares. The Company shall not be required to issue any fractional Shares pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement thereof in cash.      12. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, it shall be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of all such taxes required to be withheld. At the discretion of the Committee, such arrangements may include relinquishment of a portion of such benefit. The Fair Market Value of any Shares 40   withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory tax withholding rates.      13. Certain Terminations of Employment, Hardship and Approved Leaves of Absence. Notwithstanding any other provision of this Plan to the contrary, in the event of termination of employment by reason of death, disability, normal retirement, early retirement with the consent of the Company or leave of absence approved by the Company, or in the event of hardship or other special circumstances, of a Participant who holds an Option or Stock Appreciation Right that is not immediately and fully exercisable, any Restricted Shares as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, any Deferred Shares (Restricted Stock Units) as to which the Deferral Period is not complete, any Performance Shares or Performance Units that have not been fully earned, or any Shares that are subject to any transfer restriction pursuant to Section 10.3, the Committee may in its sole discretion take any action that it deems to be equitable under the circumstances or in the best interests of the Company, including, without limitation, waiving or modifying any limitation or requirement with respect to any Award under this Plan. However, any such actions taken by the Committee must comply with the provisions of Section 21 and the requirements of Code Section 409A.      14. Foreign Participants. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for Awards to Participants who are foreign nationals, or who are employed by or perform services for the Company or any Subsidiary outside of the United States of America, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan as in effect for any other purpose, provided that no such supplements, amendments, restatements or alternative versions shall include any provisions that are inconsistent with the terms of this Plan, as then in effect, unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Company.      15. Amendments and Other Matters.      15.1 Plan Amendments. This Plan may be amended from time to time by the Board, but no such amendment shall increase any of the limitations specified in Section 3, other than to reflect an adjustment made in accordance with Section 11, without the further approval of the stockholders of the Company. The Board may condition any amendment on the approval of the stockholders of the Company if such approval is necessary or deemed advisable with respect to the applicable listing or other requirements of a national securities exchange or other applicable laws, policies or regulations.      15.2 Award Deferrals. The Committee may permit Participants to elect to defer the issuance of Shares or the settlement of Awards in cash under the Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan. In the case of an award of Restricted Shares, the deferral may be effected by the Participant’s agreement to forego or exchange his of her award of Restricted Shares and receive an award of Deferred Shares (Restricted Stock Units). The Committee also may provide that deferred settlements include the payment or crediting of interest on the deferral amounts, or the payment or crediting of dividend equivalents where the deferral amounts are denominated in Shares. However, any Award deferrals which the Committee permits must comply with the provisions of Section 21 and the requirements of Code Section 409A.      15.3 Conditional Awards. The Committee may condition the grant of any award or combination of Awards under the Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or any Subsidiary to the Participant, provided that any such grant must comply with the provisions of Section 21 and the requirements of Code Section 409A.      15.4 Repricing Prohibited. The Committee shall not reprice any outstanding Option, directly or indirectly, without the approval of the stockholders of the Company, provided that nothing herein shall prevent the Committee from taking any action provided for in Section 11. For this purpose, repricing of an Option shall include (i) reducing the exercise price of an Option or (ii) cancelling or settling for cash or other consideration an outstanding Option and granting a replacement Option at a lower exercise price, within six months before or after the cancellation. 41        15.5 No Employment Right. This Plan shall not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary and shall not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any Participant’s employment or other service at any time.      15.6 Tax Qualification. To the extent that any provision of this Plan would prevent any Option that was intended to qualify under particular provisions of the Code from so qualifying, such provision of this Plan shall be null and void with respect to such Option, provided that such provision shall remain in effect with respect to other Options, and there shall be no further effect on any provision of this Plan.      15.7 Amendments to Comply with Laws, Regulations or Rules. Notwithstanding any other provision of the Plan or any Award Agreement to the contrary, in its sole and absolute discretion and without the consent of any Participant, the Board may amend the Plan, and the Committee may amend any Award Agreement, to take effect retroactively or otherwise as it deems necessary or advisable for the purpose of conforming the Plan or such Award Agreement to any present or future law, regulation or rule applicable to the Plan, including, but not limited to, Code Section 409A.      16. Effective Date. This Plan shall become effective upon its approval by the stockholders of the Company.      17. Termination. This Plan shall terminate on the tenth anniversary of the date upon which it is approved by the stockholders of the Company, and no Award shall be granted after that date.      18. Limitations Period. Any person who believes he or she is being denied any benefit or right under the Plan may file a written claim with the Committee. Any claim must be delivered to the Committee within forty-five (45) days of the specific event giving rise to the claim. Untimely claims will not be processed and shall be deemed denied. The Committee, or its designated agent, will notify the Participant of its decision in writing as soon as administratively practicable. Claims not responded to by the Committee in writing within ninety (90) days of the date the written claim is delivered to the Committee shall be deemed denied. The Committee’s decision shall be final, conclusive and binding on all persons. No lawsuit relating to the Plan may be filed before a written claim is filed with the Committee and is denied or deemed denied, and any lawsuit must be filed within one year of such denial or deemed denial or be forever barred.      19. Governing Law. The validity, construction and effect of this Plan and any Award hereunder will be determined in accordance with the Delaware General Corporation Law, except to the extent governed by applicable federal law.      20. Compliance with Code Section 409A.      20.1 Awards Subject to Section 409A. The provisions of this Section 21 shall apply to any Award or portion thereof that is or becomes subject to Code Section 409A (“Section 409A”), notwithstanding any provision to the contrary contained in the Plan or the Award Agreement applicable to such Award. Awards subject to Section 409A include, without limitation:      (a) Any Nonstatutory Stock Option or Stock Appreciation Right that permits the deferral of compensation other than the deferral of recognition of income until the exercise of the Award.      (b) Any other Award that either (i) provides by its terms for settlement of all or any portion of the Award on one or more dates following the Short-Term Deferral Period (as defined below) or (ii) permits or requires the Participant to elect one or more dates on which the Award will be settled. Subject to any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance, the term “Short-Term Deferral Period” means the period ending on the later of (i) the date that is two and one-half months from the end of the Company’s fiscal year in which the applicable portion of the Award is no longer subject to a substantial risk of forfeiture or (ii) the date that is two and one-half months from the end of the Participant’s taxable year in which the applicable portion of the Award is no longer subject to a substantial risk of 42   forfeiture. For this purpose, the term “substantial risk of forfeiture” shall have the meaning set forth in any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance.      20.2 Deferral and/or Distribution Elections. Except as otherwise permitted or required by Section 409A or any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance, the following rules shall apply to any deferral and/or distribution elections (each, an “Election”) that may be permitted or required by the Committee pursuant to an Award subject to Section 409A:      (a) All Elections must be in writing and specify the amount of the distribution in settlement of an Award being deferred, as well as the time and form of distribution as permitted by this Plan.      (b) All Elections shall be made by the end of the Participant’s taxable year prior to the year in which services commence for which an Award may be granted to such Participant; provided, however, that if the Award qualifies as “performance-based compensation” for purposes of Section 409A and is based on services performed over a period of at least twelve (12) months, then the Election may be made no later than six (6) months prior to the end of such period.      (c) Elections shall continue in effect until a written election to revoke or change such Election is received by the Company, except that a written election to revoke or change such Election must be made prior to the last day for making an Election determined in accordance with paragraph (b) above or as permitted by Section 21.3.      20.3 Subsequent Elections. Any Award subject to Section 409A which permits a subsequent Election to delay the distribution or change the form of distribution in settlement of such Award shall comply with the following requirements:      (a) No subsequent Election may take effect until at least twelve (12) months after the date on which the subsequent Election is made;      (b) Each subsequent Election related to a distribution in settlement of an Award not described in Section 21.4(b), 21.4(c) or 21.4(f) must result in a delay of the distribution for a period of not less than five (5) years from the date such distribution would otherwise have been made; and      (c) No subsequent Election related to a distribution pursuant to Section 21.4(d) shall be made less than twelve (12) months prior to the date of the first scheduled payment under such distribution.      20.4 Distributions Pursuant to Deferral Elections. No distribution in settlement of an Award subject to Section 409A may commence earlier than:      (a) Separation from service (as determined pursuant to U.S. Treasury Regulations or other applicable guidance);      (b) The date the Participant becomes Disabled (as defined below);      (c) Death;      (d) A specified time (or pursuant to a fixed schedule) that is either (i) specified by the Committee upon the grant of an Award and set forth in the Award Agreement evidencing such Award or (ii) specified by the Participant in an Election complying with the requirements of Section 21.2 and/or 21.3, as applicable;      (e) To the extent provided by U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance, a change in the ownership or effective control or the Company or in the ownership of a substantial portion of the assets of the Company; or 43        (f) The occurrence of an Unforeseeable Emergency (as defined below). Notwithstanding anything else herein to the contrary, to the extent that a Participant is a “Specified Employee” (as defined in Code Section 409A(a)(2)(B)(i)), no distribution pursuant to Section 21.4(a) in settlement of an Award subject to Section 409A may be made before the date which is six (6) months after such Participant’s date of separation from service, or, if earlier, the date of the Participant’s death.      20.5 Unforeseeable Emergency. The Committee shall have the authority to provide in the Award Agreement evidencing any Award subject to Section 409A for distribution in settlement of all or a portion of such Award in the event that a Participant establishes, to the satisfaction of the Committee, the occurrence of an Unforeseeable Emergency (as defined in Section 409A). In such event, the amount(s) distributed with respect to such Unforeseeable Emergency cannot exceed the amounts necessary to satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution(s), after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). All distributions with respect to an Unforeseeable Emergency shall be made in a lump sum as soon as practicable following the Committee’s determination that an Unforeseeable Emergency has occurred. The occurrence of an Unforeseeable Emergency shall be judged and determined by the Committee. The Committee’s decision with respect to whether an Unforeseeable Emergency has occurred and the manner in which, if at all, the distribution in settlement of an Award shall be altered or modified, shall be final, conclusive, and not subject to approval or appeal.      20.6 Disabled. The Committee shall have the authority to provide in the Award Agreement evidencing any Award subject to Section 409A for distribution in settlement of such Award in the event that the Participant becomes Disabled. A Participant shall be considered “Disabled” if either:      (a) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can period of not less than twelve (12) months, or      (b) the Participant is, by reason of any medically determinable physical or an accident and health plan covering employees of the Participant’s employer. All distributions payable by reason of a Participant becoming Disabled shall be paid in a lump sum or in periodic installments as established by the Participant’s Election, commencing as soon as practicable following the date the Participant becomes Disabled. If the Participant has made no Election with respect to distributions upon becoming Disabled, all such distributions shall be paid in a lump sum as soon as practicable following the date the Participant becomes Disabled.      20.7 Death. If a Participant dies before complete distribution of amounts payable upon settlement of an Award subject to Section 409A, such undistributed amounts shall be distributed to his or her beneficiary under the distribution method for death established by the Participant’s Election as soon as administratively possible following receipt by the Committee of satisfactory notice and confirmation of the Participant’s death. If the Participant has made no Election with respect to distributions upon death, all such distributions shall be paid in a lump sum as soon as practicable following the date of the Participant’s death.      20.8 No Acceleration of Distributions. Notwithstanding anything to the contrary herein, this Plan does not permit the acceleration of the time or schedule of any distribution under this Plan in settlement of an Award subject to Section 409A, except as provided by Section 409A and/or U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance.      21. Predecessor Plan. Upon stockholder approval of this Plan pursuant to Section 17, no new awards will be granted under the Predecessor Plan, and any awards for Shares granted under the Predecessor Plan after December 1, 2005 will reduce the number of Shares available for Awards under Section 3.1 using the share reduction ratios set forth in Section 3.2. 44   LINDSAY MANUFACTURING CO. Restricted Stock Units Granted Pursuant to the 2006 Long-Term Incentive Plan Agreement with U.S. Employee Lindsay Manufacturing Co. (“Company”) grants to you, as a matter of separate inducement and not in lieu of salary or other compensation for services, the following award of Restricted Stock Units (“Units”) pursuant to the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”). Except as otherwise specified in the attached Terms and Conditions or herein, vesting of the Units is conditioned upon you being continuously employed by the Company or a subsidiary from the Grant Date to each relevant vesting date. Restricted Stock Units You are awarded the following Restricted Stock Units. Each Unit is the equivalent of one Share of Common Stock and will be distributed on the relevant vesting date (or as soon thereafter as practicable) in the form of Shares of Common Stock. The Units will vest ratably (one-third each year) on November 1 of the next three calendar years following the Grant Date.               Grantee:                                   Grant Date:                                 Units Awarded:                      You acknowledge that you have received this Agreement with the attached Terms and Conditions, and you agree to accept and be bound by the provisions of the Plan and this Agreement including the Terms and Conditions effective as of the Grant Date.                   LINDSAY MANUFACTURING CO.                     By:                       I have received a copy of LMC Policy No. 14 concerning “Notice of Confidentiality of Information/Restrictions on “Trading” in Stock” and understand and agree to comply with said Policy.                   GRANTEE                       By:                               Name:         GRANT DATE:                      LINDSAY MANUFACTURING CO. TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS GRANTED TO U.S. EMPLOYEES These terms and condition are made part of the Agreement dated as of the Grant Date indicated above awarding Restricted Stock Units pursuant to the terms of the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”). All capitalized terms used herein shall have the meaning set forth in the Plan, unless the Agreement (including these terms and conditions) specifies a different meaning.           Section 1. Form and Purpose of Award. Each Restricted Stock Unit (“Unit”) represents a non-transferable right to receive one Share of the Company’s Common Stock ($1.00 par value) on the applicable vesting date (or as soon thereafter as practicable). The purpose of this award is to motivate your future performance and to align your interests with those of the Company and its shareholders.           Section 2. Special Cash Dividend Equivalents. If any special cash dividend (other than regular quarterly dividends) is paid by the Company on its Common Stock while Restricted Stock Units under this award are outstanding, you will be credited with additional Units, the number of which shall be determined by first (i) multiplying the number of your outstanding Units on the payment date of the special cash dividend (“Dividend Payment Date”) by the per share dollar amount of the special cash dividend, and then (ii) dividing the resulting amount by the Fair Market Value of a Share of Common Stock on the Dividend Payment Date (such additional Units being referred to herein as “Special Cash Dividend Equivalents”). Additional Units which are credited as Special Cash Dividend Equivalents will be treated for purposes of vesting and payment (and any other applicable terms and conditions) as if part of the original Units in relation to which such additional Units are credited as Special Cash Dividend Equivalents. No cash payment or dividend equivalent shall be payable in connection with any regular quarterly dividends which are paid by the Company on its Common Stock.           Section 3. Vesting Dates/Vesting Periods.           3.1 The Units will vest according to the vesting schedule in your Agreement, provided that you are continuously employed by the Company through the relevant vesting date or you meet the requirements for vesting described below. The period from the Grant Date to each vesting date will be a separate vesting period.           3.2 All outstanding Units shall become fully vested and immediately payable upon a Change in Control (as such term is defined in the Plan) of the Company.           3.3 All outstanding Units shall become fully vested and immediately payable if your employment with the Company is terminated due to your death or permanent and total disability. In the event of your death, your outstanding Units will be distributed in Shares of Common Stock to your designated beneficiary on file with the Company, or if no beneficiary has been designated or survives you, then to your estate.           3.4 Except as provided in this Section 3, all of your outstanding Units shall be forfeited if your employment with the Company terminates for any reason (including retirement) prior to the relevant vesting date set forth in the vesting schedule in your Agreement.           Section 4. Withholding Taxes. The Company will retain from each distribution the number of Shares of Common Stock required to satisfy the statutory minimum required amount of Federal and State tax withholding obligations. - 1 -             Section 5. Miscellaneous Provisions.           5.1 Restricted Stock Units do not convey the rights of ownership of Shares of Common Stock and do not carry voting rights. Shares of Common Stock will not be issued to you until Units have vested, and Shares will be issued in accordance with the Company’s procedures for issuing Common Stock. The Company’s obligation hereunder is unfunded.           5.2 All outstanding Units shall be appropriately adjusted as determined by the Committee in the event of any stock dividends, stock splits or reverse stock splits of Common Stock of the Company. No fractional Shares of Common Stock will be issued. The Company may make such adjustments as it deems appropriate to eliminate fractional Share interests.           5.3 The Agreement may only be amended in writing with the approval of the Committee. The Agreement will be binding upon any successor in interest to Lindsay Manufacturing Co. by merger or otherwise.           5.4 Nothing contained in the Agreement shall confer on the Grantee any right with respect to continuation of employment with the Company, or interfere with the right of the Company to terminate at any time and for any reason the employment of the Grantee.           5.5 The Units and rights under the Agreement may not be sold, conveyed, assigned, transferred, pledged or otherwise disposed of or encumbered at any time, except upon the Grantee’s death by will or the laws of descent and distribution or written designation of a beneficiary by the Grantee in a form acceptable to the Company. Any attempted action in violation of this paragraph shall be null, void and without effect.           5.6 The Company intends that the grant of Units under the Agreement will not be subject to Section 409A of the Internal Revenue Code of 1986, as amended, because all payments with respect to the Units will qualify for the exception from coverage under Section 409A for short-term deferrals. The Agreement shall be interpreted in a manner which is consistent with the foregoing intent. The Committee may not take any action or exercise any discretion under the Plan in a manner which will cause the Units granted under the Agreement to be subject to Code Section 409A. Each payment which becomes due under the Agreement shall be made as soon as practicable on or after the date when the right to receive the payment vests. The latest date for any payment shall be the end of the calendar year in which the Grantee’s right to receive the payment becomes vested, or if this is not practicable, not later than the 15th day of the third month following the end of such calendar year. - 2 -   LINDSAY MANUFACTURING CO. Restricted Stock Units Granted Pursuant to the Agreement with Director inducement and not in lieu of other compensation for services, the following award of Restricted Stock Units (“Units”) pursuant to the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”). Except as otherwise specified in the attached Terms and Conditions or herein, vesting of the Units is conditioned upon you continuing to serve as a Director of the Company from the Grant Date to the vesting date. Restricted Stock Units equivalent of one Share of Common Stock and will be distributed on the vesting date (or as soon thereafter as practicable) in the form of Shares of Common Stock. The Units will vest on November 1 next following the Grant Date.               Grantee:                                    Grant Date:                                 Units Awarded:                     Grant Date.                   LINDSAY MANUFACTURING CO.                       By:                                         GRANTEE                       By:                               Name:         GRANT DATE:                      LINDSAY MANUFACTURING CO. GRANTED TO DIRECTORS different meaning. Company’s Common Stock ($1.00 par value) on the vesting date (or as soon thereafter as practicable). The purpose of this award is to motivate your future shareholders. its Common Stock.           3.1 The Units will vest on November 1 next following the Grant Date, provided that you are continuing to serve as a Director of the Company through the vesting date or you meet the requirements for vesting described below. Company. payable if your service as a Director of the Company is terminated due to your death or permanent and total disability. In the event of your death, your outstanding Units will be distributed in Shares of Common Stock to your designated beneficiary on file with the Company, or if no beneficiary has been designated or survives you, then to your estate. Units shall be forfeited if your service as a Director of the Company terminates for any reason (including retirement) prior to the vesting date set forth in Section 3.1 above.           Section 4. No Withholding Taxes. There are no withholding taxes applicable to this award. will not be issued to you until Units have vested, and - 1 -   Shares will be issued in accordance with the Company’s procedures for issuing Common Stock. The Company’s obligation hereunder is unfunded. the Board upon recommendation of the Committee. The Agreement will be binding upon any successor in interest to Lindsay Manufacturing Co. by merger or otherwise. right with respect to continuation of service as a Director of the Company. foregoing intent. The Committee and Board may not take any action or exercise any discretion under the Plan in a manner which will cause the Units granted under the Agreement to be subject to Code Section 409A. Each payment which becomes due under the Agreement shall be made as soon as practicable on or after the date when the right to receive the payment vests. The latest date for any payment shall be the end of the calendar year in which the Grantee’s right to receive the payment becomes vested, or if this is not practicable, not later than the 15th day of the third month following the end of such calendar year. - 2 -   [NAME OF LINDSAY FOREIGN SUBSIDIARY] AGREEMENT FOR CASH RESTRICTED STOCK UNITS      THIS AGREEMENT is made and entered into this            day of                                         , 200     , by and between [name of Lindsay Foreign Subsidiary] (hereinafter, “Employer”) and                                                              (hereinafter “Grantee”).      WHEREAS, Employer recognizes the value to it of the continuance of the services of Grantee as an employee, and desires to furnish Grantee a greater personal interest in the success of Employer and an added incentive to remain employed with Employer;      NOW, THEREFORE, in consideration of the above premises and mutual covenants contained herein, and in consideration of Grantee’s future and continuing service on behalf of Employer, the parties hereby agree as follows:      1. Grant of Units. Employer hereby grants to Grantee, as a matter of separate inducement and not in lieu of salary or other compensation for services, the following award of Cash Restricted Stock Units (“Units”). Except as otherwise specified herein, vesting of the Units is conditioned upon Grantee being continuously employed by the Employer from the Grant Date to each relevant vesting date. Cash Restricted Stock Units Grantee is awarded the following Cash Restricted Stock Units. Each Unit is the cash equivalent of one share of Common Stock of Lindsay Manufacturing Co. (“Parent”) and will be distributed on the relevant vesting date (or as soon thereafter as practicable) in the form of a cash payment. The Units will vest ratably (one-third each year) on November 1 of the next three calendar years following the Grant Date.           Grant Date:                             Units Awarded:                        2. No Employment Rights. This Agreement shall not be construed to confer upon Grantee any right to continue employment with the Employer, nor does it interfere with the right of the Employer to terminate the employment of Grantee      3. No Acquired Rights. Grantee understands and agrees that the grant of Units provided under this Agreement is completely discretionary in nature and is not to be considered part of Grantee’s salary or compensation for purposes of calculating any severance, resignation, redundancy, end-of-service payments, bonuses, long-term service awards, pension or retirement benefits or similar payments, except as otherwise required under local law. Grantee further understands and agrees that the grant of Units under this Agreement does not create any obligation on the part of the Employer to grant Units or other rights to Grantee in the future.      4. Forfeiture of Units. Grantee expressly acknowledges that, in the event Grantee’s employment with the Employer is terminated prior to vesting of Units Grantee shall be cancelled, and Grantee shall not be entitled to any payment therefor.      5. Data Privacy Consent. Grantee hereby requests and gives consent to Employer to access, store, process and transfer various personal data relating to Grantee, as often as necessary, to Parent and any designated third party administrator located abroad, any overseas broker and any other legitimate third parties for the purpose of implementing, administering and managing the Grantee’s award under the Agreement and any other compensation or     incentive plan or arrangement of Employer, Parent or its subsidiaries in which Grantee is eligible to participate. Grantee further understands that Grantee may, at any time, view the Grantee’s personal data so held and make any necessary amendments and corrections to the data, and withdraw this consent at any time in writing. Grantee hereby agrees that neither Employer, Parent or any of Parent’s subsidiaries, any designated plan administrator, any designated broker, or any legitimate third party appointed by Parent shall be liable for any loss or damage, whether direct or indirect or consequential, incurred by Grantee arising from the use of such personal data as authorized herein.      6. Successors and Assigns. The rights and obligations of the parties under this Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of Employer and to the personal representatives, executors, administrators and heirs of Grantee.      7. Applicable Law. This Plan shall be construed in accordance with applicable United States of America federal law and, to the extent otherwise applicable, the laws of the State of Delaware.      8. Entire Agreement. This Agreement (including the attached terms and conditions) contains the entire agreement of the parties regarding the subject matter hereof.      IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first above written.                   By:                         Its:                                       GRANTEE                       By:                           Name:                       - 2 -   GRANT DATE:                      TERMS AND CONDITIONS OF CASH RESTRICTED STOCK UNITS Date indicated above awarding Cash Restricted Stock Units.           Section 1. Form and Purpose of Award. Each Cash Restricted Stock Unit (“Unit”) represents a non-transferable right to receive in cash the “fair market value” of one share of Common Stock ($1.00 par value) of Lindsay Manufacturing Co. (“Parent”) on the applicable vesting date. The purpose of this award is to motivate your future performance and to align your interests with those of the Employer, Parent and its shareholders. For purposes of the Agreement, the “fair market value” of one share of Parent’s Common Stock shall be the last price per share at which the Common Stock is sold in the regular way on the New York Stock Exchange or other national securities exchange or NASDAQ on the relevant vesting date or, in the absence of any reported sales on such day, the first preceding day on which there were such sales. The “fair market value” shall be determined based on United States dollars. All payments which become due under the Agreement shall be converted to local currency at the time each payment is made based on the then current exchange rate. dividend (other than regular quarterly dividends) is paid by Parent on its Common Stock while Cash Restricted Stock Units under this award are outstanding, you will be credited with additional Units, the number of which shall be determined by first (i) multiplying the number of your outstanding Units on the payment date of the special cash dividend (“Dividend Payment Date”) by the per share dollar amount of the special cash dividend, and then (ii) dividing the resulting amount by the “fair market value” of a share of Common Stock on the Dividend Payment Date (such additional Units being referred to herein as “Special Cash Dividend Equivalents”). Additional Units which are credited as Special Cash Dividend Equivalents will be treated for purposes of vesting and payment (and any other applicable terms and conditions) as if part of the original Units in relation to which such additional Units are credited as Special Cash Dividend Equivalents. No cash payment or dividend equivalent shall be payable in connection with any regular quarterly dividends which are paid by Parent on its Common Stock. Agreement, provided that you are continuously employed by the Employer through vesting period. payable upon a Change in Control (as such term is defined in the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”)) of Parent. payable if your employment with the Employer is terminated due to your death or permanent and total disability. In the event of your death, the value of your outstanding Units will be distributed in cash to your designated beneficiary on file with the Employer, or if no beneficiary has been designated or survives you, then to your estate. Units shall be forfeited if your employment with the Employer terminates for any           Section 4. Withholding Taxes. All payments of the vested portion of Units shall be subject to applicable withholding and reporting according to applicable law. The Employer will retain from each distribution the required amount of tax withholding obligations.               5.1 Cash Restricted Stock Units do not convey the rights of ownership of Common Stock and do not carry voting rights. The Employer’s obligation hereunder is unfunded. determined by the Committee which administers the Plan in the event of any stock dividends, stock splits or reverse stock splits of Common Stock of Parent. the President of Parent. The Agreement will be binding upon any successor in interest to the Employer by merger or otherwise. right with respect to continuation of employment with the Employer, or interfere with the right of the Employer to terminate at any time and for any reason the acceptable to the Employer. Any attempted action in violation of this paragraph           5.6 The Employer and Parent intend that the grant of Units under the Agreement will not be subject to Section 409A of the Internal Revenue Code of 1986, as amended, because all payments with respect to the Units will qualify for the exceptions from coverage under Section 409A for short-term deferrals and foreign arrangements. The Agreement shall be interpreted in a manner which is consistent with the foregoing intent. Each payment which becomes due under the Agreement shall be made as soon as practicable on or after the date when the right to receive the payment vests. The latest date for any payment shall be the end of the calendar year in which the Grantee’s right to receive the payment becomes vested, or if this is not practicable, not later than the 15th day of the third month following the end of such calendar year. - 1 -

President Section 906 Certification under Sarbanes Oxley Act I, Brian E. Binder, certify that: 1. I have reviewed this report, filed on behalf of Deutsche Global Inflation Fund, a series of Deutsche Income Trust, on Form N-CSR; 2. Based on my knowledge and pursuant to 18 U.S.C. § 1350, the periodic report on Form N-CSR (the “Report”) fully complies with the requirements of § 13 (a) or § 15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. November 28, 2014 /s/Brian E. Binder Brian E. Binder President Chief Financial Officer and Treasurer Section 906 Certification under Sarbanes Oxley Act I, Paul Schubert, certify that: 1. I have reviewed this report, filed on behalf of Deutsche Global Inflation Fund, a series of Deutsche Income Trust, on Form N-CSR; 2. Based on my knowledge and pursuant to 18 U.S.C. § 1350, the periodic report on Form N-CSR (the “Report”) fully complies with the requirements of § 13 (a) or § 15 (d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. November 28, 2014 /s/Paul Schubert Paul Schubert Chief Financial Officer and Treasurer

Name: Commission Regulation (EEC) No 1383/89 of 19 May 1989 amending Regulation (EEC) No 282/67/EEC on detailed rules for intervention for oil seeds Type: Regulation Date Published: nan No L 139/8 Official Journal of the European Communities 23 . 5 . 89 COMMISSION REGULATION (EEC) No 1383/89 of 19 May 1989 amending Regulation (EEC) No 282/67/EEC on detailed rules for intervention for oil seeds THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 136/66/EEC of 22 September 1966 on the establishment of a common organization of the markets in oils and fats ('), as last amended by Regulation (EEC) No 1 225/89 (2), and in particular Articles 24a (3) and 26 (3) thereof, Whereas the characteristic of 'double zero' rape seed is a lower glucosinolate content, which facilitates its incorpo ­ ration in animal feed ; whereas the first subparagraph of Article 3 (4) of Commission Regulation (EEC) No 282/67/EEC (3), as last amended by Regulation (EEC) No 1018/89 (4), lays down a maximum authorized content of 20 micromoles per gram for seed of that description ; whereas, however, the second subparagraph of that provision provides for a temporary exception until the end of the 1989/1990 marketing year to enable operators to adapt to the new quality requirements ; whereas experience has shown that provision should be made for a further exception to permit such adaptation ; Whereas the exception provided for in Article 4 of Regulation (EEC) No 282/67/EEC on the use of the uniform method to determine the glucosinolate content should be extended ; wheresas experience has shown that the fifth subparagraph of Article 7 of Regulation (EEC) No 282/67/EEC could be deleted ; Whereas the measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Oils and Fats, HAS ADOPTED THIS REGULATION : Article 1 Regulation (EEC) No 282/67/EEC is hereby amended as follows : 1 . In the second subparagraph of Article 3 (4), 'marketing years 1986/87 to 1989/90' is replaced by ' 1986/87 to 1990/91 marketing years'. 2. In the second subparagraph of Article 4, 'marketing years 1986/87 to 1988/89' is replaced by ' 1986/87 to 1989/90 marketing years'. Article 2 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities, This Regulation shall be binding in its entirety and directly applicable in all Member States . Done at Brussels, 19 May 1989 . For the Commission Ray MAC SHARRY Member of the Commission (') OJ No 172, 30. 9 . 1966, p. 3025/66. V) OJ No L 128, 11 . 5. 1989, p. 15. 0 OJ No 151 , 13 . 7. 1967, p. 1 . (&lt;) OJ No L 109, 20. 4. 1989, p. 17.

Title: I'm paid up. I'm a good tenant. Landlord and son packed up my entire apartment while I was gone, took door off hinges. No eviction, no notice. Question:Studio attached to main house. My landlady lives in terror of her meth-addict son, and lies to the police to cover for him. Sick situation. He came back to live with his mom, decided he wanted my apartment, tried bullying me out. Attacked me twice. Gaslighting me, terrorizing me for months. I got an assault charge finally and order of protection is going through this weekend. Mother's Day he came into my apartment with his mom's key, held me down, threatened my life, pushed me out. I came back a day later to my entire apartment packed up. Meth heads love menial tasks. All doors off hinges, including main door. Cops come. He speaks for his mom, says 'Officer, he helped us pack.' Yeah, right. I'm getting my stuff and just moving. This is too crazy to deal with. Not even going to fight it anymore. I did nothing wrong, he'll get my apartment, his mom will lose the rent she was making from me. Good riddance. It's a gorgeous, cheap studio, but not worth this level of insanity. I know this guy is a thief. He bragged to me about how he steals a couple of times. I just know he'll have taken some of my things. I'm sure he'll have taken my nicest things, like my really nice-quality American flag, my box of old camcorder tapes I made growing up, my camera. I just know it. I'm terrified to be there so I just looked in the fridge and he had taken all my more expensive frozen foods, and my nice lamp was in his garage. My mini fridge is gone. The cop said it was a he said she said. He doesn't know if I helped them pack or not. But another cop in the dept. knows this guy is crazy. And he's the one who took my assault complaint after I showed him an audio recording of this guy in one of his psychopathic rants. Once I figure out what's missing--whether it's something expensive or something priceless for sentimental reasons, like 40 camcorder tapes full of footage... what do I do? The cop who was there, who didn't know the situation, said "this is a civil matter" and told me "Hey man, my ex wife threw out all my stuff one day, and it sucks, but it happens." I handled it well, didn't call him a fucking idiot, just said "Ok," and left with my lamp. What do I do here? Answer #1: He held you down with a knife, please dont walk away from this. You have the opportunity to put this freak away. Do it.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13 a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of April , 201 3 Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (Exact name of Registrant as specified in its charter) Telecommunications Indonesia ( A state-owned public limited liability Company ) (Translation of registrant’s name into English ) J l. Japati No. 1 Bandung 40133 , Indonesia (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F : Form 20-F þ Form 40-F ¨ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Yes ¨ No þ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Yes ¨ No þ SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned, thereunto duly authorized. Date April 4

Exhibit 10.19 TERMINATION AGREEMENT AND GENERAL RELEASE This Termination Agreement and General Release is between the undersigned Oxford Holdings, LLC (“Oxford”), The Venture Group, LLC (“VG”) and Health Enhancement Products, Inc., a Nevada corporation (the “Company”) and is dated as of this 26th day of January, 2012. RECITALS Reference is made to that certain Consulting Agreements between the Company and Oxford dated September 15, 2011, as amended October 11, 2011 (“Agreement”), which was executed in connection with a planned capital raising transaction with VG. VG and the Company executed financing documents dated on or around November 8th, 2011 (“Original Financing”), in connection with which Oxford was paid $42,600 (the “Transaction Fee”). However, the Company and VG have since terminated the documents executed in connection with the Original Financing.   VG and the Company have since entered into a new financing transaction (“New Transaction”) under which VG will purchase a maximum $500,000 Subordinated Convertible Note.   Oxford and the Company have agreed that the Transaction Fee already paid to Oxford ($42,600), plus a warrant (to be issued Oxford upon closing of the New Transaction) to purchase 200,000 shares of Company common stock at an exercise price of $.15 per share for a term of two years, shall be in full and complete satisfaction of all amounts owing to Oxford by the Company under the Agreement or otherwise, including but not limited to in connection with the Original Transaction and the New Transaction. Oxford and the Company have agreed to terminate the Agreement and that neither party shall have any further rights or obligations thereunder. AGREEMENT For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Payment of Fees under Agreement.  Upon the Closing of the New Transaction, in the amount of $500,000, in addition to the Transaction Fee already paid to Oxford, the Company shall issue to Oxford a warrant to purchase 200,000 shares of Company common stock at an exercise price of $.15 per share for a term of two years.  In addition, at the request of VG, the Company shall pay to the Deveney Law Firm $358 in payment of wire transfer fees.  The foregoing payments are in full and complete satisfaction of all amounts owing to Oxford by the Company whether under the Agreement or otherwise, including but not limited to in connection with the Original Transaction and the New Transaction. 2.  Termination of Agreement.  The parties hereby agree that the Agreement is hereby terminated and that neither party shall have any further rights or obligations thereunder. 3. Compliance with Laws.  Oxford and VG represent and warrant jointly and severally to the Company that Oxford has complied fully with applicable securities laws in connection with rendering services to the Company under the Agreement.  Oxford and VG shall jointly and severally promptly indemnify the Company and its officers and directors from any loss, liability or expense (including but not limited to reasonable attorney fees and costs) incurred by any such persons in any way relating to or arising from Oxford’s breach of the foregoing representation.     4. General Release.    Oxford (together with its predecessors, successors, affiliates, subsidiaries, parent companies, DBA's, insurers, subcontractors, contractors, employees, former employees, directors, officers, shareholders, members and any other related entities) hereby fully releases, remises, acquits and forever discharges the Company (together with its predecessors, successors, members and any other related entities) from any and all claims, demands, actions, causes of action, damages, obligations, losses and expenses of whatsoever kind or nature, known or unknown, choate or inchoate, directly or indirectly arising out of, or related to, any matter arising prior to the date hereof.  This release shall not apply to any claims or suits arising from or pertaining to this Agreement.  This release shall be binding from the date hereof to eternity.  The parties acknowledge that this release should receive full faith and credit from all courts and agencies. Executed by the parties as an instrument under seal as of the date hereof. The Venture Group, LLC Health Enhancement Products, Inc. /s/ Jeff Rice                                          /s/ Philip Rice                                              By: David  J. Rice, Managing Member Philip M. Rice, II, CFO, duly authorized duly authorized Oxford Holdings, LLC /s/ William Sudek                              By:  William R. Sudeck, Managing Member duly authorized 2

Exhibit 10.2 FORM OF RESTRICTED STOCK UNIT AWARD AGREEMENT RESTRICTED STOCK UNIT AGREEMENT PURSUANT TO THE MARKETAXESS HOLDINGS INC. 2012 STOCK INCENTIVE PLAN THIS RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”), is made as of             (the “Grant Date”) by and between MarketAxess Holdings Inc. (the “Company”) and [            ] (the “Participant”). WHEREAS, the Board of Directors of the Company (the “Board”) adopted the MarketAxess Holdings Inc. 2012 Stock Incentive Plan (the “Plan”) which is administered by a Committee appointed by the Board (the “Committee”); WHEREAS, pursuant to Section 3.3 of the Plan, the Committee has adopted guidelines (the “Guidelines”) for the grant of restricted stock units (“RSUs”) under the Plan, which constitute an Other Stock-Based Award under the Plan; and WHEREAS, the Company, through the Committee, wishes to grant to the Participant RSUs as set forth below. NOW, THEREFORE, the Company and the Participant agree as follows:   1. Grant of RSUs. Subject to the terms and conditions of the Plan, the Guidelines and this Agreement, on the Grant Date the Company awarded to the Participant [●] RSUs. The RSUs are Deferrable RSUs and the payment of shares of Common Stock upon vesting in accordance with Section 2 may be deferred by the Participant in accordance with Section 4 of the Guidelines. If the Participant chooses to defer the RSUs, the Participant must complete an election form prescribed by the Committee regarding the election period no later than 30 days after the Grant Date. If the Participant does not make such an election within 30 days after the Grant Date, the RSUs will not be treated as Deferrable RSUs and, subject to the terms and conditions of the Plan, the Guidelines and this Agreement, payment shall be made on the applicable vesting date for the RSUs.   2. Vesting.     2.1 Except as set forth in this Section 2, and notwithstanding anything in the Guidelines to the contrary (including without limitation Section 3.1 of the Guidelines), the RSUs shall become vested (but shall remain subject to Section 3 of this Agreement) pursuant to the following schedule, provided that the Participant has not had a Termination from the Grant Date until the applicable vesting date:   Vesting Date   Incremental Percentage of RSUs Vested                                                                                                                                                                                                                                 2.2 Notwithstanding Section 2.1 of this Agreement and anything in the Guidelines to the contrary (including without limitation Sections 3.3 and 3.4(iv) of the Guidelines): (a) upon the Participant’s death or Disability (which occurs on or after                     ), 50% of any RSUs that are unvested on the date of the Participant’s death or Disability, as applicable, shall become immediately vested; and (b) upon the Participant’s Termination (x) by the Company without Cause, or (y) by the Participant for Good Reason, that in any case occurs on or after                     , (1) if such Termination occurs outside of a Change in Control Period, Participant shall become immediately vested in 25% of all then unvested RSUs, or, (2) if such Termination occurs during a Change in Control Period, Participant shall become immediately vested in 50% of all then unvested RSUs. (c) “Change in Control Period” means the three (3) month period prior to, and the twenty-four month period following, a Change in Control that constitutes a Change in Control Event within the meaning of Section 409A of the Code.     2.3 There shall be no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date.     2.4 For the avoidance of doubt, the provisions in Section 6 of the Guidelines regarding Detrimental Activity shall at all times apply to the RSUs.   3. Securities Representations. The grant of the RSUs and any issuance of shares of Common Stock pursuant to this Agreement are being made by the Company in reliance upon the following express representations and warranties of the Participant. The Participant acknowledges, represents and warrants that:     3.1 he or she has been advised that he or she may be an “affiliate” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Act”) and in this connection the Company is relying in part on his or her representations set forth in this section;     3.2 if he or she is deemed an affiliate within the meaning of Rule 144 of the Act, the Common Stock must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such Common Stock and the Company is under no obligation to register the Common Stock (or to file a “re-offer prospectus”); and     3.3 if he or she is deemed an affiliate within the meaning of Rule 144 of the Act, he or she understands that the exemption from registration under Rule 144 will not be available unless (i) a public trading market then exists for the Common Stock, (ii) adequate information concerning the Company is then available to the public, and (iii) other terms and conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the Common Stock may be made only in limited amounts in accordance with such terms and conditions.     4. Not an Employment Agreement. Neither the execution of this Agreement nor the grant of RSUs hereunder constitute an agreement by the Company to employ or to continue to employ the Participant during the entire, or any portion of, the     5. Miscellaneous.     5.1 This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal legal representatives, successors, trustees, administrators, distributees, devisees and legatees. The Company may assign to, and require, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company or any affiliate by which the Participant is employed to expressly assume and agree in writing to perform this Agreement. Notwithstanding the foregoing, the Participant may not assign this Agreement.     5.2 This award of RSUs shall not affect in any way the right or power of the Board or stockholders of the Company to make or authorize an adjustment, recapitalization or other change in the capital structure or   the business of the Company, any merger or consolidation of the Company or subsidiaries, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock, the dissolution or liquidation of the Company, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding.     5.3 The Participant agrees that the award of the RSUs hereunder is special incentive compensation and that it, any dividends paid thereon (even if treated as compensation for tax purposes) will not be taken into account as “salary” or “compensation” or “bonus” in determining the amount of any payment under any pension, retirement or profit-sharing plan of the Company or any life insurance, disability or other benefit plan of the Company.     5.4 No modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced.     5.5 This Agreement may be executed in one or more counterparts (including via facsimile or PDF), all of which taken together shall constitute one contract.     5.6 The failure of any party hereto at any time to require performance by another party of any provision of this Agreement shall not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement.     5.7 The headings of the sections of this Agreement have been inserted for convenience of reference only and shall in no way restrict or modify any of the terms or provisions hereof. All notices, consents, requests, approvals, instructions and other communications provided for herein shall be in writing and validly given or made when delivered, or on the second succeeding business day after being mailed by registered or certified mail, whichever is earlier, to the persons entitled or required to receive the same, to the Company, at the address set forth below, or to the Participant, at the Participant’s address on file with the Company, or to such other address as either party may designate by like notice. Notices to the Company shall be addressed to the General Counsel of the Company with a copy to the Compensation Committee of the Board, each at the following address: MarketAxess Holdings Inc., 299 Park Avenue, 10th Floor, New York, New York, 10171.     5.8 This Agreement shall be construed, interpreted and governed and the legal relationships of the parties determined in accordance with the internal laws of the State of Delaware without reference to rules relating to conflicts of law.     6. Provisions of Plan and Guidelines Control. This Agreement is subject to all the terms, conditions and provisions of the Plan and the Guidelines, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan and the Guidelines as may be adopted by the Committee and as may be in effect from time to time. The Plan and the Guidelines are incorporated herein by reference. A copy of the Plan and the Guidelines have been delivered to the Participant. If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan and the Guidelines, the Plan and the Guidelines shall control, and this Agreement shall be deemed to be modified accordingly. Unless otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan or the Guidelines. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof (other than any other documents expressly contemplated herein or in the Plan or the Guidelines) and supersedes any prior agreements between the Company and the Participant. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.   MARKETAXESS HOLDINGS INC. By:     Name:   Title:   Date:     PARTICIPANT   Name: Date:  

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported):December 14, 2011 CAPITAL CITY BANK GROUP, INC. (Exact name of registrant as specified in its charter) Florida 0-13358 59-2273542 (State of Incorporation) (Commission File Number) (IRS Employer Identification No.) 217 North Monroe Street, Tallahassee, Florida (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code:(850) 671-0300 (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): []Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) CAPITAL CITY BANK GROUP, INC. FORM 8-K CURRENT REPORT Item 8.01.Other Items. On December 14, 2011, Capital City Bank Group, Inc. (the “Registrant”) issued a press release announcing that the Registrant’s board of directors has voted to suspend the quarterly dividends on the Registrant’s common stock.A copy of the Registrant’s press release is attached hereto as Exhibit 99.1 and is hereby incorporated by reference. Item 9.01Financial Statements and Exhibits. (d) Exhibits. Press release of Capital City Bank Group, Inc., dated December 14, 2011. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CAPITAL CITY BANK GROUP, INC. Date: December 14, 2011By:/s/ J. Kimbrough Davis J. Kimbrough Davis, Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit Number Description Press release of Capital City Bank Group, Inc., dated December 14, 2011.

Name: European Council Decision (EU) 2019/1330 of 5 August 2019 appointing the High Representative of the Union for Foreign Affairs and Security Policy Type: Decision Subject Matter: EU institutions and European civil service Date Published: 2019-08-07 7.8.2019 EN Official Journal of the European Union L 207/36 EUROPEAN COUNCIL DECISION (EU) 2019/1330 of 5 August 2019 appointing the High Representative of the Union for Foreign Affairs and Security Policy THE EUROPEAN COUNCIL, Having regard to the Treaty on European Union, and in particular Article 18(1) thereof, Whereas: (1) European Council Decision 2014/639/EU (1) appointed the High Representative of the Union for Foreign Affairs and Security Policy until 31 October 2019. (2) The High Representative of the Union for Foreign Affairs and Security Policy should be appointed for the period from the end of the current term of office of the Commission until 31 October 2024. (3) By letter of 26 July 2019, the President-elect has agreed to the appointment of Mr Josep BORRELL FONTELLES as High Representative of the Union for Foreign Affairs and Security Policy. (4) In accordance with the third subparagraph of Article 17(7) of the Treaty on European Union, the President, the High Representative of the Union for Foreign Affairs and Security Policy and the other members of the Commission are subject as a body to a vote of consent by the European Parliament, HAS ADOPTED THIS DECISION: Article 1 Mr Josep BORRELL FONTELLES is hereby appointed High Representative of the Union for Foreign Affairs and Security Policy for the period from the end of the current term of office of the Commission until 31 October 2024. Article 2 This Decision shall be notified to Mr Josep BORRELL FONTELLES by the President of the European Council. It shall take effect on the day of its notification. Article 3 This Decision shall be published in the Official Journal of the European Union. Done at Brussels, 5 August 2019. For the European Council The President D. TUSK (1) European Council Decision 2014/639/EU of 30 August 2014 appointing the High Representative of the Union for Foreign Affairs and Security Policy (OJ L 262, 2.9.2014, p. 6).

Title: [CA] Currently on FMLA leave due to an accident that left me with severe injuries. Employer stated I should be able to return to my job without accommodations since I have a desk job? Question:Hello everyone, I have a question regarding FMLA and ADA accommodations. Early December, I got in a motorcycle accident early and injured most of the right side of my body (dislocated shoulder, Medial malleolus (ankle) fracture, bruised pelvis, and several abrasions). My employer was immediately informed and told me that If I was going to be out of work more then 2 weeks, I was required to submit FMLA paperwork. I filled out the needed paperwork got it signed by my doctor, but never received a verbal or written from my company confirming that my FMLA was approved. I thought I was gonna be back to work sooner then usual but I ended up needing ORIF surgery to correct my ankle fracture. Three weeks later, I see my surgeon for my follow up appointment. My doctor feels that I am still unfit to return to work and he ends up extending my work leave for another month. At this point, I still have four more weeks of FMLA leave. I give my work a heads up via email and attach my doctor note as well. My employer stated that they are unable to wait the last 4 weeks and need a replacement. I informed that that I am willing to work if they can accommodate me with a part-time schedule instead. My employer emailed me and was pretty upset that I was taking more time off. In the email she basically stated that since I work a desk job and do not stand I do not require any accommodations whats so ever. They also informed me that any accommodations must be clarified with a doctors note. My current doctor's note I provided has my status of disability, how long I will be out, my next appointment, and my doctor's contact information, Is this not sufficient proof? I feel this is unfair since several coworkers who were on maternity leave were allowed to return as part-time in order to care for their newborn children. I have not returned my bosses email because I am unaware how to approach them regarding the issue. *Are they able to deny me my request? Also If they never told my request for FMLA was approved is it still considered FMLA leave? Lastly, I have four more weeks left of FMLA, are they able to question my ability to work If I have already provided them with a doctor's note for a leave extension.* **Tldr: Got in bad motorcycle accident, injured most of my right side of body, work asked for FMLA paperwork. FMLA was never denied or approved. Now I am trying to return to work earlier then noted because no one can complete my work and they can not "wait for me to return". Asked to work part time, was rejected due to not having a doc's note with said accommodation and because I sit most of the day. Other co-workers have been granted part time when returning from maternity leave in order to care for babies.** Answer #1: They can require a doctor to fill out paperwork for ADA accommodations.

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Name: 89/163/EEC: Commission Decision of 13 February 1989 amending for the second time Decision 84/90/EEC laying down the codified form for the notification of animal diseases pursuant to Council Directive 82/894/EEC Type: Decision_ENTSCHEID Subject Matter: information technology and data processing; health; agricultural activity Date Published: 1989-03-04 Avis juridique important|31989D016389/163/EEC: Commission Decision of 13 February 1989 amending for the second time Decision 84/90/EEC laying down the codified form for the notification of animal diseases pursuant to Council Directive 82/894/EEC Official Journal L 061 , 04/03/1989 P. 0049 - 0055 Finnish special edition: Chapter 3 Volume 28 P. 0158 Swedish special edition: Chapter 3 Volume 28 P. 0158 *****COMMISSION DECISION of 13 February 1989 amending for the second time Decision 84/90/EEC laying down the codified form for the notification of animal diseases pursuant to Council Directive 82/894/EEC (89/163/EEC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Directive 82/894/EEC, of 21 December 1982, on the notification of animal diseases within the Community (1), as last amended by Commission Decision 89/162/EEC (2), and in particular Article 5 and Annexes I and II thereof, Whereas, Directive 82/894/EEC has been completed by Commission Decision 89/162/EEC; whereas therefore supplementary information is required, concerning certain additional diseases and species, in relation to the notification of animal diseases; Whereas, therefore, it is necessary to amend the codified forms laid down in Commission Decision 84/90/EEC (3), as amended by Decision 86/311/EEC (4), to take account of the additional information required; Whereas the measures provided for in this Decision are in accordance with the opinion of the Standing Veterinary Committee, HAS ADOPTED THIS DECISION: Article 1 Annexes I, II, III and IV to Decision 84/90/EEC are replaced by Annexes I, II, III and IV to this Decision with effect from 1 September 1989. Article 2 This Decision is addressed to the Member States. Done at Brussels, 13 February 1989. For the Commission Ray MAC SHARRY ANNEX I ANIMAL DISEASE NOTIFICATION - FORM 1 NOTIFICATION TO THE COMMISSION AND TO THE MEMBER STATES OF OUTBREAKS OF DISEASE IN A MEMBER STATE, IN ACCORDANCE WITH DIRECTIVE 82/894/EEC (1) 1.2,3.4 // // // // // Information required // Text to be transmitted // // // // // Commission reference number // DGVI/B.II.2/ADN1 // // // // // // // // Date of dispatch (*) (day/month/year) // / / - - - - - - // // Time of dispatch (*) (24-hour clock) // - - - - // // Country of origin (*) // - - // // Disease (*) // - - // // // // // Serial number of outbreak (*) (year/number) // / - - - - - - // // Disease type/sub-type // - - - - - - // // Region affected (*) // - - - // // If restrictions affect another region specify that region // - - - // // Type of outbreak (*) (primary '1' or secundary '2') // - // // Reference number of outbreak to which this outbreak relates // / / / - - - - - - - - - - // // Origin of disease // - - // // // // // Control measures: (use one or more sequentially according to number of control measures to be specified) // - - - - - - - - - - // // // // // Day of suspicion of disease on holding (day/month/year) // / / - - - - - - // 1.2.3.4 // // Number of susceptible animals on holding: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // Date of confirmation of disease on holding (*) (day/month/year) // / / - - - - - - // 1.2.3.4 // // Number of animals clinically affected on holding: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // Estimated date of first infection on holding (day/month/year) // / / - - - - - - // 1.2.3.4 // // Number of animals that have died of the disease on holding: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // // // // Information required // Text to be transmitted // // // // // Commission reference number // DGVI/B.II.2/ADN1 // // // // // // (Estimated) date of completion of slaughter for human consumption (day/month/year) // / / - - - - - - // 1.2.3.4 // // Number of animals slaughtered for human consumption: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // (Estimated) date of completion of slaughter and destruction (day/month/year) // / / - - - - - - // 1.2.3.4 // // Numbers of animals killed and destroyed: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // Swine fever only - Distance from nearest pig holding (in metres): // - - - - - - // 1.2.3.4 // // Number and type of pigs on the infected holding: // - Breeding pigs // - - - - - // // // - Piglets // - - - - - // // // - Fattening pigs // - - - - - // // // 1.2,3.4 // // Swine fever - Method used for diagnosis // - - // 1.2.3.4 // // Number and type of pigs clinically affected on the holding: // - Breeding pigs // - - - - - // // // - Piglets // - - - - - // // // - Fattening pigs ANNEX II ANIMAL DISEASE NOTIFICATION - FORM 2 NOTIFICATION TO THE COMMISSION AND TO THE OTHER MEMBER STATES OF ADDITIONAL INFORMATION OR CORRECTION OF INFORMATION IN ACCORDANCE WITH DIRECTIVE 82/894/EEC (1) 1.2,3.4 // // // // // Information required // Text to be transmitted // // // // // Commission reference number // DGVI/B.II.2/ADN2 // // // // // // // // Date of dispatch (*) (day/month/year) // / / - - - - - - // // Time of dispatch (*) (24-hour clock) // - - - - // // Country of origin (*) // - - // // Disease (*) // - - // // // // // Serial number of outbreak (*) (year/number) // / - - - - - - // // Disease type/sub-type // - - - - - - // // Region affected (*) // - - - // // If restrictions affect another region specify that region // - - - // // Type of outbreak (*) (primary '1' or secondary '2') // - // // Reference number of outbreak to which this outbreak relates // / / / - - - - - - - - - - // // Origin of disease // - - // // // // // Control measures: (use one or more sequentially according to number of control measures to be specified) // - - - - - - - - - - // // // // // Day of suspicion of disease on holding (day/month/year) // / / - - - - - - // 1.2.3.4 // // Number of susceptible animals on holding: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // Estimated date of first infection on holding (day/month/year) // / / - - - - - - // 1.2.3.4 // // Number of animals that have died of the disease on holding: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // Date of confirmation of disease on holding (*) (day/month/year) // / / - - - - - - // 1.2.3.4 // // Number of animals clinically affected on holding: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // // // // Information required // Text to be transmitted // // // // // Commission reference number // DGVI/B.II.2/ADN2 // // // // // // Date of completion of slaughter for human consumption (day/month/year) // / / - - - - - - // 1.2.3.4 // // Number of animals slaughtered for human consumption: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // Date of completion of slaughter and destruction (day/month/year) // / / - - - - - - // 1.2.3.4 // // Numbers of animals killed and destroyed: // - Cattle // - - - - - - // // // - Pigs // - - - - - - // // // - Sheep // - - - - - - // // // - Goats // - - - - - - // // // - Poultry // - - - - - - - // // // - Equidae // - - - - - - // // // - Fish // - - - - - - // // // - Wild species // - - - - - - - // // // 1.2,3.4 // // Swine fever only - Distance from nearest pig holding (in metres): // - - - - - - // 1.2.3.4 // // Number and type of pigs on the infected holding: // - Breeding pigs // - - - - - // // // - Piglets // - - - - - // // // - Fattening pigs // - - - - - // // // 1.2,3.4 // // Swine fever - Method used for diagnosis // - - // 1.2.3.4 // // Number and type of pigs clinically affected on the holding: // - Breeding pigs // - - - - - // // // - Piglets // - - - - - // // // - Fattening pigs ANNEX III ANIMAL DISEASE NOTIFICATION - FORM 3 NOTIFICATION TO THE COMMISSION AND TO THE OTHER MEMBER STATES OF LIFTING OF RESTRICTIONS FROM A REGION (OR REGIONS) IN ACCORDANCE WITH DIRECTIVE 82/894/EEC 1.2.3 // // // // // Information required // Text to be transmitted // // // // // Commission reference number // DGVI/B.II.2/ADN3 // // // // // Date of dispatch (*) (day/month/year) // / / - - - - - - // // Time of dispatch (*) (24-hour clock) // - - - - // // Country of origin (*) // - - // // Disease (*) // - - // // // // // Region (*) // - - - - - // // Date restrictions lifted (*) (day/month/year) // / / - - - - - - // // Time restrictions lifted (*) (24-hour clock) // - - - - // // // // // Region (*) // - - - - - // // Date restrictions lifted (*) (day/month/year) // / / - - - - - - // // Time restrictions lifted (*) (24-hour clock) // - - - - // // // // // Region (*) // - - - - - // // Date restrictions lifted (*) (day/month/year) // / / - - - - - - // // Time restrictions lifted (*) (24-hour clock) // - - - - // // // // // Region (*) // - - - - - // // Date restrictions lifted (*) (day/month/year) // / / - - - - - - // // Time restrictions lifted (*) (24-hour clock) // - - - - // // // // // Repeat as often as necessary according to the above format // // // // // ANNEX IV ANIMAL DISEASE NOTIFICATION - FORM 4 NOTIFICATION FROM THE COMMISSION TO THE MEMBER STATES OF OUTBREAKS OF DISEASE WITHIN THE COMMUNITY IN ACCORDANCE WITH DIRECTIVE 82/894/EEC 1.2.3.4 // // // // // // Commission reference number // // DGVI/BII.2/ADN4 // // // // 1.2.3.4,5 // // Date of dispatch (date/month/year) // // - -/- -/- - // // Time of dispatch (24-hour clock) // // - - - - // // Country under report // // - - // // Disease // // - - // // Period of report (from/to) // // - -/- -/- - to - -/- -/- - // // // // // // // // 1.2.3.4.5.6.7.8 // // // // // Primary // Secondary // // // // Total number of outbreaks (per country) // // // - - - // - - - // // // // // // Region // // // // // // Total number of outbreaks (per region) // // - - - // - - // - - // // // // // // - - - // - - // - - // // // // and so on as required // // - - - // - - // - - // // // // // // - - - // - - // - - // // // // // // // // // // // // Total: // // (1) // (2) // (3) // (4) // (5) // // - Cattle // // - - - - - - // - - - - - - // - - - - - - // - - - - - - // - - - - - - // // - Pigs // // - - - - - - // - - - - - - // - - - - - - // - - - - - - // - - - - - - // // - Sheep // // - - - - - - // - - - - - - // - - - - - - // - - - - - - // - - - - - - // // - Goats // // - - - - - - // - - - - - - // - - - - - - // - - - - - - // - - - - - - // // - Poultry // // - - - - - - // - - - - - - // - - - - - - // - - - - - - // - - - - - - // // - Equidae // // - - - - - - // - - - - - - // - - - - - - // - - - - - - // - - - - - - // // - Fish // // - - - - - - // - - - - - - // - - - - - - // - - - - - - // - - - - - - // // - Wild species // // - - - - - - // - - - - - - // - - - - - - // - - - - - - // - - - - - - 1.2.3.4.5.6.7.8.9.10.11 // // // // // // // // // // // // // // // // // // // // // // Swine fever only // // // // (6) // (7) // (8) // (9) // (10) // (11) // (12) // (13) // // Information on serial number // // - -/- - - - // - - - // - // - -/- -/- - // - - // - -/- - - - // - - // - - - - // // Information on serial number // // - -/- - - - // - - - // - // - -/- -/- - // - - // - -/- - - - // - - // - - - - // // Information on serial number // // - -/- - - - // - - - // - // - -/- -/- - // - - // - -/- - - - // - - // - - - - // // Information on serial number // // - -/- - - - // - - - // - // - -/- -/- - // - - // - -/- - - - // - - // - - - - // // Information on serial number // // - -/- - - - // - - - // - // - -/- -/- - // - - // - -/- - - - // - - // - - - - // // and so on (as required) // // - -/- - - - // - - - // - // - -/- -/- - // - - // - -/- - - - // - - // - - - - // // // // - -/- - - - // - - - // - // - -/- -/- - // - - // - -/- - - - // - - // - - - - // // // // // 1.2.3.4.5 // // Swine fever only // // (14) // (15) // // Total number: // // // // // - Breeding pigs // // - - - - - // - - - - - // // - Piglets // // - - - - - // - - - - - // // - Fattening pigs // // - - - - - // - - - - - // // // // // // // End of coded section // // // // // // // // Each group above is repeated as required for other diseases and for each country. 1.2 // (1) Total number of susceptible animals on holding(s). (2) Total number of clinically affected animals on holding(s). (3) Total number of dead animals on holding(s). (4) Total number of slaughtered animals on holding(s). (5) Total number of destroyed animals on holding(s). (6) Serial number (year/number). (7) Region. (8) Type of outbreak (primary or secondary). // (9) Date of confirmation of disease on holding. (10) Origin of disease. (11) Serial number to which this outbreak relates. (12) Method used for diagnosis. (13) Distance from nearest pig holding. (14) Total numbers and types of pig on holdings._ FISH _ _ _ _ _ _ // // _ WILD SPECIES _ _ _ _ _ _ _ // 1.2,3.4INFORMATION REQUIRED TEXT TO BE TRANSMITTED COMMISSION REFERENCE NUMBER DGVI/B.II.2/ADN2 DATE OF COMPLETION OF SLAUGHTER FOR HUMAN CONSUMPTION ( DAY/MONTH/YEAR ) / / _ _ _ _ _ _ 1.2.3.4NUMBER OF ANIMALS SLAUGHTERED FOR HUMAN CONSUMPTION : _ CATTLE _ _ _ _ _ _ // // _ PIGS _ _ _ _ _ _ // // _ SHEEP _ _ _ _ _ _ // // _ GOATS _ _ _ _ _ _ // // _ POULTRY _ _ _ _ _ _ _ // // _ EQUIDAE _ _ _ _ _ _ // // _ FISH _ _ _ _ _ _ // // _ WILD SPECIES _ _ _ _ _ _ _ // 1.2,3.4DATE OF COMPLETION OF SLAUGHTER AND DESTRUCTION ( DAY/MONTH/YEAR ) / / _ _ _ _ _ _ 1.2.3.4NUMBERS OF ANIMALS KILLED AND DESTROYED : _ CATTLE _ _ _ _ _ _ // // _ PIGS _ _ _ _ _ _ // // _ SHEEP _ _ _ _ _ _ // // _ GOATS _ _ _ _ _ _ // // _ POULTRY _ _ _ _ _ _ _ // // _ EQUIDAE _ _ _ _ _ _ // // _ FISH _ _ _ _ _ _ // // _ WILD SPECIES _ _ _ _ _ _ _ // 1.2,3.4SWINE FEVER ONLY _ DISTANCE FROM NEAREST PIG HOLDING ( IN METRES ): _ _ _ _ _ _ // 1.2.3.4 // NUMBER AND TYPE OF PIGS ON THE INFECTED HOLDING : _ BREEDING PIGS _ _ _ _ _ // // _ PIGLETS _ _ _ _ _ // // _ FATTENING PIGS _ _ _ _ _ // 1.2,3.4SWINE FEVER _ METHOD USED FOR DIAGNOSIS _ _ // 1.2.3.4 // NUMBER AND TYPE OF PIGS CLINICALLY AFFECTED ON THE HOLDING : _ BREEDING PIGS _ _ _ _ _ // // _ PIGLETS _ _ _ _ _ // // _ FATTENING PIGS ANNEX III ANIMAL DISEASE NOTIFICATION _ FORM 3 NOTIFICATION TO THE COMMISSION AND TO THE OTHER MEMBER STATES OF LIFTING OF RESTRICTIONS FROM A REGION ( OR REGIONS ) IN ACCORDANCE WITH DIRECTIVE 82/894/EEC 1.2.3INFORMATION REQUIRED TEXT TO BE TRANSMITTED COMMISSION REFERENCE NUMBER DGVI/B.II.2/ADN3 DATE OF DISPATCH (*) ( DAY/MONTH/YEAR ) / / _ _ _ _ _ _ TIME OF DISPATCH (*) ( 24-HOUR CLOCK ) _ _ _ _ // COUNTRY OF ORIGIN (*) _ _ // DISEASE (*) _ _ // // // // REGION (*) _ _ _ _ _ // DATE RESTRICTIONS LIFTED (*) ( DAY/MONTH/YEAR ) / / _ _ _ _ _ _ TIME RESTRICTIONS LIFTED (*) ( 24-HOUR CLOCK ) _ _ _ _ // // // // REGION (*) _ _ _ _ _ // DATE RESTRICTIONS LIFTED (*) ( DAY/MONTH/YEAR ) / / _ _ _ _ _ _ TIME RESTRICTIONS LIFTED (*) ( 24-HOUR CLOCK ) _ _ _ _ // // // // REGION (*) _ _ _ _ _ // DATE RESTRICTIONS LIFTED (*) ( DAY/MONTH/YEAR ) / / _ _ _ _ _ _ TIME RESTRICTIONS LIFTED (*) ( 24-HOUR CLOCK ) _ _ _ _ // // // // REGION (*) _ _ _ _ _ // DATE RESTRICTIONS LIFTED (*) ( DAY/MONTH/YEAR ) / / _ _ _ _ _ _ TIME RESTRICTIONS LIFTED (*) ( 24-HOUR CLOCK ) _ _ _ _ // // // // REPEAT AS OFTEN AS NECESSARY ACCORDING TO THE ABOVE FORMAT // // // // // ANNEX IV ANIMAL DISEASE NOTIFICATION _ FORM 4 NOTIFICATION FROM THE COMMISSION TO THE MEMBER STATES OF OUTBREAKS OF DISEASE WITHIN THE COMMUNITY IN ACCORDANCE WITH DIRECTIVE 82/894/EEC 1.2.3.4COMMISSION REFERENCE NUMBER DGVI/BII.2/ADN4 1.2.3.4,5DATE OF DISPATCH ( DATE/MONTH/YEAR ) // _ _/_ _/_ _ // TIME OF DISPATCH ( 24-HOUR CLOCK ) // _ _ _ _ // COUNTRY UNDER REPORT // _ _ // DISEASE // _ _ // PERIOD OF REPORT ( FROM/TO ) // _ _/_ _/_ _ TO _ _/_ _/_ _ // // // // // // // // 1.2.3.4.5.6.7.8 // // // // PRIMARY SECONDARY // // // TOTAL NUMBER OF OUTBREAKS ( PER COUNTRY ) // // _ _ _ _ _ _ // // // // // REGION // // // // // TOTAL NUMBER OF OUTBREAKS ( PER REGION ) // _ _ _ _ _ _ _ // // // // // _ _ _ _ _ _ _ // // // AND SO ON AS REQUIRED // _ _ _ _ _ _ _ // // // // // _ _ _ _ _ _ _ // // // // // // // // // // // TOTAL : // ( 1 ) ( 2 ) ( 3 ) ( 4 ) ( 5 ) _ CATTLE // _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ // _ PIGS // _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ // _ SHEEP // _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ // _ GOATS // _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ // _ POULTRY // _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ // _ EQUIDAE // _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ // _ FISH // _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ // _ WILD SPECIES // _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1.2.3.4.5.6.7.8.9.10.11 // // // // // // // // // // // // // // // // // // // // // SWINE FEVER ONLY ( 6 ) ( 7 ) ( 8 ) ( 9 ) ( 10 ) ( 11 ) ( 12 ) ( 13 ) // INFORMATION ON SERIAL NUMBER // _ _/_ _ _ _ _ _ _ _ _ _/_ _/_ _ _ _ _ _/_ _ _ _ _ _ _ _ _ _ // INFORMATION ON SERIAL NUMBER // _ _/_ _ _ _ _ _ _ _ _ _/_ _/_ _ _ _ _ _/_ _ _ _ _ _ _ _ _ _ // INFORMATION ON SERIAL NUMBER // _ _/_ _ _ _ _ _ _ _ _ _/_ _/_ _ _ _ _ _/_ _ _ _ _ _ _ _ _ _ // INFORMATION ON SERIAL NUMBER // _ _/_ _ _ _ _ _ _ _ _ _/_ _/_ _ _ _ _ _/_ _ _ _ _ _ _ _ _ _ // INFORMATION ON SERIAL NUMBER // _ _/_ _ _ _ _ _ _ _ _ _/_ _/_ _ _ _ _ _/_ _ _ _ _ _ _ _ _ _ // AND SO ON ( AS REQUIRED ) //_ _/_ _ _ _ _ _ _ _ _ _/_ _/_ _ _ _ _ _/_ _ _ _ _ _ _ _ _ _ // // // _ _/_ _ _ _ _ _ _ _ _ _/_ _/_ _ _ _ _ _/_ _ _ _ _ _ _ _ _ _ // // // // // 1.2.3.4.5 // SWINE FEVER ONLY // ( 14 ) ( 15 ) // TOTAL NUMBER : // // // // _ BREEDING PIGS // _ _ _ _ _ _ _ _ _ _ // _ PIGLETS // _ _ _ _ _ _ _ _ _ _ // _ FATTENING PIGS // _ _ _ _ _ _ _ _ _ _ // // // // // // END OF CODED SECTION // // // // // // // // EACH GROUP ABOVE IS REPEATED AS REQUIRED FOR OTHER DISEASES AND FOR EACH COUNTRY . 1.2(1 ) TOTAL NUMBER OF SUSCEPTIBLE ANIMALS ON HOLDING(S ). ( 2 ) TOTAL NUMBER OF CLINICALLY AFFECTED ANIMALS ON HOLDING(S ). ( 3 ) TOTAL NUMBER OF DEAD ANIMALS ON HOLDING(S ). ( 4 ) TOTAL NUMBER OF SLAUGHTERED ANIMALS ON HOLDING(S ). ( 5 ) TOTAL NUMBER OF DESTROYED ANIMALS ON HOLDING(S ). ( 6 ) SERIAL NUMBER ( YEAR/NUMBER ). ( 7 ) REGION . ( 8 ) TYPE OF OUTBREAK ( PRIMARY OR SECONDARY ). ( 9 ) DATE OF CONFIRMATION OF DISEASE ON HOLDING . ( 10 ) ORIGIN OF DISEASE . ( 11 ) SERIAL NUMBER TO WHICH THIS OUTBREAK RELATES . ( 12 ) METHOD USED FOR DIAGNOSIS . ( 13 ) DISTANCE FROM NEAREST PIG HOLDING . ( 14 ) TOTAL NUMBERS AND TYPES OF PIG ON HOLDINGS .

HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE, L.P. [20--] LTIP UNIT AWARD AGREEMENT [20--] Time-Based LTIP Units THIS [20--] LTIP UNIT AWARD AGREEMENT (“Agreement”) is made by and between Hannon Armstrong Sustainable Infrastructure, L.P., a Delaware limited partnership (the “Partnership”) and HASI Management HoldCo LLC, a Delaware limited liability company (the "Company," which in this Agreement is the "Grantee"), dated as of [----]. WHEREAS, the general partner of the Partnership has determined that it is appropriate to grant [20--] Time-Based LTIP Units of the Partnership to the Grantee. 1.    Grant of [20--] Time-Based LTIP Units. The Partnership hereby grants the Grantee [----] [20--] Time-Based LTIP Units of the Partnership which are each subject to the terms and conditions of this Agreement and further subject to the provisions of the Amended and Restated Limited Partnership Agreement of Hannon Armstrong Sustainable Infrastructure, L.P., a Delaware limited partnership (the “Partnership Agreement”). Capitalized terms used but not defined herein shall have the respective meanings ascribed thereto by the Partnership Agreement. To the extent the terms or conditions in this Agreement conflict with any provision of the Partnership Agreement, the terms and conditions set forth in the Partnership Agreement shall govern. 2.    Restrictions and Conditions. The [----] Time-Based LTIP Units awarded pursuant to this Agreement and the Partnership Agreement shall be subject to the following restrictions and conditions: (a) Subject to clause (c) below, the period of restriction with respect to the [20--] Time-Based LTIP Units granted hereunder (the "Restriction Period") shall begin on the date hereof and lapse in accordance with the provisions of Schedule I attached hereto. Subject to the provisions of the Partnership Agreement and this Agreement, during the Restriction Period, the Grantee shall not be permitted voluntarily or involuntarily to sell, transfer, pledge, anticipate, alienate, encumber, assign or otherwise dispose of the [20--] Time-Based LTIP Units awarded under this Agreement (or have such shares attached or garnished). (b) Except as provided in the foregoing clause (a), below in this clause (b) or in the Partnership Agreement, the Grantee shall have, in respect of the [20--] Time-Based LTIP Units, all of the rights of a partner in the Partnership, including the right to receive distributions in respect of such [20--] Time-Based LTIP Units. Unless otherwise provided by the General Partner, the Grantee shall be entitled to receive any distributions on the [20--] Time-Based LTIP Units (whether or not then subject to a substantial risk of forfeiture) which have not been forfeited if and when distributions are made in respect of Partnership units generally. (c) The Company is a special purpose vehicle through which the members of the Company hold indirect interests in the Partnership. In order to determine equitably the rights and obligations of the Company and its members with respect to the grant of [20--] Time-Based LTIP Units to the Company, the General Partner shall be entitled to take all necessary actions and make any adjustments that are necessary or advisable to replicate, with respect to the [20--] Time-Based LTIP Units, the vesting, cancellation, forfeiture or failure to vest that occurs with respect to any corresponding [20--] Time-Based HoldCo Units. In furtherance of the foregoing, the [20--] Time-Based LTIP Units shall become vested and nonforfeitable when, as and if a corresponding number of [20--] Time-Based HoldCo Units become vested and nonforfeitable in accordance with the terms of limited liability company agreement of the Company and any applicable Unit Award Agreement with a member of the Company. Similarly, the [20--] Time-Based LTIP Units shall be forfeited by the Company without further consideration if and to the extent that a corresponding number of [20--] Time-Based HoldCo Units are forfeited by a member of the Company. 3.    Distributions. Distributions on the [20--] Time-Based LTIP Units shall be paid to Grantee in accordance with the terms of the Partnership Agreement; provided, however, that notwithstanding Section 13.02(a)(iv) of the Partnership Agreement, upon a Liquidating Event, distributions in respect of the [20--] Time-Based LTIP Units pursuant to Section 13.02(a)(iv) of the Partnership Agreement shall not exceed the lesser of (i) the amount provided to be distributed in respect of the [20--] Time-Based LTIP Units under Section 13.02(a)(iv) of the Partnership Agreement and (ii) the amount that would be distributed in respect of the [20--] such provision provided for distribution to the Partners and Assignees in accordance with their Capital Account balances, after giving effect to all contributions, distributions and allocations for all periods. 4.     Miscellaneous. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (b) The General Partner may make such rules and regulations and establish such procedures for the administration of this Agreement as it deems appropriate. Without limiting the generality of the foregoing, the General Partner may in good faith interpret this Agreement, with such interpretations to be conclusive and binding on all persons and otherwise accorded the maximum deference permitted by law, provided that the General Partner's interpretation shall not be entitled to deference on and after a Change in Control except to the extent that such interpretations are made exclusively by a General Partner who is comprised of one or more individuals who served on the Compensation Committee of the Board of Directors of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (the "REIT") before the Change in Control and take any other actions and make any other determinations or decisions that it deems necessary or appropriate in connection with the Partnership Agreement, this Agreement or the administration or interpretation thereof. In the event of any dispute or disagreement as to interpretation of the Partnership Agreement or this Agreement or of any rule, regulation or procedure, or as to any question, right or obligation arising from or related to the Partnership Agreement or this Agreement, the decision of the General Partner in accordance with the foregoing provisions of this Paragraph 3(b) shall be final and binding upon all persons. (c) All notices hereunder shall be in writing, and if to the Partnership or the General Partner, shall be delivered to the Partnership or mailed to its principal office, addressed to the attention of the General Partner; and if to the Grantee, shall be delivered personally, sent by facsimile transmission or mailed to the Grantee at the address appearing in the records of the Company. Such addresses may be changed at any time by written notice to the other party given in accordance with this Paragraph 3(c). (d) Without limiting the Grantee's rights as may otherwise be applicable in the event of a Change in Control, if the Partnership shall be consolidated or merged with another corporation or other entity, the Grantee may be required to deposit with the successor corporation any certificates for the stock or securities or the other property that the Grantee is entitled to receive by reason of ownership of [20--] Time-Based LTIP Units in a manner consistent with the Partnership Agreement, and such stock, securities or other property shall become subject to the restrictions and requirements imposed under this Agreement and the Partnership Agreement, and the certificates therefor or other evidence shall bear a legend similar in form and substance to the legend set forth in the Partnership Agreement. (e) Unless otherwise provided by the General Partner, any shares or other securities distributed to the Grantee with respect to [20--] Time-Based LTIP Units or otherwise issued in substitution of [20--] Time-Based LTIP Units shall be subject to the restrictions and requirements imposed by this Agreement and the Partnership Agreement, including depositing the certificates therefor with the Company together with a stock power and bearing a legend as provided in the Partnership Agreement. (f) The failure of the Grantee or the Partnership to insist upon strict compliance with any provision of this Agreement or the Partnership Agreement, or to assert any right the Grantee or the Partnership, respectively, may have under this Agreement or the Partnership Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement or the Partnership Agreement. (g) The Partnership shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be required by law. (h) This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto. (i) This Agreement may be executed in any number of counterparts, including via facsimile, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. (j) Except as otherwise provided in the Partnership Agreement, no amendment or modification hereof shall be valid unless it shall be in writing and signed by all parties hereto. (k) The Grantee is an “accredited investor” as defined under Rule 501 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). Grantee has duly executed and delivered to the Company an accredited investor questionnaire in the form attached as Annex A hereto indicating the basis for such representation. Grantee is capable of evaluating the merits and risks of the acquisition and ownership of the [20--] Time-Based LTIP Units and has obtained all information regarding the Partnership (and its applicable affiliates) and the [20--] Time-Based LTIP Units as Grantee deems appropriate, and has relied solely upon such information, and Grantee’s own knowledge, experience and investigation, and those of his, her or its advisors, and not upon any representations of the Partnership and/or the Company, in connection with its investment decision in acquiring the [20--] Time-Based LTIP Units. Grantee and his, her or its professional advisors have had an opportunity to conduct, and have so conducted if so desired, a due diligence investigation of the Partnership in connection with the decision to acquire the [20--] Time-Based LTIP Units and in such regard have done all things as Grantee and they have deemed appropriate and have had an opportunity to ask questions of and receive answers from the Partnership and the Company, and have done so, as they have deemed appropriate. (l) The Grantee shall execute the Joinder Agreement attached as Annex B hereto. (the remainder of the page left intentionally blank) IN WITNESS WHEREOF, the Partnership and the Grantee have executed this Agreement HASI MANAGEMENT HOLDCO LLC By:      Print Name: Title:           HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE, L.P., a Delaware limited partnership By: Hannon Armstrong Sustainable Infrastructure Capital, Inc., its general partner By:__________________________________ Print Name: Title:      Schedule I [Insert terms of Time-Based LTIP Units issuance.] ANNEX A ACCREDITED INVESTOR QUESTIONNAIRE This Questionnaire is being provided as of this __ day of [----] in accordance with the provisions of that certain “Hannon Armstrong Sustainable Infrastructure, L.P. [20--] LTIP Unit Award Agreement” dated as of [----] (the “Agreement”). Unless otherwise defined herein, all capitalized terms have the meaning set forth in the Agreement. The undersigned represents and warrants to the Company that it is an “accredited investor” within the meaning given to such term under Rule 501 of Regulation D under the Securities Act and has initialed the applicable statement below. FOR INDIVIDUALS [Entities should complete the section below] Please check the appropriate description which applies to you. (a) ______    I am a natural person whose individual net worth, or joint net worth with my spouse, exceeds $1,000,000. For purposes of this item question, “net worth” means the excess of total assets at fair market value (including personal and real property, but excluding the estimated fair market value of a person’s primary home) over total liabilities. Total liabilities excludes any mortgage on the primary home in an amount of up to the home’s estimated fair market value as long as the mortgage was incurred more than 60 days before the securities are purchased, but includes (i) any mortgage amount in excess of the home’s fair market value and (ii) any mortgage amount that was borrowed during the 60-day period before the closing date for the sale of securities for the purpose of investing in the [20--] Time-Based LTIP Units. (b) ______    I am a natural person who had individual income exceeding $200,000 in each of the last two calendar years and I have a reasonable expectation of reaching the same income level in the current calendar year. (c) ______    I am a natural person who had joint income with my spouse exceeding $300,000 in each of the last two calendar years and I have a reasonable expectation of reaching the same income level in the current calendar year, as defined above. (d) ______    I am a director, executive officer or general partner of the Partnership, or a director, executive officer or general partner of a general partner of the Partnership. (For purposes of this question, executive officer means the president; any vice president in charge of a principal business unit, division or function, such as sales, administration or finance; or any other person or persons who perform(s) similar policymaking functions for the Partnership.) FOR ENTITIES (a)    ______ A bank, as defined in Section 3(a)(2) of the Securities Act or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in an individual or a fiduciary capacity. (b)    ______ A broker or dealer registered under Section 15 of the Securities Exchange Act of 1934, as amended. (c)    ______ An insurance company, as defined in Section 2(13) of the Securities Act. (d)    ______ An investment company registered under the Investment Company Act of 1940 or a business development company, as defined in Section 2(a)(48) of that act. (e)    ______ A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958. (f)    ______ A plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if the plan has total assets in excess of $5 million. (g)    ______ An employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is being made by a plan fiduciary, as defined in Section 3(21) of such act, and the plan fiduciary is either a bank, an insurance company, or a registered investment adviser, or if the employee benefit plan has total assets in excess of $5 million. (h)    ______ A private business development company, as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. (i)    ______ A corporation, Massachusetts or similar business trust, or partnership, or an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, that was not formed for the specific purpose of acquiring the [20--] Time-Based LTIP Units, and that has total assets in (j)    ______ A trust with total assets in excess of $5 million not formed for the specific purpose of acquiring the [20--] Time-Based LTIP Units, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the Securities Act. (k)    ___X__ An entity in which all of the equity owners are accredited investors and meet the criteria listed for individuals listed above in this Questionnaire. Dated as of this __ day of [----]. HASI Management HoldCo LLC, By:     Name: Title: ANNEX B FORM OF JOINDER AGREEMENT In consideration of the issuance to the undersigned of [20--] Time-Based LTIP Units of the Partnership, the undersigned agrees that, as of the date written below, it shall become a party to the Amended and Restated Limited Partnership Agreement of Hannon Armstrong Sustainable Infrastructure, L.P., dated as of April 23, 2013 (as such may have been or may be further amended from time to time, the “Partnership Agreement”), by and among the Partnership and the persons signatory therein, and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Partnership Agreement as though an original party thereto and shall be deemed an additional Partner for purposes thereof. Executed as of the _____day of _______, _______. [20--] Time-Based LTIP Unitholder __________________________ HASI Management HoldCo LLC BY:______________________________ MANAGING MEMBER   1  

Exhibit 10.2 McMoRan EXPLORATION CO. NOTICE OF GRANT OF NONQUALIFIED STOCK OPTIONS UNDER THE 2 1.(a)Pursuant to the McMoRan Exploration Co. 2008 Stock Incentive Plan (the “Plan”), (the “Optionee”) is hereby granted effective , , in consideration of future services, Options to purchase from the Company, on the terms and conditions set forth in this Notice and in the Plan, shares of Common Stock of the Company at a purchase price of $ per share. (b)Defined terms not otherwise defined in Section 11 of this Notice shall have the meanings set forth in Section 2 of the Plan. (c)The Options granted hereunder are intended to constitute nonqualified stock options and are not intended to constitute incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). 2.(a)All Options granted hereunder shall terminate on , 20 unless terminated earlier as provided in Section 4 of this Notice. (b)The Options granted hereunder shall become exercisable in installments as follows: Date ExercisableNumber of Shares (c)Options granted hereunder may be exercised with respect to all or any part of the Shares comprising each installment as the Optionee may elect at any time after such Options become exercisable until the termination date set forth in Section 2(a) or Section 4, as the case may be. (d)Notwithstanding the foregoing provisions of this Section 2, the Options granted hereunder shall immediately become exercisable in their entirety at such time as there shall be a Change in Control of the Company. 3.Upon each exercise of the Options granted hereunder, the Optionee shall give written notice to the Company, which shall specify the number of Shares to be purchased and shall be accompanied by payment in full of the aggregate purchase price thereof, in accordance with procedures established by the Committee.Such exercise shall be effective upon receipt by the Company of such notice in good order and payment. 4. (a)Except as set forth in this Section 4, the Options provided for in this Notice shall immediately terminate on the date that the Optionee ceases for any reason to be an Eligible Individual. (b)If the Optionee ceases to be an Eligible Individual for any reason other than death, Disability, Retirement or termination for Cause, any Option granted hereunder that is then exercisable shall remain exercisable in accordance with the terms of this Notice within three months after the date of such cessation, but in no event shall any such Option be exercisable after the termination date specified in Section 2(a). (c)If the Optionee ceases to be an Eligible Individual by reason of the Optionee’sDisability or Retirement, any Option granted hereunder that is exercisable on the date of such cessation, as well as any Option granted hereunder that would have become exercisable within one year after the date of such cessation had the Optionee continued to be an Eligible Individual, shall remain exercisable in accordance with the terms of this Notice within three years after the date of such cessation, but in no event shall any such Option be exercisable after the termination date specified in Section 2(a). (d) (i) If the Optionee ceases to be an Eligible Individual as a result of the Optionee’s death, any Option granted hereunder that is exercisable on the date of such death, as well as any Option granted hereunder that would have become exercisable within one year after the date of such death had the Optionee continued to be an Eligible Individual, shall remain exercisable by the Optionee’s Designated Beneficiary in accordance with the terms of this Notice until the third anniversary ofthe date of such death, but in no event shall any such Option be exercisable after the termination date specified in Section 2(a). (ii)If the Optionee dies after having ceased to be an Eligible Individual and any Option granted hereunder is then exercisable in accordance with the provisions of this Section 4, such Option will remain exercisable by the Optionee’s Designated Beneficiary in accordance with the terms of this Notice until the third anniversary of the date the Optionee ceased to be an Eligible Individual, but in no event shall any such Option be exercisable after the termination date specified in Section 2(a). (e)If the Optionee ceases to be an Eligible Individual by reason of the Optionee’s termination for Cause, any Option granted hereunder that is exercisable on the date of such cessation shall terminate immediately. 5.The Options granted hereunder are not transferable by the Optionee otherwise than by will or by the laws of descent and distribution or pursuant to a domestic relations order, as defined in the Code, and shall be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s duly appointed legal representative. 2 6.All notices hereunder shall be in writing and, if to the Company, shall be delivered personally to the Secretary of the Company or mailed to its principal office, 1615 Poydras Street, New Orleans, Louisiana 70112, addressed to the attention of the Secretary; and, if to the Optionee, shall be delivered personally, mailed or delivered via e-mail to the Optionee at the address on file with the Company.Such addresses may be changed at any time by notice from one party to the other. 7.The terms of this Notice shall bind and inure to the benefit of the Optionee, the Company and the successors and assigns of the Company and, to the extent provided in the Plan and in this Notice, the Designated Beneficiaries and the legal representatives of the Optionee. 8.This Notice is subject to the provisions of the Plan.The Plan may at any time be amended by the Board, except that any such amendment of the Plan that would materially impair the rights of the Optionee hereunder may not be made without the Optionee’s consent.The Committee may amend, modify or terminate this Notice and any of the Options granted hereunder at any time prior to exercise in any manner not inconsistent with the terms of the Plan, including, without limitation, to change the date or dates as of which the Options granted hereunder become exercisable. Notwithstanding the foregoing, no such amendment, modification or termination may materially impair the rights of the Optionee hereunder without the Optionee’s consent.Except as set forth above, any applicable determinations, orders, resolutions or other actions of the Committee shall be final, conclusive and binding on the Company and the Optionee. 9.The Optionee is required to satisfy any obligation in respect of withholding or other payroll taxes resulting from the exercise of any Option granted hereunder, in accordance with procedures established by the Committee, as a condition to receiving any certificates for securities resulting from the exercise of any such Option. 10.Nothing in this Notice shall confer upon the Optionee any right to continue in the employ of the Company or any of its Subsidiaries or to interfere in any way with the right of the Company or any of its Subsidiaries to terminate the Optionee’s employment relationship with the Company or any of its Subsidiaries at any time. 11.As used in this Notice, the following terms shall have the meanings set forth below. (a)“Cause” shall mean any of the following: (i) the commission by the Optionee of an illegal act (other than traffic violations or misdemeanors punishable solely by the payment of a fine), (ii) the engagement of the Optionee in dishonest or unethical conduct, as determined by the Committee or its designee, (iii) the commission by the Optionee of any fraud, theft, embezzlement, or misappropriation of funds, (iv) the failure of the Optionee to carry out a directive of his superior, employer or principal, or (v) the breach of the Optionee of the terms of his engagement. (b)“Change in Control” shall mean the earliest of the following events:(i) any person or any two or more persons acting as a group, and all affiliates of 3 such person or persons, shall acquire beneficial ownership of more than 25% of all classes and series of the Company’s outstanding stock (exclusive of stock held in the Company’s treasury or by the Company’s Subsidiaries), taken as a whole, that has voting rights with respect to the election of directors of the Company (not including any series of preferred stock of the Company that has the right to elect directors only upon the failure of the Company to pay dividends) pursuant to a tender offer, exchange offer, purchase or other acquisition or series of purchases or other acquisitions, or any combination of those transactions (a “25% Stock Acquisition”); provided, however, that any 25% Stock Acquisition shall not constitute a Change in Control if all of the acquiring persons enter into a standstill agreement with the Company in a form approved by the Board and a majority of the members of the Board at the time of such approval were also members of the Board immediately prior to the 25% Stock Acquisition, or (ii) there shall be a change in the composition of the Board at any time within two years after any tender offer, exchange offer, merger, consolidation, sale of assets or contested election, or any combination of those transactions (a “Transaction”), such that (A) the persons who were directors of the Company immediately before the first such Transaction cease to constitute a majority of the board of directors of the corporation that shall thereafter be in control of the companies that were parties to or otherwise involved in such Transaction or (B) the number of persons who shall thereafter be directors of such corporation shall be fewer than two-thirds of the number of directors of the Company immediately prior to such first Transaction. (c)“Disability” shall mean long-term disability, as defined in the Company’s long-term disability plan. (d)“Retirement” shall mean early, normal or deferred retirement of the Optionee under a tax qualified retirement plan of the Company or any other cessation of the provision of services to the Company or a Subsidiary by the Optionee that is deemed by the Committee to constitute a retirement. McMoRan EXPLORATION CO. By: 4

SEPARATION AND RELEASE AGREEMENT This SEPARATION AND RELEASE AGREEMENT (“Agreement”) is made as of March 21, 2012 by and between Kevin M. Piltz, a Connecticut resident ("Employee"), and MModal MQ Inc. (f/k/a MedQuist Inc.) (the "Company"), a New Jersey corporation, having its principal office at 9009 Carothers Parkway, Suite C-2, Franklin, TN 37067. The Company and the Employee, each acting of their own free will and intending to be legally and irrevocably bound, here by mutually agree as follows: 1.    For purposes of this Agreement, the following terms shall have the meanings given to them below: "Claims" shall mean any and all suits, causes of action, complaints, charges, obligations, demands, or claims of any kind, whether in law or in equity, direct or indirect, known or unknown, matured or unmatured, which Employee may now have or ever had against the Company. “Competitor” shall mean any person, firm, company or organization engaged in providing medical transcription software technology and/or services. “Company Group” means the Company and its parents, subsidiaries and affiliates. “Confidential Information” shall mean information regarding any member of the Company Group, its past, current or future plans, employees, customers, services, programs and products which is disclosed to or becomes known by Employee as a result of Employee’s employment by the Company, and is not generally known by the public. “Customer” shall mean any client or customer or prospective client or prospective customer who is/are contacted, solicited and/or serviced, in any manner, by Employee and/or by any other employee of the Company within the one (1) year prior to the Employee’s termination of employment. 2.    Employee and the Company have mutually agreed that Employee's employment with the Company shall be terminated effective as of the close of business on July 1, 2012, at which time the Employment Letter Agreement by and between the Company and Employee dated May 18, 2009 (the “Employment Letter Agreement”), shall terminate, except as may be required by operation of law. The parties agree that Employee shall have the right to terminate his employment with the Company, by notifying the Company in writing, at any time after June 1, 2012 and prior to July 1, 2012, and Employee shall be entitled to receive employee salary and benefits through the date of such termination of employment and all of the rights and benefits set forth in paragraph 3 following the date of such termination of employment. In the event that the Company notifies Employee in writing of the Company’s intent to have employee cease the performance of his duties at any time prior to July 1, 2012, the Company shall be obligated to continue to provide Employee with employee salary and benefits through July 1, 2012, and following July 1, 2012, Employee shall entitled to all of the rights and benefits set forth in paragraph 3. If the parties mutually agree in writing, Employee’s date of termination of employment may be moved back to, but not beyond, July 31, 2012, in which event the Company shall be obligated to continue to provide Employee with employee salary and benefits through the date of such termination of employment, and Employee shall entitled to receive all of the termination of employment. The effective date of the termination of Employee’s employment with the Company in accordance with this paragraph 2 shall be referred to herein as the “Departure Date.” In addition, in accordance with the Restricted Stock Award Agreement dated July 11, 2011 by and between MedQuist Holdings Inc. and Employee (the “Restricted Stock Award Agreement”), Employee’s termination of employment is deemed to be without Cause, thereby resulting in any unvested shares covered by the Restricted Stock Award Agreement becoming vested and non-forfeitable as of the close of business on the Departure Date. 3.    Separation Benefits. Employee shall receive (i) payment of accrued and unpaid salary through the Departure Date, (ii) payment for any expense reimbursement submissions outstanding or promptly submitted following the Departure Date, which are documented and for expenses reimbursable pursuant to the Company’s expense reimbursement policy and (iii) payment for any unused vacation time that has accrued in the period January 1, 2012 through the Departure Date.   In consideration of (a) Employee's execution of this Agreement, (b) this Agreement becoming effective no later than 45 days following the date hereof and (c) Employee’s execution and delivery to the Company, and the expiration of all applicable statutory revocation periods, by the 30th day following the Departure Date, of a general release of claims against the Company and its affiliates in a form attached hereto as Exhibit A(the “Release”), the Company shall pay or provide to the Employee the following consideration: (i) in installments as per the Company’s regularly scheduled payroll cycle, less all applicable taxes and withholdings: $280,000.00 which constitutes Fifty Two (52) weeks of Employee’s base salary; (ii) reimbursement of the employer contribution portion of the applicable monthly COBRA premium for employee’s medical benefits plan coverage following the Departure Date until the earlier to occur of the end of monthly COBRA coverage period for the twelfth month following the Departure Date or the date on which employee is eligible for coverage under a plan maintained by a new employer or enrolls for coverage under a plan maintained by his spouse’s employer, at the coverage level in effect at the Departure Date (or generally comparable coverage) for himself and, where applicable, his spouse and dependents, as the same may be changed by the Company from time to time for employees generally, as if Employee had continued in employment during such period; provided, in any case, that the COBRA health care continuation coverage period under section 4980B of the Internal Revenue Code of 1986, as amended, shall run concurrently with the foregoing period.  The Company’s reimbursement obligation under this subparagraph is limited to and conditioned upon employee’s (1) timely election of COBRA coverage, (2) timely payment of the full, applicable monthly COBRA premiums, and (3) prompt remittance to the Company of written proof demonstrating payment by employee of the full, applicable monthly COBRA premium.  Employee shall notify the Company immediately upon becoming eligible for coverage under a plan maintained by a new employer or his spouse’s employer.  Notwithstanding any other provisions of this subparagraph, the Company’s obligation to reimburse employee shall cease upon termination of employee’s COBRA coverage for any reason, if not sooner; and (iii) a three (3) month Management Career Service Program through Right Management Consultants. The payments and benefits described in this paragraph 3 will begin to be paid or provided as soon as administratively practicable after the Release becomes irrevocable, provided that if the 30 day period described above begins in one taxable year and ends in a second taxable year such payments or benefits shall not commence until the second taxable year. The reimbursement payable pursuant to clause (ii) shall be paid by the Company to Employee on a monthly basis no later than thirty (30) days after Employee makes his COBRA premium payment for such month. 4.    In consideration of the Company's payment obligations set forth in paragraph 3 above, Employee, on his own behalf and together with his heirs, assigns, executors, agents and representatives, hereby generally waives, releases and discharges the Company, its parent companies, subsidiaries, affiliates, shareholders, predecessors and assigns, and each and every of their officers, directors, shareholders, employees and agents and the heirs and executors of same (each in their respective capacity as such and individually) (hereinafter, collectively, “Releasees”)from any and all Claims which Employee ever had or now has against each or any of the Releasees, including, without limitation, any Claims related to Employee’s employment or separation from employment.          This release specifically includes, without limitation, any and all Claims for: (i) wages and benefits (including without limitation salary, stock, stock options, commissions, royalties, license fees, health and welfare benefits, paid time off, vacation pay, personal time and bonuses); (ii) wrongful discharge and breach of contract (whether express or implied), and implied covenants of good faith and fair dealing; (iii) alleged retaliation and employment discrimination on the basis of age, race, color, religion, sex, national origin, veteran status, disability, handicap and/or other protected status, in violation of any federal, state or local statute, ordinance, judicial precedent or executive order, including, but not limited to, Claims for discrimination under the following statutes: Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000 et seq.), the Civil Rights Act of 1866 (42 U.S.C. 1981), the Americans with Disabilities Act (42 U.S.C. 12101 et seq.), and any similar act under applicable state laws; (iv) under any federal or state statute relating to employment and/or employee benefits or pensions; (v) in tort (including, but not limited to, any Claims for misrepresentation, defamation, interference with contract or prospective economic advantage, intentional or negligent infliction of emotional distress and negligence); (vi) attorney's fees and costs; and (vii) age discrimination or other Claims under the Age Discrimination in Employment Act, as amended (29 U.S.C. 621 et seq.) (the “ADEA”), the Older Workers Benefit Protection Act, the Rehabilitation Act of 1972, as amended (29 U.S.C. 701 et seq.) or any similar act under applicable state laws, rules and regulations; provided, however, that the above release and waiver of Claims shall not apply to any rights or Claims that are non-waivable as a matter of law. Employee represents, warrants and covenants that Employee has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, any Claims against any Releasee or any portion thereof or interest therein.      Employee acknowledges and agrees that, should any governmental agency or other third party pursue any actions or Claims on Employee’s behalf, Employee waives any and all rights to recovery or monetary award from such actions or proceedings, except to the extent, if any, that such waiver is prohibited by law. 5.    Employee understands that this Agreement extends to all Claims and potential Claims which arose on or before the date of this Agreement, whether now known or unknown, suspected or unsuspected, matured or unmatured, and that this constitutes an essential term of this Agreement. 6.    Employee understands and acknowledges the significance and consequence of this Agreement and of each specific release and waiver, and expressly consents that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims, demands, obligations, and causes of action, if any, as well as those relating to any other Claims, demands, obligations or causes of action referred to in paragraph 4 above. 7.    All remedies at law or in equity shall be available for the enforcement of this Agreement. This Agreement may be pleaded as a full and complete bar to the enforcement of any Claim which Employee may have against the Releasees. If Employee violates this Agreement, in addition to all other legal and equitable remedies available to the Company and/or Releasees, Employee shall pay the reasonable attorneys' fees and expenses incurred by the Company and/or Releasees in connection with enforcement of this Agreement. In addition, Employee’s violation of the terms of this Agreement shall automatically result in immediate termination of the Company's obligation to make payment(s) under paragraph 3 of this Agreement. Nothing in this paragraph 7 is intended to conflict with the provisions of the ADEA or the Older Workers Benefit Protection Act. 8.    It is further understood and agreed that neither the execution of this Agreement by the Company, nor the terms hereof, constitute an admission by the Company or Employee of liability with respect to any possible Claim which was or could have been made by Employee or Company. In addition, Employee shall hereinafter disclose or reveal any allegations of Claims made against the Company or any Releasee prior to the date hereof. 9.    Neither the Company nor Employee shall disclose or publicize the terms of this Agreement, directly or indirectly, to any person or entity; provided however, that the terms, amount and/or fact of this Agreement may be disclosed to their respective accountants and attorneys, or to governmental agencies to the extent required by law. 10.    Employee agrees to return to the Company, on or prior to the Departure Date, all property belonging to the Company that has been provided to the Employee and also all property that is in the Employee's possession or control, including, without limitation, computers, computer accessories, cell phones, VOIP phones, telecom equipment and/or other accessories, credit cards, keys or key fobs, files and/or copies or abstracts of any proprietary or confidential information; provided, however, the Company agrees and acknowledges that Employee may keep his Company issued laptop and iPad.. 11.    Employee understands that Employee shall be considered an Employee of the Company only through the Departure Date. Except for the payment obligations specifically set forth in paragraph 3 of this Agreement, any other rights Employee shall have as an employee of the Company shall terminate as of the Departure Date. 12.    Employee understands, acknowledges, and agrees that the Company has no obligation whatsoever to reinstate, recall, reemploy, or rehire Employee to any position with the Company. Notwithstanding any other provisions of this Agreement to the contrary, it is further agreed and acknowledged that Employee’s rehire or reemployment by the Company at any time after the Departure Date, shall automatically result in the immediate termination of the Company’s obligation to make payment(s) under paragraph 3 of this Agreement. 13.    The Employee agrees that the Employee will not attempt to disrupt the operations of any member of the Company Group in any manner whatsoever. In particular, but without limitation, the Employee agrees that the Employee shall not: a.    disparage or defame any member of the Company Group or any employee thereof; or b.    during or after his/her employment by the Company, disclose any Confidential Information or trade secret information, except as required by the nature of his/her employment by the Company, as expressly authorized in writing by the Company, or required by law; c.    for a period of two (2) years following termination of his/her employment, directly or indirectly, whether as an employee, owner, partner, consultant, agent, director, officer, shareholder or in any other capacity, solicit any Customer which would result in such Customer terminating their relationship with any member of the Company Group; d.    for a period of one (1) year following termination of his/her employment, agent, director, officer, shareholder or in any other capacity, engage in or be employed by any Competitor; and induce, solicit, or aid in the solicitation of any existing employee, agent, vendor, independent contractor or consultant of any member of the Company Group, to leave or otherwise terminate his/her employment or engagement with any member of the Company Group. 14.    Employee agrees that he/she will cooperate fully with the Company and its counsel with respect to any matter, including, but not limited to, any litigation, investigation, or governmental proceeding or internal Company review, which relates to matters with which Employee was involved during the period in which he/she was employed by the Company, or concerning which the Company reasonably determines Employee may have responsive or relevant information. Such cooperation includes, but is not limited to, full disclosure of all relevant information and truthfully testifying on the Company’s behalf in connection with any such litigation, proceeding, investigation or review. In addition, such cooperation shall include, but shall not be limited to, Employee's making himself/herself reasonably available for interviews by the Company or its counsel, depositions and/or court appearances upon the Company's request. Employee will render such cooperation in a timely manner and at such times and places as may be mutually agreeable to the parties. Upon submission of appropriate documentation, Employee shall be reimbursed by the Company for reasonable travel, lodging, meals, and telecommunications expenses incurred in cooperating with the Company under the terms of this provision. Except as required by operation of law, Employee agrees that he/she will immediately notify the Company if he/she is contacted for an interview or if he/she receives a subpoena in any matter relating in any way to his/her employment with the Company. Employee further agrees that he/she will not initiate any communication with a member of the press regarding his/her employment with the Company and that if he/she is contacted by the press for any such information, he/she will decline comment and refer the person seeking information to the Company. 15.    This Agreement has been presented to Employee on March 21, 2011.Employee understands that the release of Claims being given, as set forth in paragraph 4 of this Agreement, includes a release of Claims arising under the ADEA and is in exchange for consideration of value to which the Employee would not otherwise have been entitled. Employee understands and represents that Employee has been given a period of twenty-one (21) days to review and consider this Agreement. By Employee’s signature below, Employee represents that he/she has read this Agreement and understands its meaning and application and that he/she has been advised to consult an attorney as to the terms of this Agreement. Employee further represents that he/she understands that he/she may accept and return the Agreement to the Company prior to the expiration of this twenty-one (21) day review period, and, if he/she chooses to do so, he/she warrants that he/she used as much of the twenty-one (21) day review period as he/she required and returned the Agreement knowingly and voluntarily and without any pressure or coercion on the part of the Company or any of its representatives. Employee has the right to revoke this Agreement at any time within seven (7) calendar days after Employee has executed it. Notice of revocation must be communicated in writing and received prior to the end of the seven (7) day period by: Bill Donovan SVP Human Resources MModal Inc. 9009 Carothers Parkway, Suite C-2 Franklin, TN 37067          16.    a.    This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall inure to the benefit of and be binding upon their respective parties and their heirs, executors, administrators, successors and assigns. b.    If any provision of this Agreement or the application of this Agreement is adjudicated to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement which can be given effect without the invalid or unenforceable provision. This Agreement supersedes any and all prior agreements or understandings pertaining to the subject matter thereof, including but not limited to the Employment Letter Agreement. Employee represents and acknowledges that in executing this Agreement, Employee has not relied upon any representation or statement not set forth herein made by the Company or by any of the Company’s agents, representatives, or attorneys. c.    Neither this Agreement nor any term of this Agreement may be orally changed, waived, discharged, or terminated, except by a signed, written agreement between the Employee and the Company’s authorized representative identified below. d.    The construction, interpretation and performance of this Agreement shall be governed by the laws of the State of New Jersey without regard to its conflicts of law principals. Any action relating to this Agreement or its breach shall be brought in the New Jersey Superior Court (Burlington County Vicinage), or in the United States District Court for the District of New Jersey (Camden Vicinage). e.    The terms of the Agreement contained herein are contractual, and not mere recitals. f.    The Parties agree that if it becomes necessary to construct or interpret the language of this Agreement for any purpose, this Agreement shall be deemed to have been drafted jointly and equally by the Parties and that no party shall be deemed to have been the drafter. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the Parties. g.    All payments (or transfers of property) to Employee will be subject to tax withholding to the extent required by applicable law. h.     The payments and benefits provided pursuant to this Agreement are intended to be exempt from Code Section 409A (to the extent applicable), either as a “separation pay plan” under Section 409A or otherwise. Notwithstanding anything herein to the contrary or otherwise, no portion of the benefits or payments to be made under paragraph 3 hereof will be payable until Employee has a “separation from service” from the Company within the meaning of Section 409A of the Code. For purposes of the application of Section 409A of the Code, each payment in a series of payments will be deemed a separate payment. i.    Notwithstanding anything herein to the contrary or otherwise, except to the extent any expense, reimbursement or in-kind benefit provided to Employee does not constitute a “deferral of compensation” within the meaning of Section 409A of the Code, and its implementing regulations and guidance, the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit. IN WITNESS WHEREOF, Employee, acknowledging that he/she is acting of his/her own free will and that he/she has had the opportunity to seek the advice of counsel with respect hereto, and the authorized representative of the Company, have executed this Agreement as of the respective day and year written below. Executive                        MModal MQ Inc. /s/ Kevin M. Piltz                    By: /s/ William Donovan             Kevin M. Piltz                        Name:         William Donovan         Date: March 21, 2012                    Title:     Sr. Vice President, Human Resources     Date:     March 22, 2012             EXHIBIT A RELEASE AND NON-DISPARAGEMENT AGREEMENT THIS RELEASE AND NON-DISPARAGEMENT AGREEMENT (this “Release”) is made as of the ___ day of _______, ____ by and between Kevin Piltz (the “Executive”) and MModal MQ Inc. (the “Company”). WHEREAS, the Executive’s employment as an employee of the Company has terminated; and WHEREAS, pursuant to Paragraph 3 of the Separation and Release Agreement by and between the Company and the Executive dated __ ___, 2012 (the “Separation Agreement”), the Company has agreed to pay the Executive certain amounts and to provide him with certain rights and benefits, subject to the execution of this Release. NOW THEREFORE, in consideration of these premises and the mutual promises contained herein, and intending to be legally bound hereby, the parties agree as follows: 1.    Consideration. The Executive acknowledges that: (i) the payments, rights and benefits set forth in Paragraph 3 of the Separation Agreement constitute full settlement of all his rights under the Separation Agreement and the Employment Letter Agreement by an between the Company and Executive dated May 18, 2009 (the “Employment Letter Agreement”), (ii) he has no entitlement under any other severance or similar arrangement maintained by the Company, and (iii) except as otherwise provided specifically in the Separation Agreement and this Release, the Company and its affiliates do not and will not have any other the absence of his execution of this Release, the benefits and payments specified in Paragraph 3of the Separation Agreement would not otherwise be due to him. 2.    Release and Covenant Not to Sue. In consideration of the Company's payment obligations set forth in Paragraph 3 of the Separation Agreement, Executive, on his own behalf and together with his heirs, assigns, executors, agents and representatives, hereby generally waives, releases and discharges the Company, its parent companies, subsidiaries, affiliates, shareholders, predecessors and assigns, and each and every of their officers, directors, shareholders, employees and agents and the heirs and executors of same (each in their respective capacity as such and individually) (hereinafter, collectively, “Releasees”) from any and all Claims which Executive ever had or now has against to Executive’s employment or separation from employment. a.    This Release specifically includes, without limitation, any and all Claims for: (i) wages and benefits (including without limitation salary, stock, stock b.    Executive represents, warrants and covenants that Executive has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, any Claims against any Releasee or any portion thereof or interest therein. c.    Executive acknowledges and agrees that, should any governmental agency or other third party pursue any actions or Claims on Executive’s behalf, Executive waives any and all rights to recovery or monetary award from such actions or law. d.    Executive understands that this Release extends to all Claims and potential Claims which arose on or before the date of this Release, whether now known or unknown, suspected or unsuspected, matured or unmatured, and that this constitutes an essential term of this Release. e.    Executive understands and acknowledges the significance and consequence of this Release and of each specific release and waiver, and expressly consents that this Release shall be given full force and effect according to each and all referred to in Section 2of this Release. f.    It is further understood and agreed that neither the execution of the Separation Agreement and this Release by the Company, nor the terms of the Separation Agreement and this Release, constitute an admission by the Company or Executive of liability with respect to any possible Claim which was or could have been made by Executive or Company. In addition, Executive shall hereinafter disclose or reveal any allegations of Claims made against the Company or any Releasee prior to the date hereof. 3.    Non-Disparagement. The Executive will not disparage any Released Person or otherwise take any action which could reasonably be expected to adversely affect the personal or professional reputation of any Released Person. The Company’s directors and officers will not disparage Executive or otherwise take any action which could reasonably be expected to adversely affect the personal or professional reputation of Executive. 4.    Rescission Right. This Release has been presented to Executive on __________. Executive understands that the release of Claims being given, as set forth in Section 3 of this Release, includes a release of Claims arising under the ADEA and is in exchange for consideration of value to which the Executive would not otherwise have been entitled. Executive understands and represents that Executive has been given a period of twenty-one (21) days to review and consider this Release. By Executive’s signature below, Executive represents that he has read this Release and understands its meaning and application and that he has been advised to consult an attorney as to the terms of this Release. Executive further represents that he understands that he may accept and return the Release to the Company prior to the expiration of this twenty-one (21) day review period, and, if he chooses to do so, he warrants that he used as much of the twenty-one (21) day review period as he required and returned the Release knowingly and voluntarily and without any pressure or coercion on the part of the Company or any of its representatives. Executive has the right to revoke this Release at any time within seven (7) calendar dasy after Executive has executed it. Notice of revocation must be communicated in writing and received prior to the end of the seven (7) day period by: Bill Donovan SVP Human Resources MModal Inc. Franklin, TN 37067 5.    Challenge. If the Executive violates paragraph 13 of the Separation Agreement or this Release, no further payments, rights or benefits under paragraph 3 of the Separation Agreement will be due to the Executive. 6.    Miscellaneous. a.    No Admission of Liability. This Release is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company to the Executive. There have been no such violations, and the Company specifically denies any such violations. b.    Successors and Assigns. This Release shall inure to the benefit of and be binding upon (i) the Company, its parents, subsidiaries and affiliates and (ii) the Executive, and their respective successors, permitted assigns, executors, administrators and heirs. The Executive may not make any assignment of this Release or any interest herein, by operation of law or otherwise. The Company may assign this Release to any successor to all or substantially all of its assets and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise. c.    Severability. Whenever possible, each provision of this Release will be However, if any provision of this Release is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Release will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained. d.    Entire Agreement; Amendments. Except as otherwise provided herein, this Release contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. This Release may not be changed or modified, except by an agreement in writing signed by each of the parties hereto. e.    Governing Law. This Release shall be governed by, and enforced in accordance with, the laws of the State of New Jersey, without regard to the application of the principles of conflicts of laws. f.    Counterparts and Facsimiles. This Release may be executed, including execution by facsimile signature, in multiple counterparts, each of which shall be deemed an original, and all of which together shall be deemed to be one and the same instrument. IN WITNESS WHEREOF, the Company has caused this Release to be executed by its duly authorized officer, and the Executive has executed this Release, in each case on the date first above written. MMODAL MQ INC. By:                         Name & Title:                     Date:                         KEVIN PILTZ                          Date:                        

EXHIBIT 10.2   The Board of Directors, upon the recommendation of the Management Development and Compensation Committee, voted to amend the Employment Agreement between Raytheon Company and Jay B. Stephens, which was filed as an exhibit to Raytheon’s Annual Report on Form 10-K for the year ended December 31, 2002. Pursuant to the amendment, Mr. Stephens was added to the Schedule of Beneficiaries to the Raytheon Supplemental Executive Retirement Plan. Upon completion of five years of service with Raytheon, Mr. Stephens will receive an additional five years of pension credit and in the case of an involuntary termination, change of control, death or disability, Mr. Stephens will be treated as having ten years of service with Raytheon for purposes of any benefits provided by the Raytheon Supplemental Executive Retirement Plan. The amendment became effective during the third quarter.

Essex Portfolio, L.P. Thirteenth Amendment to First Amended and Restated Agreement of Limited Partnership   This Thirteenth Amendment is made as of October 26, 2006 by Essex Property Trust, Inc., a Maryland corporation, as general partner (the “General Partner”) of Essex Portfolio L.P., a California limited partnership (the “Partnership”) and as attorney in fact for all limited partners of the Partnership pursuant to the Partnership Agreement (as defined below), for the purpose of amending the First Amended and Restated Agreement of Limited Partnership of the Partnership dated September 30, 1997 (the “Partnership Agreement”). All capitalized terms used herein and not defined shall have the respective meanings ascribed to them in the Partnership Agreement. WHEREAS, each Person listed on Schedule 1 attached hereto (each a “Contributor”), or such person’s predecessor-in-interest, has made the Capital Contribution to the Partnership enumerated on such Schedule 1 opposite such person’s name in connection with that certain Real Estate Purchase Agreement, concerning the Property referred to in such agreement, by and between Essex Portfolio L.P. and Belmont Terrace Associates, a limited partnership, also known as Belmont Terrace Associates Limited Partnership, a California limited partnership, the Contributors’ predecessor-in-interest, dated as of July 14, 2006, as amended. WHEREAS, the General Partner desires to admit the Contributors to the Partnership as Additional Limited Partners. NOW THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: Section 1. Admission of Limited Partners. (a) Each Contributor has made the Capital Contribution set forth next to its name on Schedule 1. In consideration of this Capital Contribution and pursuant to Section 4.6(a) of the Partnership Agreement, each Contributor is hereby admitted as an Additional Limited Partner of the Partnership. (b) Pursuant to Section 4.6(b) of the Partnership Agreement, the General Partner hereby consents to the admission of each Contributor as an Additional Limited Partner of the Partnership. Pursuant to Section 4.3(a) of the Partnership Agreement, the General Partner hereby issues to each Contributor the number of common units of limited partnership in the Partnership (“Partnership Units”) set forth next to each Contributor’s name on Schedule 1. (c) The admission of each Contributor as an Additional Limited Partner of the Partnership shall become effective as of the date of this Amendment, which shall also be the date upon which the name of Contributor is recorded on the books and records of the Partnership. Section 2. Amendment to Partnership Agreement; Grant of Rights. (a)  Pursuant to Sections 4.6(d) and 13.7(b) of the Partnership Agreement, the General Partner, as general partner of the Partnership, hereby amends the Partnership Agreement by adding to and modifying Exhibit A thereto as in effect prior to this Amendment to reflect the admission of the Contributors as Additional Limited Partners and the other information set forth on Schedule 1 hereto. (b) Pursuant to Section 11.1 of the Partnership Agreement, all Partnership Units received by the Contributors, as set forth on Schedule 1, shall have the “Rights” provided in Article XI, and as set forth in Exhibit I, of the Partnership Agreement; except that, notwithstanding the foregoing, with respect to such Partnership Units, the Rights shall not be exercisable until on or after that date which is one year after the date of this Amendment. The Partnership Agreement shall be deemed amended to reflect this restriction on the Rights associated with such Partnership Units. The General Partner will promptly after the date hereof prepare a restated Exhibit A reflecting the effect of this Amendment. Except as modified herein, all terms and conditions of the Partnership Agreement The Remainder of This Page Has Been Intentionally Left Blank.] GENERAL PARTNER: ESSEX PROPERTY TRUST, INC. By: /S/ Jordan E. Ritter Name: Jordan E. Ritter Title: Senior Vice President/General Council LIMITED PARTNERS: ESSEX PROPERTY TRUST, INC., as attorney-in-fact for the Limited Partners   [Schedule 1] Schedule 1, which sets forth Additional Limited Partners information, has been omitted pursuant to Item 601(b)(2) of Regulation S-K; Copies of such schedule will be furnished supplementally to the SEC upon request.

October 12, 2007 Board of Directors Nationwide Life Insurance Company One Nationwide Plaza Columbus, Ohio 43215 Re: Nationwide Life Insurance Company Nationwide VLI Separate Account-7 Registration Statement Ladies and Gentlemen: I have acted as counsel to Nationwide Life Insurance Company (the “Company”), an Ohio insurance company, and its Nationwide VLI Separate Account-7 (the “Separate Account”) in connection with the registration of an indefinite number of securities issued through the Separate Account with the Securities and Exchange Commission under the Securities Act of 1933, as amended.I have examined the registration statement on Form N-6, including all related documents and exhibits, and reviewed such questions of law as I considered necessary and appropriate.On the basis of such examination and review, it is my opinion that: 1. The Company is a corporation duly organized and validly existing as a stock life insurance company under the laws of the State of Ohio and is duly authorized to issue and sell life insurance and annuity contracts. 2. The Separate Account has been properly created and is a validly existing separate account pursuant to the laws of the State of Ohio. 3. The issuance and sale of the Flexible Premium Variable Universal Life Insurance Policies (the “Policies”) have been duly authorized by the Company.The Policies, when issued and sold in the manner stated in the registration statement, will be legal and binding obligations of the Company in accordance with their terms, except that clearance must be obtained, or the contract form must be approved, prior to the issuance thereof in certain jurisdictions. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement filed on Form N-6 for the Policies and the Separate Account. Sincerely, Stephen F. Ayers Variable Products Securities Counsel

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13G/A (Amendment No. 3) Information to be included in statements filed pursuant to Rules 13d-1(b), (c) and (d) and amendments thereto filed pursuant to Rule 13d-2(b)1 CAI International, Inc. (Name of Issuer) Common Stock, par value $.0001 per share (Title of Class of Securities) 12477X106 (CUSIP Number) December 31, 2010 (Date of Event Which Requires Filing of this Statement) Check the appropriate box to designate the rule pursuant to which this Schedule is filed: o Rule 13d-1(b) x Rule 13d-1(c) o Rule 13d-1(d) 1The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 of 8 Pages CUSIP No.12477X106 13G/A Page 2 of 8 Pages 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Park West Asset Management LLC 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) o (b) o 3 SEC USE ONLY 4 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF

EXHIBIT Certification of CEO Pursuant to Securities Exchange Act Rules 13a-15(f) and 15d-15(f) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Ronald L. Wilder, certify that: 1.I have reviewed this Form 10-Q/A of Titan Technologies, Inc, for the quarter ended April 30, 2009. 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, and in light of the circumstances under which such statements were made, is not misleading with respect to the period covered by this report. 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. 4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a) -15(e) and 15(d) -15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13(a) -15(f) and 15(d) -15(f) for the Registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within this entity, particularly during the period in which this report is being prepared; b.Designed such internal control over financial reporting, or caused suchinternal control over financial reporting to be designed my supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles; c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent (the registrant’s fourth fiscal quarter in the case of an annual report) fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting; and 5. I have disclosed, based on my most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of theregistrant’s Board of Directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: August 11, /s/ Ronald L.

EXHIBIT 10.1 AMENDED and restated FORBEARANCE AGREEMENT THIS AMENDED AND RESTATED FORBEARANCE AGREEMENT (this agreement, as it may be amended, restated, extended or replaced, the “Agreement”) is dated April 3, 2020, and made effective as of February 1, 2020 (the “Effective Date”), and is by and among (1) Ventas Realty, Limited Partnership, a Delaware limited partnership, as Landlord with respect to the Whitley Place Premises (“VRLP”); (2) Ventas Amberleigh, LLC, a Delaware limited liability company, as Landlord with respect to the Amberleigh Premises (“Ventas Amberleigh”); (3) Ventas Crown Pointe, LLC, a Delaware limited liability company, as Landlord with respect to the Crown Pointe Premises (“Ventas Crown Pointe”); (4) Ventas Santa Barbara, LLC, a Delaware limited liability company, as Landlord with respect to the Santa Barbara Premises (“Ventas Santa Barbara”); (5) Ventas West Shores, LLC, a Delaware limited liability company, as Landlord with respect to the West Shores Premises (“Ventas West Shores”), (6) Ventas East Lansing, LLC, a Delaware limited liability company, as Landlord with respect to the East Lansing Premises (“Ventas East Lansing”), (7) Ventas Raleigh, LLC, a Delaware limited liability company, as Landlord with respect to the Raleigh Premises (“Ventas Raleigh” and, together with VRLP, Ventas Amberleigh, Ventas Crown Pointe, Ventas Santa Barbara, Ventas West Shores, Ventas East Lansing and its and their respective successors and assigns, individually and collectively, “Landlord”); (8) Capital Senior Management 2, Inc., a Texas corporation (together with its permitted successors and assigns and any other person or entity that becomes a Tenant under the Master Lease, individually and collectively, “Tenant”); and (9) Capital Senior Living Properties, Inc., a Texas corporation (“Guarantor”). RECITALS Landlord and Tenant are parties to that certain Third Amended and Restated Master Lease Agreement, dated June 27, 2012 (the “2012 Master Lease”), as amended by that certain First Amendment to Third Amended and Restated Master Lease Agreement, dated October 22, 2013, that certain Second Amendment to Third Amended and Restated Master Lease Agreement, dated January 21, 2014, that certain Third Amendment to Third Amended and Restated Master Lease Agreement, dated January 21, 2014, that certain Fourth Amendment to Third Amended and Restated Master Lease Agreement, dated June 17, 2015 (the “Fourth Amendment”), and that certain Fifth Amendment to Third Amended and Restated Master Lease Agreement dated June 30, 2016 (the “Fifth Amendment, and together with the 2012 Master Lease and such other amendments thereto, collectively, the “Original Master Lease”), which Original Master Lease was combined with the East Lansing Lease and the Raleigh Lease (each as defined in the Lease Combination Agreement and Amendment) pursuant to the terms of that certain Partial Lease Termination, Lease Combination Agreement and Amendment to Lease dated as of January 31, 2017 (the “Lease Combination Agreement and Amendment”, and the Original Master Lease, as so combined and amended by the Lease Combination Agreement and Amendment, and as further amended pursuant to letter agreement dated June 30, 2017, collectively, the “Original Combined Master Lease”). Under the Original Combined Master Lease, Tenant leases from Landlord certain independent, assisted living and memory care communities located in various states; and 1   The Original Combined Master Lease has in turn been amended by that certain First Amendment to Combined Master Lease Agreement dated April 13, 2018, by and among Landlord, Tenant and Guarantor (the “First Combined Amendment”), that certain Second Amendment to Combined Master Lease Agreement dated June 30, 2018, by and among Landlord, Tenant and Guarantor (the “Second Combined Amendment”), and that certain Third Amendment to Combined Master Lease Agreement dated June 30, 2019 (the “Third Combined Amendment” and the Original Combined Master Lease as so amended, the “Master Lease”); and Tenant’s obligations under the Master Lease are guaranteed by Guarantor pursuant to the terms of those three certain documents titled “Guaranty of Lease”, each dated June 27, 2012 (as the same may have been modified or amended, collectively, the “Lease Guaranty”); and Tenant has informed Landlord that it is unable to pay, in full and in a timely manner, its Rent payments under the Master Lease and has requested payment relief from Landlord.  Landlord has informed Tenant that, on account of the non-payment of Rent and resulting Events of Default under the Master Lease, Landlord expects to incur significant damages; and Landlord is willing to forbear from the exercise of certain remedies under the Master Lease pursuant to the terms of this Agreement; and Tenant, Landlord and Guarantor entered into to that certain Forbearance Agreement dated March 10, 2020 and made effective as of February 1, 2020 (the “Original Forbearance Agreement”); and Tenant, Landlord and Guarantor wish to amend and restate the Original Forbearance Agreement. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the parties hereby agree that the Original Forbearance Agreement is hereby superseded, amended and restated as follows: Recitals; Capitalized Terms; Conflict.  Tenant hereby acknowledges and agrees that the recitals to this Agreement are true and correct, and the same are hereby incorporated into this Agreement.  All capitalized terms used herein and not defined herein shall have the respective meanings ascribed thereto in the Master Lease.  In the event of any conflict between the terms of this Agreement and the terms of the Master Lease, the terms of this Agreement shall govern and control. Forbearance Through the Final Release Date. Landlord agrees that, effective from the Effective Date through the earlier to occur of (i) the Final Release Date (as defined below) and (ii) the occurrence of a Forbearance Default (as defined below) (the “Forbearance Period”), Landlord will forbear from exercising any remedies that would otherwise be available to Landlord under Section 17 of the Master Lease. 2   The occurrence of one or more of the following shall constitute a “Forbearance Default”: Tenant shall fail to abide by or observe any term, condition, covenant or other An “Event of Default” or an uncured default shall occur under the Master Lease, the Lease Guaranty or any document related to or executed in connection with this Agreement or the Master Lease (other than the failure to pay full Fixed Rent or to comply with the financial covenants in Sections 8.2.6 and 8.2.7 of the Master Lease, provided that Tenant is in compliance with Section 5 below and continues to operate the Facilities consistent with past practice and provide a high quality of care for residents); Tenant or Guarantor shall cease to exist or revoke or purport to terminate its liability under any of the Master Lease or this Agreement, or challenge the validity or enforceability of any of such agreements or deny any further liability or obligation thereunder; Tenant or any of its Affiliates shall become subject to a voluntary or involuntary bankruptcy, receivership, foreclosure or other creditors rights proceedings or Tenant or Guarantor shall fail to pay its debts as they become due, or admits in writing (other than a writing solely to Landlord or any of its Affiliates) its inability to pay its debts generally, or makes an assignment of all or substantially all of its property for the benefit of creditors; Tenant or Guarantor or any of their respective creditors shall commence a case, proceeding or other action against Landlord relating to any of the Master Lease, this Agreement or the Lease Guaranty or any action or omission by Landlord or its agents in connection with any of the foregoing; Tenant shall take an action that Landlord reasonably believes in good faith is inconsistent in any material respect with any provision of this Agreement, or impairs, or is likely to impair, the prospect of payment or performance by Tenant of its obligations; Any default by Tenant or any Affiliate of Tenant shall occur under the terms of (i) any Material Lease or (ii) any Material Financing that (A) continues beyond any applicable grace or cure periods and (B) with respect to which the counterparty exercises remedies other than applying security deposits and/or escrows. “Material Lease” shall mean any lease to which Tenant or a Tenant Affiliate is a party where Welltower or Healthpeak is the landlord. “Material Financing” shall mean any obligation of Tenant or any Affiliate of Tenant (including Guarantor) for borrowed money having a principal balance of $1,000,000 or more in the aggregate including any instrument under which any such obligation is created or secured; or Failure of the Other Landlords Rent Condition (defined below) for any calendar month. Surrender of Security Deposit and Escrow Deposits. Effective as of the date hereof and notwithstanding anything in the Master Lease to the contrary, the Security Deposit and all escrow deposits held by Landlord pursuant to Section 3.3 of the Master Lease have been applied to Tenant’s obligations under the Master Lease and shall be deemed fully earned by Landlord and 3   non-refundable. The application of the Security Deposit and such escrow deposits contemplated by this Section 3 shall not reduce or modify Tenant’s obligations under the Master Lease in any respect, including, but not limited to, Tenant’s obligations to pay Impositions and insurance premiums and to make the escrow deposits required by Section 3.3.1 of the Master Lease from and after April 1, 2020. Landlord’s Termination Right. At any time and from time to time from and after the Effective Date, Landlord may elect to terminate the Master Lease as to any one or more, or all, of the Facilities by written notice to Tenant delivered no later than the date that is 30 days prior to the effective date of termination, which effective date of termination may not be later than December 31, 2020 (a “Termination Notice”). Any such Termination Notice shall indicate whether Landlord elects (i) for Tenant or an Affiliate of Tenant reasonably acceptable to Landlord (“CSL Manager”) to manage the applicable Facility(ies) after the effective date of termination (a “Management Election”) or (ii) to transition the applicable Facility(ies) (a “Transition Election”) to a new operator (a “Successor Operator”). Upon any such termination, whether pursuant to a Management Election or a Transition Election, the applicable Facility shall constitute a Deleted Property and the provisions of Section 17.9 shall pertain. If, as of December 1, 2020, Landlord has not delivered a Termination Notice for any given Facility(ies), then, with respect to such Facility(ies), Landlord will be deemed to have delivered a Termination Notice making a Management Election for such Facility(ies) with an effective date of termination of December 31, 2020. Landlord and Tenant acknowledge and agree that the Fixed Rent allocable to each Facility as of the date hereof is as listed on Schedule 0 attached hereto. If Landlord makes a Management Election, Tenant would effect an Operational Transfer to Landlord or Landlord’s affiliate pursuant to the terms of Section 37 of the Master Lease, provided, however that Tenant shall, or shall cause the CSL Manager to, upon the effective date of termination of the applicable Facility(ies), enter into a property management agreement with Landlord with respect to the applicable Facility(ies) on market terms and in form prepared by Landlord in its reasonable judgment, which management agreement shall, in any event: Have an initial term expiring on the date that the Master Lease would have expired for the applicable Facility(ies) or such shorter term as Landlord may specific; Provide for a management fee equal to 5% of the gross revenues of the applicable Facility(ies); Be terminable at any time by Landlord for any or no reason on at least 30 days’ prior written notice; and Include transition obligations substantially equivalent to the transition obligations of Tenant under the Master Lease, as supplemented by this Agreement. If Landlord makes a Transition Election, Tenant shall effect an Operational Transfer of the applicable Facility(ies) to the Successor Operator(s) designated by Landlord pursuant to the terms of the Master Lease and, without limitation of any provision of the Master 4   Lease (including without limitation Section 37 of the Master Lease [Operational Transfer]), supplemented as follows: If licenses, permits or certificates held in Tenant’s name cannot be transferred, or cannot be transferred immediately, to Successor Operator, then Tenant shall, at Landlord’s request, enter into an interim management arrangement or another so called “bridging” arrangement in form and substance permit Successor Operator to continue to operate the Facility, and engage in the normal activities of the Facility, under Tenant’s license, permit or certificate, as applicable, until the earliest of completion of such license, permit and certificate transfers, issuance of replacement licenses, permits and certificates.  Under the interim management agreement or bridging arrangements, Successor Operator will be entitled to all revenues but also bear all obligations and expenses, both operating and capital, and including all rent obligations, during the effectiveness of any such agreement. Tenant shall, for each Facility, enter into (and perform its obligations under) an operations transfer agreement in customary form with Successor Operator providing for an orderly transfer and transition of the business operations, operational assets and employees to Successor Operator, in each case, for nominal or no consideration.  Such operations transfer agreement shall provide for customary indemnities and prorations and other payments of operating revenues and expenses between Tenant and Successor Operator, all of which Tenant agrees to pay or satisfy if and when required under the terms of such agreement provided that a reconciliation process and timeframes for such payment are included in such agreement.  Provisions regarding prorations under such operations transfer agreement shall generally provide that revenues and expenses of the Facility attributable to the period prior to the transition date or “closing” date under such operations transfer agreement (the “OTA Closing Date”) shall be for the account of Tenant and that revenues and expenses of the Facility attributable to the period from and after the OTA Closing Date shall be for the account of Successor Operator. Tenant and its Affiliates shall agree to customary provisions regarding the non-solicitation/non-hire of employees and customers of the Facilities for a period of two years following the final transition to Successor Operator. At the option of Landlord, Tenant shall, at its sole cost and expense, procure a two year “tail” policy providing for commercial general and professional liability insurance (if such coverage prior to closing was obtained under a claims made insurance policy) meeting the requirements of the Master Lease for such insurance, naming Landlord, Successor Operator, and/or Landlord’s other designees as additional insureds. Tenant shall not initiate, prompt or solicit the removal or transfer to another facility of the executive director or the sales director of any Facility, save and except for any removals or transfers arising in connection with any wrongful or egregious acts or omissions, performance that is below acceptable standards, or violations of Tenant’s policies and procedures. With respect to any persons who are or who become owners, officers, directors, or employees of any Successor Operator or who are involved with any Successor Operator in any manner (or who otherwise work at any Facilities transitioned as contemplated hereunder), Tenant and its Affiliates hereby for the benefit of Landlord waive and will not enforce or seek enforcement of any non-competition 5   provision in any non-competition or similar agreement in effect between Tenant and or its Affiliates and such persons. If such person is involved with any Successor Operator as provided in the preceding sentence Tenant and its Affiliates will no longer have any obligation to make payments to such persons under any employment, separation, or similar agreement with such person. Within 45 days after the Effective Date, Tenant shall agree to a general form of operations transfer agreement on the Landlord’s approved form (and such form shall then be used for all transitions contemplated hereunder, subject to usual and customary changes requested by operators, and subject to deal specific changes applicable to the facility in question). Tenant and its Affiliates may sell or transfer, directly or indirectly, those properties owned by an Affiliate of Tenant whose direct or indirect parent is Capital Senior Living Properties, Inc. (“CSLP”) (collectively, “Sales”), subject to the provisions of this Section 0. No Sales shall be permitted to Affiliates of Tenant other than those whose direct or indirect parent is CSLP. If the net proceeds (after transaction costs and repayment of secured debt) in the aggregate for all Sales exceed $30,000,000.00 of net proceeds, then such excess over $30,000,000.00 shall be paid by Tenant as prepaid rent on a pro rata basis to Ventas and Welltower within three days after such sale, such pro rata basis to be determined in accordance with the modified net base or fixed rent of Facilities still owned by Ventas or Welltower and not yet transitioned. Regardless of the amount of net proceeds of Sales, no net proceeds of Sales shall be distributed to any shareholders of the public company.  Net proceeds of Sales are available for operations in the normal course of business, including the scheduled payments of principal and interest on debt of Tenant and any affiliates, regardless of whether CSLP is the direct or indirect parent; however, the net proceeds of Sales may not be used for unscheduled prepayments of debt.  No FF&E or vehicles or other equipment or materials used in connection with any Facility (i.e., covered by the Master Lease) shall be moved (other than replacements of obsolete items in the ordinary course), sold or encumbered.   Holdover and Forbearance Period Covenants.  During the Forbearance Period, other than as expressly set forth herein, Tenant shall continue to have, and be required to observe, all of the provisions of the Master Lease.  Notwithstanding the foregoing, (a) during the Forbearance Period, Tenant shall not be required to comply with the financial covenants in Sections 8.2.6 and 8.2.7 of the Master Lease; and (b) (i) with respect to Facilities which have not yet been transitioned in accordance with the terms of this Agreement, Tenant’s obligation in respect of Fixed Rent during the Forbearance Period (A) shall, for the period from the Effective Date through December 31, 2020, be equal to 75% of the Fixed Rent that would otherwise be due pursuant to the terms of the Master Lease, as set forth on Schedule 0 under the heading “Forbearance Period Rent” (“Forbearance Period Fixed Rent”) and (B) shall be paid no later than the third calendar day of each calendar month and (ii) with respect to Facilities which have been transitioned in accordance with the terms of this Agreement, Tenant’s obligation in respect of Fixed Rent during the Forbearance Period shall nonetheless continue through December 31, 2020 in the following amount for each Facility: (x) 75% of the Fixed Rent that would otherwise be due for such Facility pursuant to the terms of the Master Lease, as set forth on Schedule 4, less (y) the lower of the 4Q19 Amount for such Facility and the T3 Amount for such Facility. “4Q19 Amount” means the amount set forth on Schedule 4A for each Facility (representing 1/3 of the EBITDAR for each Facility for the period October 1, 2019-December 31, 2019). “T3 Amount” means the average 6   monthly EBITDAR for the Facility in question for the last full three months immediately preceding the transition. “EBITDAR” means, for a given period, revenues for such period less total operating expenses for such period including without limitation property taxes, insurance, professional fees and settlement costs, but excluding management fees and bad debt expense. The aggregate difference between the Forbearance Period Fixed Rent for all Facilities during the Forbearance Period and prior to the transition of such Facilities and the actual contractual Fixed Rent due during such period pursuant to the terms of the Master Lease (such difference being referred to as “Rent Difference”) shall not be released until 91 days after the Final Release Date (in which event such Rent Difference shall no longer be applicable) or the occurrence of a Forbearance Default (in which event such Rent Difference shall become immediately due). Tenant has paid to Landlord an amount equal to $666,875, being the amount due pursuant to the terms of this Section 5 for March 2020, by automatic debit and transfer to Landlord from Tenant’s bank account. Capital Expenditures. During the Forbearance Period, (i) Tenant shall have no obligation to fund any amounts into the Capital Expenditures Account, whether or not the Capital Expenditures made and reported by Tenant for a given Capital Expenditures Year are less than the Required Capital Expenditures Amount, (ii) Landlord shall reimburse Tenant for the amounts spent on the Special Projects listed on Schedule 6 attached hereto up to the amounts for such Special Projects as set forth on such Schedule 6 pursuant to the terms of the Master Lease applicable to reimbursement for Special Projects, including the conditions to disbursement set forth therein; provided that the failure to pay full Fixed Rent or to comply with the financial covenants in Section 8.2.6 and 8.2.7 of the Master Lease (provided no Forbearance Default has occurred) shall not constitute a failure of the condition to disbursement set forth in Section 11.5.3(b) of the Master Lease (relating to the existence of an Event of Default or default), and (iii) Landlord shall reimburse Tenant for Capital Expenditures made by Tenant up to an aggregate amount of $1,000 per Unit per Capital Expenditures Year upon written request by Tenant therefor, accompanied by a report summarizing and describing in reasonable detail all of the Capital Expenditures for which such reimbursement is sought, on both an aggregate basis and broken down by Facility, and such receipts and other information as Landlord may reasonably require, provided, however, that Landlord and Tenant may in their respective sole discretions agree on the execution, completion, and reimbursement for other Capital Expenditure projects that will exceed the $1,000 per Unit amount. The aggregate maximum amount of the foregoing reimbursement requirement shall be equitably prorated for any Facility(ies) that are subject to the Master Lease for less than the full Capital Expenditures Year (e.g., due to the effect of a Management Election or Transition Election). In the event of a Forbearance Default, all amounts reimbursed by Landlord to Tenant pursuant to this Section 6 up to the total Required Capital Expenditures Amount that would otherwise have accrued for the applicable period shall become immediately due and payable by Tenant as Additional Rent. Tenant agrees that (i) except as provided in this Section 6, Landlord has, and shall have, no reimbursement obligations to Tenant with respect to any Capital Expenditures undertaken by Tenant and (ii) Tenant shall diligently and continuously prosecute the Special Projects listed on Schedule 6 to completion. Reporting. On each Wednesday for so long as Tenant continues to operate any Facility, Tenant shall deliver to Landlord, or its designees, (a) weekly occupancy data; (b) weekly move-out data; 7   (c) weekly sales funnel data; and within five (5) days after the end of a month (d) monthly rent rolls for each Facility, in each case in forms reasonably acceptable to Landlord. No later than the 5th day of each month, Tenant shall deliver an officer’s certificate to Landlord signed by the CEO or CFO of Capital Senior Living, Inc. confirming that, for the immediately preceding month, (i) all consideration of any kind paid or granted by or on behalf of Tenant and/or any of Tenant’s Affiliates (each, a “Tenant Party” and, collectively, the “Tenant Parties”) to Welltower Inc. and its Affiliates (collectively, “Welltower”) during such month (including, but not limited to, base or minimum rent, capital expenditures on the leased properties, real estate tax payments and/or escrows, and insurance payments and/or escrows, but excluding any security deposits surrendered to such landlord parties on account of a default under the applicable leases) did not exceed the amounts described on Schedule 7.2 under the heading “Welltower” for such month and (ii) all consideration of any kind paid or granted by or on behalf of any Tenant Parties to Healthpeak Properties and its Affiliates (collectively, “Healthpeak”) during such month (including, but not limited to, base or minimum rent, capital expenditures on the leased properties, real estate tax payments and/or escrows, and insurance payments and/or escrows, but excluding any security deposits surrendered to such landlord parties on account of a default under the applicable leases) did not exceed the amounts described on Schedule 7.2 under the heading “Healthpeak” for such month (the “Other Landlords Rent Condition”). In the event that properties leased to Tenant Parties by Welltower or Healthpeak cease to be leased to Tenant Parties, Schedule 7.2 shall be equitably adjusted to account for the resulting reduction in the Tenant Parties’ contractual obligations. Tenant hereby represents and warrants to Landlord that the Other Landlords Rent Condition was satisfied for February, 2020, and the officer’s certificate required by April 5, 2020 shall confirm satisfaction of the Other Landlords Rent Condition for both February 2020 and March 2020.   Final Release at Completion of Transition.  Provided that the Final Release Conditions have been satisfied in full (the date such conditions are satisfied, the “Final Release Date”), then, ninety-one (91) days following the Final Release Date (provided the Final Release Conditions remained satisfied for the entirety of such period), Landlord shall: On behalf of itself, and its current and former subsidiaries, successors, assigns, Affiliates, agents, attorneys, employees, members, partners, officers and directors (all of the foregoing persons, collectively, the “Landlord Release Parties”), release Tenant and its current and former subsidiaries, successors, and directors (all of the foregoing persons, collectively, the “Tenant Release Parties”) from any and all liabilities, claims, actions, causes of action, suits, debts, accounts, damages, injuries or demands of whatever kind or nature (including, without limitation, any claims for attorneys’ fees) related to its obligations under the Master Lease, the Facilities or the operations thereof that any of them had, now have or may have, whether fixed, liquidated or contingent, whether known or unknown and whether asserted by way of claim, counterclaim, cross-claim, action for indemnity, contribution or otherwise, but expressly excluding (i) fraud and (ii) obligations under the Master Lease that expressly survive termination pursuant to the terms of the Master Lease (and the Guaranty shall continue to pertain with respect to such obligations); and 8   The “Final Release Conditions” shall mean No Forbearance Default has occurred; All of the Facilities have been fully and finally transitioned to Landlord’s Successor Operator (for purposes of this Section 8, such term shall include, in the event of any Management Election, Landlord or its designee) in accordance with the terms of this Agreement and the Master Lease, including, but not limited to, all necessary licenses and permits to operate the Facilities having been issued to such Successor Operator and any so-called “bridging arrangements” with respect to such Facilities having been terminated; All prorations and other payments between Tenant, Landlord and/or Successor Operator of operating revenues and expenses have been fully and finally settled and paid; None of Tenant nor any of its Affiliates are subject to a voluntary or involuntary petition under the Bankruptcy Code (11 U.S.C. §§ 101 et. seq.), receivership, foreclosure, assignment for benefit of creditors, or any similar proceeding for the restructuring of its respective financial affairs or liquidation of its respective assets under state or federal law; No claim has been asserted against Tenant, Landlord, or in each case, any of their Affiliates, seeking to challenge or unwind any of the transactions contemplated herein; and Tenant provides an updated release in the form contemplated by Section 11.2. Bankruptcy.  Tenant hereby represents and warrants to Landlord that Tenant (a) intends to consensually restructure its financial affairs without filing a bankruptcy petition under Chapter 11 of the Bankruptcy Code and in the event any petition is filed under Chapter 11, Tenant will make every reasonable effort to propose a consensual plan of reorganization should such a filing become necessary, (b) is instead attempting to effect a consensual out of court restructuring with its creditors and other parties in interest including pursuant to the accommodations provided by Landlord under this Agreement, and (c) the relief allowed by this Agreement and the concessions made by Landlord to date are critical to the Tenant’s efforts to consensually restructure its financial affairs outside of Chapter 11 to the extent reasonably possible.  Landlord is entering into this Agreement in reliance on, among other things, Tenant’s representations, warranties, covenants and agreements set forth in this Section 9, and Tenant is making and entering into those representations, warranties, covenants and agreements in order to induce Landlord to enter into this Agreement.  Accordingly, in the event that Tenant files or becomes the subject of a petition under the Bankruptcy Code: (i) Tenant consents to relief from any automatic stay imposed by Section 362 of the Bankruptcy Code in connection with the exercise of the rights and remedies otherwise available to Landlord, and Tenant irrevocably waives its rights to object to such relief; and (ii) Tenant agrees that no injunctive relief against Landlord shall be sought under Section 105 or other provision of the Bankruptcy Code, and irrevocably waives its right to file an adversary action to obtain injunctive relief against Landlord. 9   Tenant agrees that (i) Landlord is relying upon the timely performance by Tenant of all obligations hereunder, including, without limitation, in respect of its holdover tenancy and obligation to transition the Facilities to a Successor Operator notwithstanding the entry of an order for relief under the Bankruptcy Code; and (ii) the failure by Tenant to comply with its obligations hereunder and the provisions of the Master Lease that survive termination of the Master Lease for any reason whatsoever will result in immediate prejudice that constitutes cause for immediate relief from the automatic stay provisions of the Bankruptcy Code to Landlord; and (iii) upon the entry of an order by the Bankruptcy Court granting relief from the automatic stay pursuant to a request by Landlord, possession will be delivered to Landlord or its Successor Operator by Tenant immediately or as otherwise directed by Landlord, in its sole discretion, without the necessity of any further action by Landlord. No provision of this Agreement shall be deemed a waiver of Landlord’s rights or remedies under the Bankruptcy Code or applicable law to oppose any relief sought against Landlord, including, without limitation, in respect of the Master Lease or this Agreement, to require timely performance of Tenant’s obligations hereunder, including, without limitation, its obligations to comply with the provisions of the Master Lease that survive termination of the Master Lease, or to gain possession of any Facility(ies) as to which Landlord seeks possession immediately or to assert any claim against Tenant. The release contemplated in Section 8.1 herein shall be automatically null and void immediately upon the: (i)  filing of a voluntary or involuntary bankruptcy by or against Tenant or any of its Affiliates within 90 days of the Final Release Date; or (i) the entry of any order avoiding or otherwise disallowing the this Forbearance Agreement. Further, the calculation of Rent and damages of Landlord under the Master Lease shall include any payments made by Tenant to Landlord that are subject to any action under Chapter 5 of the Bankruptcy Code, including pursuant to any state law under Section 544 of the Bankruptcy Code. For purposes of this Section, in the event that a bankruptcy action is commenced, the term “Tenant” shall include Tenant’s successor in bankruptcy, whether a trustee under Chapter 7 or Chapter 11 of the Bankruptcy Code, Tenant as debtor in possession, a custodian whose compliance with Section 543 of the Bankruptcy Code has been excused, or other responsible person. Most Favored Nations. Tenant shall promptly, and in any event within two (2) business days of execution, provide to Landlord a true and complete copy of any agreement or instrument that has the effect of modifying or amending any Tenant Party’s obligations under its leases with Welltower or Healthpeak (an “Other Landlords Agreement”), together with any documents or information that may reasonably be required to determine the nature and extent of such modifications or amendments, unless complete versions of such documents are already public (including, but not limited to, exhibits). If, in Landlord’s reasonable judgement, any such Other Landlords Agreement has the effect of causing the overall rights, benefits and/or concessions granted to Welltower or Healthpeak relative to its contractual rights under its leases with the Tenant Parties as of February 1, 2020 to be, in the aggregate, more favorable to Welltower or Healthpeak, as applicable, than the rights, benefits and/or concessions granted to Landlord under this Agreement, then Landlord may require such amendments to this Agreement as may be necessary to render such rights, benefits and concessions to be reasonably equivalent to those 10   granted to Welltower or Healthpeak, as applicable, and Tenant shall promptly execute and deliver any such amendment, and no Other Landlords Agreement shall cause a default under Section 7.2 provided that Tenant fully complies with the requirements of this Section 10. Miscellaneous. Representations and Warranties.  To induce Landlord to enter into this Agreement, Tenant hereby represents and warrants to Landlord as follows: Tenant is a corporation, duly organized, validly existing and in good standing under its jurisdiction of organization; Tenant is qualified to do business in and is in good standing under the laws of the State in which the Facility operated by Tenant is located; Tenant has the power and authority to execute, deliver and perform this Agreement and has taken all requisite action necessary to authorize the execution, delivery and performance of its obligations under this Agreement; This Agreement constitutes the legal, valid and binding obligation of Tenant enforceable in accordance with its terms; The execution, delivery and performance of this Agreement will not require any consent, approval, authorization, order or declaration of, or any filing or registration with, any court, any Governmental Authority or any other person other than those that have already been obtained or those that are provided for in this Agreement; and The execution, delivery and performance of this Agreement do not violate any order, writ, injunction, decree, statute, rule or regulation applicable to Tenant or any of the Facilities. Tenant has read and understands this Agreement, has consulted with and been represented by legal counsel in connection herewith, and has been advised by its counsel of its rights and obligations hereunder. The parties hereto acknowledge and agree that this Agreement shall not be construed more favorably in favor of one than the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the negotiation and preparation of this Agreement. Landlord Not Liable; Expenses. Tenant hereby acknowledges and affirms that, as of the Effective Date, it has no claim, counterclaim, defense, concession, offset, abatement or deduction against its or his obligations under the Master Lease, as affected hereby. Effective upon the execution of this Agreement, the Tenant Release Parties forever release, acquit and discharge the Landlord Release Parties from any and all liabilities, claims, actions, causes of action, suits, debts, accounts, damages, injuries or demands of whatever kind or nature (including, without limitation, any claims for attorneys’ fees) related to the Tenant 11   Release Parties, the Master Lease, the Facilities or the operations thereof that any of them had, now have or may have, whether fixed, liquidated or contingent, accruing on or prior to the Effective Date, whether known or unknown and whether asserted by way of claim, counterclaim, cross-claim, action for indemnity, contribution or otherwise (collectively, the “Claims”). In furtherance of the foregoing, the Tenant Release Parties hereby covenant and agree, for and on behalf of themselves and the other Tenant Release Parties, that they shall not, directly or indirectly, commence, maintain, prosecute or sue or cooperate in any suit against any of the Landlord Release Parties, either affirmatively or by way of cross-complaint, indemnity claim or counterclaim or in any other manner or at all on any Claim. The Tenant Release Parties acknowledge that the release contained in this Section 11.2 (the “Release”) is intended to be effective as a bar to each and every one of the Claims.  The Tenant Release Parties expressly consent to this Release being given full force and effect according to each and all of its express terms and provisions, including, without limitation, those relating to any unknown and unsuspected Claims (notwithstanding any State, Federal or other statute, rule or law that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated claims), if any, as well as those relating to any other Claims.  The Tenant Release Parties acknowledge and agree that: (1) execution of this Release is an essential and material inducement to Landlord agreeing to execute this Agreement; (2) this Agreement is to the benefit of, among others, the Tenant Release Parties; and (3) without this Release, Landlord would not have executed and delivered this Agreement or entered into the transactions contemplated hereby.  The Tenant Release Parties further agree that, in the event any Tenant Release Party asserts a Claim against any Landlord Release Party, this Release shall serve as a complete defense to such Claim, and any Landlord Release Party may present this Release as such a defense. All costs, expenses and fees (including, without limitation, reasonable attorneys’ fees and other professional fees) incurred by Landlord or its Affiliates in the preparation, execution, delivery, negotiation and implementation of this Agreement, or related documents, shall be paid and reimbursed by Tenant (i) on the date of execution of this Agreement and (ii) promptly upon written demand by Landlord from time to time. Reaffirmation of Obligations, etc.  Tenant acknowledges and agrees that the obligations hereunder, including, without limitation, the provisions of the Master Lease that survive termination of the Master Lease, and all liabilities due and owing Landlord under this Agreement and such Master Lease provisions constitute the valid and binding obligations of Tenant enforceable against Tenant in accordance with their respective terms, and Tenant reaffirms its obligations and liabilities hereunder and in respect of amounts owed under the Master Lease.  Landlord’s entry into this Agreement or any of the documents referenced herein, its negotiations with any party, its conduct of any analysis or investigation of the operations of Tenant, any collateral or any document, its acceptance of any payment from Tenant or any other party of any payments made prior to or after the date hereof and its making of any credit support prior to or after the date hereof and/or any other action or failure to act on the part of Landlord shall not, except as expressly provided herein, (a) constitute a modification of any applicable document, (b) constitute a waiver of any condition, default or Event of Default under the Master Lease, (c) excuse Tenant from any of its obligations hereunder, including, without limitation, in respect of provisions 12   that survive the termination of the Master Lease, or (d) toll the running of any time periods applicable to any rights and remedies of Landlord.  Tenant agrees that it will not assert laches, waiver or any other defense to the enforcement of any of the applicable documents based upon any agreement or action by Landlord set forth in or contemplated by this Agreement. Guarantor Reaffirmation. Guarantor joins this Agreement and hereby (a) consents to this Agreement and agrees to be bound by its terms and (b) reaffirms that its obligations under the Lease Guaranty to guarantee Tenant’s obligations under the Master Lease, as affected by this Amendment, remain in full force and effect. Acknowledgement of Liens and Security Interests.  Tenant acknowledges, confirms and agrees that Landlord has and shall continue to have valid, enforceable and perfected first-priority liens upon and security interests in the Lease Collateral and all products and proceeds thereof as specified in the Master Lease. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of Landlord, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. Further Assurances.  Landlord and Tenant agree that they shall take such actions and execute, deliver and, if necessary, file such agreements, instruments and other documents as shall be reasonably requested by the other party hereto to preserve or further the parties’ rights pursuant hereto and in order to effectuate the intent and purposes of this Agreement. Severability.  Whenever possible, each provision of this Agreement shall be but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained in this Agreement. Governing Law.  This Agreement is made pursuant to, and shall be construed and enforced in accordance with, the laws of the State of Illinois, irrespective of the principal place of business, residence or domicile of the parties hereto, and without giving effect to otherwise applicable principles of conflicts of law. Successors And Assigns.  This Agreement and the covenants and agreements herein contained shall be binding upon and inure to the benefit of Landlord and Tenant and their respective heirs, devisees, successors and assigns. Integrated Agreement; Modifications.  This Agreement, and the terms of the Master Lease that survive termination of the Master Lease, constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior representations, understandings and agreements, whether written or oral, with respect to such 13   subject matter.  Each of the parties hereto acknowledges that it has not relied upon, in entering into this Agreement, any representation, warranty, promise or condition not specifically set forth in this Agreement.  No supplement, modification or waiver of any provision of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No Waiver. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.  Landlord hereby expressly reserves all rights and remedies that it may have at law, in equity or under the Master Lease and the Guaranty.  Landlord has not waived, does not waive, and shall not be deemed to have waived, any such right or remedy or to have made or given any election with respect to such matters or otherwise.  Nothing contained in this letter is intended to limit, nor shall it be deemed to limit or in any way affect, any of Landlord’s rights or remedies at law, in equity or under the Master Lease with respect to any current or future failure to timely pay amounts owing under the Master Lease or any other matter.  Nothing contained herein, nor any failure by Landlord to exercise, or delay by Landlord in exercising, any of its rights or remedies at law, in equity or under the Master Lease with respect to any existing or future failure to timely pay amounts owing under the Master Lease or any other matter, shall be deemed to constitute, nor is it intended to constitute, a waiver, estoppel, release, modification, limitation, forbearance or agreement by Landlord to delay the exercise of any of Landlord’s rights or remedies at law, in equity or under the Master Lease or a waiver of any obligations of Tenant under the Master Lease.  The following shall not be construed as a waiver or release of any rights or remedies by Landlord or an indication of a course of dealing, and shall not operate as a course of dealing or to toll any cure period, notice period or other applicable period or in any manner modify or give rise to an obligation of Landlord to modify the legal relationship evidenced by the Master Lease: (a) the attendance and/or participation by Landlord or its attorneys or other representatives at any telephone communications, meetings or other discussions with respect to the Master Lease; or (b) any correspondence, statements, discussions, negotiations, meetings, drafts of documents (including, without limitation, unexecuted drafts of proposed modifications) or telephone communications among Landlord and/or its attorneys or other representatives and Tenant and/or its attorneys or other representatives with respect to any proposed transactions involving the Master Lease. The reservations and disclaimers set forth in this term sheet shall continue to apply and remain in full force and effect notwithstanding any action or inaction that Landlord may or may not take with respect to any matter described herein. Headings and Captions.  The headings and captions of the paragraphs of this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of this Agreement or any provision hereof. Gender and Number.  As used in this Agreement, the neuter shall include the feminine and masculine, the singular shall include the plural, and the plural shall include the singular, except where expressly provided to the contrary. Counterparts; Facsimile.  This Agreement may be signed in any number of counterparts, and signature pages may be delivered by facsimile or electronic mail, each of which shall be deemed an original, but all of which together shall 14     15   IN WITNESS WHEREOF, the parties hereto have executed these presents the day and   LANDLORD: Ventas Realty, Limited Partnership, a Delaware limited partnership Witness: By:Ventas, Inc., a Delaware corporation, as its general partner Name:     By:         Name:         Title:   16     Ventas Amberleigh, LLC, a Delaware limited partnership   Ventas Crown Pointe, LLC, a Delaware limited partnership   Ventas East Lansing, LLC, a Delaware limited partnership   Ventas Raleigh, LLC, a Delaware limited partnership   Ventas Santa Barbara, LLC, a Delaware limited partnership   Ventas West Shores, LLC, a Delaware limited partnership   By: a Delaware limited partnership, the sole member of each of the foregoing Landlords Witness:   By: Ventas, Inc., a Delaware corporation, its general partner Name:     By:           Name:           Title:             17   Tenant: Capital Senior Management 2, Inc., a Texas corporation Witness:     By:   Name:     Name:         Title:   18     Guarantor: Capital Senior Living Properties, Inc., a Texas corporation Witness:     By:   Name:     Name:         Title:     19

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13G Under the Securities Exchange Act of 1934 (Amendment No. 1)* BEXIL CORP. (Name of Issuer) Common Stock, par value $0.01 per share (Title of Class of Securities) 088577101 (CUSIP Number) December 31, 2013 (Date of Event Which Requires Filing of this Statement) Check the appropriate box to designate the rule pursuant to which this Schedule is filed: ýRule 13d-1(b) oRule 13d-1(c) oRule 13d-1(d) * The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 1 NAMES OF REPORTING PERSONS Spencer, I.I. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) o (b) o 3 SEC USE ONLY 4 CITIZENSHIP OR PLACE OF ORGANIZATION COMMONWEALTH OF PUERTO RICO NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON 5 SOLE VOTING POWER Not Applicable* 6 SHARED VOTING POWER Not Applicable* 7 SOLE DISPOSITIVE POWER Not Applicable* 8 SHARED DISPOSITIVE POWER Not Applicable* 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Not Applicable* 10 CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) Not Applicable* 12 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IC * On February 11, 2013, the Reporting Persons filed a Schedule 13G (the “Original 13G”) to reflect beneficial ownership of the Issuer’s Common Stock.However, in preparing to amend the Original 13G it was noted that on October 1, 2007, the Issuer had filed a Form 15 pursuant to SEC Rule 12g-4(a)(1)(i), providing notice that registration of the Common Stock under Section 12(g) of the Securities Exchange Act of 1934 had been terminated.As a result, at the time the Original 13G was filed, the Common Stock was not registered pursuant to Exchange Act Section 12 and therefore beneficial ownership of the Common Stock was not required to be reported pursuant to Exchange Act Section 13(d) and SEC Rule 13d-1 thereunder.This Amendment No. 1 is being filed to reflect that the Original 13G is withdrawn and will not be further amended. Page 2 of 11 CUSIP No. 1 NAMES OF REPORTING PERSONS Spencer Capital Holdings Ltd. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) o (b) o 3 SEC USE ONLY 4 CITIZENSHIP OR PLACE OF ORGANIZATION BERMUDA NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON 5 SOLE VOTING POWER Not Applicable* 6 SHARED VOTING POWER Not Applicable* 7 SOLE DISPOSITIVE POWER Not Applicable* 8 SHARED DISPOSITIVE POWER Not Applicable* 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Not Applicable* 10 CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) Not Applicable* 12 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IC * On February 11, 2013, the Reporting Persons filed a Schedule 13G (the “Original 13G”) to reflect beneficial ownership of the Issuer’s Common Stock.However, in preparing to amend the Original 13G it was noted that on October 1, 2007, the Issuer had filed a Form 15 pursuant to SEC Rule 12g-4(a)(1)(i), providing notice that registration of the Common Stock under Section 12(g) of the Securities Exchange Act of 1934 had been terminated.As a result, at the time the Original 13G was filed, the Common Stock was not registered pursuant to Exchange Act Section 12 and therefore beneficial ownership of the Common Stock was not required to be reported pursuant to Exchange Act Section 13(d) and SEC Rule 13d-1 thereunder.This Amendment No. 1 is being filed to reflect that the Original 13G is withdrawn and will not be further amended. Page 3 of 11 CUSIP No. 1 NAMES OF REPORTING PERSONS Spencer Capital Management, LLC 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) o (b) o 3 SEC USE ONLY 4 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON 5 SOLE VOTING POWER Not Applicable* 6 SHARED VOTING POWER Not Applicable* 7 SOLE DISPOSITIVE POWER Not Applicable* 8 SHARED DISPOSITIVE POWER Not Applicable* 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Not Applicable* 10 CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) Not Applicable* 12 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IA * On February 11, 2013, the Reporting Persons filed a Schedule 13G (the “Original 13G”) to reflect beneficial ownership of the Issuer’s Common Stock.However, in preparing to amend the Original 13G it was noted that on October 1, 2007, the Issuer had filed a Form 15 pursuant to SEC Rule 12g-4(a)(1)(i), providing notice that registration of the Common Stock under Section 12(g) of the Securities Exchange Act of 1934 had been terminated.As a result, at the time the Original 13G was filed, the Common Stock was not registered pursuant to Exchange Act Section 12 and therefore beneficial ownership of the Common Stock was not required to be reported pursuant to Exchange Act Section 13(d) and SEC Rule 13d-1 thereunder.This Amendment No. 1 is being filed to reflect that the Original 13G is withdrawn and will not be further amended. Page 4 of 11 CUSIP No. 1 NAMES OF REPORTING PERSONS Dr. Kenneth Shubin Stein 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) o (b) o 3 SEC USE ONLY 4 CITIZENSHIP OR PLACE OF ORGANIZATION NEW YORK NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON 5 SOLE VOTING POWER Not Applicable* 6 SHARED VOTING POWER Not Applicable* 7 SOLE DISPOSITIVE POWER Not Applicable* 8 SHARED DISPOSITIVE POWER Not Applicable* 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Not Applicable* 10 CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) Not Applicable* 12 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN * On February 11, 2013, the Reporting Persons filed a Schedule 13G (the “Original 13G”) to reflect beneficial ownership of the Issuer’s Common Stock.However, in preparing to amend the Original 13G it was noted that on October 1, 2007, the Issuer had filed a Form 15 pursuant to SEC Rule 12g-4(a)(1)(i), providing notice that registration of the Common Stock under Section 12(g) of the Securities Exchange Act of 1934 had been terminated.As a result, at the time the Original 13G was filed, the Common Stock was not registered pursuant to Exchange Act Section 12 and therefore beneficial ownership of the Common Stock was not required to be reported pursuant to Exchange Act Section 13(d) and SEC Rule 13d-1 thereunder.This Amendment No. 1 is being filed to reflect that the Original 13G is withdrawn and will not be further amended. Page 5 of 11 Item 1(a). Name of issuer: Bexil Corp. Item 1(b). Address of issuer's principal executive offices: P.O. Box 4, Walpole, NH 03608 Item 2(a). Name of person filing: This statement is filed by the entities and persons listed below, all of whom together are referred to herein as the “Reporting Persons.” (i) Spencer, I.I., a company organized under the laws of the Commonwealth of Puerto Rico (“Spencer, I.I.”) with respect to the shares of Common Stock, par value $0.01 per share, of Bexil Corp. (the “Common Stock”) held by it; (ii) Spencer Capital Holdings Ltd., a company organized under the laws of Bermuda, the sole shareholder of Spencer, I.I., with respect to the Common Stock held by Spencer, I.I.; (iii) Spencer Capital Management, LLC, a Delaware limited liability company (“SCM”), the investment adviser to Spencer Capital Holdings Ltd., with respect to the Common Stock held by Spencer, I.I.; and (iv) Dr. Kenneth Shubin Stein, a United States citizen, and the managing member of SCM, with respect to the Common Stock held by Spencer, I.I. The Reporting Persons’ agreement in writing to file this statement on behalf of each of them is attached as Exhibit A hereto. Item 2(b). Address or principal business office or, if none, residence: Spencer Capital Management, LLC 1350 Avenue of the Americas, 4th Floor New York, NY 10019 Spencer, I.I. 802 Ave. Fernandez Juncos San Juan, PR 00907 Spencer Capital Holdings Ltd. Crawford House, 1st Floor 50 Cedar Avenue Hamilton HM11, Bermuda Page 6 of 11 Dr. Kenneth Shubin Stein c/o Spencer Capital Management, LLC 1350 Avenue of the Americas, 4th Floor New York, NY 10019 Item 2(c). Citizenship: Spencer, I.I. is organized under the laws of the Commonwealth of Puerto Rico Spencer Capital Holdings Ltd. is organized under the laws of Bermuda Spencer Capital Management, LLC is organized under the laws of the State of Delaware Dr. Kenneth Shubin Stein is a citizen of the United States of America Item 2(d). Title of class of securities: Common Stock, par value $0.01 per share Item 2(e). CUSIP No.: Item 3. If this statement is filed pursuant to §§240.13d–1(b) or 240.13d–2(b) or (c), check whether the person filing is a: (a) o Broker or dealer registered under section 15 of the Act (15 U.S.C.78o); (b) o Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c); (c) x Insurance company as defined in section 3(a)(19) of the Act (15U.S.C. 78c);* (d) o Investment company registered under section 8 of the InvestmentCompany Act of 1940 (15 U.S.C 80a-8); (e) x An investment adviser in accordance with §240.13d-1(b)(1)(ii)(E);** (f) o An employee benefit plan or endowment fund in accordance with§240.13d-1(b)(1)(ii)(F); (g) o A parent holding company or control person in accordance with§240.13d-1(b)(1)(ii)(G); (h) o A savings associations as defined in Section 3(b) of the FederalDeposit Insurance Act (12 U.S.C. 1813); Page 7 of 11 (i) o A church plan that is excluded from the definition of an investment company under section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3); (j) x A non-U.S. institution in accordance with § 240.13d-1(b)(1)(ii)(J);*** (k) o Group, in accordance with § 240.13d-1(b)(1)(ii)(K). If filing as a non-U.S. institution in accordance with § 240.13d-1(b)(1)(ii)(J), please specify the type of institution: *With respect to Spencer, I.I. **With respect to Spencer Capital Management, LLC and Dr. Kenneth Shubin Stein, its managing member ***With respect to Spencer Capital Holdings Ltd. Item 4. Ownership Not applicable.On February 11, 2013, the Reporting Persons filed a Schedule 13G (the “Original 13G”) to reflect beneficial ownership of the Issuer’s Common Stock.However, in preparing to amend the Original 13G it was noted that on October 1, 2007, the Issuer had filed a Form 15 pursuant to SEC Rule 12g-4(a)(1)(i), providing notice that registration of the Common Stock under Section 12(g) of the Securities Exchange Act of 1934 had been terminated.As a result, at the time the Original 13G was filed, the Common Stock was not registered pursuant to Exchange Act Section 12 and therefore beneficial ownership of the Common Stock was not required to be reported pursuant to Exchange Act Section 13(d) and SEC Rule 13d-1 thereunder.This Amendment No. 1 is being filed to reflect that the Original 13G is withdrawn and will not be further amended. Item 5. Ownership of 5 Percent or Less of a Class. Not applicable. Item 6. Ownership of More than 5 Percent on Behalf of Another Person. Not applicable. Item 7. Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on by the Parent Holding Company or Control Person. Not applicable. Item 8. Identification and Classification of Members of the Group Not applicable. Page 8 of 11 Item 9. Notice of Dissolution of Group. Not applicable. Item 10. Certifications By signing below the undersigned certify that, to the best of their knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.Spencer Capital Holdings Ltd. also certifies that, to the best of its knowledge and belief, the foreign regulatory scheme applicable to insurance companies in Bermuda is substantially comparable to the regulatory scheme applicable to the functionally equivalent U.S. institutions.Spencer Capital Holdings Ltd. also undertakes to furnish to the Commission staff, upon request, information that would otherwise be disclosed in a Schedule 13D. Page 9 of 11 SIGNATURE After reasonable inquiry and to the best of its or his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: January 30, 2014 SPENCER, I.I. By: /s/ Scott J. Allan Name: Scott J. Allan Title: Chief Executive Officer Date: January 30, 2014 SPENCER CAPITAL HOLDINGS LTD. By: /s/ Scott J. Allan Name: Scott J. Allan Title: Chief Executive Officer Date: January 31, 2014 SPENCER CAPITAL MANAGEMENT, LLC By: /s/ Kenneth Shubin Stein, M.D. Name: Kenneth Shubin Stein, M.D. Title: Managing Member Date: January 31, 2014 KENNETH SHUBIN STEIN, M.D. By: /s/ Kenneth Shubin Stein, M.D. Page 10 of 11 EXHIBIT A AGREEMENT OF JOINT FILING Spencer, I.I., Spencer Capital Management, LLC, Spencer Capital Holdings Ltd. and Dr. Kenneth Shubin Stein hereby agree that the Statement on Schedule 13G to which this agreement is attached as an exhibit as well as all future amendments to such Statement, shall be filed jointly on behalf of each of them.This agreement is intended to satisfy the requirements of Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended. Dated: January 30, 2014 SPENCER, I.I. By: /s/ Scott J. Allan Scott J. Allan Chief Operation Officer SPENCER CAPITAL HOLDINGS LTD. By: /s/ Scott J. Allan Name: Scott J. Allan Title: President, Chief Executive Officer and Director SPENCER CAPITAL MANAGEMENT, LLC By: /s/ Kenneth Shubin Stein, M.D. Kenneth Shubin Stein, M.D. Managing Member KENNETH SHUBIN STEIN, M.D. By: /s/ Kenneth Shubin Stein, M.D. Page 11 of 11

Exhibit 10.1 November 1, 2019 Douglas Shanda,       Cheniere Energy, Inc.,             700 Milam Street, Suite 1900,                  Houston, TX 77002. Dear Mr. Shanda: This letter agreement (“Letter Agreement”) sets forth the understanding between you and Cheniere Energy, Inc. (the “Company”) regarding your transition from the Company. 1. Transition from Employment a. From November 1, 2019 (the “Garden Leave Commencement Date”) through January 30, 2020, you will be placed on garden leave and you will no longer report for work at the Company’s offices or provide any duties to the Company or its subsidiaries or affiliates. Your last day of employment with the Company will be on January 30, 2020 or such earlier date on which you resign. You agree that your placement on garden leave (and any changes to your duties and any reorganization of the Company that may occur) shall not constitute “good reason” for purposes of any plan, agreement or arrangement of the Company or its subsidiaries or affiliates. You will continue to receive your base salary, at its current rate, and continue to be eligible to participate in the Company’s health, welfare and 401(k) plans during the period beginning on the Garden Leave Commencement Date and ending on January 30, 2020 or such earlier date on which you resign (the “Continuation Period”), but will not be eligible for a bonus in respect of, or long-term incentive award grants in, 2020. b. You hereby resign without any further action by you or the Company, effective immediately upon the Garden Leave Commencement Date, from any and all positions you then hold (whether as an officer, manager, director, partner or otherwise) with the Company and its subsidiaries and any of their respective subsidiaries, affiliates, general partners and other related entities. 2. Termination Payments a. As soon as reasonably practicable following the Garden Leave Commencement Date, any unreimbursed business expenses will be reimbursed consistent with the terms of the Company’s policy. Following the end of the Continuation Period, you will be entitled to all vested amounts or benefits required to be paid or provided or which you are eligible to receive under the terms of the Company’s welfare, retirement and other plans and programs, including, but not limited to, the Company’s 401(k) plan. b. Provided that you do not resign from your employment with the Company prior to January 30, 2020, and subject to your execution and non-revocation of a release Mr. Douglas Shanda    Page 2   of claims in the form attached hereto within 21 days following the end of the Continuation Period (the “Release”) and your compliance with the Release and this Letter Agreement (including covenants referenced in Section 3), you will be entitled to the benefits set forth in this Section 2(b). Any long-term incentive or retention awards that do not vest in accordance with this Section 2(b) will be forfeited as of the end of the Continuation Period. i. You will be entitled to any bonus that is earned in respect of 2019, as determined by the Compensation Committee of the Company’s Board of Directors (the “Committee”), which will be paid to you at the same time as bonuses are paid to active employees in March 2020. ii. With respect to the restricted stock unit (“RSU”) awards granted to you on February 17, 2017, February 14, 2018 and February 13, 2019 (but, for the avoidance of doubt, excluding the 30,000 special retention RSUs granted to you on February 14, 2018) that are not subject to performance vesting conditions, the portion of each such award that was scheduled to vest in February 2020 will vest on the regularly scheduled vesting date. iii. The Train 3 Milestone Award of 25,000 RSUs will vest on February 17, 2020, the regularly scheduled vesting date. iv. The continued service requirement with respect to the performance stock unit (“PSU”) award granted to you on February 17, 2017 will be waived and any such PSUs that are earned based on actual performance will vest on the date on which the Committee certifies achievement of the applicable performance metrics. v. The continued service requirement with respect to two-thirds and one-third, respectively, of the target number of PSUs granted to you on February 14, 2018 and February 13, 2019 (the “Continuing PSUs”) will be waived and any Continuing the Committee certifies achievement of the applicable performance metrics. Any PSUs granted to you on February 14, 2018 and February 15, 2019 that are not Continuing PSUs will be forfeited as of the end of the Continuation Period. vi. The Company will pay you $1,250,000, less applicable withholdings, in cash as soon as practicable after February 14, 2021 (but no later than the first regularly scheduled payroll date after that date). 3. Continuing Covenants. a. You acknowledge that you are subject to certain obligations, including without limitation the confidentiality, non-competition and non-solicitation obligations set forth in the RSU and PSU awards referenced in Section 2(b), which will survive the termination of your employment in accordance with their terms. On your request, the Company agrees to modify your non-competition obligations with respect to a future employer where you do not provide services in any capacity with respect to LNG projects with facilities located in the United States or Canada (or any subdivision). Any such modification will contain such provisions as the Company reasonably may require and will permit reasonable, non-controlling investments in your employer. Additionally, effective as of the date hereof, you will be permitted to make reasonable, non-controlling investments in such companies as agreed in good faith between you and the Company. Mr. Douglas Shanda    Page 3   b. You acknowledge that, but for this Letter Agreement, you are not entitled to the benefits provided in Section 2(b). As consideration for those benefits and the modification of your non-competition covenants contemplated by Section 3(a), you agree that each non-solicitation covenant to which you are subject will continue for two years following the termination of your employment. c. No later than the Garden Leave Commencement Date, you agree to return to the Company all property or information, including, without limitation, all reports, files, memos, plans, lists, other records (whether electronically stored or not), keys, computers, phones and other equipment belonging to the Company or its affiliates; provided that you will be permitted to retain copies of documents relating to your personal entitlements, benefits, obligations and tax liabilities (the “Personal Information”). On the Garden Leave Commencement Date, you agree to certify to the Company that you have not removed any confidential or other information of the Company (in electronic or physical form), including without limitation any policies, procedures, organizational charts, compensation information or other work product of the Company but excluding the Personal Information. 4. General Provisions. a. Entire Agreement; No Representations. This Letter Agreement (and the agreements, plans and programs referenced herein) constitute the entire agreement between you and the Company regarding the subject matter hereof and supersede any earlier agreement, written or oral, with respect thereto. You acknowledge that you have not relied on any representations or statements not set forth in this Letter Agreement. b. Amendments; Waivers. No provision of this Letter Agreement may be amended or waived unless such amendment is agreed in writing and signed by each party hereto, or such waiver is set forth in a writing and signed by the waiving party. c. Severability; Interpretive Matters. The invalidity or unenforceability of any provision of this Letter Agreement will not affect the validity or enforceability of any other provision. If any provision of this Letter Agreement is held invalid or unenforceable in part, the remaining portion of that provision, together with all other provisions of this Letter Agreement, will remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law. d. Counterparts. This Letter Agreement may be executed in several counterparts, each of which will be deemed an original, and the counterparts will constitute one and the same instrument. Photographic, faxed or PDF copies of such signed counterparts may be used in lieu of the originals for any purpose. e. Governing Law; Venue. This Letter Agreement shall be construed in accordance with and governed by the laws of the State of Delaware to the extent federal law does not supersede and preempt Delaware law (in which case such federal law shall apply). Mandatory venue for any dispute regarding or related to this Letter Agreement shall be Harris County, Texas. f. Withholding Taxes; Section 409A. The Company may withhold from any amounts payable under this Letter Agreement any taxes and other withholdings and deductions that are required to be withheld pursuant to any applicable law or regulation. Additionally, the Company shall withhold shares of common stock of the Company that Mr. Douglas Shanda    Page 4   would otherwise be delivered under the RSU awards discussed in Section 2(b) to satisfy applicable withholding obligations in accordance with the terms of the RSU awards. This Letter Agreement is intended to be exempt from, or to comply with, the requirements of Section 409A of the Internal Revenue Code (“Code”) and this Letter Agreement shall be interpreted accordingly; provided that in no event whatsoever shall the Company or any of its Affiliates be liable for any additional tax, interest or penalties that may be imposed on the Participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. Each payment under this Letter Agreement will be treated as a separate payment for purposes of Section 409A of the Code. *                 *                 * Mr. Douglas Shanda    Page 5   To indicate your agreement with the foregoing, please sign and return this Letter Agreement, which will become a binding agreement on our receipt.   Very truly yours, CHENIERE ENERGY, INC. By:       Accepted and Agreed: _____________________________ Douglas Shanda Date: Release of Claims RELEASE AGREEMENT   1. This Release (the “Release Agreement”) is being entered into by Douglas Shanda (the “Employee”) and Cheniere Energy, Inc. (the “Company”) in order to further the mutually desired terms and conditions set forth herein and as a condition to certain benefits under the Letter Agreement, dated November 1, 2019, by and between the Employee and the Company (the “Letter Agreement”). The term “Company” shall include Cheniere Energy, Inc., its present and former parents, trusts, plans, direct or indirect subsidiaries, affiliates and related companies or entities, regardless of its or their form of business organization.   2. The Employee’s timely execution of this Release Agreement and non-revocation of the General Release and/or ADEA Release contained in Sections 3 and 5 herein is in partial consideration of the benefits under the Employee’s Letter Agreement and to which the Employee agrees he is not entitled until and unless he executes this Release Agreement and does not revoke the General Release and/or ADEA Release. This Release Agreement shall not affect the Employee’s (i) rights under the Letter Agreement, (ii) other rights to accrued payments or benefits (including any rights to receive reimbursement for unreimbursed expenses), (iii) rights to indemnification and (iv) rights pursuant to directors and officers insurance, in each case, under any agreement with the Company, the Company by-laws or as required by law (these payments and benefits, the “Excluded Benefits”). For the avoidance of doubt, this Release Agreement shall not affect the Employee’s rights in his capacity as a shareholder of the Company.   3. General Release. Except with respect to the Excluded Benefits, the Employee, on behalf of himself, his heirs, beneficiaries, personal representatives and assigns, hereby releases, acquits and forever discharges the Company, its present and former owners, officers, employees, shareholders, directors, partners, attorneys, agents and assignees, and all other persons, firms, partnerships, or corporations in control of, under the direction of, or in any way presently or formerly associated with the Company (each, a “Released Party” and collectively the “Released Parties”), of, from and against all claims, charges, complaints, liabilities, obligations, promises, agreements, contracts, damages, actions, causes of action, suits, accrued benefits or other liabilities of any kind or character, in law or in equity, whether known or unknown, foreseen or unforeseen, vested or contingent, matured or unmatured, suspected or unsuspected, that may now or hereafter at any time be made or brought against any Released Party, arising from or in any way connected with or related to his employment with the Company and/or his termination of employment with the Company, including, but not limited to, allegations of wrongful termination, discrimination, retaliation, breach of contract, anticipatory breach, fraud, conspiracy, promissory estoppel, retaliatory discharge, constructive discharge, discharge in violation of any law, statute, regulation or ordinance providing whistleblower protection, discharge in violation of public policy, intentional infliction of emotional distress, negligent infliction of emotional distress, defamation, harassment, sexual harassment, invasion of privacy, any action in tort or contract, any violation of any federal, state, or local law, including, but not limited to, any violation of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.   § 2000e et seq., the Civil Rights Act of 1866, 42 U.S.C. § 1981, the Equal Pay Act, 29 U.S.C. § 206, the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., the Americans with Disabilities Act, 29 U.S.C. § 621, et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq., the Sarbanes-Oxley Act, 18 U.S.C. § 1514A et seq., the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101-2109, the Texas Commission on Human Rights Act, TEX. LAB. CODE § 21.001, et. seq., the Texas Workers’ Compensation Act, TEX. LAB. CODE §§ 451.001—451.003, the Texas Payday Act, TEX. LAB. CODE § 61.011, et seq., or any other employment or civil rights act, and any and all claims for severance pay, vacation pay, paid time off or benefits under any compensation, cash award, bonus, stock grant, equity grants or awards, or employee benefit plan, program, policy, contract, agreement, but excluding any claim for unemployment compensation, any claim for workers’ compensation benefits; and any benefits which the Employee is entitled to receive under any Company plan that is a qualified plan under IRC §401(a) or is a group health plan subject to COBRA. COBRA continuation coverage is available to the Employee and his beneficiaries who participated in the Company’s group health plan as of the date of the Employee’s termination of employment, to the extent the participant properly elects and pays for such COBRA continuation coverage. Excluded from the General Release in this Section 3 are claims arising under the Age Discrimination in Employment Act (“ADEA”), which are released pursuant to Paragraph 5, and those claims which cannot be waived by law.   4. The Employee agrees not to commence any legal proceeding or lawsuit against any Released Party arising out of or based upon his employment with the Company or the termination of his employment with the Company. The Employee represents that he has not filed any charges, complaints, or other proceedings against the Company or any of the Released Parties that are presently pending with any federal, state, or local court or administrative or governmental agency. Notwithstanding this release of liability, nothing in this Agreement prevents the Employee from exercising any rights that cannot be lawfully waived or restricted, including filing a charge or complaint with the Equal Employment Opportunity Commission (“EEOC”), National Labor Relations Board (“NLRB”) (such as related to Section 7 rights under the NLRA), Occupational Safety and Health Administration, Securities and Exchange Commission (“SEC”), U.S. Department of Justice, Congress, any Inspector General, or other federal, state or local agency or participating in any investigation or proceeding (including providing documents or other information) conducted by such agency; however, the Employee understands and agrees that he is waiving any and all rights to recover any monetary or personal relief or recovery from the Released Parties as a result of such proceeding or subsequent legal actions. In addition, nothing in this Release Agreement prohibits the Employee from reporting possible violations of federal law or regulation to, or otherwise communicating with any government agency or entity, making other disclosures that are protected under whistleblower provisions of law, or receiving an award or monetary recovery pursuant to a government award program (including the SEC’s whistleblower program). The Employee does not need prior authorization to make such reports or disclosures and is not required to notify the Company that the Employee has made any such report or disclosure.   -2- 5. ADEA Release. The Employee hereby completely and forever releases and irrevocably discharges the Company and the other Released Parties, as that term is defined in Section 3 above, from any and all liabilities, claims, actions, demands, and/or causes of action, arising under the ADEA on or before the date of this Release Agreement (“ADEA Release”), and hereby acknowledges and agrees that:     a. The Release Agreement, including the ADEA Release, was negotiated at arms-length;     b. The Release Agreement, including the ADEA Release, is worded in a manner that the Employee fully understands;     c. The Employee specifically waives any rights or claims under the ADEA;     d. The Employee knowingly and voluntarily agrees to all of the terms set forth in the Release Agreement, including the ADEA Release;     e. The Employee acknowledges and understands that any claims under the ADEA that may arise after the date of the Release Agreement are not waived;     f. The rights and claims waived in the Release Agreement, including the ADEA Release, are in exchange for consideration over and above anything to which the Employee was already undisputedly entitled;     g. The Employee has been and hereby is advised in writing to consult with an attorney prior to executing the Release Agreement, including the ADEA Release;     h. The Employee understands that he has been given a period of up to 21 days to consider the ADEA Release prior to executing it, although he may accept it at any time within those 21 days;     i. The Employee understands and agrees that any changes to Company’s offer, whether material or immaterial, do not restart the running of the 21-day review period; and     j. The Employee understands that he has been given a period of seven (7) days from the date of the execution of the ADEA Release to revoke the ADEA Release, and understands and acknowledges that the ADEA Release will not become effective or enforceable until the revocation period has expired. If the Employee elects to revoke his release of age discrimination claims, the revocation must be in writing and delivered and presented to Wayne Williams, Director, Total Rewards, Payroll and HRIS, Cheniere Energy, Inc. by 5:00 p.m., Central Time, no later than the seventh (7th) day after the date on which he executes the Release Agreement. The consideration cited above and the promises contained herein are made for the purpose of purchasing the peace of the Released Parties and are not to be construed as an admission of liability or as evidence of unlawful conduct by any Released Party, all liability being expressly denied.   -3- 6. The Employee voluntarily accepts the consideration cited herein, as sufficient payment for the full, final, and complete release stated herein, and agrees that no other promises or representations have been made to him by the Company or any other person purporting to act on behalf of the Company, except as expressly stated herein.   7. The Employee understands that this is a full, complete, and final release of the Released Parties for the matters released. As evidenced by the signature below, the Employee expressly promises and represents to the Company that he has completely read the Release Agreement and understands its terms, contents, conditions, and effects. The Employee represents that he has made no assignment or transfer of the claims covered by Sections 3 or 5 above.   8. The Employee is advised to consult with an attorney prior to executing the Release Agreement. The Employee understands that he has the right to consult an attorney of his choice and has consulted with an attorney or has knowingly and voluntarily decided not to do so.   9. The Employee states that he is not presently affected by any disability which would prevent him from knowingly and voluntarily granting the Release Agreement, and further states that the promises made herein are not made under duress, coercion, or undue influence and were not procured through fraud.   10. The Employee represents that he has returned to the Company, except to the extent such return is expressly excused by the Company in writing, all expense reports, notes, memoranda, records, documents, employment manuals, pass keys, computers, computer diskettes, office equipment, sales records and data, and all other information or property, no matter how produced, reproduced or maintained, kept by the Employee in his possession, used in or pertaining to the business of the Company, including but not limited to lists of customers, prices, marketing plans, Company operating manuals, and other Confidential Information obtained by the Employee in the course of his employment.   11. Nothing in the Release Agreement shall be deemed to affect or relieve the Employee from any obligation contained in any agreement with the Company or any of the Released Parties related to the terms of his employment or separation therefrom, including, but not limited to, any confidentiality, non-solicitation, non-disclosure or other protective covenant, entered into between the Employee and the Company or any of the Released Parties, which covenants the Employee expressly reaffirms and re-acknowledges herein.   12. Should any future dispute arise with respect to the Release Agreement, both parties agree that it should be resolved solely in accordance with the terms and provisions of this Release Agreement and the laws of the State of Texas. Any disputes between the parties concerning the Employee’s employment with the Company and/or the Release Agreement shall be settled exclusively in Harris County, Texas.   -4- 13. The Employee hereby waives all rights to recall reinstatement, employment, reemployment, and past or future wages from the Company. The Employee additionally represents, warrants and agrees that the Letter Agreement has provided for or he has received full and timely payment of all wages, salary, overtime pay, commissions, bonuses, other compensation, remuneration and benefits that may have been due and payable by the Released Parties and that he has been appropriately paid for all time worked and in accordance with all incentive awards.   14. The Employee expressly represents and warrants to the Company that he has completely read the Release Agreement prior to executing it, has had an opportunity to review it with his counsel and to consider the Release Agreement and to understand its terms, contents, conditions and effects and has entered into the Release Agreement knowingly and voluntarily.   15. The Employee acknowledges that he may hereafter discover claims or facts in addition to or different than those which he now knows or believes to exist with respect to the subject matter of the release set forth above and which, if known or suspected at the time of entering into the Release Agreement, may have materially affected the Release Agreement and his decision to enter into it. Nevertheless, the Employee hereby waives any right, claim or cause of action that might arise as a result of such different or additional claims or facts.   16. The Employee agrees that he will forfeit certain benefits under the Letter Agreement if he challenges the validity of the Release Agreement, unless prohibited by law. The Employee also agrees that if he violates the Release Agreement by suing the Company or the other Released Parties on the claims that the Employee has released hereunder (excluding, for the avoidance of doubt, any matters or rights that are expressly not released hereunder), the Employee will pay all costs and expenses of defending against the suit incurred by the Released Parties, including reasonable attorneys’ fees, and return all payments received by the Employee pursuant to the Release Agreement.   17. Whenever possible, each provision of the Release Agreement shall be interpreted in such manner as to be effective and valid under applicable law; however, if any provision of the Release Agreement, other than Sections 3 and 5, shall be finally determined to be invalid or unenforceable under applicable law by a court of competent jurisdiction, that part shall be ineffective to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of said provision or the remaining provisions of this Release Agreement. Should Sections 3 and/or 5 be determined to be illegal, invalid, unconscionable, or unenforceable, the Company shall be entitled to the return of the amount paid or provided to the Employee in respect of his Letter Agreement pursuant to Section 2 or, at the Company’s sole option, to require the Employee to execute a new agreement that is enforceable. [Signature page follows]   -5- IN WITNESS WHEREOF, the parties hereto have executed this Release Agreement on the dates noted below.     Douglas Shanda   Date:       By:     Name:     Title:     Date:    

Exhibit 10.1     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into on this March 23, 2017 among Bancorp of New Jersey, Inc., a New Jersey corporation having its principal place of business at 1365 Palisade Avenue, Fort Lee, New Jersey 07024 (“Bancorp”), Bank of New Jersey, a corporation organized under the laws of, and authorized by statute to accept deposits and hold itself out to the public as engaged in the banking business in, the State of New Jersey having its principal place of business at 1365 Palisade Avenue, Fort Lee, New Jersey 07024 (“Bank”, and, together with Bancorp, the “Employer”) and Nancy E. Graves (the “Executive”).  This Agreement replaces in their entirety that certain employment agreement and that certain change in control agreement between the parties, each dated April 5, 2016.   WITNESSETH:   WHEREAS, the Employer presently employs the Executive as President and Chief Executive Officer of Bancorp and Chief Executive Officer of Bank;   WHEREAS, the Employer desires to provide for the continued employment of the Executive and to make certain changes in the Executive’s employment arrangements which the Employer has determined will reinforce and encourage the continued dedication of the Executive to the Employer; and   WHEREAS, the Executive is willing to terminate the Executive’s interests and rights under the existing employment agreement with the Employer and to continue to serve the Employer on the terms and conditions herein provided.   contained in this Agreement, the Employer and the Executive, intending to be legally bound hereby, mutually agree as follows:   1.                                      Employment.   (a)                                 The Employer and Executive agree that Executive shall continue to be employed as President and Chief Executive Officer of Bancorp and Chief Executive Officer of Bank and shall perform such services for the Employer as may be assigned to Executive by the Boards of Directors of Bancorp or Bank (collectively, the “Board”) from time to time in accordance with the terms and conditions set forth in this Agreement.   (b)                                 The term of this Agreement shall commence on the date hereof (the “Effective Date”) and, shall expire on the third anniversary of the Effective Date, unless sooner terminated in accordance with the provisions of Section 4 (the “Term”).  On the first anniversary of the Effective Date and on each anniversary thereafter, the Term shall be extended for an additional  year unless the Employer or the Executive shall deliver written notice to the contrary to the other party not less than 90 days prior to the applicable anniversary of the Effective Date.   In the event that Executive gives notice of non-renewal, the Employer may at any time during the remainder of the Term suspend the Executive’s duties, place the Executive on a paid leave, hire a new President and Chief Executive Officer, and/or terminate Executive’s employment, and such action shall not constitute a breach of this Agreement, a termination without Cause, or Good Reason, provided that if Employer terminates Executive’s employment pursuant to this section, and provided Executive complies with the requirements of Section 4(i) below, Employer shall pay Executive severance in the same amounts and at the same times as the salary and bonus payments   1   Executive would have received if Executive had remained employed through the remainder of the Term, and shall provide the benefits in Section 4(d)(1)(ii) below.  In the event Executive’s employment with the Employer continues after the expiration of the Term, Executive’s post-expiration employment will be on an “at-will” basis and either party may thereafter terminate such employment with or without notice and for any or no reason and without any obligations determined by reference to this Agreement other than any provisions of this Agreement which contemplate performance by them subsequent to such termination.   (c)                                  The Executive is currently serving as a director of Bancorp and Bank. Bancorp shall nominate the Executive for election as a director of Bancorp as such nominations are necessary so that the Executive will, if elected by the shareholders of Bancorp, serve as a director of Bancorp and Bank throughout the Term. Bancorp agrees to cause the election of the Executive as a director of Bank throughout the Term. The Executive hereby consents to serve as a director without any additional compensation for Executives’ services as a director or for any other duties Executive may undertake as a director.  Effective upon the termination of Executive’s employment as President and Chief Executive Officer of Bancorp and Bank for any reason, Executive shall no longer be a director of Bancorp or Bank or any of their subsidiaries or affiliates, and Executive shall resign all positions as a director or officer of Bancorp or Bank and their subsidiaries and affiliates and sign any documents necessary to assure that Executive’s resignation from all such positions is effective and properly documented.   2.                                      Duties of the Executive.   (a)                                 The Executive shall serve in the position of President and Chief Executive Officer of Bancorp and Chief Executive Officer of Bank and perform all duties and services commensurate with those positions. The Executive shall devote her full time and attention to the discharge of the duties undertaken by her hereunder.  Executive shall comply with all policies, standards and regulations of the Employer now or hereafter promulgated, and shall perform her duties under this Agreement to the best of her abilities and in accordance with general business standards of conduct. The foregoing provision shall not prevent the Executive’s purchase, ownership or sale of any interest, or the Executive engaging in, any business that does not compete with the business of the Employer or the Executive’s involvement in charitable or community activities, provided, that the Executive provides prompt notice to the Employer of such business and charitable or community activities and that the time and attention that the Executive devotes to such business and charitable or community activities does not materially interfere with the performance of the Executive’s duties under this Agreement and further provided that such conduct complies in all material respects with applicable policies of the Employer.  In addition, Executive shall not serve as a paid director of any organization without the consent of the Board, confirmed to Executive in writing.   (b)                                 The Executive shall be entitled to paid time off during each calendar year in accordance with the paid time off policy of the Employer for senior executive officers, to be taken at such time or times as the Executive and the Employer shall mutually determine.  Earned but unused paid time off shall be accrued in accordance with the Employer’s paid time off policy.  Employer shall follow its policy with respect to whether and under what circumstances Executive may receive compensation in lieu of unused paid time off.   3.                                      Compensation.  For all services to be rendered by the Executive under this Agreement, the Employer and the Executive agree as follows:   (a)                                 Base Salary.  The Employer shall pay the Executive a base salary (the “Base Salary”), at a rate of $450,000 per year, plus such other compensation as the Employer may, from time to time, determine in its sole discretion.  The Compensation Committee of the Board (the “Compensation   2   Committee”) shall review annually the amount of the Executive’s Base Salary and may increase such Base Salary to such amount as the Employer may determine in its sole and absolute discretion.  Such Base Salary and other compensation shall be payable in accordance with the Employer’s normal payroll practices (and in no event less frequently than monthly) as in effect from time to time.   (b)                                 Cash Bonus.  The Executive shall be eligible each year to receive a cash bonus of up to 50% of her annual salary (less the qualifying percentage of salary upon which any other bonus or incentive arrangements covering all bank employees is based for that year) if the Employer achieves certain performance levels established each year by the Board or the Compensation Committee.  Any bonus payment made pursuant to this Section 3(b) shall be made not later than March 1st of the year following the year in which the bonus was earned by the Executive. The parties further agree that the Executive’s potential cash bonus for 2017 shall be $150,000.   (c)                                  Equity Compensation.  The Executive shall be eligible to participate in the Bancorp’s long-term equity incentive program or under any similar or successor plan adopted by the Bancorp under which eligible participants may be granted stock options, restricted stock, and other awards as determined by the Board.  Upon signing this Agreement, Executive shall be awarded 30,000 shares of restricted stock of Bancorp under the Bancorp’s 2011 Equity Incentive Plan (the “2017 Restricted Stock Award”).  The award agreement for the restricted stock shall provide that one-third of the shares will vest on each of December 31, 2017, 2018, and 2019, but only if the Executive remains employed by the Bancorp or one of its subsidiaries on such date, and shall contain other customary terms and conditions.   Any restricted stock, options or similar awards shall be issued to the Executive at an exercise price of not less than the stock’s current fair market value (as determined in compliance with Treasury Regulation § 1.409A-1(b)(5)(iv)) as of the date of grant, and the number of shares subject to such grant shall be fixed on the date of grant.   (d)                                 Other Benefits.  Subject to any applicable terms, conditions, and eligibility requirements, from and after the Effective Date and throughout Executive’s employment hereunder, except as otherwise expressly provided in the Agreement, the Executive shall be entitled to participate in all cash and non-cash employee benefit plans that may be maintained by the Employer for senior executive officers or employees generally, including but not limited to (i) a 401(k) retirement program, (ii) long-term disability, (iii) extended medical leave, (iv) paid-time off and (v) health insurance, dental insurance and life insurance coverage as are provided to the class of employees that includes the Executive.   (e)                                  Withholding for Taxes.  The Employer may withhold from any amounts payable to Executive under this Agreement all federal, state, city or other taxes and withholdings as shall be required pursuant to any applicable law, rule or regulation.   (f)                                   Allocation of Compensation.  The Bank and the Bancorp shall apportion any payments or benefits paid to the Executive pursuant to this Agreement among themselves as they may agree from time to time in proportion to services actually rendered by the Executive for such entity; provided, however, that they must satisfy in full all such obligations in a timely manner as set forth in this Agreement regardless of any agreed-upon apportionment.  Executive’s receipt of satisfaction in full of any such obligation from the Bancorp or the Bank shall extinguish the obligations of the other with respect to such obligation.   (g)                                  Expenses.  The Employer shall promptly reimburse the Executive for (a) all reasonable expenses the Executive pays or incurs in connection with the performance of the Executive’s duties and responsibilities under this Agreement, upon presentation of expense vouchers or other appropriate documentation for such expenses and (b) all reasonable professional expenses, such as licenses and dues   3   and professional educational expenses, the Executive pays or incurs during her employment hereunder, all of the above in accordance with Employer’s policies with respect thereto.   (h)                                 Clawback.  The Executive agrees to repay any compensation previously paid or otherwise made available to the Executive under this Agreement that is subject to recovery under any applicable law (including any rule of any exchange or service through which the securities of the Bancorp are then traded), including, but not limited to, the following circumstances:   (i)                                     where such compensation was in excess of what should have been paid or made available because the determination of the amount due was based, in whole or in part, on materially inaccurate financial information of the Bancorp or the Bank, including but not limited to, when the Bancorp shall have a restatement of financial results attributable to the Executive’s actions, whether intentional or negligent;   (ii)                                  where such compensation constitutes “excessive compensation” within the meaning of 12 CFR Part 364, Appendix A;   (iii)                               where the Executive has committed, is substantially responsible for, or has violated, the respective acts, omissions, conditions, or offenses outlined under 12 C.F.R. Section 359.4(a)(4); and   (iv)                              if, while the Executive is also a senior executive officer of the Bank, the Bank becomes, and for so long as the Bank remains, subject to the provisions of 12 U.S.C. Section 1831o(f), where such compensation exceeds the restrictions imposed on the senior executive officers of such an institution.   The Executive agrees to return promptly any such compensation identified by the Employer by written notice provided pursuant to Section 11.  If the Executive fails to return such compensation promptly, the Executive agrees that the amount of such compensation may be deducted from any and all other compensation owed to the Executive by the Employer.  If the Executive is then employed by the Employer, the Executive acknowledges that the Employer may take appropriate disciplinary action (up to, and including, Termination of Employment) if the Executive fails to return such compensation.  The Executive acknowledges the Employer’s rights to engage in any legal or equitable action or proceeding in order to enforce the provisions of this Section 3(h).  The provisions of this Section 3(h) shall be modified to the extent, and remain in effect for the period, required by applicable law.   4.                                      Termination of Employment; Change in Control.  Notwithstanding the termination of this Agreement or the termination of the Executive’s employment for any reason, the parties shall be required to carry out any provisions of this Agreement which contemplate performance by them subsequent to such termination.  In addition, no termination of this Agreement shall affect any liability or other obligation of either party which shall have accrued prior to such termination, including, but not limited to, any liability, loss or damage on account of breach.  No termination of employment shall terminate the obligation of the Employer to make payments of any vested benefits provided hereunder or the obligations of the Executive under Section 6 of this Agreement. Unless otherwise stated in this Section 4, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives.   (a)                                 The Executive’s employment hereunder may be terminated by the Executive upon 90 days written notice to the Employer or at any time by mutual agreement in writing.  It shall not constitute a breach of this Agreement for the Employer to suspend the Executive’s duties and to place the Executive   4   on a paid leave during the 90-day notice period. If the Executive’s employment is terminated under this Section 4(a), the Employer shall pay the Executive only any sums due to her as Base Salary and/or reimbursement of expenses through the date of termination.  Such amounts shall be paid at the end of the payroll period that follows the payroll period in which her employment terminates.   (b)                                 This Agreement shall terminate upon death of the Executive; provided, however, that in such event the Employer shall pay to the estate of the Executive the compensation, including Base Salary and accrued but unused paid-time off in accordance with Employer’s policies with respect thereto, which otherwise would be payable to the Executive through the date on which her death occurs.  Such amounts shall be paid at the end of the payroll period that follows the payroll period in which her employment terminates due to her death.  Additionally, the Employer shall (i) pay to the Executive’s estate (A) any bonus or other short-term incentive compensation earned, but not yet paid, for any year prior to the year in which her death occurs, and (B) any bonus or other short-term incentive compensation for the year in which her death occurs that she would have been eligible to receive if she had lived, multiplied by a fraction, the numerator of which is the number of days in the year that precede the date on which her death occurs and the denominator of which is three hundred sixty-five, and (ii) cause any unvested portion of the 2017 Restricted Stock Award to become fully vested. Any bonus or other short-term incentive compensation payable under this Section 4(b) shall be paid (i) on the date of payment to other employees eligible for bonuses or other short-term incentive compensation under the same plan or plans, or, (ii) if no date or time frame for payment is specified in those plans, by March 1st of the calendar year following the calendar year in which the compensation is earned.   (c)                                  The Employer may terminate Executive’s employment under this Agreement upon its determination of the Disability of the Executive, which Disability has continued for such period required for the Executive to become eligible to receive long term disability benefits under the Employer’s long-term disability plan or insurance program.  “Disability” shall mean as defined by Treasury Regulation § 1.409A-3(i)(4).  During the period of any Disability leading up to the termination of the Executive’s employment under this provision, the Employer shall continue to pay the Executive her full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with the Employer’s normal payroll practices; provided that, the amount of any such payments to the Executive shall be reduced by the sum of the amounts, if any, payable to the Executive for the same period under any other disability benefit covering the Executive that is provided by the Employer.  In the event that Employer terminates Executive’s employment upon its determination of Disability of the Executive, the Employer shall (i) pay the Executive any bonus or other short-term incentive compensation earned, but not yet paid, through the date of termination, on the same terms as set forth in Section 4(b), and (ii) cause any unvested portion of the 2017 Restricted Stock Award to become fully vested.   (d)                                 (1)The Employer may terminate Executive’s employment under this Agreement other than for “Cause”, as defined in Section 4(e), at any time upon written notice to Executive, which termination shall be effective immediately.  Executive may resign after written notice to the Employer for “Good Reason”, as hereafter defined. In the event the Executive’s employment terminates pursuant to this Section 4(d)(1), Executive shall receive, at the end of the payroll period that follows the payroll period in which her employment terminates, her Base Salary earned through the date of termination and accrued but unused paid-time off.  In the event the Executive’s employment terminates pursuant to this Section 4(d)(1), Employer shall pay the Executive any bonuses or short-term incentive compensation as described in Section 4(b)(i)(A) and (B) above, by the times described in Section 4(b) above.  In the event the Executive’s employment terminates pursuant to this Section 4(d)(1), provided she complies with the requirements of Section 4(i) below, Executive shall also receive the following items:   (i)                                     Severance in an amount equal to 200% of the sum of (A) her current rate of annual Base Salary in effect immediately preceding such termination and (B) the   5   average of her last two year’s annual bonus(es) ; provided that such amount shall be paid in a single lump sum cash payment on the date described in Section 4(i) below; and   (ii)                                  The Executive may continue participation for both her and her covered dependents (if applicable), in accordance with the terms of the applicable benefits plans, in the Employer’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).  In accordance with COBRA, if Executive timely elects COBRA coverage, and assuming the Executive and her covered dependents (if applicable), are covered under and enrolled in the Employer’s group health plan as of her date of termination, the Employer will, for twelve months, pay an amount towards the monthly COBRA premiums that is equal to the amount Employer was paying towards Executive’s group health plan monthly premiums immediately prior to the termination of Executive’s employment (the “Continuation Period”).  If the Executive timely elects COBRA coverage for group health coverage, she will be obligated to pay the rest of the full COBRA cost of the coverage.  The Employer’s payments towards the monthly premiums during the Continuation Period shall be treated as taxable income to Executive.  Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) may be terminated by the Employer if during the Continuation Period the Executive becomes eligible for qualifying health care coverage through a subsequent employer, the Executive fails to pay Executive’s portion of the COBRA premium (after notice and within 45 days any such payment is due), or Executive or Executive’s covered dependents ceases to be eligible for COBRA coverage.  If Executive continues COBRA coverage for Executive and/or Executive’s covered dependents after Employer’s obligation under this subsection (ii) ceases for any reason, Executive shall be responsible for paying the full amount of the COBRA premiums.   (2)                                 Notwithstanding anything in this Agreement to the contrary, if Executive breaches Section 6(a) of this Agreement, Executive will not thereafter be entitled to receive any further compensation or benefits pursuant to Section 4(d)(1), other than the right to participate in COBRA at Executive’s own expense, and Executive shall be required to return any payments made to Executive pursuant to Section 4(d)(1) after the date on which Executive first breaches Section 6(a) of this Agreement.   (3)                                 For purposes of this Agreement, Good Reason shall mean one or more of the following conditions arising without the consent of the service provider:   (i)                                     A material diminution in Executive’s base salary.   (ii)                                  A material diminution Executive’s authority, duties, or responsibilities.   (iii)                               A requirement that Executive report to a corporate officer or employee instead of reporting directly to the board of directors of the Bank.   (iv)                              A material change in the geographic location at which Executive is based.   (4)                                 To terminate this Agreement and her employment under this Agreement for Good Reason, the Executive must provide written notice to the Employer of the existence of the circumstances providing grounds for termination for Good Reason within 90 days of the initial existence of such grounds and must give the Employer at least 30 days from receipt of such   6   written notice to cure the condition constituting Good Reason (“Notice of Good Reason”).  Such termination must be effective within one year after the initial existence of the condition constituting Good Reason.  In the event of termination for Good Reason, the date of termination shall be the effective date specified in the Executive’s Notice of Good Reason.   (e)                                  The Employer shall have the right to terminate Executive’s employment under this Agreement at any time for Cause, which termination shall be effective immediately, upon delivery of written notice to the Executive which shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment.  Termination for “Cause” shall mean termination because of the Executive’s personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation other than traffic violations or similar offenses or final cease-and-desist order or material breach of any provision of this Agreement.  Cause shall also include termination because of (A) misappropriation or other intentional material damage to the property or business of the Employer by the Executive, (B) the Executive’s repeated absences other than for vacation or physical or mental impairment or illness, (C) the Executive’s admission or conviction of, or plea of nolo contendere to, any felony or any other crime referenced in Section 19 of the Federal Deposit Insurance Act that, in the reasonable judgment of the Board, adversely affects the Employer’s reputation or the Executive’s ability to carry out the Executive’s obligations under this Agreement or (D) the Executive’s non-compliance with the provisions of Section 2(a) of this Agreement after notice of such non-compliance from the Employer to the Executive and at least 21 days for the Executive to cure such non-compliance.  Notwithstanding the foregoing, the Employer may not terminate the Executive’s employment under this Agreement for Cause unless the Employer provides the Executive with (X) written notice in accordance with the By-laws of Bancorp and Bank of a special meeting of the Board to consider the termination of the Executive’s employment under this Agreement for Cause and (Y) the opportunity for the Executive to address such special meeting.  It shall not constitute a breach of this Agreement for the Employer to suspend the Executive’s duties and place the Executive on an unpaid leave during the period prior to the special meeting of the Board.  In the event Executive’s employment under this Agreement is terminated for Cause, Executive shall thereafter have no right to receive compensation or other benefits under this Agreement.   (f)                                   If Executive is suspended and/or temporarily prohibited from participating in the conduct of the Employer’s affairs by a notice served pursuant to the Federal Deposit Insurance Act, the Employer’s obligations under this Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings.  Employer shall not be required to pay Executive any salary or bonus for any period of time during which Executive is unable to perform Executive’s duties due to any such notice.   (g)                                  (1)                                 If Executive’s employment is terminated without Cause within one year after a Change in Control shall have occurred or if she resigns for Good Reason within one year after a Change in Control shall have occurred, then Executive shall receive, at the end of the payroll period that follows the payroll period in termination, any bonuses or short term incentive compensation as described in Section 4(b) above, and accrued but unused paid-time off.   In the event the Executive’s employment terminates pursuant to this Section 4(g)(1), provided she complies with the requirements of Section 4(i) below, Executive shall receive the following items: (i) a single lump sum amount equal to 299% of the sum of (A) her current rate of annual Base Salary in effect immediately preceding such termination and (B) the average of her last two years’ annual bonus(es) earned on the date described in Section 4(i) below, instead of any payment described in Section 4(d)(1)(i), and (ii) the benefits and payments described in Section 4(d)(1)(ii).   7   (2)                                 For purposes of this Agreement, “Change in Control” shall mean any of the following:   (A) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities and Exchange Act of 1934 (the “Exchange Act”) other than Bancorp or the Bank, a subsidiary of Bankcorp or the Bank, an employee benefit plan of Bancorp or the Bank or a subsidiary of the Bank (including a related trust), becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly of securities of Bancorp or the Bank representing more than 50% of the combined voting power of Bancorp’s or the Bank’s then outstanding securities, notwithstanding whether the Bank is otherwise subject to the terms of the Exchange Act; or   (B) the occurrence of a sale of all or substantially all of the assets of the Bank to an entity which is not a direct or indirect subsidiary of Bancorp or the Bank; or   (C) the occurrence of a reorganization, merger, consolidation or similar transaction involving Bancorp or the Bank unless (A) the shareholders of Bancorp or the Bank, as applicable, immediately prior to the consummation of any such transaction will initially own securities representing a majority of the voting power of the surviving or resulting corporation..   (3)                                 Notwithstanding anything in this Agreement to the contrary, if the Executive breaches Section 6(a) of this Agreement, the Executive will not thereafter be entitled to receive any further compensation or benefits pursuant to this Section 4(g), other than the right to participate in COBRA at Executive’s own expense, and Executive shall be required to return any payments made to Executive pursuant to Section 4(g) after the date on which Executive first breaches Section 6(a) of this Agreement..   (h)                                 Notwithstanding the provisions relating to the timing of payments described in this Section 4 above, if the Executive is a “specified employee” under Section 409A of the Internal Revenue Code of 1986 and any regulations thereunder (the “Code”) on the date of her termination of employment, payment of amounts due under Section 4(d)(1) shall be made as described in Section 24 of this Agreement.   (i)                                     In addition, within 60 days of termination of the Executive’s employment, and as a condition to the Employer’s obligation to pay any amounts under Section 4(d)(1)(i) and (ii) or 4(g)(1)(i) and (ii), the Executive shall execute, and not timely revoke during any revocation period provided pursuant to such release, a release and waiver of claims reasonably satisfactory to the Employer.  (For purposes of clarification, the execution of a release and waiver shall not be a condition to the provision of COBRA benefits but shall be a condition to payments by Employer towards COBRA premiums.)  In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. If the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year, provided however that any portion of an insurance premium due to be paid by the Employer during such 60-day period under Section 4 shall be paid by the Employer on the due date whether or not the release and waiver has been signed.   (j)                                    If tax counsel appointed by the Employer (the “Tax Counsel”) determines that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Executive (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise) (a “Payment”) would constitute an “excess   8   parachute payment” within the meaning of Section 280G of the Code and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax and no part of the income tax deduction for the Payment shall be disallowed under Section 280G of the Code,, but only if, by reason of such reduction, the net after-tax benefit received by the Executive as a result of such reduction will exceed the net after-tax benefit that would have been received by the Executive if no such reduction were made.  The Payment shall be reduced,  if applicable, by the Employer in the following order of priority: (A) reduction of any cash severance payments otherwise payable to the Executive that are exempt from Section 409A of the Code; (B) reduction of any other cash payments or benefits otherwise payable to the Executive that are exempt from Section 409A of the Code, but excluding any any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (D) reduction of any other payments or benefits otherwise payable to the Executive on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code.  If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Executive and the Executive shall be responsible for payment of any Excise Taxes relating to the Payment.   All determinations required to be made under this Section 4, and the assumptions to be utilized in arriving at such determination, shall be made by the Tax Counsel, which shall provide its determinations and any supporting calculations both to the Employer and Executive within ten business days of having made such determination.  The Tax Counsel shall consult with any nationally recognized compensation consultants, accounting firm and/or other legal counsel selected by the Employer in determining which payments to, or for the benefit of, the Executive are to be deemed to be parachute payments within the meaning of Section 280G of the Code.  In connection with making determinations under this Section 4, the Tax Counsel shall take into account the value of any reasonable compensation for services to be rendered by the Executive before or after the Change in Control, including without limitation, the Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant, and the Employer shall cooperate in good faith in connection with any such valuations and reasonable compensation positions. Without limiting the generality of the foregoing, for purposes of this provision, the Employer agrees to allocate as consideration for the covenants set forth in Section 6 the maximum amount of compensation and benefits payable under Section 4 hereof reasonably allocable thereto so as to avoid, to the extent possible, subjecting any Payment to tax under Section 4999 of the Code.   9   5.                                      Indemnification.  Notwithstanding anything in the articles of incorporation or By-laws of Bancorp or Bank to the contrary, the Executive shall at all times during the Executive’s employment by Bancorp or Bank, and after such employment, be indemnified by such entities to the fullest extent applicable law permits for any matter in any way relating to the Executive’s affiliation with Bancorp or Bank; provided, however, that if Bancorp or Bank shall have terminated the Executive’s employment for Cause, then neither Bancorp or Bank shall have any obligation whatsoever to indemnify the Executive for any claim arising out of the matter for which the Executive’s employment shall have been terminated for Cause or for any conduct of the Executive not within the scope of the Executive’s duties under this Agreement.   6.                                      Non-Competition, Non-Disclosure, and Non-Solicitation.   (a)                                 Upon the cessation of Executive’s employment with Employer for any reason during the Term of this Agreement, Executive agrees not to compete with the Employer or its affiliates for a period of one (1) year following such cessation in any city, town or county in which Executive’s normal business office is located or in which the Employer or any of its affiliates has an office or branch or has filed an application for regulatory approval to establish an office or branch, determined as of the effective date of such termination, or in Hudson County, except as agreed to pursuant to a resolution duly adopted by the Board.  Executive agrees that during such period, Executive shall not work for or advise, consult, provide services or assistance to, or otherwise serve with, directly or indirectly, any entity whose business materially competes with the depository, lending or other business activities of the Employer or its affiliates within these cities, towns and counties.  During the same time period, Executive agrees not to directly or indirectly solicit or induce (a) any employee to leave employment with Employer or (b) any customer of Employer to cease doing business with Employer, reduce the amount of business the customer does with Employer, or do business with any other bank.  The parties hereto, recognizing that irreparable injury will result to the Employer or its affiliates, its business and property in the event of Executive’s breach of this Section 6(a), agree that in the event of any such breach by Executive, the Employer or its affiliates will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive, Executive’s partners, agents, servants, employees and all persons acting for or under the direction of Executive. Executive represents and admits that in the event of the termination of her employment pursuant to Section 4 of this Agreement, Executive’s experience and capabilities are such that Executive can obtain employment in a business engaged in other lines and/or of a different nature than the Employer or its affiliates, or in a location outside of the geographic area covered by this Section 6(a), and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. Nothing herein will be construed as prohibiting the Employer or its affiliates from pursuing any other remedies available to the Employer or its affiliates for such breach or threatened breach, including the recovery of damages from Executive.   (b)                                 Executive recognizes and acknowledges that her knowledge of the business activities and plans for business activities of the Employer and its affiliates as it may exist from time to time, is a valuable, special and unique asset of the business of the Employer and its affiliates. Executive will not, during or after the term of her employment, disclose to any person, firm, corporation or other entity for any reason or purpose whatsoever, unless expressly authorized by the Board or required by law, any of the following information: any knowledge of the past, present, planned or considered business activities of the Employer and its affiliates, any confidential or proprietary information relating to the Employer or its subsidiaries or affiliates, including, without limitation, the identity of customers, the identity of the representatives of customers with whom the Bank has dealt, the kinds of services provided by the Bank to customers, the manner in which such services are performed or offered to be performed, the service needs of actual or prospective customers, customer preferences and policies, pricing information, business and marketing plans, financial information, budgets, compensation or personnel records, information concerning the creation, acquisition, or disposition of products and services, vendors, software, data   10   processing programs, databases, customer maintenance listings, computer software applications, research and development data, know-how, and other trade secrets (“Confidential Information”).  Notwithstanding the foregoing, Confidential Information shall not include information which: (i) is or becomes public knowledge without breach of this Agreement; or (ii) is received by Executive from a third party without any violation of any obligation of confidentiality and without confidentiality restrictions, or (iii) is knowledge of banking, financial and/or economic principles, concepts or ideas which are not derived from the business plans and activities of the Employer or its affiliates. Nothing in this Agreement shall prevent the Executive from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry, or proceeding to the extent that such participation or disclosure is required or authorized under applicable law; provided, however, that, where providing notice to the Bank would not interfere with or impede an investigation or proceeding by a governmental agency,  Executive will provide the Bank with prompt notice of a request for disclosure of such information so that the Bank may seek a protective order or other appropriate remedy and/or waiver in writing of compliance with the provisions of this Agreement. In the event of a breach or threatened breach by Executive of the provisions of this Section 6(b), the Employer will be entitled to an injunction restraining Executive from disclosing Confidential Information, in whole or in part or from rendering any services to any person, firm, corporation or other entity to whom such Confidential Information, in whole or in part, has been disclosed or is threatened to be disclosed. Nothing herein will be construed as prohibiting the Employer from pursuing any other remedies available to the Employer for such breach or threatened breach, including the recovery of damages from Executive.   (c)                                  If any provision of this Section 6 is determined to be overly broad or unenforceable, then that provision shall be enforceable to the maximum extent possible under applicable law and should be reformed accordingly.  If any provision of this Section 6 is determined to be invalid or unenforceable, then that determination shall not affect the validity or enforceability of the other portions of this Section 6.   7.                                      Representation and Warranty of the Executive.  The Executive represents and warrants to the Employer that the Executive is not under any obligation, contractual or otherwise, to any other firm or corporation, which would prevent the Executive from entering into the employ of the Employer under this Agreement or prevent the Executive from performing the terms of this Agreement.   11   8.                                      Regulatory Compliance.  Notwithstanding anything to the contrary herein, any compensation or other benefits paid to the Executive shall be limited to the extent required by any federal or state regulatory agency having authority over Bancorp or Bank, including any limitations or prohibitions on payments under Section 4 of this Agreement.  The Executive agrees that compliance by Bancorp or Bank with such regulatory restrictions, even to the extent that compensation or other benefits paid to the Executive are limited, shall not be a breach of this Agreement by the Employer.   9.                                      Entire Agreement; Amendment.  This Agreement contains the entire agreement between the Employer and the Executive with respect to the subject matter of this Agreement, and this Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed by Employer’s Chairman of the Board, after approval of the full Board, and the Executive.   10.                               Assignability.  This Agreement shall be binding upon, and inure to the benefit of, the Employer and its successors and assigns.  The Executive may not assign this Agreement, but the Executive’s benefits under this Agreement shall inure to the benefit of the Executive’s heirs, executors, administrators and legal representatives to the extent this Agreement expressly provides.   11.                               Notice.  For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when (i) delivered by hand, (ii) otherwise delivered against receipt therefore, or (iii) sent by overnight courier, signature required.  In addition, transmission by facsimile, email or other form of electronic transmission, each against receipt therefore, shall be deemed to constitute due and sufficient delivery.  All notices to the Employer shall be directed to the attention of the Employer at 1365 Palisade Avenue, Fort Lee, New Jersey 07024, Attention: Compensation Committee Chairman, with a copy to the Secretary(ies) of the Bancorp and the Bank and to the Chairman of the Board of the Bank. All notices to the Executive shall be directed to Executive’s personal residence address noted in the Employer’s human resources records. All notices and communications shall be deemed to have been received on the date of delivery thereof.   12.                               Specific Performance.  The parties agree that irreparable damage would occur in the event that any of the provisions of Section 6 of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  The parties accordingly agree that each of the parties to this Agreement shall be entitled to an injunction or injunctions to prevent breaches of Section 6 of this Agreement and to enforce specifically the terms and provisions of Section 6 of this Agreement, and that such injunctive relief shall be in addition to any other remedy to which any party is entitled at law or in equity. The existence of any claim or cause of action of the Executive against the Employer, whether predicated on this Agreement or not, shall not constitute a defense to the enforcement by the Employer of the restrictions, covenants and agreements contained in this Agreement.  Furthermore, in addition to any other remedies, the Executive agrees that any violation of the provisions in Section 6(a) will result in the immediate forfeiture of any remaining payment that otherwise is or may become due under Section 4, if applicable.  The Executive further agrees that should she breach any of the provisions contained in Section 6(a) of this Agreement, the Executive shall repay to the Employer any amounts previously received by the Executive pursuant to Section 4 that are attributable to that portion of the payments paid for the period during which the Executive was in breach of any of the provisions.  The Employer and the Executive agree that all remedies available to the Employer or the Executive, as applicable, shall be cumulative.   13.                               No Third Party Beneficiaries.  Nothing in this Agreement, express or implied, is intended to confer upon any person or entity other than the Employer and the Executive and the heirs, executors, administrators and personal representatives of the Executive any rights or remedies of any nature under or by reason of this Agreement.   12   14.                               Successor Liability.  The Employer shall require any subsequent successor, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all of the business or assets of the Employer to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place.   15.                               Mitigation.  The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced by any compensation earned by the Executive as the result of employment by another employer or by retirement benefits payable after the termination of this Agreement, except that the Employer shall not be required to provide the Executive and the Executive’s eligible dependents with medical insurance coverage as long as the Executive and the Executive’s eligible dependents are eligible for comparable medical insurance coverage from another employer.   16.                               Waiver of Breach.  The failure at any time to enforce or exercise any right under any of the provisions of this Agreement or to require at any time performance by the other parties of any of the provisions of this Agreement shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement or any part of this Agreement, or the right of any party hereafter to enforce or exercise its rights under each and every provision in accordance with the terms of this Agreement.   17.                               No Attachment.  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect; provided, however, that nothing in this Section 17 shall preclude the assumption of such rights by executors, administrators or other legal representatives of the Executive or the Executive’s estate and their assigning any rights under this Agreement to the person or persons entitled hereto.   18.                               Severability.  The invalidity or unenforceability of any term, phrase, clause, paragraph, section, restriction, covenant, agreement or other provision of this Agreement shall in no way affect the validity or enforceability of any other provision, or any part of this Agreement, but this Agreement shall be construed as if such invalid or unenforceable term, phrase, clause, paragraph, section, restriction, covenant, agreement or other provision had never been contained in this Agreement unless the deletion of such term, phrase, clause, paragraph, section, restriction, covenant, agreement or other provision would result in such a material change as to cause the covenants and agreements contained in this Agreement to be unreasonable or would materially and adversely frustrate the objectives of the parties as expressed in this Agreement.  If any provision of this Agreement is reformed accordingly.  If any provision of this Agreement is determined to be or enforceability of the other portions of this Agreement.   19.                               Survival of Benefits.  Any provision of this Agreement that provides a benefit to the Executive and that by the express terms of this Agreement does not terminate upon the expiration of her employment hereunder shall survive the expiration of the term of her employment and shall remain binding upon the Employer until such time as such benefits are paid in full to the Executive or the Executive’s estate.   20.                               Construction.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New Jersey, to the extent not inconsistent with and governed by federal law,   13   without giving effect to principles of conflict of laws.  All headings in this Agreement have been inserted solely for convenience of reference only, are not to be considered a part of this Agreement and shall not affect the interpretation of any of the provisions of this Agreement.   21.                               Jury Waiver.  The Employer and the Executive agree that in any litigation action or proceeding arising out of or relating to this Agreement or the Executive’s employment with the Employer or the termination thereof, trial shall be in a court of competent jurisdiction without a jury.  The parties understand that the state and federal constitutions and certain statutes provide rights to jury trials in many types of lawsuits, and the parties agree to waive those rights.  The Employer and the Executive irrevocably waive any right each may have to a jury trial and a copy of this Agreement may be introduced as written evidence of the waiver of the right to trial by jury.  The Employer has not made and the Executive has not relied on, any oral representation regarding the enforceability of this provision.  The Employer and the Executive have read and understand the effect of this jury waiver provision.   22.                               Venue.  The Employer and the Executive hereby expressly consent to be subject to the jurisdiction of the State of New Jersey to determine any disputes regarding this Agreement and further agree that the exclusive venue for any such dispute shall be the appropriate state court located in Bergen County, New Jersey or the federal district court in Newark, New Jersey.  Employer and Executive agree to accept the jurisdiction of any such court and each waives any claim, and warrants that she or it will not argue or contend, that any such court does not have jurisdiction or is an appropriate or inconvenient forum or venue.   23.                               Full Capacity.  The persons signing this Agreement represent that they have full authority and representative capacity to execute this Agreement in the capacities indicated below and to perform all obligations under this Agreement.   24.                               Compliance with Internal Revenue Code Section 409A.  All payments that may be made and benefits that may be provided pursuant to this Agreement are intended to qualify for an exclusion from Section 409A of the Code and any related regulations or other pronouncements thereunder and, to the extent not excluded, to meet the requirements of Section 409A of the Code.  Any payments made under Section 4 of this Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion under Treasury Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion.  Any remaining payments under Section 4 are intended to qualify for the exclusion for separation pay plans under Treasury Regulation § 1.409A-1(b)(9). Each payment made under Section 4 shall be treated as a “separate payment”, as defined in Treasury Regulation § 1.409A-2(b)(2), for purposes of Code Section 409A.  Further, notwithstanding anything to the contrary, all severance payments payable under the provisions of Section 4 shall be paid to the Executive no later than the last day of the second calendar year following the calendar year in which occurs the date of Executive’s termination of employment. None of the payments under this Agreement are intended to result in an inclusion in Executive’s federal gross income on account of a failure under Section 409A(a)(1) of the Code.  The parties intend to administer and interpret this Agreement to carry out such intentions.  However, the Employer does not represent, warrant or guarantee that any payments that may be made pursuant to this Agreement will not result in inclusion in the Executive’s gross income, or any penalty, pursuant to Section 409A(a)(1) of the Code or any similar state statute or regulation.  Notwithstanding any other provision of this Agreement, to the extent that the right to any payment (including the provision of benefits) hereunder provides for the “deferral of compensation” within the meaning of Section 409A(d)(1) of the Code, the payment shall be paid (or provided) in accordance with the following:   25.                               (a)  If the Executive is a “Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Executive’s termination (the “Separation Date”), and if an exemption from   14   the six month delay requirement of Code Section 409A(a)(2)(B)(i) is not available, then no such payment that is not otherwise exempt under 409A shall be made or commence during the period beginning on the Separation Date and ending on the date that is six months following the Separation Date or, if earlier, on the date of the Executive’s death.  The amount of any payment that would otherwise be paid to the Executive during this period shall instead be paid to the Executive on the first day of the first calendar month following the end of the period.   (b)                                 Payments with respect to reimbursements of expenses or benefits or provision of fringe or other in-kind benefits shall be made on or before the last day of the calendar year following the calendar year in which the relevant expense or benefit is incurred.  The amount of expenses or benefits eligible for reimbursement, payment or provision during a calendar year shall not affect the expenses or benefits eligible for reimbursement, payment or provision in any other calendar year.   [Remainder of page intentionally left blank; signature page follows.]   15   IN WITNESS WHEREOF, each of Bancorp, Bank and the Executive have executed this Agreement as of the date first written above.       BANCORP OF NEW JERSEY, INC.         By: /s/ Stephen Crevani     Stephen Crevani     Chairman, Compensation Committee         BANK OF NEW JERSEY         By:     Stephen Crevani     Chairman, Compensation Committee               EXECUTIVE           /s/ Nancy E. Graves     Nancy E. Graves   16

Exhibit 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002 I, Leonard A. Rosenbaum, President and Chief Executive Officer of CVD Equipment Corporation, hereby certify, pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, the quarterly report on Form 10-Q for the period ending September 30, 2012 of CVD Equipment Corporation (the “Form 10-Q") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of CVD Equipment Corporation. Dated: November 21, 2012 /s/Leonard A. Rosenbaum Leonard A. Rosenbaum Chief Executive Officer, President and Chairman (Principal Executive Officer)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of August 2014. Commission File Number: 000-53805 Intellipharmaceutics International Inc. (Translation of registrant's name into English) 30 WORCESTER ROAD TORONTO, ONTARIO M9W 5X2 (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [ x ] Form 40-F [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. On August 28, 2014, the Registrant issued a news release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Intellipharmaceutics International Inc. (Registrant) /s/ ISA ODIDI Date: August 28, 2014 Dr. Isa Odidi Chief Executive Officer EXHIBIT LIST Exhibit Description News Release dated August 28, 2014

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM8-K CURRENT REPORT PURSUANT TO SECTION13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date earliest event reported):March 3, 2011 SLM Student Loan Trust 2003-4 (Exact name of issuer as specified in its charter) DELAWARE 333-97247/ 333-97247-01 61-1466416 (State or other jurisdiction of formation) (Commission File Numbers) (I.R.S. employer Identification No.) c/o The Bank of New York Mellon Trust Company National Association 10161 Centurion Parkway Jacksonville, Florida 32256 (Address of registrant’s principal executive offices) Registrant’s telephone number including area code:(703)984-6419 Check the appropriate box below if the Form8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below); ¨ Written communications pursuant to Rule425 under the Securities Act (17 CFR 230.425) ¨ Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR 240.14a-12) ¨ Pre-commencement communication pursuant to Rule14d-2(b)under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communication pursuant to Rule13e-4(c)under the Exchange Act (17 CFR 240.13e-4(c)) ExhibitIndex appears on page3 ITEM 8.01 Other Events On March 3, 2011, Sallie Mae, Inc., in its capacity as administrator, furnished to the applicable remarketing agents a preliminary remarketing memorandum (the “Remarketing Memorandum”) for distribution to certain qualified institutional buyers for purposes of remarketing the SLM Student Loan Trust 2003-4 Class A-5A Reset Rate Notes, Class A-5D Reset Rate Notes and A-5E Reset Rate Notes.The Remarketing Memorandum included tables which provide a description of the SLM Student Loan Trust 2003-4 student loan pool as of February 1, 2011.These tables are attached as an exhibit to this current report. ITEM 9.01 Financial Statements, Pro Forma Financial Statements and Exhibits (a) Not applicable (b) Not applicable (c) Not applicable (d) Exhibits Tables showing SLM Student Loan Trust 2003-4 Pool Information as of February 1, 2011. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Trust has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SLM STUDENT LOAN TRUST 2003-4 By:SALLIE MAE, INC., in its capacity as administrator of the Trust Dated:March 3, 2011 By:/s/Markd. Rein Name:Mark D. Rein Title:Vice President SLM STUDENT LOAN TRUST 2003-4 Form 8-K CURRENT REPORT INDEX TO EXHIBITS Exhibit Number Description Tables Showing SLM Student Loan Trust 2003-4 Pool Information as of February 1, 2011.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 16, 2012 PANHANDLE EASTERN PIPE LINE COMPANY, LP (Exact name of registrant as specified in its charter) Delaware 1-2921 44-0382470 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 5051 Westheimer Road Houston, Texas (Address of principal executive offices) 77056-5306 (Zip Code) Registrant's telephone number, including area code: (713) 989-7000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 4.01. Changes in Registrant’s Certifying Accountant. On April 16, 2012, Panhandle Eastern Pipe Line Company, LP (the “Company”) (i) dismissed PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm and (ii) appointed Grant Thornton LLP ("Grant Thornton") to serve as the Company's new independent registered public accounting firm to audit the Company's financial statements as of and for the year ending December 31, 2012. The Audit Committee of the Board of Directors (the “Audit Committee”) of the Company's indirect parent, Energy Transfer Equity, L.P. ("ETE") approved PwC’s dismissal and the appointment of Grant Thornton.The decision was made as part of the integration process related to the recently completed mergerof Southern Union Company (“Southern Union”), which indirectly holds 100% of the equity interests of the Company, with and into Sigma Acquisition Corp., a wholly owned subsidiary of ETE. Southern Union is the surviving entity in the merger and operates as a wholly-owned indirect subsidiary of ETE.Grant Thornton currently serves as ETE's independent registered public accounting firm and the Audit Committee determined that it would be beneficial for ETE and the Company to have the same firm audit their respective financial statements. The reports of PwC on the financial statements of the Company as of and for the fiscal years ended December 31, 2011and 2010 did not contain any adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles. During the Company’s fiscal years ended December 31, 2011 and 2010, and through April 16, 2012, the date of the dismissal of PwC, (i) there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to PwC’s satisfaction, would have caused PwC to make reference thereto in their reports on the financial statements of the Company for such years, and (ii) there were no reportable events of the type described in Item 304(a)(1)(v) of Regulation S-K. The Company provided PwC with a copy of the foregoing disclosure and requested that PwC furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the statements above concerning PwC. A copy of PwC’s letter is attached hereto as Exhibit 16.1. During the years ended December 31, 2011 and December 31, 2010, and through April 16, 2012, the Company did not consult Grant Thornton with respect to either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and no written report or oral advice was provided to the Company by Grant Thornton that was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is described in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K, or a reportable event, as that term is described in Item 304(a)(1)(v) of Regulation S-K. Item9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit No.Exhibit Letter from PwC, dated April 17, 2012, regarding the change in certifying accountant SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PANHANDLE EASTERN PIPE LINE COMPANY, LP (Registrant) Date: April 17, 2012 By: /s/ Robert M. Kerrigan, III Robert M. Kerrigan, III Vice President and Secretary EXHIBIT INDEX Exhibit No.Exhibit 16.1 Letter from PwC, dated April 17, 2012, regarding the change in certifying accountant

SECURITIES PURCHASE AGREEMENT This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of November 14, 2016, by and between Lithium Exploration Group, Inc., a Nevada corporation, with headquarters located at 3800 North Central Avenue, Suite 820, Phoenix, AZ 85012, (the “Company”), and Concord Holding Group, LLC, A New York limited liability company with its executive offices located at 1080 Bergen St., Suite 240, Brooklyn, NY 11216 (the “Buyer). WHEREAS:               A.        The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States               B.        Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a 10% convertible note of the Company, in the form attached hereto as Exhibit A in the aggregate principal amount of $31,111.00 which shall contain a $3,111.00 OID such that the issuance price shall be $28,000.00 plus interest and penalties if any become due and payable on November 14, 2017, convertible into shares of Note.               C.        The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and               NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:                      1.        Purchase and Sale of Note.                                  a.        Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of the Note as is set forth immediately below the Buyer’s name on the signature pages hereto. _______ Company Initials                                  b.        Form of Payment. On the Closing Date (as defined below), the (A) Buyer shall (i) pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto and (B) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price and Buyer Note.                                  c.        Closing Date. The date and time of the first issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be on or about November 14, 2016, or such other mutually agreed upon time.                    2.        Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:                                  a.        Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.                                  b.        Accredited Investor Status. The Buyer D (an “Accredited Investor”).                                  c.        Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.                                  d.        Information. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein. 2                                  e.        Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.                                  f.        Transfer or Re-sale. The Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not connection with a bona fide margin account or other lending arrangement.                                  g.        Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities): 3 > > > > “NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS > > > > CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE > > > > EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS > > > > AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE > > > > OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF > > > > (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE > > > > SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH > > > > COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE > > > > FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS > > > > SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING > > > > THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA > > > > FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY > > > > THE SECURITIES.”               The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a registration, such as Rule 144 or Regulation S, within 2 business days, it will be considered an Event of Default under the Note.                                  h.        Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.                                  i.        Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.                      3.        Representations and Warranties of the Company. The Company represents and warrants to the Buyer that: 4                                  a.        Organization and Qualification. The Company and each of its subsidiaries, if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.                                  b.        Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.                                  c.        Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.                                  d.        Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.                                  e.        No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a material adverse effect). All consents, authorizations, orders, filings preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Quotations Bureau (the “OTCQB”) and does not reasonably anticipate that the Common Stock will be delisted by the OTCQB in the foreseeable future, nor are the Company’s securities “chilled” by FINRA. The Company and its subsidiaries are unaware of any facts or circumstances, which 5                                  f.        Absence of Litigation. Except as disclosed in the Company’s public filings, there is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its subsidiaries, threatened against or affecting the Company or any of its subsidiaries, or their officers or directors in their capacity as such, that could have a material adverse effect. Schedule 3(f) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its subsidiaries, without regard to whether it would have a material adverse effect. The Company and its subsidiaries are unaware of any facts or circumstances, which might give rise to any of the foregoing.                                  g.        Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.                                  h.        No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities. 6                                  i.        Title to Property. The Company and its subsidiaries have good and marketable title in fee simple to all real which is material to the business of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(i) or such as would not have a material adverse effect. Any real property and facilities held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a material adverse effect.                                  j.        Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act as amended on the basis of being a "bad actor" as that term is established in the September 19, 2013 Small Entity Compliance Guide published by the Securities and Exchange Commission.                                  k.        Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies Event of default under the Note.                      4.        COVENANTS.                                  a.        Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. The Company’s obligation with respect to this transaction is to reimburse Buyer’s expenses shall be $3,000 in legal fees which shall be deducted from the Note when funded.                                  b.        Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCQB, OTC Pink, or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of notices it receives from the OTCQB, OTC Pink, and any other exchanges or quotation systems. 7                                  c.        Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTC Pink, OTCQB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.                                  d.        No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.                                  e.        Registration Rights. With respect to any Company issued note owned by the Buyer, in the event the Company completes a registration statement for its securities prior to the date on which that particular note is eligible for conversion into legend free shares under Rule 144, the shares issuable upon conversion of that particular note shall be “piggybacked” onto the registration statement.                                  f.        Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under the Note.                      5.        Governing Law; Miscellaneous.                                  a.        Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county of New York. The parties to this of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision, which may prove invalid or unenforceable under any law, shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. 8                                  b.        Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.                                  c.        Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.                                  d.        Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid                                  e.        Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.                                  f.        Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: 9 Lithium Exploration Group, Inc. 3800 North Central Avenue, Suite 820 Phoenix, AZ 85012 Attn: Alex Walsh- CEO If to the Buyer: Concord Holding Group, LLC 1080 Bergen St., Suite 240 Brooklyn, NY 11216 Attn: Manager                                  g.        Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.                                  h.        Third Party Beneficiaries. This permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.                                  i.        Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred. 10                                  j.        Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.                                  k.        No Strict Construction. The language to express their mutual intent, and no rules of strict construction will be applied against any party.                                  l.        Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required. By:________________________________ Name: Alex Walsh Title: CEO Concord Holding Group, LLC. By:_________________________________ Name: Manager AGGREGATE SUBSCRIPTION AMOUNT:   Aggregate Principal Amount of Note: $31,111.00 Less $3,000 in legal fees, less $3,111.00 in OID, attached as Exhibit A, hereto 11 EXHIBIT A 144 NOTE - $31,111           12

Name: Decision of the EEA Joint Committee No 132/1999 of 5 November 1999 amending Annex I (Veterinary and phytosanitary matters) to the EEA Agreement Type: Decision Subject Matter: agricultural activity; agricultural policy; tariff policy; Europe; means of agricultural production Date Published: 2001-01-18 Avis juridique important|22001D0118(07)Decision of the EEA Joint Committee No 132/1999 of 5 November 1999 amending Annex I (Veterinary and phytosanitary matters) to the EEA Agreement Official Journal L 015 , 18/01/2001 P. 0014 - 0015Decision of the EEA Joint CommitteeNo 132/1999of 5 November 1999amending Annex I (Veterinary and phytosanitary matters) to the EEA AgreementTHE EEA JOINT COMMITTEE,Having regard to the Agreement on the European Economic Area, as adjusted by the Protocol adjusting the Agreement on the European Economic Area, hereinafter referred to as "the Agreement", and in particular Article 98 thereof,Whereas:(1) Annex I to the Agreement was amended by Decision No 76/1999 of the EEA Joint Committee of 25 June 1999(1).(2) Commission Decision 98/720/EC of 9 December 1998 amending for the third time Decision 98/339/EC concerning certain protective measures relating to classical swine fever in Spain(2), is to be incorporated into the Agreement.(3) Commission Decision 1999/39/EC of 21 December 1998 approving the plan presented by Germany for the eradication of classical swine fever in feral pigs in Brandenburg, Mecklenburg-Western Pomerania, and Lower Saxony and repealing Decision 96/552/EC(3), is to be incorporated into the Agreement.(4) This Decision is not to apply to Iceland and Liechtenstein,HAS DECIDED AS FOLLOWS:Article 1The following indent shall be added in point 10 (Commission Decision 98/339/EC) in Part 3.2 of Chapter I of Annex I to the Agreement:"- 398 D 0720: Commission Decision 98/720/EC of 9 December 1998 (OJ L 342, 17.12.1998, p. 30)."Article 2The following point shall be inserted after point 7 (Commission Decision 98/399/EC) under the heading "Acts of which the EFTA States and the EFTA Surveillance Authority shall take due account" in Part 3 of Chapter I of Annex I to the Agreement:"8. 399 D 0039: Commission Decision 1999/39/EC of 21 December 1998 approving the plan presented by Germany for the eradication of classical swine fever in feral pigs in Brandenburg, Mecklenburg-Western Pomerania, and Lower Saxony and repealing Decision 96/552/EC (OJ L 11, 16.1.1999, p. 47)."Article 3Point 4 (Commission Decision 96/552/EC) under the heading "Acts of which the EFTA States and the EFTA Surveillance Authority shall take due account" in Part 3 of Chapter I of Annex I to the Agreement shall be abrogated.Article 4The texts of Decisions 98/720/EC and 1999/39/EC in the Norwegian language, which are annexed to the Norwegian language version of this Decision, are authentic.Article 5This Decision shall enter into force on 6 November 1999, provided that all the notifications under Article 103(1) of the Agreement have been made to the EEA Joint Committee.Article 6This Decision shall be published in the EEA section of, and in the EEA Supplement to, the Official Journal of the European Communities.Done at Brussels, 5 November 1999.For the EEA Joint CommitteeThe PresidentN. v. Liechtenstein(1) OJ L 296, 23.11.2000, p. 1.(2) OJ L 342, 17.12.1998, p. 30.(3) OJ L 11, 16.1.1999, p. 47.

Exhibit 10.31   REPURCHASE OPTION AGREEMENT   This Repurchase Option Agreement (the "Agreement") is made as of the 29th day of May, 2013 by and between U.S. Rare Earths, Inc. (the “Company”), a Nevada corporation and Michael D. Parnell Living Trust (the “Seller”).   WITNESSETH: WHEAREAS, the Seller is the owner of 200,000 shares of the Company’s common stock, par value $0.00001 per share (“Common Stock”); and   WHEREAS, the Seller desires to grant to the Company a right and option to repurchase up to 200,000 shares of Common Stock owned by the Seller (the “Shares”) at a purchase price of $1.00 per Share (the “Price Per Share”), on and subject to the terms of this Agreement (the “Repurchase Option”).   NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Company and the Seller hereby agree as follows:   Company the right and option (the “Repurchase Option”) to repurchase up to 200,000 Shares at the Price Per Share, in whole or in part, at any time on or before 5:30 pm New York City time on December 31, 2013 (the “Expiration Date”) 2.           Closing. At any time on or after the date hereof and prior to the Expiration Date, the Company shall have the right but not the obligation to repurchase up to 200,000 Shares at the Price Per Share at one or more closings which shall take place electronically at such time as shall be determined by the Company. At least one business day prior to a closing, the Company shall (a) deliver to Manhattan Transfer Registrar Company , as escrow agent (the "Escrow Agent") a notification in writing specifying (i) the number of Shares that it intends to repurchase from the Seller (the "Repurchase Shares"') and (ii) the proposed date of closing, and (b) wire transfer in immediately available funds to an account designated by the Escrow Agent an amount equal to the product of the number of Repurchase Shares multiplied by the Price Per Share (the "Purchase Price”). At each closing upon receipt of written instruction from the Company on or before the Expiration Date, the Escrow Agent shall simultaneously disburse to the Seller by wire transfer in immediately available funds an amount equal to the Purchase Price and deliver to the Company the Repurchase Shares. Upon disbursement to the Seller of the Purchase Price at closing, the Company shall automatically become the legal and beneficial owner of the Purchase Shares and all rights and interests therein or relating thereto.   3.   Escrow of Shares   (a)           To ensure the availability for delivery of the Shares upon repurchase by the Company pursuant to the Company’s Repurchase Option, promptly upon execution of this Agreement, the Seller shall deliver to the Escrow Agent a certificate (or certificates) representing the Shares, along with fully executed stock powers that are medallion guaranteed and duly endorsed in form for transfer to the Company. The Seller shall also promptly deliver to the Escrow Agent any other documents or instruments reasonably requested by the Escrow Agent. The certificates representing the Shares together with the stock powers shall be held by the Escrow Agent in escrow pursuant to the terms of an Escrow Agreement to be entered into simultaneously with the execution of this Agreement in the form attached hereto as Exhibit A. (b)           Subject to the terms hereof the Seller shall have all the rights of a shareholder with respect to such Shares while they are held in escrow, including without limitation, the right to vote the Shares and receive any cash dividends declared thereon. If from time to time during the term of the Company's Repurchase Option, there is (i) any stock dividend, stock split or other change in the Shares, or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the Company, any and all new, substituted or additional securities to which the Seller is entitled by reason of the Seller's ownership of the Shares shall be immediately subject to this escrow, deposited with the Escrow Agent and included thereafter as "Shares" for purposes of this Agreement and the Company's Repurchase Option.   4.           Restrictions on Transfer. Except for the repurchase of Shares as set forth herein, the Seller shall not transfer, assign, sell, convey or otherwise encumber any Shares not released from escrow or agree to any of the foregoing in any way until after the Expiration Date.     1   5.          Representations of the Seller. The Seller represents to the Company at the  time of execution of this Agreement and at each closing as follows:   (a)           The Seller has all necessary power and authority to enter into and to perform its obligations hereunder. This Agreement constitutes the valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.   (b)           The Seller owns all right, title and interest in and to, and have the right to transfer to the Company, in connection with the Repurchase Option provided for herein, all of the Shares being repurchased by the Company pursuant to the terms of this Agreement, free and clear of all liens, security interests, charges and o t her encumbrances.   (c)           The Seller (either alone or together with its advisors) has such evaluating the merits and risks of the Repurchase. The Seller has had the opportunity to ask questions and receive answers concerning the terms and conditions of the Repurchase Option and has had full access to such other information concerning the Repurchase Option and the Company as it has requested. The Seller has received all information that it believes is necessary or appropriate in connection with the Repurchase Option. The Seller is an informed and sophisticated party and has engaged, to the extent the Seller deems appropriate, expert advisors experienced in the evaluation of transactions of the type contemplated hereby. The Seller acknowledges that the Seller has nor relied upon any express or implied representations or warranties of any nature made by or on behalf of the Company, whether or not any such representations, warranties or statements were made in writing or orally, except as expressly set forth for the benefit of the Seller in this Agreement.   (e) The Seller represents that it is an "accredited investor" as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended.   (d) The Seller acknowledges and understands that the Company on or around the date of this Agreement or otherwise during the term of the Repurchase Option, may sell shares of Common Stock, or other securities of the Company, to third parties at per share, or effective per-share, purchase prices that may be significantly higher or lower than the per share purchase price being paid hereunder by the Company for the Shares. Notwithstanding any such sales, the Seller agrees to accept the Purchase Price as full and fair payment for the Shares to be purchased hereunder.   6.           Representations of the Company. The Company represents to the Seller at  the time of execution of this Agreement and at each closing as follows:   (a)           The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.   (b)           The Company has all necessary corporate power and authority to enter into and to perform its obligations under this Agreement, and the execution, delivery and performance by the Company of this Agreement have been duly authorized by all necessary action on the part of the Company and its board to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.   7.           Adjustment for Stock Split.  All  references  to the  number  of Shares and  the purchase price of the Shares in this Agreement shall be appropriately adjusted to reflect  any stock split,  stock dividend or other change in the Shares which may be made by the  Company  after the date of this Agreement.   8.           Miscellaneous. This Agreement constitutes the entire agreement of the parties, superseding and terminating any and all prior or contemporaneous oral and written agreements, understandings or letters of intent between or among the parties with respect to the subject matter of this Agreement. No part of this Agreement may be modified or amended, nor may any right be waived, except by a written instrument which expressly refers to this Agreement, states that it is a modification or amendment of this Agreement and is signed by the parties to this Agreement, or, in the case of waiver, by the party granting the waiver. If any section, term or provision of this Agreement shall to any extent be held or determined to be invalid or unenforceable, the remaining sections, terms and provisions shall nevertheless continue in full force and effect. This Agreement shall be governed and construed in accordance with the laws of the State of New York applicable to agreements executed and to be performed wholly within such State, without regard to any principles of conflicts of law. This Agreement shall be binding upon the parties and their respective heirs, executors, administrators, legal representatives, successors and assigns. The Seller may not assign this Agreement or any of its rights under this Agreement without the Company's prior written consent. This Agreement may be executed simultaneously in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.     2   executed as of the date first above written.     U.S Rare Earths, Inc.             By: /s/ Kevin M. Cassidy       Name: Kevin M. Cassidy       Title: CEO               Seller: Michael D. Parnell Living Trust       Michael D. Parnell, Trustee             By: /s/ Michael D. Parnell       Michael D. Parnell     3   (To be completed if individual and married) CONSENT OF SPOUSE I, __________________________________________, spouse of _____________________________________ have read and approve the foregoing Agreement.  I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares sold pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement. Dated: __________________, 2013                                                                                                Signed: ____________________________________   4     (To be completed if entity) CORPORATE STOCK RESOLUTION At a meeting of the Director(s) of ______________________________________________ (Name of  Company/Corporation held at _____________________________________________ (location) duly called and held on ______________________________ (meeting date) RESOLVED THAT ______________________________ (Name), _____________________________________ (Title of Individual executing P/A) be, and is hereby authorized and empowered to sell, assign and transfer ____________________ (Number of shares) of common stock of U.S. Rare Earths, Inc. and, for the purpose of aforesaid to execute on behalf of the company, all such conveyance, transfers and other documents as the said person may deem advisable, and to affix thereto the Corporate Seal of the Company to attest the same by his signature as an Officer of the Company, and to deliver the said documents as an Act and Deed of this Company.  The Officers and Directors as set forth below are a complete list of all Officers and Directors and I certify that they are not affiliates of the corporation in which this transfer is requested. Name: _____________________________________ Position _________________________________ Name: _____________________________________ Position _________________________________ Name: _____________________________________ Position _________________________________ I, _______________________________________, Secretary of the above Company DO CERTIFY that the above is true copy from Minutes of said Meeting of the Board of Directors and a true copy of the whole of said Resolution is full force and effect as of the date hereof. Signed by _______________________________________ (Name), at ____________________________ (location) this _________________ day of ______________________, 20_______.   _______________________________ Secretary I hereby certify that I am the sole signing officer _________________________________________­­­­­­­ SEAL I/We hereby guarantee that there is no Corporate Seal. _________________________________________ 5

SUBSCRIPTION AGREEMENT SUBSCRIPTION AGREEMENT (this “Agreement”) made as of the date set forth on the signature page hereof between BioSante Pharmaceuticals, Inc., a Delaware corporation (the “Company”) and the undersigned (the “Subscriber”). WITNESSETH: WHEREAS, the Company is offering in a private placement to accredited investors (the “Offering”) up to a maximum of 4,702,669 shares of common stock, par value $0.0001 per share (the “Common Stock”) at a price equal to $6.00 per share (the “Offering Price”) and warrants to purchase shares of Common Stock equal to twenty-five percent (25%) of the total number of shares sold to Subscribers in the Offering at an exercise price per share equal to $8.00 (the “Warrants”).The Warrants are exercisable beginning on the date that is six months and one day after the Closing Date and continuing for three years thereafter.The shares of Common Stock and Warrants offered hereby are sometimes referred to as the “Securities;” and WHEREAS, the Subscriber desires to purchase that number of Securities set forth on the signature page hereof on the terms and conditions hereinafter set forth; and WHEREAS, the Company has engaged Rodman & Renshaw, LLC and, indirectly, Oppenheimer & Co. Inc. (collectively, the “Placement Agents”) as co-placement agents for the Offering on a “best-efforts” basis. NOW, THEREFORE, in consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto agree as follows: I.SUBSCRIPTION FOR SECURITIES AND REPRESENTATIONS BY SUBSCRIBER 1.1Subject to the terms and conditions hereinafter set forth, the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such Securities as is set forth upon the signature page hereof and the Company agrees to sell such Securities to the Subscriber for said purchase price. The purchase price is payable by wire transfer of immediately available funds contemporaneously with the execution and delivery of this Agreement by the Subscriber.All wires should be sent to: LaSalle Bank NA ABA# Acct.# Account name BioSante Pharmaceuticals Bank contact Kimberly Hall 847-990-3916 Certificates for the shares of Common Stock and the Warrants will be delivered by the Company to the Subscriber promptly following the Closing (as herein defined).Notwithstanding the foregoing, the Subscriber acknowledges that, although the Company intends to file on the next business day hereafter or as soon as practicable hereafter a listing application with the American Stock Exchange (“AMEX”) containing all information required by the rules and regulations of AMEX, final approval by AMEX is required in connection with the listing of the Common Stock to be eligible for trading on AMEX.The Company shall use its reasonable best efforts to cause AMEX to approve the listing application for the Securities as soon as practicable. 1.2The Subscriber recognizes that the purchase of Securities involves a high degree of risk in that (i) the Company remains an early stage business with a limited operating history and will require funds in addition to the proceeds of the Offering; (ii) an investment in the Company is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Company; (iii) the Subscriber may not be able to liquidate the Subscriber’s investment in the Company; (iv) transferability of the Securities is extremely limited; and (v) in the event of a disposition, the Subscriber could sustain the loss of its entire investment. 1.3The Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended, (the “Act”), as indicated by the responses to the questions contained in Section VII hereof, and that the Subscriber is able to bear the economic risk and illiquidity of an investment in the Securities. 1.4The Subscriber hereby acknowledges and represents that (i) the Subscriber has prior investment experience, including investment in non-listed and unregistered securities, or that the Subscriber has employed the services of an investment advisor, attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Subscriber and to all other prospective investors to evaluate the merits and risks of such an investment on the Subscriber’s behalf; (ii) the Subscriber recognizes the highly speculative nature of an investment in the Securities; and (iii) the Subscriber is able to bear the economic risk and illiquidity which the Subscriber assumes by investing in the Securities. 1.5The Subscriber (i) hereby represents that the Subscriber has been furnished by the Company during the course of this transaction with and has carefully read the Company’s SEC Filings (as hereafter defined), including without limitation the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2007, the additional risk factors specific to the Common Stock and the Offering contained in Schedule 1.5 (together with the SEC Filings, the “Offering Documents”), and all other information regarding the Company which the Subscriber has requested or desired to know; (ii) has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of the Offering; and (iii) has received any additional information which the Subscriber has requested. 1.6To the extent necessary, the Subscriber has retained, at its own expense, and relied upon the advice of appropriate professionals regarding the investment, tax and legal merits and consequences of this Agreement and its purchase of the Securities hereunder. 1.7The Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission (the “SEC”) because of the Company’s representations that this Offering is intended to be exempt from the registration requirements of Section 5 of the Act pursuant to Sections 3(b), 4(2) and/or 4(6) thereof and Regulation D promulgated under the Act. The Subscriber agrees that the Subscriber will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Securities, except in compliance with the Act and the rules and regulations promulgated thereunder. 1.8The Subscriber understands that none of the Securities have been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon the Subscriber’s investment intention. In this connection, the Subscriber hereby represents that the Subscriber is purchasing the Securities for the Subscriber’s own account for investment and not with a view toward the resale or distribution thereof to others.The Subscriber, if an entity, was not formed for the purpose of purchasing the Securities.The Subscriber understands that Rule 144 promulgated under the Act requires, among other conditions, a one-year holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Act. 1.9The Subscriber understands and hereby acknowledges that the Company is under no obligation to register the Securities under the Act or any applicable state securities or “blue sky” laws(collectively, “Securities Laws”) other than as set forth in Section V.Prior to the Legend Removal Date (as hereafter defined), the Subscriber consents that the Company may, if it desires, permit the transfer of the Securities out of the Subscriber’s name only when the Subscriber’s request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state “blue sky” laws. 1.10So long as required by Section 5.13, the Subscriber consents to the placement of a legend on any certificate or other document evidencing the Securities indicating that such Securities have not been registered under the Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Subscriber is aware that the Company will make a notation in its appropriate records and issue “stop transfer” instructions to its transfer agent with respect to the restrictions on the transferability of such Securities. 1.11The Subscriber understands that the Company will review this Agreement and, if such Subscriber is an individual, hereby gives authority to the Company to call Subscriber’s bank or place of employment (in a call in which the Placement Agents participate) or otherwise review the financial standing of the Subscriber; and it is further agreed that upon their mutual agreement the Placement Agents and the Company reserve the unrestricted right, without further documentation or agreement on the part of the Subscriber, to reject or limit any subscription, to accept subscriptions for Securities and to close the Offering to the Subscriber at any time. 1.12The Subscriber hereby represents that the address of the Subscriber furnished by the Subscriber on the signature page hereof is the Subscriber’s principal residence if the Subscriber is an individual or its principal business address if it is a corporation or other entity. 1.13The Subscriber represents that the Subscriber has full power and authority (corporate, statutory and other­wise) to execute and deliver this Agreement and to purchase the Securities subscribed for hereby.This Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms. 1.14If the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retire­ment account, Keogh Plan, or other entity, then (a) it is authorized and qualified to become an investor in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so, and (b) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. 1.15The Subscriber represents and warrants that it has not engaged, consented to nor authorized any broker, finder or intermediary to act on its behalf, directly or indirectly, as a broker, finder or intermediary in connection with the transactions contemplated by this Agreement.The Subscriber shall indemnify and hold harmless the Company from and against all fees, commissions or other payments owing to any such person or firm acting on behalf of such Subscriber hereunder. 1.16The Subscriber acknowledges that (a) the Company has engaged, consented to and authorized the Placement Agents in connection with the transactions contemplated by this Agreement, (b) the Company shall pay the Placement Agents a commission and reimburse the Placement Agents’ expenses and the Company shall indemnify and hold harmless the Subscriber from and against all fees, commissions or other payments owing by the Company to the Placement Agents or any other person or firm acting on behalf of the Company hereunder, (c) registered representatives of the Placement Agents and/or its designees (including, without limitation, registered representatives of the Placement Agents and/or its designees who participate in the Offering and sale of the securities sold in the Offering) will be paid a portion of the commissions paid to the Placement Agents and (d) the Placement Agents have not independently verified any information (financial, legal or otherwise) and makes no representation or warranty, express or implied, as to, and assumes no responsibility for, the accuracy or completeness of the information contained in the Offering Documents. 1.17The Subscriber, whose name appears on the signature line below, shall be the beneficial owner of the Securities for which such Subscriber subscribes. 1.18The Subscriber understands, acknowledges and agrees with the Company as follows: (a)The Company may terminate the Offering or reject any subscription at any time in its sole discretion.The execution of this Agreement by the Subscriber or solicitation of the investment contemplated hereby shall create no obligation on the part of the Company or the Placement Agents to accept any subscription or complete the Offering. (b)The Subscriber hereby acknowledges and agrees that the subscription hereunder is irrevocable by the Subscriber, and that, except as required by law, the Subscriber is not entitled to cancel, terminate or revoke this Agreement or any agreements of the Subscriber hereunder and that if the Subscriber is an individual this Agreement shall survive the death or disability of the Subscriber and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and permitted assigns. (c)No federal or state agency or authority has made any finding or determination as to the accuracy or adequacy of the Offering Documents or as to the fairness of the terms of the Offering nor any recommendation or endorsement of the Securities.Any representation to the contrary is a criminal offense.In making an investment decision, the Subscriber must rely on its own examination of the Company and the terms of the Offering, including the merits and risks involved. 1.19Other than the transaction contemplated hereunder, the Subscriber has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Subscriber, executed any disposition, including “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act,in the securities of the Company during the period commencing from the time that the Subscriber first received a term sheet (written or oral) from the Company or any other Person setting forth the material terms of the transactions contemplated hereunder until the date hereof (the “Discussion Time”). Notwithstanding the foregoing, in the case of a Subscriber that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Subscriber’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of the Subscriber’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.Other than to other Persons party to this Agreement, the Subscriber has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). 1.20The Subscriber represents that the Subscriber is not a broker-dealer or if the Subscriber is a broker-dealer, the Subscriber represents that the Subscriber is purchasing the Securities in the ordinary course of business, and has no agreements or understandings, directly or indirectly, with any person to distribute the Securities. 1.21The Subscriber represents that the Subscriber did not purchase any shares of Common Stock of the Company in the open market on May 4, 2007 or May 7, 2007. II.REPRESENTATIONS BY THE COMPANY The Company hereby represents and warrants to the Subscriber and the Placement Agents that: 2.1Organization and Qualification.The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and lawful authority to conduct its business as presently conducted.Except as set forth in Schedule 2.1, the Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of the business presently conducted by it or the properties owned, leased or operated by it, makes such qualification or licensing necessary and where the failure to be so qualified or licensed would have a material adverse effect upon the business, prospects or financial condition of the Company (a “Material Adverse Effect”). 2.2Capitalization and Voting Rights.The authorized capital stock of the Company is as set forth in its most recent SEC Filing (as hereafter defined), 23,513,350 shares of common stock and 391,286 shares of class C special stock of which are issued and outstanding as of May 24, 2007.All issued and outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable.Except as set forth in this Agreement or in the SEC Filings, there are no outstanding options, warrants, agreements, commitments, convertible securities, preemptive rights or other rights to subscribe for or to purchase any shares of capital stock of the Company nor are there any agreements, promises or commitments to issue any of the foregoing.Except as set forth in the SEC Filings, in this Agreement and as otherwise required by law, there are no restrictions upon the voting or transfer of the Securities pursuant to the Company's Amended and Restated Certificate of Incorporation, as amended, (the “Certificate of Incorporation”), By-laws or other governing documents or any agreement or other instruments to which the Company is a party or by which the Company is bound; provided, however, that the Securities will be subject to restrictions on transfer and Securities Laws (as hereafter defined) as provided herein.No securityholder has the right to include any securities in the Registration Statement (as hereinafter defined) or otherwise cause the Company to effect registration of any of the Company’s securities under the Act, except for investors in the Company’s prior private placements, which rights the Company has to date satisfied. 2.3Authorization; Enforceability. The Company has all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.All corporate action on the part of the Company, its directors and stockholders necessary for the authorization, execution, delivery and performance of this Agreement by the Company, the authorization, sale, issuance and delivery of the Securities and the performance of the Company's obligations hereunder has been taken.This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy.The Securities and the issuance of shares of Common Stock upon issuance of the Warrants (the “Warrant Shares”) have been duly and validly authorized and, upon the issuance and delivery thereof and payment therefor as contemplated by this Agreement and the terms of the Warrants, will be free and clear of liens (other than any liens created by or imposed on the holders thereof through no action of the Company), duly and validly authorized and issued, fully paid and nonassessable.The Company has reserved a sufficient number of shares of Common Stock for its authorized but unissued shares for issuance upon exercise of the Warrants.The issuance and sale of the Securities contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person. 2.4No Conflict; Governmental Consents. (a)The execution and delivery by the Company of this Agreement, the consumma­tion of the transactions contemplated hereby and the offer and sale of the Securities will not result in the violation of any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound that would have a material adverse effect upon the business or financial condition of the Company, or of any provision of the Certificate of Incorporation or By-laws of the Company, and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company that would have a material adverse effect upon the business or financial condition of the Company. (b)Except as set forth in Schedule 2.4(b), no consent, waiver, approval, authorization or other order of any governmental authority or other third-party is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issuance and sale of the Securities, except for such consents, waivers, approvals, authorizations, orders or filings as may be required to be obtained or made, and which shall have been obtained or made at or prior to the required time and except for such consents, waivers, approvals, authorizations, orders or filings that would not have a Material Adverse Affect. 2.5Licenses.The Company has all licenses, permits and other governmental authorizations currently required for the conduct of its business or ownership of properties and is in all material respects complying therewith, except for any licenses, permits or other governmental authorizations which would not materially adversely affect the business, property, financial condition, or results of operations of the Company. 2.6Litigation.Except as set forth in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of this Agreement or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.Except as set forth in the SEC Reports, neither the Company, nor any director or officer thereof, is or has been the subject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.Except as set forth in the SEC Reports, there has not been, and the Company has not received any notice or indication from the SEC that there is pending or contemplated any investigation by the SEC involving the Company or any current or former director or officer of the Company.The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the Act. 2.7Accuracy of Report.The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Act and the Exchange Act, as applicable, and the rules and regulations of the Commission promulgated thereunder, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 2.8Investment Company.The Company is not and, upon completion of the Offering, will not be an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended,and the rules and regulations of the SEC thereunder. 2.9Patents and Trademarks.The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).Except as set forth on Schedule 2.9, the Company has not received a notice (written or otherwise) that the Intellectual Property Rights used by the Company or violates or infringes upon the rights of any Person (as hereinafter defined).To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights that could have a Material Adverse Effect.The Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 2.10No Material Adverse Change.Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the SEC, (iii) the Company has not altered its method of accounting, except as otherwise required pursuant to GAAP, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock plans.Except as set forth in Schedule 2.12, the Company does not have pending before the SEC any request for confidential treatment of information.Except for the issuance of the Securities contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed as of the date of this Agreement. 2.11Financial Statements.The financial statements included in the Company's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and all other reports filed by the Company with the SEC pursuant to the Exchange Act since January 1, 2007 and prior to the date hereof (collectively, the “SEC Filings”) present fairly and accurately in all material respects the financial position of the Company as of the dates shown and its results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis (except as may be indicated thereon or in the notes thereto and subject, in the case of unaudited financial statements, to normal adjustments).The Company has accounted for all option grants and other incentive-based stock awards in, compliance under GAAP, as in effect on the respective date of grant or award or as otherwise required by GAAP’s effect at the time of the SEC filing.Except as set forth in the financial statements of the Company included in the SEC Filings filed prior to the date hereof, to the Company's knowledge, the Company has no liabilities, contingent or otherwise, except those which individually or in the aggregate are not material to the financial condition or operating results of the Company. 2.12Compliance with Laws.Neither the Company nor, to the Company's knowledge, any Person (as hereafter defined) acting on the Company’s behalf and in accordance with the Company’s instructions, has conducted any general solicitation or general advertising (as those terms are used in Regulation D of the Act) in connection with the offer or sale of the Securities.Assuming the accuracy of the Subscribers’ representations and warranties set forth in Article III, no registration under the Act is required for the offer and sale of the Securities by the Company to the Subscribers.Neither the Company nor any of its Affiliates (as hereafter defined), nor, to the Company's knowledge, any Person acting on the Company’s or on the behalf of its Affiliates and in accordance with the Company’s instructions, has, directly or indirectly, made any offers or sales of any security of the Company or solicited any offers to buy any security of the Company, under circumstances that would adversely affect reliance by the Company on Section 4(2) of the Act for the exemption from registration for the transactions contemplated hereby or would require registration of the Securities under the Act.The Company is in compliance with the requirements of AMEX for continued listing of the Common Stock thereon and has not received any notification that, and has no knowledge that, the AMEX is contemplating terminating such listing nor, to the Company's knowledge, is there any basis therefore. The transactions contemplated by this Agreement will not contravene the rules and regulations of the AMEX, however, the approval of the AMEX will be required for the issuance and sale of the Shares and the Warrant Shares and the Company will use commercially reasonable efforts to obtain such approval.The Company intends to file on the next business day after the date of this Agreement or as soon as practicable hereafter a subsequent listing application for listing the Securities on and hereby represents and warrants to the Placement Agents and the Subscriber that it will take any other necessary action in accordance with the rules of the AMEX to enable the Securities to trade on the AMEX. 2.13Insurance.The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company is engaged, including, but not limited to, directors and officers insurance coverage in the amount of $5,000,000.The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. 2.14Sarbanes-Oxley; Internal Accounting Controls.The Company has at all times been and currently is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date.The Company believes that it maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 2.15Application of Takeover Protections.The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Subscribers as a result of the Subscribers and the Company fulfilling their obligations or exercising their rights under this Agreement and the Warrants, including, without limitation, as a result of the Company’s issuance of the Securities and the Subscribers’ ownership of the Securities. 2.16Disclosure.Except with respect to the material terms and conditions of the transactions contemplated by this Agreement and the Warrants, the Company confirms that, neither it nor any other Person acting on its behalf has provided any of the Subscribers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information.The Company understands and confirms that the Subscribers will rely on the foregoing representation in effecting transactions in securities of the Company.All disclosure furnished by or on behalf of the Company to the Subscribers regarding the Company, its business and the transactions contemplated hereby, including the Offering Documents, with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Subscriber makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section III hereof. 2.17Accountants.The Company’s accountants are set forth on Schedule 2.17.To the knowledge of the Company, such accountants, who the Company expects will express their opinion with respect to the financial statements to be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, are a registered public accounting firm as required by the Act. 2.18Acknowledgment Regarding Subscribers’ Purchase of Securities.The Company acknowledges and agrees that each of the Subscribers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.The Company further acknowledges that no Subscriber is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated thereby and any advice given by any Subscriber or any of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to Subscribers’ purchase of the Securities.The Company further represents to each Subscriber that the Company’s decision to enter into this Agreement and the other agreements contemplated hereby has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives. 2.19Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agents in connection with the placement of the Securities. 2.20Form S-3 Eligibility.The Company is eligible to register the resale of the Common Stock sold hereunder and issuable upon exercise of the Warrants for resale by the Subscriber on Form S-3 promulgated under the Securities Act. III.TERMS OF SUBSCRIPTION 3.1The Offering is for a maximum of up to 4,702,669 shares of Common Stock and Warrants to purchase twenty-five percent (25%) of the total number of shares of Common Stock sold to Subscribers in the Offering.The Securities are offered on a “best efforts” basis. 3.2Upon the mutual consent of the Company and the Placement Agents, this Offering may close (the “Closing” and the date of such Closing, the “Closing Date”) prior to the sale of all 4,702,669 shares of Common Stock.The purchase price is payable by wire transfer of immediately available funds as provided in Section 1.1. 3.3The Subscriber hereby authorizes and directs the Company to deliver the Securities to be issued to the Subscriber pursuant to this Agreement directly to the Subscriber’s account maintained by the Placement Agents or, if no such account exists, to the residential or business address indicated on the signature page hereto. 3.4The Subscriber hereby authorizes and directs the Company to return any funds related to unaccepted subscriptions to the same account from which the funds were drawn, including any customer account maintained with the Placement Agents. IV.CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS AND THE COMPANY 4.1The Subscribers’ obligation to purchase the Securities at the Closing is subject to the fulfillment on or prior to the Closing Date of the following conditions, which conditions may be waived at the option of each Subscriber to the extent permitted by law: (a)Representations and Warranties. The representations and warranties made by the Company in Section II hereof shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date. (b)Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to such purchase shall have been performed or complied with in all material respects. (c)No Legal Order Pending. There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement. (d)No Law Prohibiting or Restricting Such Sale. There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent or approval of any person to issue the Securities which consent or approval shall not have been obtained (except as may otherwise be provided in this Agreement). (e)Legal Opinion. Upon the Closing, counsel to the Company shall have delivered to the Placement Agents for the benefit of the Subscribers a legal opinion with respect to such legal matters relating to this Agreement and the Offering as the Placement Agents may reasonably require. 4.2The Company’s obligation to sell the Securities at the Closing is subject to the fulfillment on or prior to the Closing Date of the following conditions, which conditions may be waived at the option of the Company to the extent permitted by law: (a)Acknowledgements, Representations and Warranties.The acknowledgements, representations and warranties made by the Subscriber in Section I hereof shall be true and correct in all respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date; provided, however, that any acknowledgement, representation or warranty made by the Subscriber that is not true and correct and as a result the Subscriber is not an “accredited investor” under Rule 501 under Regulation D of the Act or the Company is not able to rely upon a private placement exemption under Rule 506 under Regulation D of the Act for the issuance of the Securities will automatically be deemed to be material.If any such representations, warranties or acknowledgements shall not be true and accurate in any respect prior to the Closing, the undersigned shall give immediate written notice of such fact to the Company, to the Placement Agents, and to his representatives, if any, specifying which representations, warranties or acknowledgements are not true and accurate and the reason therefor. (b)Covenants.All covenants, agreements and conditions contained in this Agreement to be performed by the Subscriber on or prior to such purchase shall have been performed or complied with in all material respects. (c)No Legal Order Pending.There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement. (d)No Law Prohibiting or Restricting Such Sale.There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent or approval of any person to issue the Securities which consent or approval shall not have been obtained (except as may otherwise be provided in this Agreement). V.REGISTRATION RIGHTS. 5.1As used in this Agreement, the following terms shall have the following meanings: (a)“Affiliate” shall mean, with respect to any Person (as defined below), any other Person controlling, controlled by, or under direct or indirect common control with, such Person (for the purposes of this definition “control,” when used with respect to any specified Person, shall mean the power to direct the management and policies of such person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing). (b)“Business Day” shall mean a day, Monday through Friday, on which banks are generally open for business in each of New York, New York; and Chicago, Illinois. (c)“Holders” shall mean the Subscriber and any person holding Registrable Securities as defined below, or any person to whom the rights under SectionV have been transferred in accordance with Section5.10 hereof, and who, if known by the Company, shall be specifically named by the Company as selling stockholders in the Registration Statement (as defined below). (d)“Person” shall mean any person, individual, corporation, limited liability company, partnership, trust or other nongovernmental entity or any governmental agency, court, authority or other body (whether foreign, federal, state, local or otherwise). (e)“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. (f)“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. (g)The terms “register,” “registered” and “registration” refer to the registration effected by preparing and filing with the SEC a registration statement in compliance with the Act, and the declaration or ordering by the SEC of the effectiveness of such registration statement. (h)“Registrable Securities” shall mean (i) the Common Stock, and (ii) the shares of Common Stock issuable upon exercise of the Warrants; provided, however, that securities shall only be treated as Registrable Securities if and only for so long as they (A) have not been disposed of pursuant to a registration statement declared effective by the SEC, (B) have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Act so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale, and (C) are held by a Holder or a permitted transferee pursuant to Section5.10; provided that any such securities shall cease to be Registrable Securities at such time as the Holder may sell all such securities of the Company then held by such Holder under Rule 144(k) under the Act. (i)“Registration Expenses” shall mean all expenses incurred by the Company in complying with Section5.2 hereof, including, without limitation, all registration, qualification and filing fees, printing expenses, escrow fees, fees and expenses of counsel for the Company, blue sky fees and expenses and the expense of any special audits incident to, or required by, any such registration (but excluding the aggregate fees of legal counsel for all Holders). (j)“Registration Statement” shall have the meaning ascribed to such term in Section 5.2 (a). (k)“Registration Period” shall have the meaning ascribed to such term in Section 5.4 (a). (l)“Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities and the aggregate fees and expenses of legal counsel for all Holders. 5.2(a)The Company shall, as soon as reasonably practicable, but not later than thirty (35) days after the Closing Date (the “Filing Date”), (i) use its reasonable best efforts to file with the SEC a shelf registration statement on Form S-3 (or if not eligible for such form, on such other form on which the Company is eligible) (the “Registration Statement”) with respect to the resale of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415 under the Act and cause such Registration Statement declared effective by the SEC within the earlier of (a) 90 days from the Closing Date (120 in the event of a review by the Commission) or (b) the tenth (10th) business day following the date on which the Company is notified by the SEC that the SEC will not be reviewing the Registration Statement or that the SEC has no further comment on the Registration Statement (such earlier date is referred to as the “Effectiveness Date”) and (ii) cause such Registration Statement to remain effective for the Registration Period.The Registration Statement shall contain (unless otherwise directed by at least a majority in interest of the Holders) substantially the “Plan of Distribution” attached hereto as Annex A.The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 pm Eastern Time on a trading day.The Company shall immediately notify the Holders via facsimile of the effectiveness of a Registration Statement on the same trading day that the Company telephonically confirms effectiveness with theSEC, which shall be the date requested for effectiveness of a Registration Statement.The Company shall, by 9:30 am Eastern Time on the trading day after the day the Registration Statement is declared effective (as defined in the Subscription Agreement), file a final Prospectus with the SEC if required by Rule 424. (b)If: (i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 5.4(b) or (ii) a Registration Statement filed or required to be filed hereunder is not declared effective by the Commission by its Effectiveness Date, or (iii) after the Effectiveness Date, a Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required to be effective, or the Holders are otherwise not permitted to utilize the Prospectus therein to sell Registrable Securities at any time other than during a Permitted Black-Out Period (as defined herein) (any such failure or breach being referred to as an “Event”, and for purposes of clause (i) or (ii) the date on which such Event occurs, or for purposes of clause (iii) the first date on which the Holders are not permitted to utilize the Prospectus, being referred to as “Event Date”), then in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 1% of the aggregate purchase price paid for the Securities held by such Holder pursuant to the Subscription Agreement for any Registrable Securities then held by such Holder.Notwithstanding the foregoing, the partial liquidated damages shall not exceed a maximum of 12% of the aggregate purchase price paid for the Securities held by such Holder pursuant to the Subscription Agreement for any Registrable Securities then held by such Holder.If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event. 5.3All Registration Expenses incurred in connection with any registration, qualification, exemption or compliance pursuant to Section 5.2 shall be borne by the Company.All Selling Expenses relating to the sale of securities registered by or on behalf of Holders shall be borne by such Holders pro rata on the basis of the number of securities so registered. 5.4In the case of the registration, qualification, exemption or compliance effected by the Company pursuant to this Agreement, the Company shall, upon reasonable request, inform each Holder as to the status of such registration, qualification, exemption and compliance.At its expense the Company shall: (a)use its reasonable best efforts to keep such registration, and any qualification, exemption or compliance under state securities laws which the Holders reasonably request the Company to obtain, continuously effective as to all Registrable Securities until the earlier of: (i) the Holders having completed the distribution of the Registrable Securities described in the Registration Statement relating thereto; or (ii) with respect to any Holder, such time as all Registrable Securities then held by such Holder may be sold in compliance with Rule 144(k) under the Act.The period of time during which the Company is required hereunder to keep the Registration Statement effective is referred to herein as the “Registration Period”; (b)The Company shall deliver a draft of the Registration Statement or any amendment or supplement thereto, which changes as modifies any information regarding a Holder, a Holder’s beneficial ownership of the Company’s securities or any information under the caption “Plan of Distribution” to the Holders at least five (5) business days prior to filing such Registration Statement, amendment or supplement.Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one trading day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one trading day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; and (B) with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus; (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (vi) the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided that any and all of such information shall remain confidential to each Holder until such information otherwise becomes public, unless disclosure by a Holder is required by law; provided, further, notwithstanding each Holder’s agreement to keep such information confidential, the Holders make no acknowledgement that any such information is material, non-public information; (c)Use its reasonable best efforts to obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest reasonably practicable moment; (d)furnish to each Holder, without charge, at least one copy of such Registration Statement and any post-effective amendment or supplement thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits (excluding those incorporated by reference) in the form filed with the SEC; (e)during the Registration Period, deliver to each Holder, without charge, a reasonable number of copies of the prospectus included in such Registration Statement and any amendment or supplement thereto as such Holder may reasonably request; and the Company consents to the use, consistent with the provisions hereof, of the prospectus and any amendment or supplement thereto by each of the selling Holders of Registrable Securities in connection with the offering and sale of the Registrable Securities covered by the prospectus and any amendment or supplement thereto; (f)during the Registration Period, deliver to each Holder, without charge, upon request, (i) a copy of the full Registration Statement (excluding exhibits); (ii) all exhibits excluded by the parenthetical to the immediately preceding clause (i); and (iii) such other documents as may be reasonably requested by the Holder; (g)prior to any public offering of Registrable Securities pursuant to the Registration Statement, register or qualify or obtain an exemption for the offer and sale under the securities or blue sky laws of such jurisdictions as any such Holders reasonably request in writing, provided that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction, and do any and all other acts or things reasonably necessary or advisable to enable the offer and sale in such jurisdictions of the Registrable Securities covered by the Registration Statement. (h)cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to the Registration Statement, free of any restrictive legends to the extent not required at such time as determined by the Company after consultation with legal counsel and in such denominations and registered in such names as Holders may request; (i)upon the occurrence of any event contemplated by Section 5.4(b)(v) above, the Company shall promptly prepare a post-effective amendment to the Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (j)use its reasonable best efforts to comply in all material respects with all applicable rules and regulations of the SEC, and make generally available to the Holders not later than 45 days (or 90 days if the fiscal quarter is the fourth fiscal quarter) after the end of its fiscal quarter in which the first anniversary date of the effective date of the Registration Statement occurs, an earnings statement satisfying the provisions of Section 11(a) of the Act; and (k)Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d). 5.5The Holders shall have no right to take any action to restrain, enjoin or otherwise delay any registration pursuant to Section 5.2 hereof as a result of any controversy that may arise with respect to the interpretation or implementation of this Agreement. 5.6(a)To the extent permitted by law, the Company shall indemnify each Holder, each underwriter of the Registrable Securities and each person controlling such Holder and each such underwriter within the meaning of Section 15 of the Act, with respect to which any registration, qualification or compliance has been sought pursuant to this Agreement, against all claims, losses, expenses, costs, damages and liabilities (or action in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened (subject to Section 5.6(c) below), arising out of or based on (i) any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus or offering circular, or any amendment or supplement thereof, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made, or (ii) any violation or alleged violation by the Company of the Act, the Exchange Act, or any rule or regulation promulgated under the Act or the Exchange Act, and shall reimburse each Holder, each underwriter of the Registrable Securities and each person controlling such Holder and each such underwriter, for reasonable legal and other expenses, in connection with investigating or defending any such claim, loss, damage, liability or action as and when incurred; provided that the Company shall not be liable in any such case to the extent that any untrue statement or omission thereof is made in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder or underwriter and stated to be specifically for use in preparation of such registration statement, prospectus or offering circular; provided that the Company shall not be liable in any such case where the claim, loss, damage or liability arises out of or is related to the failure of the Holder to comply with the covenants and agreements contained in Section 5.7 hereof, and except that the foregoing indemnity agreement is subject to the condition that, insofar as it relates to any such untrue statement or alleged untrue statement or omission made in the preliminary prospectus but eliminated or remedied in the amended prospectus on file with the SEC at the time the registration statement becomes effective or in the amended prospectus filed with the SEC pursuant to Rule 424(b) of the Act or in the prospectus subject to completion under Rule 434 of the Act, which together meet the requirements of Section 10(a) of the Act (the “Final Prospectus”), such indemnity agreement shall not inure to the benefit of any such Holder, any such underwriter or any such controlling person, with respect to any Losses relating to a sale made after the date of the final Prospectus if, and only if, (x) the Company complied with Section 5.4(b) and (y) if a copy of the Final Prospectus furnished by the Company to the Holder for delivery was not furnished to the person or entity asserting the loss, liability, claim or damage at or prior to the time such furnishing is required by the Act and the Final Prospectus would have cured the defect giving rise to such loss, liability, claim or damage.Notwithstanding any provision herein to the contrary, the Company shall reimburse each Holder, upon such Holder's demand, for all reasonably necessary expenses and costs which are incurred, as and when incurred, by such Holder as a result of the indemnification claims described in this Section 5.6(a).Such demand may be made from time to time prior to resolution of the claim.In no event shall the Company be liable for the expenses and costs of more than one counsel on behalf of the Holders unless in the reasonable judgment ofa Holder, based upon written advice of its counsel, a conflict of interest exists between the Holders with respect to such claims, in which case the Company shall reimburse the Holders for additional attorneys. (b)Each Holder will severally, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers, each underwriter of the Registrable Securities and each person who controls the Company and each underwriter of the Registrable Securities within the meaning of Section 15 of the Act, against all claims, losses, expenses, costs, damages and liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened (subject to Section 5.6(c) below), arising out of or based on (i) such Holder’s failure to comply with the prospectus delivery requirements of the 1933 Act or (ii) any untrue statement of a material fact contained in any registration statement, prospectus or offering circular, or any amendment or supplement thereof, incident to any such registration, qualification or compliance or based on any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made, and will reimburse the Company, such directors and officers, each underwriter of the Registrable Securities and each person controlling the Company and each underwriter of the Registrable Securities for reasonable legal and any other expenses or costs reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action as incurred, in each case to the extent, but only to the extent, that such untrue statement or omission thereof is made in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of the Holder and stated to be specifically for use in preparation of such registration statement, prospectus or offering circular; provided that the indemnity shall not apply to the extent that such claim, loss, damage or liability results from the fact that a current copy of the prospectus was not made available to the Holder and such current copy of the prospectus would have cured the defect giving rise to such loss, claim, expense, costs, damage or liability.Notwithstanding the foregoing, in no event shall a Holder be liable for any such claims, losses, expenses, costs, damages or liabilities in excess of the proceeds received by such Holder in that offering, except in the event of fraud by such Holder. (c)Each party entitled to indemnification under this Section 5.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense with its own counsel at such Indemnified Party’s expense unless the named parties to any proceeding covered hereby (including any impleaded parties) include both the Company or any others the Company may designate and one or more Indemnified Persons, and representation of the Indemnified Persons and such other parties by the same counsel would be inappropriate due to actual or potential differing interests between them, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement, except to the extent such failure is materially prejudicial to the Indemnifying Party in defending such claim or litigation.An Indemnifying Party shall not be liable for any settlement of an action or claim effected without its written consent (which consent will not be unreasonably withheld). (d)If the indemnification provided for in this Section 5.6 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, cost or expense referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, cost or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such loss, liability, claim, damage, cost or expense as well as any other relevant equitable considerations.The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied or which should have been supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5.6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.Notwithstanding the provisions of this Section 5.6(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue statement or omission, except in the case of fraud or willful misconduct by such Holder. (e)The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 5.7(a)Subject to the limitations set forth in Section 5.7(b) below, upon receipt of any notice from the Company of the happening of any event requiring the preparation of a supplement or amendment to a prospectus relating to Registrable Securities so that, as thereafter delivered to the Holders, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, each Holder shall forthwith discontinue disposition of Registrable Securities pursuant to the registration statement contemplated by Section 5.2 until its receipt of copies of the supplemented or amended prospectus from the Company and, if so directed by the Company, each Holder shall deliver to the Company all copies, other than permanent file copies then in such Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. (b)Any Holder of the Company’s outstanding Common Stock shall suspend, upon request of the Company, any disposition of Registrable Securities pursuant to the Registration Statement and prospectus contemplated by Section5.2 during any period, not to exceed two 30-day periods within any 12-month period (each, a “Permitted Black-Out Period”), when the Company determines in good faith that offers and sales pursuant thereto should not be made by reason of the presence of material undisclosed circumstances or developments with respect to which the disclosure that would be required in such a prospectus is premature because it would have an adverse effect on the Company.The period of time in which the disposition of Registrable Securities pursuant to the Registration Statement and prospectus is so suspended shall be referred to as a “Black-Out Period.”The Company agrees to so advise the Holders promptly of the commencement and termination of any such Black-Out Period, and the Holders agree to keep the fact of such Black-Out Period confidential. (c)As a condition to the inclusion of its Registrable Securities, each Holder shall furnish to the Company such information regarding the securities of the Company owned beneficially or of record by such Holder and the distribution proposed by such Holder as the Company may request in writing because it is required in connection with any registration, qualification or compliance referred to in this Section V.Any sale of any Registrable Securities by any Holder shall constitute a representation and warranty by such Holder that the required information relating to such Holder’s beneficial ownership of the Company’s securities and its plan of distribution is as set forth in the prospectus delivered by such Holder in connection with such disposition, that such prospectus does not as of the time of such sale contain any untrue statement of a material fact relating to such Holder or its plan of distribution and that such prospectus does not as of the time of such sale omit to state any material fact relating to such Holder’s beneficial ownership of the Company’s securities or its plan of distribution necessary to make the statements in such prospectus, in the light of the circumstances under which they were made, not misleading. (d)With respect to any sale of Registrable Securities pursuant to a Registration Statement filed pursuant to this Section V, each Holder hereby covenants with the Company not to make any sale of the Registrable Securities without effectively causing the prospectus delivery requirements under the Act to be satisfied. (e)Each Holder acknowledges and agrees that the Registrable Securities sold pursuant to the Registration Statement described in this Section are not transferable on the books of the Company unless the stock certificate submitted to the transfer agent evidencing such Registrable Securities is accompanied by a certificate reasonably satisfactory to the Company to the effect that (i)the Registrable Securities have been sold in accordance with such Registration Statement and (ii)the requirement of delivering a current prospectus has been satisfied. (f)Each Holder shall not take any action with respect to any distribution deemed to be made pursuant to such registration statement, which would constitute a violation of Regulation M under the Exchange Act or any other applicable rule, regulation or law. (g)At the end of the Registration Period, the Holders of Registrable Securities included in the Registration Statement shall discontinue sales of shares pursuant to such Registration Statement upon receipt of notice from the Company of its intention to remove from registration the shares covered by such Registration Statement which remain unsold. 5.8With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which at any time permit the sale of the Registrable Securities to the public without registration, the Company shall use its reasonable best efforts: (a)to make and keep public information available, as those terms are understood and defined in Rule144 under the Act, at all times; (b)to file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; and (c)so long as a Holder owns any Registrable Securities, to furnish to such Holder upon any reasonable request a written statement by the Company as to its compliance with Rule144 under the Act, and of the Exchange Act, and a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as such Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing a Holder to sell any such securities without registration. 5.9With the written consent of the Company and the Holders holding a majority of the Registrable Securities that are then outstanding, any provision of this Section V may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely) or amended.Upon the effectuation of each such waiver or amendment, the Company shall promptly give written notice thereof to the Holders, if any, who have not previously received notice thereof or consented thereto in writing. 5.10The rights and obligations of the Holders under this Section V may not be assigned or transferred to or assumed by any transferee or assignee except (i) to a transferee that acquires at least 20% of such Holder's Registrable Securities or (ii) to an Affiliate or limited or general partner of a Holder; provided that such transfer was not in violation of this Agreement or the Securities Laws; and provided, further, that any person to whom the rights under this Section V have been transferred in accordance with this Section 5.10 has assumed the obligations of a Holder hereunder and a copy of such written assignment and assumption is provided to the Company. 5.11No Piggyback on Registrations.Neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statement other than the Registrable Securities.The Company shall not file any other registration statements until the Registration Statement is filed by the Company with the SEC or permit any other registration statement filed by the Company to be declared effective until the Registration Statement is declared effective by the SEC, provided that this Section 5.11 shall not prohibit the Company from filing amendments to registration statements already filed or registration statements on Form S-8 or S-4 (or their then equivalent). 5.12Piggy-Back Registrations.If at any time during the Registration Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others under the Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option or other employee benefit plans, then the Company shall send to each Holder a written notice of such determination and, if within fifteen (15) days after the date of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered. 5.13Legend Removal. (a)The Company acknowledges and agrees that a Subscriber may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement, such Subscriber may transfer pledged or secured Securities to the pledgees or secured parties.Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.Further, no notice shall be required of such pledge.At the appropriate Subscriber’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to this Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder. (b)Certificates evidencing the Shares and Warrant Shares shall not contain any legend (including the legends referred to in Section 1.16), (i) while a Registration Statement (as defined below) covering the resale of the Shares and the Warrant Shares is effective under the 1933 Act, (ii) following any sale of such Shares or Warrant Shares pursuant to Rule 144 or pursuant to an effective Registration Statement, or (iii) if such Shares or Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Act (including judicial interpretations and pronouncements issued by the staff of the Commission.The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after such time as the legend is no longer required pursuant to this Section if required by the Company’s transfer agent to effect the removal of the legend hereunder.The Company agrees that following such time as such legend is no longer required under this Section 4.1(b), it will, no later than three trading days following the delivery by a Subscriber to the Company or the Company’s transfer agent of a certificate representing Shares or Warrant Shares, as the case may be, issued with a restrictive legend (such third trading day, the “Legend Removal Date”), deliver or cause to be delivered to such Subscriber a certificate representing such shares that is free from all restrictive and other legends.The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section.Certificates for Securities subject to legend removal hereunder shall be transmitted by the transfer agent of the Company to the Subscribers by crediting the account of the Subscriber’s prime broker with the Depository Trust Company System. (c)The Subscriber, severally and not jointly with the other Subscribers, agrees that such Subscriber will sell any Shares and Warrant Shares pursuant to either the registration requirements of the 1933 Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Shares and Warrant Shares are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 5.13 is predicated upon the Company’s reliance upon this understanding. 5.14Securities Laws Disclosure; Publicity.The Company shall, by 9:15 a.m. (New York City time) on the trading day immediately following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby and within 1 Trading Day following the date hereof file a Current Report on Form 8-K, disclosing the material terms of the transactions contemplated hereby, and filing this Agreement and the form of Warrant as exhibits thereto.The Company and Rodman & Renshaw, LLC shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Subscriber shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Subscriber, or without the prior consent of Rodman & Renshaw, LLC, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Subscriber, or include the name of any Subscriber in any filing with the SEC or any regulatory agency or trading market, without the prior written consent of such Subscriber, except (i) as required by federal securities law in connection with (A) any registration statement contemplated by this agreement and (B) the filing of final documents entered hereunder (including signature pages thereto) with the SEC and (ii) to the extent such disclosure is required by law or trading market regulations, in which case the Company shall provide the Subscribers with prior notice of such disclosure permitted under this clause (ii). 5.15Non-Public Information.Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Company covenants and agrees that neither it nor any other person acting on its behalf will provide any Subscriber or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Subscriber shall have executed a written agreement regarding the confidentiality and use of such information.The Company understands and confirms that each Subscriber shall be relying on the foregoing covenant in effecting transactions in securities of the Company. 5.16Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue shares pursuant to any exercise of the Warrants. VI.MISCELLANEOUS 6.1From the date hereof until 120 days after the date the Registration Statement is declared effective, except as otherwise provided below, the Company shall not issue shares of Common Stock or any options, warrants, rights or other securities convertible into or exchangeable for Common Stock.The restriction on issuance by the Company of securities under this Section 6.1 shall not apply to:(i) the issuance of any shares of Common Stock upon the exercise of any options or warrants outstanding as of the Closing Date; (ii) the issuance of any shares of Common Stock upon the conversion of any shares ofclass C special stock of the Company; (iii) the grant of any options with an exercise price no less than the mean between the reported high and low sale prices of the Common Stock on the date of grant pursuant to the Company’s Amended and Restated 1998 Stock Plan; (iv) any rights offering of securities, including rights to purchase Common Stock, by the Company to all of its stockholders; (v) the issuance of any shares of Common Stock or other equity securities to Paladin Labs as described in Schedule 2.2 to this Agreement; (vi) the issuance of any shares of Common Stock or any options, warrants, rights or other securities convertible into or exchangeable for Common Stock by way of stock split or stock dividend or similar capital modification; (vii) the issuance of any shares of Common Stock or any options, warrants, rights or other securities convertible into or exchangeable for Common Stock in connection with any merger, acquisition or other reorganization; or (viii) the issuance of any shares of Common Stock or any options, warrants, rights or other securities convertible into or exchangeable for Common Stock upon authorization of the Board of Directors of the Company in connection with strategic alliances or business conducted by the Company with vendors, lessors or financial institutions. 6.2From the date hereof until the one year anniversary of the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any subsequent financing involving a “Variable Rate Transaction”.The term “Variable Rate Transaction” shall mean a transaction in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price.Any Subscriber shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. 6.3Any notice or other communication given hereunder shall be deemed sufficient in writing and sent by (a) telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received); or (b) registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor, addressed to BioSante Pharmaceuticals, Inc., 111 Barclay Boulevard, Lincolnshire, Illinois 60069, Facsimile: (847) 478-9260, Attention: Stephen M. Simes, President and Chief Executive Officer.Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received. 6.4Except as set forth in Section 5.9 and except with respect to Sections 6.1 and 6.2 (which Sections may be amended with the written consent of the Company and the Holders holding at least a majority of the Registrable Securities that are then outstanding), this Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. 6.5Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Securities as herein provided, subject to acceptance by the Company and the Placement Agents; subject, however, to the right hereby reserved to the Company to enter into the same agreements with other subscribers and to add and/or delete other persons as subscribers. 6.6In the event of a breach by the Company or by a Holder, of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate. 6.7Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed in accordance with and governed by the laws of the State of Delaware without regard to principles of conflicts of law. 6.8The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein. 6.9It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party. 6.10The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement. 6.11This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument. 6.12The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation. 6.13Nothing in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement, except for the Placement Agents and the holders of Registrable Securities. 6.14Any pronoun herein shall include all genders and/or the plural or singular as appropriate from the context. ***** SIGNATURE PAGE Date Signed: May , 2007 Number of shares: Multiplied by Offering Price per share: x $ Equals subscription amount: Warrants (multiply the number of shares by 25%): “INVESTOR” (Name in which securities should be issued) By: Print Name: Title: Address City, State and Zip Code Telephone-Business Facsimile-Business Tax ID # or Social Security # *The attached Certificate of Signatory must also be completed. This Subscription Agreement is agreed to and accepted as of , 2007. BIOSANTE PHARMACEUTICALS, INC. By: Name: Title: CERTIFICATE OF SIGNATORY (To be completed if Securities are being subscribed for by an entity) I,, am the of (the “Entity”). I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Securities, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity. IN WITNESS WHEREOF, I have set my hand this day of , 2007. (Signature) ANNEX A Plan of Distribution Each Selling Stockholder (the “Selling Stockholders”) of the common stock and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock on the American Stock Exchange or any other stock exchange, market or trading facility on which the shares are traded or in private transactions.These sales may be at fixed or negotiated prices.A Selling Stockholder may use any one or more of the following methods when selling shares: · ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; · block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; · purchases by a broker-dealer as principal and resale by the broker-dealer for its account; · an exchange distribution in accordance with the rules of the applicable exchange; · privately negotiated transactions; · settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part; · broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; · through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; · a combination of any such methods of sale; or · any other method permitted pursuant to applicable law. The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus. Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales.Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with NASDR Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with NASDR IM-2440. In connection with the sale of the common stock or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the Common Stock in the course of hedging the positions they assume.The Selling Stockholders may also sell shares of the common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities.The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales.In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the Common Stock. In no event shall any broker-dealer receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%). The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the shares.The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act. Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder.In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus.There is no underwriter or coordinating broker acting in connection with the proposed sale of the resale shares by the Selling Stockholders. We agreed to keep this prospectus effective until the earlier of (i) the date on which the shares may be resold by the Selling Stockholders without registration and without regard to any volume limitations by reason of Rule 144(k) under the Securities Act or any other rule of similar effect or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect.The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with. Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale shares may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution.In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of the common stock by the Selling Stockholders or any other person.We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant x Filed by a Party other than the Registranto Check the appropriate box: x Preliminary Proxy Statement o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) o Definitive Proxy Statement o Definitive Additional Materials o Soliciting Material Pursuant to §240.14a-12 NEULION, INC. (Name of Registrant as Specified in Its Charter) (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): xNo fee required. oFee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1)Title of each class of securities to which transaction applies: (2)Aggregate number of securities to which transaction applies: (3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4)Proposed maximum aggregate value of transaction: (5)Total fee paid: oFee paid previously with preliminary materials: oCheck box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1)Amount Previously Paid: (2)Form, Schedule or Registration Statement No.: (3)Filing Party: (4)Date Filed: NEULION, INC. 1600 Old Country Road Plainview, New York 11803 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS to be held on June 7, 2011 TO THE STOCKHOLDERS OF NEULION, INC.: The Annual Meeting of the stockholders of NeuLion, Inc., a Delaware corporation (the “Company”), will be held on Tuesday, June 7, 2011, at 10:00 a.m., at the Long Island Marriott Hotel & Conference Center at 101James Doolittle Boulevard, Uniondale, New York 11553 (the “Annual Meeting”), for the following purposes: 1. To elect eight (8) directors; 2. To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2011; 3. To approve the amendment of the Company’s Certificate of Incorporation to provide for the redemption payment of any of the Company’s Class3 Preference Shares to be made in US dollars; 4. To approve the unallocated options to acquire shares of the Company’s Common Stock (“Unallocated Options”) under the Company’s Second Amended and Restated Stock Option Plan, as amended; 5. To approve the unallocated stock appreciation rights (“Unallocated SARS”) under the Company’s 2006 Stock Appreciation Rights Plan, as amended; and 6. To transact any other business as may properly be presented at the Annual Meeting or any adjournment thereof. A proxy statement providing information and a form of proxy to vote with respect to the foregoing matters accompany this notice. By Order of the Board of Directors, /s/ Roy E. Reichbach Roy E. Reichbach General Counsel, Corporate Secretary and Director Dated: April 29, 2011 IMPORTANT It is important that your shares of the Company are represented at the Annual Meeting.Whether or not you expect to attend the Annual Meeting, please complete, date, and sign the accompanying form of proxy, and return it promptly in the enclosed return envelope or follow the instructions on the enclosed form of proxy to vote your proxy by telephone or Internet.If you grant a proxy, you may revoke it at any time prior to the Annual Meeting or nevertheless vote in person at the Annual Meeting. PLEASE NOTE:If your shares are held in street name, your broker, trust, bank or other nominee holder cannot vote your shares in the (i) election of directors, (ii) approval of the amendment of the Certificate of Incorporation, (iii)approval of the Unallocated Options or (iv) approval of the Unallocated SARs, unless you direct the nominee holder how to vote by marking your form of proxy. NEULION, INC. 1600 Old Country Road Plainview, New York11803 PROXY STATEMENT for Annual Meeting of Stockholders to be held on June 7, 2011 PROXY SOLICITATION NeuLion, Inc., a Delaware corporation (the “Company”), is soliciting proxies on behalf of its Board of Directors in connection with the annual meeting of stockholders to be held on Tuesday, June 7, 2011 at 10:00 a.m. at the Long Island Marriott Hotel & Conference Center at 101James Doolittle Boulevard, Uniondale, New York 11553 and at any adjournment thereof (the “Annual Meeting”). The Company will bear the entire cost of preparing, assembling, printing and mailing this proxy statement (the “Proxy Statement”), the accompanying form of proxy, and any additional material that may be furnished to stockholders. Proxies may be solicited through the mails or direct communication with certain stockholders or their representatives by the Company’s officers, directors, or employees, who will receive no additional compensation therefor. The costs of solicitation will be borne by the Company. A copy of the Company’s Annual Report on Form 10-K containing its audited financial statements for the fiscal year ended December 31, 2010 accompanies this Proxy Statement.Our Annual Report on Form 10-K is not part of this Proxy Statement. This Proxy Statement and the accompanying form of proxy are first being sent to stockholders on or about May 4, 2011. GENERAL INFORMATION ABOUT VOTING Record Date Persons registered on the records of the Company at the close of business on May 2, 2011 (the “Record Date”) are entitled to receive notice of, and to vote at, the Annual Meeting. Voting Securities and Principal Holders Thereof As of the Record Date, the Company had outstanding 139,330,279 shares of common stock, par value $0.01 (“Common Stock”), and 17,176,818 shares of Class 3 Preference Shares, par value $0.01 (“Preferred Stock”), being all of the classes of stock entitled to vote at the Annual Meeting. Each share of Common Stock entitles its holder to one vote, and each share of Preferred Stock entitles its holder to one vote.The Common Stock and Preferred Stock shall vote as one class on all matters other than on the proposal relating to the amendment to the Certificate of Incorporation whereby the Preferred Stock shall also vote as a separate class. Procedures for Voting or Revoking Proxies You may vote your proxy by completing, dating, signing, and mailing the accompanying form of proxy in the return envelope provided or by telephone or Internet by following the instructions on the form of proxy. The persons authorized by such means to vote your shares will vote them as you specify or, in the absence of your specification, as stated on the form of proxy. You may revoke any proxy by notifying the Company in writing at the above address, ATTN: Corporate Secretary by 5 p.m. on Tuesday, June 6, 2011, or by voting a subsequent proxy or in person at the Annual Meeting.If a broker, trust, bank or other nominee holds your shares, please follow the instructions you receive from that person. 1 If you hold shares through an account with a broker, trust, bank or other nominee, your shares may be voted on routine matters even if you do not provide voting instructions.However, when a proposal is not routine and a brokerage firm, fiduciary, bank or other nominee has not received specific voting instructions from its customers, it cannot vote the shares on that proposal.Those shares are considered broker “non-votes.”Our proposals will be affected by broker “non-votes” and abstentions as follows: Election of Directors The election of directors is not considered a routine matter.The Company’s Bylaws require that in an uncontested election, such as the election at the Annual Meeting, each director will be elected by vote of the majority of the votes cast with respect to the director nominee.A majority of the votes cast means that the number of shares cast “for” a director’s election must exceed the number of votes cast “against” that nominee. Abstentions and broker “non-votes” are not counted as “for” or “against” a director nominee, and will not have an effect on the outcome of the election of directors. Ratification of Independent Registered Public Accountants The ratification of the appointment of Ernst & Young LLP (“E&Y (US)”) as our independent registered public accounting firm for 2011 is considered a routine matter, and therefore there will be no broker “non-votes” associated with this proposal.The approval of this matter requires the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter. Abstentions will have the same effect as a vote against this matter. Approval of Amendment of Certificate of Incorporation The approval of the proposal to amend the Company’s Certificate of Incorporation is not considered a routine matter.The approval of this matter requires the affirmative vote of a majority of the Company’s outstanding voting securities voting as one class and the affirmative vote of the holders of 66% of the Preferred Stock voting alone as a separate class.Broker “non-votes” and abstentions will have the same effect as a vote against this matter. Approval of Unallocated Options to Acquire Shares of Common Stock Under the Company’s Second Amended and Restated Stock Option Plan, as amended (the “Stock Option Plan”) The approval of unallocated options to acquire shares of Common Stock under the Stock Option Plan is not considered a routine matter. The approval of this matter requires the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter. Broker “non-votes” will be treated as votes not cast and will not have any effect on the outcome of the proposal. Abstentions will have the same effect as a vote against this matter. Approval of Unallocated Stock Appreciation Rights (“SARs”) under the Company’s 2006 Stock Appreciation Rights Plan, as amended (the “SARs Plan”) The approval of unallocated SARs under the SARs Plan is not considered a routine matter.The approval of this matter requires the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter.Broker “non-votes” will be treated as votes not cast and will not have any effect on the outcome of the proposal.Abstentions will have the same effect as a vote against this matter. We encourage you to provide your instructions to your broker, trust, bank or other nominee regarding the voting of your shares. 2 Attending the Annual Meeting If you wish to vote your shares in person at the Annual Meeting and your shares are registered in the name of a broker, trust, bank or other nominee, you will need to bring a legal proxy or a letter from that broker, trust, bank or other nominee that confirms that you are the beneficial owner of those shares. You may obtain directions to the Annual Meeting by writing to the Company at 1600 Old Country Road, Plainview, New York 11803, ATTN: Corporate Secretary prior to the date thereof. If you attend the Annual Meeting, you may vote there in person, regardless whether you have voted as provided under “—Procedures for Voting or Revoking Proxies.” Quorum The presence of a majority of shares entitled to vote on a matter, in person or represented by proxy, will constitute a quorum at the Annual Meeting or any adjournment or postponement thereof, other than in such cases where a separate vote by a class is required whereby a majority of the outstanding sharesof such class, present in person or represented by proxywill also berequired to constitute a quorum with respect to a vote on that matter. The Company’s list of stockholders as of the Record Date has been used to deliver to stockholders the notice and this Proxy Statement as well as to determine who is eligible to vote. Required Votes Under our Bylaws, directors must be elected by vote of the majority of the votes cast with respect to the director nominee in uncontested elections.This means that the number of votes cast “for” a director nominee must exceed the number of votes cast “against” that nominee.The affirmative vote of a majority of the votes present in person or represented by proxy at the Annual Meeting and entitled to vote is required to ratify the appointment of E&Y (US), to approve the unallocated options to acquire shares of Common Stock under Stock Option Plan and to approve the unallocated SARs under the SARs Plan.The affirmative vote of a majority of the Company’s outstanding voting securities voting as one class and the affirmative vote of 66% of the Preferred Stock voting alone as a separate class is required to approve the amendment of the Company’s Certificate of Incorporation. How Does the Board Recommend that I Vote? Your Board of Directors recommends that you vote your shares: Ø ‘FOR’ the election of each of the nominees to the Board; Ø ‘FOR’ the ratification of the appointment of E&Y (US) as our independent registered public accounting firm for 2011; Ø ‘FOR’ the approval of the amendment of the Certificate of Incorporation; Ø ‘FOR’ the approval of unallocated options to acquire shares of Common Stock under the Stock Option Plan; and Ø ‘FOR’ the approval of unallocated SARs under the SARs Plan. Interests of Certain Persons in Matters to be Acted Upon To the knowledge of the Company, · no person who has been a director or an executive officer of the Company at any time since the beginning of the Company’s last fiscal year, · no nominee for election as a director of the Company, and · no associate of any of the foregoing persons, has any substantial interest, direct or indirect, by security holdings or otherwise, in any matter to be acted upon at the Annual Meeting except as disclosed in this Proxy Statement. 3 Voting Trust Agreement Charles B. Wang, the chairman of our Board of Directors, Nancy Li, our Chief Executive Officer and a director of the Company, and AvantaLion LLC (“AvantaLion”), which is controlled by Mr. Wang, are parties to a voting trust agreement (the “Voting Trust Agreement”) pursuant to which all shares of Common Stock of the Company directly or indirectly controlled by them were deposited with Computershare so that shares of Common Stock controlled by AvantaLion, Mr.Wang and Ms.Li representing more than 9.9% of the total issued and outstanding Common Stock of the Company may not be voted in relation to: · the election of directors; · any matters related to security-based compensation; and · any other matters which may change the governance structure of the Company as disclosed in the management information circular dated September4, 2008 relating to the stockholder approval of the business combination of the entities then known as JumpTV Inc. and NeuLion, Inc. The voting restriction does not apply to any arm’s-length transferee of any of the Common Stock held by AvantaLion, Mr. Wang or Ms. Li.The Voting Trust Agreement will terminate on the first to occur of: · five years from October 20, 2008; · the date when the Common Stock ceases to be listed and posted for trading on the Toronto Stock Exchange; and · the date that AvantaLion, Mr. Wang and Ms. Li no longer own any Common Stock. PROPOSAL 1 ELECTION OF DIRECTORS The Board of Directors of the Company currently consists of eight directors.The Bylaws of the Company provide that the number of directors on the Board shall not be less than one nor more than fifteen persons.The Company has determined that the number of directors to be elected at the Annual Meeting will be eight.All eight of the nominees are currently directors of the Company and each has been a director since the date indicated next to his or her name in the table below the subheading “—Biographical and Business Experience of Directors.”Each director elected at the Annual Meeting will hold office until the next annual meeting or until his or her successor is duly elected or appointed.All of the nominees have consented to being named in this Proxy Statement and to serve if elected.We do not presently expect that any of the nominees will be unavailable.There are no family relationships between the officers and directors of the Company other than the relationship between Mr.Wang, our Chairman, and Ms.Li, our Chief Executive Officer and a director of the Company, who are married to each other. Director Qualifications and Review of Director Nominees The process for identifying and evaluating nominees for the Board of Directors is initiated by the Corporate Governance Committee conducting an annual evaluation of critical Company and Board needs based on the present and future strategic objectives of the Company and the specific skills required for the Board of Directors as a whole and for each of its committees. This annual evaluation provides guidance to the Corporate Governance Committee members, who report to the full Board with a recommendation on the size and composition of the Board as a whole and its committees. If necessary, the Corporate Governance Committee also recommends steps to be taken so that the Board of Directors as a whole and its committees reflect the appropriate balance of experience, knowledge, skills, expertise, and diversity. In conducting a review of the Corporate Governance Committee’s recommendations, the Board may consider age, experience, ability, qualifications, independence from the Company and current Board members, and such other factors as it deems appropriate given the current needs of the Company.The Board utilizes the same evaluation process for director nominees received from stockholders as it does for those nominees recommended by the Board.Due to the limited number of stockholder proposals received, the Board does not believe a separate policy for considering such nominations is necessary or efficient.Current members of the Board with skills and experience relevant to the Company’s strategic objectives are considered for re-nomination. 4 The nominees to the Board of Directors listed in this Proxy Statement, each of whom is currently a director of the Company, were approved unanimously by the Board of Directors.The paragraphs that follow provide information about each nominee for director.Each of these individuals brings a strong and singular background and skill set to the full Board of Directors that includes accounting and finance, risk management, marketing, technology, legal and civic experience, among others, which led the Board of Directors to the conclusion that each should continue to serve as a director. Biographical and Business Experience of Directors The following table and narrative below contains biographical and business information about the nominees for re-election, including name and province/state and country of residence, office or position with the Company, date the Company directorship began, principal occupation, age, business experience and public company directorships during at least the past five years.The Company has an Audit Committee, a Compensation Committee, a Corporate Governance Committee and a Disclosure Committee (see “CORPORATE GOVERNANCE MATTERS—Board Committees” for a description of each Board committee), the members of which are indicated below and will, if re-elected by the stockholders, remain members of such committees.For the number of shares of Common Stock beneficially owned, directly or indirectly or under direction or control of each nominee, see “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.” Name and Province/State and Country of Residence Office or Position with the Company Date Company Directorship Began Principal Occupation DuringthePastFiveYears Charles B. Wang New York, USA Chairman 10/20/08 Owner, New York Islanders Hockey Club, L.P. (“New York Islanders”) G. Scott Paterson Ontario, Canada Vice Chairman 01/30/02 Chief Executive Officer, Executive Chairman and Vice Chairman of the Company Nancy Li New York, USA Chief Executive Officer and Director 10/20/08 Chief Executive Officer of the Company and NeuLion USA, Inc. (“NeuLion USA”) Roy E. Reichbach(1)(2) New York, USA General Counsel, Corporate Secretary and Director 10/20/08 General Counsel and Corporate Secretary of the Company and NeuLion USA; Alternate Governor of the New York Islanders on the NHL Board of Governors John R. Anderson(1)(3) Ontario, Canada Lead Independent Director 03/31/08 Chief Financial Officer of each of LPBP Inc., TriNorth Capital Inc., Impax Energy Services Income Trust and Tailwind Financial Inc. Gabriel A. Battista(1)(2)(4) Maryland, USA Director 03/31/08 Chairman of the Board of Directors of Trustees of Capitol College Shirley Strum Kenny(1)(3)(4) Virginia, USA Director 10/20/08 Former President, State University of New York at Stony Brook David Kronfeld(3)(4) Illinois, USA Director 10/20/08 Chairman of JK&B Capital Member of the Corporate Governance Committee. Member of the Disclosure Committee. Member of the Audit Committee. Member of the Compensation Committee. 5 Charles B. Wang (Age 66) Charles B. Wang has been the Chairman of the Board of the Company since October 2008.Mr.Wang also has been the owner of the New York Islanders of the National Hockey League since July 2000 and is the founder of the Lighthouse Development Group, LLC, the developer of the Lighthouse Project, which seeks to redevelop and revitalize the Nassau Veterans Memorial Coliseum site and its surrounding area on Long Island.In 1976, he founded Computer Associates International, Inc. (“Computer Associates”), a provider of information technology management services now known as CA Inc., and served as its Chairman until November 2002.Mr.Wang created the New York Islanders Children’s Foundation, has his own charitable foundation and is extremely active in supporting charitable causes such as Smile Train, Inc., which he co-founded, and the National Center for Missing & Exploited Children. He is the author of “TECHNOVISION II:Every Executive’s Guide to Understanding and Mastering Technology and the Internet.”Mr.Wang earned a Bachelor of Science degree from Queens College and began his computer career at Columbia University’s Riverside Research Institute as a programming trainee.Mr. Wang is married to Ms. Li.Mr. Wang’s qualifications to serve on the Board include his status as a leading technology visionary and his experience in leading both technology start-ups and a Fortune 200 company.He has built many relationships as an investor in China and familiarized himself with that economic market, which is a potentially important one for the Company.Furthermore, Mr. Wang is also able to provide diverse and valuable finance and strategic expertise to the Board. G. Scott Paterson (Age 47) G. Scott Paterson has been our Vice Chairman since October 2008.Prior to his current position, Mr. Paterson was our Chairman from January 2002 until October 2008 and Chief Executive Officer from May 2005 until October 2007 and again from June 2008 until October 2008.Mr. Paterson is a Director, Chairman of the Audit Committee and a member of the Strategic Committee of Lions Gate Entertainment (NYSE:LGF).Mr. Paterson is also Chairman of Automated Benefits Corp. (TSX:AUT) and Apogee Minerals Ltd. (TSX:APE).He is also the Chairman of the Merry Go Round Children’s Foundation and a Governor of Ridley College.From October 1998 until December 2001, Mr. Paterson was Chairman and CEO of Yorkton Securities Inc., which under his leadership became Canada’s leading technology investment bank.Mr. Paterson has served as the past Chairman of the Canadian Venture Stock Exchange and as a former Vice Chairman of the Toronto Stock Exchange (“TSX.”)Mr. Paterson is a graduate of Ridley College and earned a Bachelor of Arts (Economics) degree from the University of Western Ontario.In 2009, Mr. Paterson obtained the ICD.D designation by graduating from the Rotman Institute of Corporate Directors at the University of Toronto.Mr. Paterson’s qualifications to serve on the Board include his expertise with technology investment securities as well as his founder’s knowledge of the Company and its history.Mr. Paterson’s service on both public company and nonprofit boards enables him to provide valuable guidance to the Board on financial and strategic matters. In December 2001, Mr. Paterson entered into a settlement agreement with the Ontario Securities Commission (the “Commission”) in connection with conduct that was, in the view of the Commission, contrary to the public interest in connection with certain corporate finance and trading activities engaged in by Mr. Paterson and the investment dealer with which he was associated.Mr. Paterson has fulfilled the terms of the settlement agreement, which provided that he could not be registered under the Ontario Securities Act until December 19, 2003, that he make a voluntary payment to the Commission of one million Canadian dollars and that he temporarily cease trading for a six-month period.There were no allegations of securities rule or law breaches. 6 Nancy Li (Age 53) Nancy Li has been our Chief Executive Officer since October 2008.She is the founder of NeuLion USA, our wholly-owned subsidiary, and has been its Chief Executive Officer since its inception in 2003. From 2001 to 2003, Ms. Li established and ran iCan SP, a provider of end-to-end service management software for information technology operations and a wholly owned subsidiary of CA Inc.From 1990 to 2001, Ms. Li was Executive Vice President and Chief Technology Officer for Computer Associates, and prior to that held a variety of management positions covering virtually every facet of Computer Associates’ business from a development and engineering perspective.Ms. Li holds a Bachelor of Science degree from New York University.Ms. Li is married to Mr. Wang.Ms. Li’s qualifications to serve on the Board include her knowledge of information technology systems and her executive and business experience.Ms. Li created the technology behind the Company’s successful IPTV platform and has an in-depth knowledge of the Company, its history and the IPTV industry. Roy E. Reichbach (Age 49) Roy E. Reichbach has been our General Counsel and Corporate Secretary since October 2008 and has been the General Counsel and Corporate Secretary of NeuLion USA since 2003.Mr. Reichbach is an Alternate Governor of the New York Islanders on the NHL Board of Governors.From 2000 until October 2008, Mr. Reichbach was also the General Counsel of the New York Islanders and was also responsible for the legal affairs of its affiliated real estate companies, including Lighthouse Development Group, LLC.From 1994 until 2000, Mr. Reichbach was Vice President – Legal at Computer Associates.Prior to that, he was a trial lawyer in private practice.Mr. Reichbach holds a Bachelor of Arts degree from Fordham University and a Juris Doctorate degree from Fordham Law School.He has been admitted to practice law since 1988.Mr. Reichbach’s qualifications to serve on the Board include his legal experience as a litigator in private practice and as in-house counsel for companies in several industries, as well as his executive management experience. John R. Anderson (Age 65) John R. Anderson has been the Chief Financial Officer of LPBP Inc., a Company which formerly invested in health science-focused partnerships, since May 2004 and Chief Financial Officer of TriNorth Capital Inc., a Canadian-based investment company, since December2009.Mr. Anderson was the Chief Financial Officer and Secretary of Impax Energy Services Income Trust (“Impax”), an income trust, from June 2006 to May 2009, and the Chief Financial Officer of Tailwind Financial Inc., a special acquisition company, from April 2007 to April 2009.From 2005 to June 2006, Mr.Anderson was self-employed.Previously, he was the Chief Financial Officer of The T. Eaton Company Limited and was also a partner with Ernst & Young LLP. Mr.Andersonwas formerlya director of the Canadian Medical Discoveries Fund and the Chairman of the Board of Directors of Ridley College.Mr.Anderson holds a Bachelor of Arts degree from the University of Toronto and is a chartered accountant in Canada.In 2006, Mr. Anderson obtained the ICD.D designation by graduating from the Rotman Institute of Corporate Directors at the University of Toronto. Mr. Anderson’s qualifications to serve on the Board include the corporate financial expertise he gained as chief financial officer of several companies.Furthermore, as a former public accountant and auditor, he is able to provide the Company with knowledgeable advice regarding navigating the evolving accounting regulatory environment. Impax filed for bankruptcy in December 2009, after the departure of Mr. Anderson. Gabriel A. Battista (Age 66) Gabriel A. Battista has been the Chairman of the Board of Directors of Trustees of Capitol College since 2010, having become a member of that board in 1992, and has also been a member of the Board of Trustees since 2006 and Vice Chairman since 2009 of the American University of Rome.Mr. Battista serves as a member of the Boards of Directors of Sentrillion, Network Alliance, TEOCO and the National Italian American Foundation.From 1999 until December 2006, Mr. Battista was the President, Chairman and Chief Executive Officer of Talk America.Mr. Battista received a Bachelor of Science degree from Villanova University, a Master of Science degree from Drexel University and a Master of Business Administration degree from Temple University.He is also a registered professional engineer in the State of Pennsylvania.Mr. Battista’s qualifications to serve on the Board include his success as business leader with substantial experience in the area of telecommunications, which is a significant market for the Company’s services, as well as his experience in serving as a board member of six publically traded companies in the Internet, software and telecommunications industries. 7 Shirley Strum Kenny (Age 76) Shirley Strum Kenny served as President of Stony Brook University from 1994 to 2009. Prior thereto, Dr. Kenny was President of Queens College and had taught at the University of Texas, Gallaudet College, the Catholic University of America, the University of Delaware, and the University of Maryland, where she was Provost. She has served as a member of the Boards of Directors of Goodwill Industries of Greater New York and New Jersey, and the Long Island Association. She also was a board member and vice chair of the Board of Directors of Brookhaven Science Associates, which oversees Brookhaven National Laboratory. From 2000 to 2008, she served on the Board of Directors of Toys ‘R’ Us, Inc. and of Computer Associates. Dr. Kenny holds a Bachelor of Arts degree in English and a Bachelor of Journalism degree from the University of Texas at Austin, an Master of Arts in English from the University of Minnesota, and a Ph.D. in English from the University of Chicago.Dr. Kenny’s qualifications to serve on the Board include her expertise as a successful educational administrator and her large public company board experience. David Kronfeld (Age 63) David Kronfeld is the Chairman of JK&B Capital, a venture capital firm, which he founded in 1995. Prior thereto he served as a General Partner at Boston Capital Ventures, the Vice President of Acquisitions and Venture Investments at Ameritech, a Senior Manager at Booz Allen & Hamilton and a Systems Analyst at Electronic Data Systems.Since February 2010, Mr. Kronfeld has been a director, and a member of the compensation committee and the audit committee, of Dynasil Corporation of America (NASDAQ-GM:DYSL). Mr.Kronfeld earned a Bachelor of Science degree in Engineering with high honors and a Master of Science degree in Computer Science from Stevens Institute of Technology, and a Master of Business Administration degree from The Wharton School of Business of the University of Pennsylvania.Mr. Kronfeld’s qualifications to serve on the Board include his extensive corporate financial expertise as an investor and venture capitalist. Mr. Kronfeld is also greatly experienced in guiding early to mid-stage companies to evolve and mature and has served on many boards over the course of the past 20 years. Legal Proceedings To the best of the Company’s knowledge, there are no material proceedings in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such person is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. To the best of the Company’s knowledge, other than the information disclosed in Mr.Paterson’s and Mr.Anderson’s biographies above, during the past ten years there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees involving any possibility of enjoining or suspending members of the Company’s Board of Directors or the Company’s executive officers from engaging in any business, securities or banking activities, and no member of the Company’s Board of Directors or executive officers has been found to have violated, or been accused of having violated, any federal or state securities or commodities laws or any law or regulation prohibited mail or wire fraud or fraud in connection with any business entity. The election of each director nominee requires a vote of the majority of the votes cast with respect to such nominee.Pursuant to the Voting Trust Agreement, AvantaLion, Mr. Wang and Ms. Li may only vote shares of Common Stock representing 9.9% of the votes attached to all of the then-issued shares of Common Stock of the Company, which is equal to approximately 13,793,698 shares of Common Stock as of April15, 2011. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE BOARD OF DIRECTORS’ NOMINEES. PLEASE NOTE: If your shares are held in street name, your broker, trust, bank or other nominee cannot vote your shares in the election of directors, unless you direct the holder how to vote by marking your proxy. 8 PROPOSAL 2 RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS The Audit Committee has appointed, and the Board of Directors has approved the appointment of, E&Y (US) as the Company’s independent registered public accountants for the fiscal year ended December 31, 2011, subject to stockholder ratification.E&Y (US) has served as the Company’s independent registered public accountants since May 2009.Ernst & Young LLP (Canada) served as auditors of the Company from October 2005 to May 2009.At our Annual and Special Meeting of Shareholders held in May 2009, our stockholders appointed E&Y (US) as our auditors for the fiscal year ended December 31, 2009 and authorized our Board of Directors to fix the remuneration of the auditors.Representatives of E&Y (US)are expected to be present at the Annual Meeting to respond to appropriate questions and will have an opportunity to make a statement, if they so desire. If our stockholders fail to ratify the appointment, or, if before the next annual meeting, E&Y (US) declines or the Audit Committee terminates the engagement, or E&Y (US) otherwise becomes unable to serve, the Audit Committee will appoint other independent registered public accountants whose selection for any period subsequent to the next annual meeting will be subject to stockholder ratification. The affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter is required to approve the ratification of the appointment of E&Y (US). THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS. PROPOSAL 3 APPROVAL OF AMENDMENT OF THE COMPANY’S CERTIFICATE OF INCORPORATION The Company’s Board of Directors has adopted, declared advisable and is submitting for stockholder approval an amendment of the Company’s Certificate of Incorporation to change the Redemption Amount (as defined in the Certificate of Incorporation) of the Preferred Stock from CDN$0.60 per share to US$0.58218 per share, plus all accrued and unpaid dividends thereon.If the stockholders approve this proposal, subsection(i) of Section7 of the Company’s Certificate of Incorporation will be amended to read in its entirety as follows: (7)REDEMPTION (i)Redemption by Corporation:The Corporation may, upon giving notice as hereinafter provided, redeem, subject to the requirements of the General Corporation Law of Delaware, at any time the whole or from time to time (subject to subsection (v) and the conversion provisions set forth in Section5 below) any part of the then outstanding Class 3 Preferred Stock from any one or more of the holders thereof as the board of directors may in its sole discretion determine on payment of US$0.58218 for each share to be redeemed, plus all accrued and unpaid dividends thereon, the whole constituting and being herein referred to as the “Redemption Amount.” The Board is recommending this amendment to give effect to the intent of the Company and the holders of the Preferred Stock with respect to the holders’ return of their original investment amount (US$10 million).It was not the intent of the parties for the Company or the holders of the Preferred Stock to be impacted by changes in the currency exchange ratethat may cause the original investment's valueto either decrease or increase when the investment is redeemed and converted back into the original currency. The proposed amendment will not have a negative financial impact on the Company. 9 The adoption of this amendment requires the affirmative vote of a majority of the Company’s outstanding voting securities entitled to vote thereon voting as one class and the affirmative vote of 66% of the Preferred Stock voting alone as a separate class.If the proposed amendment is adopted, it will become effective upon the filing of a certificate of amendment of the Certificate of Incorporation with the Secretary of State of the State of Delaware. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE AMENDMENT OF THE COMPANY’S CERTIFICATE OF INCORPORATION. PLEASE NOTE: If your shares are held in street name, your broker, trust, bank, custodian, or other nominee cannot vote your shares on the proposal to amend the Company’s Certificate of Incorporation, unless you direct the holder how to vote by marking your proxy. PROPOSAL 4 APPROVAL OF UNALLOCATED OPTIONS TO ACQUIRE SHARES OF COMMON STOCK UNDER THE STOCK OPTION PLAN The Company’s Stock Option Plan is subject to such future approvals of the stockholders and applicable stock exchanges as may be required by the terms of the Stock Option Plan or applicable stock exchanges from time to time.The maximum number of shares of Common Stock available for purchase under the Stock Option Plan is the greater of (i)4,000,000 shares of Common Stock and (ii)12.5% of the shares of Common Stock issued and outstanding from time to time.Since the Company has a rolling 12.5% number reserved for issuance, the TSX requires that the approval of all unallocated options to acquire shares of Common Stock under the Stock Option Plan be sought by the Company every three years from a majority of the stockholders, subject to the terms of the Voting Trust Agreement.See “GENERAL INFORMATION ABOUT VOTING—Voting Trust Agreement.” Unallocated options to acquire shares of Common Stock were approved in connection with the Company’s Annual and Special Meeting of Shareholders on May13, 2009.Although the three-year term prescribed by the TSX expires on May13, 2012, the Board of Directors has determined to place an ordinary resolution (the “Unallocated Stock Options Resolution”) before the stockholders to approve the unallocated options.This approval will be effective for three years from the date of the Annual Meeting.If approval is not obtained at the Annual Meeting, options which have not been allocated as of May13, 2012 and options which are outstanding as of May13, 2012 and are subsequently cancelled, terminated or exercised will not be available for a new grant of options.Previously allocated options will continue to be unaffected by the approval or disapproval of the Unallocated Stock Options Resolution. As of April 15, 2011, there are options outstanding to purchase 12,317,292 shares of Common Stock (representing 8.8% of the aggregate number of issued and outstanding shares of Common Stock), resulting in the Stock Option Plan currently having 5,098,993 unallocated options to acquire shares of Common Stock.If approval is obtained at the Annual Meeting, the Company will not be required to seek further approval of the grant of unallocated options to acquire shares of Common Stock under the Stock Option Plan until June 7, 2014. A copy of the Stock Option Plan is attached hereto as Exhibit A. The granting of options has been a successful strategy used by the Company to attract and retain qualified employees in a marketplace where it is increasingly difficult to find people with the specific skills and experience required for the Company’s business.As the heart of the Company’s business is its employees, the loss of this incentive element from the overall employee compensation arrangements would be significant. See “SECURITIES AUTHORIZED FOR ISSUANCE UNDER THE EQUITY COMPENSATION PLANS – Stock Option Plan” for the material features of the Stock Option Plan. The following table discloses the amount of Options received by all named executive officers, all current executive officers as a group, all current directors who are not executive officers as a group,each nominee for election as a director, each associate of any such directors, executive officers or nominees, and all employees, including all current officers who are not executive officers, as a group: Stock Option Plan Name and Position Dollar Value ($)(4) Number of Units Nancy Li, Chief Executive Officer(1) Marc Sokol, Executive Vice President J. Christopher Wagner, Executive Vice President Executive Group Non-Executive Director Group John R. Anderson Gabriel A. Battista Shirley Strum Kenny - - David Kronfeld - - G. Scott Paterson Roy E. Reichbach Charles B. Wang(2) - - Chelsea Nunn(3) Non-Executive Officer Employee Group (1) Ms. Li is Chief Executive Officer, a director nominee and an associate of Mr. Wang. (2) Mr. Wang is a director nominee and an associate of Ms. Li. (3) Ms. Nunn is an associate of an executive officer of the Company. (4) Calculated based on values determined as of the grant date in accordance with Accounting Standards Codification Topic 718 utilizing a Black-Scholes-Merton model. To be effective, the Unallocated Stock Options Resolution, the text of which is attached to the Proxy Statement as Appendix A, must be passed by the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote in respect of the Unallocated Stock Options Resolution. Pursuant to the Voting Trust Agreement, AvantaLion, Mr. Wang and Ms. Li may only vote shares of Common Stock representing 9.9% of the votes attached to all of the then-issued shares of Common Stock of the Company, which is equal to approximately 13,793,698 shares of Common Stock as of April 15, 2011. 10 THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE UNALLOCATED STOCK OPTIONS RESOLUTION. PLEASE NOTE: If your shares are held in street name, your broker, trust, bank, custodian, or other nominee cannot vote your shares on the Unallocated Stock Option Resolution, unless you direct the holder how to vote by marking your proxy. PROPOSAL 5 APPROVAL OF UNALLOCATED SARS UNDER THE SARS PLAN The Company’s SARs Plan is subject to such future approvals of the stockholders and applicable stock exchanges as may be required by the terms of the SARs Plan or applicable stock exchanges from time to time.Since the Company has the greater of (a) 4,150,000 shares of Common Stock and (b) a rolling 5% number of shares of Common Stock reserved for issuance under the SARs Plan, the TSX requires that the approval of all unallocated SARs under the SARs Plan be sought by the Company every three years from a majority of the stockholders, subject to the terms of the Voting Trust Agreement.See “GENERAL INFORMATION ABOUT VOTING—Voting Trust Agreement.” Unallocated stock appreciation rights were approved in connection with the Company’s Special Meeting of Shareholders on November 13, 2007.Since the three-year term of the SARs Plan has expired, the Board of Directors has determined to place an ordinary resolution (the “Unallocated SARs Resolution”) before the stockholders to approve the unallocated SARs.This approval will be effective for three years from the date of the Annual Meeting.If approval is not obtained at the Annual Meeting, SARs which have not been allocated as of November 13, 2010 and SARs which are outstanding as of November 13, 2010 and are subsequently cancelled, terminated or exercised will not be available for a new grant of SARs.Previously allocated SARs will continue to be unaffected by the approval or disapproval of the Unallocated SARs Resolution. As of April 15, 2011, there are SARs outstanding to acquire 675,000 shares of Common Stock (representing 0.5% of the aggregate number of issued and outstanding shares of Common Stock), resulting in the SARs Plan currently having 6,291,514 unallocated SARs.If approval is obtained at the Annual Meeting, the Company will not be required to seek further approval of the grant of unallocated SARs under the SARs Plan until June 7, 2014. A copy of the SARs Plan is attached hereto as Exhibit B. The granting of SARs has been a successful strategy used by the Company to attract and retain qualified employees in a marketplace where it is increasingly difficult to find people with the specific skills and experience required for the Company’s business.As the heart of the Company’s business is its employees, the loss of this incentive element from the overall employee compensation arrangements would be significant. See “SECURITIES AUTHORIZED FOR ISSUANCE UNDER THE EQUITY COMPENSATION PLANS – Stock Appreciation Rights Plan” for the material features of the SARs Plan. The following table discloses the amount of SARs received by all named executive officers, all current executive officers as a group, all current directors who are not executive officers as a group and all employees, including all current officers who are not executive officers, as a group. SARs Plan Name and Position Dollar Value ($)(1) Number of Units Nancy Li, Chief Executive Officer - - Marc Sokol, Executive Vice President - - J. Christopher Wagner, Executive Vice President - - Executive Group Non-Executive Director Group Non-Executive Officer Employee Group (1) Calculated based on values determined as of the grant date in accordance with Accounting Standards Codification Topic 718 utilizing a Black-Scholes-Merton model. To be effective, the Unallocated SARs Resolution, the text of which is attached to the Proxy Statement as Appendix B, must be passed by the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote in respect of the Unallocated SARs Resolution. Pursuant to the Voting Trust Agreement, AvantaLion, Mr. Wang and Ms. Li may only vote shares of Common Stock representing 9.9% of the votes attached to all of the then-issued shares of Common Stock of the Company, which is equal to approximately 13,793,698 shares of Common Stock as of April 15, 2011. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE UNALLOCATED SARS RESOLUTION. PLEASE NOTE: If your shares are held in street name, your broker, trust, bank, custodian, or other nominee cannot vote your shares on the Unallocated SARs Resolution, unless you direct the holder how to vote by marking your proxy. 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security Ownership of Management The following table sets forth certain information regarding beneficial ownership of Common Stock as of April 15, 2011 by: · each of the Company’s directors and nominees for director; · each of the Company’s named executive officers; and · all of the Company’s directors and executive officers as a group. Except as otherwise noted, the persons identified have sole voting and investment powers with respect to their shares. Name Total Number of Shares Beneficially Owned(1)(2)(3) Number of Shares Owned Convertible Instruments Exercisable Within Next 60 Days Percent of Class Charles B. Wang(4) 0 22.1% G. Scott Paterson(5) 5.1% Nancy Li(6) 28.3% Roy E. Reichbach * John R. Anderson * Gabriel A. Battista(7) * Shirley Strum Kenny 0 * David Kronfeld(8) 12.0% Marc Sokol 0 * J. Christopher Wagner 2.6% All current directors and executive officers (13 persons) 67.6% * Less than 1% The address of each director and executive officer named in the above table is c/o NeuLion, Inc., 1600 Old Country Road, Plainview, New York11803. No director, nominee for director or executive officer directly owns any of the Company’s Preferred Stock.See footnotes (4), (7) and (8) below for information regarding Mr.Wang’s, Mr.Battista’s and Mr.Kronfeld’s indirect interests in the Company’s Preferred Stock. No director, nominee for director, or executive officer has pledged any Company stock as security. Excludes 39,573,394 shares of Common Stock beneficially owned by Ms.Li, Mr.Wang’s spouse, as to which Mr.Wang disclaims beneficial ownership.Includes 27,820,650 shares of Common Stock held by AvantaLion, an entity controlled by Mr.Wang.Excludes 7,341,715 shares of the Company’s Preferred Stock owned by JK&B Capital V Special Opportunities Fund, L.P. (“JK&B SOF”), an entity in which Mr. Wang has a non-controlling ownership interest. Excludes 85,000 shares of Common Stock beneficially owned by Mr. Paterson’s spouse, and 696,826 shares of Common Stock held by Mr.Paterson’s Family Trust.Mr. Paterson does not exercise voting or investment powers over this trust.Mr.Paterson disclaims beneficial ownership of all such shares of Common Stock. Excludes 30,734,972 shares of Common Stock beneficially owned by Mr.Wang, Ms. Li’s spouse, including 27,820,650 shares of Common Stock held by AvantaLion, an entity controlled by Mr.Wang.Ms. Li disclaims beneficial ownership of all such shares of Common Stock. Includes 103,061 shares of Preferred Stock directly owned by The Gabriel A. Battista Revocable Trust Under a Trust dated August 22, 2006. Includes 1,510,300 shares of Common Stock beneficially owned by DKB JTV Holdings, LLC, an entity controlled by Mr.Kronfeld.Mr.Kronfeld disclaims beneficial ownership of such shares of Common Stock except to the extent of his pecuniary interest therein.Includes 9,732,042 shares of Preferred Stock directly owned by JK&B Capital V, L.P. (“JK&B”) and 7,341,715 shares of Preferred Stock directly owned by JK&B SOF.Mr.Kronfeld is the managing member of JK&B Capital V, L.L.C., the general partner of JK&B Management V, L.P. (“JK&B Management”).JK&B Management is the general partner of both JK&B and JK&B SOF.Mr. Kronfeld, JK&B Capital V, L.L.C. and JK&B Management each may be deemed to have sole voting and dispositive power over the shares. 12 Security Ownership of Certain Beneficial Owners Our records and other information available from outside sources indicate the following stockholders were beneficial holders of more than 5% of the outstanding shares of our Common Stock as of December31, 2010.The information below was reported in their filings with the Securities and Exchange Commission (“SEC”).The Company is not aware of any other beneficial holder of more than 5% of the Company’s Common Stock as of December31, 2010. Name and Address of BeneficialHolder Total Number of Shares Beneficially Owned(1) Percent of Class Nancy Li (2) 28.3% G. Scott Paterson (2) 5.8% Charles B. Wang (2) 22.1% David Kronfeld(2) 11.8% JK&B Capital V, L.L.C. (6) 11.0% JK&B Management V, L.P. (6) 11.0% AvantaLion LLC(8) 20.0% Based on 139,180,279 total shares of Common Stock outstanding on December31, 2010. The address of this beneficial owner is c/o NeuLion, Inc., 1600 Old Country Road, Plainview, New York 11803. Holdings as of December31, 2010 as reported in Schedule 13G/A filed with the SEC on February11, 2011. According to the report, Ms.Li had sole voting and dispositive power over 39,517,144 shares of Common Stock. Excludes 30,734,972 shares of Common Stock beneficially owned by Mr.Wang, Ms.Li’s spouse, including 27,820,650 shares of Common Stock held by AvantaLion, an entity controlled by Mr.Wang. Ms.Li disclaims beneficial ownership of all such shares of Common Stock. Holdings as of December31, 2010 as reported in Schedule 13G/A filed with the SEC on February14, 2011. According to the report, Mr.Paterson had sole voting and dispositive power over 8,125,206 shares of Common Stock. Excludes 696,826 shares of Common Stock held by Mr.Paterson’s Family Trust. Mr.Paterson disclaims beneficial ownership of all such shares of Common Stock. Holdings as of December31, 2010 as reported in Schedule 13D/A filed with the SEC on February11, 2011. According to the report, Mr.Wang had sole voting and dispositive power over 30,734,972 shares of Common Stock. Includes 27,820,650 shares of Common Stock held by AvantaLion, an entity controlled by Mr.Wang. Excludes 39,517,144 shares of Common Stock beneficially owned by Ms.Li, Mr.Wang’s spouse, as to which Mr.Wang disclaims beneficial ownership. Excludes 7,341,715 shares of the Company’s Preferred Stock owned by JK&BSOF, an entity in which Mr. Wang has a non-controlling ownership interest. The address of this beneficial owner is c/o JK&B Capital, Two Prudential Plaza, 180 N. Stetson Avenue, Suite 4500, Chicago, Illinois 60601. Holdings as of September 29, 2010 as reported in Schedule 13G filed with the SEC on October 6, 2010. According to the report, the number of shares reported above represents 9,732,042 shares of Preferred Stock directly owned by JK&B and 7,341,715 shares of Preferred Stock directly owned by JK&B SOF.JK&B Managementthe general partner of both JK&B and JK&B SOF.Mr. Kronfeld is the managing member of JK&B Capital V, L.L.C.,the general partner of JK&B Management.Mr. Kronfeld, JK&BCapital V, L.L.C. and JK&BManagement each may be deemed to have sole voting and dispositive power over the shares. The address of this beneficial owner is 250 Pehle Avenue, Suite 404, Saddle Brook, New Jersey07663. Holdings as of December31, 2010 as reported in Schedule 13D/A filed with the SEC on February 11, 2011.According to the report, AvantaLion had sole voting and dispositive power over the number of shares reported above.AvantaLion is controlled by Mr. Wang. Includes 1,181,300 shares of Common Stock beneficially owned by DKB JTV Holdings, LLC, an entity controlled by Mr.Kronfeld.Mr.Kronfeld disclaims beneficial ownership of such shares of Common Stock except to the extent of his pecuniary interest therein.Includes 9,732,042 shares of Preferred Stock directly owned by JK&B and 7,341,715 shares of Preferred Stock directly owned by JK&B SOF.Mr.Kronfeld is the managing member of JK&B Capital V, L.L.C., the general partner of JK&B Management.JK&B Management is the general partner of both JK&B and JK&B SOF.Mr. Kronfeld, JK&B Capitl V, L.L.C. and JK&B Management each may be deemed to have sole voting and dispositive power over the shares. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the Company’s directors and executive officers and any beneficial owner of more than 10% of any class of the Company’s equity security to file reports of ownership and changes in ownership with the SEC and furnish copies of the reports to the Company. Based solely on the Company’s review of copies of such forms and written representations by the Company’s executive officers and directors received by it, the Company believes that during 2010, all such reports were timely filed, except as set forth in this section. 13 A grant of Optionsby the Company to Messrs. Her, McCarthy, Nunn, Reichbach and Wagner and to Ms. Li was inadvertently reported late on SEC Form 4 for each such person.A grant of restricted Common Stock to Mr. Sokol was inadvertently reported late on SEC Form 4.The Company’s issuance of director’s compensation in the form of shares of Common Stock to Mr. Wang was inadvertently reported late as beneficially owned by Ms. Li on SEC Form 4.A transfer of Common Stock to Mr. Wang that was inadvertently not reported on SEC Form 4 was instead reported on SEC Form 5, timely filed. A purchase of Common Stock by Mr. Paterson was inadvertently reported late on SEC Form 4.Three purchases each of Common Stock by Messrs. Kronfeld and Wagner were inadvertently reported late on SEC Form 4. One such purchase from 2009 was not reported on SEC Form 5. Two purchases of Common Stock by Mr. Sokol were inadvertently reported late on SEC Form 4. CORPORATE GOVERNANCE MATTERS Board Operations Chairman, Chief Executive Officer and Lead Independent Director The positions of Chairman and Chief Executive Officer of the Company are held by different persons. The responsibilities of the Chief Executive Officer include developing and successfully implementing the Company’s strategic plans, providing quality leadership to the Company’s staff, maintaining existing and developing new strategic alliances, considering possible strategic alternatives for the Company, and acting as an entrepreneur and innovator within the strategic goals of the Company. The responsibilities of the Chairman of the Board of Directors include developing the agenda for each meeting of the Board of Directors in consultation with management, facilitating the activities of the Board of Directors and chairing Board of Directors meetings. The lead independent director coordinates the activities of the independent directors, coordinates with the Chairman and management to set the agenda for Board meetings, chairs executive sessions of the independent directors, and performs the other duties assigned from time to time by the Board. Our Board believes its current leadership structure is appropriate because it effectively allocates authority, responsibility and oversight between management and the independent members of our Board.It does this by giving primary responsibility for the operational leadership and strategic direction of the Company to our Chief Executive Officer, while enabling the lead independent director to facilitate our Board’s independent oversight of management, promote communication between management and our Board, and support our Board’s consideration of key governance matters. Role in Risk Oversight The Board is responsible for assessing the risks facing the Company and considers risk in virtually every business decision and as part of the Company’s business strategy. The Board recognizes that it is neither possible nor prudent to eliminate all risk, and that strategic and appropriate risk-taking is essential for the Company to compete in its industry and in the global market and to achieve its growth and profitability objectives. Effective risk oversight, therefore, is an important priority of the Board. While the Board supervises risk management, the Company’s executive officers are charged on a day-to-day basis with weighing and managing the risks the Company faces. The Company has robust internal processes and a strong internal control environment to identify and manage risks and to communicate with the Board.These include active risk management by the Chief Financial Officer and the General Counsel and a Code of Business Conduct (the “Code”).Additionally, the Company has engaged E&Y (US) as its independent registered public accountants to provide comprehensive external audit services.The Board and the Audit Committee monitor and evaluate the effectiveness of the internal controls and the risk management program at least annually, and the Audit Committee reports as necessary to the Board on financial risks. Management communicates routinely with the Board, Board committees and individual directors on the significant risks identified and how they are being managed. The Board reviews and adjusts the Company’s risk management strategies at regular intervals, or as needed. Directors are free to, and often do, communicate directly with senior management. 14 Meetings The Board of Directors meets at least once each quarter. The frequency of the meetings and the nature of the meeting agendas are dependent upon the nature of the business and issues that the Company faces from time to time. Non-executive directors meet periodically without management present. The Board of Directors held seven meetings during 2010.During 2010, no director attended fewer than 75% of the meetings of the Board of Directors or, other than Mr. Kronfeld as a member of the Audit Committee, of the Board Committees of which the director was a member. It is the policy of the Board of Directors that all directors should attend the annual meetings in person or by teleconference. Last year all directors attended the annual meeting. The Board has adopted a Code of Business Conduct applicable to the Company’s directors, officers, and employees. The Code is available at the Company’s website at www.neulion.com. Independence of Directors The Board of Directors is currently comprised of eight members: Charles B. Wang, G. Scott Paterson, Nancy Li, Roy E. Reichbach, John R. Anderson, Gabriel A. Battista, Shirley Strum Kenny and David Kronfeld. All of these individuals are nominated for election at the Annual Meeting. The Board has determined that four of the current eight members of the Board of Directors, namely, Dr. Kenny and Messrs. Kronfeld, Anderson and Battista, are independent directors of the Company, with independence being defined in accordance with the rules of NASDAQ. Ms. Li, Chief Executive Officer of the Company, Mr. Wang, the spouse of Ms. Li, Mr. Paterson, Vice Chairman of the Company, and Mr. Reichbach, General Counsel and Corporate Secretary of the Company, are each deemed to have material relationships with the Company and are therefore not considered to be independent. In determining whether a director is independent, the Board relied upon the definition as set forth in NASDAQ Listing Rule 5605, which defines an independent director as: a person other than an [e]xecutive [o]fficer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.For purposes of this rule, “Family Member” means a person’s spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such person’s home.The following persons shall not be considered independent: (A) a director who is, or at any time during the past three years was, employed by the Company; (B) a director who accepted or who has a Family Member who accepted any compensation from the Company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than the following: (i) compensation for board or board committee service; (ii) compensation paid to a Family Member who is an employee (other than an [e]xecutive [o]fficer) of the Company; or (iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation; . . . (C) a director who is a Family Member of an individual who is, or at any time during the past three years was, employed by the Company as an [e]xecutive [o]fficer; (D) a director who is, or has a Family Member who is, a partner in, or a controlling [stock]holder or an [e]xecutive [o]fficer of, any organization to which the Company made, or from which the Company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following: (i) payments arising solely from investments in the Company’s securities; or (ii) payments under non-discretionary charitable contribution matching programs; 15 (E) a director of the Company who is, or has a Family Member who is, employed as an [e]xecutive [o]fficer of another entity where at any time during the past three years any of the [e]xecutive [o]fficers of the Company served on the compensation committee of such other entity; or (F) a director who is, or has a Family Member who is, a current partner of the Company’s outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years. To facilitate the functioning of the Board of Directors independently of management, the following structures and processes are in place: · The majority of the Board of Directors is comprised of non-executive directors.The only members of management on the Board of Directors are the Vice Chairman, the Chief Executive Officer and the General Counsel and Corporate Secretary of the Company.While Mr.Wang is not “independent” as defined by NASDAQ Listing Rule 5605, he is not a member of management of the Company and is therefore considered to be a non-executive director. · A lead independent director, currently Mr.Anderson, provides overall leadership to the Board of Directors and ensures that the Board’s agenda will enable it to successfully carry out its duties. Mr.Anderson is familiar with the mandate of the Board of Directors and the charters of the Board committees, acts as chair of or serves on any ad hoc special committee established by the Board of Directors, and supervises compliance with the terms of the Voting Trust Agreement (see “GENERAL INFORMATION ABOUT VOTING—Voting Trust Agreement”). · Independent, non-executive directors meet periodically without management present. · Members of management, including the Vice Chairman, Chief Executive Officer and the General Counsel and Corporate Secretary, are not present for the discussion and determination of certain matters at meetings of the Board of Directors. · The Chief Executive Officer’s compensation is determined by the Compensation Committee, which is comprised entirely of independent directors. The Chief Executive Officer is not present at these deliberations. Board Committees The Board of Directors has four standing committees:Audit, Compensation, Corporate Governance and Disclosure.The Audit and Compensation Committees are comprised solely of independent directors.Each committee other than the Disclosure Committee has a charter or mandate, which is available at the Company’s website at www.neulion.com. Audit Committee The Audit Committee, which is established in accordance with Section 3(a)(58)(A) of the Exchange Act, assists the Board of Directors in discharging its responsibilities relating to the financial management of the Company and oversight of: · the accounting and financial reporting of the Company; · the Company’s independent auditor and audits; · the internal financial controls of the Company; and · the continuous improvement of the Company’s financial policies and practices. The Audit Committee may be composed of a minimum of three and a maximum of five members, each of whom has been determined by the Board to be an independent director. As of the date hereof, the members of the Audit Committee are John R. Anderson(Chairman), Shirley Strum Kenny and David Kronfeld.The Board of Directors has determined that Messrs. Anderson and Kronfeld are “financial experts” as defined by SEC rules and for purposes of Rule 10A-3(b)(1) promulgated under the Exchange Act. The Board has determined that all of the Audit Committee members have sufficient knowledge in reading and understanding the Company’s financial statements to serve on the Audit Committee. 16 During 2010, the Audit Committee met five times.All members attended each meeting, other than Mr.Kronfeld, who missed two meetings. A copy of the Audit Committee Charter is available on the Company’s website at www.neulion.com. Compensation Committee The Compensation Committee assists the Board of Directors in discharging its responsibilities relating to executive and other human resources hiring, assessment and compensation, and succession planning.The Compensation Committee has the following responsibilities: With respect to senior management succession planning, hiring and assessment, and senior management compensation: · Taking all reasonable measures to ensure that appropriate processes are in place regarding succession planning for the position of Chief Executive Officer and other members of senior management. · Recommending to the Board of Directors senior management appointments and the terms and conditions of their appointment and retirement or termination. · Annually reviewing and recommending to the Board of Directors specific corporate goals and objectives that the Chief Executive Officer is expected to attain, assessing the Chief Executive Officer’s performance in light of these goals and objectives and recommending to the Board of Directors the Chief Executive Officer’s compensation. · Reviewing the evaluation of senior managers’ performance and recommending to the Board of Directors their compensation. · Reviewing the annual report on senior management compensation for inclusion in the Company’s Proxy Statement, for compliance with applicable rules and regulations. · Articulating clear goals to be achieved by management before they earn financial bonuses and to solely establish the quantum of such bonuses. With respect to other human resources hiring, assessment, compensation and succession planning: · Taking all reasonable measures to ensure that appropriate human resources systems, such as hiring policies, competency profiles, training policies and compensation structures are in place so that the Company can attract, motivate and retain the quality of personnel required to meet its business objectives. · Maintaining an assessment and compensation philosophy that rewards the creation of stockholder value. · Making recommendations to the Board of Directors with respect to incentive compensation plans, including equity-based plans. With respect to other human resources issues: · Monitoring strategic employment issues. · Monitoring social issues. Further, the Compensation Committee may, in appropriate circumstances, engage external advisors and set and pay their compensation, subject to advising the Chairman of the Board. 17 The Compensation Committee may be composed of a minimum of three and a maximum of five members, each of whom qualifies as an independent director. As of the date hereof, the members of the Compensation Committee are David Kronfeld (Chairman), Shirley Strum Kenny and Gabriel A. Battista. The Board has determined that each of its Compensation Committee members is an “outside director” pursuant to criteria established by the Internal Revenue Service and is a “non-employee” director pursuant to criteria established by the SEC. A copy of the Mandate of the Compensation Committee is available on the Company’s website at www.neulion.com. During 2010, the Compensation Committee met once.All members attended the meeting. Corporate Governance Committee The Corporate Governance Committee assists the Board of Directors in identifying and recommending qualified individuals as nominees for election as directors, in determining the composition of the Board, and in assessing the Board’s effectiveness. The Corporate Governance Committee also assesses the Board’s relationship with management and recommends, where necessary, limits on management’s authority to act without explicit Board of Director approval. The Corporate Governance Committee periodically reviews the Code and the mandates of the Board of Directors and mandates and charters of each of the committees. The Corporate Governance Committee is responsible for supervising the management representative charged with implementing the Company’s corporate governance procedures. The Corporate Governance Committee may be composed of a minimum of three and a maximum of five members, each of whom, except for RoyE. Reichbach, qualifies as an independent director. As of the date hereof, the members of the Corporate Governance Committee are John R. Anderson (Chairman), Shirley Strum Kenny, Mr.Reichbach and GabrielA. Battista. During 2010, the Corporate Governance Committee met once.All members attended the meeting. A copy of the Mandate of the Corporate Governance Committee charter is available on the Company’s website at www.neulion.com. Disclosure Committee The Disclosure Committee assists the Board in its oversight of the Company’s system of disclosure controls and procedures. The Disclosure Committee’s role is to, among other things, evaluate the effectiveness of the Company’s disclosure controls and procedures and help to assess the quality of the disclosures that are made in the periodic reports filed with governmental agencies and stock exchanges. As of the date hereof, the members of the Disclosure Committee are GabrielA. Battista and RoyE. Reichbach. During 2010, the Disclosure Committee did not meet. Stockholder Communications Stockholders can mail communications to the Board of Directors, by writing toCorporate Secretary, NeuLion, Inc., 1600 Old Country Road, Plainview, New York 11803 ATTN: Board of Directors.Routine correspondence is handled by the Corporate Secretary or forwarded to the appropriate department for response. 18 STATEMENT OF EXECUTIVE AND DIRECTOR COMPENSATION The following table (the “Summary Compensation Table”) sets forth all compensation awarded to, earned by or paid to, during each of the Company’s last two completed fiscal years, our principal executive officer and our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at the end of the 2010 fiscal year (collectively, the “Named Executive Officers”).Other than as described in this Proxy Statement, the Company does not have any employment agreements, a Supplemental Executive Retirement Plan, any change in control agreements, or any company perks (e.g., company cars, country club memberships, etc.). 2 Name and Principal Position Year Salary Bonus Stock Awards Option-Based Awards Total Compensation Nancy Li — — Chief ExecutiveOfficer(1) — — — J. Christopher Wagner — Executive VicePresident(2) — — Marc Sokol — Executive VicePresident(3) — Ms. Li became the Chief Executive Officer of the Company on October 20, 2008. Mr. Wagner became an Executive Vice President of the Company on October 20, 2008. Mr. Sokol became an Executive Vice President of the Company on November 1, 2010.His annual salary is $250,000. Mr. Sokol was granted the right, subject to his continued employment by the Company, to receive 625,000 restricted shares of Common Stock on each of the next four anniversaries of the date of the grant (an aggregate of 2,500,000 shares), 25% of which shall be fully tradable immediately thereafter with an additional 25% becoming tradable each successive year thereafter. No such shares of restricted Common Stock have been issued to date. The grant date fair market value of each such share was $0.41. “Option-Based Awards” includes options (“Options”) granted under our Stock Option Plan, and incentive warrants to acquire 5,000,000 shares of Common Stock issued to employees in connection with the merger of the Company and NeuLion USA, Inc. (the “Merger”) which took place on October 20, 2008 (the “Incentive Warrants”). The exercise price for Options granted under the Stock Option Plan is based on the 5-day volume weighted average price preceding the grant date. The exercise price for the Incentive Warrants was negotiated as part of the Merger. In calculating the value of both Options and Incentive Warrants, the grant date fair market value price is based on the closing price on the grant date. As a result, there is generally a difference between the exercise price and the fair market value as at the grant date. The amounts reported in the Option-Based Awards column of the Summary Compensation Table represent the total fair value of the Options and Incentive Warrants granted by the Company to each of the Named Executive Officers, calculated based on values determined as of the grant date in accordance with Accounting Standard Codification Topic 718 utilizing a Black-Scholes-Merton model. The Company cautions that the amounts reported in the Summary Compensation Table in the Option-Based Awards column may not represent the amounts that the Named Executive Officers will actually realize from the awards.A Named Executive Officer can only exercise Options that vest while he or she is employed by the Company and or within 90 days of such person’s termination or departure date (unless terminated for cause, in which case such Options shall immediately terminate unless the Board of Directors determines otherwise), and will only realize value if the Options are exercised when the Corporation’s stock price exceeds the Option exercise price. The assumptions used by the Company in calculating these amounts are set forth below.The Options were awarded under the Stock Option Plan.The Incentive Warrants were granted under stand-alone warrant certificates in connection with the Merger.The material provisions of the Stock Option Plan and the Incentive Warrants are described below. 19 Below is detail corresponding to the total amounts set forth in the Option-Based Awards column above as it relates to the total fair value of the Options and Incentive Warrants granted in 2010 and 2009. Name 2009 Grants 2010 Grants Total Fair Value Nancy Li - $191,070(a) J. Christopher Wagner - $63,690(a) $290,420(b) Marc Sokol - $375,840(c) Notes: Option Award Assumptions Note Security Grant Date Expected Life Volatility Exercise Price Market Price Risk-Free Interest Rate (a) Options March 19, 2010 4 years 95% 2.77% (b) Incentive Warrants October 20, 2008 (modified on June 15, 2010) 3 years 103% 2.16% (c) Options November 12, 2010 4 years 97% 2.27% The material terms of each Option grant are set forth in the Outstanding Equity Awards at 2010 Fiscal Year End table and its footnotes. On June 15, 2010, the Company’s stockholders approved an extension of the expiration of the Incentive Warrants.The Incentive Warrants now expire on October 20, 2013. See the description below under “SECURITIES AUTHORIZED FOR ISSUANCE UNDER THE EQUITY COMPENSATION PLANS–Payments in Connection with Termination or Change in Control” for a description of shares of Common Stock issuable to Messrs. Paterson and Sokol upon a change in control of the Company. The following table sets forth, for each Named Executive Officer, information regarding unvested stock awards, unexercised stock options and other equity incentive plan awards outstanding as of December 31, 2010. OUTSTANDING EQUITY AWARDS AT 2 Option Awards Stock Awards Number of Securities UnderlyingUnexercised Options Option Option Number of Share or Units of Stock That Have Market Value of Shares or Units of Stock That Have Name (#) Exercisable (#) Unexercisable Exercise Price ($) Expiration Date Not Vested (#) Not Vested ($) Nancy Li 11/17/13 - - Chief Executive Officer(1) 03/19/15 - - J. Christopher Wagner 10/20/13 - - Executive Vice President(2) 10/20/13 - - 11/17/13 - - 03/19/15 - - Marc Sokol 0 11/12/15 Executive Vice President(2)(3) Ms. Li became the Chief Executive Officer of the Company on October 20, 2008.Options granted to Ms. Li vest at a rate of one forty-eighth of their allotted amount per month and are exercisable for a period of five years from the date of grant. Mr. Wagner became an Executive Vice President of the Company on October 20, 2008.Options granted to Mr. Wagner vest at a rate of one forty-eighth of their allotted amount per month and are exercisable for a period of five years from the date of grant. Mr. Sokol became an Executive Vice President on November 1, 2010.Options granted to Mr.Sokol vest at a rate of one-quarter of their allotted amount per year and are exerciseable for a period of 5 years from the date of grant. 20 Employee Benefits Plans Pension Benefits We do not sponsor any qualified or non-qualified pension benefit plans. Nonqualified Deferred Compensation We do not maintain any non-qualified defined contribution or deferred compensation plans. We sponsor a tax qualified defined contribution 401(k) plan in which employees are eligible for participation on the next entry date after completing the earlier of (i) one month of service in which the employee is credited with 83 hours of service and (ii) one year of service. Director and Officer Liability Insurance The Company has purchased directors and officers liability insurance.This insurance provides financial protection for our directors and officers in the event that they are sued in connection with the performance of their duties as they relate to the Company andalso provides employment practices liability coverage, which insures for harassment and discrimination suits. Compensation of Directors For the fiscal year ended December31, 2010, each of the non-executive directors earned the following compensation in cash and/or Common Stock: 2 Name Fees earned or paid in cash ($) Stock awards ($)(4) Total compensation ($) John R. Anderson(1)(3) Gabriel A. Battista(1)(3) Shirley Strum Kenny(2)(3) 0 David Kronfeld(2) 0 Charles B. Wang(2) 0 Messrs. Anderson and Battista each elected to receive his 2010 director compensation as follows:50% in cash, and 50%in Common Stock. Dr. Kenny and Messrs. Kronfeld and Wang each elected to receive 100% of his or her 2010 director compensationin Common Stock. Additional compensation in the amount of 50,000 shares of Common Stock per director was approved by Board of Directors in recognition of extraordinary efforts of its non-management directors in 2010.Messrs. Wang and Kronfeld declined to accept such additional compensation. For the fiscal year ended December 31, 2010, non-management directors earned the following numbers of shares: John Anderson – 104,838 Gabriel Battista – 92,533 David Kronfeld – 95,642 Shirley Strum Kenny – 150,757 Charles B. Wang – 83,961 21 The Compensation Committee annually reviews the directors’ compensation and makes its recommendations to the full Board of Directors for approval. The Compensation Committee believes that the directors’ compensation is aligned with the Company’s performance on both a short-term and a long-term basis and that the Company’s compensation philosophy assists in attracting and retaining qualified individuals to serve as directors. Directors who are also executives of the Company do not receive an annual retainer for service on the Board of Directors and are not currently entitled to any compensation for attending meetings of the Board of Directors, committees of the Board of Directors or meetings of the stockholders. Ms.Li, Mr.Paterson and Mr.Reichbach did not receive any compensation for service on the Board of Directors in 2010 as each is an executive officer of the Company. The key elements of the Company’s non-executive director compensation are a cash retainer, equity-based grants and Board chair and committee chair cash retainers.In setting the Board of Directors’ compensation, the Compensation Committee considered the significant amount of time that the directors spend fulfilling their duties and the skills required by directors.Each non-executive director was paid an annual retainer of $20,000 and a fee of $2,000 per Board of Directors meeting attended, except in the case of the Chairman, who earned a fee of $3,000 per Board of Directors meeting attended.Each committee member was paid $1,000 per committee meeting attended, and each committee chairman was paid an additional $500 per meeting for acting in such capacity.The lead independent director was paid an additional annual fee of $5,000 for serving in such capacity.Non-executive directors are reimbursed for any out-of pocket travel expenses incurred in order to attend meetings. Pursuant to the Directors’ Compensation Plan, the non-executive directors of the Company receive at least 50% of their annual retainers and Board of Directors and committee meeting fees by way of issuance of Common Stock and may elect to receive up to 100% of their retainers and feesin Common Stock in lieu of cash compensation. Certain Relationships and Related Transactions The Company has entered into certain transactions and agreements in the normal course of operations with related parties. In evaluating related party transactions, the Board establishes a special committee to review the proposed matters, and in a case where a director is the related party, such individual abstains from voting to approve the transaction.Significant related party transactions are as follows: Private Placement of Preferred Stock On September 29, 2010, the Company issued the Preferred Stock in a private offering, at a price of CDN$0.60 per share, for aggregate gross proceeds of US$10 million, to each of JK&B, JK&B SOF, and The Gabriel A. Battista Revocable Trust Under a Trust Declaration dated August 22, 2006 (the “Battista Trust”), pursuant to a Subscription Agreement, dated August 12, 2010, between each purchaser and the Company. JK&B received 9,732,042 shares valued at $5,665,800.27, JK&B SOF received 7,341,715 shares valued $4,274,199.68 and the Battista Trust received 103,061 shares valued at $60,000.05. Both JK&B and JK&B SOF are limited partnerships controlled by Mr. Kronfeld, a director of the Company.Mr. Wang, the Chairman of the Company, is a holder of a non-controlling ownership interest in JK&B SOF.Mr. Battista, a director of the Company, is the trustee of the Battista Trust. TransVideo International Ltd. TransVideo, a company controlled by the Chairman of the Board of Directors of the Company prior to October 1, 2010, is a public Internet-based IPTV technology and solution provider headquartered in Beijing, China. It develops proprietary hardware designs and software for encoders and transcoders, IPTV STBs, digital media storage boxes, public IPTV media servers, signal transfer and monitoring equipment and software that acts as a public IPTV player. For the period from January 1, 2010 to September 30, 2010, STB purchases from TransVideo were $263,628 and transcoder license fees paid to TransVideo were $0. For the period from January 1, 2010 to September 30, 2010, included in cost of equipment revenue is the cost of STBs sold of $308,773. For the year ended December 31, 2009, STB purchases from TransVideo were $1,029,136 and transcoder licensing fees paid to TransVideo were $78,000. For the year ended December 31, 2009, included in cost of equipment revenue is the cost of STBs sold of $937,204. 22 KyLinTV KyLinTV is an IPTV company that is controlled by Mr.Wang. On June1, 2008, the Company entered into an agreement with KyLinTV to build and deliver the setup and back office operation of an IPTV service.The Company also provides and charges KyLinTV for administrative and general corporate support.For each of the periods presented, the amounts earned for these services provided by the Company for the years ended December31, 2010 and 2009 were $457,951 and $645,722, respectively. New York Islanders The Company provides IT-related professional services and administrative services to the New York Islanders, a professional hockey club that is owned by Mr.Wang.The amounts earned for these services provided by the Company for the years ended December31, 2010 and 2009 were $424,675 and $395,681, respectively. Renaissance Property Associates, LLC Renaissance is a real estate management company owned by Mr.Wang. In June2009, the Company signed a sublease agreement with Renaissance for office space in Plainview, New York. Rent expense paid by the Company to Renaissance of $416,762 and $388,975, inclusive of taxes and utilities, is included in selling, general and administrative expense for the years ended December31, 2010 and 2009, respectively. Hawaii IPTV, LLC Hawaii, whose principals are family members of Mr. Wang, was an IPTV customer of the Company. Hawaii ceased operations during the third quarter of 2009. The amounts earned for these services provided by the Company for the years ended December31, 2010 and 2009 were $0 and $41,789, respectively. Smile Train, Inc. The Company provides IT-related professional services to Smile Train, a public charity whose founder and significant benefactor is Mr. Wang. The amounts earned for these services provided by the Company for both years ended December31, 2010 and 2009 were $108,000. SECURITIES AUTHORIZED FOR ISSUANCE UNDER THE EQUITY COMPENSATION PLANS The following is a summary description of the Company’s equity-based compensation plans, and is qualified by the text of the plans themselves. Stock Option Plan The Stock Option Plan was established to advance the interests of the Company by: Ÿ providing Eligible Persons (as defined below) with additional incentives; Ÿ encouraging stock ownership by Eligible Persons; Ÿ increasing the proprietary interest of Eligible Persons in the success of the Company; Ÿ encouraging Eligible Persons to remain loyal to the Company or a related entity; and Ÿ attracting new employees, officers, directors and consultants to the Company or a related entity. The Stock Option Plan is administered by the Board of Directors, or if so authorized by the Board of Directors, the Compensation Committee. Under the Stock Option Plan, Options to purchase shares of Common Stock may be granted by the Board of Directors to employees, directors, officers and consultants of the Company or any related entity (“Eligible Persons”). The Board of Directors or Compensation Committee, as the case may be, also has the authority, subject to the terms of the Stock Option Plan, among other things, to determine the terms of grants, suspend or terminate the Stock Option Plan or any Option Agreement and make determinations under the Stock Option Plan. 23 The exercise price for any Option granted under the Stock Option Plan is determined as follows: · If the Common Stock trades on a market, o the exercise price is based on the closing market price of the Common Stock on the market with the largest trading volume of the Common Stock on the last trading date preceding the date of the grant; and o if there is no trading on that date, the exercise price will be the average of the bid and ask on the date preceding the date of the grant. · If there is no trading market for the Common Stock, the Board of Directors will in good faith determine the exercise price of an Option based on the fair market value of the Common Stock on the date of the grant. · If the Option is to be granted on a pre-determined date in the future, the exercise price will be the weighted average trading price, rounding up to the nearest cent, of the Common Stock on the stock exchange or quotation system upon which any shares of the Company are then listed and posted or quoted for trading for the five trading dates preceding the date of the grant. The maximum number of shares of Common Stock issuable upon exercise of Options granted pursuant to the Stock Option Plan is equal to the greater of (i)4,000,000 Common Stock; and (ii)12.5% of the number of issued and outstanding Common Stock from time to time. As a result, any increase in the issued and outstanding shares will result in an increase in the available number of shares of Common Stock issuable under the Stock Option Plan, and any exercises of Options will make new grants available under the Stock Option Plan. The maximum number of shares of Common Stock issuable upon exercise of Options granted pursuant to the Stock Option Plan is exclusive of any awards made pursuant to the Company’s Restricted Share Plan, as amended (the “Restricted Share Plan”) and the SARs Plan, respectively. Options are exercisable during a period established at the time of their grant provided that such period will expire no later than five years after the date of grant, subject to early termination. Until April 29, 2010, Options granted under the Stock Option Plan vested over a 48-month period and could be exercised after they vested until the end of the five-year period. The Board of Directors has discretion under the Stock Option Plan to change the vesting schedule, and on April 29, 2010, the Board of Directors approved a new vesting schedule which provides that Options granted under the Stock Option Plan after May 31, 2010 will vest in equal increments of 25% on each anniversary of the date of grant. Options not exercised prior to the expiry date will become null and void and the Common Stock reserved for such issuance would then be available for subsequent Option grants. If a holder of Options (an “Optionholder”) ceases to be an Eligible Person on a particular date (the “Termination Date”) for any reason whatsoever other than death, each Option held by such Optionholder, its permitted assigns or the Optionholder’s Registered Retirement Savings Plan (“RRSP”) or a Registered Retirement Income Fund (“RRIF”) will cease to be exercisable 90 days after the Termination Date. If any portion of an Option has not vested by the Termination Date, that portion of the Option may not under any circumstances be exercised by the Optionholder, or the Optionholder’s RRSP or RRIF or its permitted assigns. In the event that an Optionholder’s employment, consultancy or directorship, as applicable, is terminated by the Company for cause (as defined in such Optionholder’s employment or consulting agreement, as applicable), such Optionholder’s Options, whether vested or otherwise, shall immediately terminate unless the Board of Directors determines otherwise within 30 days. If an Optionholder dies, the legal representatives of the Optionholder may exercise the Optionholder’s Options within 120 days after the date of such Optionholder’s death (but only to the extent the Options were by their terms exercisable on the date of death). If there is a “take-over bid” or an “issuer bid” other than a “normal course issuer bid” (within the meaning of each of these terms under applicable securities laws and stock exchange rules) made for all or any of the issued and outstanding Common Stock, then the Board of Directors may, in its sole discretion, permit any or all unvested Options of any or all Optionholders outstanding under the Stock Option Plan to become immediately exercisable (subject to any limitations that the Board of Directors may impose) in order to permit Common Stock issuable upon the exercise of such Options to be tendered to such bid. Unvested Options do not automatically vest in the event of a change of control (as defined in the Stock Option Plan) unless otherwise agreed in an employment or consulting agreement between the Optionholder and the Company or unless an Optionholder’s employment is terminated other than for cause, in connection with a change of control. However, the Board of Directors may, in its sole discretion, permit any or all unvested Options of any or all Optionholders outstanding under the Stock Option Plan to become immediately exercisable (subject to any limitations the Board of Directors may impose) in the event of such a change of control. 24 Options are personal to each Eligible Person and its permitted assigns. No Eligible Person may deal with any Options or any interest in them or transfer any Options held by the Eligible Person except in accordance with the Stock Option Plan. Grants under the Stock Option Plan are restricted to insiders to: · 10% of the Common Stock outstanding under all share compensation arrangements; · 10% of the Common Stock outstanding issuable to insiders within a one-year period; and · 5% of the Common Stock outstanding issuable to any one insider within a one-year period. Stockholder approval is required for the following amendments: · to increase the maximum number of Shares that may be issued pursuant to Options granted under the Stock Option Plan; · to reduce the exercise price of Options for the benefit of an insider; · to extend the expiry date of Options for the benefit of an insider; and · to amend the section of the Stock Option Plan that addresses these types of amendments. Certain Federal Income Tax Consequences of the Stock Option Plan The following is a general summary of the federal income tax consequences under current tax law to the Company and to Eligible Persons who are individual citizens or residents of the United States for federal income tax purposes and who are granted an Option under the Stock Option Plan (“U.S. Optionees”).This summary does not purport to cover all of the special rules that may apply, including special rules relating to limitations on the ability of the Company to deduct the amounts for federal income tax purposes of certain compensation of certain U.S. Optionees, special rules relating to deferred compensation, golden parachutes, U.S. Optionees subject to Section 16(b) of the Exchange Act or the exercise of an Option with previously-acquired shares of Common Stock.For purposes of this summary, it is assumed that U.S. Optionees will hold the shares of Common Stock they receive upon Option exercise as capital assets within the meaning of Section 1221 of the United States Internal Revenue Code of 1986, as amended.In addition, this summary does not address the non-United States, state or local income or other tax consequences, or any United States federal non-income tax consequences inherent in the grant, vesting, holding, exercise, termination or disposition of an Option under the Stock Option Plan, or inherent in the holding or disposition of shares of Common Stock issued pursuant to the exercise of an Option.All grantees of Options under the Stock Option Plan are urged to consult with their own tax advisors concerning the applicable tax consequences to them of the grant of an Option thereto pursuant to the Stock Option Plan. A U.S. Optionee generally does not recognize taxable income upon the grant thereto of an Option.Upon the exercise of an Option by a U.S. Optionee, the U.S. Optionee generally recognizes ordinary income in the amount equal to the excess, if any, of the fair market value on the date of exercise of the shares of Common Stock so acquired over the exercise price paid by the U.S. Optionee under the Option, and the Company will generally be entitled to a deduction for such amount at such time.If a U.S. Optionee sells shares of Common Stock acquired thereby pursuant to the exercise of an Option, the U.S. Optionee recognizes a long-term or short-term capital gain or loss, depending upon the duration of the period for which such shares were held thereby.A long-term capital gain is generally subject to more favorable tax treatment than ordinary income or a short-term capital gain.The deductibility of capital losses is subject to certain limitations. As of April 15, 2011, the maximum number of shares of Common Stock issuable upon exercise of Options was 17,416,285 (representing 12.5% of the issued and outstanding Common Stock). Of that number, Options to purchase 12,317,292 shares of Common Stock (representing 8.8% of the issued and outstanding Common Stock) had been issued and are currently outstanding, leaving Options to purchase 5,098,993 shares of Common Stock (representing 3.7% of the issued and outstanding Common Stock) available for grant. See “PROPOSAL 4 -APPROVAL OF UNALLOCATED OPTIONS TO ACQUIRE SHARES OF COMMON STOCK UNDER THE STOCK OPTION PLAN.” Restricted Share Plan The Company had established a Restricted Share Plan for employees and consultants of the Company and the Company’s subsidiaries.As no shares of Common Stock remain available for issue under this plan and the Company no longer requires the plan to provide incentives to employees and consultants, on April 18, 2011, the Board of Directors determined to terminate the plan pursuant to Section 8.1 of the Restricted Share Plan. Stock Appreciation Rights Plan The Company has established the SARs Plan for senior officers and directors of the Company and any subsidiary or affiliate thereof. The purpose of the SARs Plan is to motivate senior officers and directors of the Company and any such subsidiary or affiliate thereof to put forth their best efforts on behalf of the Company (and any affiliate or subsidiary thereof) and to closely align the personal interests of such senior officers and directors with those of the stockholders. The SARs Plan is administered by the Board of Directors, or if so authorized by the Board of Directors, by the Compensation Committee of the Board of Directors. Under the SARs Plan, the Board of Directors may grant SARs awards to senior officers or directors of the Company and any such subsidiary or affiliate thereof. Subject to the provisions of the SARs Plan, the Board of Directors has the authority to: · determine and designate from time to time those persons to whom SARs are to be granted and the number of shares of Common Stock to be subject to such SARs; and 25 · determine the time or times when, and the manner in which, each SAR will be exercisable and the duration of the exercise period. All discretionary awards to non-executive directors shall be administered by the Compensation Committee, being an independent committee of the Board of Directors. Each SARs grant specifies: · the period for which the SARs thereunder are exercisable, to a maximum term of five years from the date of grant; and · the exercise price of such SARs, as determined by the Board of Directors at the time such SARs are granted, subject to a minimum of the market price of the Common Stock (as determined in accordance with the SARs Plan). A holder of SARs may elect to be paid the “in the money value” of each SAR upon exercise thereof in cash or may be issued that number of shares of Common Stock (which the Company may issue from treasury or purchase on the secondary market) equal to the aggregate “in the money value” of the SARs divided by the fair market value of one share of Common Stock at the time of exercise. Alternatively, a holder of SARs may choose to pay the exercise price of the SARs and be issued Common Stock from treasury. A holder of SARs may elect to receive any combination of the above. The Board of Directors has discretionary authority to accept or reject a request for cash by a holder in whole or in part. At the 2007 annual and special meeting of the stockholders of the Company, the stockholders approved an increase in the maximum number of shares of Common Stock which may be issued pursuant to the SARs Plan to the greater of 4,150,000 shares of Common Stock or 5% of the issued and outstanding Common Stock. The Common Stock reserved for issuance upon the exercise of SARs that terminate, expire unexercised or are cancelled shall be available for subsequent grants of SARs under the SARs Plan. Upon the death of a holder of SARs while a senior officer or director of the Company (or within 30 days of such senior officer or director’s termination of employment), the holder’s SARs will expire upon the earlier of 12 months from the date of death and five years from the date of grant. Upon the termination of an office or directorship due to disability of a holder of SARs, the holder’s SARs will expire upon the earlier of six months from the date of termination and five years from the date of grant. Upon the termination of a holder of SARs’ employment with the Company for a reason other than death or disability, the holder’s SARs will expire upon the earlier of 90 days from the date of termination and five years from the date of grant (except if such termination is for cause, in which case, such holder’s SARs will expire immediately upon notice of termination). If there is a “take-over bid” or an “issuer bid” other than a “normal course issuer bid” (within the meaning of each of these terms under applicable securities laws and stock exchange rules) made for all or any of the issued and outstanding shares, then the Board of Directors may, in its sole discretion, permit any or all unvested SARs of any or all holders of SARs outstanding under the SARs Plan to become immediately exercisable (subject to any limitations that the Board of Directors may impose) in order to permit shares issuable under such SARs to be tendered to such bid. Unvested SARs do not automatically vest in the event of a change of control (as defined in the SARs Plan) unless otherwise agreed in an employment or consulting agreement between the holder of SARs and the Company or unless the holder’s employment or directorship is terminated due to a change of control (except in the case of termination for cause). The Board of Directors or any committee of the Board of Directors shall not be permitted to accelerate the vesting of any awards under the SARs Plan except in the case of death, disability, retirement, change in control or pursuant to the terms and conditions of pre-existing employment agreements. If the Board of Directors and/or committee of the Board of Directors accelerates or waives the vesting period for any reasons other than the instances above, the number of SARs to be accelerated or waived for purposes other than death, disability, retirement, change of control or pursuant to the terms and conditions of pre-existing employment agreements shall be limited to 10% of the securities authorized for issuance under the SARs Plan. The SARs Plan provides that the Board of Directors has the authority to amend any term of any outstanding SARs, provided that: 26 · any required approval of any regulatory authority or stock exchange is obtained; · if the amendments would reduce the exercise price or extend the period for which the SARs are exerciseable in respect of SARs granted to insiders, approval of the stockholders must be obtained; · the Board would have had the authority to initially grant the SARs under the terms so amended; and · the consent or deemed consent of the SARs holder is obtained if the amendment would materially prejudice the rights of the SARs holder. No SARs holder shall have any rights as a stockholder with respect to any Common Stock subject to the SARs holder’s rights prior to the date of issuance of such SARs holder of a certificate or certificates for such Common Stock in connection with a Securities Settlement Request or a Treasury Shares Settlement Alternative Request (as each are defined in the SARs Plan). Grants to insiders are restricted to: · 10% of the Common Stock outstanding under all share compensation arrangements; · 10% of the Common Stock outstanding issuable to insiders within a one-year period; and · 5% of the Common Stock outstanding issuable to any one insider within a one-year period. Stockholder approval is required for the following amendments: · to increase the maximum number of shares of Common Stock that may be issued pursuant to the SARs Plan; · to reduce the exercise price of SARs for the benefit of an insider; · to extend the expiry date of SARs for the benefit of an insider; and · to amend the section of the SARs Plan that addresses these types of amendments. While the Board has the authority to accept or reject a cash payment request, the General Counsel of the Company may approve a cash payment request in respect of amounts equal to or less than CDN$2,500. As of April 15, 2011, the maximum number of shares of Common Stock issuable upon exercise of the Company SARs was 6,966,514 (representing 5% of the issued and outstanding Common Stock). Of that number, SARs to purchase 675,000 shares of Common Stock (representing less than 1% (0.5%) of the issued and outstanding Common Stock) had been issued and are currently outstanding, leaving SARs to purchase 6,291,514 shares of Common Stock (representing 4.5% of the issued and outstanding Common Stock) available for grant. See “PROPOSAL 5 - APPROVAL OF UNALLOCATED SARS UNDER THE SARS PLAN.” Directors’ Compensation Plan The purpose of the Directors’ Compensation Plan is to advance the interests of the Company by (i)encouraging its directors to acquire Common Stock, thereby increasing the proprietary interests of such persons in the Company and aligning the interests of such persons with the interests of stockholders generally; and (ii)preserving the Company’s cash for other corporate purposes. The Directors’ Compensation Plan is administered by the Board of Directors or the Compensation Committee. Subject to the limitations of the Directors’ Compensation Plan, the Board of Directors has the authority to: · issue Common Stock to non-executive directors under the Directors’ Compensation Plan; · determine the terms, including the limitations, restrictions and conditions, if any, upon such grants; · interpret the Directors’ Compensation Plan and to adopt, amend and rescind such administrative guidelines and other rules and regulations relating to the Directors’ Compensation Plan as it may from time to time deem advisable, subject to required prior approval by any applicable regulatory authority; 27 · suspend or terminate the Directors’ Compensation Plan; and · make all other determinations and to take all other actions in connection with the implementation and administration of the Directors’ Compensation Plan as it may deem necessary or advisable. Management directors are not eligible to receive Shares under the Directors’ Compensation Plan because they do not receive compensation as directors. Under the Directors’ Compensation Plan, the non-executive directors of the Company receive at least 50% of their annual retainers and Board of Directors and committee meeting fees in the form of Common Stock and may elect to receive up to 100% of their retainers and fees in Common Stock in lieu of cash compensation. Each non-executive director was paid an annual retainer of $20,000 and a fee of $2,000 per Board of Directors meeting attended, except in the case of the Chairman, who earned a fee of $3,000 per Board of Directors meeting attended. Each committee member was paid $1,000 per committee meeting attended, and each committee chairman was paid an additional $500 per meeting for acting in such capacity. The lead independent director was paid an additional annual fee of $5,000 for serving in such capacity. Non-executive directors are reimbursed for any out-of-pocket travel expenses incurred in order to attend meetings. Subject to the overall maximum as described in the preceding paragraph, there is no maximum number of Common Stock available to be issued by the Company to any individual non-executive director under the Directors’ Compensation Plan. Upon ceasing to be a non-executive director, a director will no longer be eligible to receive Common Stock under the Directors’ Compensation Plan and any amounts owing to such director shall be paid in cash. Common Stock is issued following receipt of a notice from each director and during the month of December or June, or such later time in the discretion of the Board. For the first half of the fiscal year ended December 31, 2010, the non-executive directors of the Company earned a total of 179,327 Common Stock in lieu of cash compensation pursuant to the Directors’ Compensation Plan. These shares of Common Stock were issued to the non-executive directors on June 30, 2010. A total of $23,250 of cash compensation was also paid. For the second half of the fiscal year ended December 31, 2010, the non-executive directors of the Company earned a total of 198,404 Common Stock in lieu of cash compensation pursuant to the Directors’ Compensation Plan. These shares of Common Stock were issued to the non-executive directors on December 20, 2010. A total of $24,750 of cash compensation was also paid. On March 21, 2011, John R. Anderson, Shirley Strum Kenny and Gabriel A. Battista each received 50,000 shares of Common Stock as additional compensation in recognition of outstanding efforts in 2010. The directors were issued such shares and cash in accordance with their allocation elections under the Directors’ Compensation Plan. Stockholder approval is required for the following amendments: · to increase the maximum number of shares of Common Stock that may be issued pursuant to the Directors’ Compensation Plan; and · to amend the section of the Directors’ Compensation Plan that addresses these types of amendments. On June 15, 2010, the stockholders of the Company approved an increase the number of Common Stock reserved for issuance under the Directors’ Compensation Plan from 500,000 shares of Common Stock to 1,500,000 shares of Common Stock. As of April 15, 2011, the maximum number of shares of Common Stock issuable under the Directors’ Compensation Plan was 1,500,000 (representing 1.1% of the issued and outstanding Common Stock). Of that number, 985,669 shares of Common Stock (representing less than 1% (.7%) of the issued and outstanding Common Stock) had been issued, leaving 514,331 shares of Common Stock (representing less than 1% (.4%) of the issued and outstanding Common Stock) available for issuance. 28 Retention Warrants Plan The Company has established the Amended and Restated Retention Warrants Plan (the “Retention Warrants Plan”) for the Eligible Persons,to advance the interests of the Company by: · providing Eligible Persons with additional incentive; · encouraging share ownership by Eligible Persons; · increasing the proprietary interest of Eligible Persons in the success of the Company; · encouraging Eligible Persons to remain with the Company or a related entity; and · attracting new employees, officers and consultants to the Company or a related entity. The Retention Warrants Plan is administered by the Board of Directors or the Compensation Committee, as the case may be. Subject to the limitations of the Retention Warrants Plan, the Board of Directors or the Compensation Committee has the authority to: · issue Retention Warrants to purchase Common Stock to Eligible Persons; · determine the terms, including the limitations, restrictions and conditions, if any, upon such issuances; · interpret the Retention Warrants Plan and adopt, amend and rescind such administrative guidelines and other rules and regulations relating to the Retention Warrants Plan as it may from time to time deem advisable, subject to required prior approval by any applicable regulatory authority; · suspend or terminate the Retention Warrants Plan; and · make all other determinations and to take all other actions in connection with the implementation and administration of the Retention Warrants Plan as it may deem necessary or advisable. Any discretionary awards made to non-executive directors under the Retention Warrants Plan shall be administered by the Compensation Committee, being an independent committee of the Board of Directors. The maximum number of shares of Common Stock available for issuance pursuant to the exercise of Retention Warrants issued pursuant to the Retention Warrants Plan is limited to 2,500,000, inclusive of those Common Stock purchase warrants issued by the Company pursuant to its acquisition of the broadband network business of XOS Technologies, Inc. or issued pursuant to its acquisition of Cycling Television Limited, but exclusive of all other issuances of warrants made prior to the establishment of the Retention Warrants Plan as well as any warrants, options, or rights granted under any other security-based incentive compensation plans of the Company and such warrants, options or rights, as the case may be, are not subject to the terms of the Retention Warrants Plan. Pursuant to the Retention Warrants Plan and subject to the applicable rules of any stock exchange or quotation system on which the Common Stock may be listed from time to time, the Board of Directors shall establish the exercise price of a Retention Warrant at the time each Retention Warrant is granted on the basis of the closing market price of the Common Stock on the market with the largest trading volume of the Common Stock on the last trading date preceding the date of the issuance. If there is no trading on that date, the exercise price of a Retention Warrant will be the average of the bid and ask on the date preceding the date of the issuance. 29 Subject to the regulations of the applicable regulatory authorities, the aggregate number of securities available for issuance under the Retention Warrants Plan to any one Eligible Person and an RRSP or a RRIF of which that person is an annuitant, is 5% of the Common Stock outstanding at the time of the grant (on a non-diluted basis). Retention Warrants issued must be exercised no later than 5 years after the date of the issuance or such lesser period as the applicable issuance, regulatory authorities or the provisions of the Retention Warrants Plan may require (the “Expiry Date”); provided, however, in the event that a Retention Warrant is scheduled to expire or terminate during or within ten business days following a blackout period, the Expiry Date shall be the date that is the tenth business day following the date of expiry of the blackout period (the “Blackout Expiry Date”). If a new blackout period is imposed prior to the Blackout Expiry Date, the Blackout Expiry Date shall be the date that is the tenth business day following the date of expiry of the new blackout period. The Board of Directors may determine when any Retention Warrant will become exercisable and may determine that the Retention Warrant will be exercisable in installments. No fractional Common Stock may be issued and the Board of Directors may determine the manner in which fractional Common Stock value will be treated. Not less than 100 shares of Common Stock may be purchased at any one time except where the remainder totals less than 100. If an Eligible Person ceases to be an Eligible Person for any reason whatsoever other than death, each Retention Warrant held by such person, such person’s permitted assigns, or such person’s RRSP or RRIF will cease to be exercisable 90 days after such person’s termination date. If any portion of a Retention Warrant has not vested by the termination date, that portion of the Retention Warrant may not under any circumstances be exercised by such person, such person’s permitted assigns or such person’s RRSP or RRIF, regardless of whether such person received compensation in respect of dismissal or was entitled to a period of notice of termination which would otherwise have permitted a greater portion of the Retention Warrant to vest in such person, their permitted assigns or their RRSP or RRIF. If an Eligible Person dies, the legal representatives of the Eligible Person may exercise the Eligible Person’s Retention Warrants, the Eligible Person’s permitted assign’s Retention Warrants and the Retention Warrants held by the Eligible Person’s RRSP or RRIF within 120 days after the date of the Eligible Person’s death but only to the extent the Retention Warrants were by their terms exercisable on the date of death. In the event that an Eligible Person’s employment, consultancy or directorship, as applicable, is terminated by the Company for cause (as defined in such Eligible Person’s employment or consulting agreement, as applicable), such Eligible Person’s Retention Warrants and its permitted assigns’ Retention Warrants, whether vested or otherwise, shall immediately terminate. The Board of Directors shall have discretion to permit such Eligible Participant and its permitted assigns to exercise the vested portion of such Eligible Person’s Retention Warrants (as of the termination date). The Board of Directors shall have a period of 30 days to exercise its discretion to permit the exercise of such Eligible Person’s Retention Warrants and in the event of such exercise of discretion, the Retention Warrants shall be deemed not to have been terminated as of the termination date of the Eligible Person’s employment, consultancy or directorship, as applicable. If there is a “take-over bid” or an “issuer bid” other than a “normal course issuer bid” (within the meaning of each of these terms under applicable securities laws and stock exchange rules) made for all or any of the issued and outstanding Common Stock, then the Board of Directors may, in its sole discretion, by resolution permit any or all unvested Retention Warrants outstanding under the Retention Warrants Plan to become immediately exercisable (subject to any limitations the Board of Directors may impose) in order to permit Common Stock issuable under such Retention Warrants to be tendered to such bid. There shall be no automatic vesting of unvested Retention Warrants in the event of a change of control unless otherwise agreed in an Eligible Person’s employment or consulting agreement; however, the Board of Directors may, in its sole discretion, by resolution permit any or all unvested Retention Warrants of any or all Participants outstanding under the Retention Warrants Plan to become immediately exercisable (subject to any limitations the Board of Directors may impose) in the event of a change of control. Pursuant to an amendment to the Retention Warrants Plan approved by the Board of Directors of the Company on May 13, 2008, the Board of Directors or any committee of the Board of Directors shall not be permitted to accelerate the vesting of any Retention Warrants under the Retention Warrants Plan except in the case of death, disability, retirement, change in control or pursuant to the terms and conditions of pre-existing employment agreements. If the Board of Directors and/or a committee of the Board of Directors accelerates or waives the vesting period for any reason other than the instances above, the number of Retention Warrants to be accelerated or waived for purposes other than death, disability, retirement, change of control or pursuant to the terms and conditions of pre-existing employment agreements shall be limited to 10% of the securities authorized for issuance under the Retention Warrants Plan. stockholder approval is required to increase the benefits accrued to participants under the Retention Warrants Plan, when modifying the requirements for participation under the Retention Warrants Plan, when changing the provisions relating to the administration of the Retention Warrants Plan or when changing the terms of a Retention Warrant including, without limitation, any vesting provisions. 30 In the event that Retention Warrants issued under the Retention Warrants Plan are surrendered in accordance with the provisions of the Retention Warrants Plan, terminate or expire without being exercised in whole or in part, the Common Stock reserved for issuance but not purchased under such lapsed Retention Warrants shall be available for subsequent Retention Warrants to be issued under the Retention Warrants Plan. Retention Warrants are personal to each Eligible Person and its permitted assigns. No Eligible Person may deal with any Retention Warrants or any interest in them or transfer any Retention Warrants held by the Eligible Person except in accordance with the Retention Warrants Plan. Grants to insiders are restricted to: · 10% of the Common Stock outstanding under all share compensation arrangements; · 10% of the Common Stock outstanding issuable to insiders within a one-year period; and · 5% of the Common Stock outstanding issuable to any one insider within a one-year period. Stockholder approval is required for the following amendments: · to increase the maximum number of Common Stock that may be issued pursuant to the Retention Warrants Plan; · to reduce the exercise price of rights for the benefit of an insider; · to extend the expiry date of rights for the benefit of an insider; and · to amend the section of the Retention Warrants Plan that addresses this type of amendment. As of April15, 2011, the maximum number of shares of Common Stock issuable upon exercise of Retention Warrants was 2,500,000 (representing 1.8% of the issued and outstanding Common Stock). Of that number, Retention Warrants to purchase 739,876 shares of Common Stock (representing less than 1% (.5%) of the issued and outstanding Common Stock) had been granted and are currently outstanding, leaving Retention Warrants to purchase 1,760,124 shares of Common Stock (representing 1.3% of the issued and outstanding Common Stock) available for grant. Employee Share Purchase Plan At the annual and special meeting of stockholders of the Company held on June 26, 2008, stockholders approved the Company’s Employee Share Purchase Plan (the “ESPP”), pursuant to which certain employees of the Company may elect to purchase Common Stock from treasury. Upon implementation of the ESPP, senior employees of the Company will be eligible to participate in the ESPP following six months of continuous employment with the Company. Participating employees will be able to make contributions, by payroll deduction only, at a rate of not less than 10% of their salary or such other integer percentage rate up to and including 100% of their salary as such participating employee shall elect, which contribution rate may be changed at the election of the employee from time to time in accordance with the terms of the ESPP. Participating employees will be able to choose to suspend participation in the ESPP provided proper notice in writing is filed with the Company at least 15 days prior to the first of the month in which payroll deductions are to be suspended. 31 The Board of Directors has the power and authority, without notice or stockholder approval, at any time and from time to time, to suspend or terminate the ESPP and to establish the rules and regulations relating to ESPP and to make all determinations necessary or advisable for administration of the ESPP. Without limiting the foregoing, the Board of Directors shall have the authority to amend the ESPP as follows without seeking stockholder approval: · amendments as may be necessary to comply with applicable law or the requirements of any applicable regulatory authority or stock exchange; · an amendment to correct or rectify any ambiguity, defective provision, error or omission in the ESPP; · an amendment to change the provisions relating to the administration of the ESPP; and · to make any other amendment to the ESPP that does not require stockholder approval by virtue of the provisions of the ESPP, applicable laws or relevant regulatory or stock exchange requirements. In the event of termination of the ESPP, each participating employee shall receive the number of whole Common Stock in his or her account and a cash payment by check for any fractional Common Stock held in his account, as soon as practicable following the effective date of termination of the ESPP. Any amendment of the ESPP to increase the maximum number of shares of Common Stock issuable under the ESPP shall become effective only upon stockholder approval thereof, such approval to be obtained in accordance with applicable corporate and securities laws and the rules of the stock exchanges on which the Common Stock is listed. A maximum of 2,000,000 shares of Common Stock have been reserved for issuance under the ESPP from treasury of the Company at a 15% discount to the 10 day volume weighted average price of the Common Stock traded on the TSX provided, however, that the aggregate of the Company’s securities (i) issued to insiders of the Company, within any one-year period, and (ii) issuable to insiders of the Company, at any time, under the ESPP, or when combined with all of the Company’s other security based compensation arrangements, could not exceed 10% of the Company’s total issued and outstanding securities. The administrator of the ESPP will hold the Common Stock credited to a participating employee’s account for the whole period of participation of such participating employee in the ESPP. A participating employee, who terminates employment (with or without cause at law), retires or otherwise elects to withdraw from participation in the ESPP, or, the participating employee’s beneficiary in the event of the participating employee’s death, shall receive, subject to applicable withholding taxes: · the number of whole Common Stock credited to his or her account, or · the cash equivalent of the value of the whole Common Stock to his or her account, less any brokerage fees, as determined by the administrator, as of the date of termination of employment, retirement, death or withdrawal from the ESPP, whichever the case may be. Any fractional Common Stock remaining in the participating employee’s account will be paid in cash by check in an amount equal to the value of the fractional Common Stock as determined by the administrator. A participating employee who terminates employment (with or without cause) may, upon notice to the Company, request that all or a portion of the Common Stock in that participating employee’s account be transferred to his or her name, or an external account in his or her name, or be sold or, where the participating employee holds Common Stock in a registered retirement plan, that all or a portion of the Common Stock in that participating employees’ registered retirement plan be transferred to, be sold and the proceeds transferred to another registered retirement plan in the participating employee’s name, or be sold and the proceeds, net of withholding tax, be remitted to the participating employee. Any fractional Common Stock credited to the participating employee’s account shall be disregarded on any sale or transfer and the participating employee shall be entitled to receive the cash equivalent thereof. Each participating employee of a subsidiary company shall, upon such company ceasing to be a subsidiary, cease to be a participating employee of the ESPP and will receive the number of whole Common Stock in his account and a cash payment by check for any fractional shares held in his account as soon as practicable following such participating employee ceasing to be a participant of the ESPP. 32 The Company is responsible for the administration of the ESPP and the payment of any fees or charges incurred in the operation of the ESPP, including payments to the administrator, counsel and other agents employed by the Company in connection with the operation of the ESPP. The Company has not implemented the ESPP since its approval by stockholders. Warrants As of April 15, 2011, the Company has issued a total of 8,642,500 warrants that are exercisable to acquire Common Stock. On October 20, 2008, the Company granted 5,000,000 Incentive Warrants previously approved by stockholders in connection with the Merger to former NeuLion USA employees (now Company employees) at an exercise price of $0.63 per Incentive Warrant. The Incentive Warrants vested immediately and, pursuant to the approval of stockholders on June 15, 2010, expire October 20, 2013. The balance of the warrants issued by the Company are unrelated to equity-based compensation. Payments in Connection with Termination or Change in Control The Stock Option Plan, the SARs Plan, the Restricted Stock Plan and the Retention Warrants Plan each provide for immediate vesting of all Options, SARs, restricted stock awards or retention warrants held thereunder by plan participants if any such person’s employment, directorship, or other association, as the case may be, with the Company is terminated (other than for cause) prior to the expiry of such Options, SARs, restricted stock awards or incentive warrants by virtue of, or in connection with, a change of control (as this term is defined in each respective plan) of the Company.The Board of Directors of the Company may also provide in its discretion for vesting under such plans if there is a take-over bid or issuer bid (as such terms are defined in each respective plan) or in the event of a change of control. The Company does not have any employment agreements or other related arrangement with any employee other than Mr. Paterson, its Vice Chairman.Mr. Paterson’s agreement is for an indefinite term, subject to the provisions of the agreement. Mr. Paterson is permitted to terminate the employment agreement upon 60 days’ notice and the Company is permitted to terminate the employment agreement at any time for cause. In the event of a change of control of the Company, all Options, SARs granted under the SARs Plan or other incentive compensation held by Mr. Paterson that are subject to vesting within a period of twelve months from the date of the change of control will automatically vest. The agreement contains (i)non-solicitation and non-competition covenants in favor of the Company, which apply during the term of Mr. Paterson’s employment and for a period of 24 months following the termination of his employment (subject to exclusions to the non-solicitation covenant allowing Mr. Paterson or his designates to solicit without restriction executives who had been associated with Paterson Partnersor its affiliated entities and exclusions to the non-competition covenant in respect of commercial involvement that encompasses an interest of less than five percent in a publicly traded company), and (ii)confidentiality covenants in favor of the Company, which apply indefinitely. In the event of termination of the agreement by the Company without cause, Mr. Paterson is entitled to a severance package consisting of 24 months compensation in lieu of notice inclusive of base salary and bonuses and a continuation of benefits for a period of 24 months. In addition, all Options, SARs or other incentive compensation held by Mr. Paterson that were subject to vesting within a period of 24 months from the date of termination will automatically vest. For purposes of Mr. Paterson’s employment agreement, termination “without cause” includes a change of control or a constructive dismissal after Mr. Paterson provides specified notice to the Company. “Change of control” means a transaction or series of transactions whereby, directly or indirectly: (a) any person or combination of persons obtains Common Stock or other securities in excess of the number which, directly or following conversion thereof, would entitle them to cast 50% or more of the votes attaching to all Common Stock which may cast to elect directors; or 33 (b) the Company shall consolidate or amalgamate with, or enter into a statutory arrangement with, any other person (other than a subsidiary of the Company (a “Subsidiary”)) or merge with and into any other person (other than a Subsidiary) or another person shall merge with or into, the Company, and, in connection therewith, all or part of the outstanding voting Common Stock shall be changed in any way, reclassified or converted into, exchanged or otherwise acquired for Common Stock or other securities of the Company or any other person or for cash or any other property; or (c) the Company (or a Subsidiary) shall sell or otherwise transfer, including by way of the grant of a leasehold interest property or assets (A) aggregating more than 50% of the consolidated assets (measured by either book value or fair market value) of the Company and its subsidiaries as at the end of the most recently completed financial year of the Company or (B) which during the most recently completed financial year of the Company generated, or during the then current financial year of the Company are expected to generate, more than 50% of the consolidated operating income or cash flow of the Company and its subsidiaries; or (d) there occurs a change in the composition of the Board which occurs at a single meeting, or a succession of meetings occurring within six months, of the stockholders, whereby such individuals who were members of the Board immediately prior to such meeting or succession of meetings, cease to constitute a majority of the Board without the Board, as constituted immediately prior to such meeting, approving of such change. A “constructive dismissal” shall be deemed to have occurred upon any material and adverse change in the title, status, position, job function, job responsibilities and/or reporting responsibilities of Mr. Paterson from those current at the date of his employment agreement without his prior written consent. The agreement provides annual base salary, subject to annual increases as determined by the Board and a bonus that is based on the attainment of certain objectives to be determined by mutual agreement of the Board and Mr. Paterson. Effective January 1, 2007, Mr. Paterson’s annual base salary was increased to $300,000. In addition, Mr. Paterson was granted 1,000,000 SARs pursuant to the SARs Plan, with an exercise price of $4.00 per SAR that vest at a rate of 1/48th per month. Effective as of the date of the grant of such SARs, March 27, 2006, 11/48ths of Mr. Paterson’s SARs were deemed vested.On April9, 2007, Mr. Paterson was granted 650,000 Options to purchase Common Stock with an exercise price of $6.05 per Option with such Options vesting at a rate of 1/48th per month. The Company has arranged for and paid the premiums on CDN$10 million of key-man term life insurance for Mr. Paterson to provide 24-hour all-peril coverage with the Company as beneficiary of CDN$8 million of the proceeds, with the remaining CDN$2 million to be paid to beneficiaries designated by Mr. Paterson. The annual premium payable by the Company in respect of the portion of Mr. Paterson’s insurance to be paid to his designated beneficiaries is CDN$1,973. For the purpose of converting the value of Mr. Paterson’s insurance coverage in United States dollars, as at April 15, 2011, the Bank of Canada noon rate for the conversion of United States dollars to Canadian dollars was US$1 to CDN$0.9615. Pursuant to a Restricted Share Agreement (the “Restricted Share Agreement”) between the Company and Mr. Sokol, dated as of November 12, 2010, the Company agreed to issue 2,500,000 shares of Common Stock to Mr. Sokol over a four-year period.Mr. Sokol will be issued 25% of the shares on each anniversary of November 12, 2010, with 25% of each tranche of newly issued shares to be released on each such anniversary and an additional 25% to be released each successive year thereafter.In the event of a change in control of the Company, the shares of Common Stock shall be immediately issued and released to Mr. Sokol.In the event of Mr. Sokol’s termination prior to issuance of all of the shares, all unissued shares will be forfeited. Other than as set forth above, the Company is not a party to any other contract, agreement, plan or arrangement (written or unwritten) that provides for payment following a change in an executive officer’s responsibilities or following a change in control.The Company has no other plan that provides for the payment of retirement benefits, or other benefits that will be paid primarily following retirement, or at, following, or in connection with resignation, retirement or other termination of an executive officer. 34 AUDIT COMMITTEE MATTERS Audit Committee Report The Audit Committee reviews the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal control and disclosure controls. In this context, the Audit Committee has met and held discussions with management and the independent registered public accountants. Management represented to the Audit Committee that the Company’s financial statements were prepared in accordance with United States generally accepted accounting principles, and the Audit Committee has reviewed and discussed the audited financial statements and related disclosures with management and the independent registered public accountants, including a review of the significant management judgments underlying the financial statements and disclosures. The Audit Committee is directly responsible for the appointment (subject to stockholder ratification), compensation, retention and oversight of the work (including resolution of disagreements between management and the Company’s independent registered public accountants regarding financial reporting) of any independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. The independent registered public accountants report to the Audit Committee, and the chairman of the Audit Committee reports to the Board of Directors, at each regularly scheduled Board meeting or as necessary. The Audit Committee has discussed with the independent registered public accountants the matters required to be discussed by Statement on Auditing Standards (“SAS”) No. 61 (Communication with Audit Committees), as amended by SAS 89 and 90, as adopted by the Public CompanyAccounting Oversight Board, and by Rule 2-07 of Regulation S-X, including the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements. In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accountants’ communications with the Audit Committee concerning independence and has discussed with the independent registered public accountants their independence from the Company and its management. In concluding that the independent registered public accountants are independent, the Audit Committee determined, among other things, that the non-audit services provided by E&Y (US) (as described below) were compatible with their independence. Consistent with the requirements of the Sarbanes-Oxley Act of 2002, the Audit Committee has adopted policies to avoid compromising the independence of the independent registered public accountants, such as prior Audit Committee approval of non-audit services and required audit partner rotation. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board of Directors subsequently approved the recommendation) that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for filing with the SEC. The Audit Committee has also appointed E&Y (US) as the Company’s independent registered public accountants, subject to stockholder ratification, for 2011. AUDIT COMMITTEE MEMBERS: John R. Anderson, Chairman Shirley Strum Kenny David Kronfeld Pre-Approval of Services The Audit Committee follows a policy pursuant to which audit and non-audit services proposed to be performed by the independent registered public accountants may be pre-approved. These services may include audit services, audit-related services, tax services, and other services. 35 The Audit Committee determines from time to time permitted services that have its general pre-approval. Any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget and annual review. The Chief Financial Officer reviews all requests for services to be provided by the independent registered public accountants to determine whether such services are included within the list of services that have received the general pre-approval or require specific pre-approval by the Audit Committee. The Chief Financial Officer shall consult as necessary with the chairman of the Audit Committee in determining whether any particular service has been pre-approved. Audit-related services in the amount of $350,000 for 2010 and $348,635 for 2009, and tax services in the amount of $80,000 for 2010 and $57,000 for 2009, were provided through the general pre-approval process. The Audit Committee has determined such services are consistent with SEC rules on auditor independence. A service which has not received general pre-approval will require specific pre-approval by the Audit Committee before the service can be provided by the independent registered public accountants. The Audit Committee has delegated pre-approval authority to the chairman of the Audit Committee, who must report to the Audit Committee at its next scheduled meeting any services so approved by him. All services performed by the independent registered public accountants in 2010 were pre-approved under the general pre-approval process or under the specific pre-approval process. The Audit Committee pre-approves all services performed by the independent registered public accountants, in part to assess whether the provision of such services might impair the independent registered public accountants’ independence. The Audit Committee’s policy and procedures are as follows: · The Audit Committee approves the annual audit servicesengagement and, if necessary, any changes in terms, conditions, and fees resulting from changes in audit scope, company structure, or other matters. As discussed above, the Audit Committee may also pre-approve other audit services, which are those services that only the independent registered public accountants reasonably can provide. · The Audit Committee believes that the provision of audit-related services does not impair the independence of the independent registered public accountants.Audit-related servicesare assurance and related services that are reasonably related to the performance of the audit, and that are traditionally performed by the independent registered public accountants. · The Audit Committee believes that, in appropriate cases, the independent registered public accountants can provide tax compliance services, tax planning, and tax advice without impairing the auditors’ independence. · The Audit Committee may approve other servicesto be provided by the independent registered public accountants if (i)the services are permissible under SEC and Public Company Accounting Oversight Board rules, (ii)the Audit Committee believes the provision of the services would not impair the independence of the independent registered public accountants, and (iii)management believes that the independent registered public accountants are the best choice to provide the service. For each engagement, management provides the Audit Committee with information about the services and fees sufficiently detailed to allow the Audit Committee to make an informed judgment about the nature and scope of the services and the potential for the services to impair the independence of the independent registered public accountants. After the end of the audit year, management provides the Audit Committee with a summary of the actual fees incurred for the completed audit year. 36 Services and Fees of Independent Registered Public Accountants The following table shows the fees incurred for services rendered by E&Y (US), the Company’s independent registered public accountants, in 2010 and 2009. All such services were pre-approved by the Audit Committee in accordance with the pre-approval policy. Fees Audit Fees $ $ Tax Fees $ $ All Other Fees $ $ Total $ $ Audit fees are comprised of fees for professional services rendered for the audit of the Company’s annual financial statements and the review of the Company’s quarterly financial statements. Tax fees are comprised of fees for professional services rendered for the preparation of the Company’s tax returns. All other fees in 2010 and 2009 were comprised of fees related to an E&Y (US) online subscription. In considering the nature of the services provided by the independent registered public accountants, the Audit Committee determined that such services were compatible with the provision of independent audit services. The Audit Committee discussed these services with the independent registered public accountants and Company management to determine that they were permitted under the applicable rules and regulations. OTHER INFORMATION Important Notice Regarding Availability of Proxy Materials for the Annual Meeting This Proxy Statement and the Company’s 2010 Annual Report on Form 10-K are available on the Company’s website at www.neulion.com.This Proxy Statement,the form of proxy and theCompany’s 2010 Annual Report on Form 10-K, excluding exhibits, will be mailed without charge to any stockholder entitled to vote at the meeting upon written request to ATTN:Corporate Secretary, NeuLion, Inc., 1600Old Country Road, Plainview, New York11803. Other Matters to Be Presented at the Annual Meeting The Company did not have notice, as of March20, 2011, of any matter to be presented for action at the Annual Meeting, except as discussed in this Proxy Statement.The persons authorized by the accompanying form of proxy will vote in their discretion as to any other matter that comes before the Annual Meeting. 37 Stockholder Proposals for Next Annual Meeting Stockholder proposals intended to be included in the Proxy Statement for the next annual meeting must be received by the Company by January4, 2012.Additionally, the Company’s advance notice by-law provisions require that any stockholder proposal to be presented from the floor of the 2012 annual meeting must be received by the Corporate Secretary, at the Company’s principal executive offices at 1600 Old Country Road, Plainview, New York11803, no later than April8, 2012 and not before March9, 2012.The persons authorized by the form of proxy to be sent in connection with the solicitation of proxies on behalf of the Company’s Board of Directors for next year’s annual meeting will vote in their discretion as to any matter of which the Company has not received notice by March20, 2012. By Order of the Board of Directors, /s/ Roy E. Reichbach Roy E. Reichbach General Counsel, Corporate Secretary and Director April 29, 2011 38 APPENDIX A UNALLOCATED STOCK OPTIONS RESOLUTION WHEREAS it is considered to be in the best interests of the Company that the Company approve unallocated options to acquire shares of Common Stock issuable pursuant to the Company’s Second Amended and Restated Stock Option Plan, as such plan may be amended from time to time (the “Stock Option Plan”), all as described in the proxy statement of the Company dated April 29, 2011 prepared by management in respect of its Annual Meeting of Stockholders on June 7, 2011. NOW THEREFORE BE IT RESOLVED as a resolution of the stockholders of the Company that: 1. all unallocated options to acquire shares of Common Stock issuable pursuant to the Company’s Stock Option Plan are hereby approved and authorized until the date of the Company’s annual stockholders’ meeting in the year 2014 (provided that such meeting is held on or prior to June 7, 2014); and 2. any one director or officer of the Company be and is hereby authorized for and on behalf of the Company to execute and deliver all such documents and to do all such other acts and things as such director or officer may determine to be necessary or advisable in connection with the foregoing resolution, the execution of any such document or the doing of any such other act or thing by any one director or officer of the Company being conclusive evidence of such determination. 39 APPENDIX B UNALLOCATED SARS RESOLUTION WHEREAS it is considered to be in the best interests of the Company that the Company approve unallocated stock appreciation rights issuable pursuant to the Company’s 2006 Stock Appreciation Rights Plan, as such plan may be amended from time to time (the “SARs Plan”), all as described in the proxy statement of the Company dated April 29, 2011 prepared by management in respect of its Annual Meeting of Stockholders on June 7, 2011. NOW THEREFORE BE IT RESOLVED as a resolution of the stockholders of the Company that: 1. all unallocated stock appreciation rights issuable pursuant to the Company’s SARs Plan are hereby approved and authorized until the date of the Company’s annual stockholders’ meeting in the year 2014 (provided that such meeting is held on or prior to June 7, 2014); and 2. any one director or officer of the Company be and is hereby authorized for and on behalf of the Company to execute and deliver all such documents and to do all such other acts and things as such director or officer may determine to be necessary or advisable in connection with the foregoing resolution, the execution of any such document or the doing of any such other act or thing by any one director or officer of the Company being conclusive evidence of such determination. 40 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS OF NEULION, INC. TO BE HELD ON JUNE 7, 2011 Electronic Voting Instructions You can vote by Internet or telephone. Available 24 hours a day, 7 days a week, until the deadline for receipt. Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your shares. Proxies submitted by the Internet or telephone must be received by 11:59 p.m., EDT, on June 6, 2011. Vote by Internet · Log on to the Internet and go to www.investorvote.com/NEUL · Follow the steps outlined on the secure website. Vote by telephone · Call toll free1-800-652-VOTE (8683)within the USA, US Territories and Canada at any time on a touch tone telephone. There is NO CHARGE to you for the call. · Follow the instructions provided by the recorded message. 1. ELECTION OF DIRECTORS John R. Anderson o FORo AGAINSTo ABSTAIN Gabriel A. Battista o FORo AGAINSTo ABSTAIN Shirley Strum Kenny o FORo AGAINSTo ABSTAIN David Kronfeld o FORo AGAINSTo ABSTAIN Nancy Li o FORo AGAINSTo ABSTAIN G. Scott Paterson o FORo AGAINSTo ABSTAIN Roy E. Reichbach o FORo AGAINSTo ABSTAIN Charles B. Wang o FORo AGAINSTo ABSTAIN 2. RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS oFOR oAGAINST oABSTAIN 3. APPROVAL OF AMENDMENT OF CERTIFICATE OF INCORPORATION oFOR oAGAINST oABSTAIN 4. APPROVAL OF UNALLOCATED OPTIONS TO ACQUIRE SHARES OF COMMON STOCK UNDER THE STOCK OPTION PLAN oFOR oAGAINST oABSTAIN 5. APPROVAL OF UNALLOCATED SARS UNDER THE SARS PLAN oFOR oAGAINST oABSTAIN Please sign exactly as your name appears below.When shares are held by joint tenants, each should sign.When signing as attorney, executor, administrator, trustee, guardian, corporate officer, or partner, please give full title as such. Date: [], 2011 Signature Signature if held jointly 41 RoyE. Reichbach and Arthur J. McCarthy, and each of them, each with full power of substitution, hereby are authorized to vote as specified below or, with respect to any matter not set forth below, as they or their substitutes present and acting at the meeting shall unanimously determine, all of the shares of capital stock of NeuLion, Inc. that the undersigned would be entitled to vote, if personally present, at the 2011 Annual Meeting of Stockholders of NeuLion, Inc. and any adjournment thereof. Unless otherwise specified, this proxy will be voted FOR Proposals 1,2, 3, 4 and 5.The Board of Directors recommends a vote FOR Proposals 1, 2, 3, 4 and 5. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE BY 5:00 P.M. ON JUNE 6, 2011. 42 EXHIBIT A NEULION, INC. SECOND AMENDED AND RESTATED STOCK OPTION PLAN May 2007, as amended on May 13, 2009, July 14, 2009 and April 29, 2010 TABLE OF CONTENTS NEULION, INC. (FORMERLY JUMPTV INC.) A-2 ARTICLE 1.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): July 3, 2013 QUALSTAR CORPORATION (Exact Name of Registrant as Specified in its Charter) California (State or other Jurisdiction of Incorporation or Organization) 000-30083 (Commission File Number) 95-3927330 (I.R.S. Employer Identification No.) 3990-B Heritage Oak Court Simi Valley, CA 93063 (Address of principal executive offices) (Zip Code) (805) 583-7744 (Registrant’s telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below): ☐ Written communication pursuant to Rule 425 under Securities Act (17 CFR 230.425) ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act CFR 240.14d-2(b)) ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act CFR 240.17R240.13e-4(c)) Item 1.01. Entry into a Material Definitive Agreement. At a meeting held on July 3, 2013, the Board of Directors of Qualstar Corporation (“Qualstar” or the “Company”) approved an amendment (the “Amendment”) to the Company’s Rights Agreement, dated February 5, 2013, between Qualstar and Corporate Stock Transfer, Inc., as rights agent (the “Rights Agreement”), to advance the Final Expiration Date of the Rights Agreement from the close of business on January 31, 2014 to the close of business on July 3, 2013, effectively terminating the Rights Agreement as of the close of business on July 3, 2013. A copy of the Amendment is attached hereto as an Exhibit. Item 3.03. Material Modification to Rights of Security Holders. See the information set forth under Item 1.01. Entry into a Material Definitive Agreement, which is incorporated by reference to this Item 3.03. Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Appointment of Officers On July 3, 2013 the Board of Directors appointed Steven N. Bronson to serve as the interim Chief Executive Officer and President of Qualstar, effective immediately. The Board has not yet fixed Mr. Bronson’s compensation nor has the Company entered into an agreement with Mr. Bronson for his services. Departure of Officers On July 10, 2013, the Company terminated the employment of Lawrence D. Firestone, the Company’s prior Chief Executive Officer and President, for cause. In connection with the termination of Mr. Firestone, on July 11, 2013, Qualstar commenced a lawsuit against Mr. Firestone, in the Superior Court of the State of California, Los Angeles County, alleging breach of his duties owned to the Company. As of the filing of this Current Report on Form 8-K, no severance or compensation arrangement has been entered into between the Company and Mr. Firestone in connection with his termination . Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description Amendment No. 1 to the Rights Agreement, dated February 5, 2013, between Qualstar Corporation and Corporate Stock Transfer, Inc., as rights agent SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. QUALSTAR CORPORATION Dated: July 11, 2013 By: /s/Steven N. Bronson Name: Steven N. Bronson Title: President and Chief Executive Officer